Forming an Effective Team Puts Your Littleton Agent to Work

1-21-agent-300x300One of the most effective ways to maximize your chances of achieving the best residential real estate deal possible lies in your ability to partner effectively with your choice of Littleton real estate agent. Your agent is your local guide through the complexities of Littleton’s market—your assistant, tutor, and trusted right arm in the enterprise of buying and selling a residence. It’s your Littleton agent’s job to make the team an effective one—but for all parts to truly work as a unit, some basic elements should be in place…and clearly understood by everyone:

For prospective buyers, when your real estate agent fully understands your search criteria, the end product is a more focused search that yields the intended results most efficiently. It will conserve an under-appreciated asset (your patience)—and free your schedule by eliminating properties that aren’t right for you. Shopping for a home can lead to a bewildering jumble of options. Simply searching online for properties, or driving around likely neighborhood choices looking for “For Sale” signs is an inefficient and time-consuming stratagem. What’s more, tapping into a Littleton agent’s comprehensive understanding of the market—past and present—makes you much more likely to unearth the best value/price offerings as they become available.

For those who are selling a Littleton home, an experienced agent wades through less-than-serious inquisitors, keeping you from getting bogged down with fruitless showings or unreasonable offers.

A move into an unfamiliar area comes with a certain level of risk. A trusted agent equips you with the insights you would otherwise be missing. It can mean the difference between landing your dream property and buying into a subpar situation—one you might regret for years. You only need imagine buying a home in the warmer months only to be blind-sided when access becomes iffy during the rainy season. An agent will have a more complete understanding of the benefits and disadvantages of all of Littleton’s neighborhoods—as well as the ability to help you make an informed choice, irrespective of when you are available or ready to buy.

Establishing a candid relationship with your Littleton real estate agent will not only afford you a buying or selling experience that’s as untroubled as possible, it will also provide you with a resident’s comprehensive knowledge of all the local factors long-time residents take for granted. Buying or selling, I hope you will consider giving me a call for a no-obligation chat about the current market!

Three Easy Littleton Home Winterizing Tips Cut Energy Bills

1-21-winterize-300x168Littleton home owners don’t have to live in the kind of January landscape that features blizzards and snowdrifts to want to winterize their home before the onslaught of the chilliest temperatures. In even the mellowest of climates, winterization is a way to shrink energy bills. And even if the recent shocking downward spirals in world oil prices have sent your home heating costs to the bottom of your budget-tightening “to do” list, remember that if and when you eventually put your Littleton home on the market, low utility expenses can be a strong selling point. Regardless of how you set your internal thermostat, the Big Three of energy cost reduction always include the following:

Raise the Air Temp; Lower the Water Temp

Two tips that could seem counterproductive will cut energy costs in many a Littleton home. You’d think you should just switch ceiling fans off until spring, but not so. For cooling, the blades are set to spin counterclockwise so that cool air won’t be wasted down near the floor. The tip is to reverse the fan’s rotation to clockwise. That will act to push warmer air down from the ceiling. Wait until the blades come to a stop, then slide the small direction switch (it’s usually next to the pull cord). The second tip is actually one you can do any time of the year since hot water heaters are usually set to heat to 140 degrees. In truth, most of us don’t need it that hot. Try resetting the temperature to 120 degrees, and see if it’s sufficient. If so, in the course of a year you’ll save more than a few dollars!

Block Air Creep

For a few dollars, a tube of caulk can be a final defense against the creep of cold outside air. Use caulk to seal cracks in the walls and gaps around your windows and doors. In extremes, there are inexpensive extra measures, such as see-through plastic sheets to cover windows with a second seal (doing both would keep the most remote Siberian cabin as buttoned-up as a baby kangaroo). If a drafty door will have to wait until spring for full renewal, an interim trick is to roll up a bath towel and place it against the threshold. This temporary fix keeps out the worst drafts and doesn’t cost a dime.

