After a multi-year run in the local real estate market that was unlike anything anyone had ever experienced, a slight sense of reality has returned to both prices and sales activity.
And while those often double-digit growth figures have slowed down considerably, Debbie Nelson and Ned Walley of Nelson Walley Real Estate say the change in market temperature still offers opportunities for sellers – provided they gauge their expectations appropriately and do their homework.
“We want to reassure sellers that they did not miss the boat, even though the market certainly peaked out by May,” Nelson says. “Things have calmed down, but people shouldn’t feel like they have to rush. Average prices are still up 16% from what they were in 2021, and we still only have two and a half months of inventory available on the local market. Buyers are being pickier and won’t settle for things they would have lept at just a few months ago.”
The continued difficulties in the slow pace of new construction and the impact of both municipal and county-wide short-term rental regulations are additional forces at play. However, sellers still hold significant power as they figure out the best way to maximize their investment in Summit County real estate.
The main challenge for 2023, Walley says, will be learning from the absolute roller-coaster ride of the Covid-era market and helping new sellers resume some of the habits – and pricing research – that were more common before the real estate free-for-all of the last two years.
“We are sort of in a hangover phase, but this comes after the craziest market ever,” Walley says. “Not that we shouldn’t have seen this downturn coming, especially with inflation and understanding the way that the Fed was going to manage it by hiking interest rates. And interest rates weren’t the primary cause of our market adjustment, it was the stock market.”
NEW (OLD) STRATEGIES FOR SELLING
Both Nelson and Walley suggest potential sellers take a more nuanced look at the way they want to present their home, just as the two broker-owners are now spending much more time and detail in establishing values for properties.
“It’s still important for sellers to do their prep work, and not just get their home on the MLS services, as is,” Nelson says. “If they want to extract maximum value, they need to prep a home for sale and market it more effectively – that’s a must. If buyers are seeing a home and are overwhelmed by its décor, then sellers need to make some big changes if they don’t want to leave money on the table. And that’s where we come in.”
In a further effort to heighten the value of local properties, Nelson Walley Real Estate does independent Comparative Market Analysis reports on sellers’ homes. Those include many factors such as size, bathrooms, garage, age, level of finishes, acreage, views, and any features unique to the home. It’s a detailed process, sometimes taking two full business days to complete, but Walley said the results often provide considerably higher prices for sellers.
“Using our unique strategies and marketing tactics, we sold a single-family home a couple of weeks ago in Dillon Valley for $1.5 million, which is by far the highest price ever paid in Dillon Valley. We had two other long-time local buyer’s agents whom we respect say they couldn’t see a value more than $1.3 million,” Walley says. “When we stick to our formula, our sellers always win.”
DISCLOSURES HAVE ALSO BECOME MORE IMPORTANT
Sellers are also cautioned to pay much closer attention to disclosures about any pre-existing issues with a home, as there have been more cases of buyers’ remorse – and even legal action – from unresolved problems such as water leaks.
“I’ve been in this business since 2005 and this was the first year I saw three different deals where buyers said things weren’t disclosed, and demanded some action or compensation from the seller,” Nelson says. “I had to contact the Colorado Association of Realtors legal team for advice. They said their calls have increased significantly as buyers have complained that they paid too much or jumped into the market too quickly, and didn’t even have time to think about any potential problems.”
No longer will it suffice to have a blank disclosure statement, and Nelson encourages sellers to spend much more time offering an explicit and detailed assessment of any past or potential issues.
“Our job is to protect the seller as much as we can,” Walley says. “Whether it’s by using our methodical approach to pricing and marketing a home so we don’t leave any money on the table, or by holding our sellers’ hands to guide them through the disclosure process so they minimize any future liability. Most of our business is referrals from past clients, so to me that says our process works.”
This article originally appears in the Summit Daily.