Tag: Home Buyer Information

Are High Interest Rates Discouraging you from Buying a House?

A picture of a toy house to demonstrate the idea of Are High Interest Rates Discouraging you from Buying a House?

Are High Interest Rates Discouraging you from Buying a House? What do you do when you are ready to buy but the high interest rates have you discouraged?  You get creative.  The typical mortgage for buyers to obtain when purchasing, is a thirty year fix rate mortgage.  There are other mortgage options available. When interest rates are high you might be better off obtaining an adjustable mortgage, with a lower interest rate.  If that sounds scary, it shouldn’t. There are loan programs out there including a seven year ARM?  This loan offers an interest rate that stays fixed for the first seven years of the loan. In real estate you will hear agents say, you date the rate and marry the property. What this saying means is that you find the house that you love that you can live in for a long time and you refinance to bring your rate down when rates drop. There are other options available.

Explore other loan options

There are other loan options that will provide a lower the interest rate on the mortgage for awhile. An option available is called the 3/2/1 buy down. This mortgage works by having the interest lowered for the first year, then going up the second year and the third year, the loan is at the rate it will be for the life of the loan. As an example  the rate for the first year might be four percent. 

The second year the rate goes to five percent and the third year the rate is at six percent.  When you take out this type of loan there will be upfront costs. The upfront amount that you pay is the amount that the lender is not earning by reducing the interest for the first two years of the loan. The benefit is not long term.  You need to make sure that you are able to comfortably pay the loan in the third year at the higher interest rate. 

Don’t let high interest rates keep you from buying

A picture of text on a board to demonstrate the idea of Are High Interest Rates Discouraging you from Buying a House?

Are High Interest Rates Discouraging you from Buying a House? Higher interest rates do not need to discourage you from buying a house. There are creative solutions for the higher interest rates that we are experiencing. First step is to meet with a knowledgable, trusted, creative mortgage loan officer to explore what might work best for you.  Next, find a property that you love and a mortgage that will work for you until interest rates improve. When interest rates drop, then refinance your loan. Don’t let the interest rate keep you from buying.  Get into the market. Remember, if you need a recommendation for a good lender. Contact us!

How To Buy When Interest Rates Are High

An image of a home depicting how to buy when interest rates are high

So you are wondering how to buy when interest rates are high? Don’t worry you have come to the right place. There are strategies that you can use that can make home ownership possible! Here are some tips to get you into a home that you can afford and enjoy. You may feel like you know exactly the neighborhood or town that you would like to live in. If you expand your search you may be able to find a home that you love somewhere that is more affordable and can work perfect for you.

How To Buy When Interest Rates Are High, Loan Types and Loan Options

  • The favored loan, for most buyers is a fixed rate mortgage, but what would your payment look like if you were to get a variable rate mortgage? Have a frank discussion with your lender and ask for assistance exploring what is best for you.
  • Remember that when you purchase a home you are not stuck with the loan and the interest rate on the loan. You can refinance when interest rates become more attractive in the future. Interest rates go up and they also come down.
  • Look into grants and down payment assistance or gift funds. Not everyone has a rich uncle that they can call and get a chunk of change from. But do you know if you qualify for no interest down payment assistance? That does exist and you might be able to obtain it. Check with your lender and see if you might be able to qualify.

Home Ownership Equates to Building Wealth

Remember that buying a home to live in is a great way to build wealth. Owning your own place can protect you from ever rising rents. Having a place of your own you can paint the walls the colors you want and enjoy making the place yours. That is how to buy when interest rates are high. So, don’t be discouraged by what you hear in the news. Contact us today and get a recommendation for a lender. Explore whether now is the right time for you to buy!

How Do Water Rights Impact Your Property?

Water, water, water. If you live in town you are use to turning on the faucet and water coming out. You pay the bill every month and the water is available to use. It seems like you have an unlimited supply. You hear about water shortages but feel that they don’t affect you. So, how do water rights impact your property?

Source of Water

What is your experience if you live outside a municipality in Northern Colorado? One of the most important aspects of buying a rural property in Colorado is understanding the water supply. Water is important. Someone has once said that water is life. Most properties in the country are serviced by a well, district water or a spring.

Drill Baby, Drill

If you are purchasing a property and would like to drill a well what are the types of wells and how are they different? One type of well that you might obtain is a household well. Household well is for use only inside the house. No exterior watering of plants, animals, or even washing your car. The rule is only inside the house also includes not filling a hot tub. This is restrictive.

