Increase Your Marketability Secrets Denver

Denver Real Estate Market perspective

As we start into a new season in the Denver real estate market, we start to see more sellers getting the “attitude”. That means one of three things: The prices are 7% above the last sale because “that is what I think it is worth and everybody’s house in Denver is going up that much!”; the availability is limited’ eg terms “showings only between 6 & 630”; and the condition is marginal “they can fix it up…I do not have to work to sell my house”. One sees this especially in the listings that expire off the market everyday. Truth is, in Denver every neighborhood has its own appreciation rate (price), and sometimes it is depreciation in the million plus range. And more truth: you cannot sell it if they cannot see it (available to show) and it still does need to be in top flight condition to sell as fast as we want. It also points out the value a full-time, professional Realtor can add to your efforts. Here is a perspective from my friend Pat Zaby:

The seller has three tools available to affect the marketability of their home: price, condition and terms. Price is the easiest to adjust for the competing properties, amount of inventory or market conditions. However, lowering the price is not necessarily the best decision when trying to maximize the proceeds of sale.

If a home is in poor or outdated condition, updating can be done to make it show favorably with other homes that are currently on the market. Sometimes, sellers rationalize not doing the work by saying they believe the buyers would rather make their own choices. The truth is that most buyers are using all their resources to get into the home and will have to live in its present condition until they can save enough to make the changes they want.Denver real estate market

Another reason to go ahead and invest the money and effort into improving the condition is that it is difficult for buyers to imagine the home any other way than its current condition. When comparing one home to another, buyers will sometimes refer to a home as the “stinky house” or the “old kitchen” which may put it at a disadvantage.

While price and condition are the main things that control the marketability, terms can be equally effective. Terms relate to financial considerations made by the seller to induce a buyer to make a decision to purchase their home.

Seller-paid points or closing costs, interest rate buy downs and owner-financing are examples of terms that may increase the marketability of a home because of the additional benefits they offer to buyers.

An example could be that a seller will carry a 10% second lien so that the buyer can get an 80% loan and avoid the expense of mortgage insurance. The seller gets most of their equity plus a fair interest rate on the loan that doesn’t have to be tied up for 30 years like the first mortgage.

Increasing the marketability of your home is a great conversation to have with your real estate professional especially to help you get the highest price in the shortest time with the fewest problems. Just be aware that not all agents may be as creative as some and not all are Realtors. To learn more about Pete Doty check his websites: www.DenverRelocation.com and www.petedoty.com.

Posted in Castle Rock, Centennial, Denver, Denver Real Estate, Denver Realtor, Englewood, General Real Estate, Highlands Ranch, Littleton, Lone Tree, www.DenverRelocation.com | Tagged , , , , , , , , , | Comments Off on Increase Your Marketability Secrets Denver

If you’re going to play, GET IN THE GAME

Denver Real Estate = Sellers Market

As we help buyers in this Denver real estate market the primary comment we get is there is nothing to buy (inventory is low). Once they decide to move and to make an offer they tend to disbelieve the statistics and make low offers where homes are selling in days (low days on market = full price or above). The reality pill tastes bitter when they loose their first dream home, and then their second. This is all price sector sensitive of course with some markets in Denver having more homes for sale due to their price range. To be successful today’s Denver buyer needs to be ready to go into battle and has to be well armed! We are happy to share some strategies that have proven to get the Seller’s attention and to bring your offer to the top of the pile, but read this first. Then give Pete a call!

If competition is a buyer’s biggest concern, for goodness’ sake, get in the game. In a new survey of close to a thousand home buyers conducted by Redfin, affordability is still the number one concern but due to low inventories, competition from other buyers is moving its way up the poll.

Denver real estate

When buying Denver real estate you have to be ready to compete

26% identified affordability while 19% mentioned competition and 15% mentioned low inventory as their respective top concerns.

To win, athletes study the competition to come up with a plan and buying a home is not different.

  1. Ask what terms are important to the seller before you write the offer.
  2. Once you decide to make an offer, do it as fast as you can, hopefully, to be the only one the seller is considering.
  3. Make a good (or possibly, your best) offer in the beginning; you may never get a chance at improving it. In highly competitive situations, offer above the list price.
  4. Attach your pre-approval letter from a respected lender. This means you’ll need to get pre-approved before you even think about writing an offer.
  5. Have your lender call the listing agent to reassure them of your ability to qualify.
  6. Include a higher than normal amount of earnest money to show you are serious.
  7. Eliminate unnecessary contingencies.
  8. Write a personal, hand-written letter telling the seller what you like about their home and why you want it. Consider including pictures of your family.
  9. Minimize seller expenses paid for the benefit of the buyer.
  10. Shorten inspection times.
  11. Don’t ask for personal property.
  12. Be flexible on closing dates to accommodate the seller’s move.

