Englewood Real Estate Watchers Note Rise in U.S. Jumbo Loans

2-27-jumboloan-300x223Inside Mortgage Finance is a periodical that precisely lives up to its name: Englewood residential real estate professionals can turn to it for the latest word on national trends inside the mortgage industry. Admittedly, this usually makes for pretty dull reading for outsiders (that is, everyone else); but one story in last week’s edition was interesting enough that it was picked up by the general business press.

The topic was jumbo loans. In Englewood real estate circles, the issuing of jumbo loans is of particular interest because of their indicator status. Jumbos are the ones with mortgage amounts exceeding the limits for government-backed loans. They’re also known as ‘nonconforming’—and like all the other non-conformists in life, they don’t quite behave like everyone else. Englewood jumbo loans tend to be slightly harder to qualify for than run-of-the-mill mortgages, and as a rule carry higher interest rates. If their share of the home loan market grows, it indicates that high-end home sales are improving.

And that’s what happened in the U.S. in 2014, according to IMF. “Jumbo Lending Stronger than Overall Market, Hits Highest Share in 10 Years” was the headline in a report that pegged fourth quarter jumbo loan volume at $67,000,000,000. That’s a lot of high-end real estate!

When The Wall Street Journal picked up the story, they pointed to a decrease in mortgage lending overall, but pointedly less so for jumbo loans. Bank of America reported a 3% growth in the number of first-time home buyers who took out jumbos in 2014—and applicants were a younger bunch, too: their average age decreased from 46 years to 44. Wells Fargo Home Mortgage, the largest jumbo provider, observed a similar trend: more first-timers taking out jumbo loans.

If this has local real estate watchers wondering whether the popularity of jumbo loans in Englewood will follow the national trend (and if so, why), there was at least one straightforward explanation. HSH, the housing and mortgage data firm, reported that by the end of this January, the average interest rate for a 30-year fixed jumbo mortgage “dropped below 4% and was at a historic low of 3.92%….” With rates like those, the WSJ wrote, “Low interest rates are spurring more older affluent Americans to consider a mortgage.”

You don’t have to be in the jumbo market to seize the financial advantages this winter’s favorable real estate climate offers. Just call me!

 

Littleton Property Buyers Choice: On the Deed/On the Loan

Littleton Property Buyers ChoiceHome buyers direct a series of major decisions when it comes down to finalizing their Littleton property purchase. Among the most important are two with decisive ownership and financial consequences: who will be the primary borrower for the mortgage; and who will be named on the deed?

The answers to these questions are the opposite of the fine print details that few of owners ever need to concern themselves about. These cast defining roles in determining the eventual ownership of the Littleton property and in assigning financial responsibility for loan repayment.

Whose Name Goes On the Loan?

Determining who is to be the primary borrower may not be as simple as you would think. After all, one person might have the excellent credit needed to insure the best interest rate, while the other person currently brings in a higher annual income—providing the cash flow boost that enables a sufficient mortgage. It is often necessary for both members of a couple to sign on the dotted line to get a Littleton property financed. A loan officer will walk buyers through the process, explaining which combination will offer the greatest loan amount at the most favorable terms.

Whose Name Goes on the Deed?

It’s important to keep in mind that the deed is almost completely separate from the loan. Even if only one person signs for the loan, several people can be listed on the deed. Placing a name on the deed shares ownership of the property. That can be helpful in the event of an untimely death or to avoid probate during an estate settlement, but there can also be drawbacks.

Since those named on the deed share in title rights to the property, that can empower them to prevent a sale—and also leave the property vulnerable to their debts. That’s why it’s important to be clear about all outstanding obligations before adding people to a deed, lest a pre-existing debt result in a lien being filed against the property. It’s also good to remember that until the loan is paid in full, the bank or lender also has an ownership interest, which is why the bank can take possession for non-payment.

Making the Decision

Making the most of your Littleton property is a continuing planning exercise that begins with these first ownership decisions. For individuals as well as couples, the multiple issues that come into play have financial and tax ramifications that merit careful consideration.

Before buttoning up those final decisions, I always advise clients to consult with their accountant and lawyer to get the whole story—it’s a story which begins with your first call to my office!

For Englewood Boomerang Buyers, a Window Opens

2-20-boomerang-300x238There is a seven-year window for some past Englewood homeowners—and it’s one that’s opening, not closing. The ‘window’ in question is the one that could activate Englewood “Boomerang Buyers”—which would come as good news for the local home sales.

