Showing posts from February, 2011

10 Reasons People Decide to Buy A Home

by Ann Douglas

Renting is a very frustrating way of life. The money you pay every month disappears, leaving you with few benefits other than a roof over your head. Compared to owning a home, renting is a futile exercise that leaves you with nothing after your lease is up. It’s no surprise that people want to get out of the rent race, and here are 10 reasons why people decide to buy a home versus renting.

1. They Want to Build Equity

Homebuyers build equity as their property increases in value over time. This equity has many benefits, including the ability of a homebuyer to leverage equity in lines of credit to make repairs or additions to their home. Equity is a powerful thing and a natural consequence of home ownership. Renters never gain equity in their rental space, and at the end of their lease they are thrown out on the street with nothing to show for years of on time rental payments.

2. They Don’t Want to Throw Their Money Away

Without equity, what does paying your rent on time gain …

What It Takes To Be A Mortgage Expert

by Dean Hartman

In the choppy seas of mortgage finance, you need someone who can navigate the ever changing product guidelines, interest rate environment, and understands your individual circumstance. These professional mortgage originators are worth their weight in gold. Most people enter the maze of mortgages every five years or so, and the industry has evolved so much that it is barely recognizable (and its evolution continues and is likely to appear vastly different five years from now).

The must-have qualities in a loan officer (LO) today are:

1. Superior Product Knowledge

Knowing all the nuances of the loan product menu is crucial for a loan officer. How will your ability to be approved, your rate and your fees be impacted by your FICO score, Loan-To-Value, or liquid reserves? Being well versed in loan products and being able to see your personal situation as an underwriter is normally a function of experience.

2. An Educated Opinion On Interest Rate Movements

No one is right all the …

MERS: A MESS We Should Know About

by The KCM Crew

The greatest hurdle standing in the way of a complete housing recovery is the backlog of distressed properties that must be liquidated. The banks must release these properties to the market in a controlled fashion. If released too quickly, they will crush house values. If released too slowly, the recovery will be further delayed. However, the control of the flow may no longer be in the hands of the banks. The issue is rather complicated. It starts with the formation of Mortgage Electronic Registration Systems (MERS).

What is MERS?

According to a white paper by the National Association of Independent Land Title Association (NAILTA):

MERS is a creation of some of the most powerful forces in the real estate and mortgage banking industries. In the mid-1990’s mortgage bankers decided they no longer wanted to pay recording fees for assigning mortgages between institutions. This decision was driven by securitization – a process of pooling many mortgages into a trust and selling i…

When Did 'Expert' Become a Dirty Word?

by Steve Harney

The world around me is evolving rapidly. Sometimes I wonder if I can even keep up with all the advances and changes. One big change that seems to have occurred while I wasn’t looking is that it now seems that being an EXPERT is a bad thing. I’m not sure when this happened but I’m really confused. I grew up thinking we should respect people who have become experts in their field: those who have taken the time to truly learn the nuances of their industry.

I’m specifically talking about the real estate industry in this post. Today, it seems that people are upset that agents would consider themselves experts in this field. Why?

Let’s look at the definition of expert:

a person who has extensive skill or knowledge in a particular field.

There are those who believe that, if you consider yourself an expert, you need to be infallible. You cannot give advice unless you are 1000% sure of everything that will happen. That is a standard that is well beyond the definition and is unreason…

Real Estate: Like a Phoenix Rising from the Ashes

by The KCM Crew

The real estate market has experienced difficulty over the last five years. From 2000-2006, house values climbed to unsustainable heights. Since then, we have seen much of this appreciation disappear. Now many look at the housing market as dead and lying in the ashes of its previous glory. However, there is growing evidence that, just like the Phoenix, there is a new market currently rising from those ashes.

Buyer activity is increasing

The first sign of an improving market is buyers again beginning to shop for a home for themselves and their family. That is taking place right now.

Pete Flint, CEO of Trulia said in a recent press release:

“We’re seeing a national resurgence of buyer and seller activity on In January alone, we experienced an unprecedented level of site traffic including 11 million unique visitors – which is more than 70 percent year-over-year growth… (We) are now experiencing 100,000 property views per minute.”

