NOTE TO SELLERS: IT'S NOT MAGIC, BUT THERE IS A TRICK TO INCREASING DEMAND FOR YOUR HOME
In a recent survey of prospective homebuyers, nearly half (47 percent) said they would buy if the rate for a 30-year fixed-rate mortgage dropped to 5.5 percent or lower. That compares to just 13 percent who would be content with 6.99 percent or lower (as of Oct. 31, the average rate was 6.72 percent, according to the Federal Reserve Bank of St. Louis).
In short, if the rate dropped to 5.5 percent, the pool of potential buyers would deepen dramatically. It’s considered the “magic mortgage rate” – the point at which buyers are more willing to give up the low rate they currently possess on their existing home and move for something new.
While sellers can’t waive a wand to reduce mortgage rates, there is a proven way to increase the number of buyers who can afford your home – and without slashing the list price. It’s a tactic that homebuilding companies have been using with great success to keep their inventory in demand.
By making financial concessions at the closing, you can help the buyer “buy down” their effective interest rate – and get closer to the “magic” 5.5 percent rate (see accompanying graphic).
Here’s a scenario for how it would work:
If you’re listing your home for $600,000, you can contribute $18,000 (3 percent of the price) at closing – which cuts 125 basis points (1.25 percent) off the buyer’s mortgage rate. That means you can take the interest rate from 6.72 percent to 5.47 percent, which then lowers the buyer’s monthly payment.
An alternative tactic for creating a similar level of affordability is to drop the list price of the home upfront, which could ultimately cost the seller approximately twice as much!
For sellers, the message is this: You don’t need to wait for interest rates to drop to attract buyers. The more financial concessions you’re willing to offer, the more buyers you can attract to your home.
NEW YEAR, NEW RULE: FORT COLLINS LANDLORDS NEED TO REGISTER THEIR RENTALS
Under a new law taking effect at the beginning of 2025, most rental housing owners in Fort Collins will need to register their property with the city government.
Proponents of the new rule say it will help the city protect the quality of the local rental housing stock, which represents about 40 percent of all dwelling units in Fort Collins.
Fundamentally, rental registration is expected to serve three primary purposes:
- Enable the city to better enforce its rental housing code, which sets minimum standards for rental housing quality (Fort Collins maintains a complaint-based rental inspection system; the rule means inspections are not required of landlords, but renters who suspect their housing is falling short of minimum health and safety standards can ask for an inspection).
- Establish open communication between the city and landlords, which can lead to better outreach and education for landlords and tenants.
- Help the city identify and contact landlords when nuisance complaints are lodged.
The registration requirement applies to rentals with leases of 30 days or more. It does not apply to owners of commercial properties, short-term rentals, mobile homes, and owner-occupied homes.
City officials hope for voluntary compliance, but failure to register could lead to penalties. If the city learns a landlord has not registered, it will issue warning notices. If the landlord still fails to comply, they could eventually be fined.
Fort Collins has offered sweeteners to persuade landlords to register before January 1. Early registrants are eligible for incentives and prizes, such as grant money to pay for repairs and upgrades, free legal consultations, and house cleaning and pest prevention services.
REGISTRATION DETAILS
Here are details about registering rental properties in Fort Collins:
- The registration deadline is Dec. 31, 2024.
- The annual fee is $37 per property and $10 for each additional unit.
- Register online HERE
- For help registering or for more information, contact the city at rentalhousing@fcgov.com or 970.416.2305.
- Landlords and tenants can learn more about the city’s minimum housing requirements by calling 970.657.9521 or emailing rentalhousing@fcgov.com.
- Tenants can check the city’s rental registration database to make sure the property is in compliance before signing a lease.
Call The Group’s property management arm, The Source, at 970.797.3383 if you’d like us to manage your rental. When registering, you have the option to add The Source as your property management company, which allows us to receive information on your behalf and ensure everything is accurately managed.
