FIRST TIME HOME BUYERS: DO YOU QUALIFY?

Natasha Hunsaker and Marcia Reynolds were renting a 2 bedroom apartment in Wheat Ridge for $1025 per month when they started wondering whether they might be able to purchase a house of their own. “We kept seeing these articles about how this is supposed to be a great year to buy a home”, said Natasha, a General Manager for a soft goods manufacturing company. “But we really didn’t even know where to begin”.

The federal government is encouraging first time home buyers like Hunsaker and Reynolds to take the plunge into home ownership. But the water is still pretty frigid with an endless supply of bad news about housing. So this year congress enacted an economic incentive for first time home buyers in the form of an $8000 tax credit that can be cashed this year, even if you’ve already filed your 2008 tax returns.

So Natasha called her long time friend and Realtor, Tammy Marasia, a Keller Williams agent in Westminster. “She sent us so many refrigerator magnets over the years, I had to call her”, joked Hunsaker. Marasia, an experienced residential and commercial broker, was no stranger to world of first time home buyers. After meeting with the two women and conducting an initial needs assessment, she recommended that they speak with a mortgage broker first. “The rules and regulations have changed so much concerning home loans”, advises Marasia, “that I always counsel my clients to seek out an honest and reliable lender before anything else”.

The most popular loan program for first time home buyers is a government backed loan through FHA (Federal Housing Administration). Buyers can usually obtain an FHA loan with a minimum 625 credit score and a 3.5% down payment. But even if you know your credit score or don’t have the minimum required down payment, experts recommend seeking the advice of loan professional to receive better clarification and explore potential options. In Natasha and Marcia’s case, their Realtor referred them to Mitch Friedman with Premier Mortgage Group, a 20 year veteran in mortgage lending.

“When I met with Natasha and Marcia, they were worried about their credit and down payment and whether they could qualify”, explained Friedman. “If you’ve never purchased a home before, and you hear all the news about people foreclosing, it can be a pretty intimidating and confusing.” On the one hand, most housing experts agree that this is great year to buy a house, while on the other, wary customers don’t want to end up like so many before them on the foreclosure list. In Hunsaker and Reynold’s case, their combined credit score fell below the minimum requirement for an FHA loan. So now their fears were coming true—they thought they wouldn’t be able to qualify for a home loan.

“Mitch gave us some great advise”, said Natasha, “he showed us exactly how to clean up our credit”. With some persistent phone calls, the two women were able to effectively raise their fico score enough to make the difference. Then came the issue of the down payment and the cost of obtaining the loan, or “closing costs”. They estimated that they would need almost $10,000 to make it all work. Like most first time home buyers, Hunsaker and Reynolds didn’t have much in savings and weren’t sure how they were going to get it.

But that’s where the national and state governments are jumping in to help first time buyers. The federal tax credit, with a maximum of $8000, can be obtained with a simple Tax Amendment, if you don’t want to wait till next year to receive the money. Or, the Colorado Housing & Finance Authority (CHFA) has a program that will allow you to utilize up to $6000 of the tax credit and apply it toward your down payment. The CFHA Jump Start program, as it’s called, is actually a short term second mortgage, which can be repaid once the home buyer receives their tax credit from the federal government.

Natasha and Marcia decided to save enough money for the down payment themselves, and with a clear goal in mind, they were able set aside the money they needed. Now with funds in the bank and a Pre-Approval letter in hand, they were ready to buy a house. “We started looking at houses, but quickly found out that most of the so called foreclosure deals needed a lot of repairs”, commented Natasha. “Then Tammy showed us a cute little house in Thornton that had been totally remodeled”. But the price was higher than their approval limit, which meant it was time for their Realtor to show off her negotiating skills. Marasia recommended that they offer several thousand dollars lower than the asking price and additionally ask the seller to pay for the buyer’s closing costs. The seller countered their offer, but in the end, agreed to pay their closing costs. Bingo. They had a deal.

