Nov 30

Money Magazine - Bad Advice for Buyers

Denver Real Estate, General Interest 2 Comments »

I spent some timing being a good little consumer down at Barnes and Noble catching up on all the magazines I can’t afford to have delivered to my door. 

My eye was drawn to the Best Ideas of 2007 Article in Money Magazine.  The section with advice for buyers could not have been more inaccurate.  While I’m not in the habit of writing long winded letters to editors.  I couldn’t help myself.  Below is my email to the editor…I deleted the name of the Broker in question in the interest of not ‘throwing him under the bus’ directly. Follow the link to see who it was and we’ll see if there is a correction in an upcoming magazine.  For now, we’ll call him Uncle Frank.  We all know that you have an Uncle Frank that has a tendency to exaggerate. 

Written at 1 in the morning, this is probably not my best work and wrought with error but you’ll get the point.

To whom it may concern,
        

I wanted to let you know that I really appreciated this months Money Magazine article for best ideas of 2007.  For the most part I found it very accurate especially the advice for Sellers.  The advice for buyers section struck me as rather off base from my experience as a Realtor and so I decided to do a little research.
        

There is no way UNCLE FRANK is getting 15% below the list price for his clients.
    As a Denver Realtor, I have access to the local MLS statistics that I check regularly with religious fervor.  Knowing what is going on in the market is extremely important.  Among the things I check on a regular basis for each area is the separation between what a house is finally offered at on the MLS and what the ‘net to seller’ offer is.  As a general rule for most areas of Denver, the net offer price is within 1-5% of the listing price.  So needless to say,  the claim that he was getting his clients 15% has to raise an eye brow. 
       

    Metrolist that runs the primary MLS for Denver requires that statistics be recorded for property sales.  Usually the agent the is representing the buyer is recorded along with this.  As a rule, Realtors should not openly criticize other Realtors.  So, for the record, I imagine the 15% was a typo.
        

UNCLE FRANK is showing 7 purchases between 235K and 340K over the last 365 days.  The average Sold price to List Price is only 98.18%.  The net price to list price is 97.13%.  So his clients on average were getting about 1% in concessions (some got none) and the offer was usually within 2% of the final list price. The only thing approaching 10% was the net sold price to the original list price.  That was showing as 91% of the list price. Read the rest of this entry »

Nov 30

Refinance your Adjustable Rate Mortgage (ARM) now!

Denver Real Estate, General Interest No Comments »

You’ll Be Sooorrrryyy. 

Nothing sells something faster than striking fear into the consumers hearts. 

They’ll make fun of you at school wearing that.

Your compact car isn’t safe as long as SUV’s are on the road.

Your computer will not be able to run the new Windows Vista Operating system.

The many media outlets love to make you shiver with the cold thought that you are unattractive, unprepared, undereducated, and about to lose all your money. 

What you say?…”Shouldn’t I fear losing my money?”

Of course you should but let’s be reasonable.  First of all, don’t believe the hype.  I got a letter from my lender today letting me know that rates are going sky high and I should lock in to a fixed rate now.  Assuming my lender has my best interest at heart, I should move forward with this quickly.  But I ask myself,  “Self?, Remember when the lender was charging you all those silly little fees to process your loan just so they could lend you their money which they charge you interest on?” 

Come to think of it, why would a lender be trying to convice you that your ARM was going up.  I understand why the starving mortgage brokers out there would do this but not lenders.  Unless of course the lenders themselves felt rates were going to go down and wanted to lock me in now to a fixed rate.   Hmm..

Nov 28

Thanks to Blogs

General Interest, Personal No Comments »

I have a new respect for blogs and the resources available for them.  In setting up my blog on my 1and1 host, I found that I knew very little about how it all worked.  Of course, I started searching the internet for solutions to each little problem.  I found the answers in the form of blogs & forums of user generated content strewn across the internet and buried in blogs.  I suppose I should be thanking Google and Yahoo for finding it, but they didn’t write those tasty little help tidbits.

 And of course, I have to thank the creators and contributers of the Wordpress movement.

Nov 28

Market Timing in Real Estate - What’s happening with home prices.

Business, Denver Real Estate No Comments »

Existing home sales rise, prices fall. - Yahoo!

With home prices expected to fall in most major cities, many buyers continue to wait on the sidelines.  Many sellers are waiting to sell their homes to make sure they can hit the home price peak while buyers wait for better interest rates and home prices to fall.  Reluctantly, prices are edging down as buyers are waiting out the sellers.   What motivates this mentality and is it well founded? 

 What is a little confusing is that homeowners are also holding back selling their homes even when they’re planning to just upsize in the same neighborhoods.  When a seller will become a buyer in the same market, it doesn’t matter if a neighborhood has appreciated or depreciated.  The home they are buying will be experiencing the same issues.  Timing the real estate market in this manner is not as effective as selling in Spring and buying in Fall or Winter. 

    It’s understandable that first time home buyers would approach any purchase with caution.  Since they must compare their current cost of living to the increased cost of home ownership.  The X Factor in that equation is the increased value of home ownership which varies greatly for every nook and cranny of a city.  The real motivating factors behind all home appreciation is the quality of the housing stock combined with the growth of the local economy.  For example, it’s easy to understand why home prices hit a slump when rental prices don’t keep pace with the monthly cost of a home purchase.  The cost to purchase will always be higher than renting.  The value of homes is more closely related to local market conditions and what’s going on with employment in the city where you live than anything else.  Buyers and Realtors do well to consider an areas median income when determining if a market is becoming overextended as historical averages suggest a relationship between the two.  This makes sense since if the local population can’t support the home price to purchase or rent, where is the money coming from?

Many of the areas that had experienced extensive growth in home values had been historically depressed.  This being said, the question should be asked how much of the growth was normalization to reflect the local economy.  Studying the relationships here will give a clue to how long a slow down should last.

  

Nov 28

Why Blog?

General Interest No Comments »

It appears that everyone has indeed found their voice.  Every person with access to the internet can speak freely without fear.  Their thoughts put to screen ready to be immortalized in the memory banks of a thousand servers.  With this amazing growth of free speech comes the thought that not all of it is worth spending your valuable free time browsing the internet for.  This site is intended to begin sorting thru the clutter coming from the internet soapbox and place it into pleasant easy to swallow, twice a day tablets. 

If anyone wishes to become a contributer to the site.  Please feel free to contact me. In the mean time, I’ll start discussing the what’s and why’s of all the little things you missed from the best blogs, TV, Video, and news sources around.    Oh, and feel free to comment on anything you see here.Â