FEDERAL DEADLINE NEAR FOR REPORTING YOUR BUSINESS OWNERSHIP STATUS
One type of registration may not be enough for some landlords in Fort Collins.
If you own your rental unit as a business holding, then you are likely one of 32 million companies in the United States that is subject to a federal rule requiring business owners to report their ownership stake in a corporation or limited liability company (LLC).
The deadline for reporting is January 1, 2025.
The rule is rooted in the federal Corporate Transparency Act, which is an effort to reduce fraudulent or illegal activities, such as money laundering. Corporate officers or decision-makers are required to submit their Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN).
There are exemptions for certain types of businesses. Failure to comply can lead to fines or even criminal penalties.
A BOI filing can be submitted online HERE. For more information click HERE.
REAL ESTATE BY NUMBERS
- $150 million. Estimated investment to create a new fusion energy laboratory at Colorado State University, which started under construction in October. The 71,000-square-foot facility will be known as the Advanced Technology for Laser Applications and Science (ATLAS) Center. Funding includes a $28 million grant from the U.S. Department of Energy.
- 4,300. Acreage that would accommodate a major solar energy facility along the border of Weld and Morgan counties. The proposed facility is known as Taelor Solar Project.
- 4. Number of Colorado counties that rank among the top 20 most expensive counties for housing prices, based on analysis by Zillow. All four counties – Pitkin (2), Eagle (9), Routt (16) and Summit (19) – include major ski resort communities.
- 69 percent. Percentage of American homeowners who say they would buy their current home if they had to do it over again, according to Bankrate’s Homeowner Regrets Survey. Another 19 percent of American homeowners said they wouldn’t repurchase their current home and 13 percent said they didn’t know.
- 18,324. Square footage for a new 84 Lumber outlet in Greeley, taking over a former recycling warehouse in northwest Greeley at O Street and 59th Avenue. The Pennsylvania-based company also has plans for a new component plant in Fort Collins later this fall.
- $6.6 million. Amount that donors are giving to Colorado State University to create a new construction engineering degree program at the school. The donations include a $3 million gift from Kiewit Construction, as well as $1 million from the Patterson Family Group.
- $10.6 million. Price that Utah investors paid for The Best Western Plus Hotel in Hudson. The four-story building is located at 301 E. Bison Hwy. and includes 60 guest rooms and 27 suites.
- 300. Number of acres that the city of Greeley plans to annex at the southwest edge of the city. As planned, the acreage will be used for housing developments that could serve about 1,500 residents. The annexation site is located west of Colorado Highway 257.
- $3.5 million. Price that a Utah-based business paid for the former ADP office building in downtown Fort Collins. The new owner, Kiln, plans to convert the 19,871-square-foot space at 301 Remington St. into a co-working facility.
- 613. Number of apartment units that an Idaho real estate company has recently purchased in Fort Collins. The investor’s acquisitions include a 405-unit Fort Collins apartment complex and a 208-unit complex.
- 4. Number of Colorado towns ranked among the 20 communities with the greatest growth in home values since 2000. The four towns and their rankings are: Carbondale (1), Rifle (12), Boone (18) and Glenwood Springs (19). The ranking is based on an analysis of Zillow data.
- $25 million. Price that investors paid to buy a senior living community in Greeley. The Lodge at Greeley, which includes both assisted and independent living units, is located in the Centerplace development, 4430 24th St. Road.
- $8.5 million. The price that the city of Greeley has paid, partly with the use of grant funding, to complete the acquisition of 978 acres of undeveloped land on its west side. The ground will preserve a natural area and is located along Colorado Highway 257, north of the U.S. Highway 34 Bypass.
As the holiday season brings us together, we take a moment to express our gratitude for the communities we serve and the connections we’ve built. At The Group, we are honored to be part of your journey and look forward to helping you achieve new goals in the coming year. We wish you warmth, joy, and a home filled with love this holiday season.