Real Estate & Relocation ^ Colorado

Denver Real Estate and Relocation

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Denver Real Estate and Relocation

Tenants find themselves Homeless...

Modern day Carpet baggers are taking advantage of the public in a different way. Homeowners are renting their homes to tenants, collecting the rent and not paying the mortgage.

This practice is called “Equity Skimming.” While the homeowner, who many times pass themselves off as “investors” legally own the home, they fail in their obligation to keep the mortgage current.

Time is on the Equity Skimmers side, for only so long. Eventually the tenant will come home one day to find a “eviction notice” taped to the door. When that happens, the tenant has little choice but to move out. Seldom does the new owner (the bank) honor the lease. They want the property sold and quickly. That means you will be asked to move.

Eviction notices that are ignored are followed by the Sheriff arriving and physically having you and your possessions place at the curb. It’s not a pretty sight. continue ...

Denver real estate sales statistics ~ August 2007

The Berkshire Group keeps statistics on a monthly basis regarding home sales in the Denver Metropolitan area.  Looking at the past helps us forecast the future.  Here you can learn about Denver's average home sale price, average days on market, the current Denver absorption rate and the list to sale ratio.  If you would like information about years past, please visit the Denver Real Estate website.

August 2007

Metro Denver Prices:

 

Metro Denver Prices:

                                                                                                                                                       

Single Family Average Price: (Detached Dwelling)		Aug 2007	$329,783
		Jul 2007	$316,024
		Aug 2006	$320,092
Condo Average Price: (Attached Dwelling)		Aug 2007	$182,741
		Jul 2007	$192,885
		Aug 2006	$196,659
Combined Average Price:		Aug 2007	$298,466
		Jul 2007	$289,294
		Aug 2006	$292,973
Percent of Sales Price Change: from August 2006 to August 2007		Single Family:	3.03%
		Condo:	-7.08%
		Combined	1.87%
Total Combined Number of Homes for Sale:		Aug 2007	30,827
		Jul 2007	30,272
		Aug 2006	31,664
Percent of Change in Available Inventory: (August 2006 vs. August 2007)			-2.64%
Number of Combined Homes Sold this month		Aug 2007	5,010
vs. previous month		Jul 2007	4,980
vs. same month last year		Aug 2006	5,025
Average days on Market: (Combined Sales)		Aug 2007	94.13
		Jul 2007	94.78
		Aug 2006	98.37
Absorption Rate: (number of weeks necessary to sell current combined inventory at current rate of sales)		Aug 2007	26.66 weeks
		Jul 2007	26.34 weeks
		Aug 2006	27.31 weeks
Median Sold Price:Single Family		Aug 2007	$257,500
		Jul 2007	$255,000
		Aug 2006	$252,900
Condo		Aug 2007	$152,500
		Jul 2007	$158,000
		Aug 2006	$160,000

Homebuyers find alternatives with Colorado Housing Finance Authority

Homebuyers are finding their pot of gold at CHFA

Industry news in the finance sector has been scary to say the least.  Home buyers are finding themselves with less and less options each passing day.  One steady financing resource for purchase funds in  Colorado is CHFA.

I received an excellent email from Mark Afman a Senior Loan  Consultant with Universal Lending explaining CHFA's offerings.  Mark has given me permission to post his email:

CHFA is a non-profit investor that sells tax free municipal bonds to fund their loans and is there specifically to help low to middle income buyers into homes. They allow FHA and conforming loan programs to be funded through CHFA. The CHFA program is the antidote for the predatory lending practices that are now under so much scrutiny. CHFA sets the Interest rate so a lender could not charge a higher interest rate even if they wanted to and CHFA caps the closing fees that a lender can charge so CHFA is considered a loan program that protects home buyers.

There are 4 programs that CHFA offers. All programs require the buyer to attend a CHFA approved, free first time buyers education course.