Then it was time for the home inspection. Being fully remodeled, the house faired well under the scrutiny of the inspector, expect for one major item. The electric panel was mounted incorrectly, which after some persuasion from the buyer’s Realtor, the sellers agreed to fix. The two women were ecstatic; it really seemed like the deal was coming together, thanks to a lot of good advice from professionals like Mitch and Tammy. On March 26, 2009, Marcia and Natasha bought their first home. “We couldn’t be happier, says Hunsaker, we started out thinking we couldn’t qualify for a loan and now we’re home owners!”

Mitch Friedman and Tammy Marasia sponsor a series of First Time Home Buyer classes, which run once a month. The free, no obligation classes are designed to help educate people about the process of purchasing a home for the first time. “I think there is a lot of desire on the part of first time home buyers to educate themselves and learn the correct way to purchase real estate”, counsels Friedman. “With so many incentives, options, and advantages in 2009, we want to give people the resources and knowledge to make good home purchasing decisions.” The next class will be held at the Arvada Public Library on June 23 from 7-8:30 PM. For more information about the free First Time Home Buyer classes, visit www.cfthb.com or call Jim Lyons at 720-581-0342.

BROOMFIELD BEAUTY

Check out this beautiful home in Broomfield, CO. Clean and bright with a functional open floor plan. Finished basement gives you a spacious 2778 square feet with 3 bedrooms and 3.5 bathrooms. The deck is low/no maintenaince Trex Deck--you can share it with friends or enjoy all by yourself! Come to the Open House, Saturday, June 6, 1-4PM or call Chip Bruss at 720-271-9898, or visit ChipBruss.com.

DENVER #1 CITY TO REBOUND

Visit msnbc.com for Breaking News, World News, and News about the Economy

Good news is spreading fast in Denver, Colorado! NBC News Today Show featured a story this week about the five U.S. cities most likely to rebound from the national housing crisis. Guess who came out on top? 5280, the mile high city!

Actually, this is not surprising, as I've been talking about the economics and real estate market of the Denver/Boulder/Broomfield region for at least a year now. This area is poised for great things; new expansion in the energy sector will drive everything else forward, business development, jobs, real estate, services, etc. The reason this is so important to point out is that this is REAL growth, stimulated by a new industry and a vital need in the our economy. Back in 1995, the beginning of the housing boom, the federal government was using interest rates to stimulate the housing market and the thereby the economy. Well, we saw how well that worked. This time Denver, Boulder, and Broomfield will be at the epicenter of the energy technology industries, researching and developing new ways and means of generating, storing, and distributing power.

For more information about real estate and the economy of the North Metro Denver area, contact Chip Bruss at www.chipbruss.com.

Networking with the Boulder Chamber Orchestra

The Tuesday Breakfast Club, part of The Broomfield Chamber of Commerce, hosted a business breakfast to support The Boulder Chamber Orchestra on Tuesday, May 12 at the Runway Grill. “One of the many ways the Chamber fosters business in Broomfield is through Leads Groups”, remarked Larry Rooney, membership coordinator, “which gives business leaders and entrepreneurs a way to gather and share ideas”. The Tuesday Breakfast Club is one such group, composed of five members—Peggy Pingel, Andrea Balazs, Sam Lansing, Keith Bobo, and Chip Bruss. “We wanted to do something to support a local non-profit arts group”, says Pingel, the group’s leader. “The arts add so much to the quality of life that we all enjoy, so we invited The Boulder Chamber Orchestra to come network with us.”

The Boulder Chamber Orchestra is a 26 piece orchestra established in 2004, and plays 6 concerts each year in the Boulder and Broomfield area. The conductor and music director, Bahman Saless, spoke to the business men and women at the breakfast meeting. “Of course, we appreciate the support, but it’s the networking that really counts”, said Bahman. “There’s nothing better than word of mouth promotion by peers and influential members of the community. We attribute our success and sold-out attendance to you.” Bahman Saless holds a Ph.D. in Physics from the University of Colorado and worked briefly for NASA, before to pursuing his passion for classical music and the violin.