Take Care of Your Air Conditioner

If you have water-served central air, during the colder months when it’s out of service, good maintenance requires draining the water hoses. Split air conditioners don’t have that issue, but some of them need an exterior cover for preventing drafts (if you haven’t felt any on chilly evenings, it’s not necessary). If you haven’t already removed any window units, better go to the hardware store to buy exterior covers: a lot of chilly air can make its way in through uncovered vents.

The Big Three tips alone comprise a Littleton home winterization program that costs less than a burger and fries—yet can result in measurable energy savings. If you have found any other simple energy savers, I hope you’ll share: drop me an email, or give me a call at the office!

Four Reasons Englewood Real Estate Investments Beckon

1-21-realestateinvestment-300x195Good investors tend to be cautious souls. For those who prior to 2007 had never ventured into the realm of Englewood real estate investments, the ensuing downturn might have been enough to discourage any curiosity about that direction (even if their other investments had also suffered during the global financial crisis).

Nonetheless, at this juncture those same cautious investors might well assume that the value of real estate investments in Englewood have rebounded so substantially that it’s now too late to bother looking into them. But as National Public Radio has just pointed out, there’s an excellent argument to be made that conditions are now highly conducive for real estate—with real estate investments in Englewood being no exception. I could tick off three solid reasons that immediately leap to mind, but stand corrected: NPR points to four:

1. Employment.

Employers are hiring anew, and “when companies are hiring, would-be homebuyers feel more confident about taking on mortgage debt.” Unemployment rates have (finally!) come down to 5.6%, and with employers having added 252,000 jobs in December, consumer confidence is up nearly 20% over a year ago.

2. Prices seem more rational.

NPR points out that from January to October, prices rose 4.5% nationally; a “subdued” gain compared with the 11% burst of the year before. They project that the slower price appreciation may have set the stage for a “buying surge in 2015.” From an Englewood real estate investments standpoint, too, gains from last year’s run-up in equities markets combined with mortgage rates still holding below 4% would seem to create the key elements many investors would consider favorably.

3. Demand for rentals is high.

There is a healthy demand for rental accommodation across the country due to a tight supply of quality accommodations. USA Today tells us that between 2009 and 2013, the national vacancy rate for apartments dropped from 8% to 4.1%. Over the same period, the effective rent increased by 12% to $1,083. As one potential consequence vis-à-vis Englewood real estate investments, new landlords might expect to be more selective about the tenants that they choose. That would mean fewer headaches for landlords with troublesome and slow paying tenants. It might also portend that investment properties will stand vacant for briefer periods.

4. Millennials are sick of Mom’s basement.

NPR points to a Census Bureau report that says only 36% of Americans under age 35 own a home, down from 42% just seven years ago. The recovering employment picture might not enable young people to save up for a down payment for a while yet, but renting quality digs should soon be more doable than was previously the case. That could set the table for a continuing robust rental environment, with Englewood real estate investments benefitting proportionately.

NPR’s four reasons for optimism in 2015 are actually only the tip of the iceberg. If you have ever had the thought that it could be worthwhile to take a look at Englewood real estate investments, this is a great time of year to give me a call!

Littleton Rental vs. Purchase Choice Involves Multiple Factors

Littleton Rental vs. Purchase Choice Involves Multiple FactorsWhen your primary residence is one of our Littleton rentals, from time to time you may find yourself pausing, pen hovering over checkbook, thinking, “What if this check were going to buy this place, instead…?”

It’s a nearly unavoidable thought because common wisdom has it that buying a Littleton home usually makes more financial sense than renting it. That sounds sensible simply because at the end of the day (or, more accurately, at the end of a 15- or 30-year mortgage term), ownership means you no longer have to write those checks: you own that Littleton rental. It could be true—but there’s a lot more involved in the purchase-or-rental decision. If you make it a point from time to time to recalculate your situation, should it turn out that you aren’t any better off exiting the rental ranks, writing those checks to the landlord will become a less stressful activity.

The first consideration is location, location, location—but not in the usual sense. The question is how permanently you are likely to stay where you are. What are the odds that your job or family issues will take you away? If it’s likely that you will be moving out of Littleton within five years or less, a rental could well be a better choice. Buying and selling expenses—plus the time and effort involved—are factors that often make it wiser to delay buying until you are situated more permanently.

