Saturday, September 18, 2010

How To Reduce Home Energy Costs By Sealing Air Leaks

Air leaks With Labor Day past, the autumn and winter months aren't far behind. It's a good time to reflect on your home's heating and cooling costs, and take steps to lower your energy bills. Finding air leaks may be a perfect first project.
According to the U.S. Department of Energy, up to 30 percent can be cut from a home's energy costs just by reducing drafts. For example, a 1/16-inch gap unsealed gap around a window is equivalent to leaving the window 3 inches open.
That's a lot of wasted Brighton air.
The good news is that air leaks are rather simple to identify, and simple to fix. The key is to know where to look. And, to make the job easier, the government offers a complete DIY Guide To Sealing and Insulating a home.
Some of the key tips include:
  • Focus on the attic and basement, where most air is lost
  • Locate problem areas on a chimney
  • Check recessed lights which allow air flow between conditioned and unconditioned air
The government's website also provides a 13-page PDF with detailed images, instructions, and recommendation to help you with the work.
However, if the job is beyond your skill set, be sure to call a qualified contractor. Sealing your home from air leaks will reduce your monthly energy bill and the money spent to pay a professional will be just a fraction of what you'll save over time.
(Image courtesy: US Department of Energy)

Saturday, September 11, 2010

How To Change A Showerhead

There's plenty of reasons to want to change a showerhead in your head. Perhaps you're trying to fix a leak in the faucet; or, remodeling your bathroom; or, trying to conserve water via a low-flow showerhead.
Whatever the reason, changing a showerhead can be a basic do-it-yourself project. The tools aren't complicated and the job is a quick one.
In this 2-minute video from AOL, you'll learn:
  • What tools you'll need to change the showerhead
  • How to remove your old showerhead
  • How to firmly attach your new showerhead to prevent leaks
If you get stuck, or just want to outsource, call a professional handyman to finish the job. Changing a showerhead should take less than a hour to complete.

Tuesday, August 10, 2010

The Fed Is Meeting Today. Should You Float Or Lock Your Mortgage Rate?

Fed Funds Rate June 2007-June 2010The Federal Open Market Committee holds a one-day meeting today, its fifth scheduled meeting of the year, and sixth overall since January.
The FOMC is the government's monetary policy-setting arm and the group's primary tool for that purpose is an interest rate called the Fed Funds Rate.
The Fed Funds Rate is the prescribed rate at which banks borrow money from each other and, since December 16, 2008, the Federal Reserve has voted to keep the benchmark rate within a target range of 0.000-0.250 percent.
It's the lowest Fed Funds Rate in history.
Because the Fed Funds Rate is near zero, it's accommodative of economic growth, spurring businesses and consumers to borrow money on the cheap. This, in turn, fosters economic growth within a U.S. economy that is somewhat tentative and facing headwinds.
The Fed has said over and again that it will hold the Fed Funds Rate "exceptionally low" for as long as conditions warrant.  It's expect that the Fed will reiterate that message in today's post-meeting press release.
However, just because the Fed Funds Rate won't be changing today, that doesn't mean that mortgage rates won't.  Mortgage rates are not set by the Federal Reserve; open markets make mortgage rates.
Mortgage rates in Colorado tend to be volatile when the Fed is meeting. This is because the Fed's press release highlights strengths and weaknesses in the economy and, depending on how Wall Street views those remarks, bond markets can undulate and mortgage rates are based on the price of mortgage-backed bonds.
When Ben Bernanke & Co. speak, Wall Street listens.
The Fed's press release today will be dissected and analyzed.  Talk of higher-than-expected inflation, or better-than-expected growth should have a negative effect on rates. Talk of an economic slowdown may help rates to fall.
Either way, we can't be certain what the Fed will say or do this afternoon so if you're floating a rate right now and wondering whether the time is right to lock, the safe choice is to lock before 2:15 PM ET today.

Tuesday, July 27, 2010

New Homes Sales Gain in June, But Gains Are Relative

New Home Supply June 2009 - June 2010
After a down month in May, the sales of newly-built homes appears back on track.
As published by the Census Bureau, June's New Home Sales report showed:
  1. A 24 percent sales volume increase from the month prior
  2. A 2-month drop in the supply of newly-built home
There are now just 210,000 new homes for sale nationwide.
June's data is a major improvement over May, but it's possible that the true "new home market" may be softer than the statistics suggest.  This is for several reasons.
First, we're comparing June's sales data to the worst month in New Home Sales history.
In May, sales of new homes totaled just 267,000 units nationwide. That's one-quarter fewer sales than in the previous worst month in New Home Sales history. May's sales levels were awful by any measure but June's improvement to 330,000 units remains second-worst sales levels ever posted.
Second, although much improved, June's new home supply of 7.6 months is elevated versus the historical norm near 6.0 months.  The last year has averaged 7.7 months.
For buyers of new homes in Henderson, Colorado, this combination of low sales volume and higher-than-normal inventory may be a positive.  It's the main reason why homebuilder confidence is reeling and the downturn has opened some doors for big discounts and deals. Free upgrades and closing cost credits can make a well-priced home even more attractive.
Plus, with mortgage rates at all-time lows and expected to rise, home affordability is may never be better.