For more information about the Boulder Chamber Orchestra, you can visit their web site at www.boulderchamberorchestra.org. And for more information about the Broomfield Chamber of Commerce, visit www.broomfieldchamber.com.

First Time Home Buyers

We had a fabulous seminar last week for first time home buyers. The purpose of the event was to provide education and resources for people wanting to purchase their first home. It was held in Broomfield, Colorado at the North Metro Denver Realtors Association.

Several factors have come together this year, including lower interest rates, a large supply of homes, lower purchase prices, down payment assistance programs, and tax credits, all creating a unique opportunity for many people considering a first time home purchase. As part of The American Recovery and Investment Act, the U.S. Government is offering up to an $8,000 tax credit to first time home buyers who purchase a home before November 30, 2009. The class is just one part of the public outreach that our office is doing for first time home buyers. The National Association of Realtors estimates that first time home buyers comprise about 40 percent of the housing market. They are a critical component of not only the housing recovery, but the overall economic recovery as well. When first time buyers purchase a home, it allows the owner to sell and buy another home, and so on.

The next first time home buyer class will be held May 26. For more information, contact Chip Bruss at 303-463-3660 or chipbruss@kw.com.

HAPPY VALENTINES DAY!

The best valentines day gift we could get this year would be housing relief. The government and the banks still don't get it! Bail out money and buying toxic assets is all wonderful, but it's not going to solve the problem. Housing got us into this mess, so we have to fix the housing problem at the root level. It's big, but it's not complicated. Here's the deal. Foreclosures are out of control--I read in the paper today that some expert predicted we could see as many as 10 million foreclosures before this thing is over.

Here's the fix. Every homeowner who is delinquent on their house payment must be evaluated for hardship. And there are only three options: 1. If the homeowner is delinquent due to their own fault, the bank should foreclose. It's not the best option, but it is the law. 2. If the homeowner is experiencing economic hardship, due to job loss, adjustable rate mortgage, or other outside influence, they should apply for a loan modification. A loan modification is where the bank agrees to reduce either the interest rate, the principal, or change the terms of the loan to benefit the homeowner. 3. If the homeowner cannot qualify for a loan modification, then the best solution is a short sale to avoid foreclosure and remove the asset from the marketplace and the bank's inventory.

Like I said, it's a big problem, but it's not complicated. Unfortunately, the banks and the government make it more complicated than necessary and therefore exacerbate the problem.

So it's a volume problem. How do we process millions of homeowners in a timely manner? Well, there are lots of people unemployed who have adequate financial skills to evaluate homeowners, and with a little training, you'd have a ready, willing, and able workforce. Hmmmm, that's interesting. How come nobody's talking about that?

If you have questions about foreclosures, loan modifications, short sales, investor deals, or market conditions, please contact me. Happy to help!

TAX CREDIT FOR FIRST TIME HOME BUYERS

The United States Senate unanimously passed a bipartisan amendment to the Economic Stimulus Bill creating a $15,000 tax credit to individuals who purchase a home in the next year.
Specifically, the amendment to the pending economic stimulus bill would provide a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislation's enactment, and the tax credit would not have to be repaid.
The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principle residence and by recapturing the credit if the home is sold within two years of purchase. The amendment would sunset the current $7,500 housing tax credit on the date of enactment.
While the final details of the Stimulus Bill are still being debated, this amendment represents a tremendous step forward in efforts to stabilize housing markets around the nation. We expect the final Economic Stimulus Bill will contain several major housing provisions. We will continue to update you as the bill progresses through the legislative process.
If you have any questions about the new tax credit or need help finding housing in Colorado, please call me or visit my web site, www.chipbruss.com.

KELLER WILLIAMS BUCKS THE TREND

Keller Williams Realty Bucks National Business Trends During the Toughest Real Estate Market on Record.



Bailout. Credit crunch. Foreclosure. Despite these words permeating the headlines and airwaves, there are companies out there moving forward - even in real estate. Keller Williams® Realty Inc., the fourth largest real estate company in North America, announced that it outpaced the market in 2008, while remaining free of debt, and gave back more than $30 million in profits to its agents.

