How to Purchase a Foreclosure in Denver

Buying a foreclosure in Colorado is a little different. Instead of being handled by a judicial system, these sales are handled by public trustees.

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A lot of buyers in the marketplace want to purchase properties with equity. Today we are going to discuss how to do that in Denver, specifically when it comes to purchasing public trustee homes.

Colorado is a public trustee sale state. Unlike states like California and New York, where foreclosures are handled by the judicial system, ours are handled by a public trustee. That means the timeline is much faster.

Here’s what that process looks like in Arapahoe County. The lender will set the opening bid for the properties on Monday and make that public record around noon on the same day. On Wednesday morning, these properties will go into auction at 9 am.

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This is just one option you have.

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This leaves a very short window for you to do your due diligence. Sometimes these properties will be occupied, sometimes they will be vacant. Each scenario poses different challenges, so you want to make sure you’re making a good investment.

One of the biggest pitfalls I see people making is not doing their due diligence in regard to the home’s title. If you purchase a lien that you think is in first position, but it’s actually in second, you may have to pay off that first position lien in order to get that property. You can end up losing a lot of money this way. You should be somewhat versed in title details, or at least have a title rep who is.

This is just one option you have when you’re considering buying a home with equity. If you have any questions for me, don’t hesitate to reach out. I would love to set up a one-on-one strategy session with you to give you some more details. I hope to hear from you soon.

3 Ways to Find a Fix and Flip Property in Denver

When looking for a potential fix and flip property in Denver, you’ve got to be creative. This is a tough market, so you’ve got to explore every opportunity in looking for a deal.

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We’ve got three different strategies to share with you today about how you can find a property out there with instant equity. In today’s market, it can be tough to find a home with equity that is listed. Here are three ways you can find a home to fix, flip, and make some money off of.

1. Purchasing a property at a Public Trustee sale. If you’re purchasing a property at one of these sales, you have an opportunity to bid on the property directly. The opening bid will be set, then you have two days to do your due diligence and place your bid on the property at the Public Trustee's office. This can be a risky scenario, so you should look out to make sure you are buying a home that has a clean title.

2. Purchasing a property at a pre-foreclosure. Pre-foreclosures happen when a lender is made aware that a home is going to likely be forced into foreclosure. You can prospect for these properties by either door knocking or cold calling. We have some other great tips for doing this as well.

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Find homes that meet your parameters by searching online.

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3. Cold call a neighborhood. Find homes that meet your parameters by searching online for homes in a certain area that owe a certain amount in mortgage payments. You can get pretty detailed with the demographics and parameters you want to target in our system.

If you’re seriously interested in fixing and flipping a property, the most important thing to do is find a property with equity. If you’re willing to put in the work and hustle that most people won’t, you are going to succeed.

If you have any questions for us, don’t hesitate to reach out and give us a call or send us an email. We look forward to hearing from you.

What’s Happening in the Fall Real Estate Market?

The fall real estate market is here and it is a great time for Denver home buyers. Interest rates are low and market conditions are fantastic, partially thanks to Brexit.

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Why is now a great time to buy a home in Denver?

One reason is that interest rates are still incredibly low. When interest rates are low, homes are more affordable. Right now, interest rates are floating around 3.3%.

Interest rates are phenomenal and so are current market conditions. It is not always nice to take advantage of a neighbor’s mishaps, but in this case, everything that is happening with Brexit and the European Union has positively affected the economy here in the U.S.  Brexit has created an excellent opportunity for you to purchase real estate here in Denver.

Also, market trends show that the exact same thing has happened in the Denver market over the past three years: inventory slightly increases at this time of the year, but home prices go down. Sellers tend to take less than what they were asking for, which is completely opposite of the trends we saw in the market two or three months ago.

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In the fall, inventory goes up but home prices go down.

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If you got burned by the market a couple of months ago, now may be the perfect time for you to jump back in there and take another shot. You won’t be competing against as many other buyers; herd mentality causes more people to buy homes in the spring and summer. Go against the herd and jump into the market in the fall so you can take advantage of these phenomenal rates and find the perfect home for you.

If you have any other questions about the fall real estate market or about buying a home, give me a call or send me an email. I look forward to hearing from you!

How Can Appraisals Affect Your Denver Home Sale?

