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

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.

Bank Reposessions Reach Record Levels For The Second Straight Month

According to foreclosure-tracking firm RealtyTrac.com, 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.

Conforming Loan Costs Are Rising, Says Freddie Mac

Mortgage 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.

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.

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.

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.

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.