A Toast to the Happy Couple

Well, happier anyway.  All relationships have some struggles in trying to get everyone's needs met simultaneously, but sometimes compromises can be reached that make everyone happier.  That's where the Federal Housing Administration (FHA) and condominium developments are going - putting aside old fears and resentments, bringing home flowers, and coming to a more amicable union.

FHA loans are a great option for some homebuyers as they require smaller down payments and usually have lower credit hurdles than other types of loans.  It's also possible to use monetary gifts to pay for closing costs, and even roll the costs of renovations into the financing.  However, there is a downside.  FHA home loans have relatively low limits, and mortgage protection insurance can be more onerous than on a conventional loan.  

Probably wouldn't qualify for FHA financing...

Another consideration is that the FHA looks not only at the person who is doing the borrowing, but the property being purchased.  Homes bought with FHA financing have to go through an FHA appraisal, which can be strict with its requirements.  For instance, with other lenders you may be able to get by with a seller credit to replace the dying furnace, but the FHA will require the work actually be completed prior to loan approval.  Also, it can be more difficult to finance a condominium due to regulations that govern the complex as a whole, not just the individual unit.  It's really important to talk to a professional mortgage broker who can help you decide on the best option for your unique situation.

Some positive changes have been made recently that should help more potential homebuyers, specifically in regards to purchasing condominiums.  In the past, FHA had strict rules about how many investors could own property in a condo development, and what percentage of the whole they could hold in order for the development to still qualify.  The former remains the same; at least half of the units must be owner-occupied to get approval.  However, now a single investor may own up to half of the units and the development will retain FHA certification, up from only 10% previously.

May allow for more business uses...

Other significant changes have been introduced, with more promised.  Condo complexes can now devote up to half of their space to non-residential commercial use, up from only 25%.  In regards to delinquent HOA dues, FHA is now allowing up to 15% of the units to be 60 days delinquent, up from just 30 days.  And while a lot of folks are struggling right now to make the mortgage payment and may not be as current with their homeowners dues, this could make the difference for some projects.

If you are even considering FHA financing for an attached dwelling, it's a good idea to talk with a mortgage professional early on.  While FHA has eased some of their requirements, it may still take a lot of hoop-jumping to get approval, which can delay transactions for weeks or even longer.  If you need a mortgage professional that's tried and true, give me a call.


images:  Robert Tewart, Jeremy Levine Design

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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Lock and Leave Lifestyle

A condo or townhouse is an attractive option for some folks.  The ability to turn off the lights, lock the front door and leave for extended periods of time without worrying about property maintenance is ideal for some lifestyles.

A great property with this advantage was put on the market yesterday.  It's a 2 bedroom, 4 bath, 2-story townhouse in The Summit at Rock Creek.  Drive by 2855 Rock Creek Circle #177 and check out the area.  It's Superior location gives the neighborhood some great views, it's down the road from a ton or restaurants and the Flatiron Crossing mall, and the unit itself is just steps away from a park.

Brand new carpeting was just installed throughout

The rooms are large, with two master bedrooms upstairs and over 2600 square feet total.  The walk-out basement is finished, wired for media, with a fenced patio area that already has a deck wired and reinforced for a hot tub.  One of the comments people usually make when they check it out is all of the unexpected storage.  There are several large closets on every floor, including two walk-ins upstairs.  The two-car attached garage has a high ceiling and shelving already installed above the garage door.

Spacious feel with expansive views

One of the issues some people have with an attached dwelling is having people so close that they are looking into your windows.  This particular unit has a great location within the development - it's back deck faces east, at the edge of the neighborhood, with no neighbors behind and city views.  It's also one of the few units with a driveway, which gives it two additional parking spaces.

The seller is meticulous about maintenance, so the unit has been well-cared for.  She is the first and only owner, and was on site every day while it was being built, checking on progress and holding the builder to a high level of service.  The water heater is only a couple of years old with a transferable warranty, and there's already a sump pump and radon-mitigation system installed.  The HOA has a great reputation and takes care of all exterior grounds and building maintenance consistently and responsibly.

If you'd like to get a peek inside the unit for yourself, give me a call, I'd be happy to take you on the tour!

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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100 Posts Later

Benjamin Franklin is credited with saying, "If you would not be forgotten as soon as you are dead, either write something worth reading or do things worth writing."

I aspire to do both, although no doubt my effort falls short from time to time.  One of the reasons I enjoy my job are the times when it all comes together, when I find the right solution for my client and it makes them really happy.  The blog is a way to reach more people than I can actually meet, sharing some knowledge and experience along the way, to perhaps help others find what makes them happy.  

