In the land of the broke, the one-nickle man is king. Let me start by stating the obvious: I may be wrong. My opinion doesn’t really mean anything. It’s just my opinion. And I’m not brilliant, just average intelligence at best. But it seems painfully obvious to me that if you encourage a new round of first-time home buyers to jump in to the real estate game when they don’t even have enough for a down payment, then you’re just asking for trouble.
This is pretty much what the current administration is doing by creating this “fake” bond market. I’ve mentioned earlier how the housing collapse took this bond market with it. It just disappeared…there was no longer a bond market where investors bought and sold mortgage-backed securities. Makes sense, right? If those securities are worthless, then who is going to buy them. Well, you are. And me. We are buying them.
The Federal Government is jumping back into the mortgage security game and plans on buying up Fannie and Freddie assets backed by state bonds in order to finance loans to first time home buyers. Part of program also helps people with BAD loans get refinancing. I’m not opposed to that at all, in fact that seems like a good idea to me. If you can take someone from an arm loan that adjusted to 12% to a fixed loan at 5% and they can avoid foreclosure, then great! I’m all for it.
My problem with this program is that it appears that we haven’t learned anything from our recent mistakes. Wouldn’t it be great if everyone could afford a home? Sure, that sounds really nice. Maybe even Utopian. But is that that case? Should we be messing around like this and continuing to encourage home ownership to people who just can’t afford it? What’s wrong with renting and saving for a down payment? I’m NOT talking about saving for a 20% down payment, no. The current FHA minimum down payment is only 3.5%. Just three and a half percent. That’s $7,000 down for a $200,000 home. Doesn’t it seem reasonable to expect a potential home owner to come up with 3.5%? And if they can’t, then that’s ok. It doesn’t mean your a bad person if you need to rent for a while in order to SAVE up that 3.5%. I’ve rented for more of my adult life than I’ve owned a home. I’m a decent guy, not some sort of miscreant.
Rent does not equal Bad. Ownership does not equal good. Let your reality dictate whether you rent or own. RESPONSIBLE home ownership is a great thing. Responsible renting is also a good thing, especially if it affords you the opportunity to SAVE some money.
One of the big debates in the City of Boulder has to do with the proposed “pops and scrapes” ordinance which will limit structure size in Boulder. This issue has been debated and detailed in many other blogs and news sites around town, so I won’t bore you with all the details. But basically, City Council wants to limit what Boulder homeowners can do with their own property. It’s not known as The People’s Republic of Boulder for no reason…
Now, in theory, this sounds fine. Who wants to wake up one morning and as Councilman Macon Cowles says, “find the Queen Mary parked next to their house?”. But the problem is that there are only about 100 6,000+ square foot homes in Boulder. And the council is aiming its actions at “preserving” neighborhoods/structures in the 1200-2000 square foot range. Those are they guys they’re protecting. But…
Listen to this interview on CPR Colorado Matters between homeowner Warren Hultquist and councilman Macon Cowles. In it, Hultquist points out that he simply wants to make an addition in order to access his basement square footage, and that his home is in the neighborhood of the 1200-2000 square foot range mentioned above. But this new ordinance would prohibit him from making such modest additions.
The part that just rubs me the wrong way about Macon Cowles’ championing of the new size limit ordinance is this: councilman Cowles lives in a 4,800 square foot home. That’s a huge home for Boulder. A huge home. Does anything about this rub you the wrong way?
Furthermore, the City Council is opposed to the idea of putting any such ordinance to a general vote because, as council member Macon Cowles says in the attached interview, the issue is too complex for laypeople to understand. Hmmmm…
I’d encourage Boulder residents to visit the website Leave My Home Alone when they have a moment. This is taken from the LMHA position statement on their website:
“The Proposed Regulations are Anti-Family and Unfair
The proposed regulations are anti-family and would unfairly restrict the right of Boulder citizens to build additions to or remodel their homes and unfairly decrease property values, thereby effectively snuffing out the hopes, plans, and dreams of people living and working in Boulder. The proposed regulations are a “one-size fits all” approach that goes too far and would prohibit many types of appropriate additions and remodels. The proposed regulations would have a disproportionate impact on relatively modest neighborhoods like Martin Acres, Aurora 7, West Highlands and Columbine. If families can’t grow in their homes, they will move elsewhere, thereby exacerbating the loss of families with children in Boulder and the declining enrollment in Boulder’s schools.”
Fair warning to all Boulder residents: you need to inform yourselves and voice your concerns to your City Council!