Tuesday, July 20, 2010

Sagging Homebuilder Confidence Opens The Door For Good Deals

NAHB Housing Market Index July 2008-2010Builder confidence in the housing market slipped this month, according to the National Association of Homebuilders' monthly Housing Market Index.
The Housing Market Index is actually a weighted composite of 3 separate surveys. One measures current single-family sales; one measures projected single-family sales; and one measures traffic of prospective buyers.
All three surveys were down in July:
  • Single-Family Sales : From 17 (June) to 15 (July)
  • Single-Family Project : From 22 (June) to 21 (July)
  • Buyer Foot Traffic : From 13 (June) to 10 (July)
The HMI's July reading of 14 puts confidence at its lowest point since April 2009.
For home buyers in Henderson, Colorado , a drop in builder confidence could create an opportunity for negotiation.
Remember, it wasn't too long ago that most builders were flush with home inventory, unable to find willing buyers. To help move product at that time, builders dropped prices and offered incentives including free upgrades. If confidence continues to sag going forward, home purchase deals of that nature may return -- especially as the foreclosure market gets larger.
See, in the past, builders' main competition for buyers were the existing home sellers.  Today, builders compete with the existing home sellers and the banks with REO.
It's a terrific time to be a home buyer, in other words -- sellers are fighting for you. It's no wonder sellers have little leverage anymore. Couple that with all-time low mortgage rates and affordability for homes is at an all-time high.
If you're planning to buy a home later this year, you may want to consider moving up your time frame. The market looks ripe for good deals this summer.

Foreclosure Activity Slows Again In June 2010

Foreclosures per capita, June 2010
313,841 foreclosure filings were made in June, according to foreclosure-tracking firm RealtyTrac. The figure represents a 3 percent drop from May and 7 percent drop from June of last year. However, foreclosure filings remain relatively high nationwide.
June marks the 16th straight month the filings topped 300,000. 1 in every 411 U.S. homes received some form of notice last month with foreclosure density varying wildly from state-to-state.
Like everything else in real estate, it seems, foreclosures are a local phenomenon.
The states with the highest foreclosures per capita were:
  • Nevada : 1 foreclosure filing per 88 homes
  • Florida : 1 foreclosure filing per 171 homes
  • Arizona : 1 foreclosure filing per 189 homes
The states with the lowest foreclosures per capita were:
  • Vermont : 1 foreclosure filing per 26,051 homes
  • West Virgina : 1 foreclosure filing per 8,058 homes
  • South Dakota : 1 foreclosure filing per 6,528 homes
Overall, 40 states beat the national Foreclosure Per Capita average and 10 states fell below. The sheer volume of REO, though, is creating interesting buying opportunities for first-timer buyers, move-up buyers, and real estate investors in Denver.
Homes bought from banks are usually less expensive than non-foreclosure homes. This is one of the major reasons why distressed sales account for roughly 30 percent of all home resales. Less expensive, though, doesn't always mean "cheaper". Foreclosed homes are often sold as-is and may be defective or otherwise uninhabitable.
Making repairs to get these homes into "living condition" can be costly.
Therefore, if you're buying a foreclosed home, make sure you know what you're buying before you make your bid. Have a certified professional inspect the home to check for damage, and consider enlisting the help of a real estate agent to assist with negotiations and management of the contract.
The process of buying a foreclosed home is different from buying a typical resale. Make sure you do your homework.

Monday, July 19, 2010

25 Cities In Which To Get A Bang For Your Homebuying Buck

Affordable cities for homebuyersHome affordability is at an all-time high. Home values are still in recovery while mortgage rates continue to make new lows. But where are homes the most affordable? recently ran a piece titled "Where Homes Are Affordable", listing 25 communities around the U.S. in which median incomes are relatively high and median homes are relatively low.  It's a housing market "bank for your buck" list.
The top 10 cities as listed by the editors:
  1. Deerfield Beach, FL
  2. Lafayette, IN
  3. San Antonio, TX
  4. Deltona, FL
  5. Spring, TX
  6. Glendale, AZ
  7. Avondale, AZ
  8. Bolingbrook, IL
  9. Fishers, IN
  10. Des Moines, IA
Of the top 10, 2 picks are from the Southeast; 4 are from the Midwest; and 4 are from the Southwest.  2 are "major" cities and the rest are suburbs of bigger cities.  Lafayette stands lone as a college town.
The rest of's 25 cities follow a similar pattern -- larger suburbs geographically concentrated in the Midwest and Southwest. Surprisingly, though, New Jersey and Virginia do find themselves represented.  Even the expensive Eastern Seaboard has its good buys.

Thursday, July 8, 2010

June's Jobs Report Wasn't As Bad As The Headlines (And How You Can Take Advantage)

Net Job Gains July 2008 - June 2010In June, for the first time since December 2009, the U.S. workforce shrank.
According to the Bureau of Labor Statistics, the economy shed 125,000 jobs last month even as the Unemployment Rate dropped to 9.5 percent. The drop in the Unemployment Rate is being attributed to fewer Americans looking for work.
At first glance, the jobs report looks weak but a deeper look shows something different.
Excluding the 225,000 government Census workers that recently left the workforce, the total number of employed persons actually grew by 83,000 in June. That's 50,000 more working Americans as compared to May.
And, since the start of the year, the U.S. workforce has grown by 857,000.
Jobs growth is closely tied to economic growth because more working Americans means more disposable income which, in turn, stokes consumer spending. Job growth is better than job loss.
Consumer spending makes up the majority of the U.S. economy so as consumer spending grows, investor mentality tends to shifts toward "return on principal" (i.e. stock markets) from "safety of principal" (i.e. bond markets).
A move like this is often bad for home affordability because falling demand for bonds is tied to higher mortgage rates. In addition, with the growing number of Americans earning a paycheck, demand for homes is likely to increase, thereby helping to push home prices higher.
Overall, therefore, the jobs report should be bad for rate shoppers and home buyers in Denver. Except the markets aren't reacting that way. For now, mortgage rates are slightly improved since the jobs report's release.
Perhaps Wall Street is watching the wrong figures, but don't let that be your loss. If you're shopping for a mortgage, a home, or both, now may be your best time to make a move- while rates are still low, with home prices down- before traders change their tune.
Because when markets change, it'll likely happen fast.

