Monthly Archives: October 2010

Fire in Boulder, Relaxed Rules for Rebuilding

Posted by Michael Hughes

Land use codes for Fourmile Fire victims who want to rebuild their homes have been relaxed by the Boulder County Commissioners. Deja Vu yesterday when another fire threatened Boulder real estate in the nearby foothills.

People whose houses burned in the blaze have up to two years to apply for permits to rebuild essentially in the same location, the same house they lost without going through the county’s painstaking site plan review process. As a person who as done an addition and built in house in Boulder I speak from experience.

The fresh rules will also allow victims to add up to 530 square feet, typically the size of a two-car garage. That’s somewhat of a random number however any additional amount that can be added is beneficial to the fire victims. They can also make minor changes to the house design and site location, using an accelerated review process that’s more meticulous than just applying for a building permit but easier than going though the entire review.

The Fourmile Fire burned more than 6,000 acres, demolishing 169 homes in its wake in the mountains west of Boulder.

The commissioners said they were sympathetic to the call to waive fees but apparently they aren’t into doing it across the board. They know they should just do it instead of wasting time in more meetings to resolve minutae. They need to be sensitive to cases of hardship and  a fire is all hardship. Of course we don’t want the taxpayers of Boulder County footing the bill for the items that otherwise might be paid for by insurance companies. These people have been devastated they don’t need to be more devastated by an numb group of county commissioners. Let them rebuild there Boulder real estate and move on. To read the full article.

If you have questions about this article or any things Boulder or Real Estate give me a call a comment a text or visit my website or Phone or text. Michael Hughes at Fuller Sotheby’s International Realty.

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Banks Resume Foreclosures…

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Posted by Michael Hughes

It is important  in today’s Boulder real estate market that you know what a short sale is In order for these people to sell their house and move on they either have to come to the closing with money or negotiate with the bank who hold the mortgage to accept less than they owe (short sale).

The Basics: A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan (mortgage).  It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower into foreclosure. A short sale is better for the borrower because it does not impact them as severely (or nearly as long) as a foreclosure does. Both parties (lender and the owner) consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency..

Owners View: These would be sellers are stuck.  They would like to (need to) sell their house in Boulder, but for any number of reasons (bought at the peak of the real estate market, or negative amortizing loans, or ARM’s, or second loans, or HELOC’s or, or,or) they cannot find a price a buyer will pay for the home and that will also pay off the existing loans and closing costs.  Convincing the lender is not an easy job to take less than they are owed.  First of all there must be a compelling hardship where the seller absolutely cannot keep up the payments nor come up with cash to close.
So they must have a proveable hardship (and write a letter in detail regarding what the hardship is). Once all of the documentation is complete a package including the sales contract signed by buyer and seller is sent to the bank for approval.   This is the tough part, it takes patience.  It can take up to 6 or 7 months but usually no fewer than 8 weeks to get an answer from the bank.  If the short sale is approved and  the sale goes through at a lower amount,  the sellers credit is hurt (although not as bad as a foreclosure) and the bank still has the right to claim and try to collect a deficiency.

Buyers Perspective: Short sales provide a unique value opportunity.  If you have the patience of Job. Many times banks approve a price which is a great deal for the buyer.  The main downside for a buyer is the uncertainty.  The bank has the right to accept other offers so even if you were the first offer in to the bank, by the time they get around to reviewing it there may be multiple offers.  It might take two or more months to figure out that the bank will not approve the list price of the house.  Buying a short sale is not for someone who has a certain date in mind or is not willing to be patient while the weeks tick by without any word.  There is no countdown, there are no numbers.  You hear when you hear and the news is not always what you had hoped for.  For the right buyer it is a good opportunity but it is certainly not for everyone.

If you have questions about this article or anything Boulder TEXT or give me, Michael Hughes a call at 303-359-6627 and you can also visit my website or the Boulder MLS. You can also facebook me.

