Kristal Kraft ~Denver Real Estate~303-589-2022

100 Real Estate & Relocation Tips in 100 Days (Day 80)

In Web 2.0 parlance, crowd sourcing is the act of throwing a question out to everyone in your social network, looking for the best, or many best answers to your query. That can be a great thing when you are looking for a recommendation on how to tweak your website, or get the best results from FaceBook. Crowd Sourcing your home purchase can be (and usually is) a recipe for disaster.

This is not to say you should not seek advice when buying a home. Quite the contrary, good, well informed advice can be invaluable when buying a home. There are, however, a few cautions on just how to go about asking for and receiving that advice.

First, make certain you can rely on the professional advice being provided by your Realtor®. If you have made a considered and informed decision on your professional advisor, then listen. If you believe your professional is giving you bad advice, or is not listening and responding to your concerns, then change your professional.

It's probably best not to seek or accept real estate advice from your mortgage lender. Lenders make loans, few are well versed (nor licensed) in the skills necessary to provide professional assistance involving a home purchase. Family members can be a great source of advice and counsel, providing they have the advantage of good information to provide that counsel.

It is almost certainly a very bad idea to ask advice from all of your friends. You will get as many opinions as you have friends, and none of those opinions will have basis of fact. One friend, maybe two can be good, but only if they have been involved since the beginning. As a parent, I want all of the children to make good life decisions, especially when it comes to buying a house. I believe that most parents feel the same way. That does not mean that I, or any parent can, or should, offer home buying advice from 2000 miles away.

Almost every Realtor® can cite multiple stories of the jittery first time buyer bringing a friend or relative to take one last look at the buyers dream home, only to have that dear friend or 2nd cousin veto the sale based on 5 year old market knowledge. If you really want your 2nd cousin's advice and involvement, bring them along every time you look at houses. Make your cousin part of a collaboration, not someone with veto power.

Make certain you can rely on your own best advice to yourself. Learn about the process, shop for your professional advisors, study up on the important things before you start looking at homes. Before you write a contract, learn about the neighborhoods that you want to live in, knock on a few doors, ask questions of potential neighbors, school administrators, even local business owners. Take the time to understand market values before being faced with making a pricing decision. Ask your Realtor® to explain the purchase contract before you have to sign a contract under pressure.

Most people want and need a source of reasoned advice. Just choose your advisor wisely.

100 Real Estate & Relocation Tips in 100 Days (Day 79)

by guest blogger, Larry D. McGee Denver IQ

For most people, there are three very large concerns when it comes to buying a house to call home. The first concern is finding, contracting for, and performing the necessary due diligence for the selected property. The second concern is qualifying for and obtaining the mortgage loan. And the third is keeping all of the emotions in some sort of manageable order. Most people know about the first two, but little thought is given to the last. You can make the whole process more enjoyable by considering the following:

People lie. Wish that were not true, but the fact is, the truth is sometimes very elusive. Even when the truth is obvious, it can at times scamper away from the simplest of questions. The real estate professional sometimes lies when they "puff" a property. A bit of comparison shopping will usually take care of that issue. Sometimes lies happen when somebody tries to tell you what a house is worth. The best the professional can do is demonstrate what similar houses have been selling for recently. While that is a very reasonable guide to worth, the fact is, worth is decided by the buyer and seller agreeing about a price. Sometimes the professional will tell you about things that may happen, or not tell you. Sometimes they do not know, because there is more to know today than ever before. Take a bit of responsibility for verifying what you are told.

Lenders lie. No mortgage lender today can tell you what your interest rate or lendabilty is without a complete loan application. So be aware most radio and television that lay claim to "lowest rates" or "24 approval" are simply not true. If you receive a "promise", ask the promiser just how they can make that promise, and get it on paper. There are many people involved in creating a mortgage loan, with the "investor" (usually represented by the underwriter) having the final say on your loan. Ask your lender to explain the process, and about the people involved. Put your lenders toes in the fire and the beginning, and keep them there. The lender needs your business, you, the consumer, actually have the power, so do not give it away.

Appraisers lie. No often, but it does happen, sometimes by design, but usually because of ignorance of fact. As the consumer that is paying for the loan, you have the right to question the appraisal. While it may be to your advantage to receive an appraisal less than the agreed price, nothing says the seller has to sell it to you at that price. With the new Home Value Code of Conduct (HVCC) now part of the appraisal landscape, there will much confusion and angst regarding appraisal for the near future. Be aware of any lender that guarantees an appraisal.

