The New and Improved GFE?

A “Simplified” GFE?

Making the Good Faith Estimate More Transparent May Make it More Difficult to Close

I 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!

Enter 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.

The 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...

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.

Open House Redux: A Few Tips for Open House Success

In my career, I've had mixed success with Open Houses.  I do believe that they can be a valuable tool for attracting attention to properties for sale.  Especially if the house is newly on the market.  Or, conversely, if it has been on the market far too long, but has not yet had an Open House.
Early in my Real Estate Lady profession, I do what many newbies do.  Having no listings of my own, I offered to help colleagues out by holding their properties open.  This idea was designed to gain exposure for both the new listing and the new agent (me).
These experiences taught me how NOT to conduct an Open House.  But in the spirit of being "glass half full", I will share the DOs:

• DO clean your house!  And not just the weekly vacuum, dust, bathroom cleaning. You've got to do a great big spring cleaning.  In fact, you should do this before you even put your house on the active market. In one of those ill-fated early career open houses I hosted, the sellers decided to start cleaning the morning of the open house.  Potential buyers were greeted at the door with dirty mop water and the teenage son was "cleaning up" by stuffing dirty laundry into his closet.  Wipe fingerprints (and food stains) off the wall, put away the dog bed or litter box (hopefully in another state), take down junior's refrigerator collage.  Serious buyers will open closets, look in drawers, and explore anything behind a closed door.  They do not want to be greeted by a pile of laundry, or an open can of kitchen garbage (another war story for another time).

• DO take any and all valuables with you.  This includes cash, jewelry, keys- and anything that looks shiny and pretty and you actually care about.  That same darling teenage son who was shoving his smelly sweatsocks into the closet was in fact doing in to cover up the real loot- a couple of shotguns and boxes of ammo.  Seems he was a hunter...

• DON'T expect to have an open house every week.  It won't work- neighbors will wonder why your house isn't selling, and you'll get more and more frustrated.  Plus, it's just plain exhausting.  If you hold your house open every weekend and it doesn't sell for 30-45 days, everyone will start to wonder what's wrong with the house.  Your Realtor will know what the average time to sell a home like yours is in your market and will come up with a strategy that will bring the best positive exposure.

• LEAVE. Go away.  Skedaddle!  Buyers do not want to be trailed by an anxious seller when they are looking through their possible new home.  Buyers agents, however, LOVE THIS.  Why?  Because most sellers cannot help but spill out their deepest, darkest reasons for selling: pending divorce, job loss, job transfer, or the fact that they'd be happy to take $10,000 under listing price AND leave all appliances and their antique grandfather clock just to be done with the whole thing.  Even if you don't have extenuating circumstances such as these, it's just less stressful for everyone if you aren't there.  Most open houses are only a few hours long.  Go see a movie, go shopping, go for a hike.  But do NOT stay there.

I hosted another open house where I "made sure" the sellers would not be home.  I spoke to the husband, as the wife didn't speak English, and tried to emphasize the fact that they should leave.  When I got there, the house was dark and quiet, so I set up shop and placed my signs.  Then I heard a strange noise.  Is that water?  Should I call a plumber?  Nope.  The wife was taking a shower.  Shortly after that the husband arrived with teenage daughter and her 3 girlfriends.  I reminded him that it would be best not to hang around, as we had discussed.  He understood.  He agreed.  He left.  Alone.  Teenagers opened up their Burger King bags and had lunch while mom watched TV and the open house visitors walked in and immediately left.  Can you imagine why?

Happy Selling!

How's the Market in Your Neighborhood? Another Look at Belle Creek

Because I live in Belle Creek- and because I purchased my home in 2001 when the market was insane- I have a vested interest in what our micro-market is doing.  I regularly check out the solds, under contracts, new listings.  Being a runner, I usually notice when something new pops up in the neighborhood.

So, when I blogged last week about what has sold recently in the neighborhood, I admit, I wasn't showing you the whole story.  Being a mixed-use community, we have townhomes, cottages, series 1 homes and series 2 homes.  Being in close proximity to the development world has taught me about some of the builder-ese that is used in a master planned area.  Buyers may know their homes as a "Logan" or one of the "Wellshire Collection".  I just know my house is in the 2 series...

