Vacancy Rates Low - Rents Are Up - Investors Are Buying

For the first time in many years, landlords are happy. Many are even buying rental properties that "cash flow" the day they close on them. This generally has not been the case with investors in past years.

The forth quarter 07 vacancy rate for apartment buildings in Denver was 6.1%; the lowest it has been since 2001 according to a recent Denver Post article. Investors nationwide are targeting Denver to purchase rental properties since they believe the Denver rental market will be strong for the next three to five years.

Rental vacancy rates of single family homes in the metro Denver area range from just below 4.0% to around 9%. Vacancy rates have not been this low since 2001.

I have been helping buyers and sellers with their housing needs for the past 30 years. I look forward to assisting you. Feel free to call or email me. - Bill Kosena, ABR, CRS, SRES -303-796-0957.

Mysterious Real Estate Closing Costs

Buyers and sellers have told me they really do not fully understand why there are so many fees associated with the closing on their home. To make matters worse, most title insurance closing agents quickly read each line of the buyer's and seller's settlement statement and offer little to no explanation as to why each line item appears.

Certain fees are automatically assigned to either the buyer or the seller while other costs are dictated by local custom. Many of the closing fees are actually totally negotiable at the time of contracting if your agent is persuasive enough in writing and presenting your contract - or if you are selling, your agent is a better negotiator than the buyer's agent.

Possible Negotiable Items include nearly all of the following:

Customary buyer closing costs include:
• The down payment (the difference between the purchase price and the loan amount)
• Loan discount points
• Loan application fee
• Loan processing fee
• Loan underwriting fee
• Loan recording fees
• Lender administrative fee
• Buyer's credit report
• Prepaid interest from the date of closing through the end of the month
• Home inspection fees
• Homeowner’s association transfer fee
• Appraisal fee
• Homeowner's hazard insurance
• Title insurance company closing fee
• Mortgagee's title insurance
• Documentary stamps fee
• Prepaid property taxes
• Flood insurance certification
• Broker administrative fee
• Warranty deed recording fee
• Title insurance company endorsement fees
• HOA document retrieval fee
• County tax report fee
• Aggregate Accounting Adjustment
• Survey or ILC fee
When a buyer applies for a loan, lenders are required to provide a good-faith estimate of the expected closing costs. The lender's fees vary according to several factors, including the type of loan requested.

Customary Seller's closing costs include:
• Outstanding balance on the loan(s)
• Listing and selling broker's commission
• Transfer taxes
• Release of deed of trust fee
• Title insurance premium
• Title insurance company closing fee
• Unpaid Property taxes
• Water escrow for unpaid water
• Over night courier fee
• Release tracking Fee
• Homeowner's associations Special assessments
• County special assessments

At the closing, certain costs are often prorated (or distributed) between buyer and seller. The most common item is property taxes. This is because property taxes are not paid until the year following the tax year. So, if a home is sold on August 31st, that year's tax bill is not assessed until the following year. Therefore taxes are typically prorated using the prior year's (or most recent) county assessment and mill levy figures to project the current years taxes for closing.

Needless to say, fully understanding and negotiating the various closing fees can be financially rewarding. The easiest way to be successful in this process is to use the services of very seasoned professionals.

I have been helping buyers and sellers with their housing needs for the past 30 years. I look forward to assisting you. Feel free to call or email me. - Bill Kosena, ABR, CRS, SRES -303-796-0957

Where Should I Consider Buying Lots To Scrape And Build?

Within the last week two builders have ask me what area in the Denver are prime to scrape and build new homes. One builder asked me specifically about the Athmar Park neighborhood.

My response follows:
After selling homes throughout the Metro Denver area for the past 30 years, I have learned it is always a safe bet to go where people are spending money. Specifically, regarding one builder's question about considering the Athmar Park area, I suggested to only consider purchasing property in subdivisions that have shown a strong interest by other builders - and buyers. Lots may be available for less money in the Athmar Park area today. BUT, it may take an unreasonable amount of time for a buyer to show interest in being one of the first in the area to purchase a more expensive home in the area. In today's very tight real estate market, that is an intelligent risk.

