This, you see, will keep us from spending more than we can ever hope to pay off, right?  Visa wants to help us set appropriate budgetary boundaries. Thank you Discover and MasterCard too. (Now please quit sending me an average of eighty two new card offers daily and save a couple of thousand trees already.)

The problem with the credit limit thing is that they are doing it on cards that are already open, and apparently they don’t have to get your approval to do it. It can happen and you might not even realize it if you’re just floating a balance and making minimum payments. Maybe it won’t impact your spending – you’re not putting anything new on that card anyway – but it CAN have a big fat negative impact on your world in another way.

Let’s say you have a $4k balance on a card with a $15k limit. That actually looks pretty good to those FICO folks who do the credit ratings because you’re not maxing out. But say your credit card company decides in your best interest and theirs to slice your approved credit amount to $4,500. Suddenly that $4k balance doesn’t look so prudent, and guess who’s going to take big fat notice?!

In this market, credit is hard enough to come by. Keep a proactive eye on your credit scores now so you won’t be in for a rude surprise once you finally have enough equity back in your home to consider a home equity loan to pay off those “maxed out” credit cards!

Now, take that spunky attitude with you and head into the kitchen. Got any especially tired looking countertops or appliances in there? How’s the hardware?

Embracing brutal honesty, I will share with you that I have in my kitchen round green ceramic pull knobs on all the cabinet doors and drawers – 42 altogether. It was quite the style statement pre Y2K. But it’s time, I reluctantly admit, for a change.

Is it time for an update anywhere in your home?? Don’t wait until you’re ready to sell and have to scoop a professional stager up off your shag carpeting to consider a little make-over here and there.  Ask yourself the following:

• Is the color mauve on any flat surface in my house? (My apologies to the fans of this sulky southwestern shade.) 
• Do I have carpet abutting any toilet, shower or bathtub? (I know builders love to put it there. But come on …)
• Are round green ceramic pull knobs visible anywhere but on storage cabinets in the garage? (Some interior style fouls qualify for foster care in subtle locations on the perimeter.)

If you’ve answered “yes” (but not “I wish”) to any of the preceding, don’t worry. There are lots of great ways to update your home inexpensively!

• Look for cool new hardware in multipacks. Target has some nice options in satin nickel, oiled bronze, etc. (Better value than buying individually.)
• Go for fresh color.  Carefully chosen color can really transform a room cost-effectively. (Just don’t rely on the paint chip alone. Buy a quart and give it a test run before you commit to the wrong five gallons. That’s when it gets expensive!)
• Lose the clutter. Stacks of newspapers, piles of DVDs, and an overabundance of knick-knackery keep your home from looking spry. (Have a garage sale and use the $$ to ditch the carpet in the bathroom and add tile!)

Give your home the same style check you give your wardrobe every now and then. Both of you will look and feel better for it.

But here’s the deal. The foreclosure tsunami has left homeowners nationwide with anemic home values, so extreme according to the Associated Press that Americans’ equity in their homes has dropped to the lowest level on record dating back to the Second World War. Ouch.

That includes us, fellow Longmonters. Only 17 single-family home permits were pulled by contractors in the first quarter of this year. Which at first glance might seem great, right?  Less inventory to contend with in a glutted market. But it also means fewer subcontractors collecting the paycheck that keeps them paying their own mortgage or qualifying to buy your home.

So … unless you’ve been transferred to Alaska, now is probably the time to just sit tight. (Did I mention I’m a real estate agent?) Put the emergency brake on the vehicle in your garage and put that $4.00/gallon toward principle in your property. If you happen to own anything with less MPG than a Vespa, you could probably make an extra mortgage payment and double your equity.  

And with a little equity you could get out there and invest! I know a good buyer’s agent (who’d be willing to drive). 

Or is something interesting happening out there in this big fat buyer’s market?

It is my most humble opinion, and maybe there are a handful of buyers out there who agree with me, that some sellers are really starting to get it. They’re getting it, you know? They are realizing that a well priced property is going to, well … SELL. Quickly. (And that pricing has little to do, unfortunately, with their current loan to value ratio.)

Some sellers out there, both bank and private, have decided to aggressively price their properties so that they won’t linger, like a stubborn hangnail, for months on end. They’ve actually dared to go in their initial listing where so few sellers are able to go – to market value.

