BUY Low and SELL High!

We all seem to forget that in a slow - or "off" real estate market - that home owners are just taking a "paper loss" on the valuation of their Highlands Ranch, Littleton or other Denver real estate...very similar to if your 401k or stock/mutual fund portfolio decreased because the stock market was going through a down period. Should you worry?

In the stock market or with your 401k, you can sell - or shift your allocations to other more profitable; or safe fixed options instead. If you don't sell, then you can just "ride out" the bad times and let your stocks go back up; thus the term "on paper loss", as in it looks bad on paper now, but it should recover in a short while.

In real estate, you do the exact same thing. Unless you really MUST sell your home for a job, other relocation, or buy a bigger or smaller house - then right now many of you are taking a paper loss on your home. It costs you NOTHING to incur a paper loss. Your exact same model of home down the street may have sold for $25,000 below the value you "thought" yours used to be worth...but does that really matter? Sure it stinks to take a paper loss, but what does it REALLY cost you - unless you ABSOLUTELY need to sell now? What?

In this professional Realtors opinion, you have 2 clear choices to consider...

1. OPPORTUNITY COST/OPPORTUNITY
Many 'half-empty' glass people forget that you are not being forced at gun point to keep living in your current house. You have an excellent - yes excellent - opportunity to "bail" on your current house and buy another one that's: bigger, smaller, closer to work, closer to an area you like much better, closer to recreational interests, in a nicer neighborhood, in the mountains, closer to your parents or in-laws - or in a better school system for your kids.

If you "bail" on your house now, you will INCUR the paper loss as a reality cost - as you will clearly make LESS money on your house by selling now - right? BUT DON'T FORGET THIS - you will also GAIN the peace of mind that you got a better house in the different area or price range you really wanted AND you will be buying that house for BELOW MARKET PRICING too!!! This is what economists call an "opportunity cost" - where you lose $25,000 on your current house but you get a $25,000 (or MORE!) favorable exchange when you buy another house below market value.

Savvy and smart buyers see the HUGE opportunity to move-up to a much more expensive house right now, as you many be able to purchase that home for $25,000 to $75,000 BELOW the regular market price; thus the excellent "opportunity" to make a financial GAIN in a slow real estate market. It's a rather genius way to really make a profit now, by the old adage of "buy low and sell high".

2. CUT YOUR LOSSES
If your present home is too expensive, too small, too big, bad neighborhood or neighbors, schools aren't good, you're commuting too far to work - or what ever you "dislike or hate" - then perhaps you need to CUT YOUR LOSSES now and make a move somewhere you like better. If you are downsizing to a less expensive or smaller house, you will probably LOSE MONEY by selling your current house and getting a smaller house, as you might not be able to 'recoup' the trade-down value; i.e. - you'll buy a less expensive home for only $12,000 below market, but you're selling your house at $25,000 below market. Make sense?

But, if your arm is bleeding, how much longer are you going to wait to go to the emergency room? Sometimes the BEST opportunity is to "cut your losses" and move on to a better opportunity that makes you happier in the long run! Moving closer to your job, saving driving and commuting time, getting a better - moving to a nicer area makes most people MUCH HAPPIER - and there is no amount of money you can put aside for getting "happier" or "more sanity" in your life...right?

I know of people who have moved just to get their kids into a better scholastically rated - or better sports program high school - while the kids were still in elementary or middle school.; so the transition would be easier for the kids to adjust and make new friends. I know several people who have sold homes to "move-up" to nicer neighborhoods and much closer to work/jobs.

From an economic standpoint, does this help to explain why "now" many be the best opportunity for you to list your house for sale - and purchase another one? Let me know if I can help you sell or purchase your next home? We are now offering the new hybrid Home Ownership Accelerator Loan that helps you pay off your home in only 5-12 years, for homeowners wanting to get their homes paid off faster as you approach retirement age.

Don't miss my next topic - remodeling and updating mistakes that cost you dearly!

Colorado Foreclosure Report - Good & Bad News!

The new Colorado Foreclosure filings were up 23 percent higher during the 1st quarter in 2008 compared to the 1st quarter 2007, with the most home foreclosure rates found in Adams County and Weld County. Filings are NOT actual foreclosures, they are the initial notifications to cure the defaulting loan after the homeowner doesn't make 3 payments in a row. Read the full report below...

Fortunately, popular cities like Littleton real estate and Highlands Ranch real estate have very low foreclosures, keeping these markets selling strong in MOST neighborhoods.

What are the Top 3 Causes of Foreclosures in Colorado?

