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Summer is Over…

By Kristal Kraft Denver Realtor | Published: September 1, 2010

The daytime weather is warm but the nights are cooling off, summer is almost over! Looking around the city I see kids enjoying the lazy days of summer right up to the time it gets dark. I remember those days, darkness always came way too soon, I was never ready to call it quits. Judging by the look of these kids, they feel much the same way.

Photo is taken from the steps of the Museum of Natural History, overlooking City Park and the Denver Skyline as the sun sets over the Rocky Mountains.

My we have a pretty city here!

Posted in Life After Real Estate | Leave a comment

Denver Real Estate – What’s Happening in July 2010?

By Larry D. McGee, guest blogger | Published: August 13, 2010

Yet another month passes as we move toward the end of summer, the news is not surprising.

The average price for both condos and SFR dropped slightly in July, but is still higher than for July 2009 by a combined rate of 6.7
WHAT THIS MEANS: The Denver market is realizing a continuing increase in the average price, which will remove the “underwater” concept many people have, and at some point, there will be usable equity for those folks that bought prior to 2004.
Homes place under contract in July declined by 1148 units from the previous year. WHAT THIS MEANS: The tax credit artificially moved the sales forward into the 2 month period of March and April, and unbalanced the market for the remainder of 2010 and most likely for the much of 2011. Total sales will remain under 2009-2010 levels until summer of 2011.
The “Absorption Rate” jumped from 24.3 weeks in June to 31.2 weeks in July. This represents an 8 month inventory vs. a six month inventory. WHAT THIS MEANS: the entire Denver market has moved back to a more favorable position for buyers.
The Denver market priced under $500,000 is selling well. The market over $500,000 is now at a 140 days on market, which is considerably better than to 210 days of July 2009. WHAT THIS MEANS: A combination of job losses and difficulty in obtaining mortgage money in the higher price ranges has created an oversupply in the upper price ranges. This oversupply will remain in place for some time. There will be few high priced home built in the next few years, unless custom ordered.
The FHA Mortgage insurance changes that were scheduled to take place in September have been delayed until later in the year.
At this time the following is true about FHA loans in Denver
1. The FHA Loan Limit in the Denver area is $406,250. This means you can purchase a home priced at $421,000 using the minimum amount required for a down payment ($14,750).
2. At the present mortgage interest rate of 4.5% a home priced at $300,000 will require a down payment of $10,500 resulting in a loan amount of $296,000 after MIP is included. This will result in a Payment of $1630 dollars including Principle, Interest, and Mortgage Insurance. Property taxes and Hazard Insurance must be added to arrive at the true monthly payment.

Posted in Denver Real Estate Trends | 1 Comment

Come Enjoy the Taste of Lone Tree This Weekend

By Kristal Kraft Denver Realtor | Published: August 12, 2010

Lone Tree of Douglas County Colorado Celebrates

This weekend foodies and art lovers can combine their interests at the Taste of Lone Tree. The festival will be held at Park Meadows Mall in the Vistas area to the west of the Mall.

The event is free to everyone. Thirsty folks can purchase a $10 wrist band and enjoy as much wine and beer as they like. Food Samples will be sold starting at $2.00.

Dates: August 14 & 15, 2010

Time: August 14 10-9 p.m.

August 15 11-6 p.m.

30 restaurants and 50 artisans will be at the festival, so be sure to stop by. for a detailed schedule of the Event download the schedule here.

Posted in Neighborhoods of Metro Denver | Tagged Art show, Festival, Lone Tree, Taste of Lone Tree | 1 Comment

Federal Tax Credit has Expired but Denver Offers One Even Better!

By Kristal Kraft Denver Realtor | Published: August 11, 2010

Denver Real Estate News

Home buyers who plan to purchase in the City and County of Denver need to know about the Mortgage Credit Certificate (MCC) offered by Denver. Not everyone can qualify, but those that do stand to gain a significant benefit.

Here’s the scoop…Denver Mortgage Credit Certificate

The Mortgage Credit Certificate (MCC) is a program offered to qualified buyers that will allow them to receive an annual federal income tax credit equal to 20% of the annual interest they pay on the mortgage loan. This differs from the standard interest deduction in that, it is a dollar for dollar reduction in taxes owed by the borrower.

Borrowers have a choice…

They can choose to adjust their W-4 withholding and receive the value of the credit – this gives them more buying power sooner. Or they can submit the credit certificate with their 1040 form at the end of the year. Either way this means HUGE savings for a borrower!

There are some other stipulations…

There is a limit on the amount of money available in the program. Currently (on June 1, 2010) there was $14,000,000 still available. NOTE: this program is not new. It’s been available for at least 15 years. Normally when the program runs out of money it gets refunded by the U.S. Gov.

The Mortgage Credit Certificate is for First Time Home Buyers

First Time Home Buyers are described as anyone who has not owned a home in the last 3 years. This fact is validated when the borrower submits their three years of tax returns.

