Gretchen Faber ~ LifeStyleDenver

A broker in my office came to me yesterday with some questions about a seller’s recourse if the loan doesn’t fund at closing.

Colorado is a “table closing” state, and our contract expressly states that the buyer must attend the closing with all moneys and documents. This means that if a closing is at 4 p.m. on a Wednesday, as this broker’s closing was, the buyer and the buyer’s lender must perform under the terms of the contract at 4 p.m.

This lender had a lackadaisical attitude, ignored the new HERA/HOEPA regulations and essentially didn’t do his job. He was told on August 23rd that there was a slight change in the final figures, but he failed to disclose the change to the buyer.

Under the new regulations, any change upward to the buyer’s APR (over 1/8%) must be disclosed in writing to that buyer and the closing can’t happen until 3 days after the disclosure is made.

The loan broker did not disclose the resulting change in APR to the buyer until yesterday, the day of the closing. Actually, it was the second date for the closing, since this lender also didn’t order the appraisal on time (another story.)

Real Estate Buyers - Caution!

You are at risk to lose your earnest money in Colorado if you aren’t prepared to close at the date and time the closing is scheduled in the contract. In this case, the earnest money was $8,000. You lender and your real estate broker must be watching out for you and advising you. How could you possibly keep up with the changes in our industry? It’s obvious that many lenders and real estate brokers aren’t even keeping up. If the real estate broker in this instance had been on top of her game, she would have hounded the loan broker to get his disclosures out.

Her managing broker is helping her out, and using this as a “teaching moment” by paying the sellers’ damages. This equates to their loan per diem until the closing and various other pro-rations and charges. He’s a good broker and stepped up to the plate immediately because he understood that we must not stand in the way of a buyer and seller finalizing the transaction, or risk our clients’ earnest money. I’m sure he’ll also go after that lender for leaving him hanging in the wind like that.

This added level of complexity makes it more essential than ever that you hire a professional and seasoned real estate broker and that you listen when they tell you what to look for in your lender.

Don’t leave your earnest money to chance.

This was fisrt written at LifeStyle Denver.

Denver real estate is in recovery. We’re the baby sapling, taking root and growing strong.

The thing is, we never totally crashed and burned like other cities did. Prices went down for sure and according to yesterday’s S & P - Case Shiller Report, we’ve seen depreciation of 4.9% since this time last year. Compare that with Phoenix, down 35.3% year over year.

Since last month, Case Shiller reports that Denver’s prices have appreciated 1.5%. That’s an awesome bounce. Some analysts think this may be a seasonal adjustment, and may not signal a recovery.

I disagree.

Our available inventory hasn’t risen significantly this year. We didn’t experience the typical big bounce in available listings in the Spring. For that reason, we’ve been able to stabilize the market. The ratio of properties available for sale and days on the market is stable. We still have a stratified market, and we need to see high end properties shake out some inventory.

High end sales are increasing slightly too.

I looked up Park Hill and Hilltop sales since April yesterday, several million-plus sales have been recorded. Jumbo rates have become more competitive in recent weeks and there are cash buyers out there looking for a deal on their dream home.

Appreciation follows a reduction in time on the market.

As the days on the market have fallen, as we’ve begun to have multiple offers, as rates have remained competitive we’ve had appreciation re-enter the Denver market. We won’t get back to double digit appreciation very soon. But buyers beware - if you don’t get off that fence soon, you may be looking back over your shoulder in regret.

Margaret Jackson, the Denver Post’s Real Estate Correspondent wrote more about the S & P - Case Shiller Report in this morning’s paper. Read to the end!

This article and others appear on the LifeStyle Denver Blog.

Denver’s new Zoning Code is currently in the community feedback phase.

The new code has been in the works for several years, and Denver’s Zoning Code Task Force and the Community Planning and Development group are currently seeking public input. There have been several community meetings to review the code in specific neighborhoods, and you still have the opportunity to attend any of the remaining meetings.

