Is there still a market for homes on larger acreage even though most newer homes are in subdivisions?

Large American beautiful house with red door.

Dave,

We live in a semi-rural area on two acres, but several subdivisions are going in nearby. My husband is concerned that it will decrease the value of our home and property. I know that you say there is "a butt for every saddle." In your experience, is there still a market for well-kept homes on larger acreage even though most of the newer homes are in subdivisions?

Dan and Donna


Covered front porch of theold craftsman style home.

Dan & Donna,

Great question! Yes, there is “a butt for every saddle” and yes, I do believe there will always be a market for well kept homes on larger acreage! Sprawl will happen and with higher density developments you create affordability (at least that is the thought) and our area needs as much affordable housing as we can get, but ultimately there will always be those who desire “elbow room”.  What many new subdivisions lack is elbow room, privacy and enough space for RV parking! The one caveat to my answer here depends on how close the new subdivisions are to your property and how dense the density?

If the new subdivision borders your property or it is very close (within easy sight) and the density is higher than 4 homes to the acre, then there is a fairly strong chance that it may have a negative impact on your property value. If “nearby” means down the road a quarter mile etc…then I would suggest you worry not and just enjoy living there! There will always be a market for well kept semi-rural properties on two acres!  Famous last words…

Dave Kimbrough
The Kimbrough Team

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Should we turn our rental home into an Airbnb?

Beautiful Living Area with Coffee Table and Couch of New Home.

Dave,

We own a rental property Downtown and close to CMU. The lease is up soon (when college lets out) and one of our friends asked if we had thought about during it into an Airbnb instead of finding another 12-month tenant. They’ve certainly got us thinking! It’s a great location and we think we’d get quite a bit of traffic. Do you have many clients purchasing investment properties to use as Airbnbs? In your opinion what are some of the pros and cons of switching over from yearly leases?

Mike and Lynn, Grand Junction


Mike & Lynn,

I think it’s a great idea! Doing an Airbnb or VRBO can certainly be a very lucrative way to go and potentially prove to be much more profitable than a renter on a 12 month lease. We certainly have clients to look to purchase homes/rental units with the specific intent to use them as Airbnb or VRBO and many of them have proven that they work amazingly well, but they do take a bit more of a hands on approach than a traditional rental property. 

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If you use the VRBO or Airbnb website to schedule bookings etc. the interface is pretty seamless, however, it does take time to interface with each client who comes and goes. With the amount of traffic, new people coming and going on a day to day basis, that is generated you have to be aware that problems will arise.  The key  does not work, the pilot light went out, they are lost and trying to find out where to go, they arrive a day late, arrive a day early etc. Things happen and when they do many times you are the one they will need to reach out to. Also coordinating the cleaning of the property between renters takes attention and a bit more hands on effort. There are property managers for Airbnb’s and VRBO’s and I have heard they are very useful for cutting down the hassle, but they will take about 20% of the nightly rate for their management fee. If you don’t have property management in place, just expect that you will have to be aware of all the coordination of arrivals and exit, maintenance, cleaning and everyday issues that just happen. 

Also keep in mind that one of the keys to success we have seen is having a super “cute” property in a great location.

Also keep in mind that one of the keys to success we have seen is having a super “cute” property in a great location. Location and electronic presentation on the websites (along with great reviews) will all dictate your profit or loss! It’s not a quick buck model, but if you take the time to learn how to do it right it can be fun, rewarding and financially beneficial!    

Dave Kimbrough
The Kimbrough Team

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Do you need an inspection on a new construction home?

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Dave,

My wife and I are currently building a house and wonder if we need to get a home inspection even though the home will be new? We don’t want to spend money if it isn’t necessary, but also want to make sure we go through every process correctly. If we do need an inspection, at what point in the building process should we have it done?

