Spine Tingling Showings

Halloween is a time to tell scary stories around the virtual campfire (aka blog!). 

Once upon a time I received a call from a gentleman who wanted to meet me at a house.  He said he owned the house and wanted to sell it, could I please come over.  Anxious to ad a nice new listing to my inventory, I went to the house but no one ever answered the door.  I had the creepy feeling I was being watched.  When I got back to the office I checked to see if the man’s name was the same name on the tax records.  It wasn’t.  Guess I got lucky that time. (P.S. I NEVER go on appointments anymore without checking ownership.)

Another time I was showing a couple a home. We were in the basement where there was a door to a storage room.  I opened it and at the same time all three of us screamed and jumped backwards.  There was a body laying naked on the shelf!  Of course it was just a life-size store maniquein.  It curled the hair on our necks!

My favorite story occurred when I was showing a home to a prospective purchaser.  It was an awful REO that had a huge, wet basement.  I warned the buyer the basement was very wet, so please be careful.  I took him down there knowing I could stand on the steps while he looked around. Instead the buyer decided to walk the perimeter of the basement.  Each step he took, he sunk deeper into the mud.  I watched him, my mouth hanging in amazement at how far he was sinking.  Finally he finished with mud up to his knee caps!  He acted like it was all in a day’s work.  I didn’t say, “I told you so” even though I wanted too!  BTW he didn’t buy the house, years later he became a home inspector. He remains my most favorite home inspector. We never talk of the mud.

My nose remembers another nasty REO where I had to have the locksmith break into the home because the homeowners had abandoned it.  I took my contractor and the locksmith, because I always fear finding a dead body in a closet.  Well this time we found a freezer (unplugged) full of formerly frozen game meat.  It had been decaying for who knows how long!  My contractor picked up the freezer intact and disposed of it.  We didn’t dare open it again for the odor nearly killed us.

Once on holiday in Las Vegas a Realtor friend took us out to preview his inventory.  I slipped away to use the bathroom while they were looking at the house. The home was obviously build by a budget builder, because the lock to the bathroom door broke, leaving me trapped inside.  Luckily I’m not afraid of small spaces, but just the same I was annoyed at how long it took before they missed me!

Spooky stories are always more fun when they are told in past tense.  What spooky stories do you have?

Mortgage Fraud Sucks

The long arm of the Colorado Real Estate Commission reached out and smacked 20 real estate agents recently, who allegedly were involved in kickback schemes involving 105 home sales.  

These  brokers from the dark side  scammed mortgage  companies by  selling homes to members of a group called Synergy 2002 REI.  Properties were sold at inflated prices with checks at closing being given to third parties for (bogus) home repairs. 

It was reported that $8,000,000 was kicked back to buyers and brokers for sales that occurred in 2006.

How does this work?  It takes a group of scammers to pull it off.  All with greedy out stretched hands that lie, steal and look the other way when the transaction is happening.

In the end the profit made from transferring the home is far more than the profit from a normal sale. The mortgage on the home eventually goes into default, but the “homeowner” probably rents it out to milk even more profit from it as they skim the equity.

In the end the mortgage  company forecloses. The neighborhood is devalued and the innocent suffer.

The Colorado Real Estate Commission can only impose fines and sanctions on the guilty. The courts will bring criminal charges.

When all is said and done, hopefully the court will sent the offenders off for a nice long vacation, all expenses paid (including clothing) to a nice gated facility down south, perhaps Canon City?

People who cheat make it hard for the people that don’t cheat to do business. 

There are times when it is necessary to have the title company hold funds for repairs to be completed after closing.  In fact I’m doing that on one of my transactions right now.  We are doing it right. The funds will be placed in escrow until the roofing repairs are complete. At that time the funds are released directly to the vendor who did the repairs, not some bogus bidder who pretended to do work. 

My clients are willing to allow the escrow because it allows them to move into the home on schedule, rather than have to delay all their plans.

I worry that someday soon, we will have yet more legislation (thanks to the scummy scammers) that will “protect” us from the deeds these people have committed.

It is impossible to legislate common sense, but until people live their life with their moral compass pointing in the right direction, we will have to continue passing laws that effect the innocent.

Purchasing a Fixer Upper Home Made Easy with FHA 203-k

These days it seems nasty homes are more than easy to find. It never ceases to amaze me how normally nice people will take out all their anger and frustration on a home! Over the course of my career I’ve seen homes where the previous owner removed everything that wasn’t nailed down, door knobs, toilets, bathtubs, carpet, appliances even the kitchen sink!