How Do Water Rights Impact Your Property, Domestic Wells

An image of Colorado Irrigation Ditch depicting How Do Water Rights Impact Your Property?

The other type of well that you might obtain is a domestic well. Domestic wells are typically associated with rural properties. A domestic well allows for normal indoor use. A domestic well, also more than likely will allow for the watering of an outdoor animal like a horse, a donkey or maybe a goat. Watering can also typically allow a garden and/or a lawn. Additionally, a domestic well does not allow for unlimited water use. The well permit that is received when the well is drilled will provide information about, the well test report, the depth of the well and the pumping rate of the well. Moreover, make sure you understand what you have or what you are getting and what you can legally do with that water.

How do you find out what type of well a property has that you might be interested purchasing? Request a copy of the well permit. Read this over. Look for the type of well in the well description. You also can call the Colorado Division of Water information desk. 303-866-3587. Leave the address of the property and you will usually receive a return call with on 24 hours.

How Do Water Rights Impact Your Property?

The right to use water is a right. Even rain water collected in buckets and barres are not necessarily available for the landowner use. In Colorado unless a property owner has specific legal rights to use rain water they are compelled to leave water where it is.

Water is precious in the west. Know what you are getting when you are purchasing a property or drilling a well. Do your due diligence. Make sure that you can use the water the way that you would like. That is how water rights impact your property. If you have specific questions we can help. Contact us today.

Common Home Inspection Tests

An Image of the Lead and Radon Brochures to communicate the idea of Common Home Inspection Tests

Congratulations! You have been searching for a home to buy for awhile now and you are so excited. This is because you have a home under contract. Now it is time to call the inspector and get the inspection set up. This is something you should do even if the seller has had the home pre-inspected and even if the contract that was accepted said that you would take the property “as is.” It is important to know what condition the property is in and if there are any issues that you need to plan on addressing now or after closing. In order to find out you will need the inspector to run some common home inspection tests.

Call The Inspector!

So you call the inspector that was recommended by your real estate agent (We Always Recommend Advanced Inspections) and you are ask a bunch of questions. What kind of questions should you plan on having to answer and what is the best answer for those questions? That is what this blog post is about.

Common Home Inspection Tests: Radon

One question that you are sure to be ask is if you would like to have a radon test performed in the property. Radon is a naturally occurring gas that has been determined to cause lung cancer if you are exposed to high concentrations. You have to decide if you are concerned about it. The test costs about $150. The system to mitigate the radon, if the home that you have under contract has a high concentration, is about $2,000. If you are not concerned and do not test for it, know that when it comes time to sell, your buyers may test. If the level of radon is high you will have to disclose and may have to pay for the mitigation system.

Sewer Scope

Another question that your inspector will ask is whether you would like to pay to have a sewer scope preformed on the sewer line for the property. The sewer scope will cost about $200. Should you have this done? The quick answer to that question is that it depends. Is the house older than 25 years? Does it have large trees in the front yard? If the answer to both of those questions is yes, it is probably a good idea to have a sewer scope. If the house is 5 years old and it is located in a new neighborhood with little tiny or no trees, it might be $200 that you could save by not having it done. You can ask the inspector’s recommendations.

Common Home Inspection Tests: Mold and Lead

Other tests that can be performed are tests for mold and for lead. These are not common tests. If the home was built prior to 1978 it has lead based paint. That is a common fact and there is no reason to test. Detailed lead tests can determine if there is lead pipes in the home. Lead pipes would have been used in older construction, pre-1970. The test for mold should be done if there is reason for concern. The inspection is an important part of the under contract process. Getting an inspection and the appropriate tests performed can give you great information. This is vital so you know as much as you can about the home that you are purchasing.

Those are the Common Home Inspection Tests. Contact us for more information or to have your best interests represented when buying your next home.

Under Contract Process Expenses

What to expect during the under contract process. You are ready to buy a home. You have saved your dollars and you have your down payment. But you want to know what will the costs be over and above the down payment. That is a great question. You need to be ready for all under contract process expenses.

