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This past weekend, the Denver Post and New York Times both had articles on real estate websites:

The Denver Post’s article, “Homework: Buying and Selling on the Web” discusses the various real estate websites available to consumers such as:

• www.recolorado.com: real estate listings online from Metrolist Inc.
• www.realtor.com: National Association of Realtors’ website includes real estate listings
• www.postnewsrealestate.com: newspaper classifieds for metro area and mountains
• www.craigslist.com: free, similar to newspaper classifieds, including real estate categories
• www.edgeio.com: free, similar to craigslist
• www.google.com/base/: Google search engine’s free service similar to craigslist

The main focus of the article is how craiglist (a free listing service) is used by many real estate agents to list properties.

Craigslist, www.craigslist.com, has been touted as the world’s seventh-most-visited website, with about 3 billion hits per month. Users search through bare-bones home pages to find cities or regions they’re interested in.

Ads are posted by date in egalitarian fashion, so re-posting or updating an ad keeps it closer to the top of the page, where it presumably would be seen by more people.

The New York Times article, “Forget Gimmicks: Buyers Want Numbers” (login required) discusses the home buyers insatiable appetite for information when it comes to buying a home.

Today, companies and brokers are focusing less on toys and are offering something more straightforward: numbers. This detailed information — be it local home values, neighborhood amenities or broader market conditions — is part of a trend to attract consumers by offering data they cannot find easily elsewhere, or could once get only from real estate agents.

The article also sites websites such as realtor.com and trulia.com. Incidentally a Denver real estate agent (and fellow Denver blogger) Kristal Kraft is mentioned in the article. Her site, www.kristalsellsdenver.com contains chock full of info on Denver relocation.

COLORADO FORECLOSURE HOTLINE: 1-877-601-HOPE

The Colorado Foreclosure Hotline was launched on October 12th. Finally! Considering that we lead the country in foreclosures, it’s about time Colorado did something to help out homeowners.

Housing counselors facilitate communication between borrowers and lenders to find ways that the borrower can avoid foreclosure. Urban estimates that statewide, approximately 1,200 borrowers who have called the hotline have now been helped either through face-to-face counseling or other assistance over the phone.

The Colorado Foreclosure prevention directs borrowers to local homeownership counselors throughout the state and is supported by a partnership of the mortgage lenders, counselors, Realtors, and state agencies, including JPMorgan Chase, the Colorado Division of Housing, the Colorado Association of Realtors, and the Colorado Housing Counseling Coalition.

Read more from the Rocky Mountain News.

Here are the some of the more interesting articles this past weekend in case you missed it:

• Realtors discuss merging listings to compete with Internet rivals: the Colorado Association of Realtors plans to consolidate the Colorado MLS (Multiple Listing Service) in an effort to compete with their internet rivals.
  

  The Colorado Association of Realtors plans to form a task force to study creating a “one-stop shopping” regional listings of houses for sale. The idea is to combine a number of the estimated 16 MLS services in the state, such as Metrolist in Denver and Information and Real Estate Services. IRES serves northern Colorado cities such as Boulder, Fort Collins, Loveland and Greeley.

• In FINANCE 101, the Denver Post discusses interest only mortgages. They also discussed the perils of NO MONEY DOWN HOME LOANS.
• Todd Carpenter of Lenderama, offers up his view of the Colorado foreclosure situation in “Some Perspective is in Order.”
• Pulte Homes and Centex Homes are the top builders according to the latest JD Power surve.
• Dan Green of The Mortgage Reports discusses the difficulty of blogging, watching football and managing two fantasy football teams.
• The Broncos beat the Chiefs 9-6. The Chiefs are now coached by former Jets head coach, Herm “You Play to Win the Game” Edwards. A more apropos nickname is Herm “Clock Mismanagement” Edwards.

One thing i’ve noticed with first time homebuyers is that they’re getting younger and younger. This article by the Denver Post over the weekend proves it:

In 1995, people 25 and younger bought 172,000 homes nationally, said Walter Molony, spokesman for the National Association of Realtors. In 2005, that number jumped to 501,000.

“The children of the baby boom generation - approximately 75 million (nationally) born between 1982 and 1995 - that generation is just entering the years in which people buy a first home,” Molony said.

Many are just graduating from college with good educations “and are landing lucrative jobs,” said Angela Burdick, broker/owner of Metro Brokers Angela Burdick Real Estate in Littleton.

“I think what’s spurring them to buy is the investment potential.”