1) MRB First Step: This is the program for first time buyers (someone that has not had an ownership interest in a home for at least three years). This is a 30 year fixed loan. There are income limits, for example a 2 person family can not make more then $71,400 a year. There are also purchase limits, for example in the Denver Metro area, the limit is $365,100. CHFA also offers a 3% "Silent 2nd" for down payment assistance. This 2nd mortgage has no interest or payments due for the life of the loan but is is a lien against the property so when the buyer is done with it they have to give it back. So if the buyer sells the property, refinances the mortgage, or lives there for 30 years, the original 3% must be paid back to CHFA. This effectively offers the buyer 100% financing. However, if a buyer uses the CHFA 2nd mortgage for down payment assistance, the interest rate on the 1st mortgage will be 1/4% higher then if they bring their own 3% down payment. The buyer is required to put in a minimum of $1,000 in to the transaction. The interest rates are set by CHFA at an affordable level usually below the normal prevailing market rates. They also cap the amount of closing costs a lender can charge at $600 plus a 1% origination fee. For current rates and information on the training, etc. go to www.CHFAinfo.com

2) Taxable Home Opener: This program is very similar to the MRB First Step program but it allows for non-first time buyers to use the CHFA advantages. The income limits are higher, for example, a 2 person household needs to be under $82,100 and there are no purchase limitations. The rates are about 3/8% higher on the Taxable Home Opener program then the MRB First Step rates but it offers a safe 100% financing option to those that do not have a down payment saved up.

3) HomeStretch: This is a new CHFA program for buyers that may need help keeping their payments lower. It is a 40 year fixed loan and has lender paid mortgage insurance, unlike the other 2 programs. The rates are higher by about 7/8% but with the combination of a longer term and no MI, the payments are generally lower. This program also allows for non-first time buyers to use it. It can also be used for refinancing. This program also allows for Involuntary Unemployment Insurance which pays up to $1500 a month against the mortgage payment for up to 6 months.

4) Home Access: This program is specifically for buyers that have a disability or the parents of a child with a disability. This is for low income, first time buyers. You can find more information at CHFA.

Looking to Denver real estate?  Call me! (303-589-2022)  Need to finance a home?  Call Mark Afman 303-759-7392.

Thanks Mark!  We all appreciate your sharing this excellent advice.

Be careful of what you say!

Cruising around the blogisphere this morning brought me to a very good post on Real Estate Undressed.  Mr. Larry Cragin posted photos of bears playing on a children's playset.  I loved the photos of the adorable bears having a wonderful time! They must have thought the playset was provided just for them.

Naturally I brain traveled back in a time to an earlier date this year when I was showing homes.  My clients and I arrived at a lovely home on Bell Mountain in Castle Rock. The owners were home and proudly showed us around, describing every detail of their obviously loved home.

Our conversation turned to the large lot that backed up to open space. Mr. Seller  shared with us his experience with a bear in his back yard.  His exciting rendition of how the bear rambled across the back yard one morning triggered the fear factor in my clients.

Being from the city they failed to understand the beauty of having a large wild animal appear at random in their back yard.

Needless to say, without any question Mr. Seller talked himself out of selling his home.  Oops!

The good intentions a seller may have many times are not received as intended.

In the past I've had sellers meet us at the house and droll on about home features my buyers absolutely didn't want.  Of course the buyers would never be so bold as to tell the homeowner the feature was not their preference, they politely let the seller continue.

As an agent for the buyer, we seldom need the seller to step in for a tour.  In fact, I would rather not have the seller there, at least the first time.  Later when the transaction turns to reality, the buyers and sellers can and should get together to discuss the finer details of the home.  But certainly not prior to the decision to buy.

To a seller letting go of your home when you feel so strongly toward it is difficult.  Yes, you know it well, but the best thing to do is leave.  The pain of not being able to say anything for fear it is the wrong thing may be too great to bare.

No pun intended...

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Colorado is  home to many wild animals, having them in your back yard is not a common occurence, but it does happen.  When faced with a bear the best thing is to not turn and run.  The last thing you want to do is look like food!

Bear cubs as adorable as they are, should never ever be approached. Mama will be near by and she will most assuredly object to her babies associating with a two legged creature.

