Scott Bayens: The agony and the ecstasy of the Aspen real estate deal
The week before last, at the foot of Red Mountain, a 12-acre parcel of land with a 6,500-square-foot scraper sold for more than $1.875 million an acre. That’s $22 million for those of you with a knack for numbers. The offering was one of five contiguous lots, three of which have traded in the past 18 months for $10, $13 and $18.5 million respectively. The buyers have commanding views from Independence Pass to Mount Sopris, significant water rights and county approval to build nearly 19,000 square feet above grade without TDRs. Just up the hill a bit, Red Mountain continues to confound and amaze with 12 homes sold in the past 12 months — one for $30 million — and two more currently under contract.
Specific to the record-breaking lot sale, that’s a $63.5 million take down for members of a family with long ties to Aspen by way of Houston. As one of the sellers, Robert Rubey, told me by phone this week, “It’s going to be an extraordinary little subdivision when it’s finished” and added he’s confident the new buyers will prove to be excellent stewards of the development moving forward. By the way, the last remaining piece of this mind-blowing five-piece puzzle is currently listed at $20 million. It may not be Manhattan, but it’s obviously how we roll here in the thin air at 7,908 feet.
The patriarch of the family, Billy Rubey (a World War II veteran, one of the original directors of the Aspen Skiing Co. and namesake of Rubey Park), likely had no idea just how valuable his initial investment would become. But more than likely he acted out of pure emotion and enjoyment — the views, the privacy, the water, the rustling aspens — you name it, this location had it all. The surviving members of the Rubey family also worked to increase the value of the land over the years. They negotiated with Pitkin County to establish the area’s unusual large development rights through a vested agreement that required some horse-trading with TDRs as well as an agreement to fund the existing interconnect between the Rio Grande and the Hunter Creek trails that runs through the property.
For those involved in deals like these, specifically the sellers, the buyers and the real estate brokers, the path to real estate ecstasy is far from a walk in the park. Now, I’m not suggesting that we feel sorry for the seller who realized a record windfall, or the buyer who could drop all that cash, or the real estate agents who pocketed six-figure commissions. But I do find the complexity of these big deals interesting and a good way to put the process of the real estate transaction in perspective for the rest of us.
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As you might imagine, a deal of this size has a lot of moving parts. For one, this offering was subject to a variety of easements, each one requiring disclosure, investigation and, in some cases, negotiation and adjustment. There were encroachment issues, meaning some of the lot lines crossed over to neighboring lots creating a discrepancy over lot size and specific boundaries. There were water rights to understand, examine and divide properly. Then there were all the other usual hurdles: the offer, the negotiation, the contract, amendments to the contract, inspection, approvals, etc.
So, what does all this teach us about other deals? The process of buying and selling real estate, not just here in the Aspen area but around the world, can be complicated, emotional and highly frustrating. Simply put, it is an exercise not for the faint of heart and at its worse, can bring agony to all involved. Looking for the perfect property can be fun because fundamentally, it’s just like shopping. You walk into your favorite store, see the perfect dress on the rack, grab it and go. But all the fun ends when another shopper takes the dress you had your eye on from under your nose.
My point is, you can find the perfect house but in our accelerated market, it can go under contract without notice, sometimes as you are standing in it. And if you do manage to secure the home at the price you want by making an offer, a variety of challenges precede you. The loan, the inspection and the appraisal are all punch list items that can turn a deal on its head in a matter of minutes.
This is where my wife would accuse me of being overly negative and not seeing the forest for the trees. She’s right, of course. There are deals that go smoothly, there are scenarios that develop that are simply meant to be and don’t fly off the rails or require much work. And yes, when it all comes together after all that’s involved to get to the closing table, the result can be, well, ecstatic! After all, buying a house is the most important and expensive investment most of us will make in our lifetime. It’s where we live, rest and make memories. But when things do get jammed up, and believe me they can, a local expert can make all the difference; a licensed individual that represents you, knows the process and potential pitfalls, who works to keep the emotion of the deal on the sidelines and gets the job done. Can Google, Zillow or Trulia do that?
Scott Bayens is a broker/Realtor with Aspen Snowmass Sotheby’s International Real Estate with more than a decade of experience with buyers and sellers. He uses Google but thinks he and his fellow brokers are better search engines than anything you can find on the web. Scott can be reached at email@example.com.
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