Once you find your dream home, don’t take a chance on losing it. Write a winning offer that will be good for both the sellers and the buyers.

Posted in Castle Rock, Centennial, Colorado, Denver, Denver Real Estate, Denver Realtor, Englewood, Highlands Ranch, Littleton, Lone Tree, www.DenverRelocation.com | Tagged , , , , , , , , | Comments Off on If you’re going to play, GET IN THE GAME

Your Tenants Will Send Your Kids to College

Denver Parents, with children getting closer and closer to entering college, may also be feeling stress because they haven’t saved enough for tuition and other expenses. It’s estimated that the average cost for the 2015-16 school year is $32,405 for private colleges, $9,410 for state residents of public colleges and $23,893 for out-of-state residents.kids to college.png

If you started saving the year your child was born, you’d have to save $4,608 per year for 18 years at 5% to accumulate $129,620. If you waited until they were 10 years old, you’d have to save $13,574 per year to have the right amount. Saving enough can be difficult if you have a lot of time but if you only have a short time to meet your goals, it can seem impossible.

College costs.png

Student debt is one way to handle the tuition but many parents are reluctant to saddle their children with the obligation. Currently, there is more than $1.2 trillion in outstanding student loan debt to 40 million borrowers with an average balance of $29,000. Some economists suggest that this debt is delaying would-be buyers from making their first home purchases.

There is another way to pay for the education by making an investment in a rental property. Rents are continuing to rise, homes in owner-occupied neighborhoods are appreciating and the leverage due to borrowed funds can be a huge help in building the equity to pay the tuition.

Rent the home and maintain its condition over the years. As the loan amortizes and the value increases, the equity will grow. When your student is ready to start college, you’ll actually have several options.

You can sell the property; pay the tax on the gain at the reduced capital gains rate and fund the education. Another option would be to refinance and take the proceeds to pay for the tuition. This would allow you to continue to own the asset but would free your equity. Under current tax laws, it is a non-taxable event.

In effect, your tenants are paying to send your kids to college.

Posted in Castle Rock, Centennial, Colorado, Denver, Denver Real Estate, Denver Realtor, Englewood, Highlands Ranch, Littleton, Lone Tree, www.DenverRelocation.com | Tagged , , , , , , | Comments Off on Your Tenants Will Send Your Kids to College

The Obvious Alternative Investment – homes in Denver

Rental homes in Denver equal great income opportunity

Rental homes in Denver can be a natural alternative investment choice for homeowners because they are already familiar with houses. Maintenance on a rental is not that much different than on your personal home. The same plumbers, painters and other workmen can be used to make repairs. Denver Homes

Single family homes in Denver offer an investor high loan-to-value mortgages at fixed interest rates for long terms on appreciating assets with defined tax advantages and more control than other investments.

  1. High loan-to-value mortgages – most investments require that you pay cash but rental properties can be purchased with 20% down payment.
  2. Fixed interest rates – most commercial loans are based on a floating rate such as prime interest plus one or two percent compared to real estate loans as fixed rates for the term.
  3. Long terms – commercial loans are generally short-term such as six months or a year with the possibility of being renewed for another six months or a year unlike real estate where a 30-year mortgage is commonplace.
  4. Appreciating assets – real estate has a long-term history of going up in value.
  5. Defined tax advantages – many investments are taxed as ordinary income but rental real estate enjoys a non-cash deduction called cost recovery, the profits from sale are taxed at lower long-term capital gains rates or may be eligible for a tax-deferred exchange.
  6. Control – rental homes don’t require partners and afford the investor more options than investing in mutual funds and other traditional investments.

The demand for good rental homes in Denver is strong and the rents continue to go up in most markets. There are people who choose not to buy or cannot buy a home who would prefer to live in a single family home rather than an apartment.

Posted in Denver, Highlands Ranch, Littleton, www.DenverRelocation.com | Tagged , , , | Comments Off on The Obvious Alternative Investment – homes in Denver

7 Out of 50 Could Save Money on Denver Home

Denver Home owners should know that seven million out of 50 million homeowners could save money by refinancing their existing mortgages. Obviously, if the replacement mortgage has a lower rate than your existing one, you will save money.

If you bought a Denver home before 2011 and are paying mortgage insurance, you should investigate refinancing to eliminate that requirement. Even if you don’t get a lower interest rate, the savings could amount to hundreds of dollars a month.

