Spring time In The Rockies

Well here I am a native of Colorado and I can still be surprised by the whacky weather. From snow storms to sunshine to sunshine and snow it's still the best place to be. When I was a kid folks used to say, "Don't like the weather? Give it a few minutes and it will change..." I guess in this time of uncertainties it's good to know some things are consistent....even if those things are actually inconsistency. Real estate and the weather are the same in that way and you must constantly adapt.

For the Colorado climate one is well advised to wear layers- things that can be shed as the weather warms and slipped back on with the inevitable cooling off that will follow, particularly as the sun sets. In the case of real estate, it is wise for all of us realtors, buyers and sellers alike to pause and at the very least re-adjust our thinking if not being actually prepared to shed some of our preconceived notions formed from "how the market used to be." It is a whole different market than the one we knew just 3 or 4 years ago.

We are still laboring under a very clear and present lending crisis. It is difficult for even well qualified buyers with substantial down payments to get loans and it is virtually impossible to get loans for condominiums. The lending market appears to have turned its back on condominiums. If the condo that you or your buyer have your eye on is not in a project that is at least 70% sold there will be no fannie mae approval. And what you ask does that mean? Well it means that your lender cannot send a loan package through automated underwriting and will likely have a very difficult time selling the loan- hence they won't make the loan. However, there are still a few options if you look hard enough or work with a savvy city realtor. If the project is at least 51% owner occupied and the HOAs look good a buyer may be able to get an FHA loan, through a process known as spot approval for a purchase price of $417,000. or less. And if that isn't a possibility there are things called portfolio loans that allow a buyer to obtain a loan for a few years until such time as the market corrects itself. These loans are made by banks, typically smaller state chartered banks and they do not sell the loan, instead holding it in their portfolio. Knowing where and how to find some of these products will allow condo buyers to purchase property and take advantage of some really great opportunities that prevail in this market place.

Yes I did say opportunities. Many brand new condos have not been able to sell because of these very lending practices and so developers are a bit more motivated not only to sell but to help the buyer obtain their loan and get to the closing table. Now this is the part where I say be prepared to slip some of those old notions back on...there is a point beyond which a seller can not or will not go. If a deal seems unbelievable- it probably isn't real; there is probably something that you don't know or are missing so as always, "caveat emptor" (latin for buyer beware).

If you get to the point of making an offer and you have your financing figured out- at least in theory- there are some things you should consider. When dealing with a developer of a new project know that often times the developer is not the only one negotiating. It may be that the developer's lender is directly involved in the release prices- that is the number at which the bank is willing to make a partial release of the construction/acquisition loan enabling the developer to provide you with a clear title. The developer is still there to try to make money or at the very least to escape without losing money.

When making an offer on any property whether it be a private party seller or a developer remember that nothing counts unless it is in writing and signed by all parties. Don't ask your realtor to field verbal offers- they don't mean anything anyway. Your realtor is there to help you and if you have chosen wisely your realtor has likely been through many many closings, even in this market so trust them. If you don't value the realtor's opinion then get another realtor. And last but not least, when negotiating remember what our mamas always told us, "you get farther with honey than you do with vinegar." All negotiaitions are contentious- the mark of a good negotiaition is when both parties feel like they had to give a bit more than they wanted to, but that doesn't mean it has to be personal or ugly. Placating a seller who is accepting a lesser price costs the buyer nothing and can make a big difference throughout the transaction.
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