The latest Credit Suisse Monthly Su…

Foreclosures: The Eye of the Storm

by The KCM Crew

We have seen many headlines recently reporting that foreclosures and foreclosure sales have decreased over the last few months. However, though the headlines are technically accurate, they don’t reflect what is actually taking place.

Foreclosure statistics are being impacted by the issues surrounding the challenges with faulty paperwork which the banks have spent the last several months trying to correct.

James J. Saccacio, CEO of RealtyTrac addressed this issue in a recent press release:

“We’ve now seen three straight months with fewer than 300,000 properties receiving foreclosure filings, following 20 straight months where the total exceeded 300,000. Unfortunately this is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing.”

While these issues are being addressed, the number of foreclosures are …

Grieving Can Be Good!

by Dean Hartman

In many municipalities, it is that time of year when homeowners have an opportunity to grieve their taxes. In most places, your real estate tax bill is determined largely by the value of your home. With the tumble in home values continuing, many homes have an over-assessed value attached to them. So, if you own a home, I suggest you explore the complete process: the forms required, the data you need, and the deadlines you need to hit. Real estate taxes are calculated by a simple formula:

Assessed Value x The Tax Rate = Your Taxes

The lower the assessed value is, the lower taxes. Understand that many municipalities cannot afford the loss in revenue, so they increase The Tax Rate to compensate. That means if you DON’T grieve your real estate taxes, your taxes can actually increase….even though your home has decreased in value!

The value of a tax grievance to a home seller

The value of a grievance starts with the understanding that home buyers buy primarily based on the future…

Where Are Mortgage Costs Headed?

by The KCM Crew

We have received many questions regarding the government’s plans for limiting federal support of the mortgage process. We realize that there is much confusion and concern surrounding this issue. However, the KCM Crew does not get involved in discussing the possibilities of future legislation nor are we in the business of lobbying for certain outcomes. This will be a long, drawn-out process. However, since many have asked, here are the thoughts of others on the issue.

The Business Community

AnnaMaria Andriotis, writer for Market Watch:

“In the proposals were changes that will mean more expensive mortgages, with higher fees and, probably, higher interest rates, larger down payments and, in the near term, fewer lenders to choose from.”

Mark Zandi, Chief Economist of Moody’s

“A private system would also likely mean the end of the 30-year fixed-rate mortgage as a mainstay of U.S. housing finance. A privatized U.S. market would come to resemble overseas markets, pri…

Selling Your House? 5 Reasons to Do It NOW!

by The KCM Crew

The conventional wisdom when selling a home has always been to wait until the ‘Spring Buying Season’. Over the years, that has seemed to make sense and is now accepted as a good strategy for those who want to sell their house and receive the best possible price. This real estate market has shattered many previously held beliefs. The wisdom of waiting for a spring market is another belief that is about to fall. Here are five reasons why?

1.) Interest Rates Are On the Rise

Interest rates have spiked up rather dramatically over the last ninety days and are now over 5%. Initially, an increase in rates has a positive effect on the market as it forces buyers off the fence. However, it also eats into a buyer’s purchasing power. As rates increase, the mortgage amount a buyer qualifies for decreases. This will eventually have a negative impact on prices.

2.) Your Dream Home Will Never Be Cheaper

If your family goal is to sell your current house and take advantage of the fabulous sel…

"Own Thy Own Home"

“Own Thy Own Home”
by The KCM Crew

The title of this blog is the advice given in a book of financial wisdom, The Richest Man in Babylon, written by George S. Clason in 1930. The book has become a classic having sold over 2 million copies in 26 languages. The advice is just as important today as it was when written almost a century ago. And, it is comforting to know we still realize how important homeownership is.

Two different surveys released last week show that homeownership is still part of the American Dream.

Trulia’s American Dream Survey

The survey looked at how Americans feel about homeownership.

They found:

70% of Americans still view homeownership as being part of their American Dream.
78% say their homes are the best investment they ever made.
88% of 18-34 year old renters aspire to be homeowners.