If the home you purchased since 2011 has appreciated enough, it could easily justify refinancing to eliminate the required mortgage insurance. Most loans don’t require mortgage insurance if the loan-to-value is 80% or less. There are some programs for 90% mortgages that don’t require mortgage insurance. It is certainly worth investigating with a trusted mortgage professional.

Continuing to pay mortgage insurance that could be eliminated is like having a broken cell phone and continuing to make the monthly payments for something you can’t use and don’t need.

If your current mortgage is several years old, instead of getting a new 30 year mortgage, you might consider a 15-year term. The money you save with a lower interest rate could help you to retire your loan in a shorter time so that your home would be paid for.

Denver Home 30-year average FRM.png

Posted in Castle Rock, Centennial, Denver, Denver Real Estate, Denver Realtor, Englewood, Highlands Ranch, Littleton, Lone Tree | Tagged , , , , | Comments Off on 7 Out of 50 Could Save Money on Denver Home

Some Denver home improvements keep costing you

Bying a Denver Home keeps costing…but not a lot more

Denver HomeYou bought a Denver home and now you’ve saved the money and are ready to pay cash to build a new pool for your home. However, that’s just the beginning of your soon to be increased expenses which will include maintenance, higher utilities and higher taxes.

Homeowners obviously benefit by a larger equity when their home increases in value due to appreciation. A not-so-obvious effect that will also more than likely take place is that their property taxes will increase. In most cases, a property’s assessed value is generally tied to market value to calculate the property taxes based on the tax rate for that year.

Similarly, a homeowner can affect the value of their Denver home by making capital improvements. Some small items may never be recognized by the taxing authority but items that require a permit, certainly are brought to their attention. Items such as a fence, roof, remodeling, windows, new rooms or swimming pools can easily increase the assessed value of a property.

Most states have an established time frame in which to challenge the current tax assessment for that year. The process is relatively simple and doesn’t require professional representation. It generally involves showing that there is an error which has overstated the value or that current comparable sales indicate a lower value.

If you’d like more information or need the comparable sales data, please let us know. We would be happy to help you investigate the possibility of lowering your property taxes.

Posted in Centennial, Denver, Denver Real Estate, Denver Realtor, Englewood, Highlands Ranch, Littleton, Lone Tree | Tagged , , , , , | Comments Off on Some Denver home improvements keep costing you

Your Denver Real Estate may be worth a lot more than you think

Denver real estate bubble?

Denver real estate lost a lot of value during the recession but nationally most areas have rebounded considerably. In some cases, the homes are worth more than they were before the housing bubble burst. 60178926_250.jpg

The dynamics are classic for this type of market: inventories are low, mortgage rates are low and demand is high. All price ranges are on the rise with some at an even higher rate because the short supply is causing competition among buyers.

Another reason many homeowners’ may have more equity is simply not staying current with what is going on in the market. In a recent FNMA study, it indicates that 23% of owners believe they have negative equity in their home when actually, it is 9%. 37% believe they have greater than 20% equity in their home when actually 69% of homeowners do.

Even if you’re not planning to sell your home, knowing the value helps you understand your financial position better. Home equity debt up to a $100,000 limit is tax deductible and can be used for any purpose. Owner’s commonly refinance to eliminate mortgage insurance, consolidate mortgages, pay off higher interest rate debt like credit cards or student loans or to buy out an ex-spouse’s equity.

Be aware that an automated value model like Zillow Zestimates uses algorithms to determine a price and while it might be in the ballpark, AVM results may only be accurate about 20% of the time. A comparable marketing analysis or broker’s price opinion will be more accurate due the subjective approach that will be used by an agent with personal experience in the area. An agent will consider factors like condition, floorplan, marketability and demand.

Posted in Denver, Denver Real Estate, Highlands Ranch, Littleton | Tagged , , , , | Comments Off on Your Denver Real Estate may be worth a lot more than you think

Denver & Highlands Ranch November 2015 “BLIZZARD”

<h3>November snow storm in Denver</H3>

Linda & I love the different seasons here in Denver. And just so you know, we live in Highlands Ranch in the southern end of the city. One day it is full on 70 degrees with beautiful blue skies. The next we can see a storm coming across the valley with those foreboding clouds. And then it is a real gully washers of a rain storm with or without thunder & lightening, or a white out “BLIZZARD” like this one. Denver has all 4 seasons!Denver Cherry Tree

It was so warm on Monday here in Denver, as the snow fell it melted, so the streets were dry by lunchtime on Tuesday. As I drove through Highlands Ranch, there was some splash back but no major interruptions. At 5:30 in this morning it was a different story, which is typical of a snow storm here at any time of year! But here is what things looked like on Thursday morning as I drove through Highlands Ranch in south metro area…
As you can see the wispy clouds that were a snow storm are head out, the snow has turned to slush and even the sidewalks are clear. You have to love the different seasons in Denver.

