another interesting article from 24/7 Wall Street
24/7 Wall St. analyzed several of the pitfalls owners should know about and that meticulous buyers can discover.
All states have mandatory disclosure laws that require home sellers to disclose any material property defect. In some cases, the sellers may not be aware of a defect they have lived with for years and are not trying to hide the issues. There may be problems that existed before the current owner bought the home or that were added inadvertently as a property was altered. Failing to disclose these can lead to lawsuits when the defects are eventually found. Material defects regulations can vary from state to state, which can further complicate the process of purchasing of a new home.
Most home buyers and home sellers are likely to pay the few hundred dollars for a home inspection, which can save both parties money and grief later. This is particularly true for older homes. Still, even good house inspectors have limits to what they can inspect. Often, they are unable to check inside or under the structure and are restricted to what they can see or reach. Not many buyers or sellers opt for a more thorough inspection, which is much more expensive and time-consuming.
Material defects in a house that can affect the sale price substantially, or even be deal breakers. They often involve water issues such as old pipes, as well as hazardous materials and structural problems, but are hardly limited to that
When asked to name some of the problems, a home inspector might or might not find on a property that could cause a buyer to refuse to go through with the purchase, Frank Lesh, executive director at the American Society of Home Inspectors (ASHI), said, "A severe structural problem. For example, leaning or cracked foundation, excessive mold, or water damage."
Nick Gromicko, founder of the International Association of Certified Home Inspectors (InterNACHI) told 24/7 Wall St. that about one-quarter of the home inspection industry is related to testing for mold because it can cause such serious health problems. "Mold is a health issue which many young families wish to avoid. There is sometimes a feeling that mold will never go away," added Lesh.
Here then are 5 problems that may make selling a house either more difficult or even impossible.
1. Mold
Black mold is a potential environmental problem that will scare off buyers quicker than just about any other problem. If the mold is not visible but dampness in the walls, floors, or ceilings is apparent, then mold of some kind is almost certainly growing. In most cases, getting rid of mold is far more costly than preventing moisture from attacking the lumber, sheetrock, ceiling tiles and other wood products that mold spores love. Some molds are toxic, and even those that are not may cause allergic reactions in some people.
A professional mold inspection gives the seller a signed report from before the house is listed for sale. Buyers may choose to conduct their own testing as well, but at least the seller has a better chance of completing a sale with a satisfactory mold report. However, unlike leaded paint, there are no federal regulations for mold inspections or remediation. In 2012, Virginia rescinded legislation regulating licensing for mold inspection and remediation after just one year in effect due to the lack of federal standards.
2. Stigmatized property
Stigmatized properties belong to a broad category of houses and apartments that have been the scene of a suicide, murder, cult activity and so on, or that have been associated with other misfortunes or crimes — even ghosts. In most states, buyers are responsible to spot a stigmatized property. However, if a potential buyer asks about any stigmas attached to the property, home sellers are generally better off disclosing all they know about the property. While sellers may lose the sale if they disclose it all, they could end up in court if they don't. Regulations vary widely among states. In California, for example, state law requires disclosures of murders and suicides on the property and any death within the past three years, except in the case of AIDS-related deaths. But Tennessee, Colorado, Pennsylvania and many others have no such requirement at all.
A study of 100 stigmatized homes in 2000 indicated that stigmatized homes sold for an average of just 3% less than comparable listings but stayed on the market 45% longer. That is not always true, however. The condo where Nicole Simpson and Ron Goldman were murdered in 1994 sold for $200,000 less than the price Simpson paid for it. Some stigmatized properties have been demolished rather than put up for sale, or demolished and reappeared as a new house with a different address at the same location. But nothing compares with the danger of buying a former meth house, Nick Gromicko of InterNACHI pointed out. It makes people sick and if a later inspection finds that the house was used as a meth lab, the house is usually destroyed.
While a radon test costs about $150 and remediation costs about $1,000, Gromicko explained, a test for meth costs about $450 but could save the buyer the entire price of the house or tens of thousands of dollars in remediation costs.
What about a crazy neighbor? The National Association of Realtors has cited a case in Texas where the sellers were forced to repurchase the house they had sold because they failed to disclose that the next-door neighbor often left her house naked and cursing loudly.
Gromicko told us that undesirable neighbors are the biggest problem for potential home buyers. Sellers are under no disclosure obligation regarding who the neighbors are or how they behave. This is one area where caveat emptor really matters.
Finally, ghosts. In a survey conducted by the National Association of Realtors, more than 60% of respondents to a survey would consider buying a haunted house. The same survey indicated that about 40% of prospective buyers for a haunted house expect to get a discount of up to 30% from the asking price.
MORE: Best Markets to Flip a Home
3. Polybutylene piping
Millions of U.S. houses built between 1978 and 1995 in all parts of the country used polybutylene piping for the plumbing system. The piping reacts with oxidants in the water, causing the pipes to degrade and, ultimately, leak. Because the water pipe deteriorates from the inside, discovering the defect is often problematic. The problem is apparently worst in treated public water systems. The damage to a house can be severe. If the house has polybutylene pipes, it is not a matter of whether they will fail but of when, according to home listing service Propex.com. If the sellers know of the polybutylene piping, they should disclose the information and be prepared to either fix the plumbing before selling the house, discount the house at least enough to cover the cost, or change their plans to sell the house.
4. Well and septic systems
A septic system treats household sewage on properties not connected to a public sewer system, and a well is a private water source for the property. Septic systems and wells are common in rural areas and can be safe and effective for years if well-maintained. However, a failure in any part of the septic system or a well that runs dry can be expensive to repair.
Because replacing a septic system can run into the thousands of dollars, potential buyers are likely to want to know how well the system works and whether it has been tested recently. The tank should not leak and the drainfield should not have any water puddled on top. Of course, any sewage odor is a sign that the system is not working properly. Replacing the drainfield can cost as much as $20,000, while replacing a leaking tank might cost as much as $2,000.
Many places also have regulations related to the proximity of a house's well to its septic tank or to the property line. These distances vary by state and probably even by county, but a general rule of thumb could be the 100-foot separation between a well and the septic system required by the Federal Housing Administration in order to get an FHA-approved loan to buy the house. The FHA also requires a minimum distance of 10 feet for the septic system from the property line.
MORE: Buying a House Causes More Anxiety Than Getting a Root Canal
5. Zoning
Issues related to zoning could play a role in any house sale. If the buyer wants to build an addition or tear down a part or all of the house and build something else, zoning regulations could kill a deal if such changes are not permitted. Zoning is a local issue, and in an incorporated city there are probably at least two zones — residential and commercial — and sometimes more.
For example, a house that exceeds current zoning ordinances usually got there before the rules were written and is called non-conforming. It cannot be enlarged without getting a variance, and getting a variance is not guaranteed. And that's not all. If the house is more than 50% destroyed by fire or some natural disaster, it cannot be replaced without a variance.