Denver was identified as one of three metropolitan areas that appear to be on their way up according to an article in the Real Estate Journal:

Across the U.S., there are signs of a cooling housing market. Yet, in pockets throughout the country, there is a contrasting trend — areas sidestepped by the real-estate boom are experiencing increased buyer demand, says David Lereah, chief economist of the National Association of Realtors in a recent commentary. Driving buyers to these comparatively lower-priced areas is affordability, he says. Here’s a look at homes in three metropolitan markets that appear to be on the way up: Salt Lake City, Denver, and Albuquerque, N.M.

Editors Note: Due to the mortgage and credit crunch, loans for second homes and vacation homes are available but qualifying has become more difficult. If you’re in need of one of these mortgages in Denver contact us to discuss your mortgage options.

2005 was one of the hottest years on record for people buying second homes with over 21% of all purchases being second homes. Driving this trend is the availability of capital for baby boomers from harvesting the swelling equity from primary residences as home values soared over the last few years. Some areas like Destin, Florida averaged over 25% appreciation in 2005 alone. Hot areas are, as suspected, homes near the beach, like the Destin area, mountains and other recreation areas. According to the National Association of Realtors, for markets where over 10% of the homes are seasonal, there was a 59% increase in value from 2001 to 2004.Also helping in the growth is the publicity given to the real estate investment industry with infomercials like Carlton Sheets focusing on the low down payments required. In some cases 5% or less is all that is required to get you interest rates that rival those for primary residences. Lastly the popularity of low payment loans like the interest only and cash flow option arm have joined the low down payment programs so that the homes are cheaper to get into and cheaper to hold, at least on the short term. Also helping in the growth is the publicity given to the real estate investment industry with infomercials like Carlton Sheets focusing on the low down payments required. In some cases 5% or less is all that is required to get you an interest rates that rival those for primary residences. Lastly the popularity of low payment loans like the interest only and cash flow option arm have joined the low down payment programs so that the homes are cheaper to get into and cheaper to hold, at least on the short term.

To be considered a 2nd home you are not allowed to own more than two second/vacation properties. Any more than two second/vacation properties and you may have to consider it an investment property.

Often the lender will lend a lower LTV on a second home vs. a primary residence.

You may be asking yourself why real estate is such a good investment. Let’s look and see why it is such a good investment. You average home’s appreciation rate is around 5% per year. The numbers look like this: Year 1 - 100,000 home value when you buy Year 2 - 105,000Year 3 - 110,250Year 4 - 115,762Year 5 = 121,550As you can see it doesn’t take long to build up some equity in your house. If you bought a 200K home then those numbers would be double. This example is not even taking in into account that you are paying down the principle balance on your loan. If you have your home on an interest only or pay option loan then you are probably cash flowing each and every month too.

Option ARMs are excellent tools for investors seeking rental income, particularly on seasonal properties. You have the option to keep your payments low when the property is empty, and manage your cash flow while the property is booked or rented.

Keep in mind that if it is a second home or investment property, there may be loan to value restrictions.

Some of the factors that lenders look at when qualifying a home as a “second home” are:1. Distance from primary residence2. Location3. Is the home being used for “personal” use

The first step for obtaining a second home is to speak with your mortgage broker and discuss financing options and determine the amount of money you can affords to spend. Be sure to remember the added maintenance costs of a second home, a lot of routine work needs to be done to maintain it and keep it in enjoyable condition. This may be work that you may not be able to do yourself do to distance or time limitations.

If the property that you are buying is for the purpose of a legitimate vacation or second home, many lenders offer loan terms that are comparable to those offered on a primary residence. To qualify, the lender will need to be comfortable that the property is being used as a second home, not as investment (rental) property.

Lenders offer more favorable terms on second homes than investment properties. Underwriters will want to know for sure if the home is being used as a second home or as an investment property. Most people purchase second homes in resort areas for vacation purposes or near relatives and family members.

Lending banks post more stringent underwriting requirements for second homes and vacation homes, because if the homeowner should suffer a financial crisis, he would almost always first default on the vacation home and try to save the primary residence. In addition to ensuring that the homeowner is able to afford payments for both the primary and the second home, most banks also require higher down payment for the second residence.

Realtor: A real estate agent or broker who is a member of the NATIONAL ASSOCIATION OF REALTORS, and its local and state associations.

