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Home Buying

Information about buying a home, condominium or townhome.

Market Value vs Affordability in Residential Real Estate

I was listening to the news this morning and heard about an article, in the Denver Post, that stated that homes in the Denver Metro area were OVERVALUED by 20%.  That got my attention! The report then proceeded to give information about AFFORDABILITY.  Of course, since this kind of misinformation   directly affects my clients, who may have just purchased or are considering purchasing a home, it is important for me to clarify. (No wonder we don’t trust the media any longer)

Market value and affordability are two distinctly different things.  Real estate can be unaffordable without being overvalued.

Let’s start out with some basic definitions of the terms being used.

Market Value of a homeMarket value is simply the price at which something will sell within a reasonable period of time. In a normal or average real estate market, “reasonable”, in the current market, means one to three months.

Affordable HousingFamilies who pay more than 30 percent of their income for housing are considered cost burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. An estimated 12 million renter and homeowner households now pay more than 50 percent of their annual incomes for housing.

As you can see, understanding the different terms is critical to accurately evaluating the real estate market in Colorado and the Denver Metro Area.

Let’s look at the city of Denver over the last 3 years (see the graphs below).  The average sales price of a home (this includes all residential real estate) has risen 9.1% to $426,328.00  and the median sales price has risen 9.8% to $354,000.  These two graphs show the increase in MARKET VALUE.

The median income increase in Denver has risen 8.86% to $70,283 according to, The Department of Numbers website. ( I don’t have a nice graph to show you but here is the table from the website I linked to here). The fact that income increases are lagging behind home prices is an indication of AFFORDABILITY.

Addressing the issues of affordable housing or the potential of another housing bubble require completely different solutions. 

Affordability, in my opinion, is a much greater concern and can be addressed by reducing government regulations on builders and developers, providing tax credits to builders and developers, where needed, and convincing local governments to allow these types of developments in their cities (I am talking to you BOULDER).

The worry of another housing bubble is a completely different concern.  As mortgage interest rates rise the cost of housing will likely level out but as long as the Denver Metro area has a robust economy with high job growth, people will want to move here and likely will be willing to pay the high cost of housing. The need to get rid of the ridiculous Construction Litigation Laws on condominiums is a topic for another post.



June 2016 Real Estate Negotiation Tips

Tips for Successful Negotiations

Knowledge is power. Be prepared for each point in the process where negotiations may occur.  Several steps in the home buying or selling process where negotiations typically occur are the purchase price, the home inspection and the appraisal.  Know your limits and ability and willingness to compromise for each situation.  Communicate clearly with your broker.

Allow your agent (me) to handle all communication with the other agent. I am experienced at negotiating real estate transactions. Allowing me to handle the negotiations and communication creates an ‘”arm’s length transaction”. The concept of an arm’s length transaction ensures that all parties are able to act in their own self-interest and are not subject to any pressure or duress from the other party. This can help you keep your emotions in check.

Don’t take anything personally. This is a business transaction and we are working to achieve the best outcome for you. Remember, the seller wants to sell and the buyer wants to buy or you wouldn’t be involved in this negotiation. Stay focused.

Always respond to any counter-offer and keep the negotiations moving. As long as both parties are talking we are making progress our chances for a good outcome increase.

Be willing to walk away. The one who is willing to walk away holds the cards. Set emotions aside and focus on getting what is most important to you and compromise on less important items.

Know your bottom line and stick to it (see ‘be willing to walk away’)

Don’t let emotions get in the way of making a deal. Keep your cool.

Choose your battles wisely. Be careful not to argue over something just for the sake of winning a point. You may want to save some “good will” for later negotiations.

Replacing doorknobs and deadbolts

When I have a client who is buying a home.  I strongly recommend that they replace the entry door knobs and deadbolts on their home as soon as reasonably possible.  There is no way to know who the previous owners have given a key to.  For personal safety alone, this is a task that should not be delayed.

Types of Cylindrical Door Knobs
Privacy lock (aka bedroom) – has a button or thumb turn on the inside knob, which locks the door so it cannot be opened from the outside.
Passage (aka closet and hall) – cannot be locked and is typically used on closets and hallway doors.
Keyed P1000295Lockset (aka entry) – can be locked or unlocked from both sides of the door by usin g a key, a button or a throw latch depending on the type.
Dead bolt – This is an auxiliary lock that is used to improve security. A double cylinder dead bolt requires a key on both sides of the door to lock or unlock the door.

Keyed Alike – this is when all locksets and deadbolts use the same key to lock/unlock.  When replacing locksets/deadbolts on more than one exterior door you can purchase multiple sets that are keyed alike. Look for matching numbers on the back of the packaging.

Steps to Changing a Doorknob


Remove Screws

Remove Screws

1. Detach the trim or rose (the ring of metal between both doorknobs and the door) by removing the two screws that hold it on. In newer doorknobs, this does not exist.

2. Remove two more screws under the trim. These are long screws that attach the two doorknobs on either side of the door.

3. Pull the doorknobs apart and remove them from the door.


Remove Screws

Remove Screws


4. Remove the two screws that hold the bolt (the locking mechanism), which remains attached to the door, and extract the bolt or throw.

Note: If you are replacing your doorknob with the same brand, you may not need to change this portion out.





5. Look at the metal strike plate attached to the frame around the door (this is what catches the bolt). If the strike plate is not loose and is the right color, leave it there. Otherwise, detach it by removing its screws.

6. Insert the new bolt into the door and screw it into place. Remember to face the slanted side toward the direction the door closes.
7. Insert the doorknob on both sides of the door, making sure the two are aligned so that P1000328the long screws can hold them together.
8. Tighten the screws gradually, alternating each one so that the doorknobs come together evenly.

Top 10 Reasons to use a GOOD LOCAL mortgage broker

During a recent real estate transaction, on which I was the listing agent (representing the seller of the property),  I experienced first-hand the obstacles that can occur when a buyer is using a mortgage broker or loan originator from outside our state.  The closing was unnecessarily delayed by 14 days because the lender did not understand how business is done in Colorado and has no incentive to learn.

Here are my top 10 reasons buyer’s should use a GOOD LOCAL mortgage broker when securing a loan for the purchase of a home:

#10 They understand how real estate transactions are handled in your state.

#9  They have taken the time to establish relationships with title companies ensuring a smooth transaction for your purchase.

#8 They are willing to work closely with everyone involved with the transaction from real estate agents to title companies, inspectors and contractors.  Communication is key in successful real estate transactions

#7  They are able to be more flexible with changing situations throughout the entire process and can respond quickly to special requests.

#6  Using a good local mortgage broker can give you an advantage  in multiple offer situations.  Your offer is evaluated on more than just the purchase price, it will also be evaluated on the likelihood you will make it to the closing table. I have negotiated many multiple offer situations, both as the buyer’s agent and as the seller’s agent.  The reputation of the buyer’s lender is important.

#5 They know about special state, county or city programs that may provide credits or incentives to buyers.

#4 They will focus on your personal GOALS and build a program around what matters most to you: low down payment, target mortgage payment, 1st-time home buyer programs, grants and assistance programs, etc.

#3 They know that every deal is a little different and can successfully navigate you though all the details required to deliver the funds ON-TIME for Closing.

#2 They have an incentive to work closely with you as a client since their business success depends on quality customer service rather than the quantity of transactions.

And the # 1 reason to use a local mortgage broker … You’re making one of the most  important purchases in your lifetime – don’t leave the details to someone who doesn’t  know your market or who hasn’t taken the time to get to know you.

If you’re thinking of buying a home and need a referral to several great local mortgage brokers, be sure to contact me!