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Buying a Second Home in Colorado

Buying a Second Home in Colorado

by Susie Cortright, Broker Associate, RE/MAX Properties of the Summit, RSPS, PSA

Do you spend your free time scrolling through online listings of cozy ski condos – or second homes perched on ridgelines, enveloped in powder? Do you routinely imagine yourself there, taking it all in, steam rising from your outdoor hot tub as you enjoy the life—or at least the occasional weekend—of retreat and restoration?

It might be time to consider buying a second home in Colorado.

As a Realtor, certified Resort & Second Home Property Specialist (RSPS), and a long-time Breckenridge local, it’s my privilege to give you some insider info – both the short- and long-term advantages of buying a second home in Colorado, as well as some important cautions and considerations.

First, the positives…

Advantages to Buying a Second Home in Colorado

1. Possibility for Long-Term Appreciation

Summit County Real Estate Buyer's Handbook

Download Susie’s 13,500-word PDF, The Summit County Real Estate Handbook (Buyers Edition) for essential knowledge of real estate in Breckenridge and Summit County, written exclusively for buyers.

There are two reasons that vacation properties like those in Summit County are generally considered to be poised for appreciation: One, they are located in areas that are popular among visitors and other vacation homeowners, and, two, the supply of homes here is limited.

Of Summit County’s 619 square miles, about 80 percent of it is public land, managed by either the Forest Service or the Bureau of Land Management. That means only 20 percent of land in Summit County is privately owned and managed. (Source).

Once you own a piece of this paradise, you can realize the appreciation over the long term. All while you are enjoying that aforementioned hot tub.

And while no one has a crystal ball and real estate valuations can be affected by any number of events outside our control, certainly, at this time, prices are trending upward. In 2016, across Summit County, we saw a 7.9% increase in Average Sold Price. Breckenridge’s Average Sold Price was up 9.4% and Keystone’s was up 9.1%. (Read the latest market stats.)

2. Potential for Rental Income

Own a vacation property in a desirable area, and you have the added benefits of being able to short-term rent the property when you aren’t in town to enjoy it yourself.

In our resort market, vacation homes are really best thought of as lifestyle purchases, and the rental income is best thought of as something to offset your expenses.

There are ways to maximize your rental income however–by finding the right property, choosing the right vacation rental management company, and making the property available during peak rental times, for example.

As someone who studies rental income from various listed properties, I have seen a number of increases in year-over-year gross rental figures. One Ski Hill Place and ski in, ski out homes in Breckenridge seem to be doing particularly well in the rental market and occupancy rates are high across a great variety of properties.

As Denver and its surrounding communities continue to grow, many of these Coloradans are spending extended weekends and longer vacations in the High Country. Summit County is perfectly positioned to take advantage of the rising population in Denver and the rest of the Front Range. We are, after all, less than a two-hour drive away—and a world apart.

Another nice thing about purchasing a second home in a highly desirable area: there are plenty of people and organizations to help make the process easy for you. And if you choose to offer your second home on the short-term rental market, there are a great variety of solutions to help you take care of the tasks associated with renting it out.

A word of caution: Make sure to discuss your plans for renting out the property with your Realtor before you begin looking, especially if you are considering single family homes. Some subdivisions/HOAs prohibit short-term rentals altogether.

If you do plan to rent out your second home it’s important to be aware that rental income can vary greatly – across the four seasons, and across the years. I can provide you with any available figures about historic or projected rental income, but these past figures may not predict the future.

It’s important to note that, on many Breckenridge and Summit County residential properties, buyers will realize a cash flow only with a substantial down payment, and, even then, they may have a property that just breaks even – a “cash flow neutral.”

Even so, keep in mind that your equity in the property will increase as you continue to pay your mortgage. And if the property also increases in value while you own it, you can gain considerable equity. There may also be tax advantages, which we’ll discuss in a moment.

So, what kind of rental income can you expect?
The answer depends on the property and on what kind of marketing and property management you employ. Again, I can always get rental income projections for you from property management companies. But here’s some basic information to help guide your decision.

Generally speaking, if you want to offer a property for short-term rental in Summit County, we’re going to be looking for those properties with past annual gross rental income between 5% and 10% of the purchase price. (More if we can find it.)

Consider that property management companies will take 25% to 50% of your gross rental income as their fee. (I have a resource to help you navigate those companies/fees, and I’ll share it with you as we get started down that path.) Depending on the location of your unit, you also have the option of running your property management yourself, through sites such as VRBO.com, but then you are using your own time and money to market the property, so there’s some costs associated with that, as well, if only opportunity costs.

Rental numbers will vary, again, due to location, amenities and time of year. Of course, ski in, ski out properties command the most each night, and so do properties with attractive amenities. (A hot tub is a must.) Here’s my collection of properties with particularly high short term rental income in relation to list price. It’s a good idea to bookmark that page. It’s changing all the time.

3. Potential Tax Advantages.

I am not a tax advisor and this is not tax advice (so discuss this with your tax professional),  but I can tell you that purchasing a second home in Colorado may allow you to take advantage of certain tax deductions. If you choose to rent out his home, you will be able to take advantage of more deductions.

I write about this in more detail here: Tax Deductions for Second Homes, but here’s a quick explanation:

If you use your second home primarily for your own enjoyment (in other words, you rent the home for fewer than 14 days each year), you can deduct your property taxes and your mortgage interest, just like you do with your primary residence, as long as the debt secured by these homes (combined) does not exceed $1.1 million.

If you use your second home as an investment property and rent it for more than 14 days you are required to claim the income but can also deduct a number of expenses related to the rental activity, as well as depreciation. This is the deduction that allows for wear and tear on the home and it can result in significant tax savings.

If the second home is an investment property, you can also take advantage of a Section 1031 Exchange by which you can purchase a second investment property without paying tax on the sale of the first property. (The payment of this tax is deferred.)

In other words, you can use a 1031 exchange to defer taxes on the capital gain of the real estate, and you can use the depreciation deduction to help with your taxes on the property’s cash flow. Read Tax Advantages for Second Homes and my guide to 1031 Exchanges. IRS Publication 527 covers residential rental property, including vacation homes.

Again, you’ll want to speak with a tax professional and/or a Qualified Intermediary (for 1031 exchanges). I have some good contacts if you need them.

4. Second Homes Lend a True Sense of Community.

Why do people choose a vacation home, rather than renting someplace new each time? Because it gives them a stake in the community they love. As a homeowner, you get to know the neighbors, the shop owners, the bartenders, the grocery store checkers. You are living like a local whenever you are here.

Or maybe you’re thinking ahead. Many people in our marketplace find a ski condo or second home while they are living elsewhere with the idea that they will eventually retire here, either in the same property or a trade-up property.

This consistent vacation home can give true cohesiveness to your family in a peaceful piece of paradise. This is a place for everyone to get together, away from the distractions of everyday life. On some visits, you might invite friends and family along. For others, maybe it’s just the immediate family. In any case, the relationships forged in a vacation home are priceless. Such a home represents both a reason and a place to get together.

Especially with larger homes, many people purchase with the idea that this will be a legacy home where their families – immediate and extended – will continue to come and use as a respite for years and generations to come. Again, hard to put a price on that.

5. Quick & Easy Vacations.

When you have a second home, it’s much easier to make the vacation actually happen. If your cozy clothes and skis are in your Summit County second home (along with your mountain bike and kayak for the summertime) you are ready for adventure any time. Not to mention the plates, bowls, flour, sugar, salt, etc.

Hop in the car or on a plane and you’re a world away in no time, without having to worry about bringing along all of your gear – or renting it when you arrive.

 

So all of this sounds pretty good so far. But I always like to make sure would-be buyers understand the expenses and any potential downside to buying a second home in Colorado.

Cautions and Considerations when Buying a Second Home in Colorado

1. Real Estate Values Can Fluctuate.

Like all investments, real estate prices can rise and fall. As there are so many variables that affect a resort real estate market, no one can guarantee you that your second home will appreciate and certainly can’t guarantee that it will appreciate at any particular rate. All we can go by are historic figures and our knowledge of the past dynamics in our unique real estate market.

2. Financing can be (a bit) Costlier/Trickier.

On second homes and investment properties, most lenders are going to require at least 25% down, though there are exceptions. I recently met with a lender who can offer Investment Occupancy loan-to-value ratios of 85% and Second Home Occupancy loan-to-value ratios of 90% to qualified buyers.

Also, if you are looking at ski condos for your second home, note that any condos a lender may classify as a “condotel” or “resort condominium” can potentially be more difficult to lend on.

Condotels and resort condos are those hybrid properties that have particular features like a hotel, but each unit is individually owned. They may have a front desk, for example, and offer concierge service and lavish amenities, just as you might expect in a luxury hotel. Some examples of resort condos in Breckenridge: Beaver Run Resort, Main Street Station , The Village at Breckenridge, BlueSky Breckenridge, One Ski Hill Place and Crystal Peak Lodge to name a few. We do have local lenders in our area, however, who have already approved many of these properties.

Most of the loan programs we see on these types of properties are 5/1, 7/1, 10/1 ARMs and 10- and 15-year fixed rates. Just recently, a lender entered our marketplace, however, who can offer conventional 30-year lending on certain condo projects, including a number of those with an on-site front desk. We will talk more about your options here and I can introduce you to lenders, if necessary, as we begin working together.

On a related note, your homeowner’s insurance may be a bit higher on your second home. Renting the property may affect your rates, as well. Your insurance company may also have some additional requirements for using the property as a second home. For example, if your home is worth $500,000 or more, you might need to purchase a security system that automatically notifies someone if the temperature falls below a certain level. In the case of condos, most of the time you will just need to get contents and liability coverage for your individual unit.