Thanks, Josh—Grand Junction


Josh,

Yes. It is my recommendation that you always get an inspection (especially if the home you are purchasing is NOT new), but I will say that if there is one scenario where it might be ok to skip the home inspection it would be in the case of new construction. You have to remember that any new home has been inspected over and over and those inspections have also been inspected. To put it mildly, any new construction project has been meticulously inspected from the foundation up and this ensures that each new building has been built to local building codes and is structurally sound and mechanically safe. These inspections catch most mistakes along the way and thus limit the real effectiveness of a new home inspection for anything but minor/cosmetic items. 

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A home inspection will cost somewhere between $300 -$450 and my experience is that very few substantive items are discovered on new construction home inspections. Generally items that are discovered are VERY minor, but there have been times where something more significant was found and needed to be corrected. I will also point out that virtually every one of those more significant items would have presented themselves in short order without the home inspection. From a timing perspective, you should consider the home inspection sometime around the CO, Certificate of Occupancy. If you use this time frame, you can be confident that the home will be mostly complete and all that is left will  be mostly cosmetic issues. This is also a good time to do the inspection as any items identified can just be added to the builders punch list to complete prior to close.  Although there are no guarantees with getting any home inspection, they do provide some surface level peace of mind. Also remember that every builder will provide at least a 1 year home warranty for your entire home and most of them are willing to help even after that one year if the problem proves to be a material or workmanship issue. 

Ultimately what an inspection on a new home provides is some insurance that there are no major problems with the quality of construction, workmanship or mechanical systems.

Ultimately what an inspection on a new home provides is some insurance that there are no major problems with the quality of construction, workmanship or mechanical systems. You have to ask yourself if the peace of mind is worth the cost? I can say that I have not seen a home inspector yet that is as qualified as the general contractor you hired to build your home and the inspections your home goes through prior to getting its certificate of occupancy have been extensive and complete. It is a call you must make, but it is completely understandable if you skip the home inspector on a brand new home! Hope this helps.

Dave Kimbrough
The Kimbrough Team

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Can a qualified family member perform our home inspection?

Old cute house

Dave,

My husband and I have been looking at homes for the past several months and our real estate agent has advised us that when we purchase, we need to have a professional home inspection done by a home inspector. My husband's brother is a general contractor who has been building homes for over 15 years in Denver and before that spent 10 years or so as a licensed plumber. His brother has told us that he would be happy to look it over for us, instead of having to pay someone to inspect it. We understand that it will cost about $400 and we would like to save as much money as we can. Our real estate agent told us that having a family member do it is not a good idea, but we are not convinced and are still thinking about having him do it for us. What are your thoughts?

Wendy & Bret, Fruita


Wendy and Bret,

Modern Kitchen with Teal Base Cabinets

Wow, another very good and very pertinent question. We hear this all the time and it is a question we have answered many times before. First, let me say that we always recommend for a buyer to have a professional home inspection performed and if they choose not to, we have them sign a waiver that states they are going to deny a professional home inspection and inspect it by themselves or have a friend or family member perform the inspection on their behalf. 

The reason your real estate agent has urged you to have a professional home inspection performed is that it protects most home buyers from purchasing a home that may have some latent defects that only a trained professional would find.  More often than not, when a buyer waives the professional home inspection, the buyers want their “Uncle Bob” to perform the inspection because he is very handy and fixes most things for the entire family and has done it for years. This is a recipe for disaster for any potential home buyer and for any real estate agent who does not get a signed waiver. A professional has developed a “trained eye” and will be able to identify many items that the lay-person will overlook.

The professional home inspection will also provide a solid baseline for the overall condition of the home and all mechanical systems at the time of your purchase.

The professional home inspection will also provide a solid baseline for the overall condition of the home and all mechanical systems at the time of your purchase. You can reference the home inspection report for years after you purchase and it will provide you with many details that you may have forgotten during the excitement, and stress, of purchasing your home. Home inspections don’t just find problems, they also educate you about the house you are to call home.  