“Our strategy is no secret. We faithfully follow the sound financial model of leading with revenue - the same model our market centers follow,” said Mark Willis, CEO of Keller Williams Realty Inc. “As we watch companies throughout the country take on billions of dollars of debt, we are proud to say that our company has not one dollar of financing debt and we remain strong and financially sound. It is our joy to be able to give back to our agents during these times.”

Despite pervasive downward trends in the real estate industry, Keller Williams Realty continues to outperform the industry. For the first 11 months of 2008, existing home sales for the United States fell 17% when compared to the same period the year before. By comparison, Keller Williams Realty is poised to outdo those numbers by 10 percentage points, and in addition, the company experienced a much smaller contraction in its agent base compared to the National Association of REALTORS®, who saw a 10% decline in membership.

“Keller Williams was founded 25 years ago during one of the toughest markets on record - when interest rates were higher than 18 percent. We continue to urge our agents to zero in on lead generation and reducing expenses so they can thrive during this market,” said Mary Tennant, president and COO of Keller Williams Realty Inc. “We admire our agents’ spirit, tenacity, and dedication to their businesses. They just keep powering forward.”

Throughout 2008 Keller Williams Realty launched new products and services specifically to boost its agents’ businesses, including two new books: Your First Home: The Proven Path to Home Ownership for first-time home buyers, and SHIFT: How Top Real Estate Agents Tackle Tough Times. Both books are written by Gary Keller, co-founder and chairman of the board of Keller Williams Realty, who also authored national best sellers The Millionaire Real Estate Agent and The Millionaire Real Estate Investor.

REPRINTED FROM RISMEDIA. For more information, visit www.kw.com.

HOW TO REDUCE FORECLOSURES & UNEMPLOYMENT

I reposted this blog entry, after being asked to condense it for the Broomfield Enterprise.

Dear President Obama and America’s banking leaders. While the nation's banks are receiving billions of dollars of bailout money with no real accountability, here's an idea that might help reduce foreclosures and the unemployment rate simultaneously.

The problem is that there are too many foreclosures and the process for handling them is too slow. The solution is to utilize talented unemployed people to speed up the process.

According to Realty Trac, there are currently 2.3 million foreclosures in the United States that are devastating our economy. Foreclosures are a cancerous blight that devalue surrounding homes and create a downward spiral for the entire market. So, in order to achieve any real recovery, we need to purge the market of as many foreclosures as possible, and fast. But here’s the problem. It takes approximately 6-12 months (sometimes longer) to push each one of these distressed properties through the banking and legal system. So, how will we ever push 2.3 million of these “toxic assets” through the system fast enough to turn the market around? Why are the banks so slow and how do we speed up the process?

When a home owner becomes delinquent on their mortgage, the bank has to evaluate the situation to determine whether they should proceed with a legal foreclosure or take a loss on the property. The bank has every right to foreclose, but a legal foreclosure is the longer and more costly road for all parties. The banks would be better served to cut their losses quickly and move on to the next case.

But here’s where the banks get stuck. The bank who holds the mortgage is usually not the original lender and is typically located out of state, lacking first hand knowledge of both the owner’s situation and the true market value of the property. The bank passes papers from department to department, all in the name of “loss mitigation”, when in truth, all of these people have very limited knowledge or accountability. This creates enormous inefficiencies and bad decision making.

So let’s get to work. Unemployment is now over 7%. Here is a ready, willing, and seasoned workforce, many with excellent accounting, finance, mortgage, and real estate experience. Using the economic stimulus money, the banks should hire experienced, knowledgeable people to oversee the foreclosure process. But the key is to assign one experienced, knowledgeable individual to each case, who can analyze the situation quickly, negotiate, and make an intelligent decision on behalf of the bank. It seems counter-intuitive that assigning one person per transaction could be more efficient, but a knowledgeable expert, who is accountable to the bank, can make smarter decisions faster, advise the bank about risks and liabilities, and actually push transactions through faster. This would speed up the process tremendously and put lots of people to work.

