Outsmarting Ourselves
Denver Dwellings would like to welcome a guest columnist, Greg Polashock. Greg is a mortgage lender who enjoys answering the challenging call of the consumer. Please welcome Greg by sharing your thoughts in the comments section below.
Sometimes I wonder if we are just incapable of learning “the lesson.” In the real estate industry five years ago we
pretty much collectively acted in a way that shouted, “I want it now, I want it free, I want it my way, and no matter what history teaches, I expect things to turn out the way I want.” As Dr. Phil would say, “So… how’s that workin’ out for ya?”
Many people got a very hard lesson on the exercises of self-indulgence. And, too many people failed to listen to voices of reason and moderation, instead flocking to squawkers who simply said the things people wanted to hear, in spite of a lack of soundness and reason.
It seems the same thing is happening again, only different. Everybody is now gun-shy of risky mortgages (hurray for finally having gotten THAT message), but it seems like many people still are making financial mistakes when it comes to making real estate decisions.
I see the current phenomenon as a meeting of what I’ll call “analysis paralysis” with an attitude of “I know more than the experts.” I’ll analogize it to people deciding to waste a gallon of gas to find the station that will sell it for ten cents a gallon less. (Think about it for a moment if you’re not getting it immediately.)
I expect Yogi Berra would say something like, “we’ve all gotten so smart, we’re now stupid.”
It doesn’t seem to matter who I talk to – realtors, financial planners, builders, bankers, mortgage professionals… the stories I hear and the personal experiences I have seen indicate that the consumer generally seems to think that they know better than the professionals. A sarcastic aside – I am curious to see how well this mentality goes over once it bleeds over into their relationships with doctors and lawyers!
I am at a bit of a loss as to how to help consumers these days… I really am! And it is taking a toll on me. It bothers me to see people hurt themselves financially. They would have been better off listening to good advice early on. It concerns me to see someone walk away from a great transaction after the realtor has negotiated in an exemplary manner only to have the client dicker about the inclusion of the refrigerator, but not see the $60,000 in equity they’re getting because of the realtor having gotten the contract as such a bargain price. It REALLY burns me at the failure of ethics when a client, through actions, basically shouts, “Thanks for that excellent, free advice that nobody else was smart enough to tell me about… I’m gonna take your great advice and now go over to ‘XYZ Mortgage’ so I can save $13 a month on my housing payment.”
While we seem to have learned a lesson over the past year about risky mortgages (and we probably wouldn’t have learned that one if the marketplace had not been absolutely forced by economic necessity to teach it to us); we still haven’t seemed to learn the lesson about prudence and the need to listen to sound professional advice. As I look around these days, the underlying issue I really see is that the lesson to have been learned from five plus years of shady real estate trickery (where everyone from consumer to title company and everyone in between was complicit) is that we must apply ethics and morals in how we interact with others and in how we represent ourselves. I am concerned that that most important lesson has not yet been learned.
From the desk of:
Greg Polashock
Home Mortgage Consultant
Cherry Creek Mortgage
w) 303-887-0672
Greg@GregisFinancingSolutions.com
Gregis Financing Solutions
Colorado Foreclosures Maybe Heading for Time Out Room!
Two lawmakers in Colorado are introducing a bill to enable judges to extend a foreclosure for up to 90 days. The extra time could be used to work out a settlement as opposed to the homeowner losing their home to foreclosure.
The problem with mortgage workouts is time. So much of what needs to be done takes an extraordinary amount of time. The workload of the persons dealing with homeowners is overwhelming I am told. In fact much of the time the bank is trying to determine who actually owns the loan and who has the say in what can be worked out or not.
Homeowners facing financial issues should not delay in contacting the mortgage holder. The longer you wait, the less likely you will be able to work out a solution.
Many homeowners do not realize as soon as the bank files a Notice of Election and Demand for Sale, the clock starts ticking. The homeowner must redeem the property by making up the back payments or coming to an agreeable settlement with the mortgage holder. All this takes time.