A question I get asked all the time by Denver sellers is, “Should I have an appraisal done before listing?” Today, I thought I would answer the question in detail.

Although I don’t think a pre-listing appraisal is a necessity, it’s definitely a good idea and it certainly won’t hurt to get a little more knowledge from a professional who is objectively valuing your property.

However, one thing to take into consideration when you're looking at the appraised value is that there is often a disconnect between that appraised value and a Denver home’s fair market value. The reason being that appraisers are only looking at historical and sold data as it relates to your property. They may be looking online at sold properties and only have pictures as their reference point. They don’t get to see the quality of the finishes or other different nuances. They also don’t take into account the lack of inventory or the competition currently on the market.

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The fair market value is what you really want to know.

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To get your fair market value, you’re better off talking to a professional real estate agent. They know the market, they know what homes near yours are selling for, and they understand the different nuances that go into determining a home’s value. They will help you find the perfect price.

A pre-listing appraisal is by no means a bad idea, but it’s not the end-all of where you should price your home. If you have any questions for me, don’t hesitate to reach out and give me a call. I would love to hear from you.

Denver Homes Are More Affordable Now Than Ever

Today I wanted to update you on the market for the second quarter of 2016 and discuss some of the changes to interest rates and how they affect affordability as well. 

While mortgage rates for this quarter are up a bit, they’re still really low by historical standards. Households with a $60,000 yearly income can currently afford a house with a purchase price of $310,000 at today’s interest rate of 3.5%. If rates were to jump up to 4.5%, this same household would only be able to afford a $275,000 home. This 1% increase in rates can dramatically affect the kind of home you’re going to be able to afford.

Looking at the graph at the bottom of the chart, we can see pretty clearly that 30-year fixed interest rates between 1970 and 2014 were significantly higher than they are today. To put this into perspective for you, in 1970, a household bringing in $60,000 per year looking to buy a home with a purchase price of $170,000 at the average 9% interest rate of the time would have to make a monthly payment of $1,610. Today, a family with the same income per year would be able to afford a $290,000 house for $965 per month at the current average interest rate of 4.1%.

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It’s a strong seller’s market for homes 1,850 square feet or less.

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If we take a look at the second quarter of 2016, what sticks out to me is the fact that there haven’t been any major changes since 2015, but it’s still a very strong seller’s market for homes that are 1,850 square feet or less. There are very low amounts of inventory for those homes—only 1.5 months’ worth—and it only gets to be a balanced market for the homes that are 3,500 square feet or larger.

The next line over on the graph shows the price change and the increase from 2015 to 2016, where the average appreciation rate of 9% has been driven more by homes 1,000 square feet and smaller. These homes saw an increase of 15%, but appreciation rates become lower for larger homes with the exception of the luxury market. Homes on the luxury market that are 3,500 square feet or larger saw a major increase in their appreciation ratings of 11%, compared to around 6% last year. On the last column of the chart, we see that the average number of homes under contract is currently floating around 55%.

If you’ve got any questions regarding our current market, interest rates or appreciation, please don’t hesitate to call, text, or email me at your convenience. It would be my pleasure to be a resource for you about anything real estate-related!

We Help You Get Under Contract in Multiple Offer Situations

We have some tactics that we use to get our clients here in Denver under contract in a multiple offer situation on properties they really want.

A thing we've started offering our clients that we really think is setting us apart is a home buying warranty when they purchase a home. It's mutually beneficial for both you and the seller because it guarantees that if your furnace, washer, dryer, or any other major things in the home break within the first year, they will be taken care of. It's also beneficial when positioning your contract to the seller because the seller understands that these things will be taken care of, so they won't have to worry about them coming up as inspection issues.

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You need every advantage you can get.

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Another thing we feel we do really well is put you in front of a solid local lender who has nominal rates, and will also put you through a pre-approval process rather than just a pre-qualification process. With the pre-approval, sellers will see that you've taken extra steps in your financing and that you're ahead of other buyers. It helps your offer stand out, and in this extremely competitive real estate market, you need every advantage you can get.

As always, if you have any questions, please feel free to reach out to me. I'd love to help you with any and all real estate needs.

Knowing What Kind of Denver Home You Want

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What do you want in real estate? Why does it matter? How are you going to get it as it pertains to purchasing a property here in Denver? I want to help you find a clear on answering these three questions.

