New Listing in Fort Lupton

New listing in Fort Lupton

245 2nd Street

2 Beds /1 Baths / 1,144 SF / $299,000

Sweet home on a quiet corner with a one car detached garage and huge shop with two additional garage doors. The exterior has a fresh coat of paint and the roof/gutters were replaced two years ago. Sunshine floods into the living/dining space at the front of the home featuring southern facing windows with upgraded up/down blinds The main level features new laminate flooring in the kitchen/living room and the seller replaced the linoleum in the bathroom with new tile. Full bathroom also has new vanity and light fixture. The updated kitchen with white cabinets has refreshed countertops, new backsplash, sink, faucet, and garbage disposal. A cozy bedroom with carpet finishes out the main level. Downstairs you have a laundry area with a flex space that could be used as a second living area or home office and a second non-conforming bedroom. Seller recently expanded the garage door opening and added a new garage door to the one car structure. A huge selling point is the oversized two car detached shop with tons of space with tinker and store all your toys. Conveniently located in the heart of Fort Lupton, near Highway 85.

Winning Strategies in a strong Seller’s market.

Winning strategies for my buyers!

When I am working with a buyer I in a competitive market, I start by sharing some of the strategies we can use to get our offer accepted.  These are strategies many buyers are using to win in competitive situations. With multiple offers being very common, there are several ways to stay competitive with other offers. Although all of strategies are frequently used in today’s market, be sure to keep in mind that some of these strategies are more risky than others. There are ways to keep some contingencies in place and modify others making the offer more attractive to the seller.

1. PRICE – Of course price is the most important factor. If the home is new to the market, I recommend presenting your highest and best offer ASAP.

2. APPRAISAL GAP – Because many buyers are bidding over the list price or are paying cash, some waive appraisal conditions. If the house does not appraise for the agreed purchase price, the buyer is agreeing to cover the difference at closing because a loan will only cover the appraised value. In an extremely competitive situation we will review comparable homes and I will suggest to you what I believe to be appropriate regarding appraisal.

Example:

List price $400K

Offer:  $425K with a $25K appraisal gap.

Appraised Value: $415K

If the appraisal comes back low (below offer value) and the home only appraises for $415K, that would mean you have to bring an additional $10K in cash to gap the difference between the offer and appraised value. You can either choose to bring an additional $10K in cash to closing, or you can also adjust your down payment with your lender to reflect the difference.

It is important to note that the lender will NOT lend on a value higher than the appraised value.

3. TIMELINE – Being cognizant of the seller’s ideal time line is highly important as we go into the offer process. Unoccupied homes typically want a quick close while occupied homes may need more time or even a rent back to find their replacement home. In today’s market, typically we do not charge the seller for a rent back – your first payment will be 30-60 days after closing so this is a good way to sweeten the deal if your move timeline is flexible. The max rent back allowed by lenders is 60 days after closing.  Depending on their situation, being able to offer them their ideal circumstances can work wonders to set your offer apart. I will secure these details for you with the listing agent before you make any decisions.

4. INSPECTION – You can offer a limited inspection – example limiting to only major items that cost over $1000 to repair. Some buyers are waiving the inspection objection and taking out the deadlines from the contract. You should always do an inspection no matter what. Limiting inspection or waiving inspection is an effective way to let the seller know you aren’t planning to submit a huge list of cosmetic repairs. Depending on the condition of the home I can make recommendations on how to proceed.

5. ESCALATION CLAUSE – In this case, you present your purchase price and then agree to escalate that price a few thousand above the highest offer (with proof that another higher offer exists). In multiple offer situations, unfortunately this can be a slightly ineffective strategy. Listing agents will typically receive multiple offers with escalation clauses which can make it difficult to know who to go with. Typically sellers go with the highest and best offer vs. putting a lot of weight into the escalation.

6. SIGNING BONUS – This is a newer strategy I have used. We write into our offer that if the seller accepts our offer by a certain time and signs, they will receive a signing bonus.

7. LOVE LETTER – Pull the seller’s heart strings by drafting a letter describing why you love their home. Compliment them on the aspects of the home that they improved.  Tell them who you are so they will identify with you personally, instead of regarding your offer as just a number. This is only effective if the owner is personally attached to the home, not for flips or investment properties. Some listing agents won’t allow “love letters” because it can create cases of discrimination. Your letter should NOT include any information regarding —race, color, religion, sex,  national origin, handicap and familial status to prevent discrimination based on the protected classes.

