JUST SOLD! Victorian Restoration Project

I recently sold this fascinating Victorian home in Ogden.

Built in 1889, this is one of the oldest standing structures in the city.  I first sold this home to a client in 2007 during the peak of the market bubble fever.  At that time the property was being used as a triplex. About a year later, the home experienced a water main break and my client was looking for options to help rescue the property.  Fortunately, a buyer expressed interest and a willingness to fix the problem and purchase the property.  We structured a seller finance transaction and things moved forward.

Unfortunately, the new owner of the property made some serious mistakes in managing their investments.  In early 2014 they defaulted on their loan and after some lengthy attempts to work things out with buyer, the former owner proceeded with a foreclosure.  The total loan balance due exceeded the market value of the property.  Thus, the foreclosure auction at the courthouse steps was sparsely attended.

Here is the trustee placing the home up for auction at the courthouse steps.

During the foreclosure proceedings, the owners wanted to know what to do with the property. The property experienced a broken sewer line and serious water damage to the interior of the home prior to the default.

You can see the video tour here:

Fortunately, another buyer expressed interest in the home.  We placed the property under contract subject to the foreclosure being completed.  Once the foreclosure was done, we closed at a price of $109,900 with a seller financed contract.  

The future of this property is bright.  The new buyer will be consolidating the current triplex configuration of the home and making it into a beautiful Victorian homestead again. I look forward to sharing photos of the finished work when it is done.

If you are looking for a restoration project to make into your home, CONTACT ME, for a list of homes that are available.
    

The Peril of Broker Paid Home Inspections

When it comes to buying a home, buyers need to be aware of the risks of homeownership.  Any property, even new homes,  have warts and wrinkles that need to be addressed or understood by anyone wanting to own the property.  Thus, during the purchase process, we give buyers ample time to discover all the things they want to know about a property.  This process usually includes a home inspection by a professional, radon tests, zoning verification, and other fact finding.  

Here is a checklist that Realtors give clients to help shepherd them through the process of doing due diligence.  

Utah Buyer's Due Diligence Checklist

As you can see, the checklist is pretty thorough.

However, recently I was made aware of a brokerage that offers to "help" buyers in their due diligence process.  They promise to provide a home inspection at no cost to the buyers.  While this may sound appealing, this situation actually causes more problems than it solves.

I met a young couple who recently purchased their first home in my neighborhood.  The home had recently been renovated by an investor who wanted to flip the property.  The home was listed for sale by Agent Andrew at SuperDooper Realty (not their real names, obviously).  The buyers were represented by Agent Sally who worked for SuperDooper Realty as well.  Agent Sally showed the buyers the home and placed an offer.  As part of the deal, SuperDooper Realty hired and paid for a home inspection.  The deal closed and the buyers move in.

So what was the result of this scenario?  Well, the buyers found all kinds of electrical problems and bad wiring that was easy for a home inspector to find but was not disclosed in the home inspection they received.  They felt like they had been hoodwinked.  But, someone might say, isn't the home inspection supposed to report these things?  The answer is, maybe.  In this case, the home inspector wasn't working for the buyers, he was working for the brokerage or the agents who paid for his services.  The agents and brokerage have a strong financial incentive to see the transaction completed.  And, the home inspector has a strong financial incentive to keep his client happy.  So, if things get missed or overlooked in the report being given to the brokerage (which is then relayed to the buyers) that is unfortunate but a cost of doing business this way.  (NOTE: Home inspectors are not regulated by state law in Utah but this is a conversation for another day...)

The best way to prevent this deceptive chicanery is for buyers pay for their own inspections so the inspector is accountable to the buyers as his clients.  If you are being represented by a brokerage that is offering to pay for your home inspection, politely refuse, and insist on paying for your own inspection.  It is worth the money.

If you are looking for a home inspector you can trust, I highly recommend Mark Ward at WIN Home Inspections.  He has been my tried and trued inspector for years.  His reports are thorough and readable and his experience as a home builder has been invaluable to my clients' understanding of the homes they are purchasing.  Feel free to reach out to Mark at 801-444-9464.

