Zach Otten Metro-Denver Real Estate Blog

Positive Colorado News – October 2009

Zach Otten Metro-Denver Real Estate Blog — Tue, 20 Oct 2009 23:15:54 +0000

Forbes Ranked Colorado Fourth Best State for Business: Forbes.com’s latest ranking of the best states for business ranks Colorado at No. 4, up from No. 6 last year. The ranking measures six categories for businesses: costs, labor supply, regulatory environment, current economic climate, growth prospects and quality of life. Colorado finished in the top 15 in four of the six main categories, including quality of its workforce (1st), prospects for growth (2nd), and economic climate. read more here

Denver Home Prices Rise Again, Getting Closer to 2008 Levels: Home prices in the Denver area rose in July for the fifth straight month, and prices are creeping closer to where they were a year ago, according to Standard & Poor’s closely watched S&P/Case-Shiller Home Prices Index. read more here

Vestas Hiring Workers for Brighton Plant, Plans Job Fair: Vestas Nacelles America Inc. is recruiting workers for its planned Brighton wind-power factory and will hold a career fair Thursday. Vestas announced last year it will build a $290 million plant in Brighton for assembling wind-turbine nacelles and making blades. The facility is expected to be in operation by next year. The blade factory will employ about 650 people and the nacelle plant will have about 700 employees, Vestas has said. read more here

Record Streak Continues for Pending Home Sales: Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to the National Association of Realtors®.Lawrence Yun, NAR chief economist, said the housing market momentum has clearly turned for the better. “The recovery is broad-based across many parts of the country. Housing affordability has been at record highs this year with the added stimulus of a first-time buyer tax credit,” he said. read more here

Colorado Mortgage Rates Hit 4.9%, Lowest in Months: Mortgage rates in Colorado dipped to 4.9 percent Tuesday September 29^th, their lowest level in several months, and were headed lower Wednesday, Zillow Mortgage Marketplace reported. Local rates for 30-year-fixed mortgages topped 5.3 percent in early August and have been heading more or less downward ever since, according to Zillow data. read more here

Is the Vail Valley Economy Starting to Rebound? The Vail Valley’s giddy boom days of 2007 are long past, but there may be some signs the local economy is starting to show some signs of life. read more here

Denver No. 7 as Youth Magnet: The Wall Street Journal enlisted the help of six experts to determine the 10 most attractive cities that for attracting young professionals, and profiled the top 5. Denver ranked No. 7. read more here

Positive News Colorado – September 2009

Zach Otten Metro-Denver Real Estate Blog — Mon, 28 Sep 2009 18:53:32 +0000

Tired of hearing all the negative press coverage. Jim Renshaw of Land Title was. So he created the “Positive Perspecitve” newsletter. He sends out the letter once a month with all the positive news stories that relate to Colorado! Below are the links:

CNBC Rates Colorado #3 in America’s Top States for Doing Business: read more here

ABC News Rates Boulder as a Top 10 Place to Sell a Home in the Nation: Median Home Value: $ 318,900, up 2 percent from a year ago. Property values are up 2 percent compared with five years ago. 61 percent of homes are increasing in value 85 percent of homes were sold for a gain. read more here

America’s Strongest Housing Markets – Boulder #1: Working with data from Zillow.com, BusinessWeek came up with the strongest housing markets by ranking metro areas based on the share of single-family homes for which values rose in the second quarter, compared with the second quarter of 2008. In the top-ranked metro, Boulder, an affluent Denver city that is home to the University of Colorado at Boulder, 59.39% of homes appreciated during the past year, and the median home value rose 2.12% on a year-over-year basis. read more here

Denver makes list of ’10 Best Places to Grow Up: Good news if you’re looking to raise a family in Denver. The Mile High City is number 6 on the list of “America’s 10 Best Places to Grow Up.” read more here

Study: Colorado 11th in State ‘Economic Performance’: Colorado ranks 11th best among the states in an evaluation of economic performance by the Pacific Research Institute, a free-market think tank. The report, issued August 18th, rates the states using a variety of yardsticks, including gross domestic product, disposable income, private-sector job growth, the poverty and unemployment rates, and in- or out-migration. read more here

Vestas Backs its $1 Billion Worth of Wind Projects in Colorado: When Vestas Wind Systems A/S — the world’s largest maker of wind turbines — decided to build a factory in Colorado, one of the first things it did was send some local hires to Europe. read more here