Athmar Park is experiencing a very high rate of foreclosure actions. (See Jan. 22 Blog below for link to interactive foreclosure map.) A high foreclosure rate does not indicate a strong area for builder speculation in the near future.

It is always safer to follow other money into a subdivision than it is to be the leader. Let me know if you would like more specific statistics on foreclosures by neighborhood. I would be happy to assist you.

I advised both builders to consider other areas of town right now. Very strong buyer demand has been achieved on the north side of Eisenhower Park and the Cory/Merrill subdivision. Other areas to consider would be University Park, Hilltop and Observatory Park if a builder's development budget allows an $800,000 plus range for a finished home. Many other builders have already achieved success in these areas so it is a good bet these builders will too.

I have been helping buyers and sellers with their housing needs for the past 30 years. I look forward to assisting you. Feel free to call or email me.

Bill Kosena, ABR, CRS, SRES -303-796-0957.

MOLD - Is It In Your Home?

The most frequent real estate lawsuit in America today involves MOLD in homes. In past years top legal action was against home owners for such things as asbestos, formaldehyde foam insulation and radon. With mold becoming such an issue, it is probably a good idea if you had your home check for mold. You also really should consider having a qualified inspector check and possibly test for mold prior to purchasing a new residence. I would be happy to pass along the names of some home inspectors if you contact me.

An article I wrote many years ago titled MOLD MOLD MOLD. . . ANY YOU goes into much more detail on the various types of mold, how to obtain mold testing kits that you can use yourself as well as useful links to helpful EPA web sites.

Here are some interesting facts about mold:

Over 69,000 mold species have been identified
More are discovered every day- evolution
Molds generally need three components in order to thrive:
- Water
- Food Source
- Lack of natural light (UV rays)

Mold flourish best in:
- Temperature range of 40° - 100°F
- Relative humidity greater than 60% but mold can start growing with 50% relative humidity.

TOXIC vs. NONTOXIC (allergenic)

The entire area of mold toxicity is the subject of highly charged debate among Industrial Hygienists and other IAQ experts.

There are several basic types of mold (various species and sub-species) have exhibited toxic reactions in humans- some examples include:

Stachybotrys - a mycotoxin - producing mold species
Aspergillus/Penicillium - may cause infections
Fusarium - may cause infections
Claudosporium - most common outdoor fungus

Mold Exposure

Any type of mold can be allergenic, particularly in susceptible individuals. They may cause a variety of allergic histamine reactions such as:

Coughing
Sneezing
Runny Nose
Itching eyes
Headaches
Asthma episodes may be triggered
Chronis exposure can suppress the immune system

The stereotypic "toxic mold" is Stachybotrys (a very unique mold)
Mycotoxins may cause acute/immediate reactions such as:

Nasal/Sinus "Pressure"
Headaches
Fatigue
Mild Fever
Chills
Nausea
Paralysis ( in particularly sensitive individuals)

Chronic/Long-Term Reactions may include:

Severe headaches- including migraines
Short-term memory loss
Immunosuppressive infections- including bone or tooth infections
Liver damage
Often gender-specific

As you can see, mold can be quite an issue for you or other family members. If you would like to discuss mold issues or be referred to mold testing or mold mitigation experts, please feel free to contact me.

I have been helping buyers and sellers with their housing needs for the past 30 years. I look forward to assisting you. Feel free to call or email me. - Bill Kosena, ABR, CRS, SRES -303-796-0957.

Disclose or Not Disclose

A few days ago a Realtor from another brokerage company called me to ask my opinion on what his seller needs to disclose on our Colorado Seller's Property Disclosure form. He was specifically asking about carpet that was under a runner by the back door of the home. Apparently the sun has somewhat faded the carpet in the room but the carpet under the runner was much darker since it has never been exposed to the sun.

So, what do you think? Should the seller disclose the carpet condition to perspective buyers? Or do you think it is not a big deal one way or the other? Some brokers and sellers would think the buyer's home inspector will find the carpet condition and it is therefore not worth mentioning.

Another way of looking at the situation is that the faded carpet condition is not a material item like a flooded basement or a fire in the attic would be so it does not need to be disclosed.