Then there is the real monthly outlay comparison between the two. Realistic calculations for owning take into account all of the monthly expenses involved. They include property taxes, homeowner or condo fees, insurance, gardening expenses, utility costs, and maintenance costs (they tend to be more than you first estimate). If your Littleton rental check is significantly smaller than the monthly home owning total, your financial ship might float higher if you put the difference into a savings account. You should consider whether your money might be put to better use elsewhere.

That last item points to the overriding issue: whether your current savings are able to support a purchase without incurring too much financial strain. That monthly home ownership calculation did not include the initial cost—the down payment. This part may have become less of a hurdle recently: the Federal Housing Administration has reduced its requirements. In fact, it may be possible to buy a house with an FHA mortgage with as little as a 3.5% down payment…although a higher down payment means a lower mortgage payment and no private mortgage insurance.

The last part of your calculation is one that can be a very positive financial benefit of ownership vs. rental: the mortgage interest tax deduction. Especially for those in higher income tax brackets with hefty mortgages, it can tilt the scales toward ownership.

I’m here to offer help and advice about any Littleton rental and ownership questions—in fact, about any of your real estate questions. I hope you won’t hesitate to give me a call!

First Time Home Buyer Rates Drop to Near 30-Year Low

1-14-firsttimebuyer-300x53As the end of 2014 approached, the National Association of Realtors® was able to come up with some general observations on the makeup of the current market—facts that anyone expecting to deal with Littleton home buyers in the coming year should find useful. With consumer attitudes showing improvement across the board, you might have expected that all segments of the home buying public would have shown increased activity. Not so.

According to the NAR’s annual survey—the big one that they’ve been conducting since 1981—the percentage of first time home buyers sank to a nearly 30-year low. It dropped 5% in just one year. Throughout the 40+ years of the survey, first time home buyers have usually made up about four of every ten home sales…but in 2014, that rate fell to 33%. 1987 was the only other year with a comparably weak rate.

We don’t tally separate statistics on Littleton’s first time home buyers, but there’s no reason to suspect our buyer profiles wouldn’t reflect the same trend. But there’s some good news, too. Help may on the way.

The reasons first-timers have been having a hard time was addressed by Dr. Lawrence Yun, NAR’s chief economist. He points to obstacles Littleton first-time homebuyers are likely to face—many of them connected with the rising difficulty young people have in saving for a down payment. Rising rents plus student debt and auto loan payments combine with stagnant wage levels to cramp savings growth. Added to that, the cost of mortgage insurance for Federal Housing Authority-insured loans have been rising. In 2010, 56% of first time home buyers used affordable FHA loans to purchase their home; by 2014, that number had dwindled to 35%.

Dr. Yun’s analysis is borne out by a separate RealtyTrac analysis of housing affordability and down payments. This, too, was a wide-ranging survey, examining affordability in 500 counties across all states. It found that for buyers with no additional debt, housing is affordable in 90% of markets —regardless of whether a 3% or a 20% down payment was contemplated. But for buyers with additional debt (like Dr. Yun’s student loans and car payments), housing is affordable in only 48% of real estate markets. Many who find themselves in that category are first-time home buyers. No wonder their activity is down.

That sounds like daunting news for many aspiring Littleton first time home buyers, but some good news is waiting in the wings. RealtyTrac footnoted a big one. According to data collected by Down Payment Resource, there more 2,300 separate programs are out there to assist buyers with down payments and closing costs. Finding which ones a Littleton first time home buyer might be eligible for is easy: DPR offers online help. Add in recent good news on the economy (job growth in particular) and government efforts to loosen mortgage loan requirements by lowering down payments, and it looks likely that 2015 will find more first timers crossing the threshold to their first home.

I hope it is the wave of the future—and I’m standing by to help make it happen!

FICO this, FICO that: Littleton Home Loan Background Info

1-14-fico-300x137When anyone is in the early stages of finding a Littleton house to buy, unless they are planning to pay for it with cash, a large part of what eventually happens will be determined by the home loan they secure. Both the size of the home loan and its interest rate are negotiable, but in almost all cases, the applicant’s part of the “negotiation” consists of comparing offers from various Littleton home loan providers.

