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TIPS FOR BUYERS
2008 Cheaper Mortgages for Summit County Dream Homes
By The Walsh Group
If you?ve been stumped in your attempts to pick up a second home in the Keystone CO real estate market, try again. The recent economic stimulus package increased the loan limits for government sponsored enterprises (GSEs) up to $729,750 for properties in Summit County, Colorado.
The former loan-size limit for Fannie Mae and Freddie Mac topped out at $417,000 while FHA loans for a one-unit, single family home in Summit County in the last couple of years increased from $327,750 to $362,790 and now to the gracious figure of $729,750?offering boomers doable financing for dream homes. The new GSE-loan limits reflect the rising prices for homes in Keystone and Summit County, and are perched at about 125% of the current median home prices.
Actually, these loans are also available for purchases of real estate in Breckenridge, Dillon, and the entire Silverthorne Micropolitan Area that originated last year after July 1, 2007 and through December 31, 2008. During this year, home buyers in Keystone and Summit County will find more affordable financing options, lower housing prices, and historically low interest rates.
In the recent past, even if a purchaser has been well qualified from the standpoint of income and credit, they are frequently halted by the size of the down payment required for conventional loans. The FHA program requires less of a down payment and affords more consumers the opportunity to purchase a more expensive property.
The line of thought behind the stimulus package is to jumpstart the housing market while assisting many families to build wealth through homeownership.
Homeownership also strengthens communities, allows for civic responsibility, and gives people a stake in their communities. The National Association of Realtors estimates that increasing FHA loan limits could assist 138,000 Americans to enter the housing market. Another 200,000 homeowners will have the opportunity to refinance. Increasing the GSEs loan limits could lead to as many as 500,000 refinanced loans and reduce foreclosures by 210,000.
Research shows that over 300,000 additional home sales could occur, reducing the housing inventory and strengthening the housing market. Increasing Fannie Mae and Freddie Mac will hopefully improve the overall liquidity of the mortgage market.
FHA and GSE loans are important to the housing market because they are insured by the U.S. Department of Housing and Urban Development (HUD). They are popular for first-time home buyers because they all a down payment as low as three percent of the purchase price. Additionally, most of the closing costs and fees can be included in the loan.
With a mission to expand affordable housing, Fannie Mae operates in the nation?s secondary mortgage market to ensure that mortgage bankers and lenders have enough funds to lend to home buyers at low rates. Then there is Freddie Mac which purchases, secures and invests in home mortgages with the purpose of providing homeowners and renters with lower housing costs and better access to home financing.
Real property is one of the best long-term investments available. This is definitely the year of opportunity in our resort area.
Articles © Copyright 2006 by The Walsh Group
Art of Negotiating for Keystone CO Home
By Craig Walsh
Whether buying or selling Keystone, Colorado real estate or Breckenridge, Colorado real estate, negotiation is crucial to a successful transaction. Every negotiation should follow a formula, beginning with preparation and ending with a proposal accepted by all parties. Negotiating is about gains and concessions between willing parties. The more educated a client is, the better the chances of reaching a smooth, mutually acceptable conclusion.
The ?Offer To Purchase? a Keystone or Breckenridge home is the result of buyers who have done their "prep? work and sellers who choose to bargain. Spending quality time on the preparation phase will reduce the time and stress involved in the bargaining phase later. The experience of a Keystone CO real estate professional serves either side to glean a clear understanding of all aspects of the transaction.
Sellers, buyers, and agents for Keystone Co real estate can prepare for bargaining by finding out the facts. When negotiating a Keystone home?s sale, sellers and buyers can't ask too many questions to enhance their negotiation position. The prime reason is to determine how motivated the other party is to buy or sell. The best way to get the information needed is by asking key questions in a friendly and gracious manner.
It is imperative to have answers to these questions:
1. Why is the seller selling his nice home? The answer to this question will help the buyer to make an offer that meets the seller's needs. If a seller needs cash, a low cash offer on a run-down house may be the ticket. If a person needs money to live on during retirement, they may like 10 percent down with a 90-percent seller carry back.
2. What was the home seller's purchase price? Without this information, buyers are at a severe negotiation disadvantage. If a home was purchased for a low price years ago, there?s a lot more wriggle room than if it was purchased within the last few years. However, if the seller has a high-motivation reason for selling and needs a quick sale, possibly the buyer could take over payments on the current mortgage.
