DENVER-What Can You Expect?

One of the basic tenants I have always subscribed to is “FAIR and HONEST Business dealings” with all my Denver, and elsewhere, clients. I was thrilled to see that proclamation in the real estate commissions guidelines and definitions of real estate brokers. I take it even further with my standards which you can see by clicking here. But read on…

Businesses must treat customers fairly if they expect to do business with them again or get recommendations to their friends. Customers of stores like Nordstrom’s understand that a salesperson is an employee and represents the company.denver home buyers

The line becomes less clear in some industries, especially ones that involve real estate. Agency is a legal relationship authorizing a person to act for or in the place of another. It involves responsibilities that exceed treating a person fairly.

The duties a buyer or seller can expect to receive from a real estate salesperson or broker include but are not limited to honesty, accountability, full disclosure, representation and reasonable skill and care. Buyers and sellers might additionally expect representation, obedience, loyalty and confidentiality. State laws can differ on specific duties.

Mortgage and title officers are limited in their duties to the buyer to honesty and accountability and specific requirements under the federal Real Estate Settlement and Procedures Act.

A special relationship with a real estate agent makes it advantageous to have them coordinate efforts with the other professionals in the home buying process. Since most buyers’ and sellers’ transactions are infrequent, the agent can bring valuable experience to the transaction.

Every buyer and seller should discuss the level of service they expect from the real estate professional they work with. Another good question is what happens if the purchase and sale are within the same company.

Regarding agency, I have always chosen the direct route…that is to disclose the relationships early. And hopefully, when we talk about your real estate needs here in Denver, you will find that I always want to take the position of being on your side of the fence, not being on the fence as so many do today. My goal is to represent you, and your interests first. How can I do that? Well as an dear friend, attorney and instructor who is now gone on to greater things once said to me “Pete, you know what you are doing”.

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Hands-Only CPR

Last time I was certified for CPR was in 1975. I am sure glad it has evolved into hands only instead of the additional breathing. Some times a Denver Realtor has to perform CPR on a real estate transaction. I had one that took 6 attempts to get it closed! But this is far more important…

Hands-only CPR can save lives. The American Heart Association states that “Almost 90% of people who suffer out-of-hospital cardiac arrests die. CPR, especially if performed in the first few minutes of cardiac arrest, can double or triple a person’s chance of survival.” Most people who survive a cardiac emergency are helped by a bystander.

  1. Check for responsiveness – shake the person and shout “Are you OK?”11700251-250.jpg
  2. Call 9-1-1 – either tell someone to call or make the call yourself
  3. Compress – Push hard and fast in the center of the chest at a rate of 100 per minute.

The victim should be flat on their back preferably on the floor. Place the heel of one hand on the center of the victim’s chest and place the heel on top of the other hand lacing your fingers together. Lock your elbows and compress the chest forcefully; make sure you lift enough to let the chest recoil.

Chest compressions should be continued until the person shows obvious life-like breathing, the scene becomes unsafe, an AED (automatic external defibrillator) becomes available, or a trained responder takes over the emergency treatment.

Alternating mouth-to-mouth breaths is not necessary using this method. Compressions are adequate except in drowning or drug overdose situations where 30 chest compressions are followed by two mouth-to-mouth breaths.

Watch this two-minute video and consider taking instructions from the Red Cross or other qualified provider. Every household should have at least one person trained in life-saving skills.

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Denver Realtor “Not Just Denver”

Denver Realtor shares From the National Association of Realtors

Pending Home Sales Sluggish as Low Supply Rears Its Head

Pending home sales were sluggish in April as low supply reared its head, down 1.3 percent in the National Association of REALTORS® (NAR) Pending Home Sales Index (PHSI). The PHSI posted 109.8 in April, down from 111.3 in March. The Index is based on contract signings.

“Much of the country for the second straight month saw a pullback in pending sales as the rate of new listings continues to lag the quicker pace of homes coming off the market,” says Lawrence Yun, chief economist at NAR. “REALTORS® are indicating that foot traffic is higher than a year ago, but it’s obviously not translating to more sales.