3. There are a Variety of Expenses to Consider.

Before you buy, it’s important to be aware of these (sometimes hidden) costs involved in buying a second home in Colorado.

HOA fees. The HOA fees for single family homes tend to be fairly minimal, but for condos and townhomes, it’s typical to see HOA fees upwards of $400 a month. These fees might pay for snow removal, trash pickup, and cable TV, as well as on-site amenities such as hot tubs, fitness centers, pools, and saunas – or all of the above. Some Association’s fees even pay for electricity and heat.

Keep in mind that your HOA fees, whether a townhome, a condo or a single family home, will be included in your debt-to-income ratio, which your lender will use to determine whether you qualify for a loan.

The higher the HOA fees, the more amenities the condo probably provides. And that makes sense for some items, but maybe not others. If your complex has eight hot tubs and two pools, but you know you won’t ever use them, it makes no sense for you to pay for them (unless you plan to rent out your unit.) If they are part of your HOA dues, however, you will have to pay for them regardless of how much you use the amenities.

Utilities. One cost that sometimes takes people by surprise is the price of heating their Summit County property.

Anywhere it snows enough to ski through the middle of April, it’s going to cost a bit to heat your place.

The first home I owned here was a drafty little cabin at an elevation of 11,000 feet. We had a single wood-burning stove for heat, and so, in the depths of the wintry night—every single wintry night—I’d have to leave the cozy bed and feed the fire.

It was kind of romantic at this time of my life. (Not really. Not really at all.) But I truly don’t recommend it. Nowadays, there are a variety of ways to heat your home, and each has its benefits and its drawbacks. As your Summit County real estate agent, I will be able to educate you on a case by case basis.

Many of the newer properties are heated with in-floor radiant heat, which warms everything from the floor up. It keeps your toes nice and warm, even on the tile and slate floors. Gas fireplaces are common in Summit County condos, so if you have your heart set on one, I’m happy to make sure we look at the right properties.

Some of the newer construction is tremendously energy efficient. Some is not. And some of the older properties might be a little drafty. I’ve previewed units where my hair blew back when I stood at the window. (I won’t be showing you these unless, of course, you want a fixer-upper). The bottom line is that the price of heat should always be a consideration. As we look at properties together, we’ll pay close attention to the heating method and the utility cost for each.

Accommodation Unit License and Tax. Along with the rise in popularity of such sites as BookbyOwner.com and Airbnb.com, many resort towns are being a bit more deliberate in the ways that they license rentals and collect lodging taxes.

If you purchase a property in Breckenridge, for example, shortly after your closing, you will receive a mailing from the town’s Finance and Municipal Services Division. This letter will help you determine if you need an Accommodation Unit license and, if you do, what your fee will be. A license is required in the town of Breckenridge if you plan to rent the unit on the short-term market (“short term” is defined as fewer than 30 consecutive days.) Fees are based on the number of bedrooms and range from $75 to $175.

Real Estate Transfer Tax. Many resorts and ski towns (ours included) charge a real estate transfer tax. A real estate transfer tax is a one-time payment, made at the time of closing. The amount of real estate transfer tax in Summit County varies according to the location of the property purchased but will be either 0%, 1%, 1.5% or 2% of the total purchase price.

You can read more about this in my article Summit County Real Estate Transfer Tax, but here are the basics: Transfer tax is traditionally paid by the buyer, though this is negotiable. When we begin looking at homes, I’ll be sure to tell you the transfer tax rate of each property. In general, properties in Breckenridge and Frisco will have a 1% transfer tax. Some areas of Keystone have a 2% resort transfer fee and some areas of Copper Mountain have a 1.5% resort transfer fee.

Property Taxes. Many out-of-state buyers are pleasantly surprised at how low our Colorado property taxes are. For a complete explanation of how property taxes are calculated, read my in-depth post on the subject here.

Repairs, Maintenance, & Home Care While You Are Away. With second homes, you are not always on site if/when something goes wrong in the home. If you are renting out the home and have contracted with a vacation rental management company, these maintenance and repair issues will likely be part of your agreement.

If you are not renting out your home and the home is vacant when you are not here, our community does offer a variety of easy solutions, including a fairly large industry devoted to helping you with property management tasks – checking on the property, handling the snow removal, making sure heat tape is functioning property, etc.

There are also gadgets to help second home owners. One that we see on vacant homes in our marketplace is a Water Cop Leak Detection System. This is a series of sensors installed where leaks could occur (toilets, sinks, icemaker, etc.) If a leak is detected, the master plumbing valve is automatically turned off and a call is placed to the monitoring company, which then notifies you. Again, insurance companies like these types of systems and sometimes require them.

Especially in Summit County, it’s important to be aware of costs associated with snow plowing and snow shoveling. We’ve had so much snow this year, many of the area roofs needed to be cleared by mid-January and that comes at a cost.

4. Purchasing a Property in Place that is Somewhat Unfamiliar to You

Chances are, you know the real estate market and the most desirable communities near your primary residence. But vacation markets can have different real estate dynamics. There are also various other considerations depending on whether you want just a second home to share with family and friends – or you want something that will bring in some rental income.

That’s where a good local Realtor can really help you. She can help you find the best deals, the places that have historically seen the best appreciation, and the places where you will be happiest, based on your individual wants and needs. An informed Realtor is important, so choose a good one!

I hope this gives you a little sense for the pros and cons of buying a second home in Colorado. Of course, I’m always available to answer any additional questions you may have.

summit county real estate handbook buyers guideAnd if you haven’t already, I heartily recommend you download my Summit County Real Estate Handbook – Buyer’s Edition. This is a 13,500 word guide that goes into more detail on these topics.

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Purchasing Property in the Wildland Urban Interface

Real Estate and the Wildland Urban Interface

Purchasing property in a Wildland Urban Interface (WUI) brings with it some unique challenges and considerations.

Summit County, Colorado – the majestic home of Breckenridge, Frisco, Keystone, Dillon, Silverthorne, and Copper Mountain – has some of the most beautiful homes in the state. It is also a great number of properties located in the Wildland Urban Interface (WUI).

What is the Wildland Urban Interface?

The Wildland Urban Interface (WUI) is the zone that exists between unoccupied land and developed land. Typically, the WUI includes homes from 0 to ½ mile from this interface.

These areas are at an increased risk for wildfires. And that means property owners, along with local fire departments and insurance companies, have a great interest in safeguarding homes, in these areas in particular, against wildfire.

If homeowners don’t take action, homes in the Wildland Urban Interface could be subject to higher insurance premiums or even to non-renewals or cancellation of homeowner’s insurance policies. And if you’re thinking of buying or selling real estate in the Wildland Urban Interface, you need to know that a homeowner’s insurance company may even decide not to insure a new buyer.

Here are some things to consider when looking for property in the Wildland Urban Interface.

Buyers: Make sure your purchase offer includes a property insurance contingency.

The Colorado Contract to Buy and Sell Section 10.5 relates to insurability. It states in part, “Buyer has the right to review and object to the availability, terms, and conditions of and premium for property insurance.”

This section is important as it gives you, the buyer, the right to terminate the contract on or before the Property Insurance Objection Deadline, if you are unable to find property insurance that is satisfactory to you, in your sole subjective discretion.

Start the process of shopping for property insurance as soon as possible. Of course you want to know if your insurance company will insure the home, but you also want to know what to expect in terms of a premium for this WUI property.

If the property is non insurable or if the rates are cost prohibitive, you can terminate the contract and receive your earnest money back, so long as you do so by the Property Insurance Objection deadline stated in your contract. (Each state is different, so if you are buying property outside the state of Colorado, ask your agent about applicable contingencies for your state.)

If you need a referral to  homeowner’s insurance agents who understand our local market and the unique considerations for properties in the Wildland Urban Interface, contact me. I can provide some recommendations.

Buyers: Evaluate each home’s potential wildfire risk.

Much has been written about how to reduce the risk of wildfire on your personal property. The state of Colorado has published a comprehensive document with details on exactly how individual homeowners can reduce their risk (http://static.colostate.edu/client-files/csfs/pdfs/FIRE2012_1_DspaceQuickGuide.pdf) . Before looking at properties in wildfire prone areas, it’s wise to take a look at these mitigation procedures, so you can evaluate a home’s potential wildfire risk as you tour prospective properties with your agent.

Among the considerations as you look at homes in Colorado’s Wildland Urban Interface:

  • What is the home’s roof material? Wood and shake shingle roofs can be highly flammable. Instead look for asphalt shingles, metal sheets and metal shingles or tile, clay, concrete or slate shingles. (Note that some shake shingle roofs have been fire-rated and re specially treated with fire retardant polymers. Your agent should be able to tell you if this is the case.)
  • Are the roof and gutters free of pine needles and debris?
  • Are there unhealthy trees and shrubs around the home?
  • Have the owners/sellers created a defensible space around the home? “Defensible space” is the area around the home that has been changed or modified to reduce the fire hazard. Wildfire experts set recommendations for tasks a homeowners should complete in Zone 1 (from 0 to 30 feet from the home); Zone 2 (from 30 to 50 feet), and Zone 3 (100 feet from the home.) See the publication noted above for specific recommendations in these areas in regard to tree spacing, pruning of tree branches, etc.
  • Is there slash and debris on the property? How about a heavy accumulation of pine needles, twigs and other flammable organic material on the forest floor near the home? This material is termed “duff” and should be raked if deeper than 2 inches, especially near the bases of large trees.
  • Are there shrubs and small trees under large trees? These can carry a fire from the ground into the crowns of the trees.
  • Are there tree branches extending out over roofs and in the vicinity of chimneys?
  • Are there screens on vents in attics, roof, eaves, and foundation?
  • Is there a visible address sign at the road for fire and emergency vehicles?
  • Is the driveway wide enough for fire trucks to enter and maneuver?