Local governments usually approve changes if the alterations do not change the footprint of the building — for example, adding a floor. Anyone buying a property anywhere should check the zoning to see what conforms and what is allowed. Many people assume they can make changes that are not permitted.
It also pays to check that fences and other improvements are inside the property line. Too often people build right to the setback lines and forget things like air conditioners that can stick out over a neighboring property.
It is also valuable for buyers to check the zoning of all surrounding properties and any variances they have received. In a rural location, for example, lack of zoning could be an issue. Just because someone has not built a pig farm next to your property does not mean they cannot do so.
Homeowner association and subdivision rules are some other regulations that homeowners need to consider. These rules are not established by government but by homeowners, and they can even include restrictions on the color you can paint your house.
Sunday, June 14, 2015
5 Home Upgrades That Won’t Add Enough Value
interesting article from trulia.com
Just because you upgrade doesn’t necessarily mean you’ll profit.
Myth: All upgrades will add value to your home.
Fact: You may never recoup the full cost of some home upgrades.
If you’re hoping to increase your home’s value (above and beyond the cost of an upgrade itself), you should know that some updates that are valuable to you may not be valuable to potential buyers.
Here are five of the most common upgrades that cause homeowners to lose money
1. Putting in a pool
Pools can be hit-or-miss when it comes to added value. You may see some return, but often it’s not enough to pay for the pool itself.
In fact, adding a pool to your home could be a major turnoff to some buyers. Buyers with small children may be concerned about safety risks, those looking for a low-maintenance yard won’t want to deal with the hassle and upkeep of cleaning a pool, and buyers who are on a tight budget may not have the extra cash to deal with the added expense.
If you live in a warm-weather climate where people are inclined to use a pool year-round, you’re more likely to get a favorable response from buyers.
If you’re looking to add a pool, don’t forget that you’ll need to operate and maintain the pool yourself, and this comes with a sizable extra cost. Your likelihood of recouping the money you spent on maintenance, in addition to the installation costs, is pretty low.
2. Highly custom design decisions
Your idea of a dream kitchen probably isn’t everyone’s idea of a dream kitchen. Unless you plan to stay in your house for many years to come, think twice about renovations that are too personalized.
If you install a kitchen backsplash, you might recoup the cost, because the difference between “no backsplash” and “backsplash” is noticeable. But the specific type of tile might not matter to buyers. Similarly, choosing a beveled countertop edge that’s complex and ornate, rather than a basic beveled edge, can turn off buyers whose tastes don’t align with yours.
In fact, these custom features may wind up costing you come listing time, as many buyers will factor in the money they’ll need to spend to change the house to suit their own tastes. If you’re going to upgrade your kitchen just for the sake of selling, stick with neutral, builder-grade design decisions.
3. Room conversions
Buyers will be looking for certain basic staples when they tour your home: typically, three bedrooms, two bathrooms, and a garage. Getting rid of these expected spaces (or altering them into something unusual) may harm your resale value.
Every bedroom, for instance, is coveted space that can bump your listing up into the next bracket. Buyers are looking for a two-bedroom, three-bedroom, or four-or-more-bedroom home.
You might not need that extra room and dream of knocking down a wall to create a giant walk-in closet. Or perhaps you’d prefer to cover the walls with soundproof foam and convert it into a recording studio.
Unfortunately, most buyers likely won’t share your interests. Instead, they prefer an extra bedroom for children or guests.
4. Incremental square footage gains
Sizable square footage gains — like finishing your dingy basement so it becomes an additional livable floor — can be a boon in buyers’ minds. But tiny, incremental changes may not give you much of a return on your investment. (You may love your new sunroom, but it’s not likely to drastically increase your home’s overall value.)
Adding square footage in a way that doesn’t flow well with the floor plan can also backfire. Sure, a half bath on the first floor would be useful, but if buyers have to pass through the kitchen to get to it, the half bath loses some of its appeal.
5. Overimproving
No one wants to buy a megamansion on a block full of split-levels. When your upgrades feel overboard for your neighborhood, you alienate buyers on two fronts: buyers who are drawn to your neighborhood won’t be able to afford your home, and buyers who can afford a home of your caliber will prefer to be in a ritzier area.
Keep the “base level” of your neighborhood in mind. Tour some open houses on your block to see how your neighbors’ kitchens look before you invest a small fortune in granite countertops and high-end fixtures. Being a little nicer than the other houses around you can be a selling point, but being vastly more luxurious is not.
Pursue these upgrades for your own enjoyment — but don’t trick yourself into believing you’ll more than recoup the cost of the improvement in the form of additional home value. You can always opt for the projects that have the best potential to draw in a buyer instead!
-
Just because you upgrade doesn’t necessarily mean you’ll profit.
Myth: All upgrades will add value to your home.
Fact: You may never recoup the full cost of some home upgrades.
If you’re hoping to increase your home’s value (above and beyond the cost of an upgrade itself), you should know that some updates that are valuable to you may not be valuable to potential buyers.
Here are five of the most common upgrades that cause homeowners to lose money
1. Putting in a pool
Pools can be hit-or-miss when it comes to added value. You may see some return, but often it’s not enough to pay for the pool itself.
In fact, adding a pool to your home could be a major turnoff to some buyers. Buyers with small children may be concerned about safety risks, those looking for a low-maintenance yard won’t want to deal with the hassle and upkeep of cleaning a pool, and buyers who are on a tight budget may not have the extra cash to deal with the added expense.
If you live in a warm-weather climate where people are inclined to use a pool year-round, you’re more likely to get a favorable response from buyers.
If you’re looking to add a pool, don’t forget that you’ll need to operate and maintain the pool yourself, and this comes with a sizable extra cost. Your likelihood of recouping the money you spent on maintenance, in addition to the installation costs, is pretty low.
2. Highly custom design decisions
Your idea of a dream kitchen probably isn’t everyone’s idea of a dream kitchen. Unless you plan to stay in your house for many years to come, think twice about renovations that are too personalized.
If you install a kitchen backsplash, you might recoup the cost, because the difference between “no backsplash” and “backsplash” is noticeable. But the specific type of tile might not matter to buyers. Similarly, choosing a beveled countertop edge that’s complex and ornate, rather than a basic beveled edge, can turn off buyers whose tastes don’t align with yours.
In fact, these custom features may wind up costing you come listing time, as many buyers will factor in the money they’ll need to spend to change the house to suit their own tastes. If you’re going to upgrade your kitchen just for the sake of selling, stick with neutral, builder-grade design decisions.
3. Room conversions
Buyers will be looking for certain basic staples when they tour your home: typically, three bedrooms, two bathrooms, and a garage. Getting rid of these expected spaces (or altering them into something unusual) may harm your resale value.