Some background about Englewood Boomerang Buyers. It’s a term coined in the wake of the subprime mortgage fiasco, describing those burned by the housing crisis. They were, on the whole, Baby Boomers and GenXers who were caught up in the Great Recession. For many who became enmeshed in the effects of the nasty confluence of the cliff-dive of the subprime mortgage bond market and collapse of residential valuations that swept the nation, foreclosures or short sales became, literally, offers they couldn’t refuse. Not only did the bitter aftertaste leave many with a spoiled appetite for homeownership, but the damage done to the credit ratings of millions made that a moot point: they had fallen off the scale when it came to qualifying for a new mortgage.

But that was then; this is now. It’s a now that, in RealtyTrac Newsroom’s breathless phraseology, “the first wave of…homeowners who lost their home to foreclosure or short sale during the foreclosure crisis are now past the seven year window they conservatively need to repair their credit and qualify to buy a new home.”

Soon, more and more Boomerang Buyers in Englewood will be in the clear, if they choose to be; and they are only the first wave. “Nearly 7.3 million potential boomerang buyers nationwide will be in a position to buy again from a credit repair perspective over the next eight years,” says Newsroom. Bankrate, the mortgage and financial advice website, sees the group as particularly well-qualified. They quote a broker in North Carolina to that effect: “If you’ve been through a foreclosure, you’ve already been a homeowner…you know the process. You’ve been through hell sometime in the last seven years…”

That word ‘sometime’ is apt, because the seven year period has been anything but uniform. Guidelines for that “waiting period” have sometimes been three years for FHA qualifiers, or even shorter for portfolio loans that lenders keep on their own books. But whether it’s three or seven years, the clock usually starts ticking only when a foreclosure has been completed. But according to FICO, although a foreclosure remains on a credit report for seven years, “the negative impact will fade as time passes.”

For potential Englewood Boomerang Buyers still waiting for a foreclosure to disappear altogether from their credit reports, there are other routes that can lead to a homeownership reboot. For more on buying or selling, I’m always pleased to sit down and discuss some of the great opportunities in our current market!

News Flash! Men, Women House Hunters Differ!

2-20-a-menwomen-300x300Last week, The Wall Street Journal made it official: they had a slow news day. It was February 11 (that was Wednesday) when they ran the feature story, “A Gender Gap in Real Estate.”

This was something Englewood house hunters (not to mention those hoping to attract their attention) could certainly appreciate: an article about what men and women consider “very important” when it comes to features in homes. Author Adam Bonislawski based his story on National Association of Realtors® survey information; the results pointed to some dissimilarities between what women and men look for.

Now, I’ve had a good deal of experience helping both men and women house hunters in Englewood, so it didn’t come as a complete surprise that their priorities differ. For instance, I was not at all surprised about the contrasting emphases the two put on the importance of having a walk-in closet in the master bedroom. The only surprise was that it was the men who found it much more important (38%-29%)!

What about house hunters’ feelings about the importance of kitchen appliances being new? Same phenomenon: men 38%, women 29% (possibly because appliances are gadgets, and men like the newest gadgets). How important is it that a home be single level? The sexes reverse: Male house hunters think it is very important 18% of the time; women, 31%. I’d bet that within the 18% that are masculine we’d find a disproportionate number of stay-at-home dads.

House hunters registered a big gap when it comes to rating 9-foot or higher ceilings as very important. A miniscule 8% of females agreed, while nearly three times that many of their male counterparts thought so (21%).

One harder to guess feature would have been the desirability of a kitchen island. Nineteen percent of male house hunters found it very important, versus just 8% of the females. Does this mean women are tired of entertaining? Do they no longer consider their masculine counterparts capable of sous chef action? Or is it that more men are taking over the cooking duties?

I’d have to admit, I’m less than certain that these national averages are 100% reflective of what house hunters in Englewood prefer. Yes, Englewood men certainly value attics (13%) more than the ladies (7%)—they do tend to spend more time up there (but neither are terribly committed to that form of high living). Basements are preferred by close to equal numbers.

Being that these findings are sort of interesting (not fascinating, perhaps, but at least sort of interesting), you might be wondering why at the beginning I thought it was evidence that the WSJ was having a slow news day. It’s because of some tiny print at the bottom of a graph, which gave the date of the NAR survey—all the way back in 2013! More up-to-date is what we find unfolding for today’s Englewood house hunters: give me a call to get the latest!

Littleton Rental Property Choice Involves 6 Key Factors

2-20-rental-300x199Just about any investor on the lookout for a promising Littleton rental property has a number of assumed criteria in mind—often arrived at without bothering to sit down to list them. Remember, this is already a successful individual, usually with ample business experience—and always with the financial acumen to be able to make a substantial investment. For them, creating a written decision matrix really isn’t necessary.