It really is the rare exception, but in your case, it sounds like your brother-in-law has ample experience to perform a general home inspection for you. Any GC, general contractor, should be able to perform a more than competent home inspection, especially if he used to be a plumber. The key things to look for, that take trade knowledge, are the electrical panel and outlets, heating and cooling and all plumbing. In this case you should be able to save yourself the cost of a home inspection and use that money for another part of your closing costs. 

One thing to keep in mind, if the home is offering a home warranty many of these programs require a professional home inspection report to be provided to them should you make any claims during the warrantied time frame. They will want some kind of written report to verify the condition of the property or item to ensure that it was functioning properly at the time of purchase. 

Overall, everyone should have a home inspection performed by someone who is competent to provide an overall checkup of the home’s structure and systems and if they provide a written report that is a very helpful reference for years to come. Your brother-in-law certainly sounds like he should be up to the task, but remember very few things in life are free : ) (it will certainly cost you dinner, at a minimum)!

Dave Kimbrough
The Kimbrough Team

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A Major Road Extension is Planned for Behind Our Home...Should We Sell Before It's Completed?

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Dave,

We just learned that there is going to be a well-traveled road extended that will go directly behind our home. We’ve enjoyed open space for the past several years that we’ve lived here and were really bummed (to say the least) when we heard about the road plans. We’re worried about our daughter playing in the yard, traffic noise and so much more. Will the road drastically decrease the value of our home? Should we try to sell before the road construction starts so we recoup what we’ve invested in our home or is it too late?

Thank you,

Brittany, Grand Junction


Brittany,

I am sorry to hear about the road expansion! I hate it for you as I know how it is to enjoy the peace of having no backyard neighbors. I have said it over and over again that busy road traffic does have a negative impact on a home’s value. At this juncture in my career, I do not believe that statement is in doubt, but I have learned that there are caveats to that general statement that leave room for hope that the negative impact may not be as severe as you may fear. Regardless of if you sell now or sell later the impact is going to be there. Honestly, in some cases if the road has been approved and it is general knowledge, then the buyers fear of the unknown (the how big, busy and noisy will it be?) is almost worse than if the road was already in so they could see exactly what it is and process it for themselves. I have found in life that the things I was really worried about before they happened were not nearly as bad as I thought they would be when they actually occurred. Worrying does little good, taking a positive stance on what is to come and making a plan is far more constructive, so that is what we are going to do here!

Most homes live from front to back, meaning bedrooms, offices, dining rooms etc. are often positioned towards the front of the home and the living spaces, kitchen and master bedrooms are positioned in the back so the living spaces are more focused on the back yard and back patios. It is likely your home has been designed with some form of this set up and instead of lamenting what you now have, you should focus on the things you can do to mitigate and lessen the new road’s impact! Keep in mind that the interpretation of a “busy” road is relative. The definition you receive from someone who is moving from rural Wyoming will be significantly different from someone who is moving here from L.A. whose home backed to the 405! With that thought in mind, keep repeating to yourself, all is not lost!

There are two things, actually senses, that you need to keep in mind when looking to mitigate the impact of the new road and those are sound and visibility.

There are two things, actually senses, that you need to keep in mind when looking to mitigate the impact of the new road and those are sound and visibility. Start by making sure that you make plans to put up a fence if you don’t already have one, this will immediately address the safety issue and begin to address the sound and visibility. Next, make sure to put in trees along the back that are fast growing and will create a good barrier that extends above your fence line and will absorb and deflect much of the noise and further lessen the visual impact of the new road. One common mistake is to purchase small trees that are very inexpensive and then wait years for them to grow large enough to create the desired barrier. I know it is going to cost more now, but purchase trees that are as large as you can get so the impact is much more immediate. Trust me, whatever extra you spend on larger trees you will get back in spades! After you have put up a fence and grown trees, remember…no baby saplings, it’s time to create a water feature that can also help drown out the sound of traffic. A water feature does not have to be expensive to be effective. Remember we are looking for a calming sound to help create a softer less invasive atmosphere. Next, on your deck or patio, add some new furniture that looks and feel comfortable with plush cushions and pillows! This will also soften the area and make it more inviting. Don’t run from the issue, take it head on and create an environment that will help cancel out the negative, by accentuating with a positive!

