Real Estate Mortgages – Before and Future

A snapshot infographic of mortgages

 

We’ve been enjoying low finance rates for quite some time now.  Predictions for this time next year are for higher rates.  This means less affordability for buyers and possibly less appreciation for homeowners.  Are you on the fence about buying/selling?  Now may be the best time to make that move.

About Kristal Kraft, Denver Realtor

Hi, I'm Kristal Kraft, the resident blogger here, posting real estate and Metro Denver area information since 2003! You will find me writing about things I feel are important in the home buying process. When it comes to buying and selling homes, there's so much to know. I enjoy providing that information to my clients so they can make decisions based on knowledge and actual fact. You'll find I'm more of a teacher than a salesperson. My services include: residential property sales, purchases, 1031 Exchanges, new home purchases, REO, foreclosures, short sales. So if you are in the market to buy or sell Denver real estate, tap into my knowledge, just call me. I welcome your call!

Denver Real Estate ~ What is a 1031 Exchange?

What is a 1031 ?

For investors, whether they be on-purpose professionals or reluctant owners who had to hold onto a  property as a rental because at the time it wasn’t selling, doing a can save dollars. The 1031 Tax Deferred Exchange is a frequently overlooked section of the code!

In basic terms, Internal Revenue Code, section 1031 allows a real property owner to sell his property and reinvest the proceeds in ownership of a like-kind property and defer the capital gains taxes.

A 1031 Property Exchange is also known as a Tax Deferred Exchange.

Who should consider a 1031 Exchange?

Owners of real property that upon selling will incur a net gain.  Typically this is a property that has been substantially depreciated for tax purposes and/or has appreciated in fair market value), are good candidates for doing a 1031 Exchange.

5 Classifications of Property

The fourth and fifth category and possibly the fifth category are the type property allowed in Section 1031.  The defines “Business Use” as, “To hold property for productive use in trade or business.”  Property retired from previous productive use in business can be qualifying property.  Investment purpose defined as real estate, even if unproductive, held by a non-dealer for future use of increment in value is held for investment and not primarily for sale.  Investment is the passive holding of property, for more than a temporary period, with the expectation that it will appreciate.  Property held for sale in the immediate future is not held for investment.

Why  should you  consider doing a 1031 Exchange?

  1. Relocation to a new area
  2. Diversify.  Perhaps it’s better to own more than one property
  3. Defer paying capital gains taxes
  4. Leverage
  5. Upgrade to a better property
  6. Consolidate multiple properties into a better single property
  7. Differences in growth or income potential
  8. A well-structured exchange can provide the real estate investor the opportunity to defer all of their capital gain taxes. The exchange in essence is an interest-free, no term loan allowed by the government
  9. Change in type of property residential, commercial, retail, etc.

What is “Like-Kind” Property?

An example of “like-kind” property would include commercial, condos, duplexes, raw land, rental homes (depending upon extent of personal use) and apartment buildings.  The real estate needs to be within the United States and it’s possessions.  means “similar in nature” notwithstanding grade or quality differences.

1031 Exchanges Can Be Done in Different Formats

  1. Simultaneous (2-party swap)
  2. Delayed exchange is most commonly done
  3. Multiple sales/acquisitions
  4. Reverse exchange
  5. Improvement exchange

Guidelines to Replacement Property Identification in a 1031 Exchange

  • 3-Property Rule – You may identify up to 3 properties to replace your relinquished property.
  • 200% Rule – The aggregate value of identified properties cannot exceed 200% of the value of your relinquished property.
  • 95% Exemption – You may identify any number of properties to replace your relinquished property as long as the total value you end up purchasing does not exceed 95% of all identified properties.

Like in Life, Timing is Everything!

The time you have to sell your relinquished property and close on a new one is strictly dictated by the IRS Code.

  • You have 45 days from the closing of your sale to list the properties you may want to buy. There are no exceptions to the deadline.  A day counts as a day, even if it is a weekend.
  • From the sale closing date, you have 180 days to close on a purchase of one or more properties from the 45-day list.  Again, no exceptions to this deadline.

Watch Your Tail Feathers!

As one can imagine there are lots of Carpet Baggers out there in the world trying to remove you from your investments.  Arming yourself with not just knowledge of a 1031 Exchange but also a concrete understanding of what your are doing is very important.  There’s lots of info to read and research, but it’s constantly changing.  Thus when it comes time to do your exchange be sure to partner with and expert who follows the changing legislation and monitors new legal developments.

Work with a Professional: Any real estate transaction can be confusing. Dealing with a 1031 Exchange can be mind boggling, to say the least. If you don’t have intricate knowledge or experience in dealing with a 1031, it could be very, very costly for you in the end. I have the experience necessary to make your Colorado 1031 Exchange go smoothly. For any Colorado information regarding Real Estate 1031 Tax Exchanges, please contact me Kristal Kraft at 303-589-2022. I look forward to working with you on any of your real estate transactions in the metro Denver, Colorado, area.

About Kristal Kraft, Denver Realtor

Hi, I'm Kristal Kraft, the resident blogger here, posting real estate and Metro Denver area information since 2003! You will find me writing about things I feel are important in the home buying process. When it comes to buying and selling homes, there's so much to know. I enjoy providing that information to my clients so they can make decisions based on knowledge and actual fact. You'll find I'm more of a teacher than a salesperson. My services include: residential property sales, purchases, 1031 Exchanges, new home purchases, REO, foreclosures, short sales. So if you are in the market to buy or sell Denver real estate, tap into my knowledge, just call me. I welcome your call!

Denver Real Estate Report – Comparison

Metro Denver Real Estate Report October 2014

Metro Denver real estate sales continue to move at a brisk pace. The number of weeks inventory range from 5.04 to a high of 7.29, neither of which is very much inventory.  By inventory I mean “homes available for sale.”