Many property owners are learning more about defensible space and doing what they can to mitigate the potential fire danger of their property before they put their home on the market. As you tour homes in Wildland Urban Interface Areas, it’s a good idea to keep your eyes on the defensible space characteristics.

The considerations listed above are just a few things to look at. If you see that the home will require some fire mitigation after you take possession, it doesn’t have to be a dealbreaker (provided you can get reasonably priced property insurance on the home), but it’s a good idea for you to know what tasks may lie ahead. These tasks can range from simple and free to complex and costly (especially considering the cost of cutting and removing a single tree on your property can exceed $100.)

For Homeowners and Sellers

If/when you own the home, there are a number of tasks you can accomplish and resources you can take advantage of in Summit County to mitigate your wildfire risk.

Get a free defensible space evaluation.
In Summit County, your local fire department will visit your property and provide a free evaluation of the defensible space surrounding your home. It’s important to be aware that, once you receive this evaluation, you are not required to complete any of the tasks outlined, so don’t be scared to get the process started.

Depending on your area in Summit County, call:
Red White and Blue Fire Department (Hoosier Pass to Farmer’s Corner.)
970.453.2474

Lake Dillon Fire-Rescue (Dillon, Frisco, Silverthorne, Keystone, Montezuma, and Heeney)
970.262.5209

Copper Mountain Fire Department (Copper Mountain)
970.968.2300 ext. 831

Your local homeowner’s insurance agent may also be able to provide you with a free inspection for fire mitigation.

Take advantage of Summit County’s free Chipping Program.

Summit County helps its property owners create defensible space. When you clear the branches, logs and small trees from around your house and stack it, the county government will chip it and haul it away, all at no cost to you.

Visit www.co.summit.co.us/chippingprogram for more information and to get details on scheduling, starting in June and continuing through October.

It’s my sincere hope that this information helps you find your own special place in the woods. You can search Summit County homes and properties here. Or learn more about buying real estate in Summit County and Park County, Colorado.

You might also enjoy: 

For Buyers
Sign up for Free Email Notification of Properties that Fit Your Search Criteria.
Search the Summit County MLS
Summit County Map Search (Search for real estate by map)
How Susie Cortright Works with Buyers

Community Guides 
Breckenridge CO
Keystone CO

Coping with Low Housing Inventory

Four Tips for Finding a Home in a Low Inventory Market

Like much of the nation, Summit County is experiencing low housing inventory. But there are ways to cope with a tight housing market, and ways to increase the chances that you’ll find (and close on) the home that’s right for you.

When dealing with low housing inventory, it’s especially important to:

1. Get preapproved.

In a tight market, you want to be able to move quickly once you find the right home. By speaking with a mortgage lender before you even start your search, you do just that.

If you have a pre-approval letter ready to go – and ready to accompany a purchase offer – you will be giving the seller reasonable assurance that financing isn’t going to be an obstacle or an issue, and you’ll have a better chance of having your offer accepted.

Not only that, when you take the time to speak with a lender and get pre-approval, you’ll know, ahead of time, exactly how much home you qualify for, which can save you a lot of time in the long run. (Use my affordability calculator and mortgage calculator to get a ballpark idea. And contact me if you need a recommendation for a good local lender to get the process started.)

A preapproval letter from your lender is preferred over a prequalification letter.

What’s the difference between loan pre-approval and pre-qualification?
A lender may write a prequalification letter based on the financial picture you paint, without checking into anything. It is simply the lender’s estimate of how much you would be able to borrow if the information you gave is correct.

A preapproval letter, on the other hand, is usually something that has been verified by a third party. The lender generally issues this after you’ve applied for the loan and the bank has verified that the information you gave is correct. A preapproval letter says that the bank is ready to loan you a particular amount at a particular interest rate (as long as your financial picture doesn’t change before closing.)

At this point, you’ll also want to make sure your finances are in order and that you have a plan for securing your down payment. Do whatever you need to do so that you are ready to go when the right home comes along.

2. Find a Well-Connected, Creative Agent.

In a tight real estate market, it’s especially important to have an agent who is willing to get creative and dig a little.

A good, well-connected Realtor® will be able to find you properties you can’t find with a quick online search. She’ll have access to a wealth of information and resources that you might not have on your own. She may, for example, connect you with expired listings (properties with listing agreements that expired without a sale), withdrawn or canceled listings, and even For Sale by Owner options that you might not be aware of on your own.

Your Realtor® may also provide information on any New Construction developments in the marketplace, which may not appear in the traditional home-searching channels. She may send out “seller-wanted” mailings to the neighborhoods you’re targeting and network with other brokers about “coming soon” listings, as well as “pocket listings” (properties that are for sale but that, for some reason, do not appear in the MLS).

3. Sign up for Automatic Notification of New Properties.

Especially when inventory levels are low, it’s vital that you are the first to know about a property that fits your criteria.

Ask if your agent has a way for you to immediately learn about new listings. For example, I post Today’s New Listings here. I can also sign you up for automatic notification of new Summit County properties, to be sent to you the moment they come on the market.

If you’re in my market, you can sign up for these automatic notifications yourself here, or you can tell me what you’re looking for with this simple online form, and I’ll make sure you get signed up (as I also search the aforementioned resources on your behalf.)

4. Be Ready.

When you find the right home in a tight market, you want to be able to write an offer just as soon as you feel comfortable doing so. Go over the purchase offer paperwork with your Realtor® ahead of time — before it’s time to make an offer — so you know the process and the details of the documentation. If this is your first home, you can also familiarize yourself with the homebuying process by reading my article How to Buy a House.

These days, many of our real estate contracts are handled and even signed electronically, so you don’t even have to be in town to sign your offer. All you need is an accessible, reliable, tech-savvy agent.

Another tip for coping with a low inventory real estate market: When you do write your offer, make it as clean as you can. In other words, include only those contingencies that are necessary to protect yourself and your earnest money. (If you have a home you need to sell before you buy, it’s a good idea to get that taken care of first.)

With a little careful planning, you can still find a great home at a great price in a tight housing market.

If you’re searching here in Summit County or Park County, Colorado, I’m more than happy to help you personally. If you are out of my area, I would love to put you in touch with a well-connected and creative agent who can help you find the just-right home. Just reach out to me, let me know your location and a little bit about the property you’re looking for. I’ll do the rest.

Read my article, Why is Inventory So Low?

Related Resources:
Automatic Email Notification of Properties for Sale – Stay ahead with this handy tool.
Tell Me What You’re Looking for a in a Home (so I can find it for you…)
“How’s the Market?” Updates
How to Buy a House: A Comprehensive Guide
Summit County Real Estate FAQs

Inman: Why is Housing Inventory So Low?
Redfin: Why Aren’t There More Homes for Sale?

Search Summit County Real Estate >

How to Buy a House

how to buy a house

An in-depth, start to finish guide for homebuyers — from the first online search to the closing table.

[Editor’s note: At 5000 words, this is a comprehensive and lengthy post. I’ve done my best to make it scannable with subheadings and bold fonts, but you might want to treat yourself to a cup of tea or coffee before you dive in…]

One important note before we get started:
The transaction described below assumes a Colorado real estate transaction. In Colorado, our contracts are handled via forms approved by the Colorado Real Estate Commission. If you are purchasing property in another state, the process and paperwork will be different. Specifically, the options and requirements for terminating the contract will be different. If you are not buying a home in Colorado, you’ll want to talk with a knowledgeable Realtor who understands the process particular to your state.  If you need a referral to a Realtor in your area, please don’t hesitate to contact me. I’m happy to help you in any way that I can.

How to Buy a House

Buying a house can be one of the most exciting things you’ll ever do. It can also be among the scariest.

But it doesn’t have to be. Get prepared, and choose the right people to help you, and buying a home can be emotionally and financially rewarding.

How to Buy a House, Step One: Select Your Team

Now is the time to have experts in your corner. Find both a Realtor® and a lender you trust and there will always be someone there for you — someone to answer your questions and to let you know what’s next on the agenda. These professionals have made it their career to listen to people just like you as you get ready to make this major life decision.

It’s worth taking the time to make sure you choose the right professionals

Good Realtors do more than write contracts and show houses. They also preview homes, learn the intricacies of their market, dive in to data and statistics, and stay educated on the very latest in community issues that can potentially affect their clients. Good Realtors also spend time learning from and meeting with various service providers in the community so they can provide good, honest recommendations for other professionals you may need on your team.

At the start of this process, you will be choosing a Realtor and a lender (and a good Realtor will be able to give you recommendations on lenders.) Later in the process, a good Realtor will be able to recommend a good home inspector and other service professionals, including – if your situation warrants it — a good contractor, architect, interior designer, home warranty company, etc.

Choosing a Realtor

The real estate professional you choose to represent you makes a huge difference. You want an agent who is accessible, an agent who listens to you, and an agent who knows your local real estate market, inside and out.

If you are looking for a home in Summit or Park County, Colorado, I’m happy to help you find the just right property for you (Read more about how I work with buyers.) If you are outside Summit or Park County Colorado, you’ll want to ask your friends for names of Realtors who have gone above and beyond for them. You can also look online for someone who demonstrates knowledge and expertise in your area. If you’d like a referral to a good agent in your area, please don’t hesitate to contact me, and I’ll refer you to a Realtor who will take care good care of you.

