Innovative strategy provides opportunities in Steamboat market
June 3, 2011
Steamboat Springs — In a sluggish real estate market, nothing's more frustrating to sellers than identifying a buyer for their home, only to find that their salvation is held up because the buyer can't take action until they sell their own home. It's understandable, but discouraging.
One workaround that's gaining some attention in the Steamboat Springs market involves finding buyers for sellers who are willing to buy a second, lesser property in order to get a deal done with a buyer hoping to move up to a nicer home.
The sellers trim their indebtedness to a level that's more practical for them, and buyers are freed to act on the home of their desires.
A swap isn't the easiest transaction to pull off, but with perseverance, it can un-stick a would-be deal.
"It's a lot of work," said Realtor Scott Wither, of Colorado Group Realty. "The hard part about trading is getting everyone's equity to work out. It's basically two transactions. I agree to buy your house for $1.3 million (for example), and you agree to take mine for $300,000" to make the deal happen.
Realtor Beth Bishop, of Prudential Steamboat Realty, said she is representing the developers of a never-occupied spec home in the pocket Montview neighborhood that is tucked out of sight behind a grassy ridge between the shopping and dining in Central Park Plaza and Steamboat Boulevard, just removed from the base of Steamboat Ski Area.
"Trades open an additional market for a property — people who are saying, 'Maybe this is the time'" to buy, but can't act on their impulse without selling an existing home in a slow market, Bishop said. "We've had several work out in our office. People have the opportunity of buying a new home without going through the hassle of selling their own home."
Bishop said her clients are willing to look at all types of offers for the 4,140-square-foot home they have listed at $1.499 million. They took it off the market for the winter and just put it back on the Multiple Listing Service on Thursday. The original asking price was $1.85 million, and the price reduction is $351,000.
The new asking price works out to $362 per square foot for a property that has the income potential of an attached, one-bedroom caretaker's apartment.
It's presumed that someone would have to bring a loan or cash to a transaction to trade up to the new house, Bishop said. A likely property to bring to the deal might be a townhome or condo of lesser value with the potential for nightly rental income.
"Montview is a neighborhood on the rise," Bishop said. "There are currently two properties under contract there, a townhome and a single-family home. There aren't many like it near the mountain where you have a caretaker's unit and you can walk around the corner to go shopping."
Wither's listing, like Bishop's, includes a caretaker's apartment. The 4,000-square-foot home is priced at $1.399 million. His clients bought near the top of the market in 2005 but continue to enjoy strong equity despite the declining market because they put 50 percent down.
"They're open to trading for vacant land in the South Valley or maybe a three-bedroom townhome or house," Wither said.
It's a new form of matchmaking for Realtors, but innovative strategies are called for in difficult markets.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com