8. EARNEST MONEY – You can make some or part of your earnest money non refundable. The net result costs you nothing if you close because all earnest money is credited back to you at closing. When your offer is accepted, earnest money is required within about 48 hours, it is cashed upon receipt and held in a trust account. Making earnest money non refundable shows you are a serious buyer who plans to close, you actually have skin in the game. If you do not add this provision to the contract, your earnest money is refundable if you terminate for any reason within the contract.

9. FINANCING- To make your offer stand out, a solid pre-approval letter will be required along with proof of funds demonstrating you have the down payment in your bank account. Additionally, I will begin working closely with your lender so that he/she knows where we are in the process and is ready to make a personal phone call to the seller’s agent on your behalf. When listing agents review multiple offers, there is a hierarchy of financing options where cash is superior, followed by conventional loans with the highest down payment, FHA loans, VA loans, and then financing programs using down payment assistance programs.

I will also provide a strong cover letter to the listing agent explaining your offer and qualifications. Agents prefer to work with a buyers agent who presents his/herself professionally, is eager to work together as a team, and stays in communication throughout the process. In addition to a cover letter, I will be texting, emailing and calling as appropriate to provide you with accurate and timely information about your offer so you can make educated decisions.

The most exciting phone call I get to make is –   “You got the house!” 

770 Monroe Street / NEW listing in Congress Park

 

New listing in Congress Park

770 Monroe Street, Denver 80206

4 Beds /2 Baths / 2000 SF / $695,000

 

Perfect opportunity to build equity and customize your dream home. Live walking distance to Congress/Cheeseman Park, Cherry Creek North, and the new 9th Ave/Colorado Development (called 9+CO). This home in the 7th Avenue Historic District feeds into the renowned Steck Elementary School but is not historically designated. Live in a top-ranked area in Denver known for walkable local businesses, rich architectural style, and a shady canopy of mature trees.

Classic 2000 sf 1923 brick bungalow with 3 bedrooms 1.75 bathrooms on a 4460 sf lot with a small garage. A spacious foyer leads into a classic living room with a fireplace and dining room. Great opportunity to upgrade the kitchen and create an open concept during the process. Two bedrooms and one bathroom with vintage pink tile complete the main level. The basement includes a large family/bedroom with egress, 3/4 bathroom, laundry, bedroom without egress, and storage/mechanical room. This home has been a rental earning $2400/m since 2018 with room to increase rent to $2800 according to Zillow. Move-in ready or a great opportunity to renovate.

A similar home with beautiful upgrades sold for $880K (1168 Adams Street) and 608 Cook Street will close for $930K. Add a second story and transform this into a 3000+ sq ft home worth $1.385K like 737 Garfield across the alley. At 916 Jackson a homeowner is doing a full remodel and adding a second story for $450K leaving equity for the new owner.

Four doors from 8th Ave provide ample separation. Three minutes from Trader Joe’s, Snooze, and Postino, and much more at new 9+CO. Walking distance from 12th Ave shops/restaurants in Congress Park or head south to Sixth Ave restaurants including Barolo and the luxury shops of Cherry Creek North. Home sold as-is (new water-main in 2013 and newer furnace).

 

    Watch the Listing video here.

Predictions for 2021

At the onset of 2020, there was no way to predict that Covid19 would make “stay home’ the theme of last year. One thing is for sure, homes are in more demand than ever in 2021

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The lowest inventory in history forces prices up and creates extremely competitive situations.

Denver has become accustomed to low inventory. Since 2012 we’ve been operating at about one month’s inventory vs the 6 months of inventory required to create a “balanced market”. Typically we get a spike in inventory in Spring but in 2020 due to Covid19 instead of seeing a spike, we actually saw inventory decrease. Supply has dropped to less than 0.5 months of inventory in January 2021. Yet demand is stronger than ever. In the resale market, almost every single-family home has multiple offers. In 2021 I’ve witnessed a new phenomenon – showings are completely booked through the weekend. With only one group allowed in the house every 15 minutes, popular homes book up quickly.  Terms escalate quickly in these competitive situations. It is now commonplace that buyers waive inspections, pay appraisal gaps, and use Accept. inc to make cash offers.

Get all the Denver Real Estate Market Data here.

Multiple offer situations and low-interest rates are pushing prices up.