Earnest Money

A picture of cash and keys demonstrating Under Contract Process Expenses

The first money that will be required is the earnest money is oven required within a few days of the contract being accepted. It is not uncommon for the earnest money to be required to be provided within three business days of contract acceptance. The earnest money amount is what is requested by the seller and is apart of the contract. Sometimes when wanting to ensure your contract is accepted you may add to the earnest money amount. Doubling the requested amount or even tripling the amount requested by the seller. The earnest money is provided in the form of a personal check that is cashed and be credited to you at closing or you can provide the title company with a wire for the funds. 

Under Contract Process Expenses: Inspection

The next cost that you will have once you have a property under contract is the cost of the inspection.  Most inspectors charge based on the location of the property and the square footage of the home. The larger the home the more expensive the inspection. The cost can run anywhere between $400 to $750.  Inspectors usually expect payment before they begin or at time of the inspection.

Appraisal

Another cost that you can expect to pay as a part of the process is the cost of the appraisal. How this cost is handled depends on the lender that you are working with. Some lenders want the money at time of the contract acceptance others will make the appraisal apart of closing costs. Make sure know what you the expectation is. If you are required to have the money upfront that can be as much as $500 to $800 that you will need to pay at time of contract acceptance.  

Buying a home has expenses as a part of the process. This post gives you some idea of what to expect in terms of under contract process expenses. Contact us so that we can be your guide through the process of purchasing a new home.

Red Flags When Buying A Home

Buying a home is an exciting, stressful, and can be a fun process.  What are some important things that all buyers should pay attention to and look out for while shopping for your home?  Here is a list of ten red flags to look for when buying a home. 

Too Much Scent

While looking at home you may walk into a home that smells like air freshener.  Every where you walk in the home you see another plug in or sent producing product.  This is a red flag and the owner of the home could be covering offensive odors.

Red Flags When Buying A Home: Poor Tile Work

A photo of a tile backsplash demonstrating red flags when buying a home

Sometimes home owners take on projects that they know nothing about and they struggle to complete these projects.  Tiling can be a project that looks so easy on the home improvement shows.  Bad tiling can cost a lot to un do and re do.  Check grout lines, and tile alignment. Cracked grout can be a sign of major issues. It won’t be long before these tiles start coming loose. It may also be a sign of water damage underneath the tile. Misaligned tiles are indicative of a home owner completed job and should give you pause. Best case scenario the tile will always be crooked. Worst case, a much shorter life span for your tile.

Foundation and Maintenance Issues

These problems can show up through uneven floors, cracks in walls, sticking windows and doors and gaps that can be found around doors and windows. Poor maintenance in the home can indicate that the seller has ignored other issues.  Poor maintenance can also shorten the life of furnace and a/c units. 

Red Flags When Buying A Home: Beware of Water Nearby

A photo of a tile backsplash demonstrating red flags when buying a home

Water front property is beautiful but can mean more expense to you as the buyer and additional problems.  Water front property can indicate that there is a higher chance of flooding. The property may also require flood insurance. 

Beware of Water Inside

Water can also cause problems inside. Mold is a four-letter word in real estate.  A small bit of mold can cost thousands of dollars to address.  Make sure that bathrooms are inspected for mold.  Check under sinks in kitchen and bath for small gray or black spots. Look for water damage. Musty odor can indicate that you should check further to ensure that the home that you would like to buy does not have water damage. Check ceilings for water damage and even make sure that your inspector checks the attic too.

Cosmetic updates can be the reason that you fell in love with the home.  Beware and make sure that those great updates are not hiding something that could be a deal breaker if you knew about it. Bad ventilation can allow moisture to stick around and create mold.  Make sure that bathrooms have working vent fans. 

Red Flags When Buying A Home: Wonky Windows

Another important thing to watch for is wonky windows.  What is a wonky window?  That is a window that does not open smoothly.  A wonky window can signal foundation issues.  Moreover, windows are pricy to fix and repair.  

Buying a home is exciting.  It is important to know what you are buying.  Watch out for these red flags when buying a home. Get the home inspected to ensure that you are not taking on more than you can handle. Some of the issues listed above are not quick or inexpensive fixes.  You should enjoy home ownership and not feel burdened with a problem that costs thousands to correct. Your inspector should be able to find issues like those listed above.  Then you can make an educated decision to buy.  Let us be your guide through the process. Contact us today.

What Do Real Estate Agents Actually Do?

Popular culture has probably painted a picture for you of real estate agents. This might be anything from a cut throat negotiator to something along the lines of a used car salesman. In honesty the truth depends on which agent you talk to. However, professional real estate agents probably all fall somewhere along the lines of what is discussed below. So what do real estate agents actually do?