The #1 problem causing foreclosures (which is ALSO the #1 problem causing bankruptcies) is that home buyers are NOT financially responsible. The majority of this responsibility results when home buyers do NOT live within their financial 'means' after they buy the house, as statistics show that these same home buyers drastically increase their overall debt after purchasing the house. It has very little to do with the loan or interest rate they closed with, instead, it is that the home buyers begin to spend beyond their financial means and can't get caught up.

The #2 problem causing foreclosures is that about 40% of ALL foreclosures were a direct result of a home buyer buying a new home builders home - and getting a mortgage loan from the new home builders mortgage lender. The misconception is that 'predatory lenders' are causing the high foreclosures - when the statistics clearly show that new home builder's have the highest percentage of defaulting foreclosure homes. The interesting 'fact' drawn by this statistic is that MOST home foreclosures are occurring with first-time buyers, minorities and people with very little financial sense or financial experience...(and their in NO way to regulate financial irresponsibility or stupidity.)

The #3 problem causing home foreclosures is "bad circumstances" that occurred for home buyers. This includes a job lose by a spouse, an illness, medical situation, accident or divorce. These 'causes' can happen to anyone, and cannot be predicted (unlike the #1 and #2 causes) and are just an unfortunate situation. Of these, a prolonged job loss and income loss is the most common situation leading to a foreclosure.

Editorial: The biggest issue causing foreclosures right now in Colorado is homeowners not being financially responsible AFTER buying their home, i.e. - that they 'rack-up' a ton of extra debt buying cars, boats, atv's and running up credit cards buying stuff for their new homes AFTER qualifying for the mortgage loan at a MUCH LOWER debt ratio. Then, they just get behind when many of their adjustable or sub-prime loans adjust upwards by $200-$800...they can't pay all their NEW bills. See more about buying foreclosures here.

Foreclosure Report:
According to the Colorado Division of Housing, there were 11,630 new foreclosure filings during the 1st quarter, compared to 9,443 for the same period last year. There were 39,915 foreclosure filings reported during 2007. Foreclosure filings increased 6 percent since the 1st quarter of 2007, climbing from 10,955 during the 4th quarter to 11,630 during the first quarter this year.
Statewide, there was one foreclosure filing for every 159 households, with the highest foreclosure rates found in the Denver metro area and in Weld County and Adams County. Adams County had the highest foreclosure rate with one foreclosure filing for every 86 households, while Weld County showed one foreclosure filing for every 102 households. According to the study, foreclosure filings for 2008 are likely to be 15 percent higher than 2007 totals. Foreclosure filings increased 30 percent during 2006, and 40 percent during 2007.

Yet, while filings increased by 23 percent - ACTUAL Foreclosure Sales at auction only increased 5 percent year-over-year during the first quarter. In this Realtors professional opinion, the 5 percent is not a dramatic increase - not enough to even raise much of a concern, as these foreclosure numbers were predicted to happen. Foreclosure sales occur when a foreclosed home is actually SOLD to the lender or a third party. During the 1st quarter, there were 5,875 foreclosure sales, compared to 5,586 for the same period last year. There were a total of 25,320 actual foreclosure sales during 2007.

Unfortunately, according to the report, Douglas County and El Paso County experienced the most growth in new foreclosure filings. Douglas County's filings were 78 percent higher during the first quarter of 2008 than during the same period in 2007. Foreclosure filings in El Paso County were 47 percent higher during this year's 1st quarter than last year's.

Trends in Littleton, Highlands Ranch and Denver Real Estate

There are 4 new major "positive" trends in the Denver Colorado real estate market that both BUYERS and home SELLERS had better be aware of - if you are going to survive this summer buying and selling season! Read more about these at http://www.jeffboyce.net/

First, it appears that many home SELLERS have decided to "not" take their Realtors advice to clean up, stage and make your remodeled/updated home look nice for incoming potential BUYERS. This in NOT the "sellers market" of 2005...and you are competing with about 2-3 times as many homes for sale in your neighborhood and surrounding subdivisions. Smelly pet odors, diry or worn out carpet, an outdated kitchen, moldy bathtub grout or ugly paint/wallpaper will NOT get your house sold in 2008. If you clearly want to waste your time & energy by having a bunch of buyers 'parading' through your house...then PLEASE DON'T remodel/update your home before putting it on the market for sale. If you don't remodel and have it nice, then please reduce the price by $5,000-$15,000 and make it priced at the genuine market value...

