Really?  Not a short sale?  Not a foreclosure?  It’s called a ” Deed in Lieu of Foreclosure” which actually lets a homeowner voluntarily turn over the deed to their house to the lender!    This is not a new concept, however, neither is foreclosure, but this crazy real estate market we are living in now requires that you cover all you bases before making a final decision on how to get out from under your mortgage.  Even thought the federal government launched some new rules earlier this month concerning short sales, some homeowners might not quality for a short sale because they have no hardship. Could this be you?  Read on please….

A Deed in Lieu options sometimes allows the homeowner to negotiate more favorable exit terms than a foreclosure allows.  It is a signed written legal instrument that is used to grant a right that will convey all interest in your property to the mortgagor to satisfy a loan that is in default, ultimately avoiding foreclosure.  If you have already declared bankruptcy, however, and your home is part of the bankruptcy, a Deed in Lieu will not apply. After talking to a short sale facilitator recently, I found out that If you are contemplating bankruptcy sometimes it’s best to settle your real estate affairs, either with a short sale or deed in lieu prior to filing for bankruptcy.  You should always professional legal and accounting advice before making your final decision.  

Here are few of the advantages that I found for both the borrower and the lender:

Advantages for the homeowner:

• The borrower is immediately released from “most” or all of the personal indebtedness
• The borrower avoids the public notoriety of a foreclosure proceeding
• The borrower may receive more generous terms from the lender than if they went into formal foreclosure
• The borrower’s credit might be hurt less than with a foreclosure, however, if you are concerned about your credit, a short sale is the best alternative.  The bank still has to re-sell your house with a Deed in Lieu to recoup their costs, it’s a close cousin of foreclosure.
• The borrower might be able to stay in the house a few months longer

Advantages for the lender:

• Lender has a reduction in the time and costs of a repossession
• Lender has a lower risk of owner revenge (vandalism before sheriff eviction), although lenders have the option of coming after the homeowner if there has been vandalism). Remember in your mortgage contract….there’s this clause that says..you will maintain the property and not damage it.
• Lender can potentially save tens of thousands of dollars in legal fees and other costs associated with foreclosure

Contact your lender and discuss your options before it gets too far down the road.  As always, communication is “crucial” with your lender to get maximum outcome.  Here are some things you should also know in order to be considered for a Deed in Leiu of foreclosure:

• Both lender and borrower must enter into this agreement voluntarily and in good faith – which means with honest intentions
• The value of the agreement between you and your lender must be at least “fair market value of the home”, which is the estimated value that a knowledgeable, unpressed buyer would pay a seller in the current real estate market.
• Sometimes the lender will agree to a Deed in Lieu even if the amount owed on the mortgage is more than the current fair value, because they will end up with the property anyway
• Lender will want the borrower to sign a written offer of conveyance stating that the offer and negotiation is being done voluntarily.  The will prevent either party from presenting evidence that contradicts or adds to the written contract and will protect the lender from a  possible claim that the lender acted in bad faith or pressured the borrower into the settlement.
• Get in writing from the lender “debt forgiveness”  otherwise they may come back and ask the for difference.

One more important thing to note is  “document everything”, from phone calls to certified letters and please don’t forget to have an attorney help you with the negotiations. I wouldn’t suggest negotiating this alone.

As a Realtor on the Troia Team in Boulder Colorado, we are doing our due diligence to educate ourselves and our clients as to what the options are for them.  We know how hard it can be, we’ve worked with many home owners and understand the complexity, complications and the anxiety that are a part of our real estate world today.  How may we help you?

The Coldwell Banker Story.  I’ve been on a lot of listing appointments lately with spring arriving here in Boulder Colorado and included in the listing presentation are reasons why to choose Coldwell Banker.  I, myself even had to ponder the reasons why to choose one brokerage company over another when becoming a real estate agent.   Upon intensive research and endless appointments with recruiting office managers, I went with Coldwell Banker Residential Brokerage and The Troia Team.  Here’s why I did and why you should as well.

The history of our residential brokerage is fascinating and proves this company comes with experience – over 104 years old in fact!  Yes, legacy has it that the origination of Coldwell Banker began to evolve in 1906 after the devestating earth quake and fire.  Saddened economic times resulted and contemptuous business practices emerged.  Two men sought to change the way companies were operating by creating a real estate firm that was based on the principles of honesty, integrity, and professionalism.  Our accomplishments to this day are proof that we are the most successful and influential brokerage.  Check out the video.

QUESTION: How did we get our name?