Uncle Sam is indicating that he’d like to use a few of our tax dollars to finance billions in loans. Great. Now, I’m all for the current $8,000.00 tax credit as I’ve seen first hand benefits for buyers I’ve been working with in the Denver and Boulder markets. But this is a much different creature.
The program I’m referring to is the one announced today by the Obama Administration whereby the Federal Government will become the new buyer in the previously evaporated mortgage-backed security market, thus allowing state agencies to fund millions of mortgages. What? Basically, when the economy and housing market imploded last year the bond market for mortgage backed securities disappeared. This caused various HFA’s (housing finance agencies) to cease giving loans or raise rates considerably. So now Uncle Sam is Subprime Sammy!, your mortgage backed security expert and buyer extraordinaire.
All kidding aside- how is the potential of this program any different than what subprime lenders did over the last decade or so to “encourage” first time buyers to jump into the market? Aren’t we currently living through the aftermath of the collapse of just such a program?
Part of this program would allow first-time buyers to use the future $8,000 tax credit as part of their down payment. Another bad idea. This means that this new round of buyers will have the same amount of skin in the game as the subprime borrowers who got 100% financing in 2003. None. So there is no incentive to stay in the game, and we might as well look forward to another massive wave of foreclosures 3-5 years from now when some of these new homeowners realize that this is not their cup of tea.
I’m all for helping first-time buyers…we do it all the time at Real-a-Save. But if a potential buyer has ZERO dollars, then maybe, just maybe, they’re NOT a potential buyer after all. FHA loans require 3.5% down right now. That’s a pretty darn good deal. Why are we looking for ways to require zero down? Isn’t that exactly what got us here in the first place?
Email bob@realasave.com if you have any real estate questions, or if you would like to know about our Colorado commission rebate program. And no, you cannot use a commission rebate towards your down payment;-)
We’re looking for some new agents in the Fort Collins, Colorado area. If you or one of your friends or family members would like to join the Real-a-Save team then please email us at bob@realasave.com, or simply call 303-415-2541.
Experience: you’ll close a higher volume of deals, and will gain more experience, thus becoming a better agent. Period. There’s really no faking experience.
Best technology and tools: maybe you’re an agent who is not up to date on things like digital signatures, blogging, social media, electronic contracts, virtual offices. We’ll show you how to use these tools in ways that your clients will love and you’ll appreciate.
A place on our site: you’ll get your own agent page on our website, giving your clients access to the best Colorado map search around. Try it, you’ll like it!
Systems: we’ll train you on the best client management systems, blogging, work-flow, and advertising.
Real-a-Save is a great company- sure, I’m biased because I own the company, but I really believe in what I’m doing. I love coming in to work- which is much more than I can say about my time in a traditional real estate company. The traditional company is set up to benefit the Brokerage. That’s it. The brokerage employs as many Broker Associates as possible (reminiscent of “Boiler Room“) and hopes that a few of them will pan out. They charge lopsided splits of up to 50% or more. Then there’s the whole “administrative fee”…but I’ve already written about that one and it’s a total joke. Not here. You’ll keep at least 90% of what you earn, and there’s no “administrative fee”.
So pass along this post if you’ve got a friend who works the Fort Collins real estate market, or just tell them to email me at bob@realasave.com. And remember that we’ve got the best Colorado rebate program around where home buyers receive 50% of our commission, see www.realasave.com for more details.
Yes, the sky has fallen. Agreed, the real estate market has been rocked over the past year and a half. Yes, the economy sucks. Yes, it’s completely annoying to hear another tool-box Realtor telling you how GREAT! everything is and WHAT A WONDERFUL TIME IT IS TO BUY!. I’m embarrassed by some of my esteemed colleagues, and completely annoyed by the NAR advertising campaign telling us how GREAT! things are. Puke.
The truth is wrapped in an old cliche: all real estate is local. Maybe it is a great time to buy. Maybe it’s an awful time to buy and you should just keep renting. It all depends on where you live and where you’re looking to buy. Sounds obvious, right?
Colorado has been hit hard, really hard, by the real estate downturn. But there are areas of relative strength. Louisville, Colorado is one of them. It doesn’t hurt that Louisville keeps getting mentioned by Money Magazine as the best place to live. It also doesn’t hurt that it’s a great little town with a lot going for it. But there are a lot of great little towns with a lot going for them that are AWFUL places to buy right now. What sets this one apart?
