How Bad Are Wildfires In Colorado? – Sherrie Figuerao
On this episode of The Closing Table, we sat down with Sherrie Figuerao!
To watch the full episode, check it out on YouTube below. In the meantime, here’s a summary of the conversation…
Here’s what you missed from Sherrie Figuerao…
The conversation began with a word association on title work, rent control, and more. Sherrie then introduces herself as a mother of two and a wife, originally from Miami but having lived in Boulder for the past 18 years. Before becoming a real estate agent, she worked as a massage therapist. Interestingly, her experience in massage therapy has translated into valuable qualities for building relationships, conducting business, and skillfully negotiating deals. Sherrie also highlights the differences between Miami and Colorado, emphasizing the quality of life that Colorado, particularly Boulder, offers.
Boulder, Colorado is described by Sherrie as an amazing town located approximately 30 minutes away from Denver, providing convenient access to an international airport within a 45-minute drive. Notably, Boulder is a bustling college town that encompasses all the desirable aspects of a city. What sets it apart is the extensive open space available, with approximately 150 miles of maintained trails and 45,000 acres of open land surrounding the city. This unique feature contributes to the limited inventory of properties in Boulder, as strict regulations restrict extensive construction. As a result, the available inventory is highly sought-after and commands higher prices. Boulder also appeals to outdoor enthusiasts, as the city allows for biking from one end to the other and attracts triathletes seeking ideal training conditions. Additionally, Boulder boasts a thriving tech and finance industry, including venture capitalism, and is home to world-class skiing and 16 Michelin-starred restaurants, among other attractions. Overall, there are numerous reasons why people are drawn to Boulder and choose to relocate there.
Sherrie then provides insights into the economic aspects of the Boulder real estate market. In Boulder County, the average price for a detached home is approximately $1.1 million, while an attached, entry-level condo averages around $600,000. For properties specifically within the city of Boulder, the average price for a detached home stands at around $1.35 million. These figures reflect the relatively high pricing in the area, influenced by the limited inventory and the desirability of properties in Boulder.
According to the Chair of the DMAR Market Trends Committee, sellers in the Denver real estate market are becoming more realistic and willing to strategize with price reductions (source: https://porchlightgroup.com/blog/posts/2023/06/08/denver-real-estate-market-stats-may-2023/). In light of this, it is essential to explore effective strategies that sellers can employ to attract buyers and facilitate successful transactions in the current market.
Sherrie emphasizes the importance of pricing and presentation as key factors in attracting buyers. As a real estate agent aligned with a full-service brokerage, she believes that a comprehensive approach is crucial. Given the softening of the market, pricing plays a pivotal role. Sherrie generally advises her sellers to price competitively, putting their best foot forward. In addition, she emphasizes the significance of presentation and staging. Sherrie goes the extra mile by engaging a designer to ensure that each home is aesthetically appealing and well-presented. Staged listings tend to sell 2.5 times faster, often fetching an average of 8-10% more, which is beneficial to both the seller and Sherrie in terms of commission.
Furthermore, Sherrie highlights the importance of incentivizing buyers. For instance, sellers may consider including provisions in the listing that demonstrate their willingness to address certain issues, such as offering to replace the roof or provide a contribution. Another strategy that Sherrie mentions is rate buy downs, which can be advantageous to buyers, allowing them to save more compared to a simple discount on the purchase price. Overall, Sherrie’s goal is to operate as a collaborative team player, setting a positive tone from the start and striving for a win-win situation through compromise and cooperation, regardless of whether she represents the buyer or the seller.
Moving on to the risks associated with wildfires in Colorado, Sherrie explains that the situation is complex. The state is exposed to various elements, including floods, fires, and intense winds that often contribute to wildfires. Sherrie highlights that even living at lower elevations does not guarantee immunity from wildfire impacts. She cites a devastating fire in December 2021, which destroyed over 1,000 homes and businesses in their community, despite being situated well east of the foothills. The combination of strong winds and unsafe burning practices led to this massive fire. Many affected homeowners lacked sufficient insurance coverage, which added to the devastation. Sherrie also notes the significant smoke damage that homes can experience, even if they are not directly affected by the fire.