Consumer Sentiment Improves More than Expected in August: Consumer sentiment rose more than expected in August and expectations hit the highest level since the recession began, indications that Americans’ pessimism about the economy may be lifting. read more here

Typical Colorado Closing Costs

Zach Otten Metro-Denver Real Estate Blog — Wed, 23 Sep 2009 15:31:57 +0000

First, what are closing costs? Closing costs are a variety of costs (fees, prepayments, and down-payment) that are required to transfer title from the seller to the buyer. I will break down how these fees are typically spread out below. Keep in mind when you are purchasing a home, condo, or townhouse that closing costs are typically between 3% to 5% of the sales price of the property. This 3 to 5% is in addition to the down-payment (typically 3.5% for a FHA loan and 20% for a conventional loan). For example, if you were to put down 3.5% for a down payment with a FHA loan, you would need an additional 3 to 5% for closing costs. However, you can always ask to split or have the seller pay for most of the closing costs! Also, keep in mind that closings are different in every state. Below are some typical closing costs for Denver Colorado:

Appraisal Fee: Can be paid by buyer or seller. Even if it is paid by seller, buyer typically pays the fees at the time of the appraisal and is reimbursed at the time of closing.

Brokerage Commission:This is a sellers expense 99.9% of the time. Seller typically pays both the listing agents commission and the buyer agents commission (co-op). Fees for the brokerage commission range depending on the brokerage firm and the specific real estate agent.

County Recording Fee: A fee the county collects for recording the documents.

Credit Report: Fee associated with lender pulling buyers credit score.

Discount Points: These are optional but paid by the buyer to the lender if buyer chooses to purchase them (you may ask for seller to pay for them). Points are charged by the lender to “buy down” the interest rate. One discount point equals one percent of the loan principal.

Document Preparation: This is part of a lenders fee to the buyer for handling the paperwork associated with the loan.

Home Inspection: *Note: This is not an actual closing fee because buyer pays for this before closing.* Home inspections are optional in Colorado, but are extremely valuable and should be done on EVERY transaction (even new homes).

Home Warranty: This is optional and may be paid for by buyer or seller. This is a warranty on major household items for a year after the purchase of the home.

Origination Fee: This is typically 1% of the loan amount and is paid for by the buyer. This is a lenders fee for originating the loan.

Pre-paid Items:

Loan Interest: Interest pre-paid from the date of closing to the end of the month.

Property (Homeowners) Insurance: A full year of property insurance is pre-paid at the time of closing.

Property Taxes: Buyer pays taxes into an escrow account for taxes at time of closing

HOA (homeowners Association Fees): Buyer pays a fee to equal the amount of time he/she is going to be in the home. For example, if the new buyer moved in on November 1 the new purchaser would pay for November and Decembers HOA dues.

Real Estate Closing Fee: This 175.00$ fee is typically split between the buyer and seller.

State Documentary Fee: A charge by the state of Colorado of one penny per thousand dollars.

Title Insurance: A fee for obtaining title insurance which is required by lenders.

Zach Otten

Metro-Denver Realtor, Keller Williams Executives

303-888-6101

www.zosellsdenver.com

Terms You Need to Know!

Zach Otten Metro-Denver Real Estate Blog — Sun, 06 Sep 2009 14:44:55 +0000

I hope everyone is having a great labor day weekend so far!

Below are some commonly used words in the real estate business. For example, its great for the average consumer to know what an ARM (Adjustable Rate Mortgage) is when a Realtor or lender mentions one. If you can think of other terms that you have a question on, please ask them in the comment section below and I will respond to them quickly.

Acceptance: the date when both parties, seller and buyer, have agreed to and completed signing and/or initialing the contract.

Adjustable Rate Mortgage (ARM): a mortgage that permits the lender to adjust the mortgage’s interest rate periodically on the basis of changes in a specified index. Interest rates may move up or down, as market conditions change.

Amortized Loan: a loan that is paid in equal installments during its term.

Appraisal: an estimate of real estate value, usually issued to standards of FHA, VA and FHMA. Recent comparable sales in the neighborhood is the most important factor in determining value

Appreciation: an increase in the value of a property due to changes in market conditions or other causes. The opposite of depreciation.

Assumable Mortgage: purchaser takes ownership to real estate encumbered by an existing mortgage and assumes responsibility as the guarantor for the unpaid balance of the mortgage.

Bill of Sale: document used to transfer title (ownership) of PERSONAL property.

Cloud on Title: any condition that affects the clear title to real property.