Once I listed a bank property in Cripple Creek (before gambling was legal) where the owner turned the water on and left. The town water-meter maid finally figured out no body was home and shut off the water, but that was after many weeks of running. The bank I represented was responsible for paying the water bill before the property was sold. It was in the thousands of dollars! The worse part was the house. The moisture in the home caused the wall board to collapse. The seeds in the carpet sprouted and we had plants growing inside.

Needless to say the bank had to let this property go for a fraction of it’s value. So sad. So pointless.

Ah but I digress! The buyer of this property normally would have had to pay all cash for it, due to its deplorable condition. However if they buyer wanted he could have gotten an FHA 203-k loan to fix up and mortgage the property at the same time.

The 203-k mortgages are trickier to do than the normal FHA loan, but on the right property with the right buyer, they certainly can solve a lot of problems.

Here’s what a 203-k can do:

• Make any kind of improvement from simple remodels to complete rehabilitations.
• Convert one unit into 2-4 units or greater than 4 units into 4 units or less
• Demolish and rebuild a new house on an existing foundation
• Mixed use residential properties are eligible
• Borrow up to 110% of the “after-completed” value
• Include all repairs in the mortgage (Minimum $5000)
• Eliminate health hazards (lead paint)
• Make structural repairs and alterations (including additions)
• Remodel kitchens, bathrooms, etc.
• Replace siding, roof, gutters, downspouts, etc.
• Update plumbing, heating, electrical systems
• Install or repair the well and/or septic systems
• Replace flooring, carpeting or tile
• Make energy conservation improvements; Double pane windows and doors, insulation, caulking
• Add decks, patios, fencing.

FHA 203-k loans can assist not only in the purchase of a home, but in adding value to the property and the neighborhood. Keep this wonderful program in your “bag of tricks” for the next time you see a sweet deal that needs some enhancing!

Homeownership Costs

Come Join the First Time Home Owners Club

Every once in awhile I find one of my clients has decided to purchase a home, but in the excitement forgets to sit down and tally an expense list. Everyone has different needs, but when it gets right down to the reality of homeownership there are necessary expenses one must consider.

Don’t forget to budget for:

• moving expenses
• furnishing your new home
• HOA ~ Home Owner Association Fees
• Utilities ~ electric, gas, water and sewer (you can call Xcel to get the real scoop on an address)
• Home maintenance tools ~ mop, broom, dustpan
• Exterior maintenance tools ~ lawn mower, ladder (to clean the gutters) weed wacker, spade, snow shovel.

All these things all up, accounting for them early and setting aside funds in the budget will make joining the Home Ownership Club a pleasure instead of a pain!

I aim for helping buyers with sustainable ownership by encouraging proper planning and taking into account the buyer’s personal goals. Owning real estate is a priviledge and another part of the American Dream. To learn more about the Home Buying Process, please visit my website.

First Time Home Buyer = Investor

First time investor? What does that mean? Simply stated first time homebuyers are recognizing the opportunity right now to come out of the rental cycle and buy. OK, so they are buying their first home, not to rent but to live in, that makes them investors.

Wise investors.

Buying a home is an investment in your future. When you rent, the only one who benefits it the landlord. Renters pay rent and might as well be flushing the check down the tubes, they will never see a return on that money beyond the end of the month.

Homeowners reap benefits in more ways than one;

• At tax time they get a refund on the mortgage interest they paid
• At time of sale they get to keep the appreciation on the property value
• Homeowners have a steady place to call home, they develop roots in the community
• Homeowners don’t have to move just because the landlord changes plans

What does it take for a renter to become a homeowner?

The question is, can a renter actually “afford” to buy a home. There are a few factors to consider when approaching the decision to buy.

1. Credit ~ in today’s finance world the most important thing to have is good credit. The better the credit the less of a risk the lender takes, so the interest rate is better.
2. Income ~ steady income with job stability or a track record of 3 years is needed to obtain a loan. Of course if the first time buyer is paying all cash, this doesn’t apply.
3. Future plans ~ if the renter knows or has reason to believe there is a job transfer in the near future, buying a home may not be the best thing to do. Unless the home owner is willing and able to rent the home out in case of a job transfer. Usually the rule of thumb is 3 years are needed to stay in the home before having to sell it. After 3 years, the home buyer is usually safe.
4. Down payment ~ most loans require at least 3% down to obtain a loan. Of course there are a few programs out there that will assist with a down payment, i.e. CHFA. However even with CHFA the borrower is expected to come up with at least $1000 of his own funds. Buyers with relatives who are willing to “gift” the down payment money can also obtain a loan.