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Who is John Paulson and why is he telling me to buy a house NOW!?

Posted by Michael Hughes

They say “if he says it is time to buy a home, buy a home!

Paulson went on to say “if you don’t own a home, buy one. If you own one home, buy another one. And if you own two homes, buy a third and lend your relatives the money to buy one.”          John Paulson 9/27/2010

No ostrich to the housing scene John Paulson has always spoken the truth. He’s a bull in the residential real estate market. Who is this guy and why should we listen to him.

Paulson is the person who made a massive fortune betting that sub-prime mortgage faux pas would cause the real estate market to collapse.  He understands when to buy and when to sell. Like a commodity. Now is the time to buy Boulder realestate oh yes a house in boulder

What are others saying about Paulson. Well according to Forbes;

Paulson is a multibillionaire hedge fund operator and the investment genius who made a killing going short sub-prime mortgages a few years ago.

According to the Wall Street Journal Paulson is:

A hedge fund tycoon who made his name, and a large fortune, betting against suprime mortgages when no one else even knew what they were.

Wall Street agrees with Paulson;

Ignore the critics, the odds are on Paulsons’ side. With 30 year fixed rate mortgages around 4%. This will prove an absolutely awesome deal if we see inflation return.

Just last week the groups on the band wagon that are saying NOW is the time to buy a house in Boulder or anywhere for that matter.

–          The Wall Street Journal

–          Professor Karl Case, founder of the Case Shiller Housing Price Index

–          The wealthiest families in the country and

–          70% of everyone else in America

Really there is no better time. Housing prices are low. Lending rates are the lowest in recorded history ever.

If you have questions about this article or anything Boulder TEXT or give me, Michael Hughes a call at 303-359-6627 you can also visit my website or the Boulder MLS. As well you can  facebook me.

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Banks Halt Foreclosures

Posted by Michael Hughes

Bank of America has recently announced a halt on all the foreclosures it is processing throughout all of the United States including some house in Boulder. They said that they were taking these measures in order to investigate a “few flaws” in the process that they might have found, according to a statement made by the banking giant.

Bank of America decided to freeze all foreclosures only 7 days after one of the biggest banks in America announced it was doing the same thing in 23 states that require a court approval in order to proceed with a foreclosure.

The foreclosure process will still continue on, however it will stop before it gets to a judgement ruling or a foreclosure sale. Somewhat like traffic on highway 36 going out of Boulder at 5 pm. To say that the pipeline is clogged would be putting it mildly. This was the process that was going to put our housing market back on track. When you have a fever you take ibuprofen or something to keep the fever down until your bodys’ natural defenses can kick in. In this case you work your way through all the foreclosures when you have an ailing housing sector until they are all but diminished to a natural level. The freeze is only supposed to last a few weeks. I guess we’ll see. The banks are having a tough time working through all these foreclosures. Does that mean that the short sales will take an indefinite detour or backseat? This is not a good thing for the housing community. We need to continue to work through these foreclosures and get them done as quickly as possible. JPMorgan Chase also halted foreclosures on 56,000 people who own homes in the U.S. they also said they would be reviewing how the approval process was working. Apparently some of the employees who review and approve the files were not following the guidelines. In the past few days most banks have followed suit. This is not only bad news for foreclosures but also for short sales of Boulder real estate in the county. Short sales were on the back burner and took a very long time, until this is sorted out  and untangled they will not be moving forward.

We have been very lucky with Boulder Real Estate. There are not a Tsunami of foreclosures like the sand states. What do I say? Get it done. Of course follow the proper procedures but pull the band aid off quickly and move along! Read the entire story.

If you have questions about this article or anything Boulder TEXT or give me, Michael Hughes a call at 303-359-6627 and you can also visit my website or the Boulder MLS. You can also facebook me.