Second, BUYERS seem to think that waiting until they "find" the perfect dream-house is the 'time' to start thinking about mortgage financing... Just because your "think" you'll have no problem getting a loan, doesn't excuse the massive amount of outright stupidity happening in the Littleton and Highlands Ranch real estate markets!!! The general consensus among MOST listing agents is that they are 'forced' into getting nearly 2 contracts per home - just to get the house sold!!! The biggest problem being that the BUYERS did not - or were not able to get a mortgage loan that they could qualify for... Or worse yet, you had to suddenly liquidate a 401k or checking account because your loan "now" required a 3% or 5% extra down payment - that you were not expecting. PLEASE contact a good Colorado mortgage company and get a written loan Pre-Approval before you ever go out house shopping. Don't be shocked to learn that getting approved in 2008 is 5 times harder than in 2006 or 2007!

Third, smart SELLERS who update/remodel their homes, stage & declutter them - and offer a great value and list price to BUYERS are getting multiple contract offers in nearly every subdivision in Denver! So despite what all the doom & gloomers say nationally, the nice fresh houses are be SOLD fast - with bidding and competing offers. BUYERS who offer ridiculous "low-ball" offers are just wasting their Realtors time on these nice homes for sale. You know what these houses look like as soon as you walk into them...they look nice!

Fourth, the last major trend in the Denver real estate market is that "greed" and "stupidity" has taken over the minds of many real estate BUYERS - who think that just because the market has a lot of home inventory - that they can write "low-ball" offers $20,000 to $50,000 on every listing they see. If your Realtor shows you 'comps' that a home is priced very reasonably, then making an "insulting" and absurd "low-balled" purchase offer is just going to severely offend the SELLERS. If you 'think' most SELLERS are going to counter your insulting offer with a reasonable offer - forget it...as most insulted SELLERS will not even respond to your offer. If your Realtor is able to "smooth things over" and get all parties to agree to a reasonable sales price, then the SELLERS will become your worst enemy later on when you do your inspection or need more time to close because your loan couldn't close. You just screwed yourself over by acting stupid or arrogant...why? Smart and savvy BUYERS know that they'll get a far better price and far more sales concessions if they turn in a low - but very REASONABLE offer.

Read my next blog that will deal with the TOP reasons why Home Purchase Contracts are rejected by SELLERS

Thank God for GOOD CREDIT Loans!

Yes indeed - "Thank God" for those buyers who have good credit so they can keep our real estate market plugging along this summer selling season!

You see, without good credit now (typically a 600+ mid-fico score to qualify for a FHA 30-Year fixed rate) our Littleton & Highlands Ranch real estate market would not be doing very well at all...nor would the rest of the Denver real estate market - or the whole national real estate market for that matter! Statistics show that around 24%-27% of all potential homebuyers in Denver now (and nationally) have lower credit scores and CANNOT qualify to buy a home with the stricter mortgage lending regulations now in place since last fall. Here's why...

What that means is that 24%-27% of the existing Littleton, Highlands Ranch and metro Denver real estate CANNOT be bought now...causing a continuance in the real estate selling problems plaguing the USA now. Yes - that means that about one in four homes for sale will NEVER sell during the 4-9 month listing period - because 1/4 of all potential buyers CANNOT qualify for a mortgage loan now. This is not "doom & gloom" - it's just stating a stastistical fact. To take advantage of this problem, most Sellers ABSOLUTELY need to make sure that their home is in 'fine' selling condition - and priced accordingly!

Selling condition means: 1) Clean and in "model home" showing condition, 2) freshly painted walls in NEUTRAL colors!, 3) remodeled and updated kitchens, bathrooms, new or newer carpet and NOT looking like anything that has "Brady Bunch" era decor, 4) Nicely landscaped exterior & yard - with flower pots on the entry or porch areas, 5) NO CLUTTER and no old wallpaper/old messes/pet odors! Sellers absolutely need to spend more time and MONEY to get your home sold this summer!

Buyers DO NOT want to make you a full price offer if they have to fix-up or remodel your dang house! Worse yet, they will probably find a nicer home in your subdivision that DOESN'T need new carpet, paint and major remodeling - because THOSE other Sellers were given advice that having a nearly perfect house will actually help them sell their house FASTER and for MORE MONEY!!! Buyers are now required to put 3-10% Down Payment to qualify for almost every single mortgage loan offered currently (...there are NO MORE $0 Down loans folks!) which means they will NOT have extra money to do your remodeling, painting and carpet that your home needs!!! REALTOR TIP: You spend the money upfront for all this fix-up stuff and your home will sell faster.

If you'll make your home look pleasant for incoming buyers at your showings, you'll increase your 'probability' of getting a good or reasonably good purchase price offer! Pretty simple - huh?

Unfortunately, I showed homes last weekend in the Littleton area at $250,000 to $280,000 - and 6 out of 10 homes looked terrible when the Buyers walked inside of them! No one wants to buy your crappy looking house - and my Buyers didn't want to spend the time or money to remodel your "mess"!