Every bedroom, for instance, is coveted space that can bump your listing up into the next bracket. Buyers are looking for a two-bedroom, three-bedroom, or four-or-more-bedroom home.
You might not need that extra room and dream of knocking down a wall to create a giant walk-in closet. Or perhaps you’d prefer to cover the walls with soundproof foam and convert it into a recording studio.
Unfortunately, most buyers likely won’t share your interests. Instead, they prefer an extra bedroom for children or guests.
4. Incremental square footage gains
Sizable square footage gains — like finishing your dingy basement so it becomes an additional livable floor — can be a boon in buyers’ minds. But tiny, incremental changes may not give you much of a return on your investment. (You may love your new sunroom, but it’s not likely to drastically increase your home’s overall value.)
Adding square footage in a way that doesn’t flow well with the floor plan can also backfire. Sure, a half bath on the first floor would be useful, but if buyers have to pass through the kitchen to get to it, the half bath loses some of its appeal.
5. Overimproving
No one wants to buy a megamansion on a block full of split-levels. When your upgrades feel overboard for your neighborhood, you alienate buyers on two fronts: buyers who are drawn to your neighborhood won’t be able to afford your home, and buyers who can afford a home of your caliber will prefer to be in a ritzier area.
Keep the “base level” of your neighborhood in mind. Tour some open houses on your block to see how your neighbors’ kitchens look before you invest a small fortune in granite countertops and high-end fixtures. Being a little nicer than the other houses around you can be a selling point, but being vastly more luxurious is not.
Pursue these upgrades for your own enjoyment — but don’t trick yourself into believing you’ll more than recoup the cost of the improvement in the form of additional home value. You can always opt for the projects that have the best potential to draw in a buyer instead!
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Monday, May 11, 2015
Get Paid to Live in a Haunted Ghost Town
instead of paying for housing get, get paid to live in a house....
from wideopencountry.com
If you could spend the summer in a historic, haunted ghost town in Montana, would you do it?
If the paranormal is your thing, check out this job posting from the U.S. Bureau of Land Management. They’re looking for volunteer residents to help out with the care and conservation Garnet Ghost Town. Back in the day, Garnet was a frontier mining town but has been mostly abandoned for about 100 years.
Your lodging is absolutely free. You’ll be provided with a furnished cabin, complete with a propane powered refrigerator and range (sorry, no electricity or running water available in historic ghost towns). You’ll even be paid a stipend and allotted a food allowance.
All you’d have to do is assist with tours, help set up exhibits, work in the gift shop, and other general upkeep. Oh, and, you know, live with the creepy sounds of haunting laughter and music that’s often heard in Kelly’s Saloon, the most active spot on the premises.
After your shift ends at 5pm, the ghost town is yours to explore.
“…Volunteers are really left to their own devices after the visitors are gone.” says U.S. Bureau of Land Management Garnet Ranger Nacoma Gainan. “We rely on volunteers to do much of our day-to-day stuff. We can’t hire full-time personnel or even seasonal personnel. But we have all the stuff you need to live there,”
Visitors and volunteers have reported doors opening and closing without explanation, and hearing footsteps running throughout the old Wells Hotel.
If this sounds right up your alley, the summer program is open and ready for unsuspecting victims — I mean, applicants!
from wideopencountry.com
If you could spend the summer in a historic, haunted ghost town in Montana, would you do it?
If the paranormal is your thing, check out this job posting from the U.S. Bureau of Land Management. They’re looking for volunteer residents to help out with the care and conservation Garnet Ghost Town. Back in the day, Garnet was a frontier mining town but has been mostly abandoned for about 100 years.
Your lodging is absolutely free. You’ll be provided with a furnished cabin, complete with a propane powered refrigerator and range (sorry, no electricity or running water available in historic ghost towns). You’ll even be paid a stipend and allotted a food allowance.
All you’d have to do is assist with tours, help set up exhibits, work in the gift shop, and other general upkeep. Oh, and, you know, live with the creepy sounds of haunting laughter and music that’s often heard in Kelly’s Saloon, the most active spot on the premises.
After your shift ends at 5pm, the ghost town is yours to explore.
“…Volunteers are really left to their own devices after the visitors are gone.” says U.S. Bureau of Land Management Garnet Ranger Nacoma Gainan. “We rely on volunteers to do much of our day-to-day stuff. We can’t hire full-time personnel or even seasonal personnel. But we have all the stuff you need to live there,”
Visitors and volunteers have reported doors opening and closing without explanation, and hearing footsteps running throughout the old Wells Hotel.
If this sounds right up your alley, the summer program is open and ready for unsuspecting victims — I mean, applicants!
Proven Ways to Increase the Value of Your Home
some good food for thought....
from trulia
Heed these 8 suggestions from real estate pros to ensure your property fetches the highest possible price.I’m no real estate investor, but I’ve bought and sold two houses in my time (one on my own and one with an agent), and what I can tell you from those experiences is that little things mean a lot when it comes to selling your home and getting a great price for it. But if everything counts and you have only so much time and money to invest, how do you know where to start to get your home for-sale ready and to fetch the best price? The good folks at Consumer Reports National Research Center set out to answer just that, with an online survey of 303 real estate professionals from around the country.
As we head into the hottest selling months and with 5.3 million homes expected to change hands this year, we thought it might be nice to get our own answers to help you leverage all you can against the competition.
1. Stage and declutter your home
One of the panel members Consumer Reports consulted was the former executive producer for This Old House, Massachusetts real estate agent and renovation consultant Bruce Irving. (He knows his stuff: the guy has been interviewed by Oprah protégé Nate Berkus, and The New York Times called him “the house whisperer.”) “Do all the work necessary to make your property look good, not through expensive changes but through excellent staging,” says Irving. “Your agent should be able to provide proper advice and even bring in a professional.” That means clearing out clutter.
“I have a gal who I send into listings to declutter and depersonalize for sellers and just tidy things up using the sellers’ own possessions for the most part,” says Karen Wallace, an agent with Lyon Real Estate, located in Auburn, CA.
Tara Miller of Tarabell’s Designs in Portland, OR, is just such a gal. She helps homeowners and agents stage their houses for maximum sales appeal. Miller points out that people who don’t keep up on needed repairs end up spending the most when it comes time to readying a home for sale. “It’s remarkable what regular home maintenance, cleanliness, and minimizing clutter in your everyday life can do for you when it comes time to sell.” She also notes that staging a home is very different from designing or decorating. “It’s a tough thought, but not everyone likes your pets, hobbies, sports teams, or religion.”
2. Clean it up! “If it’s dirty, it will not sell — even if it’s a great place,” says Kathy Partak, a real estate agent with Select Estate Properties in Auburn, CA. In fact, surprisingly, most of the agents we spoke with focused on overall cleanliness and space in the home as the biggest factor in selling your home. And cleanliness pays off, according to Consumer Reports: cleaning and decluttering can deliver a 3% to 5% return on investment, and this is something you can do yourself. When showing your home, Irving adds, “Raise window blinds, lower toilet seats — make sure the place looks at least as good as it would if you were having your boss over for dinner.”
