How Will The Coronavirus Impact The Housing Market?

Hey Dave….. These are crazy times.  We currently have our home on the market and are wanting to downsize.  We listed our house about 6 weeks ago and the showings started strong and have dwindled to near nothing the past 2 weeks.  What should we do?  Should we keep it on the market?  Are prices going to go up or go down?  I guess, overall, how do you think this Coronavirus will impact the housing market here in Grand Junction. 

Judy, Grand Junction

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Judy,

Wow!  You are right!  These are crazy times and the only sure bet is that nobody knows how this will ultimately play out.  Your current experience mirrors most everybody’s experience over the past 6 weeks and the speed that this has happened is hard to fathom.  Two weeks ago homes were being shown and contracts being presented and as of today, there are very few showings and even fewer contracts.  So take some solace in the fact that you are not alone.   I know that not being the only one is not very comforting, but there is some comfort in the fact that there is little you can do right now to change the number of showings you are getting on your home. 

I would suggest holding the line for now and staying the course.  As far as I am concerned, the data sample we currently have is too small to make important decisions.   The real estate market has slowed over the past few weeks, but prior to Coronavirus our team was already on pace to shatter our best year ever and we were only 2 months in!  Things have changed and I am prayerful they can change fast again!  We need to see how the stimulus package falls out and what support that provides to workers and small business owners.  We need to see how long the shelter in place remains in effect, and if in fact, it ends April 11, how fast does the interest in real estate regain its momentum.  What happens with interest rates? Interest rates are all over the board, up one day, down the next.  There are too many blurry angles to get a real clear picture of what lies ahead, but I am confident in Mesa County’s short and long term future.  I think prices will remain fairly solid as inventory is still low and demand will once again be high after the fog lifts.  Mesa County needs more homes, as I believe demand will grow from this Coronavirus as people realize that living on top of one another in urban settings is not as appealing as it was pre-pandemic.  There are going to be many silver linings to these events, but may not be completely visible yet.  A certain level of faith is the name of the game moving forward.

There are so many variables that are far above my pay grade that I am taking the outlook of controlling the things I can control and letting go of the things I can’t!  Take a deep breath and come to the realization that this is a global issue and the bumpy road ahead will spare very few.  I can remember my mom saying, “we are all in this together” and I would think, yeah we are in this together because you are making me be “all in this together”, but in this case, we really are ALL in this together!  I am prayerful that each and every one of us can put aside our politics, religion, sexual identity, and economic status and band together moving forward.  Maybe a pandemic is what was needed to bring us all back together!   It's hard to see the light when you just enter the tunnel, but as you keep walking the light will appear and hopefully keep getting brighter!  I hope that helps.

Dave Kimbrough

The Kimbrough Team

Do We Have To Use An Agent If We Want To Buy A "For Sale By Owner" House?

Dave,

We’ve been on the hunt for a new house! We’ve used an agent to look at four houses so far, but last night we were driving through a neighborhood that we love and saw a great house that is currently for sale by owner. We called the phone number on the sign and they happened to be home. We took a tour of the house and had a great time talking with the owner about all of the house’s character and history. To make a long story short, my husband and I went home and after a lot of discussion we think this house is the one! Do we need to use the agent that showed us houses before to make an offer on the house? We don’t really feel attached to him, he did not find us the house and we think we can navigate the process from here on our own. Any advice?

Thank you!

Becky, Fruita

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Becky,

Ugh…. Why this question?  You are cruel and must love the thought of seeing people squirm!  I can think of few questions I would rather avoid than this one.  The reason I would choose to avoid this question is that the answer may not sit well with my peers, potentially even those on my own team!  First, if you signed an Agency agreement, you are likely bound to this agreement and kicking him to the curb may prove difficult.  However if you did not sign an agreement, then the decision is fully in your court.  This answer boils down to has your agent earned the right to work with you?  Regardless of who found the home or if it is in the MLS or FSBO (For Sale by Owner), has he earned the right to work with you, regardless of who found the property?

