Tips for Home Sellers | Denver Real Estate

Denver Home Sellers: Understanding the Appraisal Changes in the New HVCC

July 10, 2009 By michelleapotter Leave a Comment

The Home Valuation Code of Conduct (HVCC) was implemented on May 1^st and requires new methods for conducting home appraisals. This three month old code is clearly creating challenges for Denver home sellers, buyers, and parties involved in the real estate transaction.

At present, HVCC affects real estate deals (purchase and refinance on 1-4 single family loans) that involve a conventional Fannie Mae or Freddie Mac loan product. Federal Home Bank Loans, FHA, and VA loans are currently exempt from the code.

Home Valuation Code of Conduct was designed to prevent practices of collusion between unscrupulous lenders and appraisers who were attempting to artificially inflate property values.

Instigated as a result of a lawsuit:

New York Attorney General Andrew Cuomo sued an appraisal subsidiary division of First American Corp for allegedly colluding with Washington Mutual to push home values. http://www.reuters.com/article/bondsNews/idUSN0143151620071101

In short, and in an effort to ensure an independent appraisal by a non-vested third party with no financial stakes to the transaction, limits were placed on the lender/appraisal relationship.

As a result, appraisal management companies (AMC) were introduced to create a “level playing field”. This is generating additional barriers and time delays on the under-contract to close process for home sellers and home buyers.

While commendable on paper, in real estate practice this is biggest obstacle facing home sellers:

Appraisers who are chosen randomly through the appraisal management company may be called in from outside their geographic territories. Unfortunately, these appraisers are sent to neighborhoods in which they are completely unfamiliar. While this might sound insignificant it is clearly negatively affecting home values.

Even in a fairly homogenized community like Highlands Ranch a simple street boundary can make a considerable difference when considering comparable homes.

I live in a sub-area of only 300 homes yet there are three subtle pockets of this neighborhood that impact price in as much as $100,000 or more. An appraiser from Loveland coming to Highlands Ranch is unlikely to appreciate these pricing nuances.

The fall-out in this new process is that homes are coming in well under appraisal.

Proactive measures for sellers who are concerned about appraisal:

There is a misconception that real estate agents are not allowed to meet the appraiser. We can. While there are no guarantees in this new appraisal frontier – make sure your listing agent attends the appraisal and is armed with the following:

1). A list of comparable homes recently sold in your actual neighborhood taken from the local Metrolist (MLS) service.

2). A list of all improvements, upgrades, location differences or anything else that supports the purchase price.

3). All available interior, exterior or virtual tours of recently sold homes.

Clear communication between the listing agent and the appraiser along with thorough supporting data can certainly reduce the chances of a surprisingly ugly appraisal.

Read more on the how the HVCC is impacting Denver home sellers and buyers at: http://www.realtor.org/research/economists_outlook/commentaries/appraisals0709

Michelle A. Potter

Denver Realtor

Re/Max Professionals

Filed Under: Tips for Home Sellers Tagged With: Denver Appraisal, Denver Home Seller, Denver HVCC

Denver Real Estate: Open House Warning to Buyers and Sellers

July 7, 2009 By michelleapotter Leave a Comment

A fellow Denver Realtor shared a dire warning with me today about holding open houses. Apparently, while holding an open house in an upper-middle class neighborhood in Highlands Ranch, it was discovered that an open house attendee emptied a full prescription bottle of medicine in his/her pocket.

The agent noted that all of the open house attendees on that day were clean- cut and well-presented. Of course, this means nothing as addicts come in all flavors from all walks of life.

Realtors do indeed warn home sellers to remove all valuables and pharmaceuticals prior to any showings or open houses. Sometimes the stress of selling a home gets in the way, and home sellers forget to adhere to these cautions. And yes, it is a sad commentary that these measures need to be taken.

What to do? While my intent is not to intrude on prospective buyers who are interested in seeing a home while I am holding an open house, my job is to shield the home owner to any extent that is possible.