The Clock Keeps Ticking…
Homeowners do have alternatives to foreclosure. Forbearance agreements can be arranged so the homeowner can pay the delinquent payments on the "back end" of the loan. Some mortgage companies will restructure the loan so the homeowner can stay in the home.
Colorado provides a Foreclosure Hotline to the public seeking to AVOID foreclosure. 1-877-601-HOPE Trained counselors help those in trouble find alternatives in repayment plans, modifications to the mortgage agreement or selling the home prior to the foreclosure.
Home Improvements
Home improvements are often very costly, both in money and the time it takes to undergo a renovation. I’ve had
clients who actually moved out of their homes while the home was being redone, thus absorbing a double cost of living, in addition to the cost of renovation.
When you are spending money like that you want to be sure you 1) really love what you are doing to the home 2) understand what the ROI will be when you go to resell 3) the renovations will appear to others, not just you and your family! Many times the cost of renovations far exceed the return on investment upon sale. When that occurs the homeowner must understand the renovations are for his pleasure only.
Recently I was showing a daring home an investor had purchased as a "fix and flip". As I toured the home with my clients, we were excited about it possibly being The Home! Then we got to the main bathroom. This is where our excitement ended.
The bathroom was very narrow. It was an old house where the main floor bath was the bathroom that serviced the house, including 3 bedrooms and the visiting guests. In the bathroom there was a toilet, sink and a bathtub, all very normal appointed, but the issue was the space.
The toilet was squished very close to the tub. A person of normal height could not easily use the toilet without their legs being pressed up against the tub.
Why on earth would any builder in their right mind complete a renovation with this very obvious negative arrangement? Perhaps the builder himself was 4′9"! A person of this height might be able to use this toilet in comfort.
Functional Obsolescence occurs in real estate frequently because styles change, tastes change and in the case of the squished toilet, people get bigger!
When renovating a home, take into account today’s taste in style and what is appealing to the broadest audience. They are your future buyers, ignoring them may cost you.
There are other faux pas home renovation homeowners make when trying to improve their homes. Most recently I’ve been seeing many beautifully finished basements with game rooms, extra bedrooms serviced by a 1/2 bath. Yikes! The rule to follow here, if you have a bedroom the bathroom needed to make a completely sweet finish must be at the very least a3/4 bath. The best scenario would be to have a full bath, that means a toilet, sink and tub/shower.
My clients have passed up at least 4 lovely homes that didn’t follow this rule!
Yes, full bathrooms cost more, but if you are going to renovate, do it right or don’t do it at all!
Another important rule to remember in real estate is one we Realtors learn early on.
Cost does not equal value.
Just because a renovation cost "$X" doesn’t mean your home will increase by "$X!" In the cases above, I would venture to guess the renovations SPOILED the home, not improved it!
Before you renovation, do your research. Talk to your Realtor about the lastest trends and styles. Pretend the renovations are finished and you have to sell your home. Will the neighborhood uphold the current value you have in the house? If not, are you OK with that?
Over-improving for the neighborhood is a fatal sin that cannot be forgiven. Well it will be forgiven if you throw enough CASH at it! Only the homeowner can determine if that is OK, it’s his cash after all!
Remodeling Magazine publishes the latest Cost vs. Value Reports each year. The values vary in different parts of the country, so they compile the trend reports accordingly. Research into the appropriate renovation will provide valuable insight as to whether the whole idea is a good one or not.
If after you examine the facts and the renovations are for pure personal enjoyment because you plan to live in the home for a long time, then go ahead renovate. A home is a castle, if we can’t enjoy living there what’s the point. Just remember when you go to sell, your enjoyment may have come with a bigger price tag than expected.
Lessons learned
This past week I had the pleasure of attending Inman Connect a real estate conference in New York City. In addition to hearing top industry professionals, I got to meet blogger friends I have been chatting with for a couple years.
New York is a wonderful, colorful city, a perfect place for a people watcher like myself. I thoroughly enjoyed just being there.
As my colleagues and I roamed the town we would joke about being tourists. Yes, we obviously were tourists with our unpurposeful stride and the ever-present cameras hanging from our necks. Or maybe it was my constant looking up toward the skyscrapers while trying to take in the contents of every dressed store front.
