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Who controls appreciation in your neighborhood?

Sep 23rd 10

filed under: Castle Rock Homes, Homes for Sale, Lone Tree Colorado Homes, Real Estate Answers, Real Estate Stats, Stonegate

Home Appraiser

The wonderful new system that our government has forced upon us is the HVCC. Home Valuation Code of Conduct. When you combine this with appraisers that are incapable and or incompetent then boy do you end up with a cluster… I’m not going to go into the full details of the HVCC but I did add a link above that you can go read and learn.

Here’s my story I wanted to share about my experience and how I believe the current new system is setup to:

Prevent natural appreciation of a home, neighborhood, city or area.
Allows appraisers, underwriters and banks the ability to control appreciation and market value in our real estate market versus the buyer and seller.
Completely removes “Market Value” from the real estate industry. Market value being defined as what a ready willing and able buyer has agreed to pay a ready willing and able seller.

I have a seller that purchased a home next door to his mother. He bought the home years ago at a very low price and totally gutted the property. He took it down to the studs and replaced everything from the electrical system to the roof to the floors, kitchen and I mean everything. It was basically a NEW house. There is not an old surface in the house. He did the same on the exterior. It was a CLASSIC over improved property for this neighborhood. He knew this and was reasonable in his understanding that he was not going to get all of his money back out of this property. Not even close. He was probably going to be forfeiting $50,000 or more from what he had in the property but it was all fine. He used and enjoyed the house for several years while living next door to his mother when he was in town. He has several other homes in other states and travels almost constantly. Got the picture?

So we listed the house $60,000 under what he had in the house. When we originally talked about listing the house last year there were several arms length closings and a few foreclosures and of course the short sales closings. We had comps that were going to be about $25,000 less than what we were going to list for. I seriously didn’t think it would be an issue once the appraiser and bank saw the comps and the upgrades in this home. I figured we could garner at least $25,000 for the more than $100,000 he had put into it.

Once we listed the house with it’s upgrades and ideal location it was an immediate showing success. We secured an offer within about 2 weeks and agreed on a contract price which was about $5,000 under asking. All was good and we were trucking to closing.

Weeks later I met the appraiser at the property and handed him some comps and the full list of everything that was done on the house. Showing the over $100,000 in repairs and upgrades that he could easily see and touch.

Then the bottom fell out.

Even though I had a comp (that he used) that sold for $20,000 more than this house he said our house was only worth EXACTLY what the last foreclosure in the neighborhood was worth.

How is this possible?

How can a remodeled home be EXACTLY worth a trashed out foreclosure DUMP?

I called the bank the other broker and the lender. They all agreed that their must be a major issue. We were over 20% off the contract price. This has never happend before to me, the buyer’s agent or the lender. What was going on? Lots of questions to be answered. How could a comp that sold for $20,000 over this one not matter?

The buyer really wanted this house and was still willing to proceed so we waited several days for an appraisal review. At this point the seller and the buyer agreed that as long as they got it close we would all do whatever we could to make it happen.

Oh yes it came back the same. No change at all. Didn’t even add one cent to the appraised price. Basically a dead deal at this point…No hope.

The underwriter, lender , buyer, seller and both brokers all agreed that the appraisal was wrong but the controlling forces wouldn’t change the price.

Obviously I believe the appraiser was so inept and a major idiot probably with an axe to grind so he took it out on this seller and buyer. Maybe he was so freaking stupid and scared to lose his license he wouldn’t step out on a limb and give the property a true value. I think a lot of it has to do with stupidity and laziness in the industry. He knew he was getting his check from the bank so what the heck. Why should he do any extra work and try to determine the real value of the house with it’s upgrades. WTF? Lazy, lazy, lazy.

Market Value = what a ready willing and able buyer is willing to pay a ready willing and able seller.

Market Value = What we the appraisers fell like valuing your house for on a particular day if we feel like working that day.