Choosing a Lender

If you don’t already have someone in mind for your loan, once you have chosen a Realtor, you can ask for a list of good lenders in the area. In many areas, Realtors recommend working with a local lender. This is particularly true in my marketplace, as we have many vacation homes and investment properties, and local lenders understand the intricacies of our unique resort market.

Why work with a local lender? Good local lenders know our local HOAs. They are familiar with the HOA documents as well as the strength of the HOA’s finances. They know about special assessments that may apply to a property. They know how to deal with second homeowner situations, short term rentals, well and septic systems, and the list goes on.

A local lender will also be in tune with special financing options for special situations that are common in your area. In Summit County, Colorado, for example, we have a number of condos on the market that can require special financing due to the fact that the building has a front desk and operates much like a hotel with short-term rental management. Local lenders will also be up to date on all of the different programs available to you in your financial situation, and whether you might qualify.

Lenders who do not have a local presence may attract you with a nationally advertised (and very low) teaser rate. But, especially if the lender doesn’t have a presence in your local area, this rate can change. What’s more, if the online or nationally-based mortgage company uses an in-house appraiser who isn’t familiar with your local area, the entire deal could fall apart. (If the home doesn’t appraise for the loan amount or more, you’ll need to renegotiate, find funds to make up the difference, or walk away from the deal.)

When I give you my list of recommended local lenders, please know that I am not compensated for these lender referrals. These are simply professionals that I know are great to work with – and/or they offer a program that might be right for you.

The USDA loan might be one such program. This type of loan, available in rural areas (including the Summit County, Colorado marketplace), allows qualified buyers to finance up to 100% of the home’s appraised value or sales price, whichever is lower. And a USDA loan allows your closing costs to either be paid by the seller or rolled right into the loan. (Read my guide to USDA and FHA loans for more details.)

Even before you begin house-hunting, you can talk with your lender about the kind of loan that makes the most sense for you and for your financial situation. Whether that’s a fixed rate, an ARM, a 15-year term, or a 30-year term, a good local lender will be able to help you navigate through this decision by examining your credit, your income, your living expenses, your debt, and asking questions specific to your situation, such as how long you plan to live in the new home. (Read more in my article Summit County Mortgages: Tips for Getting the Right Home Loan.)

How to Buy a House, Step Two: Determine What You Can Afford

Your Realtor and your lender can help you determine just how much home you can afford. And it’s better for all if you figure out this dollar figure before you go looking.

Why is it important to talk to a lender before you go home shopping?

  • It helps you to know exactly what kind of home you can afford. Talking to a lender first gives you a grasp on your price range that will help you save all kinds of time.
  • It strengthens your offer when you find the home you want to make an offer on.

A pre-approval letter from a lender is going to strengthen any offer you write. If the seller has reasonable assurance that you qualify for this loan, they have reasonable assurance that the deal is going to close in a timely fashion.

And it’s best to get a pre-approval letter, when the time comes to write an offer, over a pre-qualification letter.

What’s the difference between a pre-approval letter and a pre-qualification letter?
A lender may write a pre-qualification letter based on the financial picture you paint, without checking into anything. It is simply the lender’s estimate of how much you would be able to borrow if the information you gave is correct.

A pre-approval letter, on the other hand, is usually something that has been verified by a third party. The lender generally issues this after you’ve applied for the loan and the bank has verified that the information you gave is correct. A pre-approval letter says that the bank is ready to loan you a particular amount at a particular interest rate (as long as your financial picture doesn’t change before closing.)

Getting pre-approved and using a local lender is the best way to help ensure a smooth transaction, all the way to closing day.

How much debt do you feel comfortable with?
Throughout this process, it’s important to keep in mind that a bank may give you approval for a loan that is larger than you might actually want. Just because the bank says you would be eligible to borrow a certain amount doesn’t always mean it’s best to do so. Only you know what kind of debt you’ll feel comfortable with, and how much of your income you want to have going toward your mortgage payment. (Use my Mortgage Calculator for ballpark figures.)

How Much House Can You Afford?

To begin determining how much house you can comfortably afford, you can use my Affordability Calculator. Know that lenders often will cap monthly housing allowance (including taxes and insurance) by the lesser of two ratios: 28% (from your gross income) and 36% (from your gross income including other monthly debt and payment obligations).Other factors are considered here, of course, but the highest debt-to-income ratio you can have and still be eligible for a Qualified Mortgage is generally 43%.  

To determine affordability according to these guidelines, simply enter the following values in the affordability calculator.

  • Monthly Gross Income
  • Monthly Debt Expenses
    Include:
    * Monthly Credit Card Payments
    * Monthly Auto Payments
    * Monthly Child Support
    * Monthly Association Fees
    * Other Monthly Obligations, but NOT utility bills.
  • Down Payment
  • Interest Rate

As another rule of thumb for setting your initial budget, lenders often recommend sticking to homes that are two to three times your annual income. Again, lenders don’t like your monthly mortgage payment to be more than 28% of your monthly gross income.

Generally speaking, you can avoid the cost of Private Mortgage Insurance (PMI) by having 20% as a down payment. If your down payment is less than 20%, this PMI will allow you to put down a lesser amount and pay a monthly premium, along with your mortgage payment, until you reach that 20% loan to value ratio. This can take years, depending on the size of your down payment. (Also note that, with FHA loans, this premium does not go away after a certain loan-to-value ratio is met and is with you for the life of the loan.)

Of course, owning a home comes with certain expenses you may not be accustomed to paying, including home improvement and maintenance costs, as well as property taxes, homeowner insurance premiums, and HOA fees, so make sure you aren’t draining your savings or your emergency fund to make your down payment.

You will also need some cash on hand just to cover the expenses of moving. As a homeowner, it’s always wise to have a cash reserve for unexpected home expenses, such as appliance or plumbing repairs.

How to Buy a House, Step Three: Tell your Realtor What You Want and Need

Note the process is explained below through the lens of how I personally work with my clients. If you are not in my area, and you need a referral to a good, accessible agent who communicates well and will work with you closely throughout the entire process, please don’t hesitate to reach out to me. I’ll do some digging so I can refer you to a good agent in your area.

When I start working with a new buyer, I start with a set of detailed interview questions to determine what you absolutely must have in your new home, what would be nice to have, and what you absolutely do not want to have.

We will talk about general items, such as property type, price range, square footage, number of bedrooms and bathrooms, of course, but we’ll also talk about features such as fireplaces, main floor master bedrooms, garage and parking options, storage areas, heating systems and their corresponding costs, as well as lot size, home office suitability, fixer-upper vs. move-in ready, area amenities, neighborhoods/communities, and proximity to local recreational amenities.

I will also ask you about your intentions for the property: whether it’s for full time personal use, a vacation home, short term rental, or investment purposes. We’ll talk about how long you plan to live in the property, which will help guide your choice of loan as well as the areas we focus our search on, as some areas may be easier than others to sell in the short term market.

It’s possible, of course, to begin your home search online, and I encourage you to do so. But talking with a Realtor who really knows an area can save you a great deal of time.  Make sure the Realtor you choose spends time asking you what you really want and what is really important to you – and listens carefully to your answers.  And make sure the Realtor has been in a number of the homes you are looking at. I spend a good deal of time previewing homes as they come on the market, so that I know firsthand what a home looks and feels like inside.

Also keep in mind that information you find online can be deceiving. Technology allows us to see numerous photographs and virtual tours of property, but these depictions aren’t always entirely representative. A wide angle lens can make rooms and even lot sizes appear larger than they really are. Don’t make the mistake of falling in love with a property online, and then have your hopes dashed when you see it in person. It’s best to get in there and get a feel for the place (or send your Realtor to preview it for you). Andrew Fortune’s post Looking at Homes Versus In Person addresses this issue well.

After our initial interview, and after I know what kind of property you’re looking for, I will set you up for automatic email notifications so you can be alerted as soon as a home that fits your criteria comes on the market. That way, you stay ahead of the market. When you see a property you like, just say the word, and I’ll make the necessary arrangements for us to visit it together.

I will also enter your search criteria into our Multiple Listing Service (MLS) database and prepare detailed reports of any properties you are interested in. (You can also search the Summit County MLS anytime for yourself here: http://www.susiecortright.com/homes-for-sale-search/ ).

I can also research all For Sale by Owner properties (FSBOs), as well as expired listings, withdrawn and cancelled listings for additional potential matches. If we still aren’t finding the just right home, I can broadcast your needs and wants to other real estate professionals, in the hopes that someone has a pocket listing or knows about a property that is soon to come on the market.

(Read the other things I do for buyers to help them find the perfect home).

Together, we will look at and investigate the properties you’ve chosen until you find one you love.

How to Buy a House, Step Four: Make an Offer

Once you’ve found the just right home, in your predetermined price range, it’s time to write it up. Once again, I’ll as you a series of questions…

Deciding What to Offer

Now it’s time to make an educated and informed decision about the dollar amount you wish to offer for the property, and your agent can help you with this.

If your Realtor is working as your Buyer’s Agent, she’ll be able to offer you advice here.(Read my “Insider’s Guide” PDF  – or contact me – for a detailed description of the difference between a Buyer’s Agent and a Transaction Broker).

When acting as your agent, I will tell you as many details as I can about the individual property as well as the pertinent details about the real estate market in your area.