Conoco Phillips just purchased an office campus a few minutes from Louisville in the Northwest corridor between Denver and Boulder. There are future jobs. They’re building an office tower. Future jobs. IBM, Sun Microsystems,WhiteWave Foods, and Amgen (just to name a few) are some of the big companies just a stone’s throw from Louisville.
But really, the proof is in the pudding. There were 21 sales in Louisville in the last 30 days where the sellers got almost 98% of list price. Anecdotal point: every time we represent a buyer in Louisville it seems that we’re in a competing offer situation; the last home we sold in Louisville was on the market for one weekend before we had 2 offers. Louisville is a good place to buy. Period. Great lifestyle, Boulder Valley Schools, lots of technology jobs.
No kidding.
Check out all the Louisville, Colorado homes for sale on this map search link. And email bob@realasave.com if you have any Denver, Boulder, or Louisville, real estate questions. And remember that we rebate 50% of our commission back to you in our Colorado rebate program.
You’ve got a contract on your home and you’ve just sailed through inspections without a hitch. All’s well, right? Maybe.
It used to be that once you get through inspections it was all downhill from there. Closing is just around the corner and unless the buyer decides to bail on the contract then the property should close (Incidentally, buyers are really in charge and have lots of protection in Colorado. More on that another time ). But with the way that the lending industry is reacting, and often overreacting, to the recent housing meltdown, there is a new hurdle that’s often more treacherous than inspection: The Appraisal.
I have no problem with an honest, experienced, reliable appraiser doing his or her job and placing a proper value on a home. And if that value is less than the contract price then so be it. Appraisers serve a very important function in the real estate world. And honestly, if there were more rigorous appraisals in years past then maybe we would have had the severe run up in housing prices we saw over the last decade or so…that’s debatable, but an interesting issue none the less.
The problem I have with the way that appraisals are currently done is that we are getting inexperienced appraisers who are often NOT familiar with the neighborhood trends and micro-market they’re working in. Does this sound like typical BS from a Realtor who just wants the deal to close? Sure, I understand skepticism like that. But all real estate IS local. And you truly need to understand how pricing works from one city and one neighborhood to the next if you’re going to put a proper value on a place.
What to do? Well, since there’s really no way for sellers to change appraisal laws/rules and force lenders to hire experienced, impartial, LOCAL appraisers, then we have to do the next best thing: make sure you have pricing support IN HAND at every moment when your home is for sale. Sounds obvious, right? Well, not to everyone. Maybe you’ve had your home listed for 9 months and you started out at $350k, and dropped to $345k a few weeks ago. You remember the comps from 9 months ago and they clearly supported a price of 345-350k, so you priced on the high side (which is not the best tactic anyway…). But it’s quite possible that the market has dropped significantly since then. And when an appraiser comes to value your home they’re only going to be interested in the last 3 months of sold comps. And there had better be about 3 of them.
So be sure you are constantly updating your sold comps as you sit on the market. Numbers don’t lie. If home values are dropping significantly in your area then it’s best to SET the market then to chase the market. Price just under what the numbers support, generate some interest and get your place sold.
Remember that www.realasave.com can help you save lots of cash on commissions with our Colorado commission rebate program and flat-fee listing service, so email bob@realasave.com for more info.
Real-a-Save is a full-service, licensed Colorado real estate company. We offer services to both buyers and sellers.
We feel it’s very important for home buyers to have someone on their side when negotiating a contract, and so we offer exclusive Buyer’s Agency. Many buyers just want to be left alone at the start of their home search- and that’s fine. The Internet has certainly put a ton of information at the savvy buyer’s feet. But when you are ready to look at a home, or if you have some questions about a particular property, then that is the time to give us a call and let us help.
It’s best for buyers not to simply start calling random real estate agents and asking questions. The listing agent is trying to sell that lovely Denver condo that you fell in love with. And his/her job and loyalty is clearly on the side of the seller. So it seems wise that you have someone on your side.
Let us be on your side. No only will you be hiring a local Realtor with tons of experience, but you’ll also receive significant savings from our Colorado Commission rebate program. We basically split our paycheck for you. Sound too good to be true? Well, the US Department of Justice supports companies like Real-a-Save. Just take a look at what the US DOJ has to say about rebate real estate companies like ours.
For more information about our commission rebate program and how you can receive 50% of our commission, you can email bob@realasave.com, or simply go to our website at www.realasave.com and join the scores of Denver/Boulder real estate consumers who have taken advantage of the great savings we offer.