I am seriously considering requiring potential home buyers attending my open houses to show me their Colorado Driver’s license and jotting down the ID # for safe measure. Simply requesting a Denver buyer to sign-in won’t work if their intentions are ill-devised.

Are these draconian measures? Maybe. Hopefully buyers attending Denver open houses will understand that this decision stems from a few miscreants ruining the process for everyone.

Michelle A. Potter

Denver Realtor

Re/Max Professionals

Filed Under: Tips for Home Sellers Tagged With: Denver Open House Warning, Denver Open Houses

Tips for Selling Your Home: Let Your 5 Senses be Your Guide

June 29, 2009 By michelleapotter Leave a Comment

Wondering how to sell your home in any market? Why not give this brutally honest guide for selling your home a try?

#1 Sight

Visit the pending (under contract) homes in your immediate neighborhood with your Realtor. Pay close attention to the homes condition, upgrades and location. Take photos, use a checklist, make notes or do whatever is necessary to realistically compare the positive and the negative attributes between properties.

While the final sale price of the under-contract properties will not be available until they actually close, your agent can track this information for you and this will provide the best glimpse of your actual home value.

Next, thoroughly review the recent (hopefully for the previous 3 months) sold properties with your agent. While it will be unlikely to physically enter the sold properties, the MLS details, floor plans, location… should provide valuable insight on key similarities and differences between your property and the homes that are selling.

Have your agent explain the absorption rate in your area so you have a general idea of what your neighborhood’s present rate of sales.

Incidentally -be aware of the Home Valuation Code of Conduct (HVCC) that went in to effect May 1, 2009 and understand how this is impacting home sellers during the appraisal process.

In a nutshell – out-of-area appraisers, who know nothing about your neighborhood, are missing the mark on appraisals and coming in at under market value. While this only applies to buyer’s using conventional Fannie Mae and Freddie Mac mortgage products, this is a huge piece of the buyer pool.

Make sure, once your home goes under contract, that your agent shows up armed with accurate comparables, a list of upgrades, location nuances … and meets and effectively communicates this information with the appraiser. And yes, agents can still meet the appraisers and provide information; it is the mortgage brokers who are prohibited from this activity. Read more here: http://www.freddiemac.com/singlefamily/pdf/122308_valuationcodeofconduct.pdf

Okay, so you and your Realtor have done your homework so the question to ask becomes- how does your home visually stack up against homes that area actually selling?

If your home measures up, disregard this section and proceed to the next.

If your home doesn’t make the grade when comparing it to the recent sold homes, consider:

1). Whip into to shape with paint, new carpet, slab-granite counter-tops, refinish the hardwood floor, install new cabinets – correct anything that isn’t measuring up against the comparables.

2). If you have a floor-plan that is less than desirable, pull in a home-stager who can do wonders by artfully and strategically arranging the furniture to showcase the floor-plan in its best light.

3). Make the home picture perfect prior to having marketing or MLS photos taken.

4). Finally, set the stage for showings with mood lighting. Turn on the floor lamps to create an inviting ambiance. Open the blinds, draperies or shutters and let the light soak through the home. In colder weather, turn on the electric fireplace.

It’s all About Exposure:

Home buyers want photos, and lots of them. I get calls and e-mail requests from out-of-town buyers who want additional pictures on homes. This is something I just don’t get (not enough photos) unless it is a distressed property, but I won’t vent here. Put the maximum allowed photos in your MLS and additional shots in syndicated sites such as Trulia. Few photos beg the question, “what is this home-seller hiding.”

Buyers like and expect virtual or video tours of your home if it is priced over 250K. This is an easy way to create and excitement about your home’s best features.

Buyers also want to know about your neighborhood. Have neighborhood information readily available on-line and in the outside sign box. And, speaking of the sign-box, make sure it is loaded with full-color photos.

Finally, likes attract. Why not produce a simple video chatting about why you love your home and area and post it on youtube?