3. Enhance your curb appeal
First impressions sell your home. As soon as a potential buyer drives up to your house, she’s making judgments — and a yard in disarray or untrimmed bushes could cost you. “Exterior space is ‘free’ extra square footage and is so appealing to buyers,” says Wallace. “It pays to enhance it.” But if your staging budget doesn’t include the outdoors, Partak suggests making the most of the walk from the car to the entry. “Make it look nice from the curb with some easy potted or planted flowers to trim the walkway.”
4. Pay attention to details
The details that you may believe are minor can turn out to pack a wallop for your home’s sale. For Irving that includes everything from paint touch-ups throughout the house to a full redo of public rooms. “Wash your windows, replace compact fluorescent bulbs with incandescent or halogen, and remove or minimize personal photographs,” he says. If you have a little money to invest, Partak suggests upgrading to energy-efficient windows, appliances in the kitchen, and adding solar. “These are always the things that bring in more money.”
5. Refresh your kitchen and bath Don’t forget the most important rooms in your home: the kitchen and bathroom. Consumer Reports estimates that you can increase your home’s value by as much as 7% by renovating these rooms. If you don’t have renovations in your budget, Kristen Kohnstamm, principal broker and co-owner of Dunthorpe Properties, a luxury real estate firm in Portland, OR, recommends fresh paint, a low-hanging opportunity to freshen up your space and potentially lift your asking price. Choose a neutral palette to increase the appeal to as many tastes as possible; buyers need to be able to easily visualize themselves living in the home. But don’t invest too much time or personality in things like paint and new carpeting. “The worst thing you can do is put lots of money into things like carpet, paint, and other aesthetics that a new homeowner will likely want to change,” says Kohnstamm.
6. Invest in good photos When it comes to the listing, make sure your real estate agent offers great photos that show your home in its best light. First impressions can make all the difference to someone sitting at home on the computer. And when it comes to open houses and showings, Irving suggests you “absent yourself” because sellers can sometimes get in the way of a sale by taking things too personally.
7. Don’t DIY everything Irving’s top tip includes a good finger wagging at people like me, who think they can DIY a home sale and still come out ahead. “First and foremost, for correct pricing, widest and best marketing, and the highest price, hire a real estate agent,” says Irving.
8. Try not to take it personally While this tip won’t necessarily increase your home’s value, it will certainly speed up the sale. Kohnstamm cautions first-time sellers to temper their emotions when it comes to the sale of their home. “Whatever comments are [made] about your home, they’re never intended as a personal affront. Remember, everyone has different tastes, but clean and well maintained never goes out of style.”
from trulia
Heed these 8 suggestions from real estate pros to ensure your property fetches the highest possible price.I’m no real estate investor, but I’ve bought and sold two houses in my time (one on my own and one with an agent), and what I can tell you from those experiences is that little things mean a lot when it comes to selling your home and getting a great price for it. But if everything counts and you have only so much time and money to invest, how do you know where to start to get your home for-sale ready and to fetch the best price? The good folks at Consumer Reports National Research Center set out to answer just that, with an online survey of 303 real estate professionals from around the country.
As we head into the hottest selling months and with 5.3 million homes expected to change hands this year, we thought it might be nice to get our own answers to help you leverage all you can against the competition.
1. Stage and declutter your home
One of the panel members Consumer Reports consulted was the former executive producer for This Old House, Massachusetts real estate agent and renovation consultant Bruce Irving. (He knows his stuff: the guy has been interviewed by Oprah protégé Nate Berkus, and The New York Times called him “the house whisperer.”) “Do all the work necessary to make your property look good, not through expensive changes but through excellent staging,” says Irving. “Your agent should be able to provide proper advice and even bring in a professional.” That means clearing out clutter.
“I have a gal who I send into listings to declutter and depersonalize for sellers and just tidy things up using the sellers’ own possessions for the most part,” says Karen Wallace, an agent with Lyon Real Estate, located in Auburn, CA.
Tara Miller of Tarabell’s Designs in Portland, OR, is just such a gal. She helps homeowners and agents stage their houses for maximum sales appeal. Miller points out that people who don’t keep up on needed repairs end up spending the most when it comes time to readying a home for sale. “It’s remarkable what regular home maintenance, cleanliness, and minimizing clutter in your everyday life can do for you when it comes time to sell.” She also notes that staging a home is very different from designing or decorating. “It’s a tough thought, but not everyone likes your pets, hobbies, sports teams, or religion.”
2. Clean it up! “If it’s dirty, it will not sell — even if it’s a great place,” says Kathy Partak, a real estate agent with Select Estate Properties in Auburn, CA. In fact, surprisingly, most of the agents we spoke with focused on overall cleanliness and space in the home as the biggest factor in selling your home. And cleanliness pays off, according to Consumer Reports: cleaning and decluttering can deliver a 3% to 5% return on investment, and this is something you can do yourself. When showing your home, Irving adds, “Raise window blinds, lower toilet seats — make sure the place looks at least as good as it would if you were having your boss over for dinner.”
3. Enhance your curb appeal
First impressions sell your home. As soon as a potential buyer drives up to your house, she’s making judgments — and a yard in disarray or untrimmed bushes could cost you. “Exterior space is ‘free’ extra square footage and is so appealing to buyers,” says Wallace. “It pays to enhance it.” But if your staging budget doesn’t include the outdoors, Partak suggests making the most of the walk from the car to the entry. “Make it look nice from the curb with some easy potted or planted flowers to trim the walkway.”
4. Pay attention to details
The details that you may believe are minor can turn out to pack a wallop for your home’s sale. For Irving that includes everything from paint touch-ups throughout the house to a full redo of public rooms. “Wash your windows, replace compact fluorescent bulbs with incandescent or halogen, and remove or minimize personal photographs,” he says. If you have a little money to invest, Partak suggests upgrading to energy-efficient windows, appliances in the kitchen, and adding solar. “These are always the things that bring in more money.”
5. Refresh your kitchen and bath Don’t forget the most important rooms in your home: the kitchen and bathroom. Consumer Reports estimates that you can increase your home’s value by as much as 7% by renovating these rooms. If you don’t have renovations in your budget, Kristen Kohnstamm, principal broker and co-owner of Dunthorpe Properties, a luxury real estate firm in Portland, OR, recommends fresh paint, a low-hanging opportunity to freshen up your space and potentially lift your asking price. Choose a neutral palette to increase the appeal to as many tastes as possible; buyers need to be able to easily visualize themselves living in the home. But don’t invest too much time or personality in things like paint and new carpeting. “The worst thing you can do is put lots of money into things like carpet, paint, and other aesthetics that a new homeowner will likely want to change,” says Kohnstamm.