Income Limitations are Generous!

Occupancy

Borrower is required to purchase as primary residence. Non-owner occupant co-mortgagors are allowed (Mom & Dad!) provided that combined income does not exceed income limitation (that could nix it!). The non-occupying co-mortgagor is not required to be a first time home buyer.

Process

There is a submission process that the lender must go through. It takes a minimum of 4 weeks to complete. The buyer MUST complete a Homebuyer Education course certificate, obtained through a HUD approved agency. The process can be completed in conjunction with the mortgage loan, so it’s NOT an additional 4 weeks.

Costs

There is a fee (non-refundable) to make application in the amount of $75.00 plus .15% of the mortgage amount for the MCC Issuance Fee paid to the City and County of Denver. Most reliable lenders will be able to tell borrower in advance of paying this fee if there is a very good chance to obtain the certificate.

Recapture Tax

In some cases when the borrower goes to sell the property he may be subject to a “recapture tax.” If a recapture tax is owned it is computed and paid to the IRS for the tax year in which the home is sold. For the average buyer in thiws program, it’s unlikely they will be required to pay because their income is lower than that allowed without penalty.

A recapture tax is due only if:

the borrower sells his home in under 9 years
the borrower receives a “gain” on the sale of the home and the borrower’s income has increased significantly over the 9-year (typically more than 5% per year)
a recapture tax is due, it will be based upon the lesser of 6.25% of the original loan amount or one half of the gain on the sale of the home.

Let’s Look at an Example (this is for explanation purposes only!)

Assuming a borrower could qualify for the mortgage and the mortgage credit on a home purchase of $350,000, with an income of $68,000, interest rate (available today but who knows how much in the future) and a 15% tax bracket. Here are the numbers.

Using Denver’s Mortgage Credit Certificate a borrower could save $2603 a year, or $216 a month!

Buyers may be interested in knowing what the average home/condo sale price is in the City and County of Denver. As of July 2010 here are the average home sale prices:

So you can see buying a home in Denver and having a very worthwhile tax credit, is possible!

Now what? Need a lender to contact? The nice lady who provided me with the above information is experienced in doing Denver’s Mortgage Credit Certification, she’s done many in the past and is not afraid of tackling the paperwork for you. (note: many mortgage lenders are not willing to go the extra mile, qualified to do it or more importantly experienced in doing so.) My suggestion would be to give Jaxzann Riggs at The Mortgage Network 3030-394-2121 a call.

If you are interested in seeing homes for sale in Denver, feel free to use my Denver Home Search website. You can be looking at all the homes for sale in Denver immediately!

Posted in Buyer Tips | Tagged "Jaxzann Riggs", Denver Mortgage Credit Certificate, first time buyers, Home Financing, MCC, Mortgage Tax Credit | 1 Comment

Use Caution When Buying a Home!

By Kristal Kraft Denver Realtor | Published: August 8, 2010

Denver Relocation News

When moving to a new area, many people bring with them the understandings they developed back home. Not that there’s anything wrong with such knowledge, but in a new location it doesn’t always apply!

How so?

Well oddly enough, each state has different laws. So for instance when moving from the east coast, let’s say Connecticut to Colorado you may be surprised (and frightened) to learn we close real estate contracts without using an attorney! Yes, it’s true. Our contracts are written specifically so Colorado real estate brokers are permitted to “fill in the blanks.” For 99.9% of residential real estate deals that’s all that’s needed. Of course, if you want to hire an attorney to represent you, you certainly may do so.

Use Extreme Caution When Hunting for a New Home

Colorado has different laws about agency. Most consumers are well aware of how important it is to have your own representation when purchasing real estate. That means if you are a buyer, going directly to the listing agent or worse yet the on-site-sales agent is not the way to get representation. In both cases the agent or on-site sales person by law represents the owner of the property (not you!). By going directly to them you can jeopardize your negotiating position, sometimes innocently before you even know it.

I call it, “giving away the farm.” Savvy agents strike up an informal conversation with you, or you might perceive it as informal, but all the while they are “qualifying you, by asking indirect questions that may later be used against you. Ouch!

Builders Co-operate with Brokers in Colorado

Many parts of the country find that home builders refuse to work with real estate agents. They prefer to sell directly to the consumer. Well that’s not so in Colorado. Here we work together with builders, as real estate brokers we can show a consumer ALL the GOOD builders in the area not just one. In fact, the builders and brokers in Colorado have worked together for years, because we understand how important it is for the consumer to have buyer representation!

As a Colorado real estate broker I make it my business to know the various areas and the products offered by the builders. I also know which builders service their buyers AFTER the sale, because I talk to my clients and they tell me if they are satisfied. To me the most important aspect of buying a new home is satisfying the client by providing good service not just during the transaction, but long after the ink has dried on the deed.

Kristal Kraft…Selling Denver and the 'Burbs!