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Top 4 Things you Need to Know about Appraisals

Top 4 Things you Need to Know about Appraisals

The appraisal of a home is a vital part of any real estate transaction, and the role of an appraiser is possibly one of the most critical parts of the entire transaction. See below as to how you, as a Seller, can be way ahead of the learning curve with just a few helpful hints from me when are you ready to put your home on the market for sale!

1. Appraisers are always hyper sensitive to contributing to potentially over inflating any real estate market. And, with multiple offers being the norm in most price ranges here in Colorado Springs, they are even more so.  Encourage your real estate broker to have comparable sold data ready to present to an appraiser. This data should support whatever sales price the buyer and seller finally agree to...ESPECIALLY vital if that sales price is OVER what the original list price was.

2. Most real estate brokers are ridiculously busy right now, but that ABSOLUTELY DOES NOT excuse your real estate broker from not showing up to your home, with comparable sold data and a list of every improvement made to the home in hand to meet the appraiser for his or her site inspection. Your real estate broker knows your home better than the appraiser does, so make sure your real estate broker shows up and represents!

3. Your real estate broker should be as descriptive as possible about your real estate listing and include, if at all possible, ALL 36 photos that the Pikes Peak MLS allows. It helps an appraiser immensely to include photos of the front of your home, the rear of your home, the street view of your home, and all major rooms in your home as well as the features of the home itself. Again, your real estate broker knows your home better than the appraiser does. 

4. What your real estate broker should tell you, from the very beginning, about the role of an appraiser in a real estate transaction? The role of the appraiser is actually NOT to confirm the sales price, but to provide the Buyer's lender an independent, objective, and completely impartial opinion of the value of your home. This value of your home is considered the collateral to which the Buyer's loan would be based.

Happy Selling! 

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Out of Pocket Expenses for Buyers

Out of Pocket Expenses for Buyers

When purchasing a home, the first out of pocket expense that you’ll have is the earnest money. This shows the seller that you are committed to the purchase & aren’t out submitting offers on other properties. You give the earnest money check to your Broker or Title Company and it’s kept in escrow until the purchase is finalized. This money will go towards your closing cost or down payment at closing. There are instances throughout the buying process, where this is refundable to the buyer should the deal fall through.

The next out of pocket expense is inspection fees. There are many types of inspections to include:

  • Basic home inspection to determine the homes condition. Usually runs $300-400, depending on the size & age of the home.
  • Radon Test. This determines if your home has unsafe levels of Radon gas. Usually about $175.
  • Sewer Line Scope. To see if there are any issues with the current sewer line. Usually about $125- 200.
  • Lead Based Paint Assessment. This determines if the home contains lead paint & applies to anything built prior to 1978. This usually runs about $300.
  • Meth Lab Test. This will check to see if there has ever been methamphetamine in the home. This starts around $600 & can go to about $1200.
  • Mold Test to see if your home contains dangerous mold. Usually runs about $300. There’s also Well & Septic testing if the home has them. These fees are to be paid in full at the time of service.

The next cost is your down payment. This pays a percentage of the sales price of the home, which you pay at closing. VA loans do not require any down payment. There’s also first time buyer programs that provide down payment assistance for buyers that qualify. The most common loan for first timers is FHA. This requires 3.5% down and is due at closing. Conventional loans start with a minimum of 5% down and go up from there.

The last out of pocket expense is closing costs. These are fees paid at the closing of a Real Estate transaction. This pays for things like points, appraisal and title company fees, taxes, pre-paids and many other important items. Luckily, you will know what to expect ahead of time, because lenders will provide a cost analysis worksheet with estimated fees.

If you have any questions about out of pocket expenses, please give me a call!! I’d love to help anybody that’s beginning or curious about this process.

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Condos and Townhouses - What's the difference?

Condos and Townhouses - What's the difference?

There is a lot of confusion about the differences between condominiums and townhouses. They share many similarities, and this seems to be the source of this confusion. Even amongst real estate professionals we often hear more opinions than facts.

So, let's start by clarifying, condominiums or condos are a type of real estate ownership. A townhouse is an actual style of building.

A condominium is best described as “the concept of ownership of a single unit of air space within a multi-unit dwelling, along with co- ownership of any common amenities (recreation centers, pools, etc...) and common areas of the structures and land among all unit owners.”

Townhouses are generally attached structures of 2 or more stories with common walls. These are a version of the old "Brownstones or "Row Houses" made popular on the east coast.

Similarities:

Townhouse ownership means you own the structure along with any associated land. So the owner of a townhouse can have absolute ownership, like a single family home.

Here's where things get a little confusing. It is not unusual to have “condominium ownership” of a townhouse. In other words, the structure is a "townhouse" while the ownership is "condominium".

Differences:

Ownership and common areas are the primary differences between condos and townhouses. You can actually have absolute ownership of a townhouse as well as the land (yard) associated with it. In a Condominium you only own the "air-space" inside of your particular unit.