100 posts later and there is still so much to learn, explore and write about.  Although some days it feels more like Steven Wright:  "I"m writing a book.  I've got the page numbers done."

image:  Alan Cleaver

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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Redleaf Neighborhood, Broomfield

Normally, I limit showings to 6 per day; it's more tiring than clients think!  You are driving and walking for hours, all the while your brain is working trying to notice and remember and compare, usually accompanied by the excitement and adrenalin of the decisions ahead.  After a while, the properties and rooms start to get mixed up in your head and the process becomes much less productive.

For out of town clients, exceptions have to be made.  I like to start with listing alerts - automatic searches set up in the MLS with specific criteria given to me by the client.  From the listings generated, we narrow down the possibilities and then I'll preview the properties and take additional pictures and notes.  By the time the client is ready to get on a plane to see things in person, we have eliminated houses most likely to waste our time.  Even so, we often have to cram as many showings into our limited time as possible.

My most recent whirlwind took us through a dozen homes in Superior, Louisville, Lafayette and Broomfield in one day.  The last home was IT, and we went back for a second showing the next morning after doing research on the competition, property history and sales data.  The chosen property was in the Redleaf neighborhood in Broomfield, located just north of the Broomfield County Commons Park and the Paul Derda Recreation Center, where detached homes can go for as little as $225,000 and as much as $575,000.

Building began in 2005, so sales data is still a bit light, but below you can see the numbers for the past 5 years.  Keep in mind that there could be some builder sales or FSBOs not reflected in the MLS data.

You can see the slowdown in the market from 2008 to 2010, but the area is rebounding.  The number of properties sold in 2011 was almost double the number in 2010, and so far this year sales are up 70% over the same time period last year.

If you'd like to view a home in Redleaf, or need more information about any of the Broomfield neighborhoods, give me a call or email.  I'd be happy to give you the guided tour.

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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Attached or Detached?

Wildgrass Townhomes, Broomfield

A condo or townhouse (a.k.a. "attached dwelling") can be a good choice for a first time homebuyer or someone who is downsizing, as they are generally less expensive than a detached home in the same area.  They have perks that apartments don't have, such as being able to make your own changes to the interior and having someone else take care of the exterior, not to mention the appreciation on your investment.  However, there are important considerations that you should be aware of before purchasing an attached dwelling.

Do parties spill into the hallway?

• Sharing walls, floors and ceilings can sometimes be a challenge, and certain units are better constructed and insulated than others.  Ask current residences about their experiences, and consider your own lifestyle preferences to determine if being in such close proximity to other people would be a bother.

• Do you own any associated parking or storage, or do you just have use rights?  Sometimes garage or reserved parking spots are included in the deed and sometimes they are deeded separately.  If separate, there may be a list with the homeowners' association of residents who are waiting to buy or rent one.

The Board may not approve

• Like many neighborhoods these days, condos and townhouses will have a homeowners' association with rules and restrictions that dictate what you can and can't do to the property.  These may include items that affect the exterior, such as the type of replacement windows you can use, whether you can add openings, even what is allowed to be kept on your balcony.  They can also dictate what happens on the interior, such as whether you can have pets or run a business from your home.  It's very important to review the Covenants, Conditions and Restrictions (CCRs) during the contract period to be sure that the rules are not too limiting.

• HOAs require an additional fee which may be paid on a monthly, quarterly or yearly basis.  These fees may only cover common area maintenance and insurance, or they may include trash removal and other amenities such as a clubhouse or swimming pool.  Find out what is included in a particular development, and be sure that you can afford your monthly payment once you add in HOA dues.

No one likes a surprise bill

• In addition to the dues, there may be other budgetary concerns relating to the HOA or common areas.  HOAs often try to build their financial reserves to address ongoing maintenance items such as exterior painting or roof replacement, but sometimes unexpected costs come up.  When I was the Office Manager at a Boulder HOA, the old elevators had to be replaced to be brought up to code and address some safety issues that the board was not aware of.  This was rectified with a "special assessment," a several hundred dollar charge to each condo owner above and beyond their monthly dues.

• How the HOA is being managed can affect homeowner satisfaction.  Most hire professional management companies to run both the administrative duties as well as the maintenance of the development, but some still hire their own people that are supervised by the board of directors.  Ask current residences about their experiences, or attend an HOA meeting and ask to see several months of meeting minutes to determine if there are ongoing issues with residents, maintenance or other items.

You can't pick your neighbors

• Condos and townhouses can sometimes be difficult to finance as lender requirements are different than they are for detached homes.  The proportion of owner occupant units versus rentals is a big factor in obtaining financing.  Lenders may also look at the delinquency rate for HOA dues, as well as any outstanding litigation against the development.  Not long ago, I was working with a Buyer who also had a townhouse to sell.  She was tripped up by a buyer's lender who would not finance the loan due to a pending lawsuit over another owner's unleashed dog biting someone.  Even though my client didn't know these people, the dog owner was in violation of the HOA leash rules, and the HOA was adequately insured against such lawsuits, it still made the underwriter nervous.  Be sure to talk to your lender about financing limitations regarding a particular unit you are interested in purchasing.  Your Realtor should also be able to find a lender who has experience with harder-to-finance developments.

