Friday, January 16, 2009

"I Can't Believe It Is This Hard To Buy A Home With Cash"

During a closing I had this week my buyer actually said "I Can't Believe It Is This Hard To Buy A Home For Cash". The buyer was buying the property for cash and could not imagine how difficult the process was to finally get to the closing table.

The problems were sure not on our end of the transaction but rather on the seller's end. You see, the seller was not making payments on the property any longer. Neither the 1st mortgage lender nor the 2nd mortgage lender were in too big of a hurry to send their borrower (the seller) the official Notice of Election and Demand that would start the foreclosure process. So, we ended up writing a purchase contract that required a "Short Sale" Addendum. This also required both existing lenders who were taking substantial losses to provide written notice that they would allow the "Short Sale" to occur. They basically had to put into writing their agreement to accept considerably less at our closing than their promissory notes were written for.

Today, lenders REO (Real Estate Owned) departments are so over worked that they get around to contracts like ours whenever they can. I this example, it took them over 60 days from the day we wrote the offer on the seller's property to get around to responding in writing that they would allow our closing to happen.

Technically, my buyer and the seller never did have an enforceable contract all the way to the closing. The Short Sale Addendum requires the lender(s) to provide written notice of their acceptance of the purchase price and the resulting short payment of their loan(s) in order for the contract to be in force.

The real problem with my buyer was that he was trying to move his family back to Denver from Mexico. He continuously asked me if me if it was save to make the move. I had to answer him every time with "I really don't know. It looks favorable, but we still do not have the required signatures from the two existing lenders"

We did finally close, but not until the buyer was quite frustrated with the home buying process that now is standard operating procedure when a home is going through a "Short Sale".

Tuesday, January 13, 2009

Do You Need A Moving Company?

GREAT, you sold your home! . . . Congratulations. One of the next steps you will need to take is to hire a good moving company. This may sound easy enough but you want to make sure you get a reputable company who won’t scam you or take any belongings.

Yes, there are moving companies that will load up your belongings and hold everything hostage to get more money for their services because of excessive weight or time required to pack their truck. You can minimize your risks by signing a contract several weeks in advance of your moving day. A client of mine just used a moving company that presented a contract their attorneys prepared just as they showed up with the truck on moving day. My client quickly signed without really reading the agreement, but sure became educated by the end of the day and later on too when the moving company would not reimburse for damages they caused to the furniture.

The first scam was to say they could not get everything on the truck so they would need more money to finish the move since a second trip required extra crew & truck time. (The owner of the company bid the job two weeks before the move to confirm the size of truck they need. My client was required to pay for their mistake in estimating the move - or, I guess, not get all of their furnature delivered.)

To make matters worse: He felt bad for the crew who worked so hard to move everything, he not only bought the entire crew a very nice lunch, he also tipped them quite well only to learn about the second surprise. My client discovered two rolls of stamps were missing from his desk drawer a few days after the move. I guess one of the movers decided he was entitled to a little extra tip.

When furniture damage was discovered the day after the move, the moving company owner referenced the signed agreement saying the company was only responsible for Penny's on a dollar for the repair/replacement; based on the weight of the item damaged not the actual cost to repair or replace the items. Needless to say, my client is much wiser now on what to watch out for.

Here are some tips about finding a quality moving company:
1. Ask around for the name of reputable company. Word of mouth is and excellent way to find a good moving company. Ask family, neighbors, friends or your real estate agent.

2. Make sure you sign a contract - only after you have had a chance to read it thoroughly - well in advance of your move date.
- be sure you know exactly how much you will be paying and what services you are receiving and not receiving.
- be sure to discuss the section regarding their claims policy.

3. Ask a lot of questions.
- You are hiring these people to move your personal belongings, ask every question you need to in order to get a feel for what type of company they are.

4. Get more than one estimate.
- Not only will this help you find the best deal but it can also help you detect a scam. If one estimate is very low compared to the others, it probably is too good to be true.