With lower inventory, most listings are receiving multiple offers and going significantly over the asking price. This demand for homes in Denver is accelerating the increase in prices. Why is this? COVID?  Partially. With Covid, people’s needs changed. The need for more space, a home office, and a backyard/outdoor space is important. That paired with all-time low-interest rates.  With low-interest rates, buyers are not wavering at the prospect of higher purchase prices. With no end in sight, the buyer wants to jump on this opportunity because they know if they wait, prices will be more expensive next month and when interest rates could rise, their buying power/price goes down.

Current homeowners have a massive amount of untapped equity.

I disagree with a recent piece by the Denver Post that said, “distressed sales and foreclosures could rise significantly from low levels as forbearance plans granted by the CARES Act expire and borrowers look for an exit strategy.” I do not see this happening. In the Denver market, I believe foreclosure will continue to be almost nonexistent. Residential values have gone up close to 40% in the last two years in Denver. Even facing unemployment, an owner can sell their home for a profit. It’s statically likely to sell in one weekend, over the asking price. An educated homeowner would not go into foreclose when they can sell at a profit and keep their credit clean.

Moreover, everyone who owns a home in Denver is sitting on major equity. They can tap into this equity using a home equity line of credit or by selling their home. Either way, we have a huge group of current homeowners who are anxious to make the most of their home equity. Now is an exceptionally good time to sell. Sellers can use their home equity for a down payment or they can sell and get a 60-day rent back from the buyer so they can stay in their home while they make non-contingent offers on their replacement home. We are seeing many homeowners keep their current home as a rental that cash flows and use that additional income to subsidize their new home’s mortgage payment.

Rising taxes and interest rates could reign in appreciation in Denver in 2022.

NO ONE IS TALKING ABOUT THE MAJOR IMPACT THIS TAX CHANGE WILL HAVE ON THE REAL ESTATE MARKET. I was only able to find one article about it online, summarized below.

In November 2020, Colorado voters passed every statewide ballot measure that dealt with taxes despite being in the midst of a pandemic. Voters repealed the Gallagher amendment (which has actually caused taxes to decrease in previous years).  Without Gallagher tax bills will rise in lockstep with property appreciation from now to eternity. Taxes in Denver will increase by $2400/year minimum for the median home in 2022. Denver sales tax rates increased by .5% and the mill levy increase by 4 mills, so assuming the median home price of $606,000, the tax bill would increase by about $2400/year minimum, if Denver continues to appreciate, which it likely will that number will be closer to $3000/year into perpetuity.

2021 is a reassessment year but taxes are paid in arrears so the higher bills won’t appear until 2022. One of the largest drivers of appreciation in Colorado is the out of state buyers from higher-cost coastal areas like California or New York. They are leaving these areas due to large property and income tax bills. As Colorado continues its upward trajectory of taxation, it will soon join the coastal club of expensive cities and at some point, see more migration out than in as people move to the next up and coming city with lower taxes.

An extra $2400 per year in taxes, would be equivalent to interest rates going from 2.75% in 2021 to 6% in 2022. If property taxes go up as planned in 2023, that would be equivalent to a 9% interest rate. In addition to taxes starting to double every year, some people think interest rates might increase in the future. I’ll believe it when I see it!

If you are looking for an opportunity for a good deal, consider a city condo in 2021.

Downtown has become a ghost town without workers, sports events, and conferences. Many bars and restaurants have shut their doors and the homeless have set up camp. Young adults didn’t last long on college campuses and moved back in with their parents at much higher rates this year than last, with nearly 2 million 18 to 25 years old still living at home in August according to Zillow.com. Pre covid, commutes, and being in “walkable” neighborhoods were a primary focus. With the vaccine, downtown will enjoy a renaissance in 2022 as these younger buyers leave the nest and flock back to city centers. Until then, there are deals all over downtown in the condo market. Get one today below market value at low-interest rates and wait for the renaissance of Downtown to realize gains from your genius foresight.

ADU update / Appraisal, Financing & Construction update.


Background

In March 2017 I purchased my first home for $315K, it was zoned for an ADU. The small 2 bed, 1 bath 800 sf brick structure required a full remodel and had an additional 800 sf unfinished basement. Before I moved in, I remodeled the main level, investing $60K. In summer 2018 I spent $40K to finish the basement – adding a master suite making the home 3 bed, 2 baths. The improvements were part of a thoughtful plan to add equity to my home in order to finance a future ADU (accessory dwelling unit). In January 2020 I engaged an architect to design the ADU and we submitted to the City of Denver mid-2020 for a permit. In December 2020 the city approved our permit and I began working with a lender to finance the project.

