Push the button…play the recording! Local real estate sales continue to spiral down with just 189 homes closed in March, a 27.9% decrease from last year. And after three months of relatively modest price declines, the March average selling price of $235,326 was 9.1% less than a year ago. With the first quarter in the books, sales totaled just 459 homes, a 23.5% decline and the average price of $243,408 was down 5.4%.

All of the news is not gloomy however as March sales were a substantial 48.8% increase over February and the best month we have had since last October. The median selling price in March was $214,000 compared to $210,500 last year and is now at $209,000 for the year to date compared to $210,000 for the same period last year, a decline of just 0.5%. The DOM (days on market) of the March sold listings also improved from 135 in February to 125 in March. For buyers, there is a better selection of homes on the market as the active listings increased to 1,938 compared to 1,663 at the end of February and prices continue to be very flat. The average selling price for 2005 was $245,243 compared to the current $243,408 so there is good value in today’s prices. And, as reported earlier, PMI’s U. S. Market Risk Index – which measures the likelihood of home price declines in two years for each of the nation’s 381 metropolitan statistical areas – calculates that the Fort Collins – Loveland MSA area has a very minimal risk index of 2.4 meaning that there is almost a 98% chance that a home purchased this year will increase in value. This Risk Index uses economic, housing and mortgage market factors (including home price appreciation, employment, affordability, excess housing supply, interest rates and foreclosure activity) to determine these probabilities. To put the 2.4% calculation in perspective, several areas of the county have a risk index of almost 100% (Miami Beach 99.9, Riverside 99.9 and Las Vegas 99.8).

We have also noticed an increase in traffic and homes being placed under contract. As an example, one particular development had five contracts written in March compared to zero the previous three months. This is a new construction project so the contracts will show up as closed sales over the next few months. In addition, the $8,000 first time home buyer tax credit, down payment assistance and very low mortgage interest rates are gaining attention.

Sales in the next five months – April to August – have traditionally been the peak months of the year, accounting for around 60% of the annual home sales so here’s hoping that the increase in activity in the last few weeks will equate to increased sales activity.

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The local MLS information is provided by IRES (Information and Real Estate Services) and they have recently decided to offer sold information to the public. This information has not been posted to the public MLS site at www.ColoProperty.com but it is available at several other sites including www.FortCollinsRelocation.com. It only shows homes sold information going back twelve months but offers much more detail than what is available through the Larimer County Tax Assessor at http://www.larimer.org/assessor/sales.cfm and can be searched by all the same categories as a search for active listings.

During the year, we have the opportunity to visit hundreds of homes, working with buyers and sellers, previewing properties, participating in office tours or attending open houses and model homes. This is a big and important part of our job – knowing the market – and it can also be the most interesting. Obviously we get to see homes in all price ranges, in all locations and in all conditions – from good to better and from bad to worse.

One thing we have noticed recently is a large number of vacant homes on the market and herein lays one of the biggest challenges facing Realtors – the marketing of a property with a vacant home. This occurs most often when a seller has accepted a job in another area and must relocate prior to the home being sold or when the seller’s new home across town is ready and the present home is still on the market or, unfortunately when the owners have lost their home to foreclosure.

Sellers do not like to leave a vacant home for good reason:

* A vacant house may imply that the owner is carrying two mortgage payments and may be desperate for a fast sale.

* A vacant home can be a target for vandalism.

* A properly furnished and well decorated home will be more attractive and show better than a vacant home.

What can be done? A vacant home presents certain challenges but it does not need to be difficult to sell and it certainly shouldn’t imply that the seller is desperate. Sellers should employ some or all of these strategies to hasten the sale of a vacant property and protect it during the process.

* Give the house a lived-in look to thwart any unwelcome visits. Set a couple of lamps on timers, and have a neighbor or friend check on the house often to take in mail, park a car in the driveway, and close and open drapes and windows.

* Continue using a gardening service or hire someone to cut the grass regularly. During the winter months, arrange to have snow shoveled from the walks and driveway.

* If you remove the furniture, have the house cleaned and painted. Furniture, rugs and decorations tend to hide or minimize imperfections. When furniture and artwork have been removed, every blemish and bruise becomes accentuated, faded paint and wallpaper become more noticeable and scratches and nicks stand out.

* Repaint brightly and boldly colored rooms to a neutral tone. What was an eye-popping room when fully furnished may appear stark and small when empty.

* Leave the utilities connected.  Depending on the season, make sure the thermostat in the house is set at a comfortable level.  You don’t want a potential buyer to run through the home because it is too hot or cold.