6. Invest in good photos When it comes to the listing, make sure your real estate agent offers great photos that show your home in its best light. First impressions can make all the difference to someone sitting at home on the computer. And when it comes to open houses and showings, Irving suggests you “absent yourself” because sellers can sometimes get in the way of a sale by taking things too personally.
7. Don’t DIY everything Irving’s top tip includes a good finger wagging at people like me, who think they can DIY a home sale and still come out ahead. “First and foremost, for correct pricing, widest and best marketing, and the highest price, hire a real estate agent,” says Irving.
8. Try not to take it personally While this tip won’t necessarily increase your home’s value, it will certainly speed up the sale. Kohnstamm cautions first-time sellers to temper their emotions when it comes to the sale of their home. “Whatever comments are [made] about your home, they’re never intended as a personal affront. Remember, everyone has different tastes, but clean and well maintained never goes out of style.”
10 Best-Kept Secrets for Buying a Home
helpful article from hgtv.com
Get the most out of your money with these handy home-buying tips.
Buying Secret #10: Keep Your Money Where It Is
It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you’re going to have a hard time getting a loan.
Buying Secret #9: Get Pre-Approved for Your Home Loan
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can't afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.
Buying Secret #8: Avoid a Border Dispute
It’s absolutely essential to get a survey done on your property so you know exactly what you’re buying. Knowing precisely where your property lines are may save you from a potential dispute with your neighbors. Also, your property tax is likely based on how much property you have, so it is best to have an accurate map drawn up.
Buying Secret # 7: Don’t Try to Time the Market
Don’t obsess with trying to time the market and figure out when is the best time to buy. Trying to anticipate the housing market is impossible. The best time to buy is when you find your perfect house and you can afford it. Real estate is cyclical, it goes up and it goes down and it goes back up again. So, if you try to wait for the perfect time, you’re probably going to miss out.
Buying Secret # 6: Bigger Isn’t Always Better
Everyone’s drawn to the biggest, most beautiful house on the block. But bigger is usually not better when it comes to houses. There’s an old adage in real estate that says don’t buy the biggest, best house on the block. The largest house only appeals to a very small audience and you never want to limit potential buyers when you go to re-sell. Your home is only going to go up in value as much as the other houses around you. If you pay $500,000 for a home and your neighbors pay $250,000 to $300,000, your appreciation is going to be limited. Sometimes it is best to is buy the worst house on the block, because the worst house per square foot always trades for more than the biggest house.
Buying Secret #5: Avoid Sleeper Costs
The difference between renting and home ownership is the sleeper costs. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes, utilities and homeowner-association dues. New homeowners also need to be prepared to pay for repairs, maintenance and potential property-tax increases. Make sure you budget for sleeper costs so you’ll be covered and won’t risk losing your house.
Buying Secret #4: You’re Buying a House – Not Dating It
Buying a house based on emotions is just going to break your heart. If you fall in love with something, you might end up making some pretty bad financial decisions. There’s a big difference between your emotions and your instincts. Going with your instincts means that you recognize that you’re getting a great house for a good value. Going with your emotions is being obsessed with the paint color or the backyard. It’s an investment, so stay calm and be wise.
Buying Secret #3: Give Your House a Physical
Would you buy a car without checking under the hood? Of course you wouldn’t. Hire a home inspector. It’ll cost about $200 but could end up saving you thousands. A home inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. It’s really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home. It’s better to spend the money up front on an inspector than to find out later you have to spend a fortune.
Buying Secret #2: The Secret Science of Bidding
Your opening bid should be based on two things: what you can afford (because you don’t want to outbid yourself), and what you really believe the property is worth. Make your opening bid something that’s fair and reasonable and isn’t going to totally offend the seller. A lot of people think they should go lower the first time they make a bid. It all depends on what the market is doing at the time. You need to look at what other homes have gone for in that neighborhood and you want to get an average price per square foot. Sizing up a house on a price-per-square-foot basis is a great equalizer. Also, see if the neighbors have plans to put up a new addition or a basketball court or tennis court, something that might detract from the property’s value down the road.
Today, so many sellers are behind in their property taxes and if you have that valuable information it gives you a great card to negotiate a good deal. To find out, go to the county clerk’s office.
Sellers respect a bid that is an oddball number and are more likely to take it more seriously. A nice round number sounds like every other bid out there. When you get more specific the sellers will think you've given the offer careful thought.
Buying Secret #1: Stalk the Neighborhood
Before you buy, get the lay of the land – drop by morning noon and night. Many homebuyers have become completely distraught because they thought they found the perfect home, only to find out the neighborhood wasn’t for them. Drive by the house at all hours of the day to see what’s happening in the neighborhood. Do your regular commute from the house to make sure it is something you can deal with on a daily basis. Find out how far it is to the nearest grocery store and other services. Even if you don’t have kids, research the schools because it affects the value of your home in a very big way. If you buy a house in a good school district versus bad school district even in the same town, the value can be affected as much as 20 percent.
Get the most out of your money with these handy home-buying tips.
Buying Secret #10: Keep Your Money Where It Is
It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you’re going to have a hard time getting a loan.
Buying Secret #9: Get Pre-Approved for Your Home Loan
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can't afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.
Buying Secret #8: Avoid a Border Dispute
It’s absolutely essential to get a survey done on your property so you know exactly what you’re buying. Knowing precisely where your property lines are may save you from a potential dispute with your neighbors. Also, your property tax is likely based on how much property you have, so it is best to have an accurate map drawn up.
Buying Secret # 7: Don’t Try to Time the Market
Don’t obsess with trying to time the market and figure out when is the best time to buy. Trying to anticipate the housing market is impossible. The best time to buy is when you find your perfect house and you can afford it. Real estate is cyclical, it goes up and it goes down and it goes back up again. So, if you try to wait for the perfect time, you’re probably going to miss out.
Buying Secret # 6: Bigger Isn’t Always Better
Everyone’s drawn to the biggest, most beautiful house on the block. But bigger is usually not better when it comes to houses. There’s an old adage in real estate that says don’t buy the biggest, best house on the block. The largest house only appeals to a very small audience and you never want to limit potential buyers when you go to re-sell. Your home is only going to go up in value as much as the other houses around you. If you pay $500,000 for a home and your neighbors pay $250,000 to $300,000, your appreciation is going to be limited. Sometimes it is best to is buy the worst house on the block, because the worst house per square foot always trades for more than the biggest house.
Buying Secret #5: Avoid Sleeper Costs
The difference between renting and home ownership is the sleeper costs. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes, utilities and homeowner-association dues. New homeowners also need to be prepared to pay for repairs, maintenance and potential property-tax increases. Make sure you budget for sleeper costs so you’ll be covered and won’t risk losing your house.