Here are some helpful websites that can make your move a smooth one:

– This will show you bad moving companies and also moving companies with good reputations. Moving Company Scams

– This will show you if your movers have a current license. Movers

– One last tip: Hide your stamps

Monday, January 12, 2009

Latest MLS Information For Denver Sales

The December and the 2008 year-to-date Denver area MLS statistics are out.
The total residential homes actively on the market for December 08 was 14,995 as compared to 18,709 homes on the market in December of 2007; a decline of 19.9%
Similarly, Condominiums & townhouse inventory throughout metro Denver fell from 5,894 during December of 2007 to only 4,606 in December of 2008. A 21.9% reduction in available inventory.

Watch out for what SOLD STATISTICS are really saying:
Although the average sales price throughout Denver appears to be dropping in most of the following areas, it is not a true picture of what is really happening. The Denver market is experiencing a significant number of bank owned properties being purchased individuals and investors as compared to the higher end closing in our market. Nearly 50% of the recent closings are in the price range below $150,000. This has drastically dropped the AVERAGE sales price of homes and therefore does not truly represent a the PERCENTAGE of decline in the market value of homes throughout metro Denver. The statistics are skewed drastically toward the lower end of our market. Although the average sales price of homes being sold throughout Denver has dropped, the actual market values of individual neighborhoods and homes has not dropped anywhere near the figures being reported.

Once again, I would like to thank the professionals at Land Title Guarantee Company, for providing the latest MLS number of closed homes sales, number of closed sales year to date, average day on market, number of active listings, number of new listings, absorption rate in months and average price sold within each area of Metro Denver.

Total MLS All Metrolist Areas as one download Aurora North (AUN)

Aurora South (AUS) Brighton, Fort Lupton (BFL)
Broomfield (BRM) Douglas County West (DCW)
Douglas Elbert Parker (DEP)
Douglas Highlands Ranch Lone Tree (DHL)
Denver Northeast (DNE)
Denver Northwest (DNW)
Denver Southeast (DSE)
Denver Southwest (DSW)
Downtown Denver (DTD)
East Suburban North (ESN)
East Suburban South (ESS)
Jefferson County Central (JFC)
Jefferson County North (JFN)
Jefferson County South (JFS)
Jefferson County West (JFW)
Jefferson County Northcentral (JNC)
Jefferson County Southcentral (JSC)
Lafayette (LAF) Mountain Clear Creek (MCC)
Mountain Conifer Pine (MCP)
Mountain Evergreen North (MEN)
Mountain Evergreen South (MES)
Mountain Gilpin County (MGC)
Mountain Jefferson County (MJC)
Mountain Jefferson North (MJN)
Mountain Jefferson South (MJS)
Mountain Park County (MPC)
Mountain Park East (MPE)
North Northeast Suburban (NNE)
North Northwest Suburban (NNW)
North Suburban Central (NSC)
North Suburban East (NSE)
North Suburban West (NSW)
South Suburban Central (SSC)
South Suburban East (SSE)
Superior (SUP)
The above links will automatically up-date themselves during the first week of each month when new numbers are posted. So, if you are interested in saving any one months information, you might want to either save a PDF version on your computer or print out the links that are of interest to you.

Is Your Home An Energy Hog?

Most of my clients who are purchasing a home do not take into consideration the additional costs their energy bill will add each month. There are certain ways to tell if your potential new home will cost you more than you planned for in energy bills.

*If the home has an older heating and/or cooling system, this will cost you more than a newer one since newer systems that are more efficient. Before buying a home, you might want to see the current owner’s power bills to get a feel for what you will likely be paying. Throughout most of metro Denver, you can call Xcel Energy at 1-800-895-4999. They will give you the high, low and average gas and electric bill of any property they service.

*Ask your home inspector to verify the insulation R value of the home you are interested in purchasing. (R-value measures insulation's resistance to heat flow.) Some Denver area home inspectors and insulation contractors use a special thermal imaging camera to detect where the house is losing heat. This can show you where improvement in the insulation should be made. If your home inspector does not offer this service, he can refer you to a company who does.

*If you are buying a home in Denver, it may be wise to purchase a home that faces or backs to the south. More window space is available to heat your home for free. The disadvantage of this is that summer sun will add extra heat to the home.

*If the home has a dark colored roof, more heat is attracted to heat your home. The trade-off here is that the summer sun will make the home hotter therefore requiring more energy to cool. If you have a dark colored roof it would be quite advantageous to install a whole house attic fan or even better yet a solar attic fan that turns on automatically with solar power to circulate hot air out of the attic area.