Construction Loan for an ADU

Before you contact a lender, you need to have your architectural plans completed, approval of the permit from the city, and select the builder you plan to work with. The builder will use the plans from your architect to come up with a detailed bid – the bid and plans must be in place to get a construction loan. The construction bid to build my ADU is $360K FirstBank is well known in the Denver community for construction loans and I went with them based on a recommendation from my builder and knowing their good reputation. I loved working with Megan MacHatton, she was excellent!! Luckily with my income, I was fortunate enough to qualify for a construction loan. When I initially purchased the home in 2017 my mom had to co-sign with me. She needed taxes for the last two years, bank statements, etc. I had to up my insurance to cover the construction project in my backyard. We talked numbers, but nothing could be determined until we had an appraisal done.

Appraisal

Appraising an ADU presents many challenges. ADUs are very uncommon in the Denver market because the concept started in 2010. Of the 200 ADUs built, most owners keep them and therefore true market value is not well established. In my appraisal, they had one good comp that sold for $806K with an ADU and he used another sale 6 miles SW in Overland for $925K with an ADU. He also considered one property with a basement ADU that sold for $750K. Lastly, he used two properties similar to the existing main house without ADUs that had sold for $538K and $549K and adjusted them $240K to account for the ADU. The appraised value ended up at $770,000 for the main house plus the ADU. Unfortunately, this is not good because I know that the main house is worth at least $540K and I’m planning to spend $360K building the new ADU. Ideally, the appraisal would be at least $900K (value of the main house + cost of constructing the ADU). Luckily, I was prepared for the low appraisal as it is commonplace with ADUs.

Financing

FirstBank will give you a construction loan for 80% of the appraised value – so my loan is for $616K (80% of $770K appraised value). They carried the loan for the entire property, so they paid off and took over the $271K loan on the primary house plus the $360K loan for construction of the ADU. It’s a $616K interest only, one year loan with a balloon payment due after 12 months. My interest rate is 4%. My payments start at $945/m and as the builder takes draws on the loan, the monthly payment will max out at $1890/m. I currently rent the main house for $2300/m so the mortgage is sufficiently covered during construction. Because the appraisal came in low, I had to bring a $23K down payment to closing and my closing costs were $5K. We estimate construction to take 6 months. After construction, I plan to refinance the home into a traditional 30-year mortgage at a lower interest rate and I’m crossing my fingers that after completion I can get a better appraisal at that time.

Welcome Abbey Puls to Living Room

We are excited to welcome Abbey Puls to the Living Room team. She is joining us as an Associate Real Estate Advisor.

Abbey grew up in a small town in mid-coast Maine. After attending college in Western New York she moved to Southern California and started a career in residential interior design. Her career took her to New York City where after over ten years of working in design she decided it was time for a change. Abbey’s love of the west then pointed her to Denver which is where her passion for home design and working with clients led her to real estate.

Learn more about Abbey on our website and follow her on Instagram.

Gorgeous Condo in Uptown Denver

New listing in Uptown, Denver

325 E 18th Avenue Unit #302 Denver, CO 80203
2 Beds + Office /1 Bath / 800 SF / $337,500

Open house this weekend on Saturday Nov. 7 from 11-2pm. Uptown condo with 2 beds plus an office in a historic building steps from restaurants and retail along 18th Ave only three blocks from Upper Downtown (UPDO). This third floor, corner unit has vaulted ceilings, city views, and two craftsman windows that flood the main living area with natural light. There is an updated bathroom and open kitchen with wood floors, bar seating, and granite countertops. The owners have added shelving throughout the kitchen, Elfa closet system in the bedrooms, and there is also a large storage unit. The 24 unit Colonial Revival style building was completed in 1910 by prominent Colorado architect Leo Andrew (L.A.) Desjardins and in the late 1990s Dana Crawford repurposed the old apartment building into condos. Crawford’s favorite design feature of the unit is the interior sunken sunrooms with gorgeous double French windows with a new Herman Miller globe light that make it perfect for a home office. An impressive column facade welcomes you into the recently upgraded foyer with new flooring, resident mailboxes, and an intercom system to buzz-in guests. All the hallways have recently been painted and new carpet in the common area showcase the beautiful historical features including wood staircase. Operate the commercial-grade washers/dryers with your smartphone and never worry about parking with a special resident parking pass from the city. Restaurants, coffee shops, bars, gyms, shopping and parks – all within a short walk. This is your opportunity to live close to everything downtown Denver has to offer! Walk Score 86 / Transit Score 89 / Bikeable Score 98 

Five top items to Winterize

It is easy to find a long list of all to the items to winterize your home. Some can be pricey and may not be necessary to do every fall/winter.  We have made a list of what we feel are the five most important items to do this fall.  This list is easy and costs very little.