This just lets us know that if the appraiser and bank don’t want your neighborhood to appreciate it ain’t going to happen.

So maybe all the people fixing up their homes right now should NOT do it? Are home remodels a total waste of time and money?

With a system like this neighborhoods cannot appreciate.

Details:

List price $265,000

Contract price: $255,000

Over $300,000 in the house for the initial purchase and remodel. Top of the line beautiful remodel. Move the house across the reservoir into Greenwood Village and it would have sold for $400,000 +.

Comps. #1 = $283,000, #2 = $205,000 and #3 = $212,000.

The house appraised for $205,000. REALLY? What a dumb-ass.

I feel better now at least I got this off my chest.

posted by Steven Beam // Please leave a comment.

Paying off my house and the BIGGEST load of CRAP in real estate.

Aug 30th 10

filed under: Castle Rock Homes, Highlands Ranch Homes, Homes for Sale, Horse Creek, Lone Tree Colorado Homes, Newlin Meadows, Pradera, Real Estate Answers, Real Estate Stats, Rental Homes, Stonegate, The Timbers

Are tax deductions worth the interest?

Should you pay off your mortgage? I think most people should.

Today I’m talking about mortgages, paying them off and what I consider to be a load of crap pushed on home buyers by the lenders of America, accountants and YES the real estate brokers.

I’ve never understood why everyone says “oh you have to have a mortgage because you get the tax write off.”

I say BS. Wouldn’t it be better to have a paid for house with no interest payment and just pay the tax?

Here’s my way of thinking and no it didn’t originate from me. I was raised by two depression era grandparents that were basically in a steady savings cycle preparing for the next GREAT DEPRESSION.

(BELOW-I may be off a little but I hope you are getting the picture. I’m going off memory as I did not go into the basement and dig out my tax returns to write this post.)

Two years ago I remember looking at my year end taxes and seeing that my wife and I had paid around $14,000 in interest to the bank over the year. I also noticed that my WONDERFUL tax deduction was around $2,400.

So basically I have to pay a bank ~ $14,000 in interest to keep from sending the government $2,400. Is this the Great American Home Tax Deduction everyone says is so wonderful? Not to mention over the life of these mortgage loans you pay hundreds of thousands in interest to get in my opinion “NOT MUCH” in the way of a deduction.

It looks like a load of goods the banks & government put together to make us feel batter about all the interest the banks charge us.

Personally I think I would rather send the government their tax and just keep all my interest. Besides living in a paid for house has got to be a GREAT FEELING. Think about it. You are recession proof. If you lost your job you could easily go work at an hourly job and make the yearly tax and insurance payments. Hopefully it would only be temporary..right?

Vacations Paid For in Advance

I talked to my accountant about ways to payoff our house and told him that over our lifetime it would save my wife and I nearly $200,000 in interest. He told me “oh, well if you do that you won’t get your deduction.” I explained my theory to him and he still tried to tell me I needed this deduction. When I asked repeatedly why I have to have this deduction he couldn’t give me a real answer. He like so many others in the country have been brainwashed into thinking that we MUST have our deduction. Again BS.

Pay your house off and live like a Prince or Princess and have your income to save, invest and SPEND as you wish. Can you imagine that?

The other side is my investment adviser. He says “Steve you need to be putting money away for retirement.” Well, we are still saving. He says all that money in the house could be earning more money in the market. REALLY. Have you seen the market? I don’t know about you but a few more of these every 10 year implosions and I’m done with “the market.” I have highly paid professionals begging for alternatives to the stock market. They all love real estate right now. YEAH.

If you have your house paid for at an early age and have the remaining years of your working life to save, invest and actually enjoy a paid for vacation how would that feel? I think it would feel pretty damn good wouldn’t it.

No matter how you do it I think paying off your home as quickly as possible is the best way to go. Here is a recent article to help prove that it isn’t just me thinking this way. A lot of Americans are starting to see the benefits of being free from all debt and especially the home mortgage.