The report went on to say:

“Contrary to popular belief, the American Dream of homeownership has not turned into an American nightmare. In fact, we’re seeing a national resurgence of buyer and…

The Cost of Wating for Prices to Fall

The Cost of Waiting for Prices to Fall
by The KCM Crew

Many purchasers have been sitting on the sidelines waiting for home prices to hit bottom. They want to guarantee that they are purchasing at the best possible price. Like them, we also believe that prices still have some room to fall in most markets. However, we disagree that waiting is a good financial decision. The buyer should not be concerned about housing prices. They should be concerned about cost.

The cost of a house is made up of the price AND THE INTEREST RATE they will be paying. Two different pieces of news released yesterday highlight this point.


The National Association of Realtors (NAR) released their 4th quarter housing research report. In the release, they reported that home sales rose 15.4% in the 4th quarter over the 3rd quarter. They also showed that prices remained stable during the year:

The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fo…

Uncertainty in Economy vs. Opportunity in Real Estate

Uncertainty in Economy vs. Opportunity in Real Estate
by The KCM Crew

There are many people sitting on the sidelines right now afraid to pull the trigger on a real estate purchase. Some are first time buyers; some are thinking of moving up to the home of their dreams; others are looking to purchase a vacation home or perhaps a future retirement home. Fear has prevented them from moving forward. Though their concern is understandable, we must never allow fear to ultimately determine who we are nor what we do. We must live our lifes.

The fear causing so many to hesitate comes from three areas:

The lackluster economy
The unemployment numbers
Real estate’s performance in the recent past
Should they stop us from moving forward with our dreams and aspirations.

The Economy

Actually, the economy is doing much better. The news is more positive every day. Consumer Affairs said this:

The U.S. Federal Reserve, which has administered life support to the economy over the last two years, says it’s seeing some…

The First Question You Should Ask Your Listing Agent

What is the most important thing a seller should look for when hiring a real estate agent to sell their house? We are often asked this question. Is it the size of the company they are licensed with? Is it their marketing program? Their years experience in the business? Should you choose the agent who suggests the highest listing price?

There are many things that should be taken into consideration when hiring someone and giving them the responsibility for selling your home. In our opinion, the most important question you can ask a potential listing agent is a simple one:

Do you truly believe that now is a good time to buy a home?

Why should this matter when hiring someone to SELL your home? Buyers are nervous about purchasing right now. They want to know they are making an intelligent choice. We believe, especially in today’s market, you need to hire someone who realizes that this is one of the best times in American real estate history to buy. If an agent doesn’t believe that, how will t…

Housing Markets: Best Recovery Bets

Home prices are poised to fall in most markets this year, but 2012 will bring a rebound. Colorado Springs ranked as number 8 in the 10 large metro areas that will record the largest price gains.

Median home price: $220,000
Drop since market peak: 12%
Forecast gain by 9/2012: 2.9%

Demand for homes is still strong in Colorado Springs, according to Chris Mygatt, president of Coldwell Banker Residential Brokerage Colorado. The area's economy has been steady, thanks to the stabilizing effects of government jobs, especially connected with the Air Force Academy and military bases.

Demand for housing has grown along with the population. That rose more nearly 17% from 2000 through 2009, faster than the national average of just over 9%.

Mygatt credits the Springs' popularity to the mild, four-season climate, natural beauty and proximity to the cultural and entertainment attractions of nearby Denver.

Affordability is a big factor as well. You can buy a fine, three-bedroom, two-bath house in a g…
Beautiful Ranch Style Home Perfect for the First Time Home Buyer, if you're Relocating to Colorado Springs or simply moving up! Featuring 5 Bedrooms, 3 Bathrooms, 3 Car Garage and 3,038 Square Feet. Tour This Home Today! Spacious Living Room with Cozy Gas Fireplace that is Open to the Formal Dining Room. The open, well appointed kitchen provides plenty of surface space for food preparation and boasts stainless steel appliances. Escape the frantic pace of daily life and unwind in the main level master retreat with attached master bathroom. The Main Level also features 2 Additional Bedrooms and Full Bathroom. The Fully Finished Walk Out Basement Includes 2 Additional Bedrooms, Full Bathroom, Recreation Area with Gas Fireplace, Wet Bar/Kitchenette and a 3rd Gas Fireplace. The Expansive Lot backs and sides to an Open Area and boasts a Large Deck Perfect for Entertaining.