Monday, July 5, 2010

The 1 Force That Can Really Change A Mortgage Rate

Inflation and mortgage ratesAll day, every day, conforming and FHA mortgage rates in Colorado are in flux.  Rates move in response to hundreds of factors which exact varying levels of influence.
Among the biggest influences on mortgage rates is inflation.  When inflation is unexpectedly high, mortgage rates tend to rise quickly. Conversely, when inflation is unexpectedly low, rates tend to fall quickly.
But what is inflation?
By definition, inflation is when a currency loses its value; when what used to cost $1.00 now costs $1.10.
As consumers, we recognize inflation by the items we buy on a daily basis becoming more expensive.  However, it's not that goods are more expensive -- it's that the dollars we're using to buy them have become worth less.
With respect to mortgage rates, this is a big deal because mortgage rates are directly related to the price of a special type of bond called a mortgage-backed bond.
On Wall Street, mortgage-backed bonds are priced, bought, and sold in U.S. dollars so as inflation renders those dollars less valuable, so it does to mortgage-backed bonds as well. It's a chain reaction by which mortgage bonds lose value, leading investors sell them, causing bond prices to fall on the excess supply.
And, because mortgage rates move opposite of bond prices, as inflation takes hold, mortgage rates rise.
Lately, inflation has been exceptionally low. The Federal Reserve acknowledged as much in its last statement to the markets, and available data backs that position.  This, after predictions that inflation would be "runaway" in 2010.
The Cost of Living is up just modestly this year and it's helping mortgage rates stay low. And, so long as it lasts, the cost of owning a home in Belle Creek will remain relatively inexpensive.

How To Use A Fire Extinguisher In Your Home

In 2006, in the U.S., a person died in an in-home fire every 2 hours, 42 minutes, on average; someone was injured every 32 minutes. Nearly $7 billion of property damage was caused.
In this 2-minute video from Lowe's, you'll get a basic education on fire extinguishers:
  • How to pick the right fire extinguisher for the right job
  • Where to place fire extinguishers in a home
  • How to use the "PASS" technique on a fire
Keeping your household safe from fire requires preparation, and part of that preparation is keeping fire extinguishers on-hand, and ready for use.  Fire deaths are preventable -- make sure your home is properly equipped.

Friday, July 2, 2010

Was The Pending Home Sales Report Really That Bad? It Depends Who You Ask -- Buyer Or Seller.

Pending Home Sales Nov 2008 to May 2010The Pending Home Sales Index plunged in May 2010, just one month after the expiration of the federal home buyer tax credit program.
The Pending Home Sales Index is now at a record-low level.
A "pending home sale" is an existing home under contract to sell, but not yet closed. According to the National Association of Realtors®, 80 percent of homes under contract close within 60 days.
Because of this timeline, we can expect the summer's Existing Home Sales to be weak, too. With fewer homes going under contract, fewer homes can close.
On the surface, May's Pending Home Sales Index looks like terrible news for housing. And, if you're a seller, it just might be. But, if you're a buyer, the story reads differently.  Just consider the market conditions.
A broad look at the housing market shows:
  1. Home supplies are rising in most markets
  2. Home sales are falling in most markets
  3. Mortgage rates are at all-time lows
In other words, in most markets, more sellers are competing for fewer buyers, and the "winning" buyers are financing their homes at the lowest rates in history.
It's an excellent time to be a home buyer in Denver.

Friday, June 25, 2010

A Simple Explanation Of The Federal Reserve Statement (June 23, 2010 Edition)

Putting the FOMC statement in plain EnglishToday, in its first meeting in 5 weeks, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged.
The Fed Fund Rate remains within its target range of 0.000-0.250 percent.
In its press release, the FOMC said that, since April, "the economic recovery is proceeding" and that the jobs market "is improving gradually". Business spending "has risen significantly", too, with the exception of commercial real estate.
Today's statement is the 8th straight press release in which the Fed shows optimism for the U.S. economy, dating back to June 2009.  Since that time, the Fed has terminated all of the programs it created to support the economy through the economic crisis.
The recession is widely believed to be over.
And, although the Fed's statement acknowledged economic growth, it did highlight lingering threats, too.
  1. Employers are still reluctant to hire new workers
  2. European debt concerns could spill-over to the U.S.
  3. Bank lending is contracting
Also, as expected, the Fed re-affirmed its plan to hold the Fed Funds Rate near zero percent "for an extended period", citing that "inflation has trended lower" recently.
Mortgage market reaction has been positive thus far. Mortgage rates in Colorado are slightly improved post-FOMC.
The FOMC's next scheduled meeting is August 10, 2010.