Picking a Loan

When picking a loan it is important to consider all the alternatives. Some ads on the radio advertise, “no brainer, no closing costs, etc.” loans. The reality is the cost of money is the cost of money. Borrowers will never get something for free. Those radio ads aren’t paid for by people who aren’t making a profit. Profits on making loans come packaged in a variety of ways. The home buyer walking in off the street can easily get thrown in front of a bus if they aren’t careful.

Choose a lender who will consider your circumstances and offer you sustainable choices. By sustainable I mean a loan that isn’t going to EAT YOU ALIVE. You need to stay within YOUR comfort zone, not someone else’s!

How Much is a Mortgage Payment on a House?

If you can afford $1200, you can purchase a home priced around $175,000. You can expect to put 5% down and have a fixed interest rate of 6%. This payment would allow for annual taxes of $1800 to be included in that payment. Additionally you would need to add the cost of your hazard insurance and HOA fees (if applicable).

If you can afford a higher payment, just add $6.00 per thousand to get an idea of how much more you can afford. Say you can pay $1300, divide the extra $100 by $6 = 16.67. So that means for an extra $100(a month) you can purchase approximately a $175,000+16.67=$191,670 home.

Can a Renter Afford to Buy?

The question really becomes, “Can a renter afford NOT to buy?” The Denver real estate market is prime for purchasers RIGHT NOW. Interest rates are low, inventory is diminishing and sellers are anxious to sell. The timing is really perfect for the first time home buyer. Even buyers who do not have a huge downpayment can use First Time Buyer Programs (i.e. CHFA) to make their first in investment.

Are you a first time buyer or know someone who is? Consider your options before this markets passes you by. Call me today for a free, no obligation consultation. We can discuss your situation and offer some good sound advice.

I welcome your call.

What do Hippo’s Do for Fun at Halloween?

Halloween is just around the corner and the Hippo’s at the Zoo certainly know it. What does a Hippo do for Halloween fun? Check out this YouTube Video. Enjoy…

Denver Playground

Planning a winter vacation in Colorado?

Here’s a week of activities for you to enjoy (reposted from 3-2007):

As a dream destination for many, Colorado offers beautiful scenery with majestic Rocky Mountains and their ever-changing classical beauty. People who opt to move to Colorado find spare time is filled with a variety of destinations, day trips to the close-by attractions that dot the state.

Living in Colorado comes with a guarantee, your friends and relatives will come to visit. Most likely they will come on a regular basis, you will find it necessary to know all the attractions so you can properly entertain them during their vacation. With a little planning and some luck on your part, you may be able to go with them. Why not; it’s another Colorado amenity.

Here’s a sample week of activities for you to ponder:

Day 1: Optimize your Colorado trip with a drive to Colorado Springs to visit the spectacular Garden of the Gods. This huge city park is a Registered National Natural Landmark. Free and open to the public daily this one of a kind park has towering red rock formations, Balanced Rock and many hiking trails, both paved and not. Doing some research, you may be able to schedule your trip with time to take one of the walking tours of the park. If not, do still go. The park is wondrous enough, it isn’t even necessary to get out of the car, unless you truly want to.

After the tour, head toward Old Colorado City or Manitou Springs for a bite to eat. My personal favorite is La Baguette (sorry no website, they are too busy baking awesome bread!) where ordering French Onion soup is not mandatory, but strongly advised. The fresh bread and pastry baked there is available to go, so be sure to get some. You earned it, climbing all over those rocks in the Garden of the Gods!

Day 2: Kids can be daredevils, but then so can some parents. Age is of no importance if you are feeling like trying something new. Go to the Indoor Skydiving place in Lone Tree in the Entertainment district. Located just of Yosemite between Lincoln and County Line, you can’t miss it. Just look for the building with the extra tall round stack. Yes, that’s where you can experience flying, or is it blowing in the wind? How ever you look at it, as a participant or a fan, you will have a few laughs and perhaps experience what all the raving is about. My niece and nephew had a great time, in fact it was one of their top 3 favorite things to do on their Colorado trip. But unlike the saying goes, “these Trix aren’t just for kids.” The big kids do it too!

Day 3: Snowriding. What’s a trip to Colorado without riding the snow ? Colorado has countless ski resorts from small family resorts to International destinations. The one you choose is up to you. Time constrains considered you can easily do a day trip to the mountains and be back home to cook dinner that night. Or you can plan an overnight and catch two or more days in the mountains. Beginner bunny, shredder or pro there is a hill for everyone, the options are endless.