Denver Realtor

National Assn Realtor

“Prospective buyers are feeling the double whammy this spring of inventory that’s down 9.0 percent from a year ago and price appreciation that’s much faster than any rise they’ve likely seen in their income.”

The West fared best in April, with pending home sales up 5.8 percent to an Index reading of 100.0, though still down 4.2 percent from one year ago. The Midwest saw a 4.7 percent decrease in the Index to 104.4, while the South saw a 2.7 percent decrease to 125.9, and the Northeast, a 1.7 percent decrease to 97.2.

Scarce supply will remain the status quo, according to Yun, unless more homes are made available, especially from the investor side.

“The unloading of single-family homes purchased by real estate investors during the downturn for rental purposes would also go a long way in helping relieve these inventory shortages,” Yun says. “To date, there are no indications investors are ready to sell; however, they should be mindful of the fact that rental demand will soften as the overall population of young adults starts to shrink in roughly five years.”

If you want to visit (no obligation) about the Denver real estate market and where we see it going, drop me a note or contact me. It would be my pleasure!

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Denver – Must Be This Tall to Ride?

Oh yeah…it happened to me near White Plains New York. But it also happened when I was looking for a house here in Denver. And it just happened to a couple who wanted to pay all cash. They did not have proof of funds that a seller could see. “I have never had to do that before!” But today is a lot different than it was 25 years ago. So enjoy the read and then come back…

Surely, you remember being a child at an amusement park when after having stood in line with your friends and family, waiting to get on a terrific ride, you discovered the sign that read, “you must be this tall to ride.”This Tall in Denver

Not only was it disappointing, it was slightly embarrassing. You never want to go through that again.

A remarkably similar situation occurs when people are buying a home. After finding the right home and negotiating the contract, they find out that they don’t measure up financially. It’s not something that anyone wants to go through if they have a choice.

Regardless of what you think you know, if you’re buying a home with a loan, you need to physically visit with a trusted mortgage professional before you get serious.

  • You’ll find out your credit score which will directly affect the mortgage rate you’ll pay.
  • You might discover blemishes on your credit that possibly can be corrected.
  • You’ll even get a pre-approval letter that you can submit with an offer which could dramatically affect your negotiations in the current competitive market.

Some rides don’t turn out to be as good as you thought they were going to be. A person certainly doesn’t want that disappointment with a lender. Contact me for a recommendation of trusted mortgage professional.

It would be my pleasure to introduce you to a professional loan officer. Contact me… When I bought my first home in 1972, people took your word you could afford it. It doesn’t seem that way anymore. If you are getting a loan they want a loan officer to say that you can. If you are paying cash they want to see proof you have it. 

And if you are an all cash buyer here in Denver, lets talk about how you need to be ready, and what documents the seller will need to see.

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Buyers with Student Debt

Denver First Time Buyers and Sellers need to be positioned to take advantage of these programs. Read on…

59% of non-owners are not comfortable taking on a mortgage with their student debt according to the Aspiring Home Buyers 2017 survey. It is estimated that buyers with student debt (aka college graduates) have an average of $37,172 in student debt.first time buyers

Fannie Mae, who has loan programs with as little as three to five percent down payments, has announced changes to how student loan debt is treated that could make the difference in qualifying for a mortgage.

For the 5 million borrowers who participate in the reduced payment plans, actual payments are considered for calculating debt-to-income ratio rather than maximum payment amount.

Non-mortgage debts paid by another party for at least 12 months won’t be included in calculating debt-to-income ratio. For example, payments being made on a student loan by the parents would not be counted against the DTI ratio for the student.

These changes can make it possible for would-be buyers with student debt to get a home now instead of waiting for years. Being pre-approved by a trusted mortgage professional is the best way to confirm that these changes apply to your situation. Call today for a recommendation of a trusted mortgage professional.

For a list of good mortgage lenders in go to my Denver lenders web page.

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Good Info – Good Decisions

While homes available to buy are pretty scarce, some folks are not willing to make the move in Denver, yet prices will make it prohibitive with 10% annual increases. Hiding one’s head in the sand will keep you in that neighborhood you do not want to be in. So we should talk after you read this…

While low inventory is certainly challenging buyers, not having a clear understanding of mortgage financing is also causing issues. By having good information, they are able to make better decisions as well as compete favorably.Mortgage Rate History in Denver

Most buyers don’t realize how the mortgage rate is determined for a borrower. While annual income is important, a good credit score, low debt-to-income ratio, loan-to-value ratio and ability to repay the loan are vital concerns.