Whatever it was, we (my friends and I) were marked; green, tourists.
My first clue came when I took out the iPhone to capture this guy who was walking around with a cat on his head. I tried surreptitiously to shoot him, but him being all eyes caught me and moved. He then capitalized on the moment by asking me if I could spare a buck for him and the kitty. Feeling foolish, I grubbed up a buck and then asked if he’d pose so I could get a better photo. After all how often does one see a cat on the hat like this?
On the way to a party we were having trouble figuring out west/east or whatever. During the course of conversation between us friends, a passer-by shouted out the directions, "46th is one street over! Hey buddy can you help me out with a buck or some change?"
Now this was not your ordinary street person, this was a young lady just passing by. I rolled my eyes as Brian Brady dolled out a dollar.
The next day I was alone and in need of a break. At Starbucks I got a Chai and sat down at a table without first properly putting my change away. A guy at the next table saw my bills and asked, "hey lady can you help me out with a buck?"
This time I got annoyed. The Jersey girl in me told him, "hey buddy, get a job!"
OK, so that was a get tough response, I felt bad but I didn’t give in. The whole episode made me think about what was going on here. These folks were just asking. If they asked at least they had a chance at getting what they wanted. I suppose it’s better than never asking at all.
How many times do we get frustrated because we aren’t getting what we want out of life? If you want something, just ask. What’s the worst that can happen?
Scams of Foreclosure
As Colorado continues to be one of the States hit hard with home foreclosures the public needs to be aware of the scammers and their tricks. Freddie Mac the governmental organization that purchases mortgages from the banks has produced an informational video to get the word out.
If you or someone you know is facing foreclosure, pass this on.
First time home buyer assistance
First Time Home Buyers in Colorado have many benefits to assist them in purchasing a home. Counties in Colorado offer a wide assortment of programs to assist not just first time buyers, but all home buyers in learning more about the process of purchasing and maintaining a home.
Understanding the process helps future home buyers make better decisions. Once they understand the consequences of making a wrong decision they can avoid doing so. Local governments have prepared educational classes so successful that discounts are given to participants, because they have proven to be more responsible in homeownership.
Rewards for taking the education course comes in a variety of forms:
- lower interest rate
- grants for closing costs
- down payment assistance in the form of a “silent” loan
- discounts on PMI are a few incentives.
If you are looking to purchase a home, I suggest you investigate your eligibility for one of these programs. Each county and some city programs are offered throughout the State of Colorado. Check into the program in the county/city where you are interested in purchasing a home.
City Programs:
- Arvada - House to Home Ownership Down Payment Assistance Loan Program (970)-494-2021
- Aurora - Homeownership Assistance Program or (303) 739-7900
- Boulder - Homeownership Programs (303) 441-3157
- Colorado Springs - Homeownership Programs - Affordable homeownership opportunities (719) 385-5985
- Commerce City - Commerce City Housing Authority or call (303) 289-3698
- Delta - West Central Housing Development - Down payment assistance (970) 874-8204, ext. 24
- Denver - Del Norte’s Homeownership Program or (303) 477-4774, ext. 18
- Denver - Colorado Housing Assistance Corp at (303) 572-9445
- Denver - New West Side Economic Development (NEWSED) or (303) 534-8342 ext. 124
- Denver - Southwest Improvement Council (SWIC) - First Time Homeownership Program (303) 934-2268
- Carbondale - Mountain Regional Housing Corporation - Down payment assistance program (970) 963-9606
- Fort Collins - Home Buyer Assistance Program or (970) 221-6758
- Greeley - High Plains Housing Development Corp. (970) 346-7660, ext. 6540
- Longmont - Down Payment Assistance Program or (303) 651-8530
- Loveland - Larimer Home Ownership Program or (970) 667-3232, ext. 39
- Pueblo - Housing Department (719) 553-2850