Day 4: Denver Zoo. After back to back activities, give the muscles a break and visit the Zoo. Denver Zoo is an amazing place, concerned with conservation and it shows. Denver Zoo is constantly upgrading the facility to give the best care for it’s guests. Polar bears, lions, tigers and monkeys are bound to entertain you. Kid friendly, of course Denver Zoo offers wagon rentals so not having a carriage is not a problem, just rent one.

Day 4, Part 2: IMAX and Museum of Nature and Science is conveniently located next to Denver Zoo. For one entrance fee your group can see both the Museum and take in a movie at the IMAX. The exhibits and shows change frequently, so don’t worry too much about having to sit through a rerun.

Day 5: Snowmobiling. Being at the base of the Rockies, it’s easy to rent a snowmobile and go motoring off into the wilderness. The snowmobile Capitol of Colorado is Grand Lake. Here and along the way you will find many opportunities to enjoy this sport. Grand Lake is located right next to Rocky Mountain National Park. In the winter snowmobiles are allowed to use the trails in the park. A four hours round trip will get you above the timberline. If you dare go here, be prepared to awe!

Day 6: Denver is home to FIVE professional sport teams. If there is a fan in your group, scoring with them will be easy. Just take them to one of the tours of these facilities;

• Bronco Stadium- Invesco Field at Mile High
• Colorado Rockies - Coors Field
• Nuggets (basketball) Avalanche (hockey) at the Pepsi Center
• Dick’s Sporting Goods Park - Opening in April, Now Open…this park will be is the largest soccer complex in the world. Tours have not been set yet, but stay tuned to the website.

Day 7: Glenwood Springs Hot Springs- People pass this place for years on their way to Steamboat or Aspen. When I ask them if they ever stopping, few know what I am talking about. Colorado has many natural hot springs, Glenwood has the Granddaddy of them all. Two pools combined lengths are 505 feet! The main pool is cooled to about 90 degrees. The therapy pool is only cooled to 104 degrees. After a day of riding the snow, nothing feels better than a dip in the pools.

I could write a book about things to do in Colorado. The best thing of all, everything I’ve mentioned here can be a day trip or less from your Denver Base Camp.

If company is coming or you just need a change of scenery, you’ve got it made if you live in Colorado!

Native or Transplant?

Denver Real Estate Headlines

Nostalgia maybe annoying to the younger generation, but to many who forever enjoying indulging in it, there is peace. Yes, it is comforting to know the world isn’t going to come to an end because of this event or that. Some would like to believe nothing will ever be the same again and they are probably right. The future never really looks exactly like the past simply because it is the future. It will be different not bad just different.

Back in the 1980’s Colorado experienced a down turn in the real estate market. I had the good fortune to be able to work with a variety of asset managers liquidating foreclosed homes. At one very low point in my business I was holding about 60 listings with very few selling. The lack of activity was getting me down and I couldn’t see how the glut of homes would ever go away.

I expressed my feelings to a wise old (?) asset manager and he told me not to worry. He said things are going to continue to be slow until the INVESTORS discover the bargains and come soak them up.

He was right.

It wasn’t too much longer when exactly that happened. Soon properties started to move again, prices increased and buyers who had been waiting for the bottom discovered they missed the bottom. Ouch!

So now I can say after living through a down market or two this too will pass. Just this month Denver is getting good press now just locally but recognition from the wise old money-bag investors who watch the market. They are coming. No actually in fact they are here.

• In September 2007, 33.5% of the total detached home sales were priced under $200k. In September 2008, 44.5% of the total detached homes sales were priced under $200k. that is an 11% increase in the lower price range, which is reflected in the lower average price.
• The inventory of unsold homes dropped 21.14% in September 2008 vs. September 2007. The inventory of combined (res and condo) homes available was 23,923, reflecting a 24 week absorption rate.
• New home construction is off 55% from last September, which was down 25% from September 2006. There is very little available new home inventory, with most new home sales to be new orders rather than spec starts.
• The average and median home prices are off because of a lack of available financing in the upper price ranges, and something approaching a frenzy among investors in the lower price ranges (under $150k)
• Money is flowing from equities to cash to real estate.
• The Case-Schiler report noted that metro Denver is the second best market in the country

Colorado is on the road to recovery. Headlines in the news are hinting of a brighter future to come and it won’t be long before this too will be a faint memory.

If I Were a First Time Home Buyer I’d…

If there ever was a perfect climate for a first time buyer to purchase a home, it is now. Why is that? Because there are bargains in both home prices and available financing terms! A combination like this allows a first time buyer to obtain more of a home for their money at less of a price.