#2 Smell:

This comes in second after sight in the home-selling importance department. The time to pan-fry tilapia, steam broccoli, or deep-fry chicken is not while you are selling your house. Unfortunately, the odor from these yummy culprits takes forever to dissipate. Weather permitting; why not grill outside or otherwise pick less intense food choices for dinner?

Next – the touchy subject of pets. As a critter lover who has three dogs, I understand how important pets are to people. When showing to prospective buyers I can safely tell you they don’t want to see or smell any pet odors whatsoever. Last week, I was showing a home (non-distressed property by the way) and could smell cats before I had the lock-box open. Guess how long our visit to that home lasted? Keep the pets washed frequently, litter-boxes clean and if possible take them with you when your home is being shown.

Finally, if there is an odor problem aside from cooking or pets, trace the source and eliminate it. Trying to cover it up with those plug-ins in every room is a huge tip-off that you are trying to hide something. Many home buyers are also sensitive to these products so again it reduces the time spent of viewing your home. Mild smelling candles, odor neutralizers and eucalyptus – used sparingly, add a nice touch. Fresh air does wonders.

#3 Hearing:

Classical music is always a nice touch for buyers when showing homes. If you live on a busy road, consider hiring a contractor to install a soothing water feature. If you have a home theater center, go ahead and have it on during showings as long as the selective movie is not offensive to buyers and not too loud. Finally, if you have neighbors with barking dogs, beg, plead or bribe them to keep the dogs inside during showings.

#4 Touch:

Give the buyer a take-away – A beautiful brochure filled with color photos that captures the essence and spirit of your home and neighborhood. It gives buyers something to hold on to and remember your home above the zillions of other properties they have seen.

#5 Taste:

Yes this is passé, yet I have never met a buyer who did not enjoy cookies left by the seller. It is a fabulous touch and people enjoy a treat during a long day of showing.

Michelle A. Potter

Denver Realtor

RE/MAX Professionals

Filed Under: Tips for Home Sellers Tagged With: how to sell your home, sell your home, tips for selling your home

How to Search for Denver Homes on DenverRelocationBroker

June 2, 2009 By michelleapotter Leave a Comment

www.DenverRelocationBroker.com provides a plethora of real estate information on Denver and Denver’s Central and Southern communities. Here is a easy guide for buyers searching for homes in the the Denver-Metro area:

Click on the Denver Home Search icon:

Here is a partial shot of the next screen as shown in the upper left hand corner. Note that you can search Denver homes in this section by City, Zip, or MLS number:

The left hand column allows you to search homes by community or a specific housing tract. Additional fields such as price, number of bathrooms, number of bedrooms… can be entered along the left column manually or using the slide bar:

As an example, I requested homes in the Highlands Ranch zip code of 80129 between $660,000 to $1,020,000. This pulls the homes available meeting this criteria as well as the location on a map:

Click on any property that looks interesting – Here is a home on Rockbridge Lane for example:

To get more information on this home I can click on “Details” at the top of the screen or simply scroll downward:

Local public schools are also available on the “Details” tab:

Click on the “Map” section to determine location and local amenities:

Click on the “Tools” section to pull up the mortgage calculator:

Click on the “Tools” section to get a Zillow “Zestimate”:

Click on the “Tools” button for additional school information; Sperling’s Best Place neighborhood information (which includes demographics, crime stats, education levels, housing facts…); and local stores and restaurants:

Click on the “Contact” tab to request additional information or to schedule a showing:

This site also allows users to set up an automated email alert system so buyers can receive daily listings based on homes meeting a specific criteria. Please feel free to call me should you need help navigating this site or to set you up on your own customized Denver buyer alerts.

Michelle A. Potter

Denver Realtor

(303) 489-4035

Filed Under: Tips for Home Sellers Tagged With: How to find Homes in Denver, How to Search on Denver Relocation Broker, Search Denver Homes

6 Tips on Closing Your Colorado Home with Ease

June 2, 2009 By michelleapotter 1 Comment

Closing on your Denver CO., home can be a breeze as long as all parties effectively communicate and avoid these common closing pitfalls that can cause delays.