- Pueblo - Colorado Bluesky Enterprises - Down payment assistance for individuals with developmental disabilities (719) 546-0572
- Pueblo - Neighbor Works of Pueblo - Affordable Housing Program (719) 544-8078
- Westminster - Home ownership Assistance (303) 227-2075
- Wheat Ridge - WRHA Home Ownership Program (303) 422-8600
Statewide Programs:
- Colorado Housing Enterprise (303) 428-1448
- Colorado Housing and Finance Authority (CHFA) - or (303) 297-7376 or (800) 877-2432, ext. 376
- Colorado Housing Assistance Corporation (303) 572-9445
- Colorado Division of Supportive Housing and Homeless Programs - Section 8 Homeownership Program or (303) 866-7350
County Programs:
- Adams County Housing Authority - Homeownership or Program HOTLINE (303) 227-2089
- Arapahoe County - HomeBuyer Program or (303) 738-8060
- Boulder County - Outside city limits of Boulder - Down Payment Assistance Program or (303) 651-8530
- Eagle County - Colorado Housing Assistance Corp or (303) 572-9445
- El Paso County - Single Family Mortgage Bond Program or (719) 520-6481
- Fremont, Chaffee, Custer and Lake counties - Upper Arkansas Area Council of Governments - Mutual Self-Help Housing or call (719) 269-7687 ext. 107
- Jefferson County - Colorado Housing Assistance Corp or (303) 572-9445
- Larimer County - Larimer Home Ownership Program - Outside city limits of Ft. Collins - (970) 667-3232, ext. 39
- Weld County - High Plains Housing Development Corp. (970) 346-7660, ext. 6540
- Bent, Crowley and Otero counties - Tri-County Housing - Downpayment and closing cost assistance, 2nd mortgages for repairs to a home being purchased, and Home Ownership Counseling (719) 263-5168
- Cheyenne, Elbert, Kit Carson and Lincoln counties - Prairie Development Corp. Down payment assistance program or (719) 348-5562 or (800) 825-0208
- Logan, Morgan, Phillips, Sedgewick, Yuma and Washington counties - Northeast Colorado Housing, Inc. in Fort Morgan - Down payment assistance program call (970) 542-0955
- All counties - Colorado Housing Assistance Corp or (303) 572-9445
Curb Appeal ~ making it look easy
One of the benefits of being in the real estate business for as long as I have is the valuable life lessons I have experienced. Some of my lessons are fun and easy others I prefer not to repeat.
A favorite memory has to do with listing a home with curb appeal. I was called by the
homeowner to sell a charming little cottage on the hillside in the town of Manitou Springs (I used to work in Colorado Springs.) Manitou is at the foot of Pikes Peak. It is a charming historic town filled with character and unique homes.
This home was a cabin, built by the homeowner’s deceased husband. You could tell the home had been loved and cherished for many years. Every inch of the interior and exterior was artfully manicured and maintained. The front yard was terraced and landscaped with shrubs. The window boxes were filled with cascading flowers in their prime.
The home could have been a Bavarian postcard, it was perfect.
The day we put it on the market was a difficult one for the homeowner. She had planned this day for a long time and had a place to go somewhere in sunny Arizona. Even so, I could tell it was very difficult for her to put this part of her life behind her. Looking around the home I could understand.
Resolutely she proceeded to sign the documents. She was determined to sell and move on. When we finished the paperwork, I went to my car to get the For Sale sign out of the trunk. We surveyed the front yard and together determined the best location for visability and concern for the landscaping.
She stood on the deck as I held the sign up high in order to drop it sufficiently deep enough into the turf. As the sign penetrated the earth, the air was filled with the screeching of brakes.
A little red sports car came to a sliding stop in front of the house. No, it wasn’t an accident. The driver shouted to me, “How much for the house?”
I told him. He said, “I’ll take it.”
He continued to tell us he was very late for work, but if I gave him my card, he’d call me to work out the details.
Flabbergasted I turned to the homeowner. Hands on her hips she looked at me and said, “I could have done that!”
Actually she was the one who did make this “sale” go quickly. It was her years of toiling in the soil that paid off in spades. The value of curb appeal is priceless.