Still, there’s a lot of literature on the web offering opinions on what are the most commonly agreed-upon factors for choosing a rental property. Quite a few “Top 10”s. Going over them, it turns out that some are only slight variations on a single theme, so I’ve boiled them down to a “Top Six.”

The first one is barely ever mentioned. It’s this:

1. Most investors have predetermined the price range that his or her Littleton rental property must fall into, but that can turn out to be a false step. If the goal is to garner the maximum return, it’s possible that some humbly-priced Littleton rental properties can actually turn a greater annual profit—even in absolute dollars—than some higher-end homes (particularly those that suffer extended periods without suitable higher-end tenants). So Number 1 is SET YOUR INVESTMENT GOAL. Cash flow return can be a very different goal than long term property appreciation.

2. LOCATION LOCATION LOCATION. This is the one that combines a half dozen factors, variously listed as Neighborhood, Proximity to Jobs, Amenities (parks, malls, gyms, movie theaters, public transportation hubs, etc.), Crime, Schools, and even Property Taxes. This factor might be chosen for convenience, as when a rental property investor wishes to be able to supervise the property; or for an expectation of value appreciation in a Littleton area which is gaining popularity. As everyone has had heard from time immemorial, L.L.L. is always important!

3. HEALTH OF THE PROPERTY. If the underlying structure and mechanicals have been intelligently designed and well maintained, this one is of no importance. If not, a thorough inspection with top-grade recommendations and cost projections is a must.

4. VACANCY RATES. The number of rental homes listed and the number of vacancies should be considered highly important for determining a promising rental property in Littleton. In newly expanding communities, sometimes you can spot a man parked near an intersection, clicking away on a counter as the autos pass by. He’s measuring traffic to see if the volume is great enough to support a gas station, or market, or mini-mall. The turnover of rental listings—how long rental properties stay vacant from week to week—can provide guidance about the same kind of information.

5. COMPETITIVE MARKET. The average rent amounts advertised for comparable properties can be the decisive factor for whether a rental home investment makes financial sense.

Of course, another factor that can make a big difference is the experience level of your Littleton Realtor®. That’s actually key factor #6—and (I hope) where I come in!

Retirees Buying a Home in Littleton Face Fewer Unknowns

2-13-homeloan-300x197One of the advantages of reaching retirement age is that your needs can be much clearer to gauge than they were in the past. When it comes to planning for buying a home in Littleton, for instance, you no longer have to worry about many of the contingencies that created vast unknowns earlier on.

When we were at the starting line in careers and family life, we couldn’t know exactly where our career would send us, so the level of certainty we had when we bought our first house was sketchy at best. Likewise, the shape of our family, needs of our children (and even those of our parents) loomed as giant question marks. We might have had definite ideas about what we wanted the future to bring, but sooner or later, most of us learned that what happens is up for grabs. In the words of the immortal philosopher John Lennon,

Life is what happens to you
While you’re busy makin’ other plans…

But as more life experience builds, the better we get at predicting what the future holds. But that’s a skill that is only useful if we take what we now know and apply it. As retirement nears, here are four areas where most of us should be better able to make much better informed decisions when it comes to buying a home in Littleton:

1. Choose an Appropriate Size

Many couples seek large houses early in life because they expect to have children. Once the next generation has vacated the premises, though, staying in a home that’s larger than necessary means blown money—not to mention wasted time spent cleaning unused rooms. Retirees may be slow to recognize their new downsizing option: buying a home that better correlates with current needs. They may even want to consider a condo or apartment if minimal upkeep will free up income to direct toward more enjoyable activities.

2. Consider a Single-Level Home

Most people experience mobility issues as they age. Some solve the problem by installing expensive devices in their homes, even though they could deal more directly with those problems by moving to a home configured to present fewer challenges. For some people, moving to a simplified home lets them live independently for many additional years–for example, a single-level home without a front porch eliminates stairs entirely.

3. Find a Convenient Location

At some point, retirees may reluctantly decide that they don’t feel safe driving their cars. If anyone experiences warning signs of unsafe driving, it’s prudent to give up the keys before an accident forces the issue. This causes fewer problems when a retiree has chosen a convenient location. It could mean living close to stores, public transportation—or near relatives who can help with everyday tasks.

4. Stay under Budget

Retirees need to take seriously realistic budget expectations, since it’s usually true that they will have less money coming in than heretofore. An inelastic income may take some getting used to—but knowing what’s coming will make intelligent planning possible.

When it comes to locating and buying a Littleton home that fits your specifications, I hope you will give me a call to discuss the current crop of appropriate available properties!