If you are looking for a home that is right for you, CONTACT ME, and let's explore the market for homes that are a perfect fit.

Scenes from Ogden Valley

Besides just representing buyers and sellers in real estate transactions, another service our brokerage provides is property management.  We service all of Weber County which includes the resort area of Ogden Valley.  While making a regular visit to property today, I took a few moments to capture the beauty of one of Utah's best kept secrets.  

It is remarkable to believe that so much of nature's splendor is just 20 minutes from the city center of Downtown Ogden. If you are looking for that special place nestled in the mountains, CONTACT ME, and lets find the right place for you to call home.  

Market Hot...But Not Frothy

The real estate market has been in overdrive the past several months.  Homes are selling at an incredible pace, especially in the sub $400K price range.  Inventories are hovering around the 3-month range which is brisk compared to years past.

With homes selling so quickly, there have been some echos of 2006 and 2007.  For those of us in the real estate business, this tends to induce uncontrolled twitching and anxiety.  Having lived through the worst real estate depression in a lifetime, many realtors are still stuffing cash in their mattresses and hoarding food.

So, fearing yet another market belly flop, I decided to do a deep dive into the data and see how our market is really faring.  What I found surprised me, soothed my nerves, and inspired some confidence.  Let's take a look at our first chart regarding house prices themselves.

Since the market bottomed out in 2012, prices have crept upward with a notable surge in 2013.  Since then, prices have plateaued.  Prices are about where they were in the major transitional periods of the first quarter of 2007 and again on the way down in mid 2010.  NOTE: The prices in this chart do not reflect an average or median price but reflect an indexed value (from FHFA data) with a starting value of $100,000 in 1979.  

The plateau in house prices is encouraging since it indicates that the market is not frothy and that homes are being sold based on economic fundamentals like income rather than on goofy hybrid mortgage products during the bubble years.

Yet, another tool I use to measure whether the market is overheated or not is a an inflation adjusted index.  This is a powerful tool which exposes some of the unseen things happening in the market.  Theoretically, if house prices are tied to income as they should be, and all incomes increase with inflation, then if we subtract inflation from the mix we should see house prices as a fairly stable value over time with little or not increase.  If we do see an increase, we know that incomes might be increasing in the county faster than inflation.  This would be a good thing because it means the workforce would be changing to higher paying jobs.  Or, it could mean that there are distortions going on in the real estate market itself like during the bubble years...in this case, weird mortgage products mucking up the works.

     The blue line represents the inflation adjusted price of housing in Weber County.  As you can see, there was a big sag in the 1980's. During this time, Utah was an undervalued market.  That corrected in the 1990's which ended in a slightly frothy 1999 with a recession and real estate market dip that followed.  Since that time, you can see that the indexed value of $100,000 has been a fairly stable point for Weber County.  The real estate bubble is obvious as well.  To give some more detail, lets zoom on in the blue line...

If we assume that the natural price in this chart should be around $100,000, then we have to ask ourselves, why isn't it at that price all the time?  In 1999 you can see the overshoot and market froth.  In 2002 the olympics created a brief period of froth.  Then in 2004-2005 the market sunk into a light recession marked by many short sales and foreclosures.  From 2005 to 2008 we experienced a once-in-a-lifetime real estate bubble. In 2011, the market over corrected on the down side providing lots of buying opportunity.  Since then, the market has returned to what appears to be equilibrium at our $100,000 index mark.

So, what is the takeaway from all this econo-babble?

1.  Your house is worth right about what it should be for a healthy economy.
2.  The next real estate market downturn should be fairly benign compared to the last one.
3.  The market is not overheated despite the brisk sales.  Low inventory is the culprit.

If you are considering putting your home up for sale and want to know what it is worth, CONTACT ME, and let's find out its fair market value.  I promise to spare you of all the econo-babble.  

The Contractor Triangle

With the weather warming up and people wanting to get their homes ready to sell, many folks have improvement projects that need to be completed before they put their homes on the market.

I have renovated many homes and have a lot of experience working with contractors and subcontractors.  When choosing a contractor to work with, make sure you know what you need from the them.

