Here's a shocker...take your present age and subtract it from 67.
(Mine is 67 - 47 = 20 years)
That means I have 20 years left until retirement age - what's yours? To most Americans, amazingly - even if you DON'T have a dime saved right now - you can easily retire wealthy if you can just start a monthly savings/investment plan now! Here's all you need to save per month to become a millionaire in 20 years...
Savings start date: 7-1-2008
Balance on start date: $0
Number of years to save: 20
Rate of return: 8%
To earn: $250,000 You will need to save (deposit) $425 per month.
To earn: $500,000 You will need to save (deposit) $960 per month.
To earn: $1,000,000 You will need to save (deposit) $1,920 per month.
No matter what or how weak/bad your current savings plan is - this clearly shows that you can earn a half-million by merely depositing $960 a month and earning an 8% return for 20 years! Most people will also pay off their houses, helping them earn an additional $175,000 to $300,000 (national averages.)
Most Americans can trim their current budgets NOW and begin a savings program to deposit that amount...especially couples. Don't forget...
At retirement age, around 67 years old - you can live off of your interest profit (assume 10%) which is $50,000 a year (or $4166 a month,) without touching your $500,000 principle amount. By retirement age, you should have a house paid off and relatively 'little' to no credit card debt or car payments - making $4166 a very nice monthly living until they throw dirt on you! Many people, however, will simply NOT be able to set aside any money for retirement - and will have to rely SOLELY on Social Security. In my opinion, I don't think Social Security will be solvent or even available in 20-25 years...so you better start saving now! Or, stop renting and buy Denver real estate, Littleton real estate - or Highlands Ranch homes for sale!
With all the "doom & gloom" right now with our U.S. economy, it's really NOT that bad after all - as most people can put aside $425 a month and earn a quarter of a million dollars in 20 years. Or you might think about accelerating paying off your present mortgage faster - if you plan on living in your present house forever. Read more on that here - as you can easily pay off your present home loan in 5-12 years... http://www.jeffboyce.net/home-ownership-accelerator-loan-.html
Showing posts with label highlands ranch real estate. Show all posts
Showing posts with label highlands ranch real estate. Show all posts
Friday, June 13, 2008
Saturday, May 31, 2008
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!
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!
Friday, May 30, 2008
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.
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.
Saturday, May 24, 2008
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
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
Wednesday, May 21, 2008
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."
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."
Wednesday, May 14, 2008
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!!!
Monday, April 28, 2008
Is The SKY FALLING On Denver Real Estate?
Is Denver real estate doomed? Is this sky really "falling" on Denver real estate?
In this Realtor's opinion the answer is NO...but we sure have slowed down a lot - as most of Denver real estate sales are "off" target from last years sales by about <28%>.
Only Highlands Ranch, Thornton and Erie remain the same -or showing sales increases. Is there an explanation for this? Well let's think about that...
There still remains two big problems for the Denver real estate market. First, there are less people able to qualify now with the tightening of the underwriting rules & qualifications for mortgage lending. With no more zero down loans and harder to qualify FHA and conventional loans - more people CAN'T buy - even if they wanted too! Second, everybody seems scared to death with the economy, the price of gas and other expenses going higher! Consumer confidence is definitely hurting the Denver real estate market.
But, is this very logical - and does this make sense in reality?
The answer is no! The reality is that you're going to neither have to rent or you're going to have to buy. You get a tax deduction when you own a home you get zero when you rent. In many neighborhoods it's pretty cheap to rent, but the stuff you're renting is pretty crappy. Nobody seems to care of their cars depreciating at record rates... but so many people are convinced they should still wait before they buy. Why the insanity difference here?
Savvy buyers are snatching up houses left and right at very low prices - and at very low interest rates! Why aren't you? Many homes for sale in the Littleton real estate market, Highlands Ranch, Parker, and southeast Denver and Southeast Aurora are selling in less than 30 days on the market - if they're priced correctly! Ugly homes and unremodeled homes are taking forever to sell - go figure...!!! But there are still many bargain homes out there if you still hurry! There certainly isn't anything wrong with a 5.875% 30-year fixed-rate loan - and I just did a 10% down investor loan at 6.625% for another client who just bought a foreclosure deal!!!
The only question for you is - how long are you going to keep sitting on the fence?
Sunday, April 13, 2008
The Summer 2008 Denver Real Estate Buying Season - Is HERE
This summer is going to be different for all Denver Homes for Sale!
Here it is - almost mid-April, and Denver's home buyers are getting ready to start their big summer purchases. What makes this home selling season significantly different than the past years, is the fact that mortgage loan interest rates are around 5.75% on a 30-year fixed-rate and 5.375% on a 15 year fixed rate with just 3-5% down!
Denver real estate sellers are going to have to be a lot more flexible to accommodate some of the new loans and the new lending regulations. Many sellers forget that although they might have to lower their home's sale price to get their home sold quicker, that they will more than make up the difference by getting a better LOAN DEAL - if they're buying the more expensive home in another neighborhood. Additionally, sellers might have to forego $5,000-$10,000 in seller concessions to get their current homes sold in the next few months - BUT - you should be able to save $20,000 to $50,000 or more on your next house purchase price... using an experienced Denver Realtor to represent you.