Some of the things I’ll do:

  • Present you with comparable properties in a Comparative Market Analysis (CMA) that I create for the home. This will tell you what comparable homes have recently sold in the area, and for how much. It will also tell you what houses are stuck on the market.
  • Discuss the home’s history in the marketplace. Together, we’ll look at the length of time the home has been on the market. Many times, we don’t know anything about a seller’s situation, but sometimes you’ll have indications, even in the MLS, that the seller is motivated.
  • Discuss the list-price to sales-price ratio for recent sales in the area.
  • Calculate average sold prices and absorption rates. We want to know what home prices are doing and what kind of market we’re looking it. We do this, in part, by figuring the absorption rates for the area and price range you are looking at. (See my article “Absorption Rate in Real Estate: What it is and Why It Matters.”) If we are in a seller’s market, it’s often best to submit a strong offer right off the bat, with fewer contingencies. If you are in a buyer’s market, you can be a little more aggressive with your initial offer. Again, we’ll use data to help guide your decisions.

These statistics and your Realtor’s insight can help guide you toward an offering price.

Of course, YOU always choose the offering price and conditions.  The agent can offer data, guidance, and market analyses – and your agent will write and present the offer, but as the buyer you will ultimately choose the offer itself.

Next, your agent will offer guidance in respect to earnest money. She will likely give you guidance on how much earnest money would be appropriate.  A higher dollar amount will strengthen your offer, of course, but it’s also money that’s at risk if anything goes wrong. Again, this is a decision you can make, based on your unique situation and the offer you wish to present.

Your Realtor will then discuss the contingencies you will need in the offer. These are particularly important because they represent events that will allow you to back out of the sale in order to protect yourself (and your earnest money) in case something in the deal turns out to be unsuitable. For example, you will likely have a contingency for your financing (so, you can terminate the contract if you are not able to find a suitable loan). You will also likely have an inspection contingency, in which you can terminate the contract if you find that a condition of the home is not suitable.

It’s vitally important that the deadlines of all contingencies are met – otherwise you can be in breach of contract and your earnest money will be at risk. A good Realtor will help you keep all these on track.

Your Realtor will ask you if you would like to request any seller concessions. And then she will go over the Dates and Deadlines portion of the offer.

Your agent should go over the fine print of the offer with you until you have a firm understanding of what you are signing. At this point, you can sign the paperwork in person or you can do so electronically. This is how most of our transactions are handled and it makes everything secure while also making it quick and convenient for all.

The agent will then submit your offer to the listing agent, after which she will represent you in any corresponding negotiations.

Once an agreement is reached and the offer is signed by both parties, the offer becomes a contract. You are now Under Contract. The listing goes to “Pending” and you and your agent begin the work that is required to make this pending sale your home.

How to Buy a House, Step Five: Call in the Team

Now it’s time to work through the contract, step by step, in preparation for closing day.

I always start by giving the buyer a calendar of Dates and Deadlines to be aware of as we progress through the contract. I also check in at least every few days with status updates as well as reminders of deadlines that need to be met from the buyer’s end.

I will then turn in the earnest money to the party designated in the contract. The receipt is recorded and a copy sent to the buyer. I will then have more paperwork for you to sign, such as the Seller’s Property Disclosure, and Square Footage Disclosure Form. I will share with you the HOA documents, including bylaws and financials provided by the listing agent and seller. And we will go over the title commitment when it comes in, as well as any information about easements or liens that is discovered in the process.

I will provide you with a list of recommended professional home inspectors. A home inspection is not required for the transaction but most Realtors highly recommend it. (I always do.) Inspections are designed to protect you. The cost of these will vary with the area and the home but typically run between $300 and $600.

If you find an issue, you have until your Inspection Objection deadline to make an objection. Your Realtor will draft your objections in an Inspection Objection document, and present it to the sellers via the listing agent, at which point negotiations begin again.

Sometimes, a reduction in the price is awarded so you can fix the items yourself. Sometimes the seller offers to fix certain items (and sometimes asks you to live with others.) If the inspection reveals something that makes you want to terminate the contract altogether, you must do so by the Inspection Objection deadline, or your earnest money will be at risk.

Note that you do not need a professional inspection to make an inspection objection. An objection can be made via your own personal inspection. The professional home inspectors I can refer you to are very thorough and can give you good, detailed reports of everything, including, if you request it, infrared thermography, which can detect such ordinarily hidden problems as plumbing leaks, broken window seals, and problems with heating and cooling systems. Depending on the property and the area, you may want to request radon testing, a well and septic inspection, and a mold inspection, in addition to the general property inspection. Typically, these are paid for at the time of the inspection.

Keep in mind that the seller does not have to remedy these inspection objections and, if both parties can not come to an agreement by the Inspection Resolution deadline stated in your contract, then you would then have the opportunity to terminate the contract, get your earnest money back and continue your home search.

Get Homeowner’s Insurance

You will also need to select a provider for your homeowner’s insurance. Your lender and Realtor can help give you some guidance in this area, as well. All policies are different, but basic homeowner’s insurance typically covers things like fire, theft, storms, vandalism and liability if an injury occurs on your property. Look closely at all inclusions and exclusions of your particular policy, as floods and earthquakes are often excluded from general coverage. You can get quotes by looking online or by calling a homeowner’s insurance agent, who can give you quotes on a variety of plans.

In very broad terms, and just for estimating purposes, multiply the value of the home by .0025 to get a ballpark estimate of annual insurance cost.  This assumes a deductible of $1000 and that the insured value of the home is the same as the list price.

Call Your Lender

Unless you are paying cash, you will need to apply for your loan by the Loan Application deadline stated in the contract.

Within 3 business days of applying for your loan (and often sooner), you will receive a Loan Estimate,a three-page document which will help you understand the costs and risks of the loan you are applying for.

If you are financing the home, your lender will order an appraisal to be completed before the appraisal deadline in your contract. If you are paying cash and you wish to have an appraisal completed, your agent will be able to help you find an appraiser.

If you are getting a loan, experts say, you should budget between 2% and 5% of the purchase price in closing costs. Closing costs will vary depending on your loan and the terms of your contract, so ask your agent to go over possible costs inherent to your transaction. Closing costs may include such items as title insurance, real estate transfer tax, prorated interest on your loan, an annual premium for homeowner’s insurance, plus two months of premiums to be put into escrow.

The biggest expense will likely by your lender fees. Expect to see appraisal fees. There may also be HOA escrow fees, depending on the HOA bylaws. Every loan and real estate contract is different, and you and your agent can sit down together and discuss the expenses you will incur.  Here’s a Closing Cost Estimator to help you get a general idea.

Getting It All Done (On Time)

The agenda and timeline for the tasks above will vary depending on the contract, and there may be other dates, deadlines and responsibilities, also depending on the contingencies of your individual contract.

Through it all, your agent will maintain contact and communication with the other parties to the transaction through the listing agent.

A few mistakes to avoid: if you are purchasing with a home loan, know that the approval was given to you based on a particular financial picture. Whatever you do, don’t change this picture. In other words, don’t close out accounts. Don’t give away large sums of money. Don’t incur new debt or take on new loans. Many real estate deals have fallen apart because a buyer decides to finance a new car just before closing, for example. Don’t let this be you.

Another important piece of advice: Make sure you ask ANY and ALL questions you have along the way. There is no such thing as a dumb question to a real estate agent. We fully understand that, while we do this all the time, most people do it only a few times in the course of their lifetimes. So ask away!

A Few Days Before Closing

Shortly before closing day, you and your agent will meet at the property once again for a final walk-through. Here, you will make sure everything is in order and that all fixtures and other items are still in place and operational, according to the terms of the contract.

Around this time you’ll also receive information on the amount, in certified funds, that you’ll need to bring to closing. Your broker will share a Buyer’s Settlement Sheet with you, which will give you all of your costs and fees broken down, line by line, and will tell you how much you’ll need to bring to closing.

Before closing, you will receive a Closing Disclosure, a 5-page document designed to help you understand all the costs inherent to your transaction. This Closing Disclosure form will need to be provided to you at least three business days before the date on which you become contractually obligated for the loan (the “consummation of the loan.”)

At this point, you’ll want to make sure to have “good funds” for the amount due at closing. Goods funds are those that will be immediately available to the title company upon deposit, so you’ll need a Cashier’s Check or you’ll need to have made a wire transfer to the title company, so the transaction will fund on your closing date and time.

How to Buy a House, Step Six: Sign the Papers & Get the Keys

Closing Day

When closing day comes, you’ll need your photo ID, your “good funds,” and any paperwork requested by the title company. This may include certification of your homeowner’s insurance. Your agent will tell you what else you will need to be fully prepared.

Once you are sitting at the closing table, all dates and deadlines should be met and the loan should be ready to fund. (Section 4.4.2 of the Colorado Contract to Buy and Sell states:All funds, including the Purchase Price to be paid by Buyer, must be paid before or at Closing or as otherwise agreed in writing between the parties to allow disbursement by Closing Company at Closing OR SUCH NONPAYING PARTY WILL BE IN DEFAULT.”) In other words, you and your broker will need to make sure that everything is on track and all funds are paid on time, according to the terms of the contract.

At closing, you will have a stack of papers to sign, most of which will have to do with your loan. Once all of the papers are signed, the title company will pass them along to the mortgage company, and the transaction will be funded. If you are using a local lender, the transaction may be funded before closing, and you’ll get the keys. In some cases, you might get the keys a few hours later, or even the next day. Again, every transaction and closing is different, but once your agent hands you the keys, it’s a done deal.

Congratulations! You own a home!

