Why should the government want to save the failing institutions and buy the bad loans, rather than just pump money into the economy Take the same $700 Billion, and make the government an investor. The money can be used for government loans for mortgages or business loans at a set interest rate (which the government can set and adjust when the market changes) with realistic qualification requirements. The lenders qualify the borrowers and make the loans. The lenders get the funds at a fixed amount lower than the actual loans. For example:

Wells Fargo creates a mortgage to a qualified borrower at 6%. Wells Fargo gets the funds from the government and agrees to pay the government back the loan plus 1%. As long as the borrower satisfies the qualification requirements that are set, the government assures the loan (i.e., Wells Fargo has no risk and can make 5% on the loan). This is a super deal for lenders, so they will go through the red tape to get the loans. Money will quickly get into the market, which will allow real estate values to stabilize and increase - making the existing bad loans less bad. This is also not a bailout, so Main Street would support it.

This would mean that companies will continue to fail and homes will get foreclosed, but it addresses the challenges in the economy today and works toward a remedy for the future. Plus it is not creating additional deficit for the government.

Let me know what you think.

Vicki Porter

Porter House Realty

Denver, Colorado

According to a First American CoreLogic report released September 23, 2008, home-sale prices dropped 2.21 percent in July of this year from July 2007 in the Denver - Aurora area. Thirty-five states had nominal price declines in July, and those declines were less than the previous month, according to First American. The Denver-Aurora area was one of the top areas included in First American's July index; i.e. our area had the second lowest amount of decline in prices.

Actually, the drop in price is VERY good news. Nominal price declines "indicate additional stabilization in the geographic expansion of the housing market malaise. ... There is reason to be cautiously optimistic because the price decline stabilization we observe in this cycle is necessary before any improvement in price levels occur," Mark Fleming, chief economist at First American CoreLogic, said in a statement.

Read the entire article: http://denver.bizjournals.com/denver/stories/2008/09/22/daily20.html?surround=lfn&brthrs=1

Vicki Porter

Vicki@PorterHouseRealty.com

YES, the slowdown in our market has slowed down, and properties are beginning to move again.

The real estate market is affected by supply and demand just like any other market. The supply is the inventory of other homes on the market. When the supply is too high, prices come down. We have been in a buyer’s market for some time, i.e. there are more homes on the market than there are ready buyers. However the number of unsold homes in the Denver area dropped by 20% in August from a year earlier, the largest percentage drop in five years. While we are still over-stocked, that is evidence that we are trending toward a better market for sellers.

Interest rates recently dropped again. When interest rates are lower, there are more buyers in the market; i.e. more demand. Rapidly falling mortgage rates are bringing consumers seeking a mortgage out in droves, according to the report released yesterday (September 15. 2008) by the Mortgage Bankers Association. The association’s Weekly Mortgage Applications Survey, which measures week-over-week volume of people applying for a mortgage to either purchase a home or refinance an existing mortgage, showed loan application activity increased 9.5%.

Wells Fargo Home Mortgage, Colorado’s largest mortgage lender, upgraded the status of the Denver metro area’s market from declining to stable. This allows buyers to get loans easier.

The National Association of Realtors, chief economist, Lawrence Yun said, “Based on local market fundamentals, I expect robust home price growth in places like Denver and Houston over the next two years.”

Let’s hope he is right!!

Vicki S. Porter

http://www.PorterHouseRealty.com

Since you are hiring someone to help you with an expensive and very personal purchase, it is important that you find someone you trust and with whom you feel comfortable. It is not unusual to spend eight hours in a day with your agent, so it is not silly to look for an agent who is not only competent, but one whose company you will enjoy. Here are some interview questions to help you compare possible agents.

What is your experience in the real estate business?

          You should learn how many years of experience the agent has in Colorado. How long he/she has been with their currently company. How many properties he/she sells in a year, and the average price of the property they sell. What neighborhoods he/she works, and what type of property he/she works with most, i.e. condos, single family, multi-family.

 What kind of clients does the agent have?

          Knowing that the agent has experience working with others, who are like you, may be helpful in finding the right agent for you. You should ask what percent of their business are first time homebuyers, move-up buyers, or sellers. Ask questions that would tell if you are a typical client for this agent - the age, sex, marital status, etc. of most of his/her clients.

 What kind of agency relationship do you offer?

          Will the agent act as a transaction broker or a buyer's agent for you? What if they represent the Seller on a property that you are interested in, how will he/she deal with that conflict? Will he/she require you to sign an exclusive agreement (that you will not work with another agent during the term of the agreement). How is the agent paid, and does he/she charge any up front fees?

What kind of service will you get from this agent?

         Are they working with too many other clients to give you the time and attention that you need? How will you communicate, and how easy is it for you to reach the agent? Will he/she be working with you, or will you be assigned to a broker associate or an assistant? What days and hours does the agent work?

Vicki Porter

Vicki@PorterHouseRealty.com

Lease with Option to Buy or a Lease-Purchase may be the best way to sell a property in today's tight real estate market. The lease to own or lease before closing type deals are ideal when a seller has a home with little or no equity, and needs to sell the home. Since seller does not have the ability to negotiate much on price, the seller has to offer some other incentives to sell this home, such as creative financing. When a potential buyer has good employment and income, but lacks good credit or the ability to get financing currently, a lease option or lease purchase can be a true win-win.