By earning the right, I am not just referencing the act of showing you homes.   Showing homes is truly one of the easier and more enjoyable parts of a Realtor’s job.  I will start by pointing out that showing a buyer houses is generally the product of many hours invested in trying to find you the perfect house.  It often means taking calls on the weekends, during family picnics, in the evening or during baseball or soccer practices.  Good Realtors, or even bad ones for that matter, are never truly “off” work and typically behind every showing there are countless unseen and often underappreciated hours of work trying to locate you the perfect property.  I would be willing to bet, if you took a minute of honest reflection, you know if your agent has earned the priviledge to work with you.   If he has, stick with him and have him help you find a solution to your dilemma.  Be honest with him and give him the opportunity to “earn” his keep.  Our agents welcome the chance to earn their commission….. we do not want, or expect, to be paid unless we have earned it and I believe most agents would agree with that position.  

Give him the chance to negotiate a better price, or build his commission into the price of the home to help assist you and the FSBO in making the process go smoothly and avoid some of the legal pitfalls that can be encountered if everyone does not dot their I’s and cross their T’s.  More often than not, we have found that FSBO’s welcome the help and guidance and are willing to work with a real estate agents who can provide value!  Providing value is key in this discussion, because cost is an issue when there is an absence of value.  If he has provided value thus far, give him the opportunity to continue doing so!

Listen, if he really has not “earned” the right, and you are not kicking him to the curb to simply justify or facilitate financial savings, then move on and purchase the home on your own and forego representation. My Grandfather told me long ago, “you will find out all you need to know about a person’s character when you dig into their wallet.”   I am not sure a truer statement has ever been made.   Don’t make the decision based on dollars and cents, make it based on his ability and track record of providing you value and service.  Hope this helps, but I am confident a little soul searching will point you in the right direction.

Dave Kimbrough

The Kimbrough Team

What Do You Think About Home Warranties?

Dear Dave,

We are looking to buy a house and have narrowed it down to some of the older neighborhoods and older homes.  One of the houses we looked at included a 1 year home warranty.  We decided that house wasn’t right for us - but we did like the idea of the home warranty.

What do you think of home warranties - are they worth it or not?

Thanks for the help,

Rich and Lydia - Delta, CO

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Rich and Lydia,

How exciting!  It is always so much fun house hunting for that special new home, that’s one reason I love my job so much.   Moving on to your question about warranties…. I have changed my stance on warranties over the past couple years.  I used to think they were not worth the money and I still have some reservations, however recently I have become more informed and now believe they can be a valuable asset to some home purchase.   

They can prove useful on any home that has problems after close, but the real benefit does come with an older home where age has run its course and items like appliances, heating or cooling systems, roofs, hot water heaters are nearing the end of their anticipated lifespan.  It is not unheard of for one or two of these things to fail within a year or two of closing.  If you purchased a home warranty you will love the fact that all you may have to pay is the deductible.  Trust me, nobody wants to move in and have to replace a furnace that fails 3 months after close.   You can often times sign up for them year after year so you can maintain the coverage benefits for several years after you close.   Bottom line, it is nice to have some peace of mind that you will receive some financial help if something fails.  On older homes, they are worth it.

Dave Kimbrough

The Kimbrough Team

We Feel Lied To...

Dave,

After moving into our house, a neighbor told us that a few years before a man had committed suicide in the kitchen.  We would not have purchased our home had we know this had happened in the house.  Do we have any recourse other than simply selling the house and moving on or accepting what happened and making the best of it? Surely someone should have told us about what happened!

William, Grand Junction

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William,

I am sure the news came as a shock to you and your family and I have no doubt that it may make it more difficult to live there, knowing what happened in the home.  Unfortunately, in your case,  Colorado has no requirement to disclose such details about any property being sold.  Under and Exclusive Right-To-Sell Listing Contract, Section 5.2.5 deals with situations like this.  It specifically states the broker shall NOT disclose “any facts or suspicions regarding circumstances that could psychologically impact or stigmatize the property”, without the informed consent of the seller. 

It is at the sole discretion of the seller to disclose or not to disclose.  It is likely that your agent did not have any knowledge of the act and quite possible that the listing agent did not know.  Even if the listing agent had knowledge, he/she can not disclose it without the sellers consent.  Bottom line, if the seller chooses not to disclose, it is highly likely a buyer would not find out till after the fact.  