Buying Secret #4: You’re Buying a House – Not Dating It
Buying a house based on emotions is just going to break your heart. If you fall in love with something, you might end up making some pretty bad financial decisions. There’s a big difference between your emotions and your instincts. Going with your instincts means that you recognize that you’re getting a great house for a good value. Going with your emotions is being obsessed with the paint color or the backyard. It’s an investment, so stay calm and be wise.
Buying Secret #3: Give Your House a Physical
Would you buy a car without checking under the hood? Of course you wouldn’t. Hire a home inspector. It’ll cost about $200 but could end up saving you thousands. A home inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. It’s really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home. It’s better to spend the money up front on an inspector than to find out later you have to spend a fortune.
Buying Secret #2: The Secret Science of Bidding
Your opening bid should be based on two things: what you can afford (because you don’t want to outbid yourself), and what you really believe the property is worth. Make your opening bid something that’s fair and reasonable and isn’t going to totally offend the seller. A lot of people think they should go lower the first time they make a bid. It all depends on what the market is doing at the time. You need to look at what other homes have gone for in that neighborhood and you want to get an average price per square foot. Sizing up a house on a price-per-square-foot basis is a great equalizer. Also, see if the neighbors have plans to put up a new addition or a basketball court or tennis court, something that might detract from the property’s value down the road.
Today, so many sellers are behind in their property taxes and if you have that valuable information it gives you a great card to negotiate a good deal. To find out, go to the county clerk’s office.
Sellers respect a bid that is an oddball number and are more likely to take it more seriously. A nice round number sounds like every other bid out there. When you get more specific the sellers will think you've given the offer careful thought.
Buying Secret #1: Stalk the Neighborhood
Before you buy, get the lay of the land – drop by morning noon and night. Many homebuyers have become completely distraught because they thought they found the perfect home, only to find out the neighborhood wasn’t for them. Drive by the house at all hours of the day to see what’s happening in the neighborhood. Do your regular commute from the house to make sure it is something you can deal with on a daily basis. Find out how far it is to the nearest grocery store and other services. Even if you don’t have kids, research the schools because it affects the value of your home in a very big way. If you buy a house in a good school district versus bad school district even in the same town, the value can be affected as much as 20 percent.
Rising Housing Values Have Started to Raise Property Taxes
Property taxes are going up....informational article
from cbs4 news...
DENVER (CBS4) – The increase in home sales and home values is now affecting property taxes across Colorado. Those values help determine a homeowners’ taxes, which are likely to go up in the years ahead.
Property values have jumped 29% in Denver, according to the city’s department of finance.
In Arapahoe, Broomfield, and Jefferson counties, home values are up by 20% or more. In Douglas County it’s almost 20%, and in Elbert County, 10%. All are average increases.
Assessors will begin mailing valuation notices on May 1.
Additional Resources
The city of Denver’s Department of Finance released the following information from assessors in the Denver metro area.
Adams:
Assessor Patsy Melonakis reported that residential property values increased 19.8 percent, commercial property values increased 11.6 percent, and agricultural property values increased 23.79 percent in Adams County. She also reported that 2015 property values (including residential, commercial, agricultural, and land) have increased in Adams County at levels comparable with surrounding large counties.
“Our current valuations reflect the real estate market recovery and increasing upward market pressures that have resulted in increased sales prices over the past three years,” Assessor Melonakis said. “We are not breaking the ceiling of values for this year, just recovering depreciation in value that occurred during the Great Recession.”
Arapahoe:
Assessor Corbin Sakdol reported that in Arapahoe County, which sent 205,888 notices of valuation this year, the residential median increase was 22 percent and the commercial median increase was 15 percent. The area within Arapahoe County with the largest gain in property value was Aurora.
“When we look at the real estate market activity there is no question the housing market has substantially improved,” Assessor Sakdol said. “The real estate market is booming in the Denver Metropolitan area. We are seeing an improved economy, increasing population and a record low inventory of available homes, along with continued low interest rates. This is a classic supply/demand issue where supply is not adequate to meet market demand and the result is steadily increasing real estate prices.”
Broomfield:
Assessor Sandy Herbison reported that, consistent with the surge in the residential real estate market since the recession, the non-multifamily residential total valuation is increasing by 22 percent in Broomfield County. Some of the largest percentage increases in the area are single family properties under $300,000. Approximately 15 percent of that increase, or 3 percent of the 21 percent increase, is attributable to new construction.
“Broomfield experienced significant increases in overall value for all property values reflecting the strong economic conditions across the City and County. Sales data shows that properties were selling for significantly more at the end of the two year period than they were at the beginning. High demand and relatively limited supply fueled the market resulting in competitive bidding for properties in this market group. Individual properties within this property class will experience increases of between 10-30 percent, depending on the neighborhood,” Assessor Herbison said.
Denver:
Denver’s Assessment Division revalued over 214,000 taxable properties citywide. The median projected increase in assessed value for single-unit residential properties is 29.6 percent in Denver. This includes single family homes, row homes, and condos.
The median projected increase in assessed value for Denver’s commercial properties is 18 percent. The downtown area in particular experienced strong demand to lease as well as purchase commercial property. Multi-family residential property also reflects record-setting activity with a median increase of 33 percent.
“Property values across Denver have recovered from the recession, reflecting the desirability and growth of the city,” Assessor Erffmeyer said. “Neighborhoods with historically lower property values saw the largest percentage increases in Denver, though each unique neighborhood in Denver saw growth.”
Douglas:
Assessor Lisa Frizell reported that the mean single family detached property value increased 19.2 percent in Douglas County. She also reported a 40 percent increase in taxable new construction value from 2013 to 2014.
“While residential values in the Denver Metro area have increased at a similar rate, Douglas County’s average residential property value is now almost $415,000; an increase of around 18 percent from the 2013 level of value,” said Assessor Frizell.
Elbert:
Assessor Billie Mills reported that real estate market in Elbert County appreciated at a median level of 10 percent. The valuation in Elbert County’s assessed properties is based on 1,028 confirmed market transactions that occurred between July 1, 2012 through June 30, 2014. All sales have been trended (or adjusted for time) to June 30, 2014.
“The valuation for Elbert County performed very well in terms of value levels and equity. We measure performance based on standards set by the State of Colorado and by the International Association of Assessing Officers (IAAO). These are standards and guidelines for mass appraisal valuation methodologies,” Assessor Mills said.
Jefferson:
Assessor Ron Sandstrom reported that as of June 30, 2014, the estimated value of single family residential property in Jefferson County has gone up 20 percent on average. The average value of a residence in Jefferson County in 2008 was $285,000. For 2015 that value has risen to an estimated $321,000, a 12 percent increase.
“These increases are a result of the change in the economy, a low inventory of residences and high demand for these properties,” Assessor Sandstrom said.
from cbs4 news...