For More Information on this Home for Sale in Colorado Springs, contact Mike MacGuire, your Colorado Springs Real Es…

Like Comparing Apples to Oranges

Over the next several months, there is going to be some confusion about how well the real estate market is doing. Some headlines are going to announce several consecutive months of increased sales. Other headlines are going to talk about a near total collapse in housing. Both headlines will be based on facts supplied by the National Association of Realtors (NAR). How can that be? How can data report that two opposite things are happening at the same time?

Let us explain. NAR will release two reports each month: the Pending Sales Report and the Existing Sales Report.

The Pending Sales Report (as per NAR)

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The Existing Sales Report (as per NAR)

Existing-home sales are completed transactions that include sing…

Does Anyone Think These Things Through?

Let’s start with an acknowledgement…the mortgage industry got messed up in the boom times. People will debate for years to come whose fault it was (loan officers, appraisers, the government, the secondary market, Wall Street, the Big Bad Wolf, Sasquatch and others). Today, we will ignore blame and look to how the Regulators are attempting to prevent it from happening again (besides creating a muddled appraisal process through HVCC) — go after the loan officer (LO).

Step 1 – Tighten Program Guidelines.

Basically, eliminate those “risky loans” (Negative Amortization, High Loan-To-Values, No Income Verification, etc.). In addition, institute risk based pricing, which penalizes weaker credit scores, higher income ratios, and higher LTVs. Make borrowing more difficult. Good conceptually, but the guidelines have probably gotten too tight.

Step 2 – National Licensing of LOs.

Creating standards and testing to insure competency and compliance, as well as, tracking of loan officer performance. An …

What Exactly Is Shadow Inventory?

It is difficult to read an article about real estate today without the term ‘shadow inventory’ being mentioned. But, what exactly is shadow inventory? It refers to the inventory of homes not yet for sale that will eventually come to market in the near future. Most definitions include properties already foreclosed on and owned by the banks (REOs), those houses in the foreclosure process and those homes where the homeowner is seriously delinquent on their mortgage payment (at least 90 days behind).

There are many questions about shadow inventory. Today, we want to address the most common misunderstandings.

I’ve heard about shadow inventory for years. Does it really exist?

Not only does it exist, it is being slowly released onto the market. The National Association of Realtors has reported that over 30% of all home sales over the last few months have been distressed properties.

Why include seriously delinquent homes in this number?

Seriously delinquent are counted because studies show that 98…

This Is a Job for Superman, Not Clark Kent

We found this past weekend’s New York Times article, You Don’t Have To Pay It, very interesting reading. It was a piece on whether it makes sense to pay a 6% commission to your real estate agent in today’s market. In the article, there are sellers, buyers and even agents debating what is the right number that should be charged to assist a consumer in completing a real estate transaction. We would like to add our two cents to the debate.

Forget what the actual amount of the commission is. The bigger question is whether you should pay a ‘full fee’ when hiring a real estate expert to guide you through the complexities of today’s rapidly changing housing environment.

If a full fee was the rule in 2006 when completing a deal was so much simpler, why would you now consider cutting the fee of your agent in today’s tumultuous market? You are depending on this person to help you reach your goals in a sale or purchase. In 2006, buyers were willing to pay almost anything to a seller just to get …

Where Are Housing Prices Headed?

The National Association of Realtors (NAR) has been reporting great news recently. Last week’s Existing Home Sales Report and Pending Sales Report both showed consecutive months of increases in the number of homes sold. Finally, buyers are jumping off the fence and taking advantage of one of the most opportune times to purchase a home in America’s real estate history. With an increase in demand, price appreciation can’t be far behind, can it?

Actually, the answer is NO! Prices are not determined by demand alone but in the relationship of demand to available supply. The inventory of homes for sale is still too high and about to surge higher. Along with the news of increased demand yesterday, RealtyTrac released their 2010 Year-End Metropolitan Foreclosure Market Report. The report showed that distressed properties across the country are on the rise:

…foreclosure levels remained five to 10 times higher than historic norms in most hard-hit markets, where deep fault lines of risk remain and…