3. Does the other party have a time deadline? If one party has a job transfer or is already purchasing another home, then there is a helpful sense of urgency. Without a timeline, buyers and sellers can drag out the process by not making decisions.
4. Has the seller obtained a professional home inspection report? Today's smart real-estate agents suggest that their sellers get a professional inspection report at the time of listing the home for sale. This makes the seller fully aware of defects. They are responsible to repair them or to fully disclose them to prospective buyers (averting future lawsuits). Even so, smart buyers include a contingency clause for the buyer's approval of their own inspection report obtained at the buyer's expense in their purchase offers.
5. What is the buyer's motivation to purchase a home? If the buyer has indicated a key reason why he is considering a particular house (great condition, outstanding school district, need to move in quickly), the seller can use that information to enhance his negotiation position.
6. Ask a creative open-ended question to find out if there is anything else that needs to be considered.
Negotiate only with people who want to negotiate. If there is weak motivation by the other party, there is not a strong climate for negotiation. However, if the other party is highly motivated, then there is a strong circumstance to negotiate your best price and terms.
Articles © Copyright 2006 by The Walsh Group
Avoid Committee Decisions when Buying Keystone Property
By The Walsh Group
For the buyers of Rocky Mountain resort real estate who are actually making the purchase of a Keystone, Copper Mountain, Silverthorne or Breckenridge home, we have some advice about who to bring along.
Keystone home buyers who show up with their parents, aunts, uncles, and other unrelated individuals are often bombarded by a variety of conflicting opinions on value, desirability and functionality of the subject Keystone property.
These opinions, many of which are unsolicited, can cause confusion and will often result in ?indecision?. In turn, indecision can mean the difference between acquiring the desired Keystone CO real estate and losing out to another ski resort home buyer.
It has been said, ?A camel is a horse designed by a committee.? The Internet is full of comments about the ineffectiveness of committees. Part of the problem in a committee is that no individual is held responsible for the decisions, especially those made by a majority ultimatum. Unless you are prepared to adopt a heterarchy, which will give all of the relatives and friends equal authority to decide on your new home, then please reconsider whether to include them in your deliberations.
Synergic consensus occurs when a group of humans sitting in heterarchy negotiate to reach a decision in which they all win and in which no one loses. In a synergic heterarchy, all members sit on the same level as ?equals?. No one has more authority than anyone else?everyone has equal responsibility and equal authority within the heterarchy. The assignment for the heterarchy is to find a plan of action so that all members win and that is not always easy. It seems that the more people involved in decision-making, the more difficult it becomes to achieve the original objective. The same holds true when buying real estate.
We advise our clients to implement this solution: Whittle down your decision-making team very easily by including only those individuals who will share the financial responsibility of the purchase! Invite everyone else to see the property once you?ve made the decision and signed the contract. That will help ensure that you?ve made the best decision for you?and not for your fan club!
It is vital to take the time necessary to visit, inspect and reflect before making a choice. For opinions relating to value, desirability and functionality of the subject property, ask your real-estate professional. That?s why we?re here. When you?re ready to buy or sell, the specialists of The Walsh Group and RE/MAX Properties of the Summit will be ready to help you!
Articles © Copyright 2006 by The Walsh Group
Earnest Money for Keystone Colorado Real Estate
By The Walsh Group
In the competitive Keystone resort real-estate market, when a buyer really wants a choice piece of resort Keystone real estate, he is best off submitting a sizeable amount of earnest money along with his offer.
What is ?earnest money?? It is the down payment a buyer makes when offering to purchase a property, whether it?s Keystone CO real estate or any other property.
The earnest money is typically payable to the listing brokerage firm or a closing agent, such as a title company. The money isn?t actually deposited until all parties come to terms and sign the purchase contract. At that point, the money is deposited and held in an escrow/trust account until closing. The funds must be good funds from the start, unless the buyer and seller agree otherwise.
While there are no specific ?rules? stating how much earnest money is enough, the amount is dictated somewhat by the price of the property. A typical seller wants the earnest money to fall somewhere between 2% and 5% of the offer price. A typical buyer wants to offer as little earnest money as possible.
After all contingency dates in the purchase contract have passed, the earnest money becomes ?hard?, which means the buyer could forfeit the earnest money should he/she not go through with the closing. This is important to a seller because once a property goes under contract it usually goes ?off the market? and other potential buyers go by the wayside.
