Articles

http://www.coloradodreamhouse.com/index.php/news/ In this week’s market update for Denver, Colorado Fuller Sotheby’s Agent Dan Polimino says don’t be afraid to insult him with a really low offer on any of his homes he has for sale. To find out why Dan wants you to insult him watch this week’s video market update for Denver Colorado.

I speak with a lot of real estate agents on a daily basis and they all seem to be talking about how many deals are falling apart over inspection items. If you are not familiar with what I am talking about, it is when a buyer puts a home under contract and then terminates the contract after the home inspection. The question is, why is this a growing trend now? To answer that question, let’s take a look at two different time periods.

It’s 2005 and it’s a hot real estate market. Bill Smith has a home for sale and Tom Jones puts it under contract. Jones has an inspection done, items come up on the inspection, some minor and some more serious in nature. Jones doesn’t object to the inspection items, he doesn’t even bat an eyelash and moves on with the purchase of the home asking for nothing to be fixed.

Fast forward to 2010 and Bill Smith is selling his home, Tom Jones put it under contract and orders his inspection. Items come up on the inspection, some minor and some more serious in nature. Buyer and seller argue, haggle, and fight over who is going to fix what and how much. Jones is not happy and terminates the contract shortly thereafter.

What’s the difference between these two scenarios? What happened between 2005 and 2010? Did all of the homes in America all of a sudden fall into serious disrepair? I think not! The answer is, “It’s all about perception.” In 2005, buyers looked the other way on inspection items or thought “No problem, I’ll fix them myself.” Buyers did not want anything to get in the way of them getting the home they wanted, not even inspection items. Today the buyer perception is, “I have the seller’s over a barrel, I am going get what I want, when I want it, and if I don’t win, I’ll take my money and go home or elsewhere.”

In most cases, deals should not be falling apart over inspection items. This can and should be a give-and-take compromise with both parties winning. I understand what the market is right now and buyers have an advantage, but I think that we can make even more progress in the recovery of the real estate market if we can get to a more equitable “perception.”

Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.coloradodreamhouse.com/denverpost

Click here to Get started searching for YOUR Colorado Dream Home.

Yes, you might be better off buying now than when the tax credit was in effect.  The reasons are very simple.  A historic drop in interest rates and less competition if you are buying residential property under $400,000.  If you were taking out your mortgage today, your interest rate would probably be around 4.5% for a thirty year fixed rate mortgage.   Rates in April were right around 5.25%.  You would be spending $135 less on your monthly payment, for an annual savings of $1,620 per year.

Home sales hit a wall with the expiration of the tax credit, reminiscent of how “Cash for Clunkers” sucked up a lot of future demand for car sales.  One advantage of the current market situation is that lower interest rates and housing prices are available to everyone purchasing residential real estate, whether homeowners or investors.  I have noticed an increase in savvy investors buying real estate to “fix and hold”.  They are saying the drop in demand after April has enabled them to get lower offers accepted.

Do I wish a tax credit would come back for everyone, not just first time homebuyers?  Of course I do.  Do I think it will with our record deficits?  Not likely.  If you purchased back in April, congratulations.  You are making yourself rich instead of a landlord.  Hopefully you went with a zero or low cost loan.  If so it might make sense to refinance now, saving a lot of money.  As always, have your mortgage professional do the numbers.

Remember that unless you are Warren Buffet, you can not time the market.  I have missed a lot of great deals because I thought prices were going to go a little lower.  Feel free to call or email with any questions.

Next Week: Update on FHA negative equity refinance program

Best

Chip

Chip Allen

Crestline Mortgage Bankers

A Division of Universal Lending Corp

Direct: 303.947.2109

Fax: 303.987.0676

Loanchip@hotmail.com

Your Lender for Life!

When people you care about need a mortgage,

for purchase or refinance, please do not keep me a secret.

Click here to Get started searching for YOUR Colorado Dream Home.