Last story, I once sold a home on a very busy road and when you went outside on the back deck all you could hear was the rush of cars passing by at 50 miles per hour. I looked at the seller and said, “hear that?” She said “What?” I said, “The traffic noise, that is going to be your primary issue…the traffic noise.” She looked at me with a straight face and said, “Really?…I always just thought it sounded like the ocean…calming.” She was a serious as could be. What a great attitude in finding the positives! That story is living proof that there is a butt for every saddle, you just have to find the right butt. Take this head on, create a plan and make the best of it. When the time is right you will have minimized the impact, preserved as much value as possible, and you will find the right butt for your saddle.

Dave Kimbrough
The Kimbrough Team

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Lots of Showings, Reduced Price, Still No Offers...What Can Be Done?

Small cute craftsman American house wth green and white.

Dave,

I have my house on the market since January 2, 2019. Lots of showings but the potential buyers do not stay long 5 or 10 minutes then they leave. My home needs masonry work in the basement and floors are sloping. My home is 100 years old but I sunk plenty of money into the house, new bathroom, new kitchen. I reduced the price by $15,000 and still no offers. The feedback is too small, sloping floors. I asked my listing agent if she knows any contractors as I want to unload my home asap. I want to relocate and I am not getting any offers at all. What can be done?

Linda     


Linda,

I am going to break this down almost line by line. There is a lot of meat on this bone, so let’s get right to it!  First, patience is the one thing this time of year requires. Remember that you listed in what is traditionally considered the slowest (from a sales perspective) time of year and it is always hard to interpret showing traffic and feedback so moving with a bit of caution might be prudent. “Lots of showings” is somewhat relative and can depend on your definition of “lots”, but nationwide statistics on the number of showings before you should have an offer is somewhere between 8 & 13 depending on the market, time of year, etc!  Clearly this is not an exact number or science, but it does provide one statistical guideline to have some guardrails that will help keep you on the road! Along that line, there really is no typical length of showings.

From years of experience I would say that the average showing is somewhere around 20 minutes, but keep in mind that is an average, meaning some look quicker and some take longer! As a Realtor, everyone loves the buyer who is a quick looker, but some people need to look in and under every nook and cranny, even if they know they are not interested! Much depends on how large the home is etc. I have seen statistics and studies over the years that indicate that a buyer will internally “know” if the house is a contender within a minute or two, which shows that the final determining factor has a lot to do with having a gut feeling. All that to say that 5-10 minutes is probably a bit light. I even wonder if they are there long enough to get to the basement to see the area in need of masonry work? 

Regardless of if they are making it to the basement or not they are bailing quickly and the reason is most likely the sloping floors. They should be aware of the size before they come to see and the fact that you have had showings tells me that the sloping floors are expediting their exit.
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Regardless of if they are making it to the basement or not they are bailing quickly and the reason is most likely the sloping floors. They should be aware of the size before they come to see and the fact that you have had showings tells me that the sloping floors are expediting their exit. These two issues are even outweighing your kitchen and bathroom updates, which I am sure makes it more disheartening.  Remember sometimes it takes patience to find the right butt for the saddle. Finding that butt can take longer when you have significant hurdles and a sloping floor would check the significant hurdle box. To overcome significant hurdles it generally takes one of three things, time, just the right buyer or price reduction(s).

Your price reduction of $15,000 is a significant move in the right direction. It’s not clear when you made the price reduction, but you need to give it at least 2-4 weeks to season and see if it brings any new buyers to the table. If this price change does not bring in serious new lookers then you will need to decide between time and money! Sounds like time is very important, so you may need to keep adjusting your price until you find the right value that makes accepting the sloping floors an attractive choice for a buyer. With every significant hurdle, there is a price that makes a buyer believe it is an acceptable risk. You will likely need to find that price if you need to sell asap. Your other option is to evaluate what needs to be done to correct the problem and get it fixed! This would significantly increase your buyer pool and appeal.