I think this guy, Dave Ramsey, has a lot going on in his debt free classes. A few years ago my wife and I went to his Financial Freedom class in Colorado Springs. We were basically on his program without knowing it. His word is true and if you stick with it you too will live like no one else so you can then live like no one else. Think about it. If you live frugally for several years to payoff all your debt it will allow you to live the rest of your life debt free. Plus along the way you will learn tricks (personal self control) that you apply once you become debt free that will save you money after you become debt free. In our society putting off our instant gratification so we could possibly live a better and more financially rewarding life in the future is a TOUGH sell.

I’m sure there are people out there that have different circumstances, needs and investment goals so this may not apply. But I believe for the average middle class person/family this is a viable option and should be explored. Just a few years ago talking about this to friends and clients was a dead end and they all thought I was a crazy person but now they seem to be coming out of the wood work to share their new goals of paying off their house.

Steven Beam is a CRS Realtor in Parker, Colorado. See client testimonials.

Steven Beam Social Media Connect.

Newlin Meadows Homes for Sale in Parker. Colorado

Meridian Village in Parker Colorado

Townhome for Sale in Parker Colorado

Lone Tree Colorado Homes for Sale

posted by Steven Beam // Please leave a comment.

Housing Market News for Denver and Colorado

Jun 29th 10

filed under: Castle Rock Homes, Highlands Ranch Homes, Homes for Sale, Real Estate Answers, Real Estate Stats

Here are some quick links to local and National news articles pertaing to the housing & real estate market. I thought you might enjoy.

U.S. home prices rise 0.8% in April: S&P – Prices have moved up 3.8% in the past year, marking the third consecutive year-over-year gain. Prices rose in 18 of the 20 metropolitan areas tracked by Case-Shiller in April compared with March. Over the past year, prices rose 4.4% in Denver.

Additional articles that you may find of interest:

posted by Steven Beam // 1 Comment »

21923 Swale Dr Parker Colorado Home for Sale

May 6th 10

filed under: Castle Rock Homes, Highlands Ranch Homes, Homes for Sale

21923 Swale Drive

Parker Colorado 80138

HOME FOR SALE

Swale Dr in Parker Colorado For Sale

Located in the Villages of Parker and right next to the Black Bear Golf Course Swale Drive is a nice place to call home. The house site on a great interior lot and has a huge cul-de-sac in the front for the kids to play in. Built in 1999 this home has been well maintained and cared for.

New roof, granite kitchen counters and exterior paint.

Details for 21923 Swale Drive.

MLS # 882027 Download the MLS Sheet Here
3 Bedrooms on the upper level
Main floor office or bedroom
Basement bedroom or office
Fully finished Walkout basement
Total sqft 3389
Finished sqft 3389
Bathrooms 4 [2 full baths upstairs, powder room on main level, 3/4 bath in the basement.
Wet bar and media room in the basement with BEER on TAP!
Formal living and dining room
Big views from the deck.

Other Homes for sale in Parker Colorado

Home for sale in Elizabeth Colorado

posted by Steven Beam // 2 Comments »

Real Estate Closing TIPS.

Apr 21st 10

filed under: Castle Rock Homes, Highlands Ranch Homes, Real Estate Answers

Real Estate Closing Tips

Here are a few quick reminders of things to watch out for before and during closing a real estate deal in Colorado.