Read my next blog on: "The Top 3 Reasons Your House WON'T Sell This Summer - and The Top 5 Reasons Why Buyers Will NOT Buy Your House."

A Home Buyers Worst Nightmare - (Your Car!)

Why in the world do homebuyers in the Denver, Highlands Ranch and Littleton real estate market actually worry about if the house they "might buy" is going to go up in value or down in value over the next two years?

After all, no one really seems to care that when you drive off the auto dealers parking lot the car you just bought over the next five years will depreciate down to about $8,000-$10,000 in value!

And, worse yet - you probably don't even have a 401(k), but if you did - you probably lost 25% of the value over the last two years!

So why is everyone crying about trying to get the world's best deal on a house if you are renting right now?

If you're a renter right now, you'll most likely spend four to five hours over the next month trying to get the world's best mortgage loan if you do decide to buy Littleton homes for sale or a home somewhere else in the Denver real estate market. You might even get an extra 1/8 or .25 point lower by shopping different lenders - and playing one lender off the other to get the world's best mortgage deal and lowest closing costs (if you have good or excellent credit.) But at the same time, your cars are depreciating at 15% a year, and you're NOT saving a minimum of 10% of your paycheck every month in a 401k! Am I missing something here? A $30,000 car loan at 7% financed over 5 years, cost you $595 every month, which means you're paying $7,140 a year for that car to lose $4,000 every year in depreciated value! Yes - you're LOSING $11,140!!! What part of "LOSING" don't you understand...?

At what point in time in your life does your car AND your car payment mean more to you than owning a house after 30 years. Instead of waiting until you are 50 years old to start saving your first dime for retirement - why not start now by buying a house instead? The US Government will write you a check for 28-33% of all your home mortgage interest & property taxes if you'll just buy a house instead of renting - which means your $1500 principle & interest payment at 6% on a $250,000 house ACTUALLY ONLY costs you $1005 - since the IRS will let you change your W4's at work and give yourself this $495 tax break every month!

Does your auto loan send you any money every month?

If you stay in this house for 30 years - you'll own a $250,000 free and clear - if it doesn't appreciate one damn dime!

How else are you going to save $250,000 - with your 401k you're going to open (finally) in 10 years?

If you lived in your house for 5 years - and it DID NOT appreciate 1 penny - you'd only owe $232,300 on the loan, after paying down the principle $17,000. But, you would have received $495 in monthly tax write-off benefits too...or $495 x 60 months = $29,700. So in reality, using REAL numbers, you'd make $29,700 + $17,700 ($250,000 - $232,300) = $47,400 as a "real estate investor" - instead of renting!!!

Is home buying such a bad thing to do now?

The only real nightmare is your dumb car payment!!!

Will "Fence-Sitting" Dominate the 2008 US Housing Market?

Is it smart to be a "fence-sitter" in 2008 if you are confused about whether you should buy a home - or to rent a house instead? This Realtor thinks that it's actually a pretty simple choice...

The issue facing so many American now, is if they'll get 'burned' financially buying now - as opposed to renting instead. But, in order to break down that decision to see if it's a sound decision - we must examine 2 key components. The first one is how much does rent cost you per month for the same equivalent lifestyle and home size? In certain parts of the country, renting is a very expensive way to live - and monthly rent costs a lot.

The biggest factor on this decision too, is that paying rent gives you NO tax write-off, where as 86-88% of a house payment & property taxes are tax deductable (86%-88% represents the interest portion of a 30 year fixed loan plus the property tax deduction during the first few years of amortizing). So your monthly interest deduction would be $1243 + 100% of your monthly tax bill; lets use $225 a month, which equals $1468. The rough way to figure this is to multiply $1468 by your .28 or .33 tax bracket (normally done on a Schedule A) which is $411 at 28% and $484 at a 33% tax bracket. These are the 'real' cost comparisons the US Government allows you every month to buy a house - and multiply them by 12 months to get $4,938 and $5,808 respectfully.

Another way to think of this - is like this: buying a house for the same or similar rent payment means that your house could "depreciate" $4,938 to $5,808 a year and you'd still break even!

The second comparison to fence-sitting and renting; to home buying, is that factor on "how long" you think you'll be living in the house or area, until you'll need a bigger or smaller house - or a job change might require you to sell?