Wednesday, June 23, 2010

May 2010 Existing Home Sales Is Better Than The Headline Data Suggests

Existing Home Sales May 2009-May 2010Existing Home Sales dropped in May for the first time in 3 months but still managed to post its second-highest since November 2009, buoyed by the expiring federal tax credit program.
An "existing home" is a home that cannot be considered new construction; a resale of an existing home.  Existing Home Sales fell 2.2 percent in May.
The press is calling the drop in sales "unexpected" and disappointing, but a deeper look at the data shows the news isn't as bad as it first appears.
First, on a regional basis, sales were mostly solid. Only the Northeast region posted a loss. The West even managed a gain.
  • Northeast : -18.3 percent
  • Midwest : 0.0 percent
  • South : +0.5 percent
  • West : +4.9 percent
Second, the supply of homes for sale dropped to 8.3 in May and, because home prices are based on supply and demand, this is a positive for pricing.
By comparison, in 2008, the average existing home inventory was 10.4 months.
And, lastly, in May, first-time home buyers represented 46 percent of all buyers. The number was likely buoyed by the tax credit program but that doesn't damper the fact that first-time buyers provide a support floor for the housing market.  Keep in mind that, in a 'normal' market, first time homebuyers make up about 1/3 of homebuyers.
First-time buyers in Denver enable "existing owners" to move-up to bigger homes, which, in turn, trickles up to the mid-size and jumbo markets.
Analysts expected more from May's numbers and that may explain why the reaction to the data is generally negative.  However, in many cities, home resales did just fine.

Monday, June 21, 2010

The Largest Historic Homes In The United States

The Biltmore Estate in Asheville, NCIn 2009, the median size of new homes started was roughly 2,100 square feet. This figure was down from 2,200 square feet between 2005-2007 which, itself, was down from 2,350 in 2004.
Homes are getting smaller across the United States.
But, as compared to the nation's largest homes, the shrinking is laughable. The Biltmore Estate, built in 1895 by George Washington Vanderbilt II, measures 175,000 square feet -- 83 times the size of a typical home today.
The Biltmore Estate in Asheville, North Carolina is the largest home in the country and, meanwhile, another Vanderbilt-built property built in 1895 checks in at number two. The Breakers, in Newport, Rhode Island, measures 165,000 square feet and cost $150 million to build in today's dollars, adjusted for inflation.
Both homes are open to the public.
The next three largest U.S. estates in terms of square footage are:
Hearst Castle, arguably the most famous "large home" in the country, measures 60,645 square feet and ranks 7th.
See the complete list of Largest Historic Homes In The United States, including their build date and architecture style, on Wikipedia.

Friday, June 18, 2010

The Home Buyer Tax Credit Extension Has Not Been Passed Into Law (Yet)

Tax credit was not extended -- yetAs its June 30, 2010 closing deadline approaches, the federal home buyer tax credit is back in the news.
Unfortunately, the headlines are misleading.
Contrary to what you may have read (or heard), the federal home buyer tax credit has not been extended past June 30, 2010. At least not yet. And here's why there's confusion.
Look at these headlines from earlier this week:
  • Senate Extends Date On Home-Buying Tax Credit (Philadelphia Inquirer)
  • U.S. Senate Approves Extension Of Home Buyer Tax Credit (NASDAQ)
  • Senate Approves Home Tax Credit Extension (Reuters)
Nothing above is factually incorrect, but each neglects a key piece of the country's law-making process -- it takes more than the Senate to pass a law. For a bill to become a law, it must pass the Senate and the House of Representatives and then it must be ratified by the President.
To date, we've only cleared just one of those 3 steps.
This means that the federal home buyer tax credit has not been formally extended. As of now, it's still in discussion.  Ultimately, though, if the extension does pass, it's expected to extend the closing date deadline for Henderson and Denver home buyers beyond the original June 30, 2010 date into September 2010.
Homeowners must still have been in contract as of April 30, 2010 to claim up to $8,000 in federal tax credits.

Thursday, June 17, 2010

Good News For Sellers : Housing Starts Fall To 1-Year Low In May 2010

Housing starts June 2008 - May 2010Single-family housing starts plummeted to a one-year low in May, just 30 days after soaring to a 20-month high.  It's no wonder home builders are confused.
Against a revised April figure, Housing Starts fell 97,000 units in May, a figure representing almost one-fifth of the total market size.
It's the worst showing for Housing Starts since May 2009, a surprise to builders and economists alike.
Furthermore, single-family Building Permits plunged in May, too -- down 10 percent from April. A permit is a certification from local government that authorizes home construction.
Housing permits are a precursor to Housing Starts with 82% of homes starting construction within 60 days of permit-issuance. Fewer permits, therefore, directly reduces the number of new homes coming to market in the coming months.
For home buyers in Henderson , this should create a sense of urgency.
Home prices are based on supply and demand and supply appears to be falling about the same time that economists predict a surge in home demand.  It could spell rising home prices and a complete loss of negotiation power with home sellers.
For now, though, home affordability remains high with properties cheap and mortgage rates near all-time lows. If you plan to buy a home later this year, the May 2010 Housing Starts data may be a reason to move up your timeframe a bit.

Tuesday, June 15, 2010

Shopping And Paying Bills Online? Here are Methods To Protect Your Online Financial Identity

In May 2010, Retail Sales at non-store retailers topped $29 billion, up 16 percent from May 2009. Clearly, Americans are doing an increasing amount of shopping online.  And we're paying our bills online, too.
But how well are we protecting our identities?
In this 5-minute piece from NBC's The Today Show, you'll learn the basics of online fraud and methods to minimize the likelihood of identity theft.  Furthermore, the tips go beyond the basic "choose a challenging password".  For example, you'll hear about:
  • Why you shouldn't pay bills from a coffee shop
  • Who might be hiding behind an unprotected public wifi network
  • The dangers of storing credit card numbers with an online retailer
And, although, at one point, the interviewee goes over the top with respect to spyware and anti-phishing prevention, the point being made is a good one -- you can't be too careful with your online financials and common sense goes a long way.