Hint: It’s a lot more than showing property, and coming to closing

It depends on who they are representing (buyer or seller). This is because there are vastly different roles that a real estate agent must fulfill. Let’s take a look at each of these roles.

What Do Real Estate Agents Actually Do When Representing a Buyer?

A buyer’s agent certainly shows a lot of property. However, they must also be a neighborhood and community expert. Buyer’s agents spend a lot of time researching. They do this in order to remain knowledgeable about pricing and the overall condition of the market. Research also allows them to find you homes that match your criteria. Being an expert on neighborhoods and the current market is vital. This is important in order to aid their clients in selecting a home and location that best meet the buyer’s needs. They will be able to tell you about specific builders’ construction practices. Along with this they can show you which homes to select and which to avoid.

The buyer’s agent must also be a negotiation expert in order to get their client’s offer accepted. This is actually only the beginning as buyer’s agents must also guide the transaction through the under contract process. During this phase the home needs an inspection and appraisal. Depending on the outcome of these inspections additional negotiation may be required. You want to make sure you have a skilled negotiator in your corner. This will allow the home buying process to work out in your favor.

Good Real Estate Agent’s Don’t Just List It And Leave It

What Do Real Estate Agents Do (Open House Sign)

As a seller’s agent the responsibilities change. It is vital to have the listing shown in the best light. This means home staging and professional grade photographs. It also means clearing up issues prior to the property going on the market. Some of these might include minor repairs or ensuring that permits are in order. It really is a case by case basis as no two properties are the same. Once the home is on the market a seller’s agent must be knowledgeable about their listings. They will field many emails and phone calls with questions about the property.

Having spent a great deal of time with your home getting it ready for sale will allow them to know your home inside and out. Absentee agents who never see your home are missing this crucial experience. A seller’s agent will need to negotiate both the initial offer and condition of the property at time of inspection and appraisal. During the under contract process they may also have to address questions of title, insurance or other issues. A knowledgeable and experienced agent can easily solve these issues. This is in sharp contrast to an inexperienced agent who may panic. There are very few new problems in real estate. A seasoned agent has probably seen most of them and can easily advocate for your best interest.

We are highly experienced representing both buyers and sellers in Fort Collins and Northern Colorado. Contact us today and let us guide you through the real estate process. Doing so will allow your interests to be best represented.

For Sale By Owner: Things to Look Out For

There are a few things to look out for with a for sale by owner property. You might think twice before buying a home that is advertised as for sale by owner.

You have been looking to buy a home and getting frustrated. 

For Sale By Owner

There is not much selection of available homes and when you have written an offer, you are competing with others and have lost out.  You wonder if you should look at homes that are not listed for sale by a realtor, but instead by the owner.  What difference does it really make you ask?  It actually matters a lot. When it comes to buying a home and dealing with all of the paperwork, digging into the home’s history and inspections.  Mistakes can cost home buyers thousands of dollars

For Sale By Owner: Things to Look Out For: Are you sure that the home is really for sale? 

Scams can be found anywhere these days. The real estate industry is no different. Do you know what a proper sales contract looks like?  Moreover, what about what things a contract should include?  Do you know all of the necessary forms required for a sale in Colorado?  Additionally, sellers do not have a Code of Ethics. Realtors do.  That seller might try to take advantage of you.  Who is looking out for your best interest? 

For Sale By Owner: Things to Look Out For, Are you a skilled negotiator? 

There is much to negotiate as a part of a real estate contract.  It is not just about the price.  Additionally, there are the dates that must be agreed up on, the possession and what repairs will be made too.

Are you willing to always have to deal with the homeowner? 

You will have to call them to schedule the inspection, appraisal.  If you would like to go over and get measurements for new carpet you will have to make another call to the owner. Moreover, if you want to take mom and dad to see it when they are visiting…that is another phone call.

You are about to make the largest investment you quite possibly have ever made. 

You want to make sure that the seller is telling you everything you need to know to make a good decision.  Additionally, are you sure that you are getting full disclosure from the seller?  Knowledge is power.  Is this a risk you are willing to take.  Additionally, they might hide key information about the condition or repairs to the property.