Bear meetings should be avoided at all costs.

Mortgage broker screws up...

Some clients of mine have  moved away.  They closed on their home last week after a traumatic few weeks of house hunting.  The story I am about to tell is real.  The names will not be mentioned, but the facts are the facts.  Take them for what they are worth.

They bought a very expensive home, the day before closing they learned the out of state mortgage broker neglected to tell them (probably because he didn't know) there was a "LUXURY TRANSFER TAX" of 1% and several thousand dollars of fees he forgot to list in the good faith estimate.

1% doesn't sound like much, but in this instance it all added up to $26,000!  OUCH!

At the last minute they were calling family for a quick loan.  Yes, they had the funds, but just couldn't access them by the next day.

Everyone makes mistakes, but why is it that mortgage brokers seems to make them more often?

Once again I must repeat, real estate is local.  When you are moving from one area to the next, never assume things are just like they are back home.  Chances are you will be wrong.

Why blame it on the out of state/area mortgage broker?  Well had they used a LOCAL mortgage banker, that person would have been more likely to be familiar with the local custom (the 1% tax was a STATE law!).  It would have come up much sooner than the day before closing.

Using an out of area lender is always risky.  Mortgage brokers often are licensed to do business in many states.  More states than they could ever possibly know all the rules and regs.  To  most, it's a crap shoot, they win some they lose some.  Mortgage brokers have NO VESTED interest in the consumer or getting the job done right. They  take applications and send them off to  investors and mortgage BANKERS to  process. This means they do not control the process, even though they tell you they do. (that's another blog)

Why do I say that?  Well time and time again mortgage brokers have ignored important dates in the Colorado approved contract.  Dates that if missed could possibly mean the buyer would lose every penny of their hard earned earnest money.

The person held responsible is the real estate agent.  The agent is required by law to represent the best interest of the buyer so he does.  But when it comes to the mortgage broker who is responsible for meeting the dates and delivering the money, they have no fiduciary to the buyer.  In fact many mortgage brokers refuse to even speak to the buyer's agent.

So the agent is left in the dark, writing extension after extension to be sure the buyer is covered. 

The best strategy for a consumer is to use a tried and true mortgage banker who lives and works in the area.  Don't rely on some friendly voice in a faraway state to handle the transaction.  Go with a professional who knows what they are doing and can advise you from the beginning.

As my daughter quipped, "You don't want to be a casualty at their first rodeo!"

Who can write a real estate contract (Colorado)

Yesterday I received a question via email from a consumer:

"I was told that one does not need a real estate agent to fill out a sales agreement on property, would like an honest answer from a licensed professional. "

The question is a fair one so I've decided to respond not just in person but in blog format too.  Hopefully the response will influence buyers and sellers in their Denver real estate dealings.

Yes, whoever told you a real estate contract does not need to be filled out by a real estate agent is correct.  Buyers and sellers get together all the time to do business without benefit or aid of real estate agents.

Of course like any answer there are always exceptions.  For instance if you are collecting a commission for the sale of the property, you will need to be licensed.  If you are not licensed you will be in violation of the law because you will practicing real estate without a license.  That is a no-no.

In the State of Colorado real estate agents are allowed to fill in the blanks of the State  Approved Contracts.  They cannot write the entire contract.  If they did, they would be practicing law without a license.  Another no-no.

The consumer obviously asked me this question to confirm a truth already heard.  I wish I could ask her a question or two to delve into the "why" and "why nots" of the transaction.

I've been selling real estate in Colorado for going on 24 years.  I've come into contact with many a poor soul who got himself into a bad situation because he wanted to save a few dollars or felt he had all the facts.

Contracts are serious business, not "dress rehearsals."

The truth of the matter is buying real estate is not an exact science.  The contract part of filling in blanks is easy.  The problem arises when the blanks are filled out without deep consideration as to what it all means. Missing a blank, erroneous data can cause very expensive issues.  A buyer's earnest money could be at risk, or lost entirely. 

