When I meet with clients for the first time, I try not to get too excited because I can be forgetful.
I can get so caught up in talking about the beautiful area I live in that I forget about what's really important and that is finding out about my clients' criteria for purchasing real estate.
The criteria is unique to each individual, couple or group of individuals you meet with.
However, there are certain points of interest regarding a property that should be brought to a prospective buyers attention early on in the search process.
1. Confirm that your buyers are not already working with another realtor. Some realtors use the Buyer Broker Agreement. Most Realtors ask and trust that the buyers are being honest and forthright just like they expect their Realtor to be.
2. Price/ Inventory. How much are your clients pre-qualified for? Are they familiar with any inventory in their price range?
3. Type of Sale. Fair Market? REO? Short Sale? What is it? Find out. Understand the process for a Short Sale transaction before even looking at one. Be sure you're willing to be patient if the process takes an extended period of time. With REO transactions, the due diligence period ( in my experience ) is shortened from 17 days to 10. All your inspections, investigations and reporting need to get done during that time-frame. Are you prepared to lace up your running shoes and move quickly?
4. Property Type. In Mammoth Lakes, condominiums and town homes can, for the most part, be rented on a night-to-night basis. The same is not true for a single family residence. Find out if rental income is a requirement to help pay for the property.
5. HOA dues. This is huge to people who want to rent their property out and would like to make a profit right from the get go. I tell people that they, in all likelihood, will not make a profit utilizing a conventional loan, with 25% down. The most likely scenario is for their monthly HOA dues and taxes to be paid assuming they don't use the property during the Holiday times when rates are three times higher than non-Holiday weekday rates. Another issue to discuss is the likelihood of an HOA dues increase and how much. This can be found in the HOA documents provided during escrow.
6. Condition of Property. Most rental properties get really worked. Furniture, appliances and carpeting have been used and re-used over the years. Lots of wear and tear. It's crucial that a home inspector come in, during escrow, and use their critical third-party eye to find and highlight problem areas within the property. The buyers can then submit a reasonable Request for Repairs to have the problems repaired during escrow or to have a credit given to the buyers.
7. EPA Fireplace. In Mammoth, there's a Town ordinance requiring all fireplaces to be retrofitted with an EPA stove insert which reduces the particulate matter going into the air. These cost around $3,500 and go up from there. If the fireplace is an original, with no insert, that's another negotiating point.
8. Security. If there's underground parking, is there an automated garage door? Are there lights in the garage? Are there multiple access points into the garage?
9. Assessments. When reading the HOA documents, is there any mention of upcoming assessments to cover deferred maintenance? If yes, how soon and how much will each owner be assessed? Owners with larger condominiums/town homes will pay a larger assessment because their property has more square footage. If it looks like there's a lot of maintenance being done as you're walking the property, go speak with the manager and ask about the work and whether or not it's being paid for out of the operating budget.
10. Parking Spaces. How many are assigned to your property? Do you get any guest parking privileges? Are there specific spaces for your unit or is it first come-first serve?
11.Amenities. Does the development have a pool, jacuzzi, sauna, laundry facilities, tennis court, green belt with picnic tables? Developments with no or just a few amenities will have lower monthly HOA dues.
12. Location. In-town? Ski-in/Ski-out? Outer areas of town? Westin versus older town home development? Lots to think about and discuss. If your clients want to rent the property out and you live in a ski town, then near the lifts should be strongly considered. If your clients want to come up with family and spend long periods of time then maybe a location on the outskirts of town with easier access to walking/bike paths.
13. In town transit. How close is the nearest shuttle stop? Where does it go to? How often does it run? Does it cost anything? Does it go to the slopes, the trailheads, local stores or restaurants? Find out.
The more questions that are asked, the more answers will be provided and surprises eliminated. It's super important to engage our customers through-out the search process so they are thinking "critically" and re-evaluating their criteria as new properties are presented.
Criteria Is Key and it's up to us to work with our clients to define, refine and finalize the key elements.