ANSWER: The two men who founded our company were Colbert Coldwell and Benjamin Banker.

Why should you list with us?  What sets us apart?

The tangibles: 1) Reality Check from ColdwellBanker.com, Previews (homes over $700,000), Colorado Homes On Demand, and CBAgentInfo (agent’s source for all needed links and resources).

We are ahead of the times and always updating our marketing strategies.  See us on YouTube, social networks such as Twitter, Facebook, and MySpace.

Our direct marketing campaign includes CB direct connect which is a monthly promotional email.  Your new listing or open house can also be distributed.

The Troia Team utilizes Proquest which is the 1-800 number on the top of your yard sign.  It allows potential buyers to call on the sign and gather more information regarding the home.  They are immediately contacted by a Troia Team Realtor, making for the quick sale of your home.

Let’s not forget about Leadrouter.  When I put your home in the multiple listing service, it also goes to websites such as coloproperty.com, Realtor.com, Zillow.  Buyers are able to inquire about a listing through the website and again, they are promptly contacted by an agent.

….300 Websites and COUNTING!!!!

Most importantly and as our history demonstrates, our company follows the values you must have in a Realtor: Integrity, Honesty, and Professionalism.  Contact me today for a free market analysis and subscribe to our website for up to date news.

We pay a premium to live close to the hiking and biking trails in Boulder Colorado.  Situated at the base of the foothills to the Rocky Mountains, our premium also comes with a responsibility.  A recent increase of  sightings this past year in Boulder of bears and mountain lions in our city of 100,000 people have prompted quite an alarm and it makes your realize “we’re not alone” as humans in Boulder.   Living in the Wonderland Hills neighborhood which directly abuts the foothills, we often wake up to a dozen mule deers roaming our front yard or cul-de-sac, as well as an early morning mountain lion or a momma bear and her cub roaming the open space where I walk the dog on the trails everyday. A long time ago, “1960″, hunters were paid a $50 bounty for the hide of a mountain lion and today there is no exact count of mountain lions in Boulder County, the sightings help to measure their population.  Did you know that Grizzly bears have been extinct in Colorado since 1970 – “a long time ago”.  One morning last fall a cougar was seen roaming between houses around 13th and Columbine Ave, and later that day a police officer saw the cougar walking down 13th St.  Last fall it started out witha standoff with a black bear in a tree in SouthBoulder.   My girlfriend was walking at Chautauqua last fall by herself and encountered a mother bear and and a baby bear in the brush on the side of the trail.  She quickly caught up with the couple in front of her.  My other girlfriend was surprised by a black bear hiking Sanitas trail,  and luckily the bear turned and walked away.   Especially during feeding season for the bears and lions,  what SHOULD you do if you encounter a bear or a mountain lion and how to heed the warning signs?  

I took this off the Boulder Colorado government website and is worth reading through – no matter how exciting it might seem to convene with nature.

If you are walking or hiking :

1. Look for bear tracks and droppings
2. Keep your dog on  a leash, especially near streams
3. Make noise to reduce your chances of surprising a bear
4. Avoid berry patches
5. Move away and make yourself look large. Back away giving the bear room to leave.
6. Report sightings – call the Bear Hot line 720-564-2020

If you meet a bear:

1. Stay calm, running will only make the bear chase you
2. Back away slowly, facing the bear, keep your distance and avoid eye contact
3. Talk loud so the bear will be aware of you and slowly and calmly leave the area
4. Never approach a cub
5. Never throw food to distract a bear – it only teaches bears to approach people for food
6. Fight back if attacked.  Use whatever you have, rocks, sticks, binoculars or even your bare hands
7. Don’t litter, it might save your life, not to mention the bear’s life

Please bear proof your yard:

1. Keep garbage indoors until trash pick up or use a bear proof garbage can
2. Feed pets inside and store pet food inside
3. Burn BBQs until they are clean then store indoors or in your garage
4. Bears love bird seed so feed your birds in the winter time only or string them up high enough and out of reach, it might save you from buying new feeders too
5. Bears have been known to tear open locked freezers so don’t put your freezer outside, not to mention your refrigerator
6. Bears will also tear open car doors and break windshields, so warn your teenager to clean out their cars
7. Fruit trees in your yard should be picked and fruit picked up off the ground
8. Keep your compost clean, that’s a big one in Boulder, since it’s most people have one. Use a 2:1 dry:wet ratio
9. Tell your neighbors, the bear might be after their yard and not yours

Not last be least, if the bear is threatening your safety, your pets or your property, call 911.  For more information on living with bears and other wildlife visit the Colorado Divison of Wildlife:  www.wildlife.state.co.us/wildlifespecies/livingwithwildlife .