Consideration: anything of value to induce another to enter into a contract, i.e., money, services, a promise.

Deed: a written instrument, which when properly executed and delivered, conveys title to real property.

Discount Points: a loan fee charged by a lender of FHA, VA or conventional loans to increase the yield on the investment. One point = 1% of the loan amount.

Easement: the right to use the land of another.

Encumbrance: anything that burdens (limits) the title to property, such as a lien, easement, or restriction of any kind.

Equity: the value of real estate over and above the liens against it. It is obtained by subtracting the total liens from the value.

Escrow Payment: that portion of a mortgagor’s monthly payment held in trust by the lender to pay for taxes, hazard insurance and other items as they become due.

Fannie Mae: nickname for Federal National Mortgage Corporation (FNMA), a tax-paying corporation created by congress to support the secondary mortgages insured by FHA or guaranteed by VA, as well as conventional loans.

Federal Housing Administration (FHA): an agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting but does not lend money or plan or construct housing.

FHA Insured Mortgage: a mortgage under which the Federal Housing Administration insures loans made, according to its regulations.

Fixed Rate Mortgage: a loan that fixes the interest rate at a prescribed rate for the duration of the loan.

Foreclosure: procedure whereby property pledged as security for a debt is sold to pay the debt in the event of default.

Freddie Mac: nickname for Federal Home Loan Mortgage Corporation (FHLMC), a federally controlled and operated corporation to support the secondary mortgage market. It purchases and sells residential conventional home mortgages.

Graduated Payment Mortgage: any loan where the borrower pays a portion of the interest due each month during the first few years of the loan. The payment increases gradually during the first few years to the amount necessary to fully amortize the loan during its life.

Lease Purchase Agreement: buyer makes a deposit for future purchases of a property with the right to lease property in the interim.

Lease with Option: a contract, which gives one the right to lease property at a certain sum with the option to purchase at a future date.

Loan to Value Ratio (LTV): the ratio of the mortgage loan principal (amount borrowed) to the property’s appraised value (selling price). Example – on a $100,000 home, with a mortgage loan principal of $80,000 the loan to value ratio is 80%.

Mortgage: a legal document that pledges a property to the lender as security for payment of a debt.

Mortgage Insurance Premium (MIP): the amount paid by a mortgagor for mortgage insurance. This insurance protects the investor from possible loss in the event of a borrower’s default on a loan. This is for FHA backed loans and is paid at closing and throughout the life of the loan.

Note: a written promise to pay a certain amount of money

Origination Fee: a fee paid to a lender for services provided when granting a loan, usually a percentage of the face amount of the loan.

Private Mortgage Insurance (PMI): see Mortgage Insurance Premium. PMI is for conventional loans and is typically only paid until you have 20% equity in your home.

Second Mortgage / Second Deed of Trust / Junior Mortgage / Junior Lien: an additional loan imposed on a property with a first mortgage. Generally, a higher interest rate and shorter term than a “first” mortgage.

Settlement Statement (HUD-1): a financial statement rendered to the buyer and seller at the time of transfer of ownership, giving an account of all funds received or expended.

Severalty Ownership: ownership by one person only. Sole ownership.

Tenancy In Common: ownership by two or more persons who hold an undivided interest without right of survivorship. (In event of the death of one owner, his/her share will pass to his/her heirs.

Title Insurance: an insurance policy that protects the insured (buyer or lender) against loss arising from defects in the title.

Zach Otten

Metro-Denver Realtor, Keller Williams Executives

303-888-6101

www.zosellsdenver.com

Convential vs. FHA Financing (the basics)

Zach Otten Metro-Denver Real Estate Blog — Thu, 03 Sep 2009 22:04:03 +0000

So, which is “better” convential or FHA financing? Like many questions in life, the answer does not have a black and white answer. However, with the current state of the economy and the way lending institutions are being regulated, FHA is quickly becoming the first choice. I will give you a little information on both to help you decide which is better for you and your situation!

FHA (Federal Housing Administration) LOAN

Their are different types of FHA loans, but the most common is the 203 loan which requires a 3.5% down payment. It’s important to know that FHA is not the entity lending you the money. They just guarantee the loan to reduce the risk for the institution that is actually lending you the money. The reason many consumers are going the FHA route for a loan today is because FHA guidelines are not as strict as Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) guidelines (Fannie & Freddie will be discussed further in the conventional section). The largest drawback of FHA loans is the mortgage insurance premium. The borrower pays 1.5% of the loan amount at closing (i.e 200,000 loan x .015% = 3,000$ added to closing costs). On top of this fee at closing, the borrower pays a .5% annual renewal premium over the life of the loan. Overall, FHA loans are becoming more and more popular.