Monday, June 14, 2010

Change Your Air Filters Monthly (But Don't Go Cheap)

3M Filtrete for HVAC units
As the mercury rises into the summer months, don't forget to change your home's air filters regularly.  It not only extends the life of your HVAC unit, but can help keep your energy costs down, too.
Not all air filters are created alike, however. Don't go cheap.
Your local hardware store carries a variety of air filters ranging in price from less than a dollar to $20 or more per filter. They're all purported to do the same job, but after watching this 1-minute video, you'll see why cheaper isn't necessarily better.
Airborne particles are smaller than most mesh filters. Pleated filters are recommended instead.

Most high-quality air filters start around $11 and can be purchased in bulk at discounts of up to 20 percent.  3M's Filtrete line of products is a popular, well-selling brand and can last up to 3 months.
If your home has shedding pets or is dust-prone, consider changing them monthly.

Thursday, June 10, 2010

Bank Reposessions Reach Record Levels For The Second Straight Month

Foreclosure concentration, by state (May 2010)
According to foreclosure-tracking firm, bank repossessions reached record levels for the second straight month in May, topping 93,000 properties nationwide.
As compared to May 2009, all 50 states now show an increase in annual REO activity.
Data like that won't surprise today's active home buyers in Brighton or Denver.  Foreclosed homes are prevalent, available and accounted for one-third of all home resales made in April.
Furthermore, total foreclosure actions -- the sum of REO, default notices, and foreclosure auctions in May -- topped 300,000 for the 15th straight month.
Foreclosures remain a huge influence on the housing market.
However, two interesting trends emerged in the data:
  1. 9 of the top 10 metro areas for foreclosure posted annual activity decreases
  2. Each of the top 4 states for Foreclosures per Household posted annual activity decreases
We can infer, therefore, that foreclosure activity may be in permanent decline in the areas hardest hit through 2007, 2008, and 2009.  In 2010, the data shows, foreclosures are waning.
This is reason for optimism -- especially as FHA delinquencies slow nationwide. As fewer homeowners go delinquent, the pace of foreclosures will slow further and that should help boost home values on every block in the country.
If you've been considered bank-owned homes for your own purchase, give a look at the RealtyTrac foreclosure report.  It's provides insight on a state-by-state level, and in the nation's largest metropolitan areas.

Then, to complement your research, talk to your real estate about the foreclosure market and what opportunities may exist.   Competition for bank-owned homes can be fierce at times, but there's plenty of "deals" out there.
You just have to know where to look.

Wednesday, June 9, 2010

Conforming Loan Costs Are Rising, Says Freddie Mac

Mortgage discount points are risingMortgage rates may be dropping, but mortgage costs are not.
According to Freddie Mac, the average required discount points on a conforming mortgage rate are higher by 0.1 percent since early-May.
A "discount point" is prepaid mortgage interest; an up-front fee paid by a borrower in exchange for a lower mortgage rate. In most cases, discount points are tax-deductible.
Tax-deductible or not, though, rising costs are rising costs and Freddie Mac glosses over it.  In its weekly press release, the government group offers mortgage rate comparisons to weeks prior, but doesn't do the same for required points.
The press fails to mention discount points entirely.
An increase of 1/10 percent in discount points costs homebuyers and refinancing households in Henderson an extra $100 per $100,000 borrowed.
The hike reminds us that there's more to a mortgage than just its rate -- costs matter, too.  And if you've only been watching the headlines, you would have missed how costs are rising.

Friday, June 4, 2010

Uncharted Territory- the End of the Tax Credit

The end of April marked an historic event.

Think about it.  Never before in American history has there been a homebuyers' tax credit.  On April 30th, it expired.
We are in uncharted territory

If you were planning on buying your first home, or even replacing the home that you had lived in for 5 of the last 8 years, you would get FREE money from the government if you were under contract by the last day of April.  That contract would have to close by the end of this month to qualify for the tax credit.

So, what impact will this have on our market?  No one actually knows.  The first deadline for the credit was scheduled for the end of November, 2009.  Eager first time homebuyers rushed to the closing table to make the November 30 deadline- in spite of the holiday weekend that bumped right into the deadline.

This time, however, the impact seemed slightly less notable.  Many houses went under contract well before the April 30 deadline, and closings were spread out over April, May and June.  There is speculation that some home sales were "borrowed" from the coming months because of the tax credit, and this certainly has some merit.  

Meanwhile, showings of for sale properties dropped.  If you are trying to sell a home, you have seen this effect.  It's time to sit tight and have patience.  

As I said, we are in uncharted territory.

Thursday, May 20, 2010

Asking for Referrals the Right Way!

I just got an email from another agent here in town.  At the end of her signature, in quotation marks no less, it says Oh, by the way....  and asks her nearest and dearest to refer anyone who is thinking of buying or selling their home.  This made me cringe.
It wasn't the quotation marks.  It wasn't the folksy, off-hand style (Oh! By the way!  I just thought of something!!).  It wasn't the fact that everyone from her best friends to her clients, to her business partners will get this request.
It is all of those things together.
Amazingly, I got an Article by Dirk Zeller today about just this very thing.  It is about asking for referrals from people you know.
The whole article is worth reading, but one of the standout quotes was:
Don’t merely use a throw away line like “Oh, by the way” before you ask for the referral. This tactic cheapens the referral process rather than raising it to the high level of honor and respect it deserves.  The client can see right through this cheap technique.
Wow.  He read my mind!  In a nutshell, if you respect your business and your clients, take the time to do things right.  You are asking them to let you into their circle, and what's more, you are asking them to vouch for your professionalism and trustworthiness.  This is a 2 way street, so show them the consideration you are asking them to show you, and you will see your referral business boom.