Founded in 1908, the NATIONAL ASSOCIATION OF REALTORS(NAR), has grown from its original size of 120 to today’s 720,000 members. NAR is composed of residential and commercial realtors, who are brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry.

What separates a realtor of other real estate professionals is the agreement of the “realtor” to operate under a universal code of ethics and standards.

A licensed person that negotiates and conducts real estate sales, and who holds active membership in a local real estate board, that is affiliated with the National Association of Realtors.

A realtor will have the ability to list your house on the MLS system if you are selling a home. If you are buying a home a realtor can help you find the right home by finding MLS listings that meet your criteria. A realtor can also have new listings that fit your search criteria E-mailed to you as soon as they are on the MLS.

Looking for a house without getting pre-approved. Do not confuse a pre-approval with a pre-qualification. When you are pre-approved you become like a CASH BUYER and have more negotiating clout with the seller.

Have an inspection done by a professional. Don’t take the sellers word that they have made repairs. Unless you are buying a new house where you have warranties on most equipment, it is highly recommended that you get a property inspection, a roof inspection, and a termite inspection. This way, you know exactly what you are buying. Inspection reports can be great negotiating tools when it comes to asking the seller to make repairs. If a professional home inspector states that certain repairs be done, the seller is more likely to agree to do them.

Remember that just because a mortgage broker or a bank, says that you can afford the home you are looking at, does not mean that you can actually afford, or feel comfortable with, the monthly payments. Know exactly what the monthly payments are, including taxes, insurance, association fees (if applicable), and any other fees that may be associated with the home on a monthly/yearly basis. Once you know the total cost of owning that home, then decide if it is affordable, while taking into consideration all of your other monthly bills. The last thing you would want to do is rush into a house, that you are unable to afford in the long run.

Do not choose a lender just because they have the lowest rate. Not getting a written good faith estimate. While rate is important, look at the overall cost of your loan. This includes looking at the APR, the loan fees, as well as the discount and origination points.

Get your rate lock in writing. Get a written statement which details the interest rate, the length of the rate lock, and detail about the program. This will save you a lot of trouble if rates increase.

Many Realtors will not show you homes before being pre-approved because they do not want to waste your time, their time, and the seller’s time.

Do not sign documents without reading them. Do not sign documents in a hurry. Whenever possible try to get documents that you will be signing ahead of time so you can review them. It is advisable to ask for a copy of all loan papers you are signing a few days ahead of the close of escrow. This way you can review them and get your questions answered. Do not expect to read all the documents during the closing - there is rarely enough time for that.

Always order a title search and purchase title insurance for the property you are buying. Mortgage banks always require a title search and title insurance. Even if you are buying from a trusted relative or friend and pay with cash or have the seller provide financing, without involving a bank loan, don’t be tempted to skip title search to save on closing costs. The fact is, title defects can stem from a time before the sellers took possession of the property. While the title insurance the sellers purchased when they bought the home protects them for as long as they own the home, that policy does not protect you. The one-time cost of a title search and title insurance may save you from a potential investment disaster.

Do not bid on a house that you have only looked at once. Many home buyers are busy with their lives like everyone else, so they look at homes when they have time, evenings and weekends. Make sure if you find a home you like, you go back and walk through it again at least once at a different time.

If there is something unusual about the home or the property that you think you can fix once you own it, make sure you know what you are getting into. Get estimates for the work, talk to a contractor, or your local government to see if you will need any special permits. DO NOT go on the word of your realtor, home inspector or appraiser, they are all very knowledgeable and can give you guidance, but ask others as well. You don’t want to end up in a home with a huge eye-sore that you can do nothing about.

If there is something in particular that is on the property that you want to remain with the property when you purchase it then make sure it’s in the contract. You can avoid many headaches by putting everything in writing. This also means any repairs that show up on the inspection report you will want the seller to do before you purchase should be put in writing.

One of the most common mistakes Buyers make when purchasing a home is assuming that sellers are the ones who pay real estate commissions along with other closing expenses and seller’s concessions. One way or the other, this money comes from the buyer.

Don’t hire an agent you meet by chance at an open house, find in the Yellow Pages, or discover on the Internet without thoroughly checking their credentials, experience and practice.

Realtors are real estate agents that are members of the National Association of Realtors (NAR). Realtors typically adhere to a strict Code of Ethics which governs their conduct. Not all real estate agents are Realtors.

If you are buying a home you may want to seek a realtor that has ABR credentials. This means they work strictly on the buyers behalf and not the sellers.