Therefore, once the earnest money is ?hard?, most sellers can breathe a sigh of relief in knowing their property will close (sell). It?s obvious that most sellers have a vested interest in fulfilling the purchase contract. Unfortunately not all buyers feel the same. There are buyers who will terminate a purchase contract on the day of closing. They are willing to lose $500 or $1,000 in order to move on to another property, etc. However, they are much less willing to lose $5,000, $10,000 or $20,000.
So what?s a buyer to do? If you want to be a stronger buyer and you want sellers to take your purchase offer seriously, write a bigger check! That?s right. Offer more earnest money than expected. The best buyers are those who are motivated and financially capable of buying a property. Sellers are more willing to enter into serious negotiations with, and respond more favorably to, a buyer who presents a strong earnest money deposit with the offer. If you?re not serious about your offer why should a seller take you seriously?
Whether you?re buying or selling, you need an experienced real estate broker?someone who understands the complexities of a real estate transaction and someone who is looking out for you! The knowledgeable buyer?s agents and listing specialists in The Walsh Group will be happy to help you with all of your real estate needs.
Articles © Copyright 2006 by The Walsh Group
Get Approval First for Keystone Property
By The Walsh Group
There is a more efficient way to buy Keystone, Colorado real estate and Breckenridge, Colorado real estate. And that is to put the horse before the cart.
In some cases, buyers will make a purchase offer for Keystone CO real estate and apply for a mortgage loan afterwards. It is far better for the buyer's broker to counsel the buyer to apply for a loan with a reputable mortgage lender before submitting an offer for Keystone or Breckenridge real estate. The buyer can then arrange for a valuable pre-approval letter.
The reason is simple. When an offer is presented, many sellers want to know if the buyer has been pre-qualified for the mortgage loan for the Breckenridge or Keystone resort real estate.
If the buyer has not been pre-qualified, many sellers will require the buyer present a "pre-qual" letter as a contingency to the contract. This is different from a pre-qualification letter. A pre-qual letter gives many sellers a peace of mind and the impression that the buyer qualifies to purchase their property.
But is that truly the case? In reality, a pre-qual letter is simply one step in the underwriting process. A typical pre-qual letter will state the dollar amount the buyer is qualified to borrow. But that qualification is contingent upon the lender's final verification of information the borrower supplied, such as income, employment, savings and debt, as well as a satisfactory appraisal. True, it does show that the buyer is willing to get the ball rolling, but a pre-qual letter does not guarantee that the buyer will obtain financing.
Therefore, the horse needs to go first. What is really needed is the buyer's pre-approval. With a pre-approval, the lender has documented, substantiated and approved the buyer's entire loan application. This means that all of the underwriting process is complete, with the exception of the property appraisal.
When a buyer presents an offer with a pre-approval letter, it allows the buyer to approach the buying process from a position of strength. Informed sellers understand the difference between a pre-qualification and a pre-approval. In a multiple-offer situation, a pre-approval often means the difference between successfully getting the property that the buyer wants and losing out to another buyer who is better prepared.
That's why it is important for both buyers and sellers to use the services of a broker who not only understands the differences between a "pre-qual" and a "pre-approval" but takes the time to inform and educate their sellers and buyers to the difference as well.
The Walsh Group is that broker.
Articles © Copyright 2006 by The Walsh Group
Powerful Buying Strategies in Keystone CO
By Craig Walsh
Buyers who follow the rules of the game have the best chance of winning the Keystone CO real estate of their dreams at the best price. I heartily suggest that buyers of Keystone CO homes heed the following points:
Get Pre-Approved
The way to make a strong offer on Keystone CO real estate (or Silverthorne or Breckenridge CO real estate, etc.) today is to get "pre-approved." This happens after all information has been checked and verified. The buyer is actually approved for the loan. The only loose end is the appraisal on the Keystone Colorado real estate. This process takes a few days or weeks, depending on the situation. It's very powerful and a weapon I recommend all my clients have in their negotiating arsenal.
Sell First, Then Buy
If you have a resort home/investment home to sell, sell it before selecting another one to buy! I haven't seen a contingent sale work in the last three years, unless it's with a new home builder who has other resort homes to sell and can afford to put one on a contingency. When selling first, specify the sale "subject to seller finding suitable housing."