A variety of myths seem to permeate the market such as rates are set and released once a day; FHA loans are for first-time buyers only; pre-qualification commits the lender; lender fees are not negotiable and adjustable rate mortgages always go up.

Misunderstanding of actual mortgage practices may be a contributing factor to why more buyers are not taking advantage of what are still historically low mortgage rates.

While getting solid information about mortgages and being pre-approved from a lender are very important, it is only one step in the home buying process. Success in buying a home in today’s market should begin with a real estate professional who will coordinate all the different parts of the transaction including mortgage, title, insurance, inspections.

For good lenders here in Denver, go to www.DenverRelocation.com/lenders.shtml

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Reasons to Refinance

The current conversation in Denver real estate circles is all around whether we are in a bubble. Even if we were (we are not) with rates this low, it is time to refinance that loan. Maybe even investigate a reverse mortgage? read on…

Regardless of the reason to refinance a home, the basic question to ask is: “Do you plan to live in the home long enough to recapture the cost of refinancing?” There are always expenses involved in refinancing which can be paid in cash or rolled into the new mortgage.

From a strictly financial standpoint, the break-even point is achieved when the cost of refinancing has been recaptured by the monthly savings. It would take approximately 23 months to recapture $4,000 of refinance costs with a lower payment of $175 a month.Deciding to refinance in Denver

  1. Lower the rate
  2. Shorten the term so that the loan will build equity faster and be paid off sooner.
  3. Lower your payment to reduce your monthly cost of housing.
  4. Convert an ARM to a FRM to stabilize your payment due to concern of rising interest rates.
  5. Cash out equity to be able to use the money for another purpose.
  6. Combine a first and second mortgage.
  7. Consolidate personal debt so the interest is tax deductible.
  8. Payoff higher cost debt such as credit cards, student debt, etc.
  9. Remove a person from a loan as in the case of a divorce.

Points paid to purchase a principal residence are tax deductible completely in the year paid. However, the points must be spread over the life of the mortgage on a refinance. For that reason, consider getting a “par” value loan with no points. It may have a slightly higher rate but the interest will be fully deductible and it will lower the cost of refinancing.

Determine the break-even point on your situation by using the Refinance Analysis . Call Pete 303-880-5585 ext 3 for a recommendation of a trusted mortgage professional.

Or go to www.DenverRelocation.com/lenders.shtml

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Indecision May Cost More

In an appreciating market, like Denver, I often find folks who are just afraid to make a move, even though they can financially. Indecision is created by their fears, which are real and I do not want to take that away, yet some rationalizing might help see through that fog. See if some of these fears resonate with your thinking today:”We won’t find a place we like” (hasn’t happened in 31 years), “we cannot afford to make the move”, “the replacement home will just cost too much”, “what if the market goes down?”, “we do not have enough furniture to fill a house”.

“More has been lost due to indecision than was ever lost to making the wrong decision.” Interest rates have as much effect on housing costs as price and when they are both trending upward, it can be very expensive to wait. Indecision in Denver

There can be some legitimate reasons for postponing a purchase such as needing to save the down payment, improve your credit or waiting to find out about a possible transfer. The problem is that prices and interest rates could, and very likely will, go up in the future.

If the price of $250,000 home went up 5% and the interest rate went from 4.5% to 5.25%, the payments would increase by $176.42. The additional cost over a seven-year period would be close to $15,000.

The questions that indecisive buyers need to ask themselves is “how am I going to feel knowing that if I had not waited, I could have been living in the home for less money?” and “What would I have spent the money on if I didn’t have to make the larger payment?”

Use the Cost of Waiting to Buy calculator to find out how much indecision may be costing you.

If you want to know the selling process go to http://www.denverrelocation.com/selling.shtml. Then call me to schedule a time to talk. 303-880-5585 ext 3.