If you are shopping for a new home, your first step should be to find out how much house you can afford by contacting us and reviewing your credit report and income, and we can then provide you with a prequalification letter which you can use to show sellers you are serious about buying the home and capable of paying the price. We will recommend top quality realtors and agents in the area where you are searching, and specialize in helping first time buyers and relocations.

A listing agent is a real estate agent who contracts to sell your home. They usually list your home in the Multiple listing Service(MLS), handles the closing transaction, and performs other duties to get your home sold such as advertising and open houses.

Sometimes the best way to select a Realtor is to just take a look around your neighborhood at the for sale signs. Chances are if you see a lot of listings by one particular Realtor, that Realtor must be doing a good job and is probably very aware of home values in your neighborhood.

Choosing the right real estate agent will make your home buying experience easy and fun. Some real estate agents specialize in listing homes, and others in showing homes. It is a good idea to interview a few before making your decision on which you will use. You want to make sure the person you choose understand what you are looking for, understand you, and wants to make your buying experience enjoyable.

Other options to find a Realtor are local organizations like the Chamber of Commerce and Neighborhood Associations. Ask your neighbors who they used, or if they know a local agent.

Ask your loan officer for a referral since we interact with many real estate agents throughout the year and on a continuous basis.

It’s a better idea to get several recommendations from friends, family members, co-workers, and others you trust who also have recently used that agent to buy or sell a home and had a satisfactory experience.

Check your Realtors credentials. Real Estate Agents are state licensed professionals. Check with your state’s licensing agency/department and verify that your realtor is currently licensed. The state may also be able to provide documentation on any complaints or disputes involving that agent. Many areas have a local or regional “Board of Realtors” this is a local organization of Real Estate Agents similar to a Chamber of Commerce. This would also be a good source to follow-up on your Realtor.

A seller’s agent is a real estate agent that works on behalf of the seller in a purchase transaction. A seller’s agent is also the listing agent but can also be another real estate agent that finds a buyer for the property listed by the listing agent. This agent will be only called a seller’s agent if the agent does not have a Buyer’s agent contract with the potential buyer.

Before choosing a real estate agent, buyers and sellers should understand the difference between listing agent, sellers agent and buyers agent. Knowing the difference between the three could help you secure the best deal possible when selling or purchasing a home.

Because an agent takes a home buyer around town and shows the buyer various homes, the homebuyer may have the illusion that the agent works for the buyer. Most agents are seller agents, meaning they are paid with the commissions from the home seller. Seller agents therefore have a fiduciary duty owed to the seller. To avoid conflict of interest, a homebuyer can pay a real estate agent and in effect hire the agent as a “buyer’s agent”. A buyer’s agent by law must act in the best interest of the buyer.

If you are looking to buy investment property, you should seek out a Real Estate agent that works with other investors. This agent should understand and be experienced in purchasing the types of properties you are looking for. If you are looking for a fourplex with good cash flows a Realtor that usually just works with first time homebuyers won’t be able to help find the right deal for you.

Tips for your Open House:

• Clean up the inside of your home. Try and remove the clutter and make your home open and welcoming, people coming through will want to pen every closed and look behind every door. Turn on all the lights and replace any low watt bulbs with higher watt bulbs. You may want to consider a fresh coat of paint.
• Bake some cookies or get a sweet smelling candle (they do have cookie scented candles). Have fresh flowers in your kitchen and/or dining room.
• See if you can get some free flyers, recently sold properties in your area and the price, loan comparison forms based on your property and asking price. A mortgage broker can help you with some of these forms. Have your own flyers ready with your home’s information (look online at another home’s listing and make sure you covered all the bases). Check and see what your state required disclosures are and have them available, Home owners disclosure, lead based paint disclosure, property condition reports, etc.
• Freshen up any landscaping; a fresh layer of mulch can make a huge improvement in appearance. Sweep up walk ways and your drive way, and remove any eye sores or clutter.
• Put on your best. It is time for your best outfit, even if it is football Sunday sweat pants and your favorite team’s jersey is not appropriate. Put on your best smile and be friendly, pretend every person you meet just offered you 25% over your asking price as a cash offer.
• Ask questions. Some people will want the grand tour and some people will just want to be left alone to poke around. Be accommodating and help those who want it.

Always answer any questions honestly. If there is an ugly patch of carpet where your dog chewed up an ink pen, let the prospective buyers know. If the roof leaks in the spring, but it’s now summer and you’ve painted over the stain, tell the prospect. Anything you misrepresent can and probably will be used against you. And of course, you would want the same honesty when you purchase.

