How Mortgage Strategy Differs for Millennials, Gen Xers, and Baby Boomers

Changes in market conditions, mortgage qualifying and changes in the nation’s economy have caused Millenials and Gen-Xers to have some anxiety about whether they will ever enjoy the benefits of homeownership. Some strategy and planning is called for. Here’s a good summary of things to consider:

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Do HOAs Affect Home Values?

Do HOAs Affect Home Values?

Research suggests that HOA’s have an effect on home values – almost always for the better.

“Theory does suggest that  HOAs increase home value. The rights and responsibilities that come with an HOA affect a home’s value, just as do the number of  bedrooms and the quality of the local schools.  A great house in a community with a poorly designed or badly managed HOA is a great house in a bad neighborhood.” – Amanda Agan and Alexander Tabarrok , George Mason University.

The Downside

Since most homes built in America today come with an HOA, the rare negative effect might be where your monthly HOA fees are substantially higher than those for a similar home in another neighborhood.  We sometimes see this where there have not been adequate maintenance reserves collected over the years and they’re having to play “catch up”; or when there has had to be a special assessment (because they didn’t have adequate reserves).  In that case, the price will have to be lower to reflect the additional cost of ownership to the Buyer.  How much lower?  Well, you could take the difference in monthly HOA fees, use that as the payment toward mortgage principal at the prevailing rates, and calculate the amount of mortgage that would pay off over 30 years.  There’s your price difference.

The Upsides

The advantages, although not as clear-cut economically, are

  1. Covenants. Also called Deed Restrictions. These are rules creating standards for quality and appearance of the home and lot. They’re usually enforced by the HOA.  Some people will bristle at the thought of anyone telling them what they can or can’t do with their home, but consider that the characteristic of “conformity” carries only a positive connotation (and value adjustment) in the language of appraisal.  Hence, the fact that neighborhoods where all the homes look nice tend to sell for more.
  2. Local Control.  Part of the premise of having a HOA is that local residents can manage their neighborhood better than the various divisions of city government. That’s why the HOA has control over streets, landscape maintenance, amenities, etc.  In fact, Denver Government even allows non-HOA neighborhoods to be an integral part of planning, development, code enforcement, variances, and other functions through RNOs (Registered Neighborhood Organizations).  In Winston Downs, we really have a RNO which has “HOA” in it’s name.
    Some analysts even point to the rise in “Local Governments” (, noting that HOAs lead the way in providing more individualized, cheaper and better quality services than can be provided by City and State agencies.
  3. Placemaking and Community.  “Placemaking is a quiet movement that reimagines public spaces as the heart of every community, in every city. It’s a transformative approach that inspires people to create and improve their public places. Placemaking strengthens the connection between people and the places they share.”  HOAs are made up of neighbors, neighbors make a community, and communities strengthen and enforce shared values.  Strong communities help drive strong home values.

Winston Downs HOA

With all that said, the HOA (really an RNO) for Winston Downs Neighborhood is entirely voluntary, and at this writing a bargain at $15/year per family. The neighborhood doesn’t carry any deed restrictions, so code enforcement is pretty much up to local government.  But the RNO is an active participant in organizing community activities, weighing in on local issues, schools, development and code variance requests which impact the neighborhood.


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What is the Hottest Price Range?

What is the Hottest Price Range?

The hottest price range in Denver is where the most sales are happening, where homes sell overnight and Sellers get multiple full-price offers. This is good information for both buyers and sellers: buyers need to know how competitive the market will be for them; and sellers can use this information to best position their home price for a quick sale.

Price Buckets

A price bucket is just a way to group products by price.  For example homes between $150-250,000 might be one bucket, $250-300,000 the next, etc.Denver MLS areas

You can make the buckets any increment you want, and it might be true that different areas have different hot buckets.  For example, in Denver, Metrolist divides Denver County into 5 geographic areas, and the surrounding counties are split up also.   Here are the geographic areas for Denver in MLS:

Notice there is a Northwest area (DNW), Northeast (DNE), etc. plus Downtown (DTD).  Although buyers and sellers often use zipcode searches (because some of the internet sites are set up that way), most brokers primarily use MLS Areas to begin a search, and it’s also the way historical data (number of sales, prices, time on market, etc.) is collated in MLS.

What I’m suggesting is that you might want to make a list of  “buckets” for the MLS area in which your home is located.  Why?  Because they’re going to be different for each area. Then when you list your $600,000 home in Northeast Denver, you won’t be as surprises to find it’s not getting the same activity as your neighbor who is priced at $350,000.