Mountain lions are primarily nocturnal and secretive, and naturally live in open space, which Boulder Co has plenty of. As long as there is prey and places to rest and hunt, they will be there. Statistics show that attacks by mountain lions as less likely than a bear but  it’s important to know a little bit about their habitat, and what to do if you see one.  For mountain lion reports activity in Boulder visit:  www.boulderwildlifeplan.net . 

1. As with bear, make plenty of noise if you are walking or hiking so not to surprise the lion and make sure little ones are under supervision.
2. Give the lion a way to escape and try to avoid a confrontation
3. Stay calm, talk in a firm voice to show them you are “human” and not prey
4. Back away slowly, as running might stimulate their instinct to attack
5. Open your jacket to appear larger and pick up your children.  I bet that’s hard to do all at once
6. Like bear, if the lion seems aggressive, defend yourself by throwing rocks, sticks or whatever, without turning your back on the lion or bending down
7. If the lion attacks, fight back and try to remain standing and keep attempting to get back up if your are brought to the ground.

Pets are a favorite delicacy of mountain lions, especially in Boulder.  although their diet consists mostly of deer and elk.  I heard a loud cat scream in my backyard a couple of nights ago, and I thought about the poor little kitty that visited my yard that day.  If pets are left outside you should leave them in a kennel or enclosure with a cover.  They also eat mice, rabbits, squirrels, raccoons, coyotes and grasshoppers (grasshoppers???). A full adult male can weigh 160 pounds and females aprox. 100 pounds, both can grow up to eight feet long (nose to tip of the tail).

 For life threatening emergency call 911.  If you see a bear or a lion in your backyard call the Boulder Police non-emergency number 303-441-3333.  For questions and to report sights that do not require a response you can call the Urban Wildlife Corrdinator:  303-551-3004.

  So you are in the market for a HUD home.  What is HUD, where do I find the, how do I get one??????  This can overwhelm you and may seem confusing but trust me it’s not. 

Confused? Don't Be

If a loan insured by the Federal Housing Administration or FHA goes in default, the FHA takes certain steps to collect on their loan.  This may result in the lender taking possession of collateral real estate. If this happens the lender may submit a claim against the FHA insurance fund and convey ownership to the United States Department of Housing and Urban Development or HUD.  HUD then in turn lists the property at market value and sells it as fast as possible.  Click this link for more info.  This is the exciting part.

Anyone can buy a HUD home, as long as they have an insured loan or are paying with cash.  To go and look at these homes call a local realtor who has NAID membership and a HUD key to get you into the home.  COLORADO REALTORS WHO WANT TO APPLY FOR A HUD KEY CLICK HERE. Just ask your realtor for details.  After seeing the home and deciding you want to make an offer on it consider yourself “in auction”, only electronically.  Your realtor will make an electronic bid for you within the bidding time frame.  Have your HUD contract 9548 (1/99) in front of you and get on the Internet.  Along with some basic buyer and broker information, this is all you will need to make your electronic bid.

If your bid is accepted you will know the day after the bidding stops by 4 p.m. eastern standard time.  It is now time to get your signed sales contract, lender’s qualification letter, and any addendas signed and delivered to the MCB headquarters in California.  www.mcbreo.com for details.  Get all these signed and taken care of before your submit a bid so you will be ready to send them in when your bid is accepted.  An escrow will be set up to take care of any issues the HUD home may have.  Such as: plumbing, heating, electrical, foundation……..Bad news these need to be fixed out of your pocket, good news you can use your FHA loan to help pay for them. 

Wheather you are first time home buyer or investor, get out there and find your HUD home today.  Call someone at the Troia Team for more details on this process.  You and your fam could be in a HUD home very soon.