Get Help Anytime

There are many moving parts to a real estate transaction. If you have any questions or need any help, please don’t hesitate to reach out to me and/or check out the following related resources:

Related Articles from the World Wide Web:
Financial Mistakes of First Time Home Buyers, by Bill Gassett
How to Avoid Home Buyer’s Remorse in Real Estate, from the Rochester Real Estate Blog, powered by Keith Hiscock & Kyle Hiscock

Foreclosed and Bank Owned Homes in Summit County, CO

Breckenridge and Summit County, Colorado typically do not have many foreclosures, and, today, we have very few. Here’s how to be the first to learn about the distressed properties that do come on the market, and how to find great deals on all property. 

It’s a question that comes up a lot when homebuyers want to make sure they are getting the best deals possible. “Aren’t there any foreclosures or bank owned homes in Summit County?”

The fact is that, like other Colorado ski resort towns, Summit County typically does not have many foreclosures, and, today, we have very few.

Because the Breckenridge and Summit County real estate market features not just primary residences but also a great number of vacation homes and second homes, our real estate market has intricacies that make it different from other markets.

Sellers in our market may, for example, be less motivated to sell because there exists the possibility of renting out the home, in either the long-term rental market or the short-term rental market, until the market is more conducive to a sale at the price the seller wants.

Additionally, many of the homeowners in our market are not highly leveraged. If a property is purchased with cash or with a significant down payment, the rate of foreclosures is, of course, decreased.

While foreclosures, bank owned properties and short sales are not common in Summit County, they do happen. If you would like to be notified of these distressed properties, when they come on the market, please simply send me a message with the type of property and price range you’re looking for and ask to be added to my Foreclosure, Short Sale, and REO Notification Bulletin. I’ll send you a message each time a foreclosure – or other distressed property that matches your criteria – hits the market.

Foreclosed Homes in Summit County: The Process

So what happens when a home enters foreclosure in Colorado? When a homeowner is in default for a certain length of time on mortgage payments, a property will enter the foreclosure process.

Homeowners actually have a specified time to cure the default before the home is foreclosed upon. Many times, a homeowner will work out a solution with their lender. Perhaps their home will be sold through a short sale, a sale of property in which the sales price is less than the actual debt owed on the property.

But if the foreclosure process begins, it does so according to a very strict timetable, which, for Summit County, is explained in detail here: http://www.co.summit.co.us/DocumentCenter/Home/View/371

The Summit County Public Trustee Office schedules foreclosure sales weekly on Fridays at 10 am at the Old County Courthouse, 209 Lincoln Avenue, in Breckenridge.

To view all properties in Summit County currently in the foreclosure process, visit the Public Trustee’s Foreclosure Search at the Summit County, Colorado website: http://apps.co.summit.co.us/ForeclosureSearch/index.aspx

But keep in mind that properties can be withdrawn from the public sale auction all the way until this date and time (Friday at 10 am), so, many times, there are no foreclosures available to bid on.

When bidding on foreclosure sales, there will be a maximum bid increment announced at the time of the sale. This amount will be based on the initial bid set by the lender and the appraised value of the property from the Summit County Assessor’s Office.

In order to purchase a property at the time of the public sale, you must have sufficient cash, certified checks, or a wire transfer to pay for the minimum bid. Read more about foreclosure bidding policies in Summit County: http://www.co.summit.co.us/DocumentCenter/View/6971

Of course, it’s important to keep in mind, always, that at a public foreclosure auction sale, you are buying the property “as is.”

Bank Owned Properties (REOs) in Breckenridge and Summit County

Properties that are not sold during the public sale auction become bank-owned properties, also known as Real Estate Owned Properties (REOs). These can be good deals, but they are often priced competitively to ensure the bank gets as much as they can from the property.

When dealing with REOs, the bank typically has taken care of outstanding property taxes (though, of course, you’ll always want to do a title search to make sure there are no surprises.)

Also, know that inspections on Bank Owned Properties (and all distressed properties) are especially important because these kinds of properties could be in fairly rough shape and are sold “as is.” No matter how good a deal it seems you’re getting, you want to make sure you know what kind of repair expenses you’re looking at.

Another thing to keep in mind when purchasing a Bank Owned Property, the process will likely take longer than a traditional sale, so you’ll need to be patient. (Sometimes very patient.)

Finding Deals Outside of Foreclosures, Bank Owned, and Short Sales

Many people ask about bank owned and foreclosed homes because they think they offer the best buy, but that isn’t always the case.

Give me a call at 970.389.8338 or send me a note to learn more about distressed properties in Summit County or to discuss your other options for finding the best value for your money in the Summit County real estate market.

Absorption Rate in Real Estate: What it Is and Why it Matters

Absorption rate in Real estate

by Susie Cortright

If you read my real estate blog, you know that I love data. I love analyzing real estate statistics, mining for trends, and using this data to help guide my clients’ decisions.

Among other statistics, I often like to cite absorption rates for a particular price range or other segment of the Summit County real estate market. This is a useful piece of information because it reflects the liquidity of a market.

For sellers, the absorption rate can help us to know how best to price a property. For buyers, the absorption rate can help us to know how negotiable a list price is likely to be and how likely the seller might be to allow certain concessions.

What is Absorption and Absorption Rate?

There are two ways to look at Absorption Rates. One is as a percentage, and one is in terms of the number of months it would take to sell the current inventory in a given market.

Absorption as a Percentage

Absorption is the rate at which homes are selling in a particular market (or segment of a market) during a particular period of time. It’s calculated by dividing the number of home sales in a particular month by the number of homes for sale at the end of that month.

If there are 943 properties listed for sale in Summit County and, in the past month, 159 sold, the absorption is 159/943 = .168, or 16.8%.

Calculated this way, if the absorption is higher than 20%, it is commonly thought to be a Seller’s Market. If the absorption is lower than 15% it is a Buyer’s Market.

Absorption Rates as Months of Inventory

More commonly, we see Absorption Rates expressed in terms of months. In other words, it is the number of months it would take for the current inventory to sell, under the current conditions.

Defined this way, the absorption rate in real estate is simply the number of months it would take to sell the homes that are currently listed.It tells us the rate at which a market – or a particular sector of the market – sells over a specified time frame.

This sector can be narrowed down and defined as, say, particular price range or a particular property type. So we might look at the Absorption Rate for the Summit County residential market. Or we might look at the Absorption Rate for, say, Breckenridge-area condos under $750,000.

With a little analysis, these Absorption Rates can help us to identify Buyer’s and Seller’s Markets, and they can help us compare the current market with the historical market, giving us a sense of where prices may be headed. (More on that in a minute.)

How to Calculate Absorption Rates

Calculating the absorption rate of any given real estate market or market sector is simple arithmetic.

As an example, we’ll calculate the absorption rate for Summit County residential properties, taking data current as of today. (July 15, 2015).

Absorption rate is typically calculated using the previous six months (or 12 months) of home sales.

1. We’ll begin by looking at the number of home sales in the past six months. In Summit County, at the time of this writing, 761 residential properties have sold in this 6-month time period.

2. To determine how many sold per month, we would simply divide 761 by 6 = 126.83. In other words, an average of 126.83 homes have sold per month.

3. There are currently 943 residential properties listed for sale in Summit County. In order to determine the number of months it would take to sell this much inventory, we would, of course, divide the number of homes currently listed by the number of homes that sell each month. 943 /126.83 = 7.43. That means we currently have a 7.43 month supply of homes for sale in this market. If the present conditions continue, and if no new listings were added or withdrawn, it would take a bit over 7 months to sell all of the residential properties currently on the market.

Why Absorption Rate Matters

Absorption Rates are just one of many indicators and metrics that we can use to get a feel for the current market. They become even more useful when you look back on past absorption rates and see how they compare with the current rates.

We can then apply the principles of supply and demand to predict certain things about the real estate market.

If you are listing a home and the absorption rate in the market has just dropped, a Realtor may advise pushing the price a bit — listing for a bit higher — because there is a trend toward high demand and lower supply.

If, on the other hand, an absorption rate has just increased — in other words, if the number of months of inventory has just increased – the market has slowed and a listing agent may advise that the price be set more conservatively. She would also notify the client that there may be negotiations to bring the price even lower. The absorption rate in this situation is indicating a trend toward lower demand and higher supply.

Absorption Rates and Buyer’s and Seller’s Markets

The National Association of Realtors defines a Seller’s Market as that which has fewer than 6 months of inventory and a Buyer’s Market as that in which there is 6 or more months of inventory. Of course, every market is different, but, conventionally, we think of:

1-4 months of inventory = Seller’s Market

5-6 months of inventory = Balanced (or Neutral) Market

7 or more months of inventory = Buyer’s Market

Of course, this makes sense because, if there are a lot of listings and not many buyers, the absorption rate will be high, and this is good for buyers. Buyers will be able to aggressively negotiate prices and sellers will be more likely to resolve inspection items and give concessions.

If, on the other hand, there are not many listings but there are a lot of buyers, the absorption rate will be low, and it will be a seller’s market. This will be good for sellers because there will often be multiple offers on a single property, and the sellers will be less likely to come down in price or bend over backward on inspection items and concessions.

Niche Absorption Rates

What’s really useful about absorption rates is that we can calculate them based on very particular parameters — not just countywide, but using the data for particular price ranges or property types, even using square footage parameters, or the number of bedrooms.

This data tells us, among other things, which kinds of homes are selling the fastest.

In Summit County, for example, the absorption rates vary significantly from one price range to another. With a price range of $0 to $200K, the absorption rate, in months, is 2.5. In the price range of $2.8M +, its close to 40.

What are Today’s Absorption Rates and Months of Inventory?