The Loan Payoff (Denver Sellers):

Your Denver listing agent will direct the title company to order a payoff on any existing loan(s) on your property. The payoff form needs to be addressed specifically to the pre-agreed upon title company (usually chosen by the seller) and will ask for the lender(s) name/address/phone number/loan number and the selling parties social security number(s) – or at least the last four SS# digits.

Additionally, the lender(s) will request a seller authorization form to obtain the payoff(s) on your home. Delays can occur when payoff authorizations are not carefully orchestrated by involved parties or in the event that the seller information is incomplete.

One more caveat – If your are closing early in the month, let your Denver Realtor know whether you will be making that months mortgage payment so she can communicate to title and avoid last minute figure changes at the closing table.

Loan Process (Denver Home Buyers):

Lenders are requiring a loan application that is thorough – Ask your mortgage broker for a complete list of needed documents and provide all requested items as quickly as humanly possible.

Next, many home purchases are derailed when the buyer makes a major purchase (car, big screen…) or when buyers transfer money or open new bank accounts. Please check with your mortgage broker before making any purchases or changes in your bank accounts.

Wire Transfers (Denver Home Buyers):

Most lenders wire good funds rather than use a cashier’s check. If you plan on closing early in the day, coordinate with your mortgage broker so the wire transfer hits the day prior to closing. This will avoid angst on your part as well as the sellers and prevent closing in escrow.

Property Taxes (Denver Home Sellers):

The title company must verify with the county that property taxes are current. If there are any outstanding property taxes – the title company must collect the unpaid taxes from the sales proceeds of the home. Again, this can cause last minute delays when not attended to prior to closing.

Power of Attorney (Denver Home Buyers & Sellers):

If any party to the real-estate transaction will be unable to sign documents at closing, a Power of Attorney (POA) will need to be devised well before the closing date. The title company and the lender must approve the POA prior to closing. The title company will also need the original POA prior to the closing so it can be recorded with the county clerk and recorder before the remaining documents are filed. Finally, the title company must be able to speak with the missing party on the day of closing.

Mail-Outs (Denver Home Buyers & Sellers):

The title company needs to know as soon as possible if any party to the real estate contract will be out of town on the date of closing. In such an instance, a “mail-out” will need to be planned so documents can be sent-out for signature well before the closing deadline. Mail-outs must be signed exactly as requested, be notarized as indicted, and be notarized in English. Additionally, original documents must be received by the title company before closing.

What to Bring to the Closing Table (Denver Home Buyers and Sellers):

Both parties need to bring a valid state driver’s license, a valid passport, or a valid state issued identification card. It doesn’t hurt to bring two forms if purchasing a home as some lenders are now requiring two forms of ID.

Bring documents (a marriage license or divorce decree and the corresponding drivers license reflecting the name change) if there has been any change in marital status.

The buyer must bring “good funds” which includes a cashier’s check or funds transferred via wire. On home purchased with cash, the title company will still request funds wired from the buyer. Western Union transfers and money orders are not considered good funds in Colorado.

Buyers and sellers must know their social security number or TIN number (for entities) for the IRS documents required at the closing table.

Sellers typically bring house keys, garage door openers, gate keys and any applicable warranty materials that will transfer with the property.

Watch and adhere to your Colorado contract dates and deadlines and avoid these common closing delays and your closing should be a snap.

Disclaimer: While designed to provide accurate information in regards to the subject matter, this is not intended as legal or accounting advice. As always, check with your attorney of accountant for legal or tax advice.

Michelle A. Potter

Denver Realtor

(303) 489-4035

Filed Under: Tips for Home Buyers, Tips for Home Sellers Tagged With: colorado real estate closing, denver real estate closing on a home, how to close on a Denver home