I recently had the unpleasant experience of dealing with a “For Sale by Owner” seller.  My buyer decided that we should look at a house that was listed in Longmont, Colorado. The Sellers representing themselves, paid a fee to have an agent enter the listing on the MLS system.  After viewing this home, my buyer decided she wanted to make an offer since the home appeared to be what she was looking for.  I cringed knowing that I would now be interacting directly with the Seller, although this shouldn’t be an issue, it was. I prepared the offer and submitted it to the Sellers, who then had tons of questions and their own opinions of Real Estate contracts and Real Estate Law. After several long phone conversations, I was able to educate these Sellers about the Contract and Contract dates and deadlines. We finally went under contract and my buyer was ready to perform her due diligence by getting the home inspection. As it turns out, this home had inspection issues, and had not been properly maintained. We submitted an Inspection Notice to the Sellers to correct many deficiencies. We also asked for documentation relating to radon, which the seller had in their possession. The Sellers refused to give us the radon documentation and refused to disclose the radon reading.  They also refused to correct most of the inspection items, claiming there were no problems and ignored the recommendations of our licensed Inspector. There were electrical issues, furnace problems, the roof had hail damage and there was much pet hair in the ducts and behind the appliances that needed cleaning. The Sellers refused to correct the inspection issues which convinced my buyer that she could not trust these people because they were not truthful and refused to disclose any adverse material facts about the home, such as the radon.

My buyer decided to terminate the contract based on the inspection and the fact that these Sellers were clueless, they had no representation and were making decisions based on emotions with no advise from a professional. The process of terminating the contract became ugly as the Sellers took offense to the Inspection Issues. They didn’t understand that the contract automatically terminates if no agreement is reached between both parties by the Inspection Resolution deadline.  The Sellers decided that I, the realtor, was wrong and that the contract was still valid.  Long story short, they finally came to their senses after several days and released the earnest money.  Meanwhile, the Sellers had re-activated their listing on the MLS system before they released my buyer from the contract.  

Does it really pay to sell your home without representation?  In the future, I will be hesistant to show properties that are not represented by an agent, it’s just too much brain damage and it’s not in the Buyer’s best interest. FSBO Sellers don’t know the laws and they do not have anyone to consult with. If I am representing the Buyer, I certainly cannot justly advise the Seller. In the long run, what is the Seller really saving?  Negotiations are much smoother with representation and agents can buffer all the emotions that go along with an offer and inspection issues.  An agent can make sure that Sellers are disclosing any information that pertains to the house.  In my example, we could not be sure that these  Sellers were disclosing all the information that was pertinent to this home and now that the house is back on the market, it would be interesting to see if these Sellers disclose all the problems that were uncovered during our inspection, my bet is they don’t because no one is monitoring their actions. Buyers beware, For Sale By Owners do not have any representation and should be treated with the utmost caution. A home purchase is a serious transaction with legal consequences and should be handled by a  licensed Realtor.

Mortgage interest rates were mostly flat this past week despite continued negative economic data. Today’s January employment report showed that the unemployment rate jumped from 7.2% in December to 7.6% in January. This is the highest unemployment rate in 16 years. Non-Farm Payrolls declined 598,000 on expectations that they would decline by 500,000. This is the largest monthly decline since December of 1974. Weekly jobless claims increased 35,000 on expectations that they would increase only 4,000. December Personal Income was down 0.2% and Spending was down 1.0%. The ISM Manufacturing and Services Sector indices were slightly better than expected but both indices still showed contraction within their respective sectors.
 
The Dow Jones Industrial Average is currently at 8,221, up over 200 points on the week. Crude oil futures are currently trading at just over $39 per barrel, down over $2 per barrel on the week. The Senate may vote on the stimulus package today.
 
Next week look toward Wednesday’s International Trade Report, Thursday’s Retail Sales and weekly jobless claims, and Friday’s Consumer Sentiment Index as potential market moving events.

It has been a while since my last blog and I am trying to get over a severe case of writers block.  With the holidays and my writers block, blogging just wasn’t working for me, so this one is a little out of date, but definitely something that needs to be discussed, so here we go.  I hope it finds everyone well and enjoying the first part of 2009.

Last month I had the opportunity to go to the Boulder County Tax Lien Sale at the Boulder County Courthouse.

Boulder Courthouse

I have always wondered about buying tax liens and the process and how one might benefit from it. Every year I see the list in the Daily Camera, but I never have actually gotten off my butt to go and see what it was really all about.  You always see those late night infomercials about the couple who made millions off of tax liens, or “BUY A HOUSE FOR ONLY $500″ and things like “I WAS A SCHOOL TEACHER MAKING $40,000 A YEAR, BUT MY HUSBAND AND I NOW OWN 15 PROPERTIES AND HAVE A NET WORTH OF $5,000,000, THANKS TO THIS BOOK ON PURCHASING TAX LIENS.” You see all this stuff and assume it is all just a big crock.  Well, it mostly is… but there is opportunity to be found in this whole mess.

An investor friend of mine knows that I am interested in all aspects of real estate and investment, so he called me up and asked if I would join him at The Boulder County Tax Sale.  Of course I would!! How could I say no to getting to the Boulder County Courthouse at 8am on a 9 degree Boulder morning to watch a bunch of people bid on delinquent taxes?  My ideal morning. Truly!