For current absorption rates and months of inventory data in Summit County, Colorado, contact me. I’m always happy to run the data that is most relevant to your particular situation and that will help guide you in your real estate decisions.

If you live outside Summit County, I’m happy to help you locate a knowledgeable Realtor. Reach out to me and let you know what you need. I’ll do everything I can to help you.

** If you own a property in Summit County, request the latest Market Report for your complex or subdivision. This report will feature properties currently for sale, properties under contract and sold properties, along with year-to-date and historic sales and trends. These are nice to look at, even if you are not planning to sell anytime soon, and I’m happy to provide them. Just email me. **

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Summit County Real Estate MLS: Is There a Way to Search the MLS Directly?

Licensed Realtors have full access to the Summit County Real Estate MLS, so I can easily conduct searches for you anytime. This access also allows me to procure a wealth of additional property information, statistics, and data on your behalf.

Additionally, I have arranged for you to search active properties from the Summit County Real Estate MLS directly through my website, so you can search on your own anytime.

There are a variety of ways to search:

1. Go directly to my main page and type in your search criteria: http://www.susiecortright.com (Or simply scroll down. There’s a search box at the bottom of this page.)

2. To find a property geographically, by town or zip code, use the Map Search function: http://www.susiecortright.com/homes-for-sale-map-search/

3. To search by a must-have feature, or to search only new properties (those added within the last 7 days), use my Advanced Search page: http://www.susiecortright.com/homes-for-sale-search-advanced/

4. Browse my write-ups of different neighborhoods on my blog. This allows you to learn more about each individual community and then to see all active listings in that community. To access these write-ups, scroll my Most Popular Post page for “Susie’s Neighborhood Spotlights”: http://www.susiecortright.com/most-popular-posts/

Once you’ve found a home you’d like to see, contact me or simply click the “Schedule a Showing” link on the property’s detail page on my website. I’ll make the necessary arrangements.

Be Notified Automatically When New Properties Come on the Market

There are two ways you can be notified automatically about new listings that fit your search criteria.

1. Let me know what you’re looking for, via phone, text, or email, and I’ll do everything in my power to locate the just-right property for you. That includes researching all For Sale by Owners (FSBOs), expired listings, and withdrawn and cancelled listings for potential matches beyond what you see on the Summit County MLS.

2. You can also sign yourself up for my free email alert servicewhich provides automatic email notification of new listings that meet your unique and specific criteria.

Whichever method you choose, this notification system is nice because it puts you in control, and it can save you a lot of time.

You’ll receive information on only those homes that match your unique criteria. You can choose the homes you like and even drive by them if you wish.  If you’d like to see inside, you just let me know and I’ll arrange the showings. There’s never any pressure to buy. The goal is simply to find you the right property.

Search the Summit County Real Estate MLS

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Summit County Transfer Tax: What You Need to Know

Summit County Transfer Tax FAQs
What is a Summit County Real Estate Transfer Tax and When Does It Apply?

Here’s a guide.

What is a Real Estate Transfer Tax?

A real estate transfer tax is a one-time payment, made at the time of closing. In Summit County, Colorado, these funds help to pay for a variety of the things that enhance the community – everything from sidewalk and road improvements to special events. In Breckenridge, the funds go into a general fund that also helps pay for our impressive amenities, including our recreation center, golf club and ice arena.

The amount of real estate transfer tax in Summit County varies according to the location of the property purchased but will be either 0%, 1%, 1.5% or 2% of the total purchase price (the “Gross Consideration”).

Transfer tax is traditionally paid by the buyer, though this is negotiable. When we draw up a purchase agreement, I will explain these terms in the Colorado residential Contract to Buy and Sell (Section 15.4), and we can talk about whether it makes sense to ask the seller to pay the transfer tax. Keep in mind that it’s likely the sellers paid the transfer tax when they bought the property.

In a normal closing, the title company will take care of the transfer tax paperwork and the remitting of the transfer tax funds.

How much is Real Estate Transfer Tax in Summit County?

When we begin looking at homes, I’ll be sure to tell you the transfer tax rate of each property.

To give you a general idea: if you are purchasing property within the boundaries of these towns, the following transfer tax applies:

  • Breckenridge transfer tax: 1% (except for some of the newer developments on Peaks 7 and 8, including Crystal Peak Lodge and One Ski Hill Place, which have a transfer tax of 2%. That’s because the development company also requires a transfer tax in these developments.)
  • Blue River Transfer Tax: 0%
  • Frisco Transfer Tax: 1%
  • Keystone Transfer Tax: Areawide, 0%, except for certain subdivisions (such as Settlers’ Creek) and condo developments (such as the condos in River Run Village), where there is a resort transfer fee of 2%.
  • Copper Mountain Transfer Tax: Areawide, 0%, except for select, newer condos, such as Lewis Ranch, Cirque Condos, and Union Creek Townhomes, where the resort transfer fee is 1.5%.
  • Dillon Transfer Tax: 0%
  • Silverthorne/Wildernest Transfer Tax: 0%

The information above is meant to just give you a general idea of the range of transfer tax in Summit County. There are exceptions and exemptions. For example, certain affordable housing and deed restricted developments may have the transfer tax waived.

Again, we’ll make sure to look at the transfer tax requirements on a property-by-property basis.

Back to FAQs

Condo or House? 10 Important Questions to Help You Know for Sure

House or Condo?

Should I Buy a Condo or a House?

It’s a question that comes up a lot, particularly with first-time homebuyers – and for good reason.

Buying a condo is different than buying a single family home, and it’s different than buying a townhouse.

Here’s what you need to know – and questions you need to ask – to ensure you’re making the right choice.

First, What’s the Difference Between a Condo, a Townhouse, and a Single Family Home?

Condos. Condominiums are properties that are individually owned, connected to one another, and typically, everyone shares ownership of the common areas as tenants in common.

When you own a condo, you own the inside of the home. But you don’t own the outside of the property or the land beneath it.

Some condos look like apartments and some look like townhomes, so it’s easy to get confused. And then there are variations on the theme, such as the condominium complexes that function and feel very much like hotels, but each unit is individually owned.  Because of all the amenities these properties provide, the Association fees tend to be among the highest, but owners benefit from ultra-convenience and peace of mind when they need to leave.

Townhomes. When you purchase a townhouse, you are purchasing not just the part of the building that is your townhome, but also the land underneath. Generally speaking, like condominiums, townhomes are also part of an HOA that takes care of common areas, as well as various other amenities and services, such as trash pick up and snow removal.

Because you own the land outside your townhome, you may be liable for the exterior of the building. It all depends on the HOA and the rules and regulations, which we’ll talk more about it in a minute.

Single Family Home. Sometimes called a Single Family Detached and often shortened to SFR (Single Family Residence), a Single Family Home is a stand alone structure with its own lot. HOA fees tend to be much lower, of course, but owners of Single Family Homes do all of their own maintenance and repairs.

Here are ten important questions to ask yourself so you know for sure what type of property is right for you.

Condo or House: Lifestyle Considerations

1. Peace and Privacy – or Action and Community?

I ask this question at the beginning for a reason. No matter how much financial sense one property might make over another, the most important consideration is how much you will enjoy living in your new home or condo.

Do you yearn for a peaceful property with a private yard and lots of space – or do you want to be in on all the action:  close to work, say, or shopping and restaurants – and spending Saturdays lounging at the condominium’s pool? Condos tend to be located in more central (but noisier) locations.

Another consideration, of course: How much do you value your privacy? Your neighbors in a condo complex can feel as though they are very close. (All the time.)

2. How long are you planning to own the property?

Every real estate market is different but, generally speaking, single family homes tend to appreciate at a faster rate than condos do. Why? When you own a single family home, you generally own it all: the home, the land, the trees, the flowers, the driveway, the garage. Everything. When you own a condominium, you own only the interior of your unit – and the right to live there. In addition, there are typically more condos available in an area than there are single family homes, so it’s a simple matter of supply and demand.

That means you may be able to squeeze more equity from a single family home when you go to sell than you will with a condo. Of course, every case (and real estate marketplace) is different, and you should talk to your REALTOR about the specifics in your area.

In Summit County, you can compare the historic data for different types of properties via the graphs and charts here.

3. How often do you travel?

Would you enjoy having the peace of mind that comes with on site management and maintenance?

4. Are you interested in renting out your property – on a short- or long-term basis?

The amenities that come with your condo association, such as a hot tub or pool, may be more attractive to renters.

5. Do you enjoy working on your home?

Are you hoping to earn some sweat equity on your home? Single family homes can give you more opportunity for improving your property as you can make improvements to both the inside and outside of your unit, as well as to the landscaping.

6. How good are you at following rules?

Nearly all residential properties these days have some sort of governing Owner’s Association but the proximity to other neighbors means that a condo or townhome’s Owner’s Association might have more rules and be more stringent in making you adhere to them.

Outside the home, the association is in charge. The HOA can tell you whether you can keep a garden, whether you can have pets (and how many), whether you can add on to your property, whether you’re allowed a satellite dish, what time you can make noise, and whether you’re allowed to rent out the unit on a short or long-term basis, as well as what kind of rules your renters will have to abide by. Depending on the HOA, that  might be just the beginning.

7. How much storage space do you need? How important is a garage?

It’s possible to find townhomes with garages, but most condos have surface parking or underground parking only. If you like to work on your own car or you need additional storage space for your toys, a condo might not be the best option for you.