So unless you are The Donald (or can supply your own wheelbarrow full of cash), Littleton’s mortgage companies will have a large say about what they think you can afford for your next home. Even though they represent totally different entities, their decisions tend to be awfully similar. The reason for that is that they all work from similar information: your assets, your current ability to generate cash— and your FICO score.

If you have ever suspected there is some kind of mysterious secret formula involved in coming up with that last, your suspicion was valid. But your FICO score isn’t a total mystery—some parts of their formula have been (however grudgingly) made public. Since the system is so pervasive, it’s good to know as much about it as you can.

To begin with “FICO” is just a company name. Back in the 50s, Bill Fair and Earl Isaac got together and engineered a credit scoring system, and so Fair Isaac COmpany was in business. Once Fannie Mae and Freddie Mac began to use them, it became a very good business. Now all the major consumer reporting agencies (Experian, Equifax, TransUnion—even PRBC and Innovis) use them. As to how they come up with their all-important scores, FICO has published the exact formula (sort of):

  • 35%: Payment history: If you have or don’t have derogatory information, like bankruptcies, liens, judgments, settlements, charge offs, repossessions, foreclosures, or late payments. It makes up more than a third of your score.
  • 30%: Amounts owed: Your current state of indebtedness.
  • 15% Length of credit history: This one is why borrowing anything early on in your consuming career is a good idea. A long history makes you more trustworthy.
  • 10% New credit: Have you recently been opening credit accounts all over the place? That’s probably not a nifty idea.
  • 10%: Types of credit used: A variety of the kind of borrowing you have done also makes you more trustworthy: revolving credit cards, car loans, home loans and lines of credit all broaden your appeal (at least the way FICO sees things).

That sounds reassuringly cut-and-dried—but before you relax, remember that ‘sort of’ we began with? As one analyst writes candidly about the Types of credit used category: “It carries the same weight as the New credit category…but in reality, the two categories aren’t quite equal.” If you had been under the impression that 10% = 10%, you now know otherwise. Also, FICO itself states that the percentages it makes public “are for the general population. For particular groups…the relative importance of these categories may be different.” In other words, the percentages are hard and fast, unless you are in a particular group. If you ask what is considered ‘a particular group,’ it gets mind-numbingly confusing. Sort of like the sound of FICO clearing its corporate throat and changing the subject…

Nonetheless, knowing just this much about what’s behind a Littleton home loan originator’s decision will stand you in good stead when it comes to securing your next home. Another canny move: give me a call right from the start!

Nightline says Reality TV House Flipping isn’t Realistic

1-14-houseflip-300x122ABC’s Nightline recently aired an interesting segment about house flipping, which included a magic number that’s probably never been seen before. Littleton house flippers would have been glued to their TVs if they’d stayed up late enough to catch Nightline, because if authentically magical, it’s a good number to know.

The segment was part of a series called “Realty Check.” This one was about new strategies in the “ever-competitive world of flipping.” The show started with some background about how expensive house flipping can be if it’s done in a hurry and on the cheap. Just slapping a coat of paint on the walls can result in an investment that languishes on the market, often until the asking price is reduced to an unprofitable level. The narrator stated that in the past, house flipping was often approached with the idea that the sooner a renovation could be completed, the better: “Get in, get out, move on.” We were shown how TV series like Flip It to Win It, Flipping Vegas, Rehab Addict, and Flip or Flop turned rehab projects into races against the clock: exciting drama for TV, maybe, but not necessarily a profitable real estate investment strategy in today’s market.

Nightline interviewed one new house flipping Phenom with 28 successful house flips to her credit. She says that “I call reality TV unrealistic.” She considers that the goal should be to produce a quality result—a house that’s “the best in the neighborhood.” That may take months rather than weeks, particularly if you want to avoid blowing your budget. Time, plus meticulous attention to detail, good taste—and a magic number.