Your 7-year-old kid could come up with a better short sale process than the ones currently being implemented by some of the largest banks in the country. Any kid who ever traded baseball cards knows what it’s like to have a hot commodity. Ask your kid which of these strategies he’d use if he had a baseball card that 4 of his friends wanted: would he a) ask one friend at a time what they’d trade him for without checking what the other friends would be willing to trade, or would he b) ask all of his friends what they’d like to pay/trade, gather all the bids and THEN make his decision.
The answer is obvious. What good does it do to have a hot commodity if you don’t allow the bidders to feel the heat? But banks are currently employing strategy “a” from the stupid example above. No kidding. I was dealing with a bank today, let’s call them Schmank of Unmerica, and the short sale property in Denver had 3 interested parties. But the bank would only CONSIDER one offer at a time. And they go all the way with that offer. Meaning, it takes weeks/months for that single offer to make it through to someone in negotiations/review and then they make a decision on that single offer without considering any of the waiting offers. And if that offer does not work, well, then our genius bank moves on to offer #2…and ONLY offer #2. And maybe that one works out.
Why wouldn’t a bank simply go back to all 4 interested bidders and ask for their best and highest by 4pm tomorrow? And then go with the best offer? Isn’t that the best thing for their bottom line?
Short sales are the monster just below the surface of our economy. These monsters are having an awful impact on property values, and are accounting for substantial losses at banks. Losses that our government has shown it’s willing to use our tax dollars to rectify.
Email bob@realasave.com if you have any short sale questions, or if you just want to discuss Denver/Boulder real estate.
Are you an SEO expert? Sure, me too. And your Mom. Probably your brother too. Everyone seems to be an SEO expert. SEO (in case you don’t know) is Search Engine Optimization. This is the process whereby you, or a high-paid consultant, makes your website “friendly” to Google and other search sites. Anyone with a web-based business knows that they must be found on Google under a certain set of search terms. You want John Q. Public to be able to find you when they enter a certain set of search terms in Google…and there are plenty of people out there who will let you pay them thousands of dollars to figure out how your company can rank higher for certain search terms on Google. Our company, for example, should be visible for certain Boulder real estate and Denver real estate related terms. And we’ve had lots of solicitations from SEO experts claiming that they can help us rank higher on these terms. Because, truth be told, we don’t rank at the top for many of these terms…yet. But we’re continuing the “Good Fight” by cranking out relevant information on the Colorado real estate market, and by creating more and better MLS home search features on our site as well. It’s going to take us a lot longer to reach the top of Google results for many of these search terms, but that’s ok. We’re a small operation and simply don’t have $10,000 per month to spend on some SEO expert who will do whatever it takes to get us onto those top Google pages. But our slow and steady approach to SEO will, I think, give us much better long-term traffic. The logic is simple: you can pay someone to give you traffic by any means necessary; or, you can EARN the traffic by slowly and surely becoming the best resource for your particular area of expertise.
Email bob@realasave.com if you have any Denver/Boulder real estate questions, or simply visit us on the web at www.realasave.com
One of the most important steps to putting your Denver or Boulder home on the real estate market is setting the list price. It’s certainly not rocket science, you just study the comps, right? Right. But make sure you take into consideration some of intangible items like view and backing to open space. It’s fine to start with a price per square foot analysis- truly, this is one of the BEST ways to begin your property valuation as numbers just don’t lie. But the square foot numbers don’t tell the complete story.
Sometimes a view is worth $10,000. Sometimes it’s worth $100,000. Sometimes backing to open space is worth $20,000. Sometimes 5 or ten times that amount. It all depends on the neighborhood trends. Now more than ever you need to have a good idea of what value your specific neighborhood puts on those items. And you need to have the comps in hand in order to back up your value claims.
Why do you need the comps in hand? I mean, just get the right buyer, right?? Right. But we’ve now got to deal with a possibly inexperienced appraiser. Lenders have gone from giving anyone or their pet dog a loan to making it very difficult for a qualified person to close. Many of these lending changes are good. Requiring buyers to put more money down is good. Requiring a higher credit score/history is good. Qualifying for LESS money is good. Sending inexperienced appraisers out to valuate properties is bad. And inexperienced appraisers are the name of the game now ever since the appraiser industry began to consolidate and contracts are being awarded to the cheapest (most inexperienced) appraisers. So be prepared. Have your comps in hand and assume the worst.
Email bob@realasave.com if you have any questions about Boulder or Denver real estate.