Most reasonably minded Denver metro home sellers understand the dynamics of getting their homes sold quickly and for a good price - in exchange for getting a good or great deal on a more expensive house in another neighborhood! Ask me about the Thiersch's in Erie, Colorado that SOLD their current home to a builder, in exchange for purchasing the builder's home listed at $525,000 more in price than their current home. If you can't quite work the master math on this one, then contact me, and I'll explain why this is so important if you are planning to buy a more expensive house!
Finally, don't forget that the LOWEST interest rates in the United States now require a 720+ mid-fico score to qualify. If you think your credit scores are hovering around the 660 to 719 range, then please contact me on how we can help you RAISE your credit scores by 25 to 50 points in the next 30 to 60 days...a complimentary (free) service to all our Denver real estate buyers and sellers who list or who we represent as Buyers Agents. Now's a good time to buy your move-up home in - look for some of the "best" home purchase deals in Highlands Ranch Real Estate and Littleton Real Estate...to name a few. Think BBQ's and NO MORE SNOW!!!
Here it is - almost mid-April, and Denver's home buyers are getting ready to start their big summer purchases. What makes this home selling season significantly different than the past years, is the fact that mortgage loan interest rates are around 5.75% on a 30-year fixed-rate and 5.375% on a 15 year fixed rate with just 3-5% down!
Denver real estate sellers are going to have to be a lot more flexible to accommodate some of the new loans and the new lending regulations. Many sellers forget that although they might have to lower their home's sale price to get their home sold quicker, that they will more than make up the difference by getting a better LOAN DEAL - if they're buying the more expensive home in another neighborhood. Additionally, sellers might have to forego $5,000-$10,000 in seller concessions to get their current homes sold in the next few months - BUT - you should be able to save $20,000 to $50,000 or more on your next house purchase price... using an experienced Denver Realtor to represent you.
Most reasonably minded Denver metro home sellers understand the dynamics of getting their homes sold quickly and for a good price - in exchange for getting a good or great deal on a more expensive house in another neighborhood! Ask me about the Thiersch's in Erie, Colorado that SOLD their current home to a builder, in exchange for purchasing the builder's home listed at $525,000 more in price than their current home. If you can't quite work the master math on this one, then contact me, and I'll explain why this is so important if you are planning to buy a more expensive house!
Finally, don't forget that the LOWEST interest rates in the United States now require a 720+ mid-fico score to qualify. If you think your credit scores are hovering around the 660 to 719 range, then please contact me on how we can help you RAISE your credit scores by 25 to 50 points in the next 30 to 60 days...a complimentary (free) service to all our Denver real estate buyers and sellers who list or who we represent as Buyers Agents. Now's a good time to buy your move-up home in - look for some of the "best" home purchase deals in Highlands Ranch Real Estate and Littleton Real Estate...to name a few. Think BBQ's and NO MORE SNOW!!!
Friday, April 11, 2008
NO MORE $0 Down Loans to Buy Denver Real Estate
Well - it's going to be "sink or swim" for most Denver real estate, as ALL major national lenders have now canceled the last zero down financing loans (except for the VA 100% loan.)
The Denver housing market - and all other Denver Metro real estate is going to have to rely on the regular Conventional and FHA loans which require a minimum of 3% down to 5% down to purchase real estate now. For real estate brokers like myself, that have closed nearly $100 million worth of real estate business - I question whether our Denver real estate market is going to "crash and burn"- or if it's going to be able to survive without 25% of the available buyers being able to get a loan this summer?
If I was betting $1000 of my own money, I would bet that we have a serious problem this spring and summer - simply because buyers cannot get loans!What this means for Denver real estate Sellers is that there will be LESS traffic coming through your house for showings - and a lot more showings that will be wasted on buyers that are incapable of buying... Denver home Sellers truly need to understand that your home had better be clean, neat, remodeled, updated, "ready to sell" and priced right -- because if it isn't, you are going to be competing with almost 40% MORE unsold inventory this summer - and 25% FEWER buyers. The problem that we have right now is very simple... it's the economics of too much supply and too little demand. There is an oversupply problem right now and the demand is just been cut by 25% by all the national lenders stopping their good (and normal) zero down financing like the Home Possibles and Flex 100 loans. These were good loans designed for A paper and A- paper borrowers (that should've never been canceled) - as they had low default rates! Now, A paper borrowers are going to have to dip into your 401(k) or other savings accounts to come up with 3% for an FHA loan or 5% for a traditional conventional loan to purchase any Denver real estate, Littleton real estate, Highlands ranch real estate or Aurora CO real estate.
Buyers with marginal credit are going to have to start working on credit repair to boost your scores to a minimum of 580 on all future FHA loans (but preferably at 620 or above) to be able to get qualified to buy a Denver homes for sale with 3% down. Read more on my Credit Repair Program here, as there are no more FHA loans if your fico scores are below 580 -- or if you've had ANY unpaid collection accounts (other than medical collections) in the last 12 months reporting on your credit reports!!!
Your alternative to this "mess" is to work with a very sharp Buyers Agent who understands that the Sellers or your parents may contribute the 3% down on FHA loan -- including the closing costs -- converting a regular FHA loan to a zero down FHA loan. Please email me and I'll explain how we can help you on that.
I feel very sorry for all home sellers in the Denver real estate market this summer it's going to be a very rough one with 25% less buyers available to buy your home...
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