The lady who asked the question may not know that she could hire a Real Estate Consultant to write the offer for her.  A Consultant would quote her a price (considerably less than a co-op commission) and negotiate for her, on her behalf. 

Many consumers are not aware there is such an alternative.  We in the real estate industry call it "fee based services."  Such services can be chosen from a menu of offerings, consumers can pick a choose what services they need, when they need them.

Paying a few dollars for the added protection is well worth the worry and expense it will save in the end.

How does the saying go? An ounce of prevention is worth a pound of cure.

Real estate, gambling and risk

I've been pondering a blog topic for awhile.  It runs through my head, but so far not onto my blog.  Then this morning  I discover, someone else wrote it. Commission Bashing is about taking on risk and getting rewarded for it.

How many jobs take on as much risk as a Realtor?  We help many more than we ever get paid for, but yet the world wants a piece of our hide.  Charge too much?  Maybe. The reality is I don't get paid until there is a success. 

Vicki Moore talks about discount agents who come and go. How true that is...twenty three years in the business, I've seen my share of those who want to light the world on fire only to burn themselves out after creating a mess for some poor cost conscientious consumer.

Real estate is not about what you do, it's about what you know.  We get paid for success. Bargain basement prices may deliver a sale, but at what cost to the consumer?

Time will tell.

When to move

Denver real estate discussions...

Over heard recently from an elderly couple selling their home.  The Mr. just turned 81 and his bride was a young 74.  After many years of searching for the  "last home" they finally found the perfect one for them.  Or at least settled for the closest thing to perfection.  But not without some regrets.

The Mrs. told me they waited way too long.  In her opinion by the time one is 65 years old, they should be in their "last home."  Waiting too many years beyond that is just too difficult.

Home prices surged beyond their ability to purchase  nearby their children.  The shear relocation pieces in themselves brought on unnecessary stress and at times panic.  The physical move even though it was orchestrated by family with the help of professional movers was difficult.

Downsizing from a huge home into a more manageable one takes time, patience and a strategy.  Waiting until one HAS to move is a serious mistake.

Planning ahead wins out, once again.

Minimum Expectations

A few years ago I was touring Vietnam on a bicycle.  One day I found it necessary to replace the batteries in my camera with fresh ones.

Finding such a rare extravagance in a small village was not easy.  Additionally I didn't speak the language, so I relied on my "show and tell" communication skills. Pulling out the old batteries I showed them to a self-proclaimed shopping helper, a young man who had attached himself to me for the moment. 

He understood my needs and immediately went off in search of fulfilling them.

After a passage of time, he returned with a wrapped package of Eveready Batteries. I was delighted! In just a few minutes I would be back shooting photos again.

My shopper's helper led me to the owner of the batteries, so I could finish the job of negotiating for their purchase. 

As with everything in the country, the negotiations took as long as the finding of the batteries.  We came to what I considered a fair price, I paid and left.

Never once during the negotiations did it occur to me to try the batteries to be sure the worked.  They were nicely wrapped in the original packaging, so I had the expectations that they would work.

I was wrong.

The batteries as pretty as they were, were old and dead.  I was screwed. The merchant who sold them to me was long gone.

Of course the money that exchanged hands probably meant far more to him than me. But it was the principle of the exchange. Perhaps he didn't know he sold me perfectly useless batteries, or maybe he did. I would never know.

I learned a cultural lesson that day. Assume nothing.

In the U.S. we call it "Buyer Beware."  We still make assumptions, but when buying a house for example we hire an inspector to come in and make sure the components of the house work.

We do have assumptions that certain parts of a home will work.  Particularly when that part of the home is advertised.

I sold a home recently that advertised a gas log fireplace.  Upon inspection, the inspector found out the gas part of the fireplace did not work. The sellers of the home didn't want to spend the money to fix it.

My buyer insisted the fireplace be repaired to work as advertised. She had the minimum expectation that what was advertised actually worked.

Buyers often have minimum expectations that the major parts of a home will be in good condition when they purchase a home.  If the condition is less than good, it needs to be disclosed.