Enough blathering, let's get to the meat of the issue.

In the past year, 20 homes have sold in Belle Creek.  Prices were holding steady until just recently.  On average, Belle Creek homes were getting about $105 per square foot overall.  This was regardless of which model was sold. 
In the past 3 months, however, we have seen that number take a nose dive.  Price per square foot is now at a frightening $90 per square foot!  There would have to be some sort of reason why.  That reason may surprise you.  I know it did me.

As it just so happens, until a month or so ago, there was still builder inventory available.  There were a couple of homes that were built but never closed back when BC was just forming.  These 2 homes were on the market for quite awhile- over 650 days, as a matter of fact.  Quick math- nearly 2 years.

So, when you are a retailer (of sorts), and you have inventory that doesn't move, what do you do?

Slash prices!  Have a Clearance Sale! 

The good news about this is that they sold.  We now have 2 formerly vacant houses that will have nice neighbors living in them.  That brings our home values as a neighborhood up. 

The not-so-good news is that they were reduced so severely that they dragged the value of the neighborhood (in price per sqft) down.

The verdict:  if you don't have to sell now, maybe you'd be better off waiting for awhile.  But if you know of someone who has been wanting to live in Belle Creek, it is a great time for them to buy.

Next:  A breakdown by price point and home size.

How's the Real Estate Market inYour Neighborhood? A look at Belle Creek

If you've been on planet Earth at any point in the last few years, you may have heard that the Real Estate market is pretty volatile.  Job losses led to record foreclosures and the introduction of the term "short sale" as a common noun.   Fortunately, as I know we have all heard, "all real estate is local."  (Otherwise stated as "the 3 most important factors in real estate: location, location, location.")

For Belle Creek residents, the market is actually pretty good.  As a Your Castle agent, I have access to neighborhood trends and reports for the Denver metro area.  As a Belle Creek resident, I concern myself with what our market is doing. 

You may have heard the term "months of inventory".  This is a valuable tool in determining whether now is a good time to buy, sell, or just stay put and wait.  When the Months of Inventory are closer to 12, it is a good time to BUY.  This means there is inventory that isn't moving and sellers are getting anxious.  As MOI moves closer to 1, it is a sellers' market.  There are more buyers out there than sellers, so sellers can be picky about what they will accept.

A "normal" market is 6 months of inventory, and this is what is ideal.  In Belle Creek, the inventory is at 4.2 Months of Inventory.  This is good news for sellers, as it indicates that there is not quite enough inventory for the buyers that are out there.

This doesn't necessarily mean that the current inventory is flying off the shelves.  But well-priced homes in good condition should sell in a reasonable time.  What's more, homes in Belle Creek are priced at a level that is desirable in the Denver Metro area.  The bulk of market activity is happening in the $250,000 or less range. 

Here are a few Belle Creek stats to chew on:

• Currently there are only 7 houses that are actively listed for sale.  3 of these are short sale situations with contracts pending.  This means the bank has to approve the sale price, but someone has written a contract with the intent of buying this home.
• Of these homes, all are priced at under $250k.  3 are at $189,000, 1 is $199,900, 1 is $210,000 and the final listing is at $219,950.
• Months of inventory for homes in Belle Creek priced under $210,000 is 3.  Months of inventory over $210,000 is 6.
• 50% of homes sold in the last 12 months were short sale or lender owned. 

Here is a list of the homes that have actually sold in the last few weeks:

• 9499 E 109th Ave.  $242,000 Sold Sept 14, 2009
• 9437 E 108th Ave.  $185,000 Sold Sept 25, 2009
• 10765 Boston St.  $155,000 Sold October 9, 2009
• 10628 Dayton St.  $135,900 Sold October 16, 2009

If you have any questions about buying, selling or any aspect of Real Estate, ask a Realtor.  As a specialist in Belle Creek, I am happy to answer any questions you have about our market!  Feel free to contact me with any of your real estate needs.

If you prefer to research on your own, check out my website.  You can research active, under contract and sold homes throughout the Denver Metro market at your leisure.