Saturday, May 8, 2010

How Many Showings Does it Take?

When selling your home, one of the "moving targets" is the number of showings to expect.  Not surprisingly, the number of showings goes down during the holidays and during cold winter months when the weather is unpredictable.  But different price points will also experience different levels of activity.
Following is a breakdown by price level of home many showings per month we experienced in the Denver Metro market for the first quarter of 2010:

  • Overall, the number of showings per month for all price categories was 8.7 per home.
  • Homes under $250,000 saw an average of 10.5 showings per month, with the $50k-100k range seeing the highest number of showings per month at 15.
  • Homes from $250k-300k saw an average of 7.4 showings per month.  Homes from $350k-400k were at 3.7 showings per month.
  • Homes in the higher price ranges, from $400,000 up, saw an average of 4.8 showings per month.
The good news for those selling homes in the $250k-400k price range is that the number of showings increased year over year: from 4.7 in 2009 to 6.1 for 2010.  Homes above that range increased from 3.4 to 4.8.  Homes priced in the lower ranges held steady at 10.5 showings per month.
Buyers are getting back out there, which is good news for all homeowners.  With renewed interest and activity in residential real estate, we will see a ripple effect throughout the economy.

Tuesday, May 4, 2010

Hey- I Thought You Said that House was Under Contract?

What Does “Under Contract” Mean?  What Comes Next?
Recently, I was driving through our neighborhood with a buyer.  He was very interested in a property a few months ago, and had been considering making an offer.  When I called the listing agent to let her know of our intent, she told me it had just gone “under contract” and was no longer available.  When we drove past this property last week, the sign was still in the front yard.  “I thought you said that home wasn’t available?” he asked.  And it’s not.  It is still “under contract”.
  How properties go Under Contract, and what happens next. 
When a buyer finds the right home, he or she makes an offer.  This is presented on the Colorado Contract to Buy and Sell.  It is a detailed contract with a schedule of dates, room for contingencies, attachments, concessions, offer price, financing arrangements and appraisal requirements, among other things.  It is 12 pages long, and is designed to protect both buyer and seller during what is often the largest sales transaction private parties ever make.
When buyers purchase a home, they want the assurance that they have thoroughly researched their purchase before the sale is final, and that no other buyer can purchase the property out from under them during this time.  If the buyer and seller can agree on the initial terms, both parties will sign a binding contract that allows the buyer to do this research.  The property is then “under contract”.  This period usually lasts from 30-60 days.  A short sale listing can take longer- sometimes several months.
The buyer is then responsible for doing this research, and there is a time limit and an Earnest Money deposit submitted so that the seller is protected.  
These steps include applying for a loan, having a certified inspection of the property, obtaining title and title insurance, obtaining property insurance, reviewing any HOA documents, reviewing Improvement Location Certificates or surveys of property boundaries and making sure the property appraises.
The For Sale sign remains in place during this process because the sale is not yet completed.  Often times, the Realtor will place an “under contract” banner on the sign.  The idea is that it “ain’t over ‘til it’s over,” so the sign remains in place until funds have been transferred and keys are passed to the buyers.

Thursday, April 22, 2010

Are Open Houses a Waste of Time?

In a word: NO!
But, I get ahead of myself.  When I started in the Real Estate game, things were gloomy (to put it mildly).  Foreclosures were everywhere and entire "ghost towns" were created when people walked away from homes they saw no way of getting out from under.
Those were bleak times.  Many Realtors left the business and didn't look back.  A couple of years ago, telling people you were a Realtor would garner a few snickers or sympathetic head shakes.
So we saw signs go up in front of houses without brochure boxes, or worse, empty boxes.  In my neighborhood, there hadn't been an open house in several years.  I'm not kidding.
But sometimes Old School is just what a neighborhood needs.  I held an open house last weekend in Belle Creek.  I put signs and balloons at every entrance to the neighborhood.  I walked to every home in the neighborhood (all 300+) and invited every neighbor.  I posted on Twitter and Facebook.  And I waited.
And I reinforced what I've always felt about Belle Creek.  It is a pretty special place to live, and people seem to want to be a part of this community.  Right at 11am when the open house was to start, a young couple came through the door.  Shortly after they left, another couple came along.  During the time of the open house, I had about 25 people come through.  When it was over, 6 more people rang the bell (after I left!) to see if they might have a look too.
So, are Open Houses worth it?  Only if you want to sell your house.  If your Realtor is not holding open houses, maybe you should ask them why.