Buyers, let’s embrace these emboldened sellers! Let’s validate them in their valiant efforts to navigate this treacherous deluge of housing inventory.

If you’ve done your homework (or had a good buyer’s agent do it), then you know what a deal is in your geographic/economic range. Should you come across a great deal within pre-determined parameters – GRAB IT. At full price. With a toothy grin.

You are no fool for paying full price when it makes sense. The great story doesn’t have to be how much you got off the asking price, but how you got there first! Everyone can win.

Go figure.

Anyway, I headed north with my buyer around 11:00 so that we could take that last walk of the property. The skies were dark and full of fabulous Colorado clouds. It started raining about ten minutes into our trek north up I-25. Leaving Longmont, we were headed for Windsor and beautiful Water Valley. We headed east on Hwy 34 and turned north on CR 17. Pretty soon, there it was – a construction sign (fixture to Colorado travel). We were forced to turn back south to 34. The rain was serious – hail starting to bruise the car.

We ventured back toward I-25 as cars all around us were pulling over. “Would you like me to stop for a minute?” I asked, prayed. “Let’s just keep going. We’ll take it slow,” he said. And really what good would it have done to sit there and get completely pummeled? As we headed west, conditions improved.

We made our way into Windsor, I would estimate, about four minutes after the tornado made its exit. The streets were empty save a carpet of stripped leaves and golf ball sized hail. It was so quiet. We ventured to the property to assess the damage: no power, one broken window was all we could see.

The seller’s agent had the back window shattered out of his car probably about the time the title folks were sprinting for the bathroom - a gargantuan twister carving its way across the lake right outside their windows.

Cell phones somehow still getting bars, I connected with the closing agent. Rattled, she managed to offer “We have no power, but we have lots of windows” (you know, for light). “Did we still want to come over?” … Hail battered cars, a fire truck, and an ambulance crowded the lot of the title company. But we got a great parking spot right out front.

My first closing. When I left home that morning I was nervous. You might even say scared. Would I get it right? And then the storm … and the ensuing circle of tenacity and support around a closing table in Windsor. Thank you Scott, Eric, Shawn, Randy and Angela. Closings aren’t scary.

Depressing numbers for America’s home owners, and for investors, undeniable evidence that opportunity is there. But investors beware, even in this buyer’s market. Be sure your intentions for your properties are in sync with the realities of this market climate.

If you’re planning a flip, can your property compete with the flood of inventory?

First time investors, make sure you’re ready to be savvy sellers. It may be wise to get professional aid in pricing and staging your properties for their return to the market. You’ll want to be very proactive with any strategy that can help minimize the carrying costs that slice into your profit.

Lastly, be wary of cash back investment schemes surrounding foreclosure - particularly involving properties that you don’t physically view yourself. Fraud abounds in this arena. Do your research thoroughly. If it sounds too good to be true – even in this buyer’s paradise – it most likely is.

In this climate of short sale and foreclosure, selling on your own, you may not have an accurate sense of what your home is worth. Even the folks at Zillow caution their website users that the “Zestimates” provided on their site “… are designed to be a starting point.” There are a plethora of complexities to pricing in this market. An experienced agent can give you qualified guidance to price your home.

What you don’t want is a “yes man.” Be wary of the agent who is just looking for the listing at any price and cannot provide you with the CMA (Comparative Market Analysis) numbers to back it up! In this market, you want representation by an agent who will give you realistic expectations.

It all really depends on your own situation - how much money, and more importantly TIME do you have to get your home sold? If you’re in an interest only payment and not building equity, time is of the essence! An agent commission may just pay for itself in lieu of your home sitting improperly priced and marketed for several months.

And should you find yourself in a position of impending foreclosure, it would certainly be worth your while to bring in an expert. An experienced agent can help you market your property and communicate with the bank to get the best outcome for everybody.

The question you may be needing to ask yourself in this rough market is not whether you can afford to hire a real estate agent to sell your home, but can you afford not to?

1) Do I NEED to sell now??
If the answer is “yes” and you must sell your home due to job transfer, change in marital status, retirement or the like, then you must be prepared to go the extra mile it takes to really make your home stand out in a crowded market!