To prepare clients for these risks, Sherrie stresses the importance of awareness and mitigation. It is crucial to identify neighborhoods that are prone to wildfires and advise clients during inspections to ensure necessary precautions are in place. This includes having adequate insurance coverage that reflects the full value of rebuilding a home. Floods often accompany fires, as the absence of vegetation and a sticky residue left by the fire can impede the soil’s ability to absorb water. Sherrie references a major flood in September 2013, which caused significant damage to many homes. When purchasing a home in Boulder County, understanding the history of flood damage, proper mitigation measures, and the availability of flood insurance is essential. Fortunately, the contract in Boulder and the state of Colorado is designed to protect buyers, providing dates and deadlines that allow for due diligence and the ability to terminate a contract if any concerning issues arise. It is crucial to rely on the expertise of professionals throughout this process to ensure comprehensive protection and guidance.
The presence of children under the age of 18 appears to be a significant factor influencing the home search criteria of many buyers in Boulder. Sherrie explains that there are no bad neighborhoods in Boulder, and people from out of town often ask which neighborhoods to avoid. The city boasts an excellent school system, with some neighborhoods having better schools than others, making them particularly attractive to families. Additionally, being within walking distance to downtown is desirable for many parents. Boulder is known for its kid and dog-friendly environment, with over 60 public parks, skate parks, and opportunities for activities such as kayaking in rivers. Sherrie believes that anywhere in Boulder is a good choice for families. When it comes to properties, families with children tend to prefer turnkey homes that are finished and move-in ready, as it can be challenging to manage renovations and remodeling with young kids.
For homeowners considering selling their homes and potentially facing capital gains tax, there are several key factors to consider in Boulder’s real estate market. Sherrie highlights that many sellers in the area are boomers who purchased their homes in the 70s or 80s for a significantly lower price than the current market value. With home values now exceeding a million dollars, these sellers must navigate the potential tax burden. Sherrie advises her clients to consult with tax professionals, as she is not an expert in tax matters. However, she shares some strategies that can help maximize profits and potentially qualify for exemptions.
One strategy is to deduct the cost of improvements made to the property from the total amount of capital gains. While certain maintenance expenses may not be eligible for deductions, many cosmetic enhancements done in preparation for the sale can be included. Additionally, if the homeowner is married, there is a homestead exemption that allows the IRS to deduct up to 500k of the profit. Fees associated with the sale can also be deducted. In cases where a significant tax burden remains, Sherrie mentions the option of a 1031 exchange. This involves involving a 1031 intermediary, where the funds from the sale are placed into a specific 1031 exchange fund. There are time limits to find and close on a replacement property, and taxes on the capital gains can be deferred until the replacement property is sold. Estate strategies can also be explored to minimize tax liabilities.
Sherrie emphasizes her role in helping clients maximize their gains when selling while strategizing deductions. She frequently works with investors using 1031 exchanges and understands the timing and intricacies involved. In the contract, there is a clause to ensure cooperation in a 1031 exchange, benefiting both parties without any detriment. Ultimately, seeking professional advice and guidance is essential to navigate the complexities of capital gains tax and make informed decisions.
The conversation wraps up with Sherrie being asked about the approach she would take to own a home knowing the resources she has today. She emphasizes the importance of looking at every property from an investment perspective. She highlights a common trap that first-time homebuyers fall into, which is solely focusing on their wants and needs without considering their budgetary constraints. Sherrie takes a different approach when working with first-time homebuyers by considering their long-term goals and how real estate can fit into those goals. She engages in conversations about her clients’ aspirations and often discovers that many see real estate investing as a means of retirement. With this in mind, she carefully evaluates her clients’ situations and explores strategies that can help them secure the best possible deal.
Check out Sherrie Figuerao:
Facebook: https://www.facebook.com/sherrie.marquet.figueroa
Instagram: https://www.instagram.com/sherrieangel/
Facebook Business Page: https://www.facebook.com/SherrieFigueroaPLBoulder
If you loved this episode subscribe so you never miss one! Want more The Closing Table content? Head over to our blog.