What I've found that was really helpful in the past for clients, especially when there is a spouse or a couple buying a property, is to write down the top 10 items you want in that property. For example, you may want a very short commute, or to live in a particular neighborhood, or love a particular style of property, or need a certain amount of bedrooms, or want a fixer-upper, or need instant equity.

There are a ton of different things you can cite, but the purpose here is to get clear. The reason why getting clear, initially, is so important is that it can save you a ton of time on the back end. If you know what you want, you won’t have as many houses to look at.

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Writing a list of what you want in a property can save a lot of time.

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This can be applied to any aspect of your life: your spirituality, the relationship you want to have with your spouse, your kids, your business, etc. Getting clear on what you want, asking yourself why that matters to you, and determining how you’re going to make that happen is going to save you a lot of time and bridge a gap for you so you can get results faster.

I hope that was helpful. Please feel free to email, text, or call me with any questions you have regarding real estate. Talk to you soon!

A Market Trend We’ve Been Noticing in Denver

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There is something going on in the Denver real estate market that has been happening like clockwork over the last few years. The average showings per active listing are steadily declining right around the same time each year, at the end of June. Why is this helpful information to know? Well, if you’re looking to buy, it means after this time you’ll have less competition from other buyers.

As you can see in the graphs in the video above, a pattern has started to emerge. We started strong with the number of showings at the beginning of each of the last three years. Once we get to late June, however, the numbers drop significantly.

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Average showings are dying off at the end of June.

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As for this year, you can see that we have had a huge dropoff in the past month of showings per active listing. The moral of the story here is that we haven’t shifted from a seller’s market to a buyer’s market, but the inventory has loosened up a bit. Like many things in life, if you can avoid moving in a herd mentality, it will usually serve you best.

If you have any questions for us, don’t hesitate to give me a call or send me an email. I look forward to hearing from you!

Easy Updates with Positive Returns for Denver Sellers

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When it comes to return on investment, there are some upgrades that’ll bring a highly positive return. They break down into two major categories: inside the home and outside the home (curb appeal).

One of the most common things we find to get a positive return on investment is repainting the garage. If your garage door is a little bit banged up, it doesn’t cost a lot of money to repaint, and it sure makes a good impression on curb appeal. If you have chipped or cracked concrete, have it poured or mud-jacked.

Then look into some typical landscaping. You don’t need to go crazy or plant expensive bushes; even just a little extra water and fertilizer can perk up your lawn and curb appeal.

When it comes to the interior, remember this: Kitchens and bathrooms sell homes! These are some of the most profitable upgrades you can make because this is where people spend the most amount of time and the rooms that buyers are most interested in when looking at a property.

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Get positive returns on these home investments.

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If you’re selling a home vacant and you really don’t want to go through the upgrades and invest the money back into the home, staging can be a really good alternative.

The reason why staging works so well is because the human eye has been programmed over thousands of years to find anomalies and discrepancies and anything wrong with a home. Imagine yourself walking through a vacant home with scratches and dings in the walls and spots in the corner of the carpet. It’s because your eye is looking for imperfections and anomalies.

Even just some furniture or pictures on the wall, staging your home draws the eye away from the discrepancies and help your home show much better, and garner you a better price.
Check out the link I’ve provided below for some interesting stats and figures. As always, it would be my pleasure to be a resource for you regarding anything real estate-related, so give me a call or send me an email and let’s talk about it.

What Denver Buyers Need to Consider for Future Resale

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Are you considering resale down the road when purchasing a home in Denver? There are some key things to focus on with the intent of resale down the road.

There are hundreds of things to do (or not do) when considering a home for resale. Three stand out to me as the most important though.

1. Never buy a home that backs to a busy road. The same goes for homes that back to a commercial property. You’ll eliminate any future buyers who are worried about road noise.
2. Desirability of style. In my experience working with buyers in the Denver metro area, the least desirable styles are bi-level, then tri-level. Ranch and two-story are going to be very similar, but a ranch will always price out higher per square foot than a two-story will.
3. Location. I’ve attached some cool links that show the 20-year appreciation throughout the Denver metro area. You might be surprised to see which parts of the city appreciated better than others.

In this link I’ve included the amount of fix and flips that are taking place here in the Denver area and what those areas are getting for a return on investment.