 Lease with Option: Leasing with an option to buy is exactly what it sounds like - a renting tenant signs an agreement with a landlord stating that the tenant can buy the property at the end of a lease term. The owner is obligated to sell at the option price, but the tenant is not obligated to buy.

 Lease Purchase: In this situation, the buyer is obligated to purchase at the end of the rental period. Both a lease and a contract to purchase are executed, and the buyer does the inspection before taking possession of the property. In that way, the buyer can be responsible for maintaining the property. There is typically a deposit made at the time of contracting, which will represent a security deposit as well as an earnest money deposit, and generally will not be refundable.

 Under either scenario, the seller is in a more secure position than if he/she sold the property and took back a mortgage, because the seller still owns the property. The seller also receives rental income and can take income tax deductions. For buyers, the biggest draw is the fact that they get more time to qualify for mortgage financing.

I have successfully done these transactions, and all parties were delighted with the result. The seller is able to stop the bleading (receiving rent now that is used to pay the seller's mortgage payment) and the buyer gets to move into a home now that he/she will own someday. The contracts are all at sales prices that the seller could not otherwise get in today's market, and which the buyer is willing to pay to have the creative financing that the seller is offering.

Before entering into such an agreement, it's a good idea to get an attorney involved to be sure all bases are covered.

Searching for the Right House

Surely, you have heard the common real estate theory that there are three things to consider when buying a house: "Location, location, location!" Once you have decided where you want to buy, you can consider what features you want in your home. Make a "wish list," and be realistic about what you must have (your non-negotiable features) as well as what you would like to have in your home. Think of objective criteria such as the style (ranch or two stories, etc.), the type (home or condominium, etc.), the number of bedrooms and baths, the square footage, whether there is a basement, a yard, a fireplace or garage.

Once you have identified the location and characteristics you want, it is time to hit the streets with your search criteria. If you have done your preparation to get to this point, the actual physical search for your home is often brief. The first thing your broker will do is put the given specifics into the computer. Within a few minutes using the local Multiple Listings Service, an agent can create a listing of the properties that match the desired profile. Then you need to determine which properties you actually want to view. You will want to make notes on the properties you view so that you can decide which best suits you.

Do not be surprised if the perfect house is the first one you visit. On the other hand, do not be disappointed if after looking at a dozen houses, you still have not found the right one for you. You have to just keep looking until you find the house that you want to call home!

If you are searching for a home in the Denver Metro area, you are welcome to search on your own on my website. Go to www.PorterHouseRealty.com and click on the home search page (you can search without being bombarded by advertisements).  You can also save your favorites, make and save notes on the listings, request daily emails to alert you of new listings that match your search and request showings on the properties that you would live to view.

 Check out the virtual tour on this great one bedroom, one bath unit for only $125,000.

http://www.PorterHouseRealty.com/2303SRace 

for more information, contact me:

Vicki Porter

Vicki@PorterHouseRealty.com

You have heard about the record numbers of foreclosures across the country. For smaller investors, now is an ideal time to look at HUD properties. The U.S. Department of Housing and Urban Development (HUD) acquires homes when there is a foreclosure on a home that was purchased using a loan insured by the Federal Housing Administration.

HUD homes are priced at the current fair market value based upon an appraisal. If the home is in need of repairs, the price is adjusted accordingly. HUD homes are sold "as is," i.e. HUD is not responsible for repairs and improvements.

HUD homes are very easy to research. They are all listed on a website of the asset manager, Michaelson, Connor and Boul ("MCB") http://www.mcbreo.com . You can research properties by state and by city or county, and there are new properties added every week. Properties are also very easy to view; all HUD homes are keyed to the same key and HUD certified real estate agents can buy a HUD key and show any HUD homes - no appointments are required.

Properties are sold using a silent bidding process. There is an initial period (10 days), during which offers are accepted only from owner occupants. HUD will only accept a bid if it meets the threshold for the property (lowest acceptable amount), and HUD will accept the highest net bid received during that initial period. Some properties, of course, sell during that time frame, but many do not.

The properties that do not sell during the owner occupied period are then open for bidding by investors. You can research if offers have been made on any properties on the MCB website, and see what offers were unacceptable to HUD. Over time, the prices on properties that have not sold are reduced, so that there are many properties today that have listing prices that are below the appraised value.

You can submit an offer at any time, and you will have a response by 4:00 p.m. eastern time on the next business day. All offers are submitted on line, and you must have a HUD certified agent submit the bid. There is a listing of HUD certified agents on the website, and if you are looking to buy in the Denver metro area, I can help you. (Vicki@PorterHouseRealty.com 303.995.3100)

 The contract itself is very simple. You must indicate the offering price, the amount of the closing costs and commission to be paid by HUD, and the buyer information. HUD will pay up to 3% of closing costs and up to a 5% commission. You must have an earnest money check at the time you make the offer in the form of a cashier's check. The amount of the earnest money is generally $1,000, but depends on the purchase price of the property that you are buying. There is no contingency in the contract regarding financing, so you should be confident that you will be able to qualify for a loan before you submit a bid.

 If your bid is accepted, your agent is notified. While the original offer is short and sweet, if your offer is accepted there are several disclosure forms that will have to be signed and delivered to MCB within 48 hours.  You will have to submit a lender letter or proof of funds to close at that time. HUD will set the closing date; usually 30-60 days from the date your offer is accepted. 

There are some great opportunities to purchase properties under market - if you know your market and choose wisely.

Vicki S. Porter, Broker, Denver, Colorado

http://www.PorterHouseRealty.com