Thursday, April 8, 2010

Inspired! Appealing Property Taxes to Lower Them, Steps 1 and 2

Yesterday, I read an article on msnbc entitled "High Property Taxes? 4 steps to lowering them."
If you have lived in Belle Creek for long, you no doubt have watched our sales values take a hit, while our property taxes stay high.  I am a serious proponent of supporting public schools and having good roads, and taking care of our parks.  I am also a pretty big supporter of not paying too much for property taxes.
When we got our tax bill this year, I stared at the nearly $4,000 and swallowed the bile rising in my throat. Good lord, isn't there something we can do about this?
Turns out there is.
Step 1: Track Down the Paperwork.  
This is where I am in the process.  I called the Adams County Assessor's office (303-654-6038) this morning after trying to find the form on their website.  A very nice and knowledgeable employee told me that Notices of Valuation were sent May 2009, and they are only sent every other year.  On the back of this notice is the form for appealing your property taxes.
Unfortunately, I am not as organized as I would like to be, and I have no idea where I put that form.  When it comes to business, I can lay my hands on paperwork at a moment's notice, but when it comes to personal stuff...
He must not have been working in county government for long, because he laughed and told me he would send out another copy right away.
Step 2: Understand the Process
Although there is a form on the back of the valuation notice, you do not need it to appeal your tax value. You must submit a written protest, but it can be done by mail, fax or in person.  This must be done before June 1.  If you submit it in person, you can sit with the county appraiser and discuss where the value comes from and plead your case.
Be sure to bring as much evidence as you can.  If you have a recent appraisal, this will help.  Also, bringing a list of recent sold comparable properties in your neighborhood will help.
I have only gotten this far in the process myself, so I will report what happens as it happens.  Wish me luck...

If you would like assistance in appealing your property taxes and need recent solds in  your area, please email me or call me at 720-341-5235.  This is a FREE service that I am happy to assist you with.  

Wednesday, March 24, 2010

Part 2: The New and Improved GFE? How to Protect Yourself

In my last post, I began to tell you a little about my adventure with the "Good Faith Estimate" or GFE for my home loan.  Here, as they say, is the rest of the story:

So I called my friendly Chase consultant AxA.  Knowing that this was not the final GFE, I also knew that it could still be changed and we were not locked in to these fees.  I left a message and sent an email.  Shockingly, I got no response.

Here is where it gets interesting.  Life happens to us all, and time passed with me assuming that it would be taken care of.  After all, I DID send an email.  

The "final" GFE arrived in the mail.  I opened it with curiosity, fully assuming that everything would be correct.  

Bottom line?  "Total Estimated Settlement Charges:  $4,015.47.

What. In. The. FLYING HELL?
(Actually, at this point I might have used stronger language, but this is a family show.)

When I called my good friend AxA, he said "Oh.  Yeah.  That's wrong, but it's no big deal.  It'll be correct at closing.  Just sign the paperwork you get and we'll schedule it."  
No, I said, Nothing will be signed until we have corrected paperwork.  Re-do this and send out a correct GFE and we will review it and schedule closing when it is correct.

Here's where he challenged me. First, a BIG, annoyed sigh.  Then: "What's not correct?"  Was this arrogance?  Ignorance?  I suspect a combination of both.  So, I went-line by line- down the page to tell him what was not kosher.
1.  In our initial phone conversation, he said there would be no points.  Lo and behold- there's an 1/8 of a point charge.
2. In our initial conversation he had claimed no origination fee.  Guess what?
3. Hazard insurance:  $1400.  First of all, we already spoke of this and he knew that insurance was not escrowed on our loan.  Secondly, $1400??!!!  Even if we didn't already have (less expensive) insurance, I might want to shop around for a better rate.
4. Title Insurance: $894.95.  Not!   This is a reissue of title insurance, first of all, so the rate should be greatly discounted.  Secondly, you can check rate cards that are publicly available from any title insurance company, and for the amount of our loan, the highest rate I found was about $500.

He challenged me as much as he could until I said: "Listen.  I happen to be a Realtor, so I know how to read a GFE, and this one is WRONG.  This is not acceptable."

THEN- and this might be my favorite quote- he told me: "Don't worry about it.  You won't have to bring this to closing, it'll just get rolled into the loan."

This got me thinking.  Not too many people are aware that they have options when it comes to these things.  This is part of the reason that the mortgage industry is such a mess.  Many people would be so relieved to get out of their ARM and into a fixed rate that they might just accept what he said as the way things are.

But, think about this:  if I didn't question him, we would be paying interest over 30 years on over $2000  worth of charges that shouldn't even be there.  

You do not have to be "in the business" to shop your rates for title insurance.  But how many people know this?  And title insurance is just one example of the services that the consumer may choose.  Interestingly, after this conversation, my husband got a call to schedule our closing time.  "We're all set to close!" said the chipper voice from the title company.  
Well, believe it or not, my husband and I communicate regularly (!).  AxA was planning on just going around me to close out our file rather than do his job and fix the problem.

A few tips if you are going to Refinance or shop for a new loan: 

  • Take copious notes.  Write down names, dates, time called, details discussed.  Do not be afraid to ask the person who answers the phone to spell their name for you or to repeat what was said so that you can write it down.  This was good info for me to have when I spoke with AxA.  When I told him I took notes, he backed down and took off the points charged.
  • Follow up with email.  Better still, if you can follow up phone conversations with email, then do it.  Just a simple "Per our conversation today at 2pm..." and then what you have in your notes.  It's also a good idea to set your email to have a "return receipt" so that you know it was received and opened.  KEEP all emails that go back and forth.
  • Don't be afraid to ask questions and challenge the answers!  So many of us are reluctant to question the bank because we assume they know what they are talking about and are telling us the truth.  But, as in my situation, paying for a couple thousand dollars over 30 years (plus interest) that should not even be charged is ridiculous.  Suggesting "rolling it into the loan" is just stupid when it doesn't even belong there in the first place.
  • Do NOT sign anything until you are satisfied that your loan paperwork is correct.  If I had just waffled and signed the loan docs stamped "sign and return", then we would have been locked into all of those erroneous charges.  
Bottom line:  my friends, if you need assistance understanding your GFE, Call me!  Or call any licensed realtor to help you understand what you are reading.  You have the right to know what you are signing and agreeing to, and what charges you do and do not have to pay!