My buyer won the negotiation on the working fireplace. She was right and the sellers finally did agree.

If everyone had the same minimum expectations my job as a real estate broker would be a lot easier.  Expectations are as numbered as there are people.  The only thing we as a group could agree on is...the sun does come up every morning.

<photo was taken on Manasquan Beach, N.J. © 2007 Kristal Kraft>

Real Estate Blogs for the Consumer

Larry Cragin over at Real Estate Undressed reads  hundreds of blogs each day and compiles a  monthly list of his top favorites.

The nominations for June 2007 included some excellent reading:

1- David Porter is back to blogging: He writes: How to protect your mortgage practice from Credit Bureaus selling your client’s mortgage credit inquiry

2- Jessica Beganski: Real Real Estate In Connecticut writes:Six Things to Know About a Condo Complex Before You Buy

3- Kristal Kraft from Denver writes: Win-win wins: When negotiating a residential real estate contract, there are typically 4 items we “fight” over. Those are; 1) price 2) terms 3) possession 4) personal property.

4-  Bigger Pockets Writes: How Home Buyers Can Stop Real Estate Deals from Collapsing During an Inspection Period

5-  Brian Brady writes on Bloodhound Blog: On Title But Not On the Loan?

6-  Sparky in Puget Sound writes:Earnest Money: “Are You a ‘SERIOUS’ Real Estate Buyer?”

7-  Rhonda Porter writes on her blog “The Mortgage Porter” When an appraisal comes in low. and on Rain City Guide:What’s wrong with calling lenders for rates.

Thank you Larry Cragin for 1) including me in your list 2) helping to inform the consumer 3) Being a swell guy! (I don't care what Teresa's says! :) )

Flipping Mistakes

USA Today had an article about a real estate investor who was regretting his past actions. He is a 23 year old investor who got very carried away on the investment scene. After buying Carleton Sheets' No Down Payment and Russ Whitney, The Millionaire Real Estate Mindset, and others, he got himself into major debt.

He made the following mistakes and would like to tell others to avoid doing the same:

1. Using "liar loans"
2. Overpaying
3. Lacking cash
4. Quitting your day job
5. Hiring an unlicensed contractor
6. Buying sight-unseen
7. Buying out of state
8. Buying too many properties too fast
9. Underestimating remodeling costs
10. Having a poor exit strategy

Any of the mistakes can be overcome in the right situation.  Having more than one or all, are fatal.  Get rich quick schemes are just that...schemes.  The guys that sell the books are the ones that make the money.

Investing in real estate should be a long range plan for wealth.  Anything less cannot be guaranteed and should be approached with caution.

Moderation is the key.

The Sharks Have Had Their Fill

Some people are naturally greedy and prey on others who are anxious to make a buck.  Broker Bryant in Florida posted in his blog a story....a very sad story about some bad people taking advantage of some anxious people.

Remember, if it seems to good to be true, it probably is....

Read Bryant's Sad Story.

Both boxes and lips should be sealed

I recently closed a transaction where I was the listing agent.  Initially the buyers had approached me to help them purchase the home, but I requested they go find an agent to represent their best interests, as I represented the seller.  In the course of the conversation, the buyers told me they didn't need representation, as they were outstanding negotiators and educated in the matters of contracts, etc.

They continued to share with me personal information about their situation, even after I suggested they share this information with their own broker.

A few days later they found someone to write the offer.  I presented it to my seller and he refused to accept an offer less than full price.

Why?  Because the purchasers had spoke to a "mutual friend" and shared the fact that they were willing to pay even more than full price for this home.  DUH!

So these "experienced negotiators" weakened their position by chatting about their circumstances and intentions to who ever would listen. 

The "mutual friend" it turned out had a higher purpose, they were also a homeowner in the neighborhood and for the cause of  "neighborhood values" turned on them and shared this info with my homeowner.

Innocent conversation sometimes reaches the wrong ears.

6 Money Mistakes Even the Experts Make

6 Money Mistakes Even the Experts Make - Everybody messes up. Smart people learn from the experience.