• Find out what the master insurance policy for the development covers and what it doesn't.  Make sure you understand where your responsibility picks up - depending on the type of attached dwelling you buy, you may or may not be liable for damage to or systems within shared walls.
  

In this area of Colorado, the attached dwelling market tends to move slower than the detached market, which can inform your negotiation strategies.  Keep that in mind when it comes time to resell your unit, as well.  Give me a call if you need some help sleuthing information for a particular development.

images: TenSafeFrogs, TCHganja, joeltelling, smerikal

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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The Gripe with Polybutylene Pipe

This summer, I represented two buyers who each bought homes in the Westminster, in the Arrowhead neighborhood.  Arrowhead is a Jefferson County neighborhood just north of 112th Avenue and west of Sheridan Boulevard.  The houses were built in the early 90s, and quite a few of them are plumbed with polybutylene piping, a material that was in use from about 1978 to 1995.  Because of its low cost and easy installation, it was used extensively to replace copper piping in areas across the United States.

Unfortunately, there have been incidents of system failure over the years, resulting in several lawsuits and a class action settlement.  The manufacturer has never admitted that polybutylene is defective, and indeed many homeowners have lived with with piping for decades without incident.  Nevertheless, once discovered by a professional inspection it can become a sticking point in negotiations.  Additionally, insurance companies are wary about issuing policies for homes that still contain polybutylene.

Pipes are typically gray or white with a dull finish

The first time I encountered this issue, neither the seller nor the listing agent were aware that the house was piped with polybutylene.  The seller was not in a financial position to have the entire house replumbed, which can be expensive for two-story homes.  We negotiated some money off of the purchase for some other repair items, but that still didn't resolve the plumbing issue.  Our inspector recommended an alternative - getting the piping certified by a licensed plumber.  We called the buyer's insurance company to find out what would satisfy the underwriter, and they echoed our inspector's suggestion.

As it turns out, over the course of the 18 years or so that polybutylene had been utilized, there were improvements in the material and installation methods that increase the integrity of the system, so the later installations have proven to be more reliable than the originals.  Still, certain insurance companies will not issue new policies on homes with polybutylene piping so it's very important to do an inspection and make the right phone calls.  Adding a home warranty into the transaction that covers the plumbing may also help give peace of mind.  And if your insurance agent says no problem, he's got it covered, make sure you get it in writing. 

Another consideration I point out to buyers when they are thinking about accepted something in a structure that is less than ideal - the effect the issue will have upon resale.  While one buyer may be willing to take on a certain amount of risk to get the house they really want, another may not touch it with a ten foot pole.  Even if the piping has no problems for the next decade or so, the subsequent buyers may insist that the house get replumbed as a condition of sale.  It's possible that potential buyers may not even consider the home if it still has polybutylene, increasing your time on market and possibly incurring a cost reduction.

Do your homework.  Ask industry experts about their experience with polybutylene, and not just the companies that are in the business of replacing it.  Find out from your Realtor if the material is prevalent in the area and what sellers have been willing to do for buyers in the past.  If you decide to move forward with the transaction, plan to build the replumbing costs into a future repair budget so that you can get top dollar when you decide to resell.

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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Heritage Neighborhood, Louisville

 

I recently took a client through some houses in the Heritage neighborhood of Louisville.  Built in the early 80s, the homes are at various levels of updating and have sold from the $240,000s to the $390,000s in the past few years.

The Louisville area has quickly turned into a seller's market, and properties that are priced well and show decently are going under contract within a week or two.  Inventory is low, and some sellers are happily dealing in multiple offer situations.  The second quarter of 2012 shows a sharp incline in the number of closings in that neighborhood alone, as the chart below indicates:

The average percentage off the asking price hasn't been lower than 97% since before 2008, although beware that this number can be misleading.  If the seller gave the buyer money toward closing costs, they actually walked away with less money that the selling price would indicate.  Also, the percentage off asking only takes into consideration the amount discounted off of the final asking price - not necessarily the original asking price.  In other words, if the property had several price reductions before an offer was made, that would not be reflected.  That may or may not be indicative of the market, however, if a particular seller just had unrealistic expectations of what his property could sell for.  That's another reason it's a good idea to hire a Realtor who has access to all of the data regarding a property and, more importantly, can help interpret that data to get you the best value.

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I would love to help you with your real estate journey. 

Please contact me at 303-917-7143 or robbin@stauferteam.com

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