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Real Estate

Information about buying, selling and investing in residential real estate.

Buying New Construction in Denver Metro Area

Buying  a New Home in Colorado

This past weekend I stopped in to see some model homes in a new home development.  While talking with the saleswoman I realized that many home buyers  might not know what questions to ask to be sure new construction is right for them.  Buying a new construction home can have different challenges compared to purchasing an existing home.

Please Note:  If you are just starting out on the home buying process, and aren’t even sure if new construction is what you want to buy, download my Home Buyer Questionnaire to get started.

Here are a few things to consider asking about when speaking with a salesperson at a new development.

Sales Price – Unlike purchasing an existing home, the base price provided for each ‘model’ is a starting point.  There are additional costs to be considered which will vary depending on the builder and the buyer’s choices.  These costs may include: lot premiums, interior upgrades, landscaping, exterior finishes and more. For a longer discussion on base price and sales price click here.

Build Schedule and Lot Releases – Large developments will typically be built in phases. If there is a high demand for homes the builder may choose to release lots in groups as construction progresses. You may need to wait to purchase a home on the lot you prefer.

Property Taxes – Property taxes in Colorado vary widely throughout the Metro Denver Area.  For new construction you can’t just rely on county records for property tax values.  Vacant land is taxed differently than a lot with a completed home.  Be sure you get a good estimate on what the property tax rate will be on your finished home from the salesperson.

Financing & Contracts – Builders may encourage you to use their finance partners through incentives which not necessarily a bad thing,  saving money is always good. Be cautious when using your own lender and be sure you are clearly communicating the important dates & deadlines or you could be in breach of your purchase contract.  Builders DO NOT use the same contracts as those used when purchasing a pre-existing home.

Home Owner’s Association (HOA) vs Metro District – Most, not all, new developments will have either a Home Owner’s Association or a Metro District. These are governing entities that will provide guidelines for the community in which you will be living.  There may or may not be a fee associated with belonging to the HOA or Metro District and the cost and amenities may vary widely between builders and communities.

Feel free to reach out to me for more information on purchasing a new or existing home.  I am happy to help in whatever way I can.

 If you are just starting out on the home buying process and aren’t even sure if new construction is what you want to buy, download my Home Buyer Questionnaire, to get started.

Dec 2016 Denver Metro Real Estate Market Stats

Below is a link to the full December 2016 Denver Metro Real Estate market information.

A quick summary of the information included:

  • Average and Median Sales prices are down slightly when compared to the previous month (NOV 2016)
  • Average and Median Sales prices are up significantly when compared to last year (DEC 2015)
  • Average Days on Market for Dec was 34 days.
  • Average and Median Sales Prices of Single Family Attached (Townhomes and Condos) have increased more than Single Family Detached homes over the last year.

Dec 2016 Denver Metro RE Snapshot

If  your live in Colorado and you’re interested specific information related to your home, neighborhood,  city or zip code.  Don’t hesitate to reach out to me.  I am happy to provide you the information.

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. https://www.hud.gov/offices/cpd/affordablehousing/

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.

P1000365
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

P1000317P1000349

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.

 

P1000297

 

 

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.

What does your house say behind your back?

We’ve all experienced that moment when we know exactly what someone is ‘saying’ without them uttering a word.  Whether they are happy or sad, angry or grateful, anxious or at ease we can often tell just from their body language exactly what they are “saying”.  Well, Mr or Ms Seller, what is your house  “saying” behind your back to potential buyers?

What is your house saying behind your back?

What is your house saying behind your back?

I showed a house last week to a client.  The home had been completely remodeled and was ‘priced right’ for the area. Afterwards I found out there had been 91 showings and no offers.  That is almost unheard of in this market.  But, minutes after entering the house my client said, “Something just isn’t right”.  She couldn’t put her finger on what it was but I knew!  The house was talking behind the seller’s back and it wasn’t saying anything nice.  The house said things like, “whoever laid this tile floor didn’t know what they were doing”.  It also said told us, “The sellers didn’t care enough to straighten that wall or fix that door; I wonder what else they didn’t care about?”  It said, “Wow, a newly remodeled house is usually spotlessly clean but no one bothered here.” We also heard it say “Hmm, maybe you should worry about what else might be wrong?”  So we decided not to go any further because “something just wasn’t right”.

There are endless articles and lists that tell a seller what they need to do to get their home ready to sell but often what may seem to be a small thing, and easily ignored, is what makes the biggest statement.

Here are some suggestions to keep your home saying only nice things behind your back:

  1. Your house shouldn’t be clean it should be IMMACULATE. A little bit of untidiness like a clothes basket full of clothes in the laundry room or clean dishes drying on the counter is easy for a buyer to understand but dirty baseboards, dirty windows, cluttered and dusty cabinets, grease and dirt covering the garage floor, a mud splattered back door or a furnace and water heater covered with dirt and dust will have your house saying mean things behind your back.
  2. Every door and window should open and close easily or your house just might say, “they don’t really care about fixing the small things so the rest of the house must really be bad.”
  3. Do NOT use air fresheners FIX THE PROBLEM. Otherwise, your house just might say, “the basement must be damp” or “the dog or cat must have peed in the house”.  It might simply say, “I think they’re trying to cover something up”.  If the cat peed, replace the carpet, rug or furniture, if the basement is damp, fix the problem. Whatever is making your house smell, make it go away, don’t just cover it up.
  4. Have someone you can trust to be completely honest AND who you will listen to (your Realtor or a friend) walk up to your house, open the front door and tell you EXACTLY what they notice first. Make a list of things to be corrected and then FIX them.
  5. Next ask them to take off their shoes and walk through your entire house. Have them write down everything they see and feel.  You’d be amazed what you notice with your shoes off. They will see what your buyers will see.  Have them make a list of anything negative and then FIX it.
  6. Don’t forget about the outside. Dirty or broken door knobs, holes in the yard, walls that are falling over or fences that need repair. Check steps and handrails and for goodness sake pick up the dog poop!

Your house is always talking behind your back; make sure it’s saying something nice.

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!

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