As Einstein said, ‘you can’t solve a problem by using the same kind of thinking that created it’. Americans are an innovative breed, so let’s innovate a better solution.
Chip Bruss
Colorado Real Estate Broker

How to fix unemployment and foreclosures at the same time

Dear President Elect Obama, America’s banking leaders, and Lou Dobbs. Here's an idea that will put a serious dent into both the unemployment rate and the foreclosure crisis simultaneously.

While the nation's banks are receiving billions of dollars of bailout money with no real accountability, this might be an intelligent way to channel those funds into something that will actually help solve serious problems. As a real estate professional, I can tell you unequivocally, and my 1.3 million Realtor colleagues will corroborate this, the bank foreclosure process is seriously screwed up. The procedures and policies that banks use to process a short sale, foreclosure, or bank owned property sale are completely inefficient, ineffective, antiquated, and are costing the banks (and therefore taxpayers) millions upon millions of dollars. If you’ve ever been victim of a foreclosure or tried to buy or sell a foreclosure property, you know that it will take many agonizing months to process, sometimes up to a year, with little or no communication from the bank, and may or may not result in a positive outcome for the bank, the buyer, the seller, or the nation.

Here's the problem in a nut shell. The bank needs to analyze the value of the subject property and the potential buyer's offer to determine whether they should take a loss on the foreclosed mortgage or how much of a loss is reasonable to take. But the bank and its employees are usually out of state and have little data, connections, or realistic knowledge of the local real estate market in question. The bank passes documents from person to person and department to department, all in the name of risk reduction, when in truth, all of these people have very limited knowledge or accountability for the actual deal. This creates enormous inefficiencies and bad decision making. What a shock! So with a better system, the banks could process foreclosure deals faster, saving millions, and make better decisions, saving even more millions. For example, when a good Realtor handles a transaction for a client, they handle the entire deal from beginning to end, with informed knowledge of all the details and can advise their clients about the best decisions to make along the way.

So here's the solution. Unemployment is over 7% and hundreds of thousands of people with excellent accounting, finance, mortgage, and real estate experience are out of work. Hire these experienced, knowledgeable, and mature people to oversee the foreclosure processes at the banks. But the key is this, assign one experienced, knowledgeable person to each deal, who can analyze and assess the situation quickly, negotiate the deal if necessary, and make an intelligent decision on behalf of the bank. Doesn’t it make more sense to pay one experienced person to follow a deal through successful conclusion and positive outcome, rather than 17 low-paid staffers, who will take more time and accept no responsibility for poor decisions? Everybody wins!!!! The bank, the buyer, the home owner, the unemployment rate goes down, foreclosures reduce faster, and the nation's real estate market will recover faster!

Of course, the devil is in the details, but the current system is inefficient, sloppy, and just plain stupid. If anyone in the white house or a major banking institution would like more details on how this plan can save America, I would be happy to answer questions and provide a strategic plan.

Sincerely,
Chip Bruss

Happy New Year 2009

Well the only thing certain about 2009 is uncertainty! I won’t go into the laundry list of problems we face on economic and global fronts. But hey, it’s a great year to be alive! If you’ve ever listened to Anthony Robbins, the self-help guru from San Diego, he advocates that we need challenges in order to make life rich. We all wish our problems would go away, but in fact, we will always have problems, otherwise known as challenges. And if you took away the challenges of life, it would be boring indeed. If you look back on the greatest accomplishments and happiest moments of your life, they were all preceded by serious challenges and obstacles. It’s the overcoming of those obstacles that creates the exhilaration, whether climbing a mountain, finishing college, or having a baby. So embrace these new challenges of 2009 and let’s make it a great year to remember!

After relocating to Broomfield, Colorado from Columbus, Ohio, I have joined Keller Williams Realty in the Northwest Denver office. It’s a great location to help people buy and sell real estate in Broomfield and Boulder County. I researched and selected this area specifically for the excellent future growth opportunities and positive economic forecast. Please visit my web site, www.chipbruss.com, and my LinkedIn site, www.linkedin.com/in/chipbruss to learn more about my approach to real estate and this exciting region.