It's Not a Sprint, It's a (Half)Marathon, Part 2

Every summer, I go to visit my dad in Wisconsin.  He's retired and he spends summers in northern Wisconsin on a lake.  My family has been going up to that same area since the 1920s.  It's a lush, verdant wooded paradise on a small chain of lakes that very few people outside of our circle have heard of.  Plus, it is extremely hilly.

Perfect for training.

Usually, I try to get up there for at least 2 weeks in the summer with my daughter.  We swim, waterski, kayak, go boating.  We read tons of books and make crafts and sometimes we bake (if it rains).  We visit the iron mine, pick strawberries, eat fried cheese curds and we go everywhere we can by boat.

And I run.  Up hills, down hills, through woods.  On and on I run.  I run alone, with my Girl Audge, with my husband.  Every day.  In a word, it is heaven.

I never knew I'd want to have a running partner until I started running with Audge.  The first time we ran, years ago, I was sure she'd kick my butt.  She is young, fit, full of energy, and young.  And did I mention fit?  She has a Master's degree in exercise physiology, is a personal trainer, a yoga instructor, etc.  But the beautiful thing about running, especially with her, is that that doesn't necessarily matter.  We get together to run and we talk nonstop.  I've known her parents since before she was born, and she and her sister stood up in my wedding.  So you could say we have some history.

This year during one of our run/chatfests, we talked about how we both wanted to do a half marathon.  Problem is, she lives in New York, I live in Colorado.  We should plan to meet somewhere to do a race!  Yeah!

Yeah.  That would be so cool, but you know how it gets.... she teaches college courses... she works.... I work... I have a daughter and husband to take care of....  Fill in any number of reasons, all of them definitely valid.

Then I got her text.  I'm coming out to visit Catherine around the 10th of October, will you be around?  "Hell, yes!  Wait a second," I wrote," the 18th is the Denver Marathon, and they have a half marathon, if you feel like racing."  I anxiously awaited her reply.  Really?  I'll have to look into it...  What?!  I thought.  (Duh, Jen)  Quickly I typed "I was thinking about doing the half and I'd love to have a running partner!"

There ya go.  Now, I'm signed up to do this thing with Audrey AND Catherine.  This is awesome!  I better get training! 

Have you ever looked at one of those training logs?  I subscribe to Runner's World (love that mag) and there are times that I have no idea how to decipher what they've printed.  Plus, they have so many plans to choose from, it can be daunting.  I got lost somewhere between Yasso 800s, pace charts, tempo runs and fartleks.  Checking back issues helped.  But I again got lost amongst phrases like  ...at the end of the first mile, the even-paced runners were at only 78 percent of their VO2 max, an effort level more akin to a tempo run than a 5-K race--below their potential.  (Taken directly from the online archives)  Well I know I don't want to be below potential, but VO2 max is getting a little more scientific than I was looking for.  Can't I just go out and run a bunch, without killing myself?

Thankfully the answer was yes.   I just needed to find a program that spoke to me, also at the Runner's World website.  I entered a few answers to a few simple questions and voila! out comes my training schedule.  It started July 13 and goes for 14 weeks, culminating in my race on October 18.  Perfect.

The first week seemed like a joke.  Day 1, 2 miles.  Huh?  That's it?  Day 2, rest.  What?!!  I scanned down the list and saw the miles gradually increasing.  (It also has days with Speedwork and Tempo Run, but at the end of the program is a handy explanation of these terms.)  But, Good Lord, it only has me running at 11 minute miles!  How lame!  Ok, I did it my way last time and that didn't work out so good.  But jeez, I can start out a little faster, can't I?

Coming next, what IS a sprint anyway?  Lessons learned along the training route 

It's not a Sprint, it's a (half)Marathon

Last winter I decided I might try a half-marathon.  I've been a runner for a lot of years, and it is my preferred method of exercise.  (As Aunt Judy puts it, you get the most benefit from the least amount of time spent)  It occurred to me that it was time to push my limits a bit and run toward a goal.  With my mind nearly made up, I happily announced it to my husband.

"No, you are NOT running a half marathon!" 

I know how this looks.  You might be thinking something along the lines of: Whoa.  Who asked John Wayne Bobbit anyway?  I should probably back up and 'splain myself.