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Aggresive Short Sale Strategies

By Michael Hughes

Strange times.  Gone are the days when you shopped for a house, found one you liked, and haggled politely with the seller, then moved in. Don’t get me wrong it does happen more often than not. But in today’s market, some buyers are making 3 to 12 offers AT A TIME. No fair, you say? Impossible! What’s the point? How can they do that?

The Boulder Real Estate (county)  market has an ample amount of distressed homes, not so much in the Boulder proper but definitely the outlying areas. Especially short sales. Combine that with aggressive, determined buyers and you’ve got an apocalyptic explosive extravaganza.  What’s that mean? Let’s look at the scenarios in play.

Consider an aggressive buyer:

This is a pre-approved or all cash buyer who is laser beam focused on the type, style, size, location, price, amenities, and anything else that they might want in a home.  They WILL buy a home some Boulder real estate in the  County.  They are determined, tenacious, relentless, tech savvy, unafraid, bold, organized, employed, and destined for success.  They have their iPhones out and are ready to rumble. Mix this with a Short Sale home for sale, where the outcome, terms, timing, conditions, price, and closing is extremely unpredictable.  Certainty and determination meets uncertainty, molasses in January slow response times and frustration.  Would you hitch only one wagon up to that star?  The aggressive buyer will answer – “not on your life.”

So what does this forceful buyer do in a market with a reasonable number of Short Sales?

Like an automatic shutter on a camera taking multiple frames per second.  Or a Gatling gun firing continuous rounds of bullets until it hits something.  Or a waistline challenged person with his buffet pants on in the buffet line. Get the idea?  The aggressive buyer takes control of the only thing he can – the offers he makes.  And waits to see what happens.  Which cork on the bottles of champagne is going to pop first?

Look at the other side of the coin:

Why in the world would a Boulder County home seller go along with this?  Well…One reason sellers work with buyers who are making other offers at the same time is because the Colorado Real Estate Commission approved form; Contract to Buy and Sell Real Estate,  has no line item to indicate how many other offers the buyer has made.  The buyer is not required to disclose the number of offers they’ve made. Currently. So the seller has no official way of knowing whether or not a buyer is firing off multiple offers.  Do some sellers ask?  Sure.  Do buyers always come clean? Maybe. Maybe not. Another reason seller’s work with buyers making other offers is that seller cannot submit a request for approval to proceed with a Short Sale WITHOUT an offer.  They usually take the first offer they receive and work with their agent to submit the Short Sale Package to get the ball rolling with their bank. Regardless of how many other offers that buyer has made.  It gets their process started.  By the time it comes down to the time for approval there are typically multiple offers on the house in boulder county. They may end up with an approved Short Sale and no real buyer, but the process has begun.

Bottom line…whether you are buying or selling in today’s wild west Boulder County real estate market, the more you know, the more prepared you’ll be to face whatever the market brings you.  And you can create your strategy accordingly.

If you have questions about this article or anything Boulder TEXT or give me a call anytime. Michael Hughes-Fuller Sothebys International Realty=303-359-6627 or you can visit my website at www.BolderRealEstate.com

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Best Time To Buy A House In Boulder-When Is Now A Good Time?

By Michael Hughes     October 6, 2010

In today’s competitive Boulder Real Estate market, you need a strategy to be a successful home buyer.  You need to by crystal clear about your finances, your down payment (with documentation of origin), your top priorities in a home, and how hard you are willing to work to make it happen. As a home buyer, you need to be clear about your money, your timing, and your most important features in a home.  Here’s how this breaks down.
You need to learn the truth about Short Sales, REOs and Residential Properties so you can make informed decisions about the offers you make and the approach you take.  Short Sales are unpredictable and have up front waiting periods while the bank considers your offer – it could be 2 – 6 months in some cases.  REOs are in unpredictable condition, often vacant for months and damaged inside and sometimes out. This could affect your budget if there are repairs that need to be made that the bank is unwilling to do.

You need to know that some homes in Boulder are being priced under market value in some cases – creating a feeding frenzy (multiple offers) similar to the chumming scene in Jaws.

