Buying Tips for Breckenridge & Summit County

 

Thinking about a property in Breckenridge or Summit County? Congratulations - this is a gratifying community to call home, for both year-round outdoor enjoyment and the community opportunities that bring families and friends together. 

If this will be your first purchase in the area, there’s much to think about. The education a buyer should go through varies, depending on the type of desired property and the experience of the buyer.  Here’s a sampling of matters to discuss with the Realtor that assists you in this important decision making process:

 

1. Rentals. Will you place your property on the short-term rental market? If yes, and if the income potential will be weighted in your property selection, then you should become familiar with cash flows for your candidate properties.

2. Inspections. Home inspections are typically done after a buyer and seller sign a contract, but in some instances, a buyer will arrange for an inspection prior to signing a contract. The buyer selects the inspector, and the inspector will review most or all aspects of the home/condo/townhome: structure, utilities, general building quality, unusual signs of wear or damage, etc. The home inspection is an important part of the buying process, and should not be skipped to save a few dollars. If objectionable conditions are found, the buyer has the right to request that the seller address those conditions; the buyer also has the option to terminate the contract due to conditions brought up in the inspection. 

3. Lenders. If a new loan will be secured for the purchase of the property, it’s never too early to begin the loan application process. Much has changed with loans since 2008, and the best advice for a problem-free process is to work locally. Ask your Realtor for a list of local lenders, mortgage companies, banks. 

4.  Furnishings. The closer a property is to the ski slope, the more likely it will be sold furnished. This is because the property is likely a short-term rental or a second home, and the seller does not have use for the furnishings elsewhere.  Sellers often have several furnishing exclusions (personal items, art work), and the buyer should fully understand what furnishings will be included/excluded at the time the contract is written. Furnishings are transferred via a bill of sale, usually with no dollar amount, and are not part of the purchase price. Dealing with the furniture can make for road blocks in negotiations, as buyers and sellers value the furnishings differently.  This is another good topic to discuss with your Realtor.
   
5. Appraisals. All buyers have the right to secure an appraisal(s) for the property being purchased, whether they are securing a loan, purchasing with cash, or purchasing through an owner carry. If working with a traditional lender, the lender will order the appraisal. If the property does not appraise to the full purchase price, the buyer has several options: accept the lesser appraisal, re-open negotiations with seller, terminate the contract.

6. Monthly Dues. If the property has a Home Owner’s Association (HOA), there will likely be dues collected on a monthly basis from all owners. The dues will cover such items as cable, phone, wi-fi, electricity, gas, water, sewer, phone, management, snow removal, trash removal, exterior maintenance. Every association is different and it’s important that a buyer understand exactly what is covered by the dues, and what the owner will pay for on a regular basis, in addition to the dues. Details on the dues will be found in the HOA documents (Declarations, Covenants, Bylaws).

7. Market Statistics. How’s the market doing? What are recent trends, trends in the past two years, trends over the past decade? What are the recent comps in the neighborhood you’re interested in? Request information on recent sales and comparable listings. For Breckenridge and Summit County statistics, click here. 

8. HOA Assessments. From time to time, every condo complex needs some upgrading – a new roof, new siding, new decks or windows. If reserve funds are not collected in advance, then assessments become necessary when improvements are planned.  Assessments will be discussed in the annual HOA minutes or board meeting minutes; a review of minutes for the previous two or three years should inform buyers of assessments that are active or may be happening soon. Also, if current assessments have not been paid in full, they need to be addressed in the contract, so both buyer and seller agree on who shall be responsible for them, long before everyone meets at the closing table.

9. HOA Minutes, Budget, Finances. The seller is responsible for providing the buyer with HOA documents, once the property has gone under contract. A close review of the minutes is especially important, so the buyer will understand what items are on the HOA radar. Maybe there are parking issues, hottubs that need replacing, or icy sidewalks that homeowners are not happy with.  Request at least two years of minutes, so that the broader picture is understood.
 
10. Radon. Radon is a colorless, odorless radioactive gas, emitted from uranium. It can occur most anywhere, and because a home’s interior has a lower pressure than the soil around the foundation, it’s not unusual to have some low level of radon detected within the home.  A home inspector will do a radon test, upon request from the buyer, and if radon is detected, then mitigation is recommended. For most homes, mitigation is not expensive, and the seller usually agrees to pay for and handle the process.  A radon test should be a standard part of the home buying process.  

11. Mold. Mold can occur in any damp space that provides a vehicle for growth – wood, drywall, carpeting, carpet padding. Home inspectors are trained to recognize the tiny, nearly invisible spots and accompanying smells that indicate mold, as well as the conditions that may foster mold in the future.  Some molds are innocuous, others are life threatening. Mold can be dormant or highly active, and an experienced home inspector is your best bet to determine if a property is infected. If mold is discovered, the usual process is mitigation, ordered and paid for by the seller. Unlike radon, mold can be very expensive to mitigate.

12. Surveys. There are several types of surveys that could be provided for vacant land or a single family residence: Improvement Location Certificate, Land Survey Plat, Improvement Survey Plat, Topographic Survey, ALTA Land Title Survey. A seller typically provides the buyer with some type of survey, and the buyer should review it closely, make sure the survey addresses any areas of concern. Buyers should take care to be informed of recorded and apparent rights-of-way, easements, and encroachments, as well as any conflicting boundary evidence. 

13. Water. Understand where your water is coming from – is it city water or well water? If buying a home that is connected to city water, you will pay a bi-monthly fee, based on usage. If a water well is a home’s source of water, the well and the water it’s producing should be inspected. If buying vacant land, make sure water is available for the property – either by tying into the local community source (city water), or by drilling a well. Owners of vacant land do not automatically have the right to drill a well if city water is not available – make sure this topic is thoroughly discussed with your Realtor.

14. Sewer and Septic Systems. If you’re buying a property in town, or in a newer subdivision, the property will likely be tied to the local sewer system. If located outside of town, or in an older neighborhood, a septic system and leach filed may be part of the property. Septic systems/leach fields must be designed specifically for the property they serve, based on soil tests, size of property, wetlands, location of neighboring systems, among other things. If buying vacant land or a home with an existing septic system, some homework is in order to understand your options (due to septic requirements, some lots can’t have homes with more than two or three bedrooms). Discuss this topic with your Realtor. 

15. Transfer Tax. A transfer tax is a tax collected at the time of purchase. Both Breckenridge and Frisco (within town limits) have a 1% transfer tax (1% of purchase price). Traditionally, the buyer paid this 1% tax at closing, but in recent years, it’s become a negotiated item.  

I make a point to spend as much time as necessary in educating the buyers I work with – if you have questions on the buying process, please get in touch, and let’s get to work.