The owners of a condominium development each own an equal share of the "General Common Elements". This includes the structural elements of the building roof, walls, halls, clubhouse, pool, etc...

In a townhouse community, any common elements are deeded to the the Home Owners Association (HOA). The townhouse owners are a part of the HOA but don't own an interest in these elements.

"Limited Common Elements" are where we see a departure between townhomes and condos. Limited Common Elements are only seen in condo ownership. These are things that are intended for the use on the individual unit owners. Parking spaces, garages, balconies and patios are examples of Limited Common Elements. Although these are owned by all of the unit owners, they are limited to the use of specific owner/s.

In a townhouse the balcony and garage are actually owned by the townhouse owner. The exception to this would be if a "townhouse" style home is owned as a "condominium".

Summary:

Both condos and townhouses are what is known as "Common Interest Communities". A "Common Interest Community" is one where common real estate is maintained through assessments and dues.

Because of the Common Interest Community designation, we see a lot of confusion. The easiest way to remember the differences is this, a condominium is a form of real estate ownership and a townhouse is an architectural style.

If you are in the market to buy or sell your condo or townhouse, or just want to get some more information about the differences, give me a call, I would be happy to help.

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International Notary Guidelines

Notary Guidelines

I'm certainly not going to pretend to be an expert on all things regarding legal notaries around the globe. It only came to my attention a few years ago that it might not be as easy everywhere as it is here! 

In the United States of America, many legal documents need to be notarized. For most of us, in our industry, that means every title closer you know can do this for you, and they perform all of our closings. If you live in another state and are closing on a property here, sometimes that means walking into your local bank or just finding a local notary in your area to certify your signature on your legal documents.

Well, such is not the case around the globe. I had a client moving from a civilian job with the USA working in Saudia Arabia. As they began the search, they of course came here to look at homes. With electronic software, the contract, inspection, amendments, etc. were fairly easy to execute halfway around the world. But when it came to closing time, we discovered they had to have docs sent to them, then notarized and returned. Easy-peasy, right? Nope! First of all, the title companies here require an American notary. So they had to find one... at the US Embassy... and pay $50/page to have it notarized. The title company was so helpful and kept to a minimum the actual documents that needed notary. It was complicated, but accomplished.

Second example, I took a recent continuing education class in which the instructor shared an example of a client that lived in Australia and was selling a property in Colorado. Well, in Australia, to get something notarized you have to go before a judge. Wow, that's complicated!! So the Colorado seller, living in Australia came to the US at some point during their transaction (not Colorado) to visit family. The title company sent documents to them while in the USA, so they could find a US notary and remove some complications! 

I have a client now, living in Prague, getting ready to sell their property here in Colorado Springs. I asked her to get started in the process of what it takes to notarize documents there, so we would be ready when the time comes. Their home here will of course sell in probably less than a week and close in under 2 months. If they are stateside at any time in the next 3 months, we'll certainly try to get any possible documents to them, especially if we are already under contract.

The internet and social media has shrunk the world in many ways. But sometimes we need to be reminded how easy we have it... what a great country this is!!! 

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Steve's Picks for a Nice Weekend

Steve's Picks for a Nice Weekend

My family and I moved to Colorado Springs in the Fall of 2008 and we quickly fell in love with the lifestyle, the abundance of year-round outdoor activity, fresh air and lots of sunshine! Oh, and plenty of snow just to make things really exciting. This area has so much to offer no matter your season of life. But if you are like me, married with kids, you will soon appreciate the variety of life-giving recreation just minutes from your door! So, here are a few family favorites.

Hiking – You could literally spend a lifetime discovering new trails, rock formations and mountain peaks nestled among the amazing Rocky Mountains. One I highly recommend is Mount Herman. Located just west of Monument, CO this trail takes you up to an elevation of 9100 feet, and can be accessed from Mount Herman Rd. halfway up the mountain. It is given a skill level of moderate and is a 2.2 mile out and back trail. On a clear day you can easily see downtown Denver and downtown Colorado Springs. Pack a lunch and plan to relax for awhile to take it all in!

Zoos – One of the area’s treasures is Cheyenne Mountain Zoo. It is located Southwest of Downtown and is sitting on the side of Cheyenne Mountain. There are dozens of exhibits and animal species represented and you can even feed the peacocks as they roam around the grounds freely. Annual passes are available at an affordable price so that you can go as often as you like! A real favorite for kids of all ages.

Shopping – You can find 100’s of shops scattered around the area featuring local craftsmen and artists. I highly recommend taking a drive through Old Colorado City and into Manitou Springs. A tourist destination located to the west of Colorado Springs and just next door to Garden of the Gods, this area boasts many restaurants, boutiques, Bed & Breakfast Inns and an old-world Arcade! While in town you can take a ride to the Summit of Pike’s Peak on the Cog Railroad. Check the calendar for a vast array of events including farmer’s markets and street fairs.

Whatever you are into, The Springs area is hard to beat. Come for a visit…you may decide to stay for the rest of your life!

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