Home mortgage interest rates are at an all time low – seriously, they have never been lower in the history of lending. Under 4% are you kidding me? It’s like banks are giving money away to QUALIFIED buyers – people with documented money already in the bank, and money coming in every month, and manageable re-payment obligations (commonly called debt.)

You’re probably not surprised to learn that you are not the only one looking for a great deal – there’s fierce competition for homes under $700K. And it may also shock you to learn that you’ve found a great deal if you can get 90% of what you are looking for in a home.  Regardless of the price range.  Honestly.

So let’s get busy – focus on all the right reasons to buy a home in today’s Boulder Real Estate Market – low low home prices, low low low interest rates, and 300+ days of sunshine every year.  Perfect!  Giddyup Let’s Go!

If you have questions about this article or anything Boulder TEXT or give me, Michael Hughes a call at 303-359-6627 and you can also visit my website or the Boulder MLS.

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A Short Sale before you’re 103 years old

By Michael Hughes  October 5, 2010

A short sale can take forever.  Currently of the roughly 50 million households in the U.S. 2.5 million are in foreclosure and 7.3 are delinquent.  A related number which encompasses many of these households are the 11 million homeowners who owe more than what their home is worth (“upside down or underwater”).  In order for these people to sell their house and move on they either have to come to the closing with money or negotiate with the bank who hold the mortgage to accept less than they owe (short sale).

Basically what a Short Sale is: A short sale is a sale of  Boulder real estate in which the sale proceeds fall short of the balance owed on the property’s loan (mortgage).  It often occurs when a borrower cannot pay the mortgage loan on their house in Boulder county, but the lender decides that selling the property at a moderate loss is better than pressing the borrower into foreclosure. A short sale is better for the borrower because it does not impact them as severely (or nearly as long) as a foreclosure does. Both parties (lender and the owner) consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency..

Owners View: These would be sellers are stuck.  They would like to (need to) sell but for any number of reasons (bought at the peak of the Boulder real estate market, negative amortizing loans, ARM’s, second loans, HELOC’s) they can’t find a buyer who will pay a price for their home and that will also pay off the existing loans and closing costs.  Convincing the lender is not an easy job to take less than they are owed.  First of all there must be a compelling hardship where the seller absolutely cannot keep up the payments nor come up with cash to close.
So they must have a proveable hardship (and write a letter in detail regarding what the hardship is). Once all of the documentation is complete a package including the sales contract signed by buyer and seller is sent to the bank for approval.   Oh and there may be multiple contracts in play so roll those dice. You may be one of up to 10 or more offers in play. This is the tough part, it takes patience.  It can take up to 6 or 7 months but usually no fewer than 8 weeks to get an answer from the bank.  If the short sale is approved and  the sale goes through at a lower amount,  the sellers credit is hurt (although not as bad as a foreclosure) and the bank still has the right to claim and try to collect a deficiency.

Buyers Perspective: Short sales provide a unique value opportunity. If you have the patience Job. Many times banks approve a price which is a great deal for the buyer.  The main downside for a buyer is the uncertainty.  The bank has the right to accept other offers so even if you were the first offer in to the bank, by the time they get around to reviewing it there may be multiple offers.  It might take two or more months to figure out that the bank will not approve the list price of the house.  Buying a short sale is not for someone who has a certain date in mind or is not willing to be patient while the weeks tick by without any word.  You must have patience to the 10th power.  You hear when you hear and the news is not always what you had hoped for.  For the right buyer it is a good opportunity but it is certainly not for faint of heart or those wishing to move in a certain time period.

These are some simple yet effective tips to help you understand what a short sale is and to help you evaluate if this is a fit for you. When you are ready to start – ask your Realtor for help!

If you have questions about this article or anything Boulder TEXT or give me a call anytime. Michael Hughes-Fuller Sothebys International Realty=303-359-6627 or you can visit my website at www.BolderRealEstate.com

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