I just got off a conference call with a real estate broker from Valencia, California where they are receiving multiple offers on properties, especially those priced below $500,000. Is this good news for Colorado real estate and especially Boulder real estate?
In the early 90’s when California was faced with earthquakes and riots, the Californians were anxious to move to Boulder, Colorado. In the last few years there have been many Californians with the desire to move to Boulder however we didn’t take them too seriously because it was impossible for them to sell their homes in California in order to relocate to Boulder, Colorado. However, now that their homes are selling in California lets hope that holds optimism for Boulder County Real Estate!
For years and years in the Boulder real estate market we always considered our personal residence an asset. An asset that would keep growing and growing, giving and giving. Unfortunately too many of us have used our homes in the United States as a credit card, never the intended purpose of a residential property. I ask my sellers many times when I go to visit them at their home – is this home truly an asset at this point or is it a liability to you? If you are no longer getting the benefit of the enjoyment of living in your property, if you cannot maintain the property and certainly if you cannot afford to make the payments on your property then the property is a liability, not an asset and should be sold.
When the majority of homeowners start falling behind on their mortgage payments they become ostriches, in other words, they stick their heads in the sand and go into a state of denial. Soon it’s too late to do anything about it. There are many things that we can do to stall foreclosure and get people out with their credit relatively intact. If they owe more than their home might be able to sell for in the current real estate market then this is called a short sale.
We have done a number of these short sales here at the Bernardi Real Estate Group and this is the way that some homes, even in Boulder County, are being sold in the current real estate market. The most important thing in a short sale situation is that we receive an offer from a buyer because the bank will not even begin to negotiate on a short sale until we get an offer. Once the offer is received, we go to work and negotiate with the bank to forgive the current debt up to the amount of the sale. In fact, in most cases, with every short pay we have done this year we have seen that the bank has forgiven all of the debt of the difference between the sales price and the loan amount. They have forgiven what would normally be called short fall or a deficiency and in many cases they will forgive what is called the deficiency judgment. In fact, for every home in a short sale situation that we have sold, the bank has forgiven the deficiently judgment.
If your loan was originated before January 2008 then there is no tax consequence on the amount of the loan that is forgiven. Prior to the bill being enacted last spring by Congress, you were taxed on the difference of the amount forgiven by the loan company. My expert lenders have told me that if a homeowner does a deficiency judgment that their credit is then virtually repaired and they would be able to buy another home within 2 years. If they let the property go into foreclosure, it would be 7 years before they would be able to buy another home. My belief is that by helping families do short sales, I am helping our community and the neighborhoods in all these cities in Colorado that have been affected by foreclosures such as Erie, Lafayette, Longmont and even a few cases in Boulder and Niwot. I feel that in the cases when I’m able to help these homeowners that I’m also helping the communities to not further deteriorate into crisis.
Unfortunately, if the property goes into foreclosure it could sell for no more than 50 cents on the dollar. The pipes could break or the grass goes brown and these foreclosed homes become an eyesore in our community. I feel like I am doing the homeowner a big favor by helping them to salvage their credit as well as assisting them to move on in a dignified manner and by doing that we are also doing the right thing for our community. I believe that I am also helping our country by facilitating the absorption of the real estate inventory in Boulder Colorado to help expedite the end of our real estate recession. In addition, I’m helping our banks because they will receive more money than they would if the property went into foreclosure and this will in turn aid our country. Lastly, I’m helping the buyer because they are getting a great deal on a property that has not been vacant for 6 to 9 months.
If you are facing a foreclosure situation then please call us here at The Bernardi Real Estate Group because I can help.
What ever happened to the Bird Flu? A year and a half ago all I would hear on the news was stories about the Bird Flu. My 85 year old father was afraid to go out and feed the birds at his retirement complex. Many became fearful that it wasn’t going be safe to eat chicken. Questions were raised such as, “Is it going to cross over?” or “Is it going to mutate?” It was a crisis and when I would flip thru the channels or read the newspaper not a day went by that I didn’t hear about the Bird Flu.
Fast forward to a year plus later and all we hear about is the economic crisis. We are bombarded with messages like –“The crisis…The crisis…The economic crisis!” The media may as well be saying, “The sky is falling…the sky is falling!”
What does this have to do with the luxury real estate market in Boulder, Colorado? Or for that matter buying a home at anytime?
In the words of Teddy Roosevelt, “The only thing we have to fear is fear itself…” With the news media feeding on our fears and us feeding on the fears that are driven by the news media, we have developed an exaggerated fear of the present economy. Just as we had too much confidence in the economy in that we could all expected to continue to see rising real estate prices in Boulder and that we were immune to any logical thought.
There are great buys and opportunities in any luxury real estate market, especially this one. Interest rates are at 5% & below with loans that are still attainable to people with reasonable credit and a good income that substantiates whether they can make their payments on a continuing basis. The times right now call for logic and they should not be driven by fear and paranoia. There are great investments to be made in luxury real estate in Boulder, Colorado as long as we are not driven by fear and greed.