If you’re curious about any of those hundreds of other do’s and don’ts of to consider for resale or you have any questions for me, feel free to reach out. I’d love to work with you!

Don’t Pay Two Mortgages When Buying in Denver

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Buying a home in Denver’s tight market when you have a home to sell can be tricky. I’ve found that a few select methods are the best approach.

First, if you can qualify for two mortgages, get a loan to purchase your next property. While you’re under contract and before you close, then you can list your home.

Another possibility is something called a “bridge loan.” Prior to selling, local credit unions can help you extract the equity from your current home to use as the down payment on your next home. A big advantage of this method is that you can write offers that aren’t contingent upon you selling your current property.

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A few select methods are the best approach.

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Here in Denver’s tight market, offers that are contingent on you selling your property will make it hard to compete.

Then there’s the option of listing your home, getting it under contract, and have the buyer have their offer continent on you closing on a new property, or you can do what’s called a seller leaseback agreement. That’s when the buyer closes and you then rent your property back for the next month or two, giving you time to write contracts that aren’t contingent on you selling your current property.

There are a lot of details and nuances to each of the options. I’d be happy to go over them in-depth with you to find the option that fits best for you. Give me a call or send me an email and let’s start the conversation.

How Population Growth Impacts Denver Real Estate

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You’ve probably noticed that I-25 and the Denver metropolitan area are much more congested than ever before. That’s because Denver’s population is booming. Patty Silverstein, a local economist, predicts that we will add 50,000 people to our area each year until 2025. How will this affect the housing market?

First, let’s take a look at population growth. The largest portion of our population consists of millennials, and people between the ages of 70 and 90 make up the smallest portion of our population. The number of people between 70 and 90 is unusually small. Fewer people will be moving to retirement facilities, which further complicates the issue of inventory. In other words, where will these 50,000 new people live?

Not only that, 36% of the millennials in our area still live with their parents. There’s a lot of pent-up demand in our market as well. Ultimately, we will have to build our way out of the problem.

In 2014, 16,000 new build permits were pulled for rental properties and new homes. In 2015, 18,000 new unit permits were pulled, and the same number is projected for 2016. In order for us to keep up with demand, Denver needs to be building 31,000 new units each year: 10,000 rental properties and 21,000 homes for sale.

As you can see, we are not keeping pace with the number of people migrating to our area. This will cause an imbalance in the housing market between supply and demand. This imbalance will escalate prices until some kind of balance is reached.

Right now, we are definitely in a seller’s market and will remain in one for some time. If you have any questions, give me a call or send me an email. I would be happy to help you!

Why Do You Want to Invest in Real Estate?

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Today we’re going to be discussing investment properties. If you’ve been thinking about investing in real estate yourself, either by renting them out or flipping them, we’ve got some important information for you to absorb today before you get started.

The first thing you need to ask yourself is, “Why am I doing this?” When you’re in the middle of a transaction, you’re going to come across things that make you question what you’re doing. That’s why it’s important to have goals beforehand. The reason I wanted to start investing in real estate was because I wanted to develop passive income to give me the ability to have financial freedom so I can invest in my family when I have the time. Instead of thinking about how you will get a rental property, consider thinking first about why you are going to buy real estate. This will allow you to move forward when things look difficult, by recalling your strong and powerful “why.” Now let's talk about a few actionable steps you can take if you’re looking to buy a fix-and-flip property.

1. Have a clear understanding of the home’s “after-repair value.” 
2. Have a clear understanding of what the market conditions are like around the property.  
3. Have a clear understanding of exactly how much repairs will cost.

One helpful way to avoid many of these mistakes is by hiring an expert real estate agent. It’s a huge advantage because you can learn and grow from the mistakes or successes they’ve had previously, without having to make any mistakes yourself.

Another reason you need to hire an expert to help you with buying an investment property is that they are tuned into the market. They can let you know exactly what you can rent or sell the property for. They can also help you determine your cap rate. The cap rate is found by taking your purchase price and dividing that by your net annual operating income. Cash flows will be harder and more lucrative in “C neighborhoods” or entry-level neighborhoods. When market shifts occur, these neighborhoods will always be the ones to get hardest. So keep that in mind when investing as well. 

 
If you have any questions for me or are looking to invest in real estate yourself, give us a call or send us an email. We would love to hear from you.

Should You Accept the First Offer You Receive on Your Denver Home?