About 7 years ago, my now sister in law invited me to run a half marathon with her.  "Come on!  It'll be fun!"  Hmmm.  Sounds intriguing, I said, but I haven't really been training.  "No big deal- how much do you run?  I never train!"  Now, if she were some kind of ultra- running workout superstar I would've come up with many more reasons why I wouldn't.  But she isn't.  She works out, but not excessively.  Plus, I thought, I could kick her butt running any day.  Yeah.  Ok, yeah, I'll run it.  What fun!  What a challenge!  What great exercise!

What an idiot.  When I told my friend Charles recently that I had run that race without really training, he was horrified.  "That's downright dangerous."  Umm, yeah.

This wasn't some leisurely, flat course.  It's the Georgetown to Idaho Springs Half Marathon.  Here's a description of the course, taken from the Georgetown to Idaho Springs website:

There is .5 mile of gravel road in the 2nd mile, and 1.5 mile of dirt road from mile 6.5 to mile 8. Also be aware of a steep grade with a 90° turn at the bottom of Clear Creek Drive in the 1st mile of the course.

The elevation at the start is 8500 feet, and gradually arrives at 7500 feet at the finish. Temperatures in the early morning at this elevation can be 50°, and can reach 85° by the finish. While conditions are usually optimal at this time of year, athletes should always be prepared for adverse weather while being in a mountainous location.

Holy Crap.  That doesn't even warn the innocent anywhere near enough.  The morning of the race dawned plenty early.  On my drive up the mountain to meet up with sis and her best friend, I went over my strategy.  Ok.  I can do this.  I ran 8 miles on Wednesday and took the rest of the week off to prepare.  Plus, I had a banana this morning, so my stomach should be fine.  Oooh look, outlet stores...!

At the start, we sat in the car to keep warm.  It was 30 degrees out, but at least it was sunny.  When we could no longer sit in the car without missing the race, we lined up.  POP!  We're off!

The first mile was easy.  The other ladies had this idea that we should run for 10 minutes and walk for 1.  Wimps.  Well, ok, I've never done this before, so if you guys like to do that, that's fine.

Around mile 6, I felt good.  The cold morning was turning into a warm day, and I could do this, no prob.  Around mile 8, my lungs were filled with dust and my legs were feeling the exertion.  Somewhere around mile 9, my feet started to burn.  From mile 9.1 until the end is not very clear in my mind.  Sis fell away to a walk at some point, and her bff joined her, but in the haze was a thought that if I stopped now, I might not start up again.  Coming in to the finish, I saw a couple of people being helped into medical tents, the finish line, my husband, my daughter, water, water, where's the water?, food, Port-a-Potty.  I did it, I did it, I'm dying, but I did it.  Just need to make a quick stop at the potty... I almost didn't come back out.  We still had to drive home 1 1/2 hours, but it was more like 2 1/2 to 3 with all the stops I needed to make.  I spent most of the rest of the day between my bed and the bathroom.

What an idiot.

So, you can see why hubby wasn't too encouraging.  He later admitted to me that he had seriously considered taking me to the hospital that day, and he was pretty freaked out.  But this time I'm going to train!

Stay tuned for more.....

Tipping the Credit Score Scales in Your Favor

You might be wondering what you can do to improve your credit score.  Here are some good tips from the Credit Scores class I took last week:

• Pay ALL of your bills on time or early.  Even a 30 day late on a small credit card can have a significant negative impact on your credit score.  Sign up to have the minimum payment automatically deducted on the due date to ensure that no matter when your "real" payment gets there, you have at least paid your minimum on time every month.
• Don't co-sign loans!  Remember that their late payment becomes your late payment.  No exceptions, no do-overs.
• Don't open new accounts unless absolutely necessary.  Inquiries may or may not affect your score depending on the rest of your credit history.  There are two types of inquiries: hard or soft.  A "hard" inquiry is when your full credit file is pulled, as when you try to open a new credit card.  A "soft" inquiry is when you pull your own credit score.  Fortunately, multiple credit inquiries from mortgage companies or auto loans within a 14 day period will not hurt your score, so you can shop around.  Just be careful where you do this- online mortgage companies are reportedly not the way to go.
• In related news... Department Store Credit Cards hurt your credit!  It can be so tempting to "save 10% all day today".  However, the credit is only good in that particular store, so it isn't good for your overall rating.
• Report Fraud Immediately!  If you are a victim of fraud, contact the credit bureaus, your credit card companies, banks and the FTC at http://www.ftc.gov/
• Monitor your credit.  Order a FREE copy of your credit report once a year at http://www.annualcreditreport.com/  This site will not require you to sign up for paid service.
• If you are planning on refinancing or buying a home, do not make any purchases or runup the balances on your cards.  Wait until you move in to buy that furniture, carpet, appliances, etc.