2) Do I have enough equity in my home to break even at today’s market value?
You may have made a great purchase just a year or two ago and now find yourself in a position to have to sell for less than your purchase price. This is the ebb and flow of the market – and as we all know, things are particularly tough on the seller right now. Can you bring money to the table if need be to get out of your current property? If not, it may be time to consider a short sale especially if you can demonstrate that your monthly mortgage poses significant hardship.

3) Where am I going next?
If you are moving due to job transfer or looking to retire to a patio home, you may find that you can sooth the ache of value lost on your current property by capitalizing on a great buy in the next home.
Now is the perfect time to move UP! A 10% loss on your $250k home might be softened by a buying opportunity in which you pick up a $350k property at a 10% savings. Try to keep the big picture in mind:
250,000 – 25,000 (10% hit) = 225,000
350,000 – 35,000 (10% hit) = 315,000
= A $10K ADVANTAGE TO YOU!

Try not to get caught up in what you think your home should be worth – you finished the basement, put tile in the kitchen and five new evergreens in the backyard. Keeping a tally sheet in this market will just make you crazy. A good real estate agent can help you decipher what the market is saying about the current value of your home.

If you MUST sell now, make sure you seek professional advice, and try to make the most of the buyer’s side of this market as well!

 For home owners in distress over declining property value and upwardly adjusting payments who may also be facing the trials of job loss, health crisis, or divorce, there is some good news out there.In February, Freddie Mac expanded its short sale program to include more loans with a higher likelihood of loss. This is in addition to a move in late last year where Freddie authorized its Tier One servicers — those that have demonstrated “superior performance” — to accept short sales at bigger discounts and to pay out more to junior lien holders.

Also encouraging, Fannie Mae plans to roll out a new program in the next few months to facilitate more successful short sale transactions. A vice president for credit loss management in Fannie’s Dallas office said the government-sponsored enterprise is looking at ways to encourage servicers to implement a streamlining of the process. “We want to incentivize the borrower with a program of preapproved short sales.”This is great news for future buyers and sellers contemplating the short sale - as the typical time frame for this process has been taking anywhere from three to nine months according to industry experts. Couple this rugged time frame with reports that 1/3 of these contracts never make it to closing, and there is a process ripe for change.

Hopefully Freddie Mac and Fannie Mae are sending a message that shows mortgage investors may be willing to make further concessions as housing prices fall and the inventory of foreclosed properties continues to grow. There is surely a need for any aggressive approach to address the challenges of this current housing market.The time may be now to seriously consider a short sale on the buy or sell side.

 In March, the State of Colorado reported 5392 homes entered the foreclosure process. This is the highest rate per thousand of homes in foreclosure reported in the country. To give this some perspective, 1 in every 339 homes in the State of Colorado is in foreclosure.What’s interesting though is the rate of homes owned by lenders trails the national average. This means there is an active market of buyers acquiring the properties before ownership reverts to the lending institution holding the mortgage lien.

To lenders this is good news. The national average for lenders owning post foreclosed properties is approx. 19%. The average in Colorado is 16%, meaning approx. 850 homes are currently in the hands of the lender.The trend is starting to suggest that the pool of buyers to acquire these properties at auction is beginning to shrink. This could indicate more properties will be owned by the lending institutions.

Obviously lenders making money from lending money not in owing the real estate. This means if inventories of post foreclosed properties starts to really grow, lenders will start to lower prices to move them off their balance sheet.This will not be welcomed news to owners of the growing inventory of homes not in foreclosure. This is where there is risk of seeing retraction in the average cost of homes in the metro area.

Not all areas will see retraction. Areas close to employment centers; DTC, Denver and Boulder, will be more resilient to the downward pull. Homes in outlying areas are more at risk to downward pricing pressure. Adams and Arapahoe counties are seeing the highest level of foreclosure activity.

The average foreclosure takes more than 6 months to complete. Lending institutions are willing to work with home owners to try and keep them in their home or to assist in finding alternative ways to get a homeowner out of the home. The lenders are not interested in growing the number of homes they are holding. If a homeowner is experiencing financial difficulty and either is or will soon be unable to make the payments it is important to get the financial institution holding the mortgage involved. Don’t assume they cant or wont be willing to help.