It’s the magic number that has to interest anyone contemplating some Littleton house flipping of their own. It comes from an expert: RealtyTrac’s VP Daren Blomquist, who posited that the data reveal that “the more you put into a property, the more return you get.” Even if it takes half a year. But the amount you should budget only “Up until this magic number which is 23%.”

The magic number? It’s 23%. The goal is to make the final product the best in the neighborhood, so that a buyer coming into the neighborhood sees it as “their first choice.”

That’s a pretty tall order around here. Littleton has some fairly steep competition for best in the neighborhood. And six months between buying a property and being able to put it back on the market could seem like an awfully leisurely use of investment capital.

Without judging whether it’s truly magic or not, there is that 23% number. What was never explained was whether the magic number was meant to be 23% of the asking price, 23% of the purchased price, 23% of purchase plus rehab costs…or 23% of something else. Still—it’s nice to know there is a magic number.

If you have been thinking of undertaking some house flipping in Littleton, or even readying your own property for the market as-is (23% of $0 is $0); the New Year should be a great time to get going. Give me a call!

 

Why a Littleton ‘Short Sale’ Can Take a Long Time

1-14-shortsale-300x294The term “short sale” has been misleading people for decades. Despite the name, it’s a term applied to transactions that often involve a lengthier-than-usual sale process. A Littleton “short sale” is named for the financial aspect of a sale rather than the length of time it requires. It’s anything but a shortcut.

The ‘short’ in ‘short sale’ describes a sale at a price that comes up short—is less than the full amount owed on a Littleton home loan. As you’d guess, whether a bank (or any mortgage holder) accepts such a sale is a decision that is up to the lender.

Why would a bank choose to move ahead with a short sale instead of holding out for the full amount? After all, if a borrower is unable to pay, it’s hardly the bank’s fault. You might think that it is always in the bank’s interest to hold out for full repayment, and to take possession of a mortgaged property whenever that doesn’t happen…but in reality, that’s often not true. In the real world, the bank will lose money on either a short sale or a foreclosure—but the latter is often more expensive, since it requires the bank to do the expensive work of repossessing and selling the property.

To a distressed homeowner, a short sale is an opportunity to close accounts on better terms. Instead of weathering a foreclosure, which would result in a major strike against his or her credit record, if the bank will agree, it becomes a joint resolution between the debtor and bank—and that doesn’t just sound more amicable. But getting the lender’s approval is where the delay issue usually crops up. The steps needed before the mortgagee and the bank agree to sell the home at the lower price vary. They can involve submitting a buyer’s discounted offer, or the borrower convincing the bank that a short sale is warranted—usually after following procedures spelled by the bank. The bank can (and usually will) reject a short sale proposal or offer if it feels more money can be gained by foreclosing. And it can take a while…

It may sound like a happy solution for homeowners with financial problems, but among other drawbacks (for instance, there can be tax issues), the “a while” it takes to close a Littleton short sale can be between five and seven months! Yet for patient (or even better, very patient) buyers and sellers, a successful Littleton short sale can yield the best of a bad situation and an unmatched bargain.

There are endless variations for how any given short sale can proceed, so having an experienced Realtor® in your corner is always a good idea…and calling me is the way to start!

Englewood Mortgage Interest Rates Could Become a Missed Opportunity

1-7-mortgage-300x225Englewood’s mortgage interest rates have been so low for so long that there is the definite possibility that the real value they represent—for both Englewood home buyers and sellers—may now be being taken for granted.

It’s only natural. If you believe that past history is the best predictor of future performance, last January’s common wisdom that mortgage interest rates in 2014 would head up to at least 5% or more wouldn’t have fazed you a bit. One quick glance at the squiggly lines on a chart showing either 30-year or 15-year fixed mortgage interest rates reveals a pronounced downward slope. Ever since mid-year 2007, it looks like a playground slide. It does level off at the end, starting around three years ago; but if you take in the longer view, back to 1982, you see an even steeper tumble—all the way down from (gulp!) 18%! Only the bravest child would dare climb the ladder to that playground slide…

For a couple of years now, most of us assumed the bottoming-out of Englewood mortgage interest rates would reverse soon enough. But, as The L.A. Times pointed out on New Year’s Day, “…instead of the year ending with 30-year mortgage rates at 5% as many had projected, it wound up at an average of 3.8%…” Now, although some industry leaders (like the Mortgage Bankers Association) again expect mortgage interest rates to end 2015 at around 5%, most forecasts “now come with more sheepish comments about clouded crystal balls.” And The Times also acknowledges that some observers think rates could stay low, or even decline.