CONVENTIONAL

Many loans on the convential side have disappeared due to the collapse of the housing market. 100% financing and 80/20 loans are a thing of the past. For many conventional loans today, you must put down, at a minimum, 10% with most requiring 20% for a down payment. The first queston many people ask is, why would anyone get a conventional loan? Many consumers who are getting conventional loans today are either investors who can not qualify for FHA loans and buyers who want to avoid PMI (Private Mortgage Insurance). PMI insurance is much like the mortgage insurance premium with FHA. However, with PMI once a buyer reaches a certain threshold of equity in their home (usually 20)they no longer have to pay this PMI insurance. So if the borrower puts down 20% at closing, PMI is eliminated and the borrower never has to pay PMI. PMI insures the lender against default much like mortgage insurance premium covers lenders against default in FHA financing. Fannie Mae and Freddie Mac are the entities that purchase and securitize mortgages. Just like FHA secures an FHA loan, Fannie and Freddie do the same for conventional loans.

When you have specific questions regarding financing, its best to speak with a mortgage broker. For a referral of great brokers, contact me.

Zach Otten – Keller Williams Executives

303-888-6101

Working the Denver-Metr0 Area

Difference between REO, Bank Owned, & Short Sale

Zach Otten Metro-Denver Real Estate Blog — Wed, 02 Sep 2009 03:19:30 +0000

Consumers are hearing the terms every where! “Bank Owned (REO) properties and short sales are the only homes available these days!” But do you know what the terms mean?

To begin, bank owned or REO’s (Real Estate Owned) properties are the same thing (referred to in two different ways depending on who you are talking to). A bank owned (REO) propty is just what the name says, homes that have been foreclosed on and are now owned by the lender or bank. Many consumers associate a bank owned property with a property that is in “bad” shape. In many cases this is true. However, many bank owned properties are in very good shape and only require a few minor repairs and paint! When you put a contract on a bank owned home the seller is the bank or lender. Many people feel you can get a good deal on a REO because banks and lenders aren’t in the property management business and just want to get the property off their “books”. While this is the case in some instances, they still have a listing agent that is looking out for their best interest and want to walk away with as much money as possible. Overall, bank owned properties are very prevalent on the market and should be considered an option when you begin your home search!

A short sale on the other hand is when real estate is sold for LESS than what is owed to the lender. For example, lets say you bought your home in 2006 for 200,000$ and the home would only sell for 150,000$ today. The lender would have to approve the sale for 150,000$ because they would lose 50,000$ (200-150) on the sale. A short sale must be approved by the lender(s) before the property can be sold. This process can be very strenuous especially if the home has more than one mortgage (i.e. when a home has first mortgage for 100,000$ and second mortgage for 20,000$). The more parties involved the longer the process typically takes. If you are considering selling your home and you feel you may need to go the route of a short sale, please consult with your accountant for any tax issues you may face if you sell the home.

If you have any questions please feel free to ask in the coment section, email, or call me!

Zach Otten

303-888-6101

Keller Williams

Zach Otten Metro-Denver Real Estate Blog — Sat, 29 Aug 2009 15:28:41 +0000

Are you looking for a career change? Have you always wanted your own business? If so, call me to talk about a career in real estate with Keller Williams!

Zach

303-888-6101

My First Post!

Zach Otten Metro-Denver Real Estate Blog — Sat, 29 Aug 2009 03:13:45 +0000

Hello all!

I’m entering the blogging world for the first time! My goal with this blog is present the general public with valuable information regarding metro Denver real estate news and notes!

I plan on providing information on buying, selling, market statistics, real estate news, mortgage information, local government information (that may affect the real estate industry), local activities for the family, information on Keller Williams Realty, and much more!

I will be posting on a regular basis to keep all of you up to date on the local real estate market.

Remember, the nation may be in a real estate dive as a whole, that doesn’t necessarily mean your home has lost value!

Call me with any questions!

Zach Otten
303-888-6101
www.zosellsdenver.com
www.facebook.com/zachotten
www.twitter.com/zlax55

zotten@kw.com

Hello world!

Zach Otten Metro-Denver Real Estate Blog — Sat, 29 Aug 2009 02:53:17 +0000

Welcome to WordPress.com. This is your first post. Edit or delete it and start blogging!