For Sale By Owner Things to Look Out For include Money Issues

The main reason the seller usually chooses to sell their home themselves is to save money by not paying agent’s commission. What happens if the seller is having money issues and will not pay for repairs after you spend the money for the inspection?  Is lack of money to pay for things the reason they are trying to save money.  You may not know the answer to that question until it is too late.  The seller may also take the cheap way out when doing the repairs that you have requested. What do you do in that situation?

A real estate transaction is a complicated process. 

When looking at a for sale by owner there are a lot of things to look out for. There are many details that you will have to handle. Mistakes can be costly. A real estate agent can save you frustration, time and money. This is a time that it is wise to leave the details and paperwork to the professional. As the buyer, remember that the services of the real estate agent are not a cost you pay.  Sellers usually pay for both real estate agents. Contact us with questions about how to buy or sell a home.

Real Estate Negotiation Tips

There are many ways to come out on top in real estate negotiations both as a buyer and a seller. Today we want to highlight some of the methods you and your agent can have at their disposal.

Real Estate Negotiation Tips For Sellers: Your keys to success

As a seller you hold a lot of the cards in negotiation. You have something that the buyer wants and have piqued their interest in your property enough that they have presented you with an offer. However, negotiation is still key to ending up with the most favorable offer. It is important to share with your agent what terms you are looking for. Is price your number one concern? Or are you more concerned about not paying for potential repairs? Timing is also a crucial factor. Do you need a specific closing date in order to purchase your next property? As your agent I will field phone calls prior to offers being written. Armed with this information the negotiation begins. These days there are a lot of competing offer situations. Informing these agents what terms would be most favorable to you allows them to create a great offer. My goal is always to present you with the greatest number of amazing offers. I then help you weed through all the idiosyncrasies to sign the best one.

Real Estate Negotiation Tips For Buyers

With the seller’s market of the last few years it can seem like sellers certainly have a bit of an upper hand. While this is true in some aspects at the end of the day a seller wants to dispose of their property and receive fair compensation. They may also have time constraints. Then we negotiate condition at time of inspection. The terms we first negotiate will always include timing. Sometimes, sellers are flexible but this is not always the case. The seller may need the cash from this sale to close on their next house in two weeks. Or they might need a rent back for several weeks after closing in order to secure their next move. The saying time is money is especially true in real estate. An offer that meets the timing the seller needs can easily beat out an offer thousands of dollars over yours. You can also waive your right to inspection. This ensures the seller that there will not be extra expenses that they need to worry about. Agreeing to cover any gap between the appraised value and your offer price is another strategy. This means you will bring the difference in cash to closing. When combined, all of these negotiation strategies provide a seller peace of mind in accepting your offer.

We Are Your Negotiation Experts

Need some help negotiating your next real estate transaction? Contact us and we would be happy to help you reach your real estate goals with the least amount of stress possible.

Waiting for the Real Estate Market to Cool Off?

Are you waiting for the real estate market to cool off? We have discussed in the past it is unlikely that there will be a market crash like the 2008/09 housing crisis. There is still a chance that at some point the market will shift. This could be from a sellers market to a buyers market or even a balanced market.

Sitting, Waiting, Wishing

You might be wondering if you should wait for the real estate market to cool off before purchasing. This is a fair question and one that we get fairly often. Unfortunately, even if the market cools over the course of the next few years, it still may mean housing costs are just as high. Let us illustrate this point with some math if you will bear with us.

Do The Math

So are there any benefits to waiting for the real estate market to cool off? Let’s say that you can purchase a home today for $400,000 with a 3% interest rate, this would make your monthly payment roughly $1,686 per month. This is when you factor in a rough estimate for property taxes and insurance. Now let’s say that the market takes a nose dive. With your crystal ball you wait and buy that same house in a year or two. Now that house sells for $350,000 but with interest rates climbing your rate is now 4.75%. This would make your monthly payment $1,826 (allowing for the same estimate for taxes and insurance). You are still paying $140 more per month on the same property. Even though the value of the property has gone down.

In this scenario it is also important to note how unlikely that situation is to occur. In Fort Collins during the housing crisis, home prices dropped less that 1%. On a $400,000 home this would equate to it being worth $396,000. In the above example the home decreasing in value at that rate equates to a price drop of 12.5%.

Waiting Doesn’t Work

The simple thought experiment above demonstrates that waiting for a hypothetical market shift does not result in any real cost savings for you. If home valuation trends continue you will have lost out on thousands of dollars of appreciation waiting for a day that may never come. So, if you have been on the fence about beginning your home search contact us and we can help you get started today.