The changes to the code will be quite drastic in some instances. Currently in Denver, we have R1 (single family), R2 (duplex or carriage house), R3 (multi-family) as our primary residential zoning designations.

If you are thinking about buying a property that is currently zoned R2 because you would like to build a duplex there or have your mother-in-law move into a new carriage house above the garage - beware! Your property could potentially be “down zoned” to single family after the code changes in the fall.

Become informed about the city’s zoning changes if you live in the city, or if you’re considering purchasing a property here. You’ll want to know how the new transit area zoning might affect your property, what zoning could allow next door or across the street, and what the planning committee means by “areas of stability.”

Highest and best use might not be as high for some properties after the zoning code is changed. Other properties may benefit from a “better” zoning designation, increasing their highest and best use.

The web site for more information is www.NewCodeDenver.com. I plan on attending a meeting next week, and I’ll post more information then.

First published at LifeStyleDenver.

Yay! The market statistics are out for the month of April. This is always my favorite blog post of every month, and I wait with baited breath for the Metrolist stats to be put up on their site.

These statistics are based on homes listed for sale in the Denver MLS, and do not reflect private sales, many foreclosures or much new construction.

In April, our inventory remained about equal to what we had on the market in March. Combined single family and condo listings were at 20,628 in March and 20,705 in April. Sales have dropped from a year ago, but are up from last month. I showed a house to some clients this past Sunday, and when we called to tell the listing agent we had some interest I found out they already have 3 offers…

The most notable thing I see this month is the average days on the market continues to drop for single family homes. We’re at less than 4 months on the market, average, for most properties. This suggests that properties are selling much faster than they were, and is a sign of a market that is in balance. Even condominiums, where DOM have risen slightly since last month, are selling in less than 4 months, average.

It looks scary to see that we’ve dropped 17.56% in number of homes under contract, but as a percentage of inventory, we’re actually doing better. We had 25,030 active properties in April ‘08 and 6,093 were under contract.

Our high end of the market is still out of balance. There are $million+ homes selling, but buyers seem reticent to get into the market just yet and sellers are resistant to drop their prices any more. Many sellers in this price point have the financial wherewithal to hold out so we’re at a stalemate.

What does all of this mean for buyers and sellers? Many sellers are getting real with their prices or taking their homes off the market. I think that the lower price point is the hot spot, but since the average sold price for single family homes is up over 1% that may be a sign that the recovery is gradually trickling up to a slightly higher price point.

Spring is here, buyers need to get off the fence quickly. The current combination of low rates and low prices can’t last. If the economy at large stabilizes (the DOW was up again today) then rates will begin to creep back up. You’ll stand to lose a lot of buying power that you have right now. With Denver Real Estate sales showing more and more signs of life, we’ll see more than a 1% jump in average sales price.

Real estate is not scary, if you are wise and educate yourself you can make a smart real estate decision.

These stats were first published over at LifeStyleDenver.com.

Downtown Denver has seen several developments taking shape. Once particularly interesting building is Spire.

Developer Randy Nichols is building a mid-priced condo development aimed at the average price range for a downtown buyer. The development is rapidly rising across from the Denver Convention Center and includes cool amenities like loaner cars and a doggie park on one of the decks.

With 41 stories (483 feet high) and 503 homes (714 bedrooms), Spire will be one of the tallest residential buildings in the Western United States and the first new residential high-rise to be built in the central business district of Denver in decades (24 years). The sales office is now open across the street from the building, and Chad or any of the staff will gladly give you a tour through the models.

Our entire office was invited down for lunch and a tour recently, and we had a great time learning about the Spire development and the city’s idea to make 14th Street a “mini Times Square.”

Denver Real Estate and development is ever changing. We’re fast becoming a city to envy - and the mountain views from Spire will prove that. Downtown Denver is being transformed from a sea of office high rises to an extremely livable and walkable city. Get down there and enjoy!

First posted over at LifeStyleDenver. Check it out!