Buying before selling might cost you tens of thousands of dollars. Let's pretend that we find the perfect property and you love it! You make an offer and ask the seller to reduce the price and wait until you sell your resort home. The seller figures there is risk of passing up another buyer who doesn?t have to sell a home while he waits for you. So, he says, "Okay, but only with a full-price offer! " Now you have to sell your existing house in a hurry so you take a low offer.
Play the Game of Nines
Before house hunting, make a list of nine things you want in the new place and then a list of the nine things you don't want. This is called the "Nine of This and None of That? and is used as a scorecard to rate each property that you see. The property with the biggest score wins! This game helps to avoid confusion and keeps things in perspective while comparing dozens of homes.
Keep in mind the difference between "Skin" and ?Bones?. The Bones are things that cannot be changed such as the location, view, lot size, noise, school district, and floor plan. The Skin represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good Bones, because the Skin can always be changed to match your tastes.
Do Not Be Pushed into Any Resort House
Your agent can show you a complete list on the Multiple Listing computer. When homes are selling quickly, agents many times advise their clients to make an offer on the spot if they like the property. That is good advice only if you really like the property and you?ve seen enough to compare them.
Stop Calling Ads!
What's not mentioned in the ad is usually more important than what is. Many resort homes have some drawback that is not mentioned in the ad, maybe traffic noise, power lines, or litigation on the unit.
You need someone looking out for your best interests. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent.
Did you know that many homes are sold prior to any advertising? When an agent hears of a great buy, he's going to call his client, who he knows will buy from him. So to get the best buy on a property, I always recommend that you pick one agent and stick with him!
Articles © Copyright 2006 by The Walsh Group
Where do the Keystone Locals Eat?
By The Walsh Group
Springtime in the Colorado Rockies is a great time to sample the Epicurean adventures around the Keystone ski resort area. Local residents of Keystone CO homes can point the way to the best places to go for an enjoyable evening while the snows are melting and the rain is pouring down outside.
While checking out the Keystone CO real estate and Colorado resort properties in the neighboring areas of Dillon, Silverthorne, and Frisco, Copper Mountain and Breckenridge, ask the locals to divulge their favorite restaurants and bars. They are the ones who know the secrets about tasty food and beverage as well as culinary bargains near Keystone CO real estate and the Summit County area. Here?s a little of what we?ve learned:
Wine country tasting and sampling is not only in the wine vineyards of California and on the western slopes of Colorado. Tucked away on a picturesque corner on Main Street in Frisco is Samplings. Operating on the "small plate" concept, Samplings offers visitors the opportunity to try many different menu items and to sample its extensive wine list of more than 350 wines. Use the Flight Program to sample three wines that share similar qualities. Carefully selected wines are paired exquisitely with seasonal flavors.
Diners in Breckenridge have the option of a Samplings-type experience at the lounge of its sister location, The Cellars. They also offer fine dining and three-to-five course evening upstairs in the dining room. Don't worry about dressing up. The atmosphere at these locations isn't stuffy so your relaxed mountain attire is welcome.
If an evening at home in front of a roaring fire with that special someone is your plan, you?ll find that perfect bottle of wine at several fine wine stores throughout Summit County. Ridge Street Wines and Cheese and Chocolate on Main Street in Breck offers one stop shopping for the flavors that naturally go together...wine, cheese and chocolate. Even budget-conscious folks can find a tasty bottle as Ridge Street Wines has an entire rack of bottles for under $10.
Going one-step further is Foodies in Frisco, with a variety of gourmet food to tempt and delight your discriminating palate. Foodies stocks hard-to-find gourmet items along with organic steaks and high-end olive oils. The establishment offers samples of tasty goodies along with up to 15 different wines. As a bonus, the store offers wine education and dinner discussions with winemakers for all who want to further an epicurean education.
Next door to Foodies in Frisco is the Frisco Wine Merchant that stocks more than 200 wines. Choose anything from Vintage ports and high-end Cognacs to very affordable bottles. Check out the free wine tastings every Wednesday from 5-7 p.m.
Speaking of knowing what the locals know, no one knows this real-estate market better than Craig Walsh and The Walsh Group of RE/MAX Properties of the Summit. With over 14 years experience in this market, and a team of experts to meet your vacation or investment property needs, The Walsh Group is your best bet?whether you are buying or selling.
Articles © Copyright 2006 by The Walsh Group
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