I believe the intent is to not stigmatize a property because of a senseless act that was not the “fault” of the home and thus seriously impact the marketability and value of the home.   You will have to decide what is best for you and your family and I would remind you that you do not have to disclose what happened if you choose to sell.  My suggestion would be to make the best of it.  It is you chance to give this home a “second chance” at being a happy home and making it a home that is filled with peace and love and turning a bad past into a bright future!!  A home is what you make of it, moving forward, not what happened in the past.  Obviously you will choose which way to proceed, but you might find it an opportunity for your family to choose a path of healing and turn the page on a past which was filled with hopelessness and fill it with hope. 

I hope this helps and I will bet you can give this home a new start!!

Dave Kimbrough

The Kimbrough Team

RE/MAX 4000, Inc.

Is Now a Good Time To Buy?

Dear Dave,

It looks like interest rates are going pretty low. We are thinking about taking the jump and buying a house. Do you think that now is a good time to buy considering the rates or should we wait until after the first of the year?

We have heard many different opinions on the time of year to buy a home and just aren’t sure of when to proceed.

We would like to know what you think. Thanks for the time- 

Jim and Sherri - Grand Junction, CO

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Jim and Sherri,

Yes, I believe it is a great time to purchase a home!  We talk about it all the time with our clients and prospective clients.  If you believe you are going to be staying in your home for over 3-5 years then I believe buying at today’s interest rates (again at a multi-year low) is a really good idea.  As for the time of year…. I believe any time of year is a good time of year to buy, as long as it is the right time for you and you find the right home!  I believe the home you live in should be more than an investment, it should be where you want to shape your life and create memories and if you find that place, then that trumps the right/wrong time to buy! 

Who knows what next year will bring… higher prices?  Lower prices? Higher rates? Lower rates? Economic stability? Economic turmoil?  Who knows?  That’s why I subscribe to the “if the time is right” philosophy.  On a personal note, I have many times been hesitant to make a move because of future uncertainty and come to later realize that the uncertainty I was concerned about never materialized.  It was more my own concern about making the wrong decision that I got in the way of making the right one!  Often times the right decision is simply the decision we make, because each of us has a significant impact on the outcome of our decisions!  I will say this in close, don’t pass up on wave after wave looking for the perfect ride, make the most of the wave you catch and you just might get the ride of your life!  Good luck and make the most of whatever path you decide to take.

Dave Kimbrough

The Kimbrough Team

Have a question? Ask Dave!

Can We Perform Our Own Home Inspection?

Dave,

My husband is a home inspector, can he inspect our house we want to purchase?

Anita, Grand Junction

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Anita,

Absolutely!  There are no rules regarding who can and can not inspect a home!  In fact, many of the inspections performed on our listings each year are done by the buyers themselves or one of their relatives.  You can choose whomever you want to do your home inspection or even waive the inspection all together.  We always encourage buyers to perform a home inspection by a reputable home inspector so if you are married to one then you probably know one! : ) 

I hope everything checks out great and you love your new home! 

Dave Kimbrough

The Kimbrough Team

Have a question? Ask Dave!

What are the most important things to consider when evaluating your homeowner’s INSURANCE policy?

Dear Dave,

We recently bought a house and have been looking at what exactly our homeowner’s insurance covers.  We are quickly learning that there is a lot more to it than we initially thought and it is actually more complicated that we imagined it would be.  What do you think are the most important things to consider when evaluating your homeowner’s insurance?

Linda – Grand Junction, CO

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Linda,

I will admit, your question is going to teach me a thing or two about homeowner’s insurance, as I must admit it is not something I have spent any significant time looking over.  I have spent the past 15 years trusting my insurance agent, Mike Daniels at American Family Insurance, to make sure we have the right insurance coverage.  So where better to turn for a little help in giving you a credible answer?  I asked Mike to give us some insight into what you need to look for when reviewing your homeowner’s policy.

“Keep in mind that every homeowners needs are different and very personal, finding a local company and a local representative is a leading factor to ensure you are getting proper guidance and counsel.  There are a lot of great people in the business.  There are

2 homeowner’s policies that are very popular, HO3 and HO5.  Both of these will cover all named perils, however the form 5 will throw in some supplementary coverages that some will find important and some will not.