You may lie to yourself. Be honest with yourself about your stability, both financial and life. Just because you can make a $2,000 a month payment, does not mean that a $1,800 payment would be a whole bunch smarter. Escalating loan payments mean you need to have corresponding escalating income. Are you emotionally equipped to own and maintain a house?

Life gets in the way sometimes, and stuff happens. If everyone has done their best, and the closing is just not going to happen, then it's not going to happen. Buyers and sellers can die, get divorced, have babies, get fired, suffer the loss of loved ones, and be surprised by thousand other things that pop up out of nowhere. If you feel a need to be angry, fight for earnest money, blame someone, or otherwise lose your cool, then get over it quickly. For buyers, it is a house until you have title and can set about making it your home. For seller's, it stops being your home the minute you place the "for sale" sign in the front yard, and becomes a house, a thing, that you need to sell. That may be a bit brutal, but is the truth.

Buying or selling a home is one of the most emotional things we do as humans. Make every attempt to remain a bit detached until the process is over. Doing so will save you sleep, and serve to make you much more aware of the process, and allow you to have some influence on the outcome.

Are You Ready to Buy A Home?

100 Real Estate & Relocation Tips in 100 Days (Day 78)

In the easy money days of the mid 2000's, many people bought a home even though they were not really capable of responding to the
challenges of home ownership. Although making the monthly payment is a very important part of owning a home, there are other considerations.

The first consideration is why? Do you really need to own your residence, or is renting a viable option at the moment? If you are single or newly married, and uncertain as to where you may be growing roots, buying a property may not be such a good idea. If you want to buy a home because of the investment potential, think again. While homes should appreciate in value, using your home as a giant ATM machine to spend your equity on life opportunities is seldom a good idea. Your home is just that, a home, a refuge from the world. You should think about paying it off, if for no other reason to have value for future retirement. While there is a good argument to buying a home for the tax advantages, you should never buy a personal residence unless you can plan to remain a resident owner for at least 2 years, and 3 is better.

You must consider maintenance. Homes (even small condos) are complicated and expensive things that are not easy to separate from. While builder warranties may provide protection in the event you purchase a brand new home, there are still expenses associated with ownership. The fact is, things break, and usually at the worst possible time. It is wise to have heating systems, roofs, and plumbing checked at least every two years. Regular maintenance costs real money, but is considerably cheaper than deferring items that will cost 4 or 5 times as much later.

Before you buy a home, you should consider if your employment is stable, and not just for the next 3 months. Is your marriage or relationship stable? Buying a home as a band aid to improve a struggling relationship usually means you will have one more problem to deal with when the relationship ends.

Are you ready to become involved in the community? If you are buying property in a legal owners association, you will be subject to the rules of that association. Those rules, and costs, can change based on the majority rule of the other home owners. While you may not wish to be involved, you must at least be aware, because changes may affect your property value. Understanding property tax issues and the effect of tax base services on your property value is poorly understood by most home owners. It takes little time to be attentive to the things that affect your property value, and your ability to sell when the time comes.

Finally, there is the question of money. If you are thinking of buying a home or condo, the very first thing to do is secure the services of a competent Realtor®. Even if you are not ready to buy a home now, the valuable guidance you can receive from an expert will save you time and money. Solicit recommendations in your search, compare information on the internet, and speak top more than one Realtor® before making a commitment. Then, if necessary, find a competent mortgage lending adviser, one who will explain your options and provide advice that benefits you, not the lender.

After you consider all of the things above, then begin the process of selecting a property that you can call home.

TOD's and TOZ

100 Real Estate & Relocation Tips in 100 Days (Day 77)

by guest blogger, Larry D. McGee

Getting people from here to there has been one of the most important elements of humanity. Early humans learned to take the most advantageous routes to preferred hunting areas; permanent housing was located at or near trade routes, rivers, and natural ports. Early travel paths in the Americas followed grazing routes laid out by migrating animals, then later by native peoples. Most early road systems made use of former foot paths, following natural contours to make travel possible for horse drawn wagons. The developments of rail lines were engineered to minimize grade elevations, as trains cannot traverse steep grades. Cities have historically been built in close proximity to large bodies of water, to facilitate movement of people and goods.