Patience + a Littleton Real Estate Agent = Job Done!

2-13-agent-300x201Unless you’ve had occasion to buy a corporate jet or office building recently, the sheer size of a home purchase puts it in a class of its own. One indicator is that most people decide to engage the services of a Littleton real estate agent to help them out. This is not a trip to the mall…

It follows that first-time home buyers usually approach the whole process with a great deal of caution—an entirely appropriate attitude. Buying a home is one purchase you will be living with for a long time, so getting it right is worth any amount of effort.

Veterans of the home-buying fray start out with the advantages experience brings. They know the how’s, when’s and why’s of the home inspection and loan application processes, and when their real estate agent supplies them with listing printouts, their eyes quickly fall to the details that are most important in their current quest (which could be anything from property tax figures to details about the mechanicals). If they aren’t yet familiar with all of Littleton’s neighborhoods, they know to quiz their real estate agent about the pertinent local characteristics, especially when some features like school ratings or traffic patterns are likely to be key factors in the final choice. And they know that the first property that looks good on paper may not pan out in person.

For first-timers as well as home-buying veterans, there is one key mental predisposition that is sure to make the experience less stressful—and possibly more rewarding. It’s a mindset that doesn’t always come without effort—especially when time pressures are involved. The virtue in question is straightforward: patience.

Don’t Rush
Don’t give up after the first five (or eight) houses. Home buying is a process, and it can be a glacial one at times. By showing you houses, your Littleton real estate agent gets an ever-sharper idea of what you’re searching for. You may not wind up with the first or even tenth house you are shown. If you prepare yourself for a house-buying process that could take several months, you’re much less likely to let impatience cause you to settle for less than otherwise.

Bid for Value
The offer and negotiation processes are more of an art than a science—and this alone would be reason enough to want a Littleton real estate agent to be on your team. A Littleton agent knows the comps in the area, how truly comparable each is, what they sold for, and how the market is moving. If an offer is countered, your agent can suggest non-monetary inducements where appropriate…and let you know if it might be time to move on.

Don’t Be Discouraged
If you bid on a home but wind up losing it, don’t become discouraged. It’s hard to temper emotions when house hunting, but it works to your interest when you continue to view the entire process as a business proposition.

Even should a house offer fall through, you can rest assured that there are other viable candidates out there. With patience, a businesslike frame of mind, and an experienced Littleton real estate agent by your side, the odds are definitely stacked in your favor. Giving me a call is a good way to start taking advantage of them!

5 Very Good Reasons for Using a Littleton Buyer’s Agent

2-4-buyeragentThey don’t teach this in high school, but maybe they should. The difference between a Littleton buyer’s agent and a Littleton seller’s agent can be pivotal, yet first-time home buyers have to figure that out on their own. You can read quotes on the web that say things like, “I looked for a buyer’s agent instead of a real estate agent” (true story!) that illustrate how little knowledge is out there. It wouldn’t take much classroom time to explain that buyer’s and seller’s agents are both real estate agents, after all. And while the subject is being explained to the class, I’d put in these five very good reasons for using a buyer’s agent in Littleton home purchases:

1. There for You

A buyer’s agent is by definition obligated to promote the interests of you, the buyer. When you are being shown a home by a personable real estate agent, it’s tempting to simply go with that agent, who may be quite a nice person. After all, he or she knows the house and knows the seller. But the problem is that the agent is duty-bound to act on behalf of the seller—and in any business negotiation, you want somebody who is unequivocally in your corner. Especially since-

2. It’s Free!

A buyer’s agent is compensated through a commission. In this case, it is paid out of the proceeds from the sale price of the house. You’re reading that right: since it issues from the sellers’ proceeds, you get the service for free! Of course, the size of commission the buyer’s agent receives can impact negotiations if the seller thinks the rate is unreasonable. Remember that you can negotiate most things, including agent compensation.

3. Advice

If you rely on the listing agent, he or she can only answer certain questions that don’t transgress their duty to the seller. Issues like price, tactics, and timing can be crucial in striking a good deal—but it is precisely on those kinds of issues that a listing agent is likely to be unable to advise you. Especially if you like the agent, you might be tempted to assume silence on a point means endorsement; and that could be a costly misunderstanding. Again, a buyer’s agent in Littleton knows the Littleton market from the buyer’s perspective, and can provide a wealth of information that point you in the right direction.

4. Your Personal Traffic Cop

In a typical real estate transaction, you will encounter an array of players, including lawyers, the seller or sellers, the seller’s agent, the financial institution, the home inspection team, and on and on. Buyer’s agents keep things running smoothly. They help organize the process so it makes financial and emotional sense to choose your buyer’s agent carefully.