There are three characteristics that every person wants from the work of a contractor or handiman.  They want the work done cheaply, quickly, and at top quality.  Unfortunately, one of these characteristics is always working against the other two. What I have experienced in real life is that you only get to pick two out of the three.

For instance, if you get a really cheap bid, you can expect the work to be quality but slowly done.  If you get an expensive bid on the other hand, you should expect the work to be done quickly and at top quality.  Meanwhile, sloppy work can be done quickly and cheaply.  Keep in mind that you should get at least two of the desired characteristics.  If you are only getting one, you are being cheated.

For work done on our rentals and listings, I always shoot for good quality...even if it costs a little more or takes a little longer to achieve.  In my experience, there is nothing worse than regretting the quality of work done on a project or having to redo it again in a few years due to poor craftsmanship.

So, while you are thinking of fixing up your rental property or getting your home ready to for sale, think about what you want and need out of a contractor.  Make sure you establish your expectations with them in advance and in writing, and then enjoy getting work done without much sweat on your own part.

If you want to know what improvements to make to your home before putting it on the market, CONTACT ME, and I would be glad to do a walk through and give you some ideas so you get the best return on your money.

FOR SALE: Historic Victorian Restoration Project

I recently listed this amazing Victorian home in Ogden.

Located at 640 22nd Street, this beautiful home is a diamond in the rough.  It is located next to the new elementary school under construction and just several blocks from the recently renovated LDS temple, many diverse worship centers, the Junction, the Ogden River Parkway, and Historic 25th Street.   The home has over 1800 SQFT with four bedrooms and two bathrooms.  The home also boasts the original stairway banister, an elegant entry, tall 10' foot+ ceilings (behind a false drop ceiling), original casings and woodwork, and tons of charm.  There is a two bay carriage house behind the home with a fenced yard.  The home is brick construction built in 1898...just after Statehood.  

Unfortunately, the home was subsequently subdivided into a duplex sometime mid-century.  However, putting the home back together should be fairly simple.  To help with the restoration, Ogden City is offering $20,000 to an owner who will reduce the property to a single family residence.  

Here is a video tour of the property so you can get a feel for layout and condition:

I also went and measured out the interior of the building to get a feel for the floorplan. Here are those dimensions for your benefit:

Victorian Restoration Project - 640 22nd Street Floorplan by Jeremy Peterson

The measurements aren't exact but they are pretty close.  Estimated costs to fix this property start around $40k and increase from there depending on the level of finishes and hardware you want to use.  The property would be worth around $150k-$160k or more depending on the quality of the work done.  Contact me for a current list price for this property.

If you are looking for an opportunity to restore one of Ogden's beautiful historic Victorian homes, this is one you can't pass up.  CONTACT ME if you are interested.

 

FOR SALE: Seller Financed Craftsman Fourplex

I just listed this investment opportunity in Ogden.

Located at 2943 Porter Ave., this property is approximately 3200 square feet and hosts four rental units.  The building generates $1900/mo. in rents with the owner paying gas and water utilities.  There is ample paved parking for the tenants.

The owner of this property will sell the property with seller financing.  A 10% downpayment is required and the monthly payment would be approximately $950 (principle and interest).  Taxes and insurance would be additional.

If you are interested in exploring the possibilities with this investment, please CONTACT ME for current pricing.  I can also email you the income and expense spreadsheets.  If you drive by the property, please have the courtesy not to disturb the tenants.  

FOR SALE: Updated Mid-Century Tri-Level Gem

I recently listed this home for sale in northern Ogden.

Located at 640 E. 1300 N., this 4 bed 2 bath home sits on a spacious .21 acre corner lot.  The property boasts new windows, siding, refinished hardwood floors, carpet, modern style European cabinets, granite countertops, mosaic tile bathroom finishes and so much more.  This home is a MUST SEE!

Here is a video of the home:

The home has 1672 SQFT with a master suite upstairs and three bedrooms in the basement.  The living area has a nicely finished rock fireplace.  You will enjoy the open feel of the floorplan and the fine finishes.  

If you are interested in viewing this awesome property, CONTACT ME, and we can set up a private showing.