Tuesday, March 23, 2010

The New and Improved GFE?

A “Simplified” GFE?
Making the Good Faith Estimate More Transparent May Make it More Difficult to Close
pastedGraphic.pdfI have been living in the same home for almost 8 years now.  It is cozy and has enough room for my family.  We have designed it to suit our needs and updated or upgraded paint, bathrooms, basement.  
When we bought our home, we got a great deal on it (for the time!), and we were able to put down a pretty decent downpayment after selling our previous property.
So, our loan isn’t big.  It was originally with ABN-Amro and along the line it was purchased by WaMu.  We had no problems with that, and in fact, when  we were sent a mailer about doing a re-fi several years ago for a flat fee of $495, we decided to go for it.  We were smart- we got an adjustable rate (not the smart part...) mortgage, took a little cash out, and went on with our happy lives.  
We are thankfully nowhere near being upside down on the house (that’s the smart part), but one of these days it IS going to adjust.  Mind you, this won’t happen for at least another year.  With interest rates being low, we decided now would be a good time to lock in our rate.  If we could do that now, we would drop the interest rate down over a point, without changing our payment.  Score!
pastedGraphic_1.pdfEnter Chase Bank
In the meantime, Chase acquired WaMu.  (Cue the music: Duh-duh-DUHHHNNNN!)  People have many different stories to tell about their experience with Chase Home Loans.  This is mine:
It started with a call to the 800 number on my loan statement to try and get the right department.  This was an adventure in its own right and might even be worth another blog.
Once I got through to the correct department, I spoke with a very nice man whom I’ll call AxA.  AxA was very informative.  Per the notes I took during this first call, he told me that it would be no problem, we might even be able to lock in a rate without an appraisal!  Because we are already Chase customers, there is no origination fee!  There won’t be any points!  We have great credit!  He! was! very! Enthusiastic!!!  In double time, with me furiously taking notes, he said that there would be a processing fee of $750, but we would get some of this back at closing.  It turns out that we would need a full appraisal, but that was to be expected in this market.

pastedGraphic_2.pdfThe Good Faith Estimate Arrives
Per the new regulations and Truth in Lending, a Good Faith Estimate is sent when you originate a home loan, and then a final one is sent just before closing.  There are certain fees that a consumer is able to “shop”- among them title insurance, home inspection and a couple of others.  Because we are not purchasing a different home, inspection is not necessary.
I tore into the paperwork to see what lay inside.  This document is dated January 15- the new Truth in Lending went into effect January 1, so this would be my first glimpse.
I glanced down the page.  At the bottom, “Summary of Charges:  $2560.47”
What.  The.  Hell?
Origination charges 1510.59.  “All other Settlement Services” 1049.88.  I don’t think so.  
Next:  RealtorJenn gets to the bottom of it...

Wednesday, February 17, 2010

How Many Followers Can One Person Handle?

It seems to be a hot topic in the past few days.  Is it good to have a lot of followers on Twitter, or just a few?
I was first intrigued by the video blog of Steve Witsen.  He likens having a great many followers to trying to make an announcement to everyone at a U2 concert.  You'd have a lot of people to tell your message to, but most of them wouldn't listen.  Nor would they care.
By having a couple hundred (or less!) dedicated followers who are truly interested in what you have to say,  you target your message to those for whom it is relevant.  Lightbulb moment!
Another worthy blog that shares this sentiment and expands on it is that of Aliza Sherman on WebWorkerDaily (10 Things to Avoid in Social Media).  #8 goes a little something like this:
"Avoid the numbers gameSure you can use automated following tools and maybe get a slew of people following you back. But they’re not listening. They don’t care. I’ve always said that I’d rather have 100 friends, fans or followers who care than 1000 who ignore me.  Social media is not about the big numbers but what you do with the numbers you have — and what they do in return. Devoted actions of a few can have an exponential impact, far greater than inaction by many."
This game seems to change daily, so keeping up with it is at turns exhilarating and exhausting.  But somehow, the conventional rules of social interaction and traditional etiquette still hold. (Thankfully)  Building relationships and trust takes time and attention.  Or as we used to say "If you want a friend (follower, tweep, connection, link...) , be a friend."

Wednesday, January 6, 2010

Pending Home Sales Down- Not the End of the Trend?

NAR reported yesterday that pending home sales were down by 16% in November over October.  After steady increases, this may come as a bit of a shock to some consumers.  To others, it may seem like the inevitable fall after so many months of gain.
But, what does it really mean?  The Pending Home Sales Index is a forward-looking indicator of how the real estate market will be doing in the next couple of months.  It measures how many sales contracts have been signed with the intent of closing, usually within the next 30 to 45 days.
Does this drop mean that the market is drying up?  Just when recovery was on the horizon, are consumers baling out?
Hardly.  A closer look at the numbers reveals that buyers are still very interested in getting that home.  While the numbers dropped for November over October 2009, they are still 15.5% higher than November of 2008.  And those of us lucky enough to live in the Western region (that's you, Colorado) aren't faring bad at all: the pending home sales dropped by a mere 2.7%, still 21.4% higher than November of 2008.

Want to know more about what's happening in YOUR neighborhood?  Contact me today for a thorough look at the trends on your block.