DENVER (CBS4) – The increase in home sales and home values is now affecting property taxes across Colorado. Those values help determine a homeowners’ taxes, which are likely to go up in the years ahead.
Property values have jumped 29% in Denver, according to the city’s department of finance.
In Arapahoe, Broomfield, and Jefferson counties, home values are up by 20% or more. In Douglas County it’s almost 20%, and in Elbert County, 10%. All are average increases.
Assessors will begin mailing valuation notices on May 1.
Additional Resources
The city of Denver’s Department of Finance released the following information from assessors in the Denver metro area.
Adams:
Assessor Patsy Melonakis reported that residential property values increased 19.8 percent, commercial property values increased 11.6 percent, and agricultural property values increased 23.79 percent in Adams County. She also reported that 2015 property values (including residential, commercial, agricultural, and land) have increased in Adams County at levels comparable with surrounding large counties.
“Our current valuations reflect the real estate market recovery and increasing upward market pressures that have resulted in increased sales prices over the past three years,” Assessor Melonakis said. “We are not breaking the ceiling of values for this year, just recovering depreciation in value that occurred during the Great Recession.”
Arapahoe:
Assessor Corbin Sakdol reported that in Arapahoe County, which sent 205,888 notices of valuation this year, the residential median increase was 22 percent and the commercial median increase was 15 percent. The area within Arapahoe County with the largest gain in property value was Aurora.
“When we look at the real estate market activity there is no question the housing market has substantially improved,” Assessor Sakdol said. “The real estate market is booming in the Denver Metropolitan area. We are seeing an improved economy, increasing population and a record low inventory of available homes, along with continued low interest rates. This is a classic supply/demand issue where supply is not adequate to meet market demand and the result is steadily increasing real estate prices.”
Broomfield:
Assessor Sandy Herbison reported that, consistent with the surge in the residential real estate market since the recession, the non-multifamily residential total valuation is increasing by 22 percent in Broomfield County. Some of the largest percentage increases in the area are single family properties under $300,000. Approximately 15 percent of that increase, or 3 percent of the 21 percent increase, is attributable to new construction.
“Broomfield experienced significant increases in overall value for all property values reflecting the strong economic conditions across the City and County. Sales data shows that properties were selling for significantly more at the end of the two year period than they were at the beginning. High demand and relatively limited supply fueled the market resulting in competitive bidding for properties in this market group. Individual properties within this property class will experience increases of between 10-30 percent, depending on the neighborhood,” Assessor Herbison said.
Denver:
Denver’s Assessment Division revalued over 214,000 taxable properties citywide. The median projected increase in assessed value for single-unit residential properties is 29.6 percent in Denver. This includes single family homes, row homes, and condos.
The median projected increase in assessed value for Denver’s commercial properties is 18 percent. The downtown area in particular experienced strong demand to lease as well as purchase commercial property. Multi-family residential property also reflects record-setting activity with a median increase of 33 percent.
“Property values across Denver have recovered from the recession, reflecting the desirability and growth of the city,” Assessor Erffmeyer said. “Neighborhoods with historically lower property values saw the largest percentage increases in Denver, though each unique neighborhood in Denver saw growth.”
Douglas:
Assessor Lisa Frizell reported that the mean single family detached property value increased 19.2 percent in Douglas County. She also reported a 40 percent increase in taxable new construction value from 2013 to 2014.
“While residential values in the Denver Metro area have increased at a similar rate, Douglas County’s average residential property value is now almost $415,000; an increase of around 18 percent from the 2013 level of value,” said Assessor Frizell.
Elbert:
Assessor Billie Mills reported that real estate market in Elbert County appreciated at a median level of 10 percent. The valuation in Elbert County’s assessed properties is based on 1,028 confirmed market transactions that occurred between July 1, 2012 through June 30, 2014. All sales have been trended (or adjusted for time) to June 30, 2014.
“The valuation for Elbert County performed very well in terms of value levels and equity. We measure performance based on standards set by the State of Colorado and by the International Association of Assessing Officers (IAAO). These are standards and guidelines for mass appraisal valuation methodologies,” Assessor Mills said.
Jefferson:
Assessor Ron Sandstrom reported that as of June 30, 2014, the estimated value of single family residential property in Jefferson County has gone up 20 percent on average. The average value of a residence in Jefferson County in 2008 was $285,000. For 2015 that value has risen to an estimated $321,000, a 12 percent increase.
“These increases are a result of the change in the economy, a low inventory of residences and high demand for these properties,” Assessor Sandstrom said.
Final property tax bills months away
something to be aware of...property taxes are increasing...
from denverpost.com
Homeowners across the northern Front Range can expect sticker shock when they see the big jump in property values that county assessors are now informing them of.
The valuation notices, however, don't answer how much property taxes will bite until a complex set of discussions and calculations take place over the next several months, resulting in final tax bills out in January.
"I don't know what the taxes on my house will be," Denver assessor Keith Erffmeyer admits.
Denver home values are up 29.6 percent between June 30, 2012, and June 30, 2014. But that is only a median. Home values rose a startling 69 percent in Globeville, with nearby Elyria-Swansea at 68.3 percent.
Higher taxes are on the way, but they won't match the increase in property values dollar for dollar, assessors said.
For starters, those who disagree with the value assessors have determined get until June 1 to protest and knock them lower.
Property owners can appeal if they don't like the assessor's decision on the initial protest. Once the bulk of those protests and appeals are handled, by August, assessors can certify the overall property tax base in their counties.
Once that happens, the various taxing districts can set their budgets, which in turn will determine the tax rate or mill levy, within the limits set by state law.
For the past two assessment cycles, the focus has been on falling or flat values, not rising ones, keeping the protests at a minimum.
But with increases so large across so many parts of the metro area, assessors expect a bigger reaction.
Denver has only 25 appraisers spread across 214,000 properties, Erffmeyer said. Corbin Sakdol, the Arapahoe County assessor, said he has 33 licensed appraisers, plus another 30 staffers, to deal with 206,000 properties.
In its favor, Denver has a 311 call center where staff members are trained to field queries on property values and quash any non-starters, a resource that other counties lack.
Sakdol said outsourcing to a third-party call center would have required extensive training of outside staffers, so he decided to keep it in house.
"We are optimistic we won't have lines like the Department of Motor Vehicles," Sakdol said.
Protest protocol
The first step to a successful protest is knowing whether one is even worth pursuing, said Dariush Bozorgpour, principal of Property Tax Advisors in Aurora.
Bozorgpour said he files protests in only about four of every 10 requests for help. He recommends people research comparable home sales available on real estate websites or from a friendly real estate agent.
Any comparable sales must be before June 30, 2014, the cutoff used by assessors — the closer the better.
Those likely will confirm what the assessors found, but that doesn't mean there aren't other avenues. Bozorg pour said if homeowners can prove their homes are in poorer condition than those used in the comparable sales, they might have a case.