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Would-be to Should-be in Denver

When I counsel a new or first time buyer here in Denver, or even a seasoned seller buying their next home I often hear “we just don’t know” where, what kind of loan, how quickly, etc. There aren’t answers for some questions until you get your feet wet and start looking but the financing is often the easiest. Here are some thoughts about turning your “we shoulda” into your “we did”!

Some would-be buyers have emotional reasons to own a home like having a place of their own where they can raise a family, feel safe and secure and enjoy their friends’ company. Other buyers’ dominant reasons might be financial in nature such as building equity or lowering their cost of housing.Denver

Regardless of what might be motivating people to want their own home, it is easy to justify that now is a good time to purchase. Let’s look at a $250,000 example using a FHA loan.

The total payment will be about $1,835 dollars a month. If the payment is lower than the rent a person is paying, that should encourage a person to continue investigating.

In this example, when you consider the monthly principal reduction, the monthly appreciation and the tax savings, even with money added for monthly maintenance, the net cost of housing is less than half the total house payment.

Considering all those advantages, the would-be buyer is spending over $1,100 per month more to rent than it would be to own. In a year’s time, they would lose close to $14,000 which is more than the down payment of $8,750 required on this price home.

Most would-be buyers understand that a home is a big investment but they may not understand the advantage of the leverage caused by the low down payment mortgage. The benefits extend beyond a return on the down payment but to the value of the home.

In this example, the $8,750 down payment grows to an equity of $73,546 in seven years based on 2% annual appreciation and normal amortization on a 30-year loan. If you calculated that as a rate of return, you’d be challenged to find anything that could compare with it.

Denver rent vs own 2017.png

To see what your numbers might look like, check out this Rent vs. Own. If you need any help or have any questions, contact us. Part of our greatest satisfaction is helping would-be buyers understand why they should-be.

Most new home builders honor the Realtor Client relationship in Denver however, I would need to be with you on your first or second visit to the builder’s site. Best advice I can give you is carry my card with you and present it to the builder representative and say “this is my Buyer’s Agent”. Do not sign or fill out any forms. If you find you want to buy something right now! call me and I will do my best to get there to make sure you are well covered. Those of you out of Denver it is a bit harder, but I might find a good Realtor to help you too. Best practice is to call me with your questions.

There are pages of resources at DenverRelocation.com for all buyers

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An Alternative to Paying Tax Today

There can be a substantial amount of capital gains tax due upon the sale of an investment property in Denver, both the IRS and the State of Colorado. Often an investor will use a 1031 exchange as a tool to defer those taxes. Read on…

The cartoon character Wimpy would say that he’d gladly repay you Tuesday for a hamburger today. Some real estate investors say a similar thing to Uncle Sam to be able to hold on to their proceeds from the sale of an investment and agree to pay the tax later. Denver

The benefit of a 1031 exchange is that it allows the investor to defer the tax due from the sale into the replacement property. This allows more money to be reinvested. In the example shown, the investor has 27% more to invest now by deferring the tax into the future.

The property to be exchanged must be like-kind which means real estate for real estate. Rental property can be exchanged for other rental or investment property. Personal-use properties like a first or second home are not eligible for exchanges.

There are some critical dates that restrict the validity of the exchange. The investor must identify the replacement property within 45 days of the sale of the relinquished property. The replacement property must be closed within 180 days of the sale of the relinquished property.

  • The replacement property must be equal to or greater in value, equity and debt than the one being relinquished.
  • All net proceeds must be used in acquiring the replacement property.

There are specific rules involved in constructing a valid tax-deferred exchange. There are three professionals that should be involved: a tax advisor, a real estate professional and a qualified intermediary who will assist in the acquisition and transfer of both the relinquished property and the replacement property. Additional information can be found in IRS Publication 544.

If you would like to talk about moving your Denver real estate holdings into something closer to home, or closer to where you intend to retire, lets talk about using the 1031 exchange as a legal, and very cost effective way of doing it. There are some tricks and having a good Realtor lined up in the destination city is critical to the smooth running of the exchange. And it does not cost a buyer anything to participate in the exchange. We can get the first leg started here in Denver for you. Give me a call…or visit www.DenverRelocation.com.

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