This is actually the 'hardest' factor to consider...as no one can predict the future! If you are going to live in a house or rent for just a few years, I can tell you that the real estate commissions to sell a $250,000 house will be about $12,500 at 5% and $15,000 at 6%. If you home will NOT appreciate at these amounts, then you must factor in this expense into your rent vs home buying decision. Plus, the home might take 3-8 months (or longer!) to sell. But conversely, you'd be locked into a rental lease, and depending on when you needed to move, you might still owe 3, 6 or 9 months MORE on the lease you'd need to break!

This is the "X factor" that makes this renting vs home buying decision so hard! And - it's why fence sitting is so popular, as most people relate to making "no decision" as their typical process 9 out of 10 times, typically.

Then, look at buying a home which gives you the extra freedom & "peace of mind" knowing you control your destiny and have the joy of home ownership. You can paint, decorate and design the home anyway you want it! You lose all that freedom by renting. You can also pick the neighborhoods that you feel that 'matches' your socio-economic status - or feeds into a certain school(s) for your kids, or is closer to work or recreation opportunities. Finding a rental apartment or house in the same area might be tough or impossible...and most people 'clearly' state that they feel much worse about themselves when they are renting. The personal pride factor goes down significantly when you rent. Homeownership is a very 'powerful feeling' once you've been a homeowner before!

In conclusion, it appears that the real decision to fence-sit or to buy a home will still be dominated by "indecision" in 2008 - as most buyers will NOT commit to a decision - because no one can clearly see the real estate market booming and growing again, anytime soon. My guess is that the home rental business will be very strong for at least another year - or longer...

What is the HOME OWNERSHIP ACCELERATOR Loan?

Is the HOME OWNERSHIP ACCELERATOR Loan the best loan in the United States today - and should you consider using it - to buy or refinance your home?

There is a new mortgage loan available in Denver Colorado (and 41 other states) that combines the effectiveness of a 15 year mortgage loan - combines it with a home equity line of credit on your home - and then combines it with your checking account...so that you can PAY OFF YOUR HOME IN 6-12 YEARS on average!!!

The HOME OWNERSHIP ACCELERATOR Loan compounds interest DAILY, and can permit you to buy or refi a home - yet pay the home off in 5-12 years, without you having to pay extra monthly payments, or have HIGHER monthly payments, or having to do Bi-Weekly or other strict payment rules!!! You can use the existing equity in your home (at any time) to pay bills and borrow money against - anytime YOU want to...with NO strict rules and NO pre-pay penalties!

The loan is perfect for financially savvy home buyers, Jumbo buyers AND older borrowers who want to pay off their home much faster - yet without all the extra payments and double or triple monthly payments.

The loan requires a 15% down payment on purchase loans in Colorado, a 680+ mid-fico score, and 'decent' reserve accounts like your 401k, investments/stocks and IRA's. The loan is actually a Home Equity Line of Credit at 85% LTV, allowing you the freedom to use your equity at any time, but combining it with your checking/saving accounts - so that all your paychecks can be used to REDUCE your average daily mortgage principle & other debts. You deposit your entire paychecks into this innovative loan, and dramatically reduce your mortgage principle balance. If you are a buyer or borrower with a very good monthly cash flow (you 'bank' a large portion of your paychecks without spending most of the money) you'll be able to rapidly reduce your mortgage loan balance...and I can show you how to pay off your home loan in 6-12 years on average - WITHOUT you changing your current spending habits.

Sound too good to be true? It's not...

The loan is very popular overseas in England, Australia and South Africa - as it makes your checking account work for you - instead of the banks keeping all your checking/savings account interest!

Watch the HOME OWNERSHIP ACCELERATOR Loan video - or call me for a better explanation on how you can pay off your Denver or other home in 5-8 years! This loan is amazing, because it compounds interest daily - NOT monthly like traditional loans. It also let's you use your checking account and savings account balances to pay down your mortgage loan - without you actually prepaying on your loan! For example, if you paid your $600,000 home down to $300,000 after a few years - you have the freedom to take out the $210,000 equity (up to 85%) to invest in a stock or mutual fund, buy a car for cash, pay for your kids college expenses - or start a new business. It's YOUR MONEY that you can access whenever you want to...you just write yourself a check!

It's more cost effective than a Reverse Mortgage for seniors (you never have to give the bank 60-90% of your house!) and it's also perfect for Baby Boomers with good incomes trying to pay off their homes faster...but who don't like being "locked into" 15 year notes and no capability to get the equity out fast - if you have an emergency and can't wait to refinance. This loan IS ALREADY a home equity loan...so you can get any of your money out at anytime by writing a check or by using your VISA debit card.

Decide for yourself - would you like to buy a home next month and have it paid off in 5-10 years WITHOUT having to double or triple your monthly house payments?

This is the MOST AMAZING loan this mortgage lender and Realtor has ever seen - email me what you think of it!!!