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1. Blow out your sprinkler system 

This is something you can do yourself if you own an air condenser. If not, there are plenty of companies that will come to blow out your sprinklers. Call and schedule a time now, they book up as we get closer to freezing weather.

2. Clean out gutters & downspouts

You can grab a ladder and clean out your gutters or hire someone to do it.  It is important to make sure they are free of debris so that water drains properly away from your house.

3. Change the direction of your ceiling fans

Even in winter, ceiling fans can be used to help manage the interior climate. Ceiling fan direction in the winter should be clockwise, and the fan should run at the lowest speed. This pulls cool air up toward the ceiling, which in turn displaces the warm air that rises and collects near the ceiling. When standing under the fan, look up and double-check that the blades are rotating in a clockwise direction.

4. Clean out your fireplace & chimney

Before you touch match to kindling, take a good look around your fireplace and chimney to make sure you’re following these essential guidelines for a safe—and warm—season. Bob Villa outlined these steps to take before lighting your fireplace. 1. Check for Cracks and Damage. 2. Inspect the Chimney Cap and Damper 3. Clear Away Tree Limbs 4. Clear Out Ashes 5. Consider Heat Proof Glass

5. Plant bulbs for the Spring.

Spring-blooming bulbs, such as tulips and daffodils, should be planted in September or October when the soil temperatures have cooled. Generally, dig a hole two to three times deeper than the bulb is tall. So if you have a 3-inch-tall bulb, dig a hole 6 to 9 inches deep. If the bulb has a pointed end, that’s usually the side that faces up. If you don’t see a pointy side, look for where the roots come out—that end goes down. Like most plants, bulbs appreciate well-drained soil rich in organic matter. spread 2 to 3 inches of mulch over the soil to prevent weeds. Bulbs are plants, too, so they appreciate a good drink after you plant them.

NEW listing in Park Hill / Investment opportunity

New listing in Park Hill:
2566 N Fairfax Street Denver, CO 80207


2 BEDS/ 1 BATHS/ 913SF

OPEN HOUSE:
Sat Nov 7, 11:00AM-2:00PM

Two bed, one bathroom home setback on the alley that offers a huge 6250 lot in Park Hill – could be a great first home, rental, or building opportunity (more details below). Adobe home stays cool in the summer with new ceiling fans in the bedrooms (no AC). Fireplace and forced air furnace will make it a cozy place to be through the winter. Wood floors in the main area and bedrooms, new tile in the bathroom, and new carpet at the back entry and into the basement storage area. Kitchen has brand new appliances. New stackable full size washer/dryer in the bedroom closet. Great opportunity for construction. Rent the 2/1 for about $2000/m while you wait for permits. Build a new main house and a garage next to the current home. Keep the existing home if you can connect it to the new construction, but you’d have to remove the kitchen in the existing (zoned Urban – Singe Unit – C 5,500+).

City only allows 37.5% lot coverage = 2,343.75 sf. Existing house is 815 sf + 400 sf for a new two car garage limits you to a 1128 sf footprint on the new construction. You could do a basement and second story to make the new house over 3300 sf if you leave the existing structure. Scrape the existing structure to build a brand new 4000+ sf home like 2548 Fairfax Street, Denver, CO 80207 two lots south that sold for $1.42M in Feb, 2020. Or build an 1100+ sf addition to the existing home to add a master suite, second bathroom, and new kitchen like 5075 E 25th Avenue, Denver, CO 80207 which sold for $826K in August 2018 on the same block. Buyer responsible to verify all details building constraints.

Great schools – Park Hill School (ECE), McAuliffe International School (8-6), and East High School (9-12). 72 Walk Score – Live two blocks from Long Table Brewery, Sexy Pizza, and new Park Hill Commons development. 10 minute walk to Spinelli’s market, Honey Hill coffee shop, and Cherry Tomato. 4 min drive to Neighbor’s Wine bar, Tables restaurant, and Cake Crumbs Bakery. Buyer to verify and zoning.

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