* Arrange with a maid service to dust, vacuum and clean on a regular basis. A clean, spotless home is much more attractive than a dirty, tired property.

* Leave behind a few select pieces of furniture and keep the window treatments in place. Instead of producing a spacious appearance, an empty room tends to look smaller than a furnished room. A chair or lamp on a small table will confer a sense of scale and help potential buyers gauge whether their furniture will fit the space.

* Review your homeowner’s insurance policy with your insurance agent to find out what the stipulations and coverage are for your vacant home.

* If available in your area, consider employing a home manager or house sitter. At little or no cost to homeowners, the house is furnished and decorated for show-to-sell condition. Most companies require home managers to mow the lawn, shovel snow, and even pay pool maintenance and utilities. Having someone living on site discourages vandalism, protects against deterioration and weather hazards and may even reduce insurance costs. (Check with your insurance carrier.)  Using a service of this kind may help you sell the house faster and at a better price, while relieving you of property management duties. Search the Internet for professional house sitters in your area.

* Consider hiring a professional home staging company. These people will work to stage your home and can supply furniture, pictures and other décor items and amenities to show your home in the best possible way.

* Find a real estate professional with experience selling vacant houses. Very often, these sales professionals specialize in relocation. You want to make sure that you are comfortable with your lines of communication. If you will be residing in another town, come up with an agreement on how often your representative will check on the home and what should be done if a problem develops.

Properly presented, your ‘vacant’ home can compete with most any other property on the market.

Section 10 of the Buy / Sell contract approved for use by the State of Colorado Real Estate Commission allows home buyers the right to ‘have inspections of the physical condition of the property and inclusions’. It further states that ‘if the physical condition of the property or inclusions in unsatisfactory in buyer’s subjective discretion’, the buyer will have the right to terminate the contract or ask the seller to correct any unsatisfactory physical condition.

This ‘subjective discretion’ puts the buyer in a very powerful position, which is sometimes abused. We regularly hear stories of buyers terminating contacts for very insignificant issues, at times backing out of the contract even though the seller has agreed to fix the problem and there are even some buyers who will continue to look for another property and then use the inspection clause to cancel one contract to buy another.

The purpose of the inspection clause is to allow the buyer to understand the condition of the home and to provide a platform for negotiating the repair of any health or safety issues. Most contentious issues result from demands to repair clearly visible cosmetic items, like a chipped sink or a cracked tile.

All homebuyers should be encouraged to have a professional property inspection. A professional inspection is not mandatory, but an inspection is the best information and protection available at an affordable cost. The inspector visually inspects and detects adverse conditions and investigates, operates and systematically identifies the major systems and components of the home. The inspector addresses health and safety issues, adverse conditions and required re-sale corrections, making recommendations and counseling on repair options and maintenance. Issues can be anything from minor roof repairs to improper venting causing carbon monoxide emission or a fire hazard. A defective light switch, a window that does not open, plumbing problems and structural failure are all issues that a buyer wants to know about. If the inspector has a concern about any particular element of a home, they may suggest further investigation from a qualified contractor, like a roofing or HVAC contractor. A home inspector can also complete a test of the radon level in a home.

Home inspections are not just for buyers. Home sellers can use a professional inspection to protect themselves from liability of future non-disclosure claims. A pre-listing inspection also provides sellers with appropriate condition information, used to price and prepare their home for sale. When repairs are needed, the seller can shop for bids and choose a contractor without feedback of a potential buyer. The seller can disclose adverse conditions they decide not to repair and the report can help in the marketing to potential buyers, providing up-front information on the condition of the home.

The inspectors report is an important tool in real estate transactions and it is the only document that details the product being bought and sold. Once conditions are defined, it is up to the buyer to decide if the current condition of the home will meet their needs. The buyer decides what is acceptable and what isn’t.  Sellers are not required to make corrections although further negotiation of the contract is often the result of facts documented in the inspection.

Home inspections are not intrusive or technically exhaustive and should not be considered a guarantee or warranty but a professional inspector is accountable for accurate condition exposure. The inspector is a third party, independent of the transaction and collects his fee at the time of the inspection, purposely keeping himself out of the transaction. Professional inspectors will not perform or offer to perform any repairs, eliminating potential conflict of interest.

For more information about home inspections you can ask your real estate professional, check the yellow pages or check out many web sites dealing with home inspections. As an example, the web site of the American Society of Home Inspectors at www.ASHI.org has a lot of good information including ‘Frequently asked questions on home inspections’.