For your average buyer, the cost to correct sloping floors would loom large in the decision making process because fixing it would require cash they would likely choose to spend elsewhere and expertise that most don’t have. Fixing it would be a great option, depending on cost and timeline to correct. With every home sale there are two lines (price and time) that start off parallel and eventually meet. Adjusting your price is your quickest (notice I did necessarily say best) solution to speeding up the process! Sorry I don’t have a magic bullet, but these options should help you sort it out…best of luck!

Dave Kimbrough
The Kimbrough Team

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Refinancing Your House: Adjustable vs. Fixed Rates

Dear Dave,

We’re considering refinancing our house and have gotten lots of advice on the type of loan we should go with. What is your opinion on adjustable rate mortgages these days? I have heard adamant opinions both ways. We would really like to hear your take on this.

Thanks -

Steve and Lynne - Grand Junction, CO


Money coins stack growing graph and piggy bank nature background, business concept.

Steve and Lynne,

Well, amazingly enough the interest rates are still incredible and we are seeing 30 year fixed rates just over 4.25%, 15 year fixed rates at about 3.75 % and 5/1 adjustable rates hovering right around 3.875%. These are all fantastic interest rates, regardless of if you choose a fixed rate or an adjustable one. 

Adjustable rates are quite attractive as they are set for a specific number of years, in the case of a 5/1 ARM it is set for the first 5 years at a low or “teaser” rate that is very attractive and generally lower than a fixed mortgage, however after the initial “fixed” rate time frame it will periodically adjust in response to the treasury bill rate or the prime rate. The initial low rate is a very attractive and that incentive provides the “teaser” for the potentially higher rate to come as it potentially adjusts and increases your monthly payment. Generally these adjustable rate mortgages have a “ceiling rate” that would be the maximum rate it could achieve and that offers some protection against a potential run away upswing in interest rates. 

In my opinion Adjustable Rate Mortgages only make sense, in our current low fixed rate climate, if you are positive you will only have the mortgage for less than the initial fixed rate time frame. If you believe you will remain in the house for the long term, go with the fixed rate and enjoy the benefits of what is again, near historical low rates and not have to worry about potential market fluctuations. 

Dave Kimbrough
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Are Open Houses Effective in the Winter Months?

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Dear Dave,

Our house has been for sale for about 2 months now.  It is in a higher price bracket and we aren’t having many showings at all.  What is your opinion on open houses this time of year?  Are they worth the work and the hassle for us and our Realtor? 

We would appreciate your opinion.

Thanks,

Bob - Montrose, CO


Bob,

I believe this to be our first question from Montrose, thus I can’t resist a quick answer. Open houses are not a significant part of our marketing efforts, not because we don’t want to sell houses, but because they are not statistically effective at selling houses. Open houses are a very good place for real estate agents to meet new home buyers and sellers and add them to their client list, however they are low on the impact meter for directly impacting home sales.

Open houses are a very good place for real estate agents to meet new home buyers and sellers and add them to their client list, however they are low on the impact meter for directly impacting home sales.

In summary, it is my opinion that open houses are overall fairly benign as a marketing tool. If you and your agent want to have one then you should have one, as any activity is at least “activity”… you know the blind hog theory? To that end, I would advise you to not hold your breath while you are away from home that Sunday afternoon, as it is statistically not probable to produce a sale, but it may help get you more traffic through you home if traffic is what you are looking to achieve. Realize the open house is another tool to potentially sell and advertise your home, however like most marketing methods it will not be the silver bullet you are likely wanting it to be. Try to be patient, we are just about to enter prime selling season…Winter is almost in the rear view mirror!

Dave Kimbrough
The Kimbrough Team

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