Want to know more about the Colorado and Denver “lifestyle”? Here is a quick, fun video slideshow I did for you! Your adventure in Denver and Colorado starts here! 
http://.

 

And make sure to visit http://www.denverrelocation.com/

Posted in Denver, Highlands Ranch, Littleton, www.DenverRelocation.com | Tagged , , , | Comments Off on Denver & Highlands Ranch November 2015 “BLIZZARD”

Temporary Buy Down to buy a Denver Home

Use a Buydown to Buy a Denver Home

There is an infrequently-used mortgage program available that could be the solution to a buyer’s or seller’s problem when buying a Denver Home.

2-1 Buy Down - 2.pngA temporary buydown is fixed rate mortgage that the seller has prepaid interest at closing to lower the payments for a number of years. The borrower must qualify at the note rate but gets the benefit of lower payments for the early years.

A 2/1 is a common buydown that the first year’s payment is calculated at 2% lower than the note rate and the second year’s payment is calculated at 1% lower than the note rate. The third through thirtieth years’ payments are the note rate.

Let’s set the scene. A buyer is using their available cash for down payment and closing costs to get into their new Denver home. They’d like to put their own touches on the home when they move in but may not be able to for a year or two since most of their cash was used.

In this example, a $250,000 home is purchased with a 3.5% down payment and a 4% mortgage for 30-years. Normally, the principal and interest payment would be $1,151.76 for the full 30-year term. If the seller will pay the lender $4,736 at closing, it can be applied to pre-pay part of the interest for the first two years.

2-1 Buy Down - chart.png

The first year, the buyer’s P&I payment will be $891.71 for 12 months based on a 2% interest rate or 2% lower than the 4% note rate. It is $260.06 lower per month in the first year. The second year, the buyer’s P&I payment will be $1,017.12 for the next 12 months based on a 3% interest rate or 1% lower than the 4% note rate. It is $134.64 lower per month in the second year.

A bonus for the buyer will be that the cost of the buydown paid at closing by the seller becomes prepaid interest that is deductible by the buyer in the year of purchase. The buyer gets lower than normal payments for the first two years and a sizable tax deduction.

This type of program can be very beneficial to a seller who wants to offer terms to improve the marketability of their home rather than lower the price. The challenge will be explaining it to not only potential buyers but even agents who are not familiar with this program.

Posted in Denver Real Estate, Highlands Ranch, Littleton | Tagged , , , , | Comments Off on Temporary Buy Down to buy a Denver Home

Tips for Buying Denver Rentals

Buying Denver real estate as rental property can be an excellent decision and the better informed you are, the more likely you’ll have favorable results. The following suggestions can help you with your decisions.

rising homes.jpgReal estate is a long term investment affected by supply, demand and the economy. It isn’t an investment that is easily converted to cash. The costs to acquire and dispose of real estate are sizable and need to be spread over years to minimize their effects on the rate of return.

Invest in average price homes or slightly below average price to appeal to the broadest market not only when you are renting but later on when you sell it. The average price is relative to the market you are in and those specific prices.

Lower-priced homes will rent for more relative to higher-priced homes. There is an inverse relationship between rent as a percentage of the price. As the price increases, the rent as a percentage of the price decreases. For example, a $200,000 home might rent for $1,750 a month or 0.88% where a $400,000 home might only rent for $2,250 a month or 0.68%.

Choose predominantly owner-occupied neighborhoods because when you sell the home, it will appeal to a homeowner who will most likely pay a higher price for the home. Homes in predominantly tenant-occupied neighborhoods tend to sell to investors who pay lower prices and will not be emotionally involved with the purchase.

Purchase a property with the idea of selling it in mind. You may be able to get a property for a bargain price today but if it is due to a functional obsolescence like a bad floorplan or not enough bathrooms, that problem will still be there when you’re ready to sell the property. Identify what the problem is and what solutions are available. The property may rent fine in that condition but before you sell, it will need to be corrected.

Get the home inspected before you purchase it. Having the property checked out can save thousands in unanticipated expenses.

Consider getting a home warranty on your rental. The annual premium can limit the out of pocket expenses for repairs and maintenance.

Risk can be minimized by understanding the investment and what is involved in the acquisition, operation and disposition. For the typical homeowner, rental property is something that they can relate to because of the similar attributes of the home they live in.

Posted in Denver | Tagged , | Comments Off on Tips for Buying Denver Rentals