As the interior of the United States began to develop, cities such as Cincinnati and St. Louis developed along large navigable rivers. It wasn't until the mid 19th century that railroads began to change the need for cities to locate along the water. Atlanta is an example of a city that developed because of an intersection of rail lines. The development of the west simply would not have occurred without the railroads.

Denver is another example of a city that would not exist without rail transportation. As the city grew in the later 1800's, much of the growth was made possible by an extensive network of railroad lines connecting Denver to the rest of the country, and trolley car lines (light rail) connecting developing neighborhoods with downtown Denver. The advent of the automobile, with the convenience and freedom that came with it, rendered the trolley lines obsolete by the late 1940's, and the existing tracks were pulled or paved over.

Fast forward to today, and we find the Regional Transportation District (RTD) aggressively engaged in building rail transit to reach the far corners of Metropolitan Denver. As these modern trolley lines continued to snake their way to the suburbs, development along these transportation corridors began to intensify. The concepts of Transit Oriented Development (TOD), supported and encouraged by Transit Oriented Zoning (TOZ), took form in the minds of city planners everywhere, including Denver. For a complete report on the current status of TOD, go to: Status Report

Really nothing more than deliberate planning of what has occurred naturally throughout human existence, the labels of TOD and TOZ provide modern definition to placing people and business space next to close, walkable, proximity to rail transportation. Over time, development near to rail stations in the Metro Denver area will create more efficient and convenient living for those people that accept and use mass transportation.

Denver's Light Rail Transportation System

100 Real Estate & Relocation Tips in 100 Days (Day76)

It seems hard to believe that Denver's first Light Rail line began service fifteen years ago, in 1994. That first effort, dubbed the Central Corridor Line, wound 5 miles from the Five Points terminus at 34th and Downing Streets, through downtown Denver, then south to its southern terminus at I-25 and Broadway, a location then important only for its 1000 automobile Park-n-Ride. The line was built for under 120 million dollars, and after the normal political battles that accompany anything that looks like change. Denver was a politically tumultuous place that year, with the new airport opening delayed for the 6th time to February 1995. In spite of the political and construction difficulties (tearing up downtown Denver to lay down tracks did not sit well) the line opened with fanfare and ridership success.

With the early success of the Central Corridor Line, the Regional Transportation District (RTD) moved forward to gain support for the first extension to the line. In 2000, the Southwest Line opened, extending service from I-25 and Broadway into Englewood and Littleton. The line proved so successful that the Park-n-Ride located at the southern terminus at Santa Fe and Mineral became instantly overuse, with passengers parking their automobiles in adjacent fields. The widely publicized success of the Southwest Line led immediately to the construction of the Southeast Line, incorporated into the complete reconstruction of Interstate 25 running through South Denver and the southern suburbs of Greenwood Village, Centennial, and Lone Tree. The Southeast Line opened in November, 2006, and has been very successful at moving people along the I-25 corridor into downtown Denver.

While the construction on the Southeast Line was underway, RTC managed to convince the voters in Metropolitan Denver to support a sales tax to expand the light rail system, and add a few heavy commuter rail lines, to bring rail transportation to the rest of the Metro area, including service to Denver International Airport. Considering the local citizenry's love affair with the automobile, this was no easy victory for RTD. This project, known as FasTracks (http://www.rtd-fastracks.com/main_1) is moving forward, despite costs overruns upwards of 2 billion dollars. Although expansion of the rail system continues to have public and political support, things have not gone as well as planned.

The West Line, with service to the Denver Federal Center and the Jefferson County Government Center, began construction in May 9, 2007. Escalating construction costs have forced changes to the line, including constructing the line as a single track from the Federal Center to Golden. Recent declines in construction costs have been matched by declines in tax revenues, so the line is being built in the face of ongoing challenges.

Other lines, including the Gold Line to Arvada, and the I-225 Line located in Aurora, are in the EIS stage, with operation of both lines to begin in the middle of the next decade. Other segments of the system will be so called "heavy" or commuter rail. RTD is creating public/private partnerships to complete these commuter rail lines in order to better use the available funding. These heady rail lines will bring rail service to Denver International Airport along the East Line: to Boulder and Longmont along the Northwest Corridor, and to Commerce City and Thornton along the North Corridor. The entire system is scheduled for completion by 2017.
An important aspect of creating rail transportation is transit oriented development of TOD. In a future we will discuss the effects of TOD and the zoning created for such development (TOZ).