Condo or House? Financing Considerations

8. How are you planning to finance your purchase?

Condos and townhomes may be subject to higher interest rates than detached, single family homes. In general, lenders say, you can expect your mortgage rate to be .125% to .25% higher when you buy a condo versus buying a home. Why? The value of your condo is going to be somewhat dependent on the other tenants as well as the financial health of the HOA, so that introduces risk, which calls for a slight increase in rate. Plus, because not all lenders will finance a condo, there’s less competition in the marketplace to drive rates down.

What’s more, if you make a small down payment on your home (less than 20 percent) expect your lender to do an extensive review of your Owner’s Association’s finances, to make sure there won’t be any financial surprises for the condo owners down the line.

Before you close on a condo or a townhome, it’s critical (even if you’re paying cash) to take a very close look at the condominium’s  Conditions, Covenants, and Restrictions (CC&Rs) so that you know all the rules you’ll be expected to follow. You’ll also want to examine the budgets and financials to help you determine the financial health of the Owner’s Association. And you’ll want to read the minutes from the latest meetings to see how well the Owner’s Association addresses any issues or grievances.

9. How much is in your budget for Homeowner’s Association Fees?

The HOA fees for single family homes tend to be fairly minimal. For condos and townhomes, expect monthly or quarterly fees to be much higher. Of course, each complex is different in terms of what these fees pay for.

In Summit County, my Colorado resort community where short-term condo rentals are common, it’s typical to see HOA fees upwards of $400 a month. These fees might pay for snow removal, trash pickup, and cable TV, as well as on-site amenities such as hot tubs, pools, and sauna – or all of the above.

Keep in mind that your HOA fees, whether a townhome, a condo or a single family home, will be included in your debt-to-income ratio, which your lender will use to determine whether you qualify for a loan.

The higher the HOA fees, the more amenities the condo probably provides. And that makes sense for some items, but maybe not others. If your complex has eight hot tubs and two pools, but you know you won’t ever use them, it makes no sense for you to pay for them (unless you plan to rent your unit on occasion.) If they are part of your HOA dues, however, you will have to pay for them regardless of how much you use the amenities.

Also keep in mind that, unlike property tax and mortgage interest, HOA fees are not tax deductible. So if you were to take the money you would be paying in HOA fees each month and invest it in a larger home, there might be some financial advantage to you. Ask your financial advisor about just how much of a difference this could make in your situation.

Future fees and special assessments. Before you purchase a condo, you want to get a reasonable assurance of what HOA fees will be in the future. Individual condo owners sometimes don’t have a lot of say when HOA fees are raised.

You’ll also want to consider the likelihood of special assessments. These are fees that are shared by all owners in the complex to pay for things such as putting on a new roof or repaving the parking lot. These can be major expenses that every condo owner is responsible for, and they are in addition to the monthly fees.

Reserve funds. Make sure the condo has sufficient reserve funds for future maintenance needs. A reserve is the amount of money that goes to repairs that will be needed by all properties over time.

Find out how much is in the complex’s reserve fund and how it is funded. These days, it’s not unusual for a townhome or condo HOA to collect some kind of “working capital” from each homeowner at closing (equal to, say, 6 months of HOA fees). These funds may not be refunded or available to you until you sell the unit. Avoid surprises as your closing date approaches by knowing about these fees upfront.

FYI, many experts say, for condos built fewer than 10 years ago, the reserve or repair fund should have at least 10 percent of the HOA’s annual budget. If the condos are older than 10 years old, the reserves should be closer to 25 percent of the HOA’s annual budget.

Again, it’s super important to look at your association documents and financials before you close on your condo or townhome.Make sure there are reserves budgeted and in place for those long-term maintenance and repair issues.

It’s also a good idea to find out who manages the HOA, whether professionally or through a board of the owners. Get the contact information and give them a call. See how well (and how quickly) they respond to any questions you may have.

Of course it’s not just condo associations that need reserve funds. Every property owner needs a reserve. Regardless of whether the condo association budgets this amount or you do, as a homeowner, it’s important for every property owner to have money budgeted for ongoing repair and maintenance.

10. Can you get the loan you want on the property?

Condos and townhomes may present some obstacles for lenders that single family homes do not. For that reason alone, if you’re leaning toward a condo, it’s a good idea to talk with a lender or mortgage broker who is familiar with the area and who is at least somewhat familiar with the complex you are buying in.

As we’ve discussed, condos and townhomes have certain inherent risks that may result in a slightly higher interest rate. Lenders will look at a variety of characteristics of individual complexes and HOAs, as well. For example, lenders often look at the number of units in the complex that are rented and will typically look for owner occupancy rates of at least 65 percent. Why? Because a high number of rentals can mean a variety of things: non-primary residents may be more subject to defaulting on loans, and, if a foreclosure does occur, the HOA fees aren’t paid. This can drain reserves and put financial pressure on all of the owners.

Is the condo approved for FHA loans? If it is, buyers will be able to secure a loan with only a 3.5% down payment. This can be important to you even if you aren’t shopping for an FHA loan because, if a condo is not approved for FHA loans, the potential buyer pool will be restricted when you go to sell. You can check for FHA-approved condominium projects by location or name here: https://entp.hud.gov/idapp/html/condlook.cfm

Whether home, townhome, or condo, make sure you are working with a REALTOR who understands the issues that each option represents

An online home search can give you a general idea of the different properties available, but there’s no substitute for a knowledgeable REALTOR when it comes to researching and fully understanding your options. A real estate agent will know and will help you navigate the fine print of all the various contracts and documents inherent to a sale of real property.

About the author: The real estate information above was written and provided by Susie Cortright, a REALTOR and Broker Associate serving Summit County, Colorado, including the areas of Breckenridge, Frisco, Copper Mountain, Keystone, Dillon, and Silverthorne. Contact Susie.

If you aren’t located in Summit County, Colorado, Susie can still help you by referring you to an internet savvy, real estate professional who is accessible, easy to work with, reliable, and knowledgeable on these issues. Just drop her a note to let her know where you’re looking to buy or sell,and she’ll take care of the rest.

 

Summit County Property Taxes: How Are Colorado Property Taxes Calculated?

Summit County property taxesYour Summit County real estate agent will be able to tell you the precise tax data for the homes you’re looking at, but how are Summit County, Colorado, property taxes calculated?

Property taxes are ad valorem taxes meaning that they are levied “according to value.” But Colorado statute says that the actual value of the property is not what’s taxable. Instead, the amount that will be taxed is a percentage of the actual value.

That means your Summit County property taxes are determined in a two step process.

Step One: First, the Actual Value of your property is multiplied by the appropriate Assessment Rate to determine it’s Assessed Value.

The Assessment Rate for residential properties (including townhomes and condos) is currently 7.96%. The assessment rate for all other properties, including commercial property, agricultural land, and vacant land is 29% (.029).

How is Actual Value determined?
Assessors determine a residential property’s Actual Value by looking at homes similar to yours that sold within a 24-month period. This period ends on June 30th of the year before the assessment. In other words, new 2015 values will be based on properties sold between July 1, 2012 and June 30, 2014.

How is the Assessment Rate determined?
The Colorado state legislature sets the residential Assessment Rate every odd-numbered year. (This rate has been 7.96% since 2007.)

Step Two: The property’s ASSESSED VALUE is multiplied by your local tax rate to determine your property tax.

How is my Local Tax Rate determined?
The local tax rate will vary depending on the location of your property.

Note, a tax rate can be expressed as a percentage or as a mill. A mill is one-tenth of a cent. So a tax rate could be expressed as 5.3%, or 0.053. This same tax rate could also be expressed as 53 mills or $5.30 per $100 of assessed value (or $53 per $1000 of assessed value.)

5.3% = .053 = 53 mills = $5.30 per $100 of assessed value = $53 per $1000 of assessed value

Each fall (usually in September or October), county commissioners, city councils, school boards and other special taxing hold budget meetings to determine the amount of money they will need to operate for the next fiscal year. (See Summit County’s special taxing districts.)

Once the tax rates are established by each of these special taxing districts, the tax rates are sent to the County Assessor’s office.

Summit County’s Taxing Area Table for 2014 is here (for collection in 2015), if you’re interested in the specific tax entities and levies.

Summit County makes it easy for you to see exact values for any residential property in Summit County.
You can search for appraised values and property tax information on the Summit County website here.

First, look up the individual property, then click the link for “Property Details.” If you click “Estimated Tax / Tax Rate,” you’ll see the Estimated Tax Calculation Schedule for your particular property, with both the taxing jurisdiction name, as well as the tax rate and a clear calculation for your estimated tax amounts.

Keep in mind that Colorado tax payments are made in arrears, meaning you pay property taxes for the current year in the year that follows. In other words, 2014 taxes are paid in 2015.

A few examples: 
A Breckenridge home has an actual value, according to the assessor’s office, of $374,000, so, to determine the property tax, we would first multiply this valuation by 7.96%, and then we would multiply the resulting “assessed value” by the tax rate specific to its jurisdiction.
Step One: $374,000 x 7.96% = $29,771 in assessed value.
Step Two: $29,771 x .053 (the tax rate for residences in this area) = 1577.84

Annother home in Summit County, Colorado has an actual value, according to the county assessor’s office, of $689,885 so, to determine the property tax, we would multiply this valuation by 7.96% and then we would multiply the resulting assessed value by the tax rate specific to its jurisdiction.
Step One:
$689,885 x 7.96% = $54,915 in assessed value
Step Two: $54,915 x .048632 (the tax rate for residences in this area) = $2,670.62

Please don’t hesitate to contact me if you need any clarification or if there are any other real estate related questions I can help you with.
Susie Cortright
970-389-8338
scortright@comcast.net

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Summit County real estate FAQs