P.S. As it turned out the young attorney could not afford her house. We ended up selling it to another buyer a couple weeks later. Still the story is a good one. It is a true story from Kristal Kraft’s war chest of real estate drama.
The Value of Curb Appeal
The term “curb appeal” has been around a long time. As it relates to residential real estate the term describes how prospects feel about the appearance of a home from the street.
As Realtors we are taught to instruct home owners to “view their homes as others see them.” We take the homeowner outside, across the street to evaluate the home. Some homeowners “get it” and this process is not necessary. Others fail to understand or care so the process is lost or pointless.
The importance of having good curb appeal can mean the difference between a quick sale or one that drags on for ages. Potential buyers, particularly the virtual shoppers are making snap decisions on whether or not to view a house. If the home is “ugly” from the prospect’s standpoint, the home never gets a chance to compete.
Remolding Magazine’s annual “Cost vs. Value Report” shows exterior and replacement projects bring the biggest return. Exterior being enhancements to the home’s curb appeal.
This report validates what we have known for a long time; when preparing your home to sell, be sure it appeals to the widest market. By investing in a “home face lift” you will be putting your money where it is most likely going to get you the most traffic.
These days of virtual home shopping the importance of curb appeal and great photos of the interior are the foundation for success. Pay attention to the details that attract the buyer to actually make an appointment to visit your home in person.
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Tribute to Jeanne Assam ~ Not your ordinary hero
Yesterday yet another wacked out gunman went on a rampage. This time the scene of the crime was a church in Colorado Springs. The guy walked into the New Life Church and started shooting.
The hero came in a female form. She was a security guard, a volunteer security guard, no less. Her name is Jeanne Assam. She took responsibility beyond the norm, approaching the gunman when he was firing off rounds. Forty rounds they claim.
Jeanne took the guy out. In doing so she saved countless lives. I am amazed at your presence of mind and laser-like focus. You conquered fear and won.
Sometimes ordinary people do extraordinary things. Jeanne you rock!
Thank you.
UPDATE: As it turns out the wacked out gunman took his own life, the corner confirmed this yesterday. Of course if it weren’t for Jeanne confronting him, who knows how many more innocents would have been killed or injured.
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Smelling the roses so to speak
Today was a glorious sunshiny Colorado day. One of my homes for sale needed more brochures on the sign, so I decided to do it myself. My listing is in Turnberry, a newer neighborhood in the Commerce City area.
While I was there, I couldn’t help but notice how lovely the neighborhood looked. The developer used Xeriscaping in the common areas. Xeriscaping is a term coined by Denver Water. The practice is to use native grasses, shrubs and plants to help conserve water.
Colorado Xeriscaping has several guidelines to follow. Not only does it save time and water, but done well it is very appealing to look at.
The Seven Fundamental Principles of Xeriscape: (From the Xeriscape Colorado site)
- Plan and design for water conservation and beauty from the start
- Create Practical Turf Areas of manageable sizes, shapes and appropriate grasses.
- Select low Water Plats and group plants of similar water needs together. Then experiment to determine how much and how often to water the plats.
- Use Soil Amendments like compost or manure as needed by the site and the type of plants used.
- Use Mulches such as wood chips, to reduce evaporation and to keep the soil cool.
- Irrigate Efficiently with properly designed systems (including hose-end equipment) and by applying the right amount of water at the right time.
- Maintain the Landscape Properly by mowing, weeding, pruning and fertilizing property.
I so enjoyed the scenery today. Typically this time of year there is only one color, that drab brown. But this quaint community with it’s golden highlights was very appealing. I found myself wanting to capture what I saw and share it with others.
Xeriscape is often confused with dry landscaping using only rocks, gravel and sand. This is so NOT true. A good xeriscape will have a variety of native plants that need no or very little water.
If you are interested in conserving our precious water, I suggest you look at the Colorado Xeriscape website for additional information and resources.
Take a drive around the Denver metro area, if you see a good example of homeowner xeriscaping, snap a picture and send it to me. Help me spread the word.
Let’s all stop to enjoy the xeriscape!
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This site brought to you by Kristal Kraft, a licensed Colorado Real Estate Broker