Don’t open any credit accounts after you have been approved for your loan and before closing. Wait until after closing to open any new accounts. The lender will re-check your credit just before closing. If they see new credit lines opened you may not qualify for the loan anymore.
Make sure to schedule and complete a final walk through inspection of the house just before going over to the closing office. I ran into a friend today that when they completed their walk-through this morning on the house they were about to close the realized the family dog was so upset from all the furniture missing they the dog peed all over the house and carpet. A Disaster Recovery Team was called to come do clean up.
Make sure to check with your bank at least two weeks prior to closing on the availability of funds you will need for closing. Also ask them how long it takes to get a Cashier’s check or wired funds from your account. Two weeks is important because many banks can complete most money transfers within that time frame. Colorado real estate transactions are closed with “GOOD FUNDS.” It’s sort of like sliding a briefcase full of cash across the table to the seller.
Ask your real estate broker, lender and title company to please give you a complete copy of the Settlement Statement 24 hours in advance of the closing so you can have plenty of time to review the numbers and have changes made if needed.
Make sure you bring a photo ID. They have to make sure you are a legal citizen and check to see if you are a terrorist.
Be prepared for a minimum of 45 minutes if you will be at the closing by yourself. If the buyer and seller are closing at the same time expect a minimum of 2 hours.
Finally but most important…NEVER piss off the title lady otherwise known as the closer. They have the ability to make your life hell at closing.

How is the real estate market in Parker Colorado?

posted by Steven Beam // Please leave a comment.

The Home Buyer Tax Credit is Going Away!

Apr 2nd 10

Home Buyer Tax Credit

I guess we can all kiss the government Home Buyer Tax Credit bye, bye, bye. From the reports I’ve read and information I’ve heard it appreas to be going away with not much of a chance for a second extension.

NAR , The National Association of Realtors, appears to have given up hope of getting it extend and posted this information on a website.

“NAR has had extensive discussions with congressional allies and concluded that an additional extension of the tax credit is unlikely. While lawmakers recognize that the tax credit helped stabilize the market, it appears that much of the benefit has been realized. NAR is now focusing on improving the availability of financing.”

Well that sure is a bummer but at least we know they are going to now try and work out the many wrinkles in the mortgage industry. This should be interesting going forward.

Congratulations to all you buyers and sellers that took advantage of the tax credit and received your benefits.

Steven Beam is a member of the National Association of Realtors.

posted by Steven Beam // Please leave a comment.

5792 Diamond Ridge Parkway, Castle Rock Colorado Home for Sale

Mar 3rd 10

filed under: Castle Rock Homes, Videos

This is the Castle Rock Colorado Home for sale Video. 5792 Diamond Ridge Parkway in the Diamond Ridge Estates. Asking price is $575,000.

posted by Steven Beam // Please leave a comment.

Parker Colorado Christmas Tree Lighting Festival November 27

Nov 24th 09

filed under: Castle Rock Homes, Fun Things to Do, Highlands Ranch Homes, Homes for Sale, Horse Creek, Just Cool Photos, Lone Tree Colorado Homes, Newlin Meadows, Pradera, Real Estate Answers, Real Estate Stats, Rental Homes, Stonegate, The Timbers

Parker Christmas Tree Festival

Parker, Colorado Christmas Tree lighting festival.
Friday, November 27th
Starts at 5:00 and the tree lighting will begin around 6PM.
The Lions Club will have their famous chili and the Children’s Choir will be singing.
See you there. Dress warm!

posted by Steven Beam // Please leave a comment.

NEWS-Real Estate Market Report for Douglas County-Parker Colorado Real Estate

Oct 30th 09

filed under: Castle Rock Homes, Highlands Ranch Homes, Lone Tree Colorado Homes, Real Estate Answers, Real Estate Stats

REAL ESTATE MARKET UPDATE

An Information Service of RE/MAX Alliance/Douglas County

October/2009

Real estate markets are always bottom-up markets. Which means? For a real estate market to sustain itself and flourish, the bottom of the market, that being the less expensive properties, must sell in a timely manner. When the bottom of the real estate market suffers, the entire market is negatively impacted.

The government’s $8,000 tax credit, which ends in late November/2009, unless there is an extension or change in the program, was designed to serve two purposes: (1) provide first-time home buyers an incentive to buy now, and (2) stimulate the housing market by getting entry level homes sold so current homeowners could “move-up” to more expensive properties. The result being that life would be breathed back into the overall housing market.