So, what is the right answer? - What do you think?

The answer I gave to the other broker is probably quite different than you or the other broker expected. My answer was that the non faded portion of the carpet below the runner did not need to be disclosed on the Seller's Property Disclosure BECAUSE to most effectively market the home in our very difficult market, the seller actually only has one option. That is to replace the carpet. The home is nearly not capable of selling at all with any defects present. There are just too many homes on the market today for all of them to sell. We probably have ten buyers in any given price range for every twenty listings in that price range. So, buyers today can be very demanding - or should I say selective. Homes that have anything wrong with them just get passes over.

The issue of faded carpet is a property defect just like a dented fender on a car would be to a car dealership. When was the last time you ever saw a damaged car on a car dealer's lot. They know that a damaged car basically has no chance of selling. The damage must be repaired in order for the car to sell. Selling a home in today's very strong "buyers market" is no different.

If the seller did not want to replace the carpet, I personally would then disclose the two tone carpet condition in the Seller's Property Disclosure. I would also be sure the sellers knew that their chances of selling the home without replacing the carpet or at least crediting the buyer money to buy replacement carpet after closing would be very unlikely.

I have been helping buyers and sellers with their housing needs for the past 30 years. I look forward to assisting you. Feel free to call or email me. - Bill Kosena, ABR, CRS, SRES -303-796-0957.

I have been helping buyers and sellers with their housing needs for the past 30 years. I look forward to assisting you. Feel free to call or email me.
Bill Kosena, ABR, CRS, SRES -303-796-0957.

Interactive Denver Subdivision Map - Appreciation, Price, Days On Market

If you are interested in learning more about the Denver housing market be sure to check out the Interactive Denver Subdivision Map provided by the Denver Post. You can click on the various subdivisions throughout Metro Denver and gain a wealth of general information from percent of price change, price range of the subdivision to recent appreciation or depreciation of that area, average days on market to sell a home, percent of homes in foreclosure and more...

For example - The Top Ten Appreciating Denver Neighborhoods Are:
1. Goldsmith - 36.6%
2. Hilltop - 24.4%
3. Jefferson Park - 24.0%
4. University Park - 23.9%
5. Apple Meadows - 20.3%
6. Wellshire - 20.2%
7. Aspen Creek - 19.9%
8. Martindale - 19.7%
9. Metzler Ranch - 18.4%
10. Hidden Lake - 17.9%

If you are seriously considering purchasing a home or selling one, you should get more specific assistance. A professional appraiser or seasoned Realtor® would be able to provide you with most current and specifically applicable information for your situation.

Feel free to call or email me to discuss all of your real estate needs. I have been helping buyers and sellers with their housing needs for the past 30 years.

Bill Kosena, ABR, CRS, SRES -303-796-0957.

Disclose or Not Disclose

What Needs To Be Disclosed In A Real Estate Transaction?
I had another Realtor call me today to ask if his client should disclose a defect within the home on the Colorado Seller's Property Disclosure form that will eventually be viewed and signed by the buyer(s) of the property. The possible defect is the fact that the seller placed a runner on top of the regular carpet in a room. Over the years sun light has faded the room carpet, but not the darker carpet under the runner.

So, the question is:
If you were the seller, would you think you should disclose the difference in carpet color to a perspective buyer? OK - what you were the buyer of the property? Do you think the difference in the carpet color should be disclosed on the Seller's Property Disclosure form or that disclosing is just a bit past reasonable?

My recommendation to the other broker will be posted in a couple of days.

I have been helping buyers and sellers with their housing needs for the past 30 years. I look forward to assisting you. Feel free to call or email me. - Bill Kosena, ABR, CRS, SRES - 303-796-0957.

THE DENVER REAL ESTATE BLOG

Welcome to The Denver Real Estate blog! I hope you enjoy reading the latest real estate news happening and affecting the metro Denver Real Estate Market.

I have been helping buyers and sellers with their housing needs for the past 30 years. It would be my sincere pleasure to answer any questions you may have. I look forward to assisting you. Feel free to call or email me.

Bill Kosena - 303-796-0957

Posted by Bill Kosena, ABR, CRS, SRES