What Goes into Your Credit Score?

It seems like some kind of mystery.  How DO they figure out your credit score anyway?  Until recently, the calculations were fairly well guarded.  Yesterday, I took a class that gave an estimate of how it is figured. 
Being the mommy of a 9 year old, and a former teacher, I like to advocate SHARING!  So, here it is:

Payment History= 35%

• Pay your accounts ON TIME, even if it is only the minimum.  You can usually sign up to pay the minimum automatically online.  This ensures that a payment is recorded on time every month, even if you still mail paper payments of any amount.  Most of us have experienced going out of town and forgetting to mail your bills...  this takes care of those "oops" moments.
• Length of Positive Credit History. The longer you have your credit and pay it on time, the better
• Severity and Quantity of Delinquencies. 

Amount Owed= 30%

• Quantity of Credit Accounts.  Too many credit cards with balances can lower your score.

Length of Credit History= 15%

• The longer the better
• How long have your credit accounts been established?  It can take 6 months to a year to establish a payment history on a new credit card.  Until that time, it is a negative against your credit history because it is unestablished.
• How long has it been since you've used your accounts?  If you have many cards that you never use, this can count against you.  Unfortunately, suddenly closing a bunch of accounts is not a good idea either.  Ultimately, you should have 3 cards that you use, and pay, regularly.

New Credit= 10%

• Opening several credit accounts in a short period of time is a greater risk- especially if you have not established a credit history.

Types of Credit in Use/Having a Healthy Mix= 10%

• 2 Intallment Loans (eg. Car payments)
• 3 revolving Credit Accounts with balances
• Balances on revolving debt below 30% of the high credit (credit limit)
• No collection accounts
• No public records
• No foreclosures
• No late payments

Coming Next:  Tipping the Scales in YOUR Favor

Funnin' with the Numbers: what does "Months of Inventory"(MOI) mean?

I just read the simplest description yet for Months of Inventory.  So, here we go:

Months of Inventory are figured out when you find out how many homes sold in the last 12 month period and compare it to how many homes are actively on the market today.  If nothing else came on the market, the Months of Inventory are how long it would take for the current number of homes to be purchased, based of the prior year's activity. 

A "normal" housing market is defined as six months of inventory.  When the number is LESS than 6 months, the sellers have the advantage.  There are more buyers out there than there is inventory.  When the number is MORE than 6 months, it is a buyer's advantage market.  There is too much inventory for the number of buyers available.

So, where does Henderson stand?  Overall, the Henderson, CO, market is at 3.6 Months of Inventory.  Sounds really great if you are going to be selling.  But HOLD ON!

The numbers should be broken down further to make more sense.  To truly get a feel for whether now is the time to list your Henderson home, it makes sense to analyze how these break out:

Price Category:      Num Sold:     % of Sales:     Num Active:          MOI:
<85K                        0                     0                    0                    0
85K-135K                   1                     .8%                0                    0
135K-210K                55                   43.7%            11                   2.4
210K-315K                66                   52.4%            17                   3.1
315K-460K                 4                    3.1%               6                    18
460K +                       0                      0                    4                      *

For those homes listed above 460K, time will tell how quickly they sell. 

It is safe to say that if you are thinking of selling your home at a listing price between 135K and 315K, this is your market.  With such low supply, buyers are going to be anxious to purchase houses at this price level.

Be sure to consult with a REALTOR to find out what your most likely sold price will be!

If you are looking to upgrade, now may be the best time yet!  If you have a house to sell in that price range and are looking to buy a bigger, fancier, or better house...  as long as you can get the loan, these properties are a steal!

You can see what's available in any price range by visiting my website: http://www.jprestwich.yourcastle.org/