Everyone should pay close attention to look over the named perils of how the home is covered.  These primarily include fire, smoke, theft, windstorm, hail, explosion, vandalism, and frozen and broken plumbing.  Every company or agent should provide you with a brochure of all the named perils and supplementary coverages included with your policy.  When the policy comes in the mail, take the time to review the coverages and then also spend time reviewing the exclusion section of your policy.  It is important that if you have questions to call your agent to answer your questions or correct anything that may need to be fine-tuned.

As a home owner you need to consider the dwelling amount, how much will it be to re-build your home?  Make sure the insurance policy will cover that amount in full.  It is also important to know how much the deductible amount is on your policy.  Make sure to ask yourself how much you can afford if you have a loss?   The higher the deductible the lower your premium costs will be.  Generally speaking, if you maintain your property, you should be able to go with a higher deductible.  Lastly you also need to consider personal property loss.

When we are looking at personal property coverage, the questions to ask are how much? And how is that covered?  Also consider any specialty items you want covered such as jewelry, coin or gun collections or just any collection or specialty items you want to make sure are covered.  Lastly, look for discounts including Alarm systems, age and type of roofs, age of home, complete renovations.  It is also possible to save by combining other insurance needs including automobile and umbrella policies.  MOST IMPORTANTLY, review your homeowner’s policy at least every two years!” 

Well, that about covers it and as you can see, there is a lot to it and being a bit overwhelmed is completely understandable.  I always recommend, find an agent you can trust and build a relationship with.  I know, for our family, when we need our insurance to kick in, we can trust Mike has us properly covered.  Consistently review your policy with your agent to ensure you are both staying on top of your policies and things that may have changed so you are properly covered if you ever have to make that call.  

Dave Kimbrough

The Kimbrough Team 

Have a question? Ask Dave!

Advice For Providing Banking Passwords For A Mortgage Loan Application Portal?

Dave,

We were applying for a 30-year fixed-rate mortgage. Our credit scores are in the 800’s, and we were applying for a mortgage in order to avoid IRA withdrawals and the taxes. This mortgage company is pushing us to use an internet portal that requires all of our passwords to our banking and investment accounts. Having had my security hacked twice, I refused. They said I could furnish copies of the accounts, but when I did, they made it so difficult for me that my only course would be to furnish my passwords. Am I wrong to be concerned about this?

- Kathy, Grand Junction

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Kathy,

First, I think congratulations are in order for the 800+ credit scores! It's not very often that we see those kind of credit scores so a little pat on the back is in order. As for your question, I do believe you have good reason to be concerned, but to be sure I posed your question to James Pulsipher, Branch Manager of Fidelity Mortgage.  He knows the Mortgage industry better than anyone I know, so I figured who better to ask than James!

Here’s what he shared with me, “I think that you are right to be concerned. In today’s tech-forward culture there are many solutions like this that are designed to make the process of obtaining a loan easier. However, it is just an option – not a requirement. The reason that this option has become available is that many people would prefer to provide that information instead of providing the documentation. I would simply let the lender know that you are happy to provide them what they need outside of this automation. What they will likely need is a 60-day statement on any banking accounts of reference. Hope that helps.”

Good to know that you have the option to provide the information outside of their internet portal.  EVERYTHING is going the route of being easy and less cumbersome as our lifestyles are busy and time becomes more and more valuable. On a personal note, I know when I applied for a loan a couple of years, back with James, that Fidelity also uses a portal. I was intimidated and concerned at first, but quickly found that I fell in love with the ease of following the process and providing documentation online versus delivering paperwork. By the time we were done, I very much appreciated the collaboration of my accountant, James’ office and the ease of sharing needed documentation through the portal. Keep in mind it is always good to be wary of how you provide SS#’s and bank accounts to those requesting them. 

One note is to NEVER send either your bank account numbers or SS numbers via email. There are hackers and scammers that are CONSTANTLY scanning each and every sent email for numbers that fit the right character configurations of both and when they find a match consider yourself in serious jeopardy. I have several stories I could bore you with that would provide you with the proper amount of fear to never email either. 

The bottom line…you are right to be concerned as our information is no doubt under constant assault! You know the old saying (my mom would be proud!), “It’s better to be safe than sorry!” Great question and thanks for reading “Ask Dave”.

Dave Kimbrough
The Kimbrough Team

Have a question? Ask Dave!