That could include a leaky or worn roof, an unfinished or moldy basement or an interior replete with 1970s wood paneling and avocado appliances. Photos should suffice, although Erffmeyer said he had one taxpayer cut out and bring in a piece of groovy shag carpet.
Homeowners also have a stronger hand if they can show an appraisal, say for a mortgage refinance, before and near the June 30 cutoff.
Assessors said they understand why some property owners, especially those not following real estate trends, may get upset when they see how much values have increased.
But they need to understand the gains are over two years, not one. And they need to understand the math behind the big increases that can follow big losses.
A home that lost half its value in the downturn would need to increase by 100 percent to just get back to even. The largest percentage increases are coming primarily in neighborhoods hit hardest by foreclosures.
An interesting side note is that if a large number of protests succeed, those who don't raise a fuss could end up shouldering more of the overall tax tab — not unlike how the water drinkers get shortchanged when the wine drinkers in a dinner party suggest splitting the bill evenly.
After the property base is set, then the real fun can begin — drawing up budgets for local governments and special districts to determine the tax rate or mill levy.
In Arapahoe County, for example, there are 355 taxing jurisdictions, Sakdol notes.
Each jurisdiction will calculate its budget, in part based on the increases that higher property values allow, but also within limits set by the Taxpayer's Bill of Rights, Gallagher and other state rules.
Many local governments, including Denver, have received permission from voters to retain tax revenues that exceed TABOR limits.
But even in areas that have voted to exempt themselves from TABOR limits, it is unlikely that officials will seek a 20 percent budget increase to match the increase in values just because they can.
Citizens must engage
In Denver, the most property tax collections tied to the general fund can increase are 6 percent a year, a cap put in to protect taxpayers from the situation now taking shape.
Even if property owners don't have grounds to protest a valuation, they should weigh in as local budgets are set, advised Douglas County assessor Lisa Frizell.
"It is important for citizens to engage," she said.
Bozorgpour said he expects the fiercest challenges will come not from home owners but from owners of apartment buildings, who avoided the big value run-ups a decade ago but are now front and center.
Denver multifamily properties are up a median 33 percent in value, and Bozorg pour said he heard from one woman who had her apartment building's value boosted to $2.8 million from $1 million.
"She is just beside herself," he said.
from denverpost.com
Homeowners across the northern Front Range can expect sticker shock when they see the big jump in property values that county assessors are now informing them of.
The valuation notices, however, don't answer how much property taxes will bite until a complex set of discussions and calculations take place over the next several months, resulting in final tax bills out in January.
"I don't know what the taxes on my house will be," Denver assessor Keith Erffmeyer admits.
Denver home values are up 29.6 percent between June 30, 2012, and June 30, 2014. But that is only a median. Home values rose a startling 69 percent in Globeville, with nearby Elyria-Swansea at 68.3 percent.
Higher taxes are on the way, but they won't match the increase in property values dollar for dollar, assessors said.
For starters, those who disagree with the value assessors have determined get until June 1 to protest and knock them lower.
Property owners can appeal if they don't like the assessor's decision on the initial protest. Once the bulk of those protests and appeals are handled, by August, assessors can certify the overall property tax base in their counties.
Once that happens, the various taxing districts can set their budgets, which in turn will determine the tax rate or mill levy, within the limits set by state law.
For the past two assessment cycles, the focus has been on falling or flat values, not rising ones, keeping the protests at a minimum.
But with increases so large across so many parts of the metro area, assessors expect a bigger reaction.
Denver has only 25 appraisers spread across 214,000 properties, Erffmeyer said. Corbin Sakdol, the Arapahoe County assessor, said he has 33 licensed appraisers, plus another 30 staffers, to deal with 206,000 properties.
In its favor, Denver has a 311 call center where staff members are trained to field queries on property values and quash any non-starters, a resource that other counties lack.
Sakdol said outsourcing to a third-party call center would have required extensive training of outside staffers, so he decided to keep it in house.
"We are optimistic we won't have lines like the Department of Motor Vehicles," Sakdol said.
Protest protocol
The first step to a successful protest is knowing whether one is even worth pursuing, said Dariush Bozorgpour, principal of Property Tax Advisors in Aurora.
Bozorgpour said he files protests in only about four of every 10 requests for help. He recommends people research comparable home sales available on real estate websites or from a friendly real estate agent.
Any comparable sales must be before June 30, 2014, the cutoff used by assessors — the closer the better.
Those likely will confirm what the assessors found, but that doesn't mean there aren't other avenues. Bozorg pour said if homeowners can prove their homes are in poorer condition than those used in the comparable sales, they might have a case.
That could include a leaky or worn roof, an unfinished or moldy basement or an interior replete with 1970s wood paneling and avocado appliances. Photos should suffice, although Erffmeyer said he had one taxpayer cut out and bring in a piece of groovy shag carpet.
Homeowners also have a stronger hand if they can show an appraisal, say for a mortgage refinance, before and near the June 30 cutoff.
Assessors said they understand why some property owners, especially those not following real estate trends, may get upset when they see how much values have increased.
But they need to understand the gains are over two years, not one. And they need to understand the math behind the big increases that can follow big losses.
A home that lost half its value in the downturn would need to increase by 100 percent to just get back to even. The largest percentage increases are coming primarily in neighborhoods hit hardest by foreclosures.
An interesting side note is that if a large number of protests succeed, those who don't raise a fuss could end up shouldering more of the overall tax tab — not unlike how the water drinkers get shortchanged when the wine drinkers in a dinner party suggest splitting the bill evenly.
After the property base is set, then the real fun can begin — drawing up budgets for local governments and special districts to determine the tax rate or mill levy.
In Arapahoe County, for example, there are 355 taxing jurisdictions, Sakdol notes.
Each jurisdiction will calculate its budget, in part based on the increases that higher property values allow, but also within limits set by the Taxpayer's Bill of Rights, Gallagher and other state rules.
Many local governments, including Denver, have received permission from voters to retain tax revenues that exceed TABOR limits.
But even in areas that have voted to exempt themselves from TABOR limits, it is unlikely that officials will seek a 20 percent budget increase to match the increase in values just because they can.
Citizens must engage
In Denver, the most property tax collections tied to the general fund can increase are 6 percent a year, a cap put in to protect taxpayers from the situation now taking shape.
Even if property owners don't have grounds to protest a valuation, they should weigh in as local budgets are set, advised Douglas County assessor Lisa Frizell.
"It is important for citizens to engage," she said.
Bozorgpour said he expects the fiercest challenges will come not from home owners but from owners of apartment buildings, who avoided the big value run-ups a decade ago but are now front and center.
Denver multifamily properties are up a median 33 percent in value, and Bozorg pour said he heard from one woman who had her apartment building's value boosted to $2.8 million from $1 million.
"She is just beside herself," he said.
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