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In a strong seller's market, there are two different types of exposure. One has to do with marketing and the other has to do with time. We'll dive into both of these to ensure you understand the best strategies you can put in place to make sure you get the most amount of money for your home with the least amount of stress.

We put a home on the market Thursday of last week. We had 10 showings and two contracts the first day. Both the buyers who submitted an offer tried to pressure us into accepting it within 24 hours. We decided to let the property sit on the market for the entire weekend, which resulted in a total of nine contracts and even some cash offers. The seller was able to leverage all of these buyers against each other and get the best possible offer.

If we would have done this the old school way and accepted the first offer, the seller would have lost out on $11,000 and the chance to rent back the property, which turned out to be a huge bonus for this particular seller. This allowed them to buy their next home while living in their current home after they had closed.

Marketing is also extremely important, even in a strong seller’s market. If we can draw a lot of people into your home in the first couple of days that it’s on the market, we’re going to have a better chance of getting these people to bid against each other. This results in more money in your pocket, better terms, and your choice of financing.

If you have any questions about how our team can use time and marketing to get the best possible results when selling your Denver home, please don’t hesitate to reach out to us. We would love to help you take advantage of this strong market! 

Hire the Right Denver Real Estate Agent

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Are all real estate agents equal? The answer is no. It’s important to interview more than one real estate agent. Today, I want to share some good questions you should be asking a real estate broker before you hire them.

1. Do you work with a team or are you an independent agent? If you work with a solo real estate broker, there’s a high chance they will have a conflict in their schedule when you’re looking at homes. Homes are selling incredibly fast in today’s market, so missing a showing could mean missing out on your dream home. With my team, you have 6 agents available to show you a home whenever you want.


2. How many properties have you sold in the last 12 months? Here in Denver, there are 16,000 licensed agents, and 8,000 of them have never sold a home. The average real estate broker should sell at least four homes a year. When you hire an agent, you’re getting more than their experience; you’re also getting their connections. An experienced agent who sells more than 4 homes a year will know inspectors, title company reps, structural engineers, and attorneys. The more sales an agent has, the better he or she can navigate tricky transactions.


3. Can you provide me with references or testimonials from previous clients? Is there a website where you can see that past clients had good experiences with this agent? You also need to look for recent testimonials. It doesn’t matter if a client had a good experience with this agent 15 years ago.


4. Follow your gut. Work with the person you think understands your needs best and will work on your behalf to accomplish your goals.

If you have any questions, give us a call or send us an email. My team and I would be happy to help you! 

Showings On Average Per ​Active Listing in Denver

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Check out this graph. It examines showings to active listings over the past five years. From 2009 to 2012, there weren’t major changes in trends. However, up until around spring 2013, we experienced a slight change in the market. Around this time, interest rates started to kick up with a high level of demand and low inventory. This repeated in 2014, and again, more powerfully, in 2015.

Shortly after January 2015, we still had a huge level of showings on average per listing. This remained true until the end of the summer market. We believe buyers tried to get ahead of the herd in the summer at the same time. We expect this boom to happen again this spring! It’s going to be extremely competitive.

If you’re looking to buy or sell a home, now might be the best time to do it. You might want to get ahead of the other buyers and prepare your home for an influx of showings. For instance, we did sixty showings the three days recently! We can help you sell quickly and for top dollar.

Give us a call or send us an email today. We’d be happy to talk about the opportunities available in the surrounding Denver area.

What's the Secret to Finding Your Dream Home?

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There are three very important things we do here every time we represent a buyer during the purchase of a home.

1. We want to make sure you don't miss out on a property. In the event that I'm unavailable to show you a home when you want to see it, I have a team of agents willing to get you into the property you want to see. We're working on your time, not our time!

2. We want to make sure you do not overpay on a property. If you find a property you think will be the right fit for you, the first thing we do is a CMA, a competitive market analysis. We take a look at comparable homes in the area to give you an idea of the home's fair market value so you can make a reasonable offer on the home.

3. We want to make sure there are no surprises after closing. We have a great team of referral partners (inspectors, electricians, plumbers, etc.) who are the best at what they do in their respective industries. These professionals will help ensure you do not close on a home with any issues that are going to cost you a lot of money down the road.
 

If you have any questions about this or any other real estate topic, we're always available to chat. We would love to hear from you soon!