Remember to be willing to show your home a lot. In the end its well worth it.

Lots of Mortgage Brokers have a call capture number that comes along with an attention getting sign like 100 Percent Financing. Call for 24 hour Recorded Message that they can lend you to help manage and up the traffic on calls. They automatically capture the number of the caller like caller ID and can have it sent real time by email and text message to the seller and broker for quick prequalification.

Probably the most critical component to the success or failure of a For Sale By Owner is the asking price. It must be high enough so the seller doesn’t do all the work for nothing, yet pricing too high will make it hard to generate interest in the property. Many Realtors will perform a Comparative Market Analysis even though they are not going to be listing the home for sale. They do this because they feel the seller may let the Realtor represent them on the purchase of the seller’s next home. The CMA can prove very valuable in helping the seller determine a proper asking price.

One way to prevent potential litigation for a problem you were unaware of is to hire an inspector to go through your home before you list it. That way, there will be no nasty surprises years later when the new owners discover something that began while you owned it–but didn’t disclose. You don’t have necessarily have to fix the problems, but you do have to disclose their existence.

The National Association of REALTORS estimates that nationwide thirteen percent of real estate sales are done without any involvement from an agent or broker

Be sure and take a look at local and national FSBO companies. Many can get your home listed on the MLS system for a very small fee and provide you with the documents and information you need to do the job yourself. Plus you get the added bonus of also being featured on there website. You may also want to have open house attendee’s sign a guest book with there contact information so you can follow up with them at a later date.

Most important…make sure your house is CLEAN! Potential buyers don’t want to see an inch of dust on the baseboards. If your house looks dirty, who’s to say the upkeep and necessary maintenance have been done.

The kitchen is the single most important room that sells the house. Create a spacious feeling in the kitchen by putting away small appliances, such as microwave oven, toaster, and blender. Also be sure the kitchen counter is free of personal mails, magazines and newspapers.

There can be a great win-win situation created for a FSBO and Mortgage Broker working together where the Broker is taking the phone calls for you. The Broker can determine rather quickly rather a potential buyer would be waste of time for the owner of the property by pulling credit and assessing their potential for obtaining a mortgage.

A mortgage professional can often times help you sell your home faster, by providing free marketing, and even potential qualified buyers.

Disqualifying prospective buyers on the basis of race, color, religion, sex, handicap, family status, or national origin is illegal. Discrimination can get you into a heap of legal trouble and can cost you big bucks. If in doubt, check with the Equal Housing Opportunity agency in your area.

You are attempting to sell your home yourself to avoid paying several thousand dollars in commissions. Be willing to spend some of that on advertising. Remember your home is competing for attention with those listed by real estate agents and they are putting ads in homes magazines, mailing out flyers, etc. A small 4 or 5 line ad once a week will most likely not get the job done. Establish a budget that will realistically promote the sale of your home.

Check with a title company for a FSBO kit. Many of them will provide them at no cost to encourage the seller to use them to close the loan. The kit will have a purchase agreement and other helpful information.

One effective way to get a win-win is to help someone with no down payment money on a For Sale By Owner home. The seller is more likely to agree to seller concessions when they know they are saving the realtor commission. If you find a 100% loan for the buyer and the seller will agree to 6% seller concessions, the broker can get a fair commission for playing real estate agent and directing the parties to a good title company or attorney to help with contracts and closing. This is often considerably cheaper than FHA because FHA has the mandatory up front PMI of 1.5% although the interest rate may be a little higher than the FHA rate. You might also ask your mortgage broker about companies that offer to have the PMI added to the interest rate where it is tax deductible, or have them do an 80/20 loan to avoid MI altogether.

Work with a qualified mortgage professional. It cost you nothing, yet they will help you tremendously. A mortgage professional working for the seller should pre qualify anyone who shows an interest in your home - even those who say they are already pre-qualified. This can save you countless hours of frustration dealing with people who are not qualified to purchase your home.

Finding a mortgage professional to work with in your for sale by owner listing can help you a lot. They can make flyers for your home giving different payments and scenarios for potential buyers.

Remember less is more and that also means the furniture in your home, areas that have to much furniture will appear smaller in size than reality. Remove to many personal items so potential buyers can see there own stuff fitting right in. Burn a candle to make your home smell fresh and inviting.

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