Let’s take a look at home values. The Metro Denver real estate market has many neighborhoods offering great values in homes. Some homes are foreclosures or short sales and others are being offered by the owner. It’s very reasonable to expect to get a newer home priced in the low to mid $200’s. A few years ago that was not possible.

Just recently Uncle Sam offered to lend first time home buyers their down payment for homes up to $250,000 using a tax credit. This means the buyer must initially come up with the down payment, but will be able to deduct it from income taxes.

If the buyer doesn’t actually have the down payment, but has a relative willing to lend them the money, FHA will allow a 2nd lien to be attached to the property. This would allow the buyer to borrow the money from the relative and pay it back within a year.

There are additional rules, the tax credit is for the lesser of 10% of the purchase price or $7,500. It has a 15 year recapture rate. The income restrictions allow the first borrower to earn no more than $75,000 a year. For joint buyers they can make up to $150,000 combined.

This scenario works best with a home purchase of $250,000 or less.

Some buyers don’t have wealthy or helpful relatives but they don’t need to feel left out. The Colorado Housing Finance Authority also known as CHFA can step in and lend a hand.

CHFA makes loans to buyers who do not own any other property. The best thing about CHFA’s loans is the low downpayment. Qualified buyers can get into a home with only $1000 of their own money. Their interest rates are competitive and sometimes slightly higher, but they are the only institution that will allow a buyer to create a mortgage with so little down.

CHFA does have income guidelines, but they are quite generous. The maximum loan amount is $417,000. The biggest catch is the borrow(s) must attend a Home Buyer Education Class BEFORE executing a contract! The Home Buyer Education Classes offered are free and can be taken onsite or online.

If I were a first time home buyer, I’d…

make an effort to investigate my home ownership options. There may never be a time better than the present moment to become a homeowner!

If you would like to discuss your options, please call me. I welcome your call, with no obligation, no high pressure sales pitch. Just information the information you need to know to make a decision. The choice is yours, what would you like to do?

Deadly Sins of Home Selling

Just back from the trenches after a few days of trying to find the perfect house for my buyers, I’ve got to speak my mind! We spend so much time trying to gain access to homes that it made me wonder if the sellers who are trying to sell these homes had any idea of how difficult it was on our end!

Let me state, my clients are motivated, qualified and soon to be homeless. This was not a fire drill for them, they came prepared to buy with a checkbook in hand.

Mr. and Mrs. Seller if you are anxious to sell your home, please take notice:

• Ask to review the MLS Listing sheet as soon as it is available. Check your agent’s work. That means don’t just look for mistakes but look for what is missing. We love to know lot sizes and whether or not you have a basement, fireplace or other desirable goodies. Your agent most likely will appreciate your added suggestions, I know my buyers will also.
• Brochures in the box are very helpful, particularly when we find a neighborhood we love and we want to know if we can afford your home. Yes, I can call or use my iPhone to access MetroList, but jumping out of the car is not only quicker it gives us some exercise!
• Please don’t play “Let’s Make a Deal” with the showing time. I so wish I could honor your privacy and show up within a small window of time, but I have little control over clients who go either too slow or too fast and also decide to look at several unscheduled homes along the way. I promise to do the best I can. Remember the wise saying that goes like this, “Make it easy to business with me and I will do business with you.”
• Don’t lock the storm door when the lock box in on the interior door. Houdini I’m not.
• Shovel your walk. Park your pooch. Hide the kitty. We love them, but we want to be safe.
• Some real estate showing services are awesome and others well we wondered if they exist. Be a secret shopper and try to set a showing on your home. If you have a problem, you can just imagine we are too. With the amount of homes on the market it is easy to skip over yours if the service isn’t up to par.

Now that I’ve gotten that off my chest there are quite a few things we appreciated…

• Bottled water is always a hit. Often times we hadn’t had a drop to drink in hours.
• We love the aroma of fresh baked cake/cookies. Sometimes dishes were even left out for us. Not required of course but duly noted. Thank you!
• Full brochure boxes and all the disclosures are very important and helpful. Everyone likes to read about what they are buying.
• Clean homes.
• Parked dogs, kitties and shoe covers.
• We enjoyed viewing the home’s photo albums from the variety of seasons.
• Utility bills are oh so critical when crunching the numbers.

Selling your home is not an easy thing to do, but when you consider the customer needs you may end up selling it quicker and ending the pain sooner. Mr. & Mrs. Seller I wish you well!

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