There were some hurdles to overcome to this seemingly perfect plan. First, with the economy limping along, home values had been driven down in most geographic areas around the country, resulting in a loss of homeowner equity. A home seller considering buying-up now had less cash in their current home to buy-up with. Second, almost overnight the home mortgage industry went from loaning money to anyone with a pulse to being over selective as to whom they would bless with their sacred funds. Finally, the uncertainty of the job market and the high unemployment rate has led to many potential move-up buyers deciding to rent rather than buy. This has resulted in the more expensive homes being forced under the boot of foreclosure or short sale, or they have become rental havens for those individuals choosing not to buy now or not having the ability to buy now.

Below is a brief overview of the absorption rates for single family homes for the Douglas County area through September for the past two years. The Absorption Rate is the length of time it would take for the existing inventory to sell assuming two things happen: (1) the rate of sales activity remains the same, and (2) no new listings come into the marketplace during that period of time (this is not going to happen). (Metrolist MLS is the source of information.)

“NEWS Articles of Interest for the Denver & Douglas County Real Estate Market”

Denver fares better than nation in home resale prices - According to a First American CoreLogic Inc. report released yesterday, Denver-area home resale prices dropped in August year over year, but were down far less than the national average. First American’s LoanPerformance Home Price Index (HPI) showed that metro Denver’s average home-resale price — including sales of distressed homes such as foreclosures and short sales — decreased 1.44% in August from the same month of 2008. Nationwide, resale prices dropped 10.1% in August from August 2008. By comparison, July home prices in the Denver area dropped 2.64% from those of July 2008, and June prices were down 3.21% year over year. However, when distressed sales are excluded, August home prices were down less than 1% — .58% — from the prior-year August. July prices, not including distressed sales, decreased 1.26% and June’s prices dropped 1.68% year over year.
http://denver.bizjournals.com/denver/stories/2009/10/26/daily51.html

Freddie Sees Weekly 30-Year Fixed Rate Pass 5% - The 30-year fixed-rate mortgage averaged 5.03% with an average 0.7 point for the week ending October 29, 2009, according to Freddie Mac’s Primary Mortgage Market Survey. Last week, it averaged 5.00%, and a year ago it was 6.46%. Sales have increased, prices are down and supply is starting to decline, according to Bankrate.com. Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School of Business, said in the Bankrate.com survey the housing market is not at a false bottom. “These are strong numbers, but not surprisingly strong numbers,” Wachter said. “The fundamentals are in place for a recovery — however, a slow recovery.”
http://www.housingwire.com/2009/10/29/freddie-sees-weekly-30-year-fixed-rate-pass-5/

Additional articles that you may find of interest:

Building a home yourself without swinging a hammer
http://www.9news.com/money/consumer/article.aspx?storyid=125948&catid=103

Homebuyer Credit Gets New Life
http://www.realtor.org/RMODaily.nsf/pages/News2009102901

How to Tell Mortgage Rates Are Rising
http://www.realtor.org/RMODaily.nsf/pages/News2009102904

FHA 203(k) Loans on the Rise
http://www.realtor.org/RMODaily.nsf/pages/News2009102906

Investor Report: Fannie Mae’s PRP
http://realtytimes.com/rtpages/20091030_investorreport.htm

posted by Steven Beam // Please leave a comment.

Castle Rock Colorado Real Estate Stats Market Report

Oct 9th 09

filed under: Castle Rock Homes, Real Estate Stats

Here is the September 2009 real estate market report and stats for Douglas County West which includes Castle Rock and surrounding areas. Castle Rock real estate is doing ok compared to many other areas. I think everyone I show homes to in Castle Rock loves it. The views and landscape are beautiful. If you want to see every home for sale in Castle Rock look below as I have a FULL list of every home for sale in Castle Rock, Colorado.

See the graph below.