“I’ve been wrong about fixed mortgage rates all year,” the chief economist for Moody’s Analytics is quoted as having grumbled. Now “he wouldn’t be surprised if fixed mortgage rates are near 4.5% at the end of 2015.”

With this newly-voiced uncertainty about future rises, coupled with last year’s rates refusing to budge from the familiar comfort of basement levels, it would hardly be surprising if most folks have simply adjusted to today’s Englewood mortgage interest rates—and allowed their own real estate planning to proceed accordingly.

If so, that’s likely to become a real forehead-slapper when they look back on it…possibly in the near future. Low mortgage interest rates in Englewood are in actuality a rare gift: a true windfall for those able to capitalize on them.

If you are contemplating buying or selling an Englewood home anytime in the future, I do hope you’ll give me a call to discuss today’s market—and the opportunities that are here (and right now). As we know from our own playground experiences, once you find yourself at the bottom of the slide, sooner or later you’ll be climbing up that ladder once more!

What About Renting Your Littleton Home?

1-7-rentYou are a Littleton homeowner, but now your family has simply outgrown the place. You’re almost ready to start hunting for a new home—but hesitate. The fact is, you’re reluctant to give up your present property. It’s been a terrific home, and you suspect it’s only going to grow in value…

If your financial fortunes are on the upswing, you may be wise to consider the viability of renting your Littleton home. After all, using it as a profit-making venture even as you expand your Littleton real estate holdings might just be doable!

Many a successful landlord has begun that way, and find it every bit as rewarding as they’d hoped. Renting your Littleton home sounds like a straightforward proposition in the abstract, for sure: recruit a reliable tenant, then sit back and let any remaining mortgage payments take care of themselves. And it can be a fabulous plan—but like all successful enterprises, is most likely to reward those who prepare. If you are entertaining the prospect of renting your own area home, here are three questions you might ask yourself as you make that decision:

How’s Your Nest Egg?

The transition from residence to rentable home can take a fair amount of cash, even in a well-maintained property. You’ll want to capture top dollar anytime you rent your home, so any hint of potential roof leak or unsafe walkway needs to be eliminated. Realistically, this might be the time to upgrade the kitchen and re-tile the entryway floor. While you pencil in those costs, prudence dictates that you plan for fallow rental periods, too. While it’s possible you might find a suitable tenant as soon as you begin renting your Littleton home, you should budget for some months when that doesn’t happen.

How’s Your People-Meter?

Seasoned landlords all have war stories to tell: the presentable young couple who turned out to be non-stop party hosts for less-than-presentable friends, or the roommates who wound up playing host—or subleasing—to quite a few unauthorized friends. Before you begin renting your home, ask yourself if you’ve looked into exactly how you plan to recruit and screen tenants. You’ll want to highlight the features most likely to draw the best applicants, and advertise in outlets they visit most frequently. And while you’ll want to trust your gut instincts, you’ll need to do a bit of homework to be sure you stay in line with all fair housing laws—even if it all means your house might sit vacant a little longer.

How Much Time Can You Spare?

Late nights; vacations; rainy days—a rental can require attention on its own schedule, which doesn’t always match yours. When you start renting your Littleton home, you need to be able to invest a certain amount of your time. You will be adding the upkeep of another household, and as you already know, that does require diligence. If your spare time is already in short supply, the realistic answer will be to hire a Littleton professional property management company. If adding their fee means a bottom line that’s close to the break-even point, your decision will become one about whether expanding your Littleton real estate holdings (rather than profit-making) will be reward enough.

Whatever your decision, I’m here to help you further all aspects of your Littleton real estate endeavors!