I like to use this comparison as a tool for my buyers who want to know where they can most likely find the price home they are looking for.  Currently the lowest price average home is found in the Northeast Suburban area.  Buyers hoping to purchase a new or newer home are in luck here, because there is a significant amount on new construction in this area.

Southeast Suburban has the highest price average and the second longest length of inventory.  Of course this number is relative to the area.  Other parts of the country measure their inventory or “homes for sale” in MONTHS not WEEKS!

If you are interested in more details for a specific area/zip code, I’ve included a detailed real estate market report for the 5 regions of Metro Denver.  Just follow the links…

Denver City & County Real Estate Report by Zip Code

Northeast Suburban Denver Real Estate Report by Zip Code

Southeast Suburban Denver Real Estate Report by Zip Code

Southwest Suburban Denver Real Estate Report by Zip Code

Northwest Suburban Denver Real Estate Report by Zip Code

 

 

About Kristal Kraft, Denver Realtor

Hi, I'm Kristal Kraft, the resident blogger here, posting real estate and Metro Denver area information since 2003! You will find me writing about things I feel are important in the home buying process. When it comes to buying and selling homes, there's so much to know. I enjoy providing that information to my clients so they can make decisions based on knowledge and actual fact. You'll find I'm more of a teacher than a salesperson. My services include: residential property sales, purchases, 1031 Exchanges, new home purchases, REO, foreclosures, short sales. So if you are in the market to buy or sell Denver real estate, tap into my knowledge, just call me. I welcome your call!

NW Suburban Denver Real Estate Sales Report – October 2014

Northwest Suburban Metro Denver Real Estate Market Report ~ September 2014

Call Kristal Kraft, Denver Realtor 303-589-2022

Northeast Metro Denver Region Zip Code Market Report

 

NW Metro Denver Real Estate Statistics for October 2014

Last month this area had two “yellow” banded zip codes.  Note how this month they are gone!  The average days on market is only 5 days longer than the best average for the 5 regions which is at 30 days.

Prospective home buyers for this area  need to be on their toes, as homes are selling quickly.

This month NW Suburban Denver has the highest average sale price out of the 5 metro regions at an average of $394,046.  Last month it had the 4th highest average.  Funny how that changes!

Neighborhoods in this area include (but are not limited to):

Broomfield   Lafayette   Louisville

Arvada   Golden   Westminster

 Want to compare the statistics of all 5 Denver Metro Regions?

Southeast Metro Denver Region         Southwest Metro Denver Region

Northeast Metro Denver Region         Northwest Metro Denver Region

City and County of Denver

 

Follow the links on each city to discover more about the neighborhoods and to search for homes on my complimentary MLS-IDX.

Questions about your neighborhood? Need more specific data on your home for either purchase or to sell? Feel free to call for more in depth reporting. Kristal Kraft 303-589-2022 I welcome your call.

Contact me for information about Metro Denver Real Estate Request an Up-to-Date Market Report for your Metro Denver Neighborhood.

Based on information from Metrolist, Inc. for the period of September 2014. NOTE: this representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist does not guarantee nor is in any way responsible for its accuracy. Data maintained by Metrolist may not reflect all real estate activity in the market content.

About Kristal Kraft, Denver Realtor

Hi, I'm Kristal Kraft, the resident blogger here, posting real estate and Metro Denver area information since 2003! You will find me writing about things I feel are important in the home buying process. When it comes to buying and selling homes, there's so much to know. I enjoy providing that information to my clients so they can make decisions based on knowledge and actual fact. You'll find I'm more of a teacher than a salesperson. My services include: residential property sales, purchases, 1031 Exchanges, new home purchases, REO, foreclosures, short sales. So if you are in the market to buy or sell Denver real estate, tap into my knowledge, just call me. I welcome your call!

SW Suburban Denver Real Estate Report ~ October 2014

Southwest Metro Denver Region Zip Codes

SW-Metro Denver Region

The inventory of homes for sale in SW Suburban Denver dwindles as buyers are purchasing homes.  The month of September saw 392 homes sell out of the 659 that are available.  The average price for the area is at $377,564.

Home owners wanting to sell in SW Suburban Denver neighborhoods will be glad to know it is a strong Sellers Market with plenty of buyers writing offers on homes for sale.  The average number of days on market is 31.

Want to compare the statistics of all 5 Denver Metro Regions?

Southeast Metro Denver Region         Southwest Metro Denver Region

Northeast Metro Denver Region         Northwest Metro Denver Region

City and County of Denver

Questions about your neighborhood? Need more specific data on your home for either purchase or to sell? Feel free to call for more in depth reporting. Kristal Kraft 303-589-2022 I welcome your call.

Contact me for information about Metro Denver Real Estate Request an Up-to-Date Market Report for your Metro Denver Neighborhood.

Based on information from Metrolist, Inc. NOTE: this representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist does not guarantee nor is in any way responsible for its accuracy. Data maintained by Metrolist may not reflect all real estate activity in the market content.

 

About Kristal Kraft, Denver Realtor

Hi, I'm Kristal Kraft, the resident blogger here, posting real estate and Metro Denver area information since 2003! You will find me writing about things I feel are important in the home buying process. When it comes to buying and selling homes, there's so much to know. I enjoy providing that information to my clients so they can make decisions based on knowledge and actual fact. You'll find I'm more of a teacher than a salesperson. My services include: residential property sales, purchases, 1031 Exchanges, new home purchases, REO, foreclosures, short sales. So if you are in the market to buy or sell Denver real estate, tap into my knowledge, just call me. I welcome your call!