5. It’s Free!

If ever there were something worth repeating…

The point worth remembering is that buying a house or a condominium is such a major event, securing a professional to watch out for your interests is good common sense. It’s why giving me a call even before beginning any house-hunting venture is a very good idea!

Choosing a Littleton Home Inspector with the Right Stuff

2-4-homeinspector-300x225The importance of hiring a reliable home inspection is one of the bedrock principles every home buyer reads and hears about from all quarters. Any Realtor® worthy of the name will be able to recommend a Littleton home inspector with the kind of strong credentials that establish the validity of his or her report—it’s part of the full service a real estate professional brings to the process of buying a home.
The object of the inspection is, of course, to prevent the unexpected: repair bills that might otherwise go undetected until after the purchase. A good inspector finds problems before you close on a property. Although a home inspector’s fee may require an investment of a few hundred dollars, it’s certainly better than spending tens of thousands down the road.

A thorough inspection and the report that follows are what you are looking for—what earns a new home buyer peace of mind. And choosing the right candidate isn’t difficult, as long as you are willing to follow a few common sense procedures. For instance, the written inspection report is an important part of the process, yet some inspectors wind up sending only a checklist. The best ones accompany that with their more detailed written observations. Before you commit, ask the candidate if you can see a sample of the kind of report that will be prepared.

It’s a very good idea for you to be present when the inspection is made—it’s a one-time chance to see for yourself some of the workings of the property from a professional’s point of view. A good inspector may suggest it…and certainly will not object when you invite yourself to the party. If he or she objects, my advice is to find someone else.

As with any other expert, check the candidate’s reputation online. The Better Business Bureau website, Angie’s List, Yelp, and all the other websites that post continuing reviews of professional service providers can supply good feedback. But again, be thorough: watch out for ‘paid’ ratings; check more than one source; and if a complaint is registered, be sure to bring it up when interviewing an otherwise-qualified candidate.

Home inspectors who are strongly tied to the Littleton business community, or who are involved in national-level home inspector organizations, have their reputations on the line with every inspection. These inspectors may provide higher quality service than others, and although choosing a leading Littleton home inspector may wind up costing a few dollars more, when you’re about to invest hundreds of thousands of dollars in a home, paying a bit extra is usually money well spent.

Whenever my clients ask for advice in choosing a home inspector in Littleton, I supply a choice of several, along with what I have heard from other clients who have used them recently. It’s part of the service I’m pleased to offer—and another good reason to give me a call!

Minding Basics: Super Bowl Clichés that Help Home Buyers

2-4-superbowl-277x300Englewood home buyers may not have been watching the Patriots’ squeaker victory in Sunday’s Super Bowl for the purpose of learning something about real estate, but at least one useful piece of wisdom did become evident: the enduring value of minding the fundamentals. Despite the harrowing last 20 seconds, when the power of Seattle seemed sure to win the day, New England had confidence that their team was steeped in the fundamentals. Elaborate plays or complicated strategies didn’t seem important.

In the world of real estate, too, Englewood home buyers also benefit once some basic elements are in place. They aren’t secret or trick plays, either—they’re quite straightforward and well known. But overlooking them makes for a flawed game plan:

  1. Establish the playing field. We learned from the subprime mortgage mess that it can be a mistake for home buyers to rely on anyone else—even lenders—to determine their ultimate bottom line. The amount home buyers can safely afford is a matter of sitting down and adding up all the monthly expenditures, being sure to include once- or twice-a-year expenses like auto insurance. Once home buyers have determined an affordable monthly mortgage payment, they know their target home’s price range.
  2. After determining how much house they can safely afford, the next fundamental is to secure pre-financing. Englewood home buyers who have taken the trouble to have a pre-approval in place demonstrate to lenders, sellers, and everyone involved that their game plan is one to be taken seriously. It’s an early step that sets home buyers up for success.
  3. With those basics in place, it’s just about time to start the all-important search for that next home. All home buyers need now is to put one more fundamental in place by teaming with an experienced Englewood real estate agent. Unearthing the most suitable home is a process that should involve identifying all eligible Englewood properties—and not wasting time on those that don’t measure up. Recruiting a knowledgeable local Realtor® is the most fundamentally sound way to efficiently comb Englewood’s relevant properties (and sometimes even a few that might not yet be listed!).

Most people haven’t had the benefit of real estate training, and yet the quality of the search for their next home will in many ways determine much of their family’s future well-being. I do my best to ensure that my clients benefit from a well-grounded game plan. I hope you’ll give me a call if you are preparing to search for your next home!