Denver Southeast (DSE)

Bucket_dse_2013Notice that the “hottest” price bucket in Southeast Denver is $250-350,000.  With about 450 sales so far this year, it’s 50% stronger than the next best bucket ($350-450k).

 Northeast Denver

Now let’s look north of Colfax Ave. and see that the hot price bucket is in a slightly different market segment.

Bucket_dne_2013In this area, the hot segment is $150-250,000.

Using Price Buckets in Home Pricing

Home Sellers might want to consider the distribution of sales when pricing or re-pricing their listing.  If you have a $675,000 home, for example, your odds of selling go way up if you move it into the next lower price bucket.

The owner of a $575,000 listing in Northeast Denver more than doubles their odds of selling by dropping the price under $550,000.

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Best Way to Understand Closing Costs

Best Way to Understand Closing Costs

Federal law requires lenders and mortgage brokers to give you a booklet within three days of applying for a mortgage loan.

It’s called Shopping for Your Home Loan, and it’s a well-written guide in plain English.
Download the pdf to your computer or ipad, and consult it as you move through the Homebuying process. It can help you become familiar with a number of important things:

  • how interest rates, points, balloon payments, and prepayment penalties can affect your monthly mortgage payments.
  • Important information about your loan after settlement, including how to resolve loan servicing problems with your lender, and steps you can take to avoid foreclosure.
  • After you have purchased your home, identify issues to consider before getting a home equity loan or
  • refinancing your mortgage. Finally, contact information is provided to answer any
  • questions you may have after reading the booklet.
  • Glossary of Terms in the booklet’s Appendix.

RESPA is a federal law that helps protect consumers from unfair
practices by settlement service providers during the home-buying and loan process.


Read Guide to Settlement Costs

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4 Biggest Complaints about Brokers

4 Biggest Complaints about Brokers

The Colorado Real Estate Commission (CREC) says complaints about brokers are increasing as the market heats up.

They tell us that most complaints with brokers and mortgage lenders have to do with “transaction management”, while complaints against appraisers are usually about value.  Here are the most frequent complaints about brokers:

1. Practicing with an expired or inactive license. You must have an active real estate license to perform the duties for which a license is required.
2. Dates and deadlines. We receive numerous complaints about real estate brokers missing deadlines and we have seen an increase in the number of complaints that involve the loss of earnest money.
3. Failure to disclose adverse material facts. Unfortunately, this is not a new type of complaint and substantiated violations of this law do not bode well for one’s license. Disclose, disclose, disclose.
4. Failure to provide your clients with executed copies of the contract documents and to keep them appraised of the transaction. We receive a lot of telephone calls and complaints from consumers who are in the process of buying or selling real property and they are oblivious to what is actually occurring in their transactions. Whether the real estate broker is a single agent or transaction broker, keeping the client informed is part of exercising reasonable skill and care.

The CREC is charged with protecting the public, and what they’re doing is asking brokers to pay more attention to these details. And remember, you’re vicariously liable for the actions of your agent. As a consumer you can be forewarned by this: disclose fully what you know about the condition of the property (and make sure it’s in writing); make sure you pay attention to deadlines and understand what each one means; get copies of all documents and discuss with your agent; stay in touch with your broker — take the initiative if they’re not calling you often enough.

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David a 5-Star Pro in 5280 Magazine!

David a 5-Star Pro in 5280 Magazine!

 Five Star Professional will recognize me in an upcoming issue of 5280 Magazine.

Five Star Professional administers a survey, by mail and phone, to recent homebuyers. Clients of real estate agents may also submit evaluations online. Each respondent is asked to evaluate only real estate agents with whom they have worked and evaluate them based upon ten criteria: customer service, integrity, market knowledge, communication, negotiation, closing preparation, post-sale service, finds the right home, marketing of home, and overall satisfaction.

David Halterman, Denver Real Estate Broker

“We are pleased to inform you that you have been named a 2013 Five Star Real Estate Agent. Congratulations on reaching a level of excellence achieved by fewer than 7 percent of the real estate agents in your area.

You are being recognized by the largest and most widely published real estate agent award program in North America. Your selection is the result of a rigorous research process that included a regulatory and consumer complaint review, and an evaluation of objective criteria associated with real estate agents who provide quality services to their clients.”

Read more about 5-Star Professionals . . .

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