We get inside and grab our donuts and coffee and head into the meeting hall, where about 30 people, mostly much older are sitting with their list of hundreds of properties ready to bid (there was a real live auctioneer running it) on peoples delinquent taxes.  There is a formula to it all, which we can get to later.  My friend had already wired $10,000 that he was willing spend to purchase however many liens as he could.  This was his first time as well, so he didn’t want to break the bank on his first at-bat.  I just sat as a spectator on this one.

This year the annual interest on the liens is 11%, meaning the person whose tax lien you are purchasing will be liable to you, the purchaser, 11% of the amount of the tax per year for three years or until they pay it off in full.  The interest is accrues monthly, and if after three years they have not paid, you own the property.  In the past 20 years in Boulder County, only twice has someone received ownership of anothers’ property through this process.  Many think they are going to these sales to purchase almost free real estate.  It doesn’t really work this way.  People almost always pay, which brings me to yet another point.

You could also lose money.  What you bid on is the premium.  The amount over the interest owed that you are willing to pay to receive “ownership” of the lien.  Therefore, if you win the bid, you are liable for the amount of the delinquent lien, plus the premium.  If the lien gets paid back the next day, then you lose whatever premium you paid.  Based on this and the 11% per year potential return, we both felt that about 3-3.5% was a safe premium to pay if purchasing multiple liens.  Chances are, some will pay them back very quickly, and some will take some time.

There are also a few tricks to getting the liens you want and not paying a high premium.  Don’t start bidding on the very first ones that come out.  wait a while, until people start running out of money.  Then, if they are re-juicing their funds or if people just aren’t bidding, that is your chance to strike.  Then, you can offer the minimum and hopefully not have any competing bids.  Know how much of a premium you are will to pay, before going into it, and stick to it.  Don’t get excited by the “deal”.  Don’t go at it trying to win them all.  Know when to back out of a bid.  And definitely, buy more at a lower cost, or if you have the cash, buy a lot of the higher priced liens.  Not as many people bid on them and the premiums are always low.  Make sure the property you are bidding on is actual property and not just mineral rights or things like that.  I know several people who have obtained ownership of things like detached garages incondominium complexes.  These things can be sold or rented and profits can be made if the 3 years comes up and nobody has paid you.  Don’t go into it thinking you are buying a house or property for a few thousand dollars.  It is almost guaranteed it won’t happen, but if you want to take your extra cash out of the bank or out of the stock market, tax lien sales are a relatively safe place to invest.  It is not going to make you rich overnight, but it will get you further than having it in the bank.  I will be back next year with some of my own cash to invest.  Not the most glamorous way to make money, but it is a safe-ish avenue for investment.

Where do we get our water?  Yes, you turn on the kitchen tap and viola, there’s water.  Seriously where does our precious water originate.  Most of Colorado’s water is largely dependent on Colorado’s winter weather, from the mountain snow-melt.  Once the snow melts it either streams east toward the Atlantic or West towards the Pacific oceans.   Some water is diverted, some replenishes our aquifers and the rest is captured in our reservoirs.   

Because most of Colorado’s population is on the east side of the Rockies or Continental Divide, Pacific bound water is transported to the east side reservoirs.  Did you know that 90% of Colorado’s water usage is for agriculture! Pipelines have been established to move water through the Continental Divide moving water from the Western Slope to the Front Range.

Have you ever heard the expression “First in time, first in right?”  The Arkansas River has long been used as a source of water dating back to the early trappers and traders.  During the Colorado Gold Rush of 1850 water was diverted, taken and put to use for hard rock mining and the rules established back then became the basis for the rules used today in Colorado.   When water is scarce or the source of water is over appropriated, the oldest rights get theirs first and others may go without.  The best water rights are those that date back to the 1800’s.

So, who does water belong to?   It belongs to the Public!  Water is not attached to the land through or upon which it flows.  The administration of water and water rights is done at the state level, Colorado Division of Water Resources, headed by the State Engineer.

The Colorado River, whose water is it?  Did you know the Colorado River supplies water to seven (7) states, Arizona, Colorado, California, New Mexico, Utah, Wyoming, and Nevada and Mexico serving 25 million people and irrigation water for 4 million acres of land!  If you want to see the water useage in real time, go to USGS of Colorado.  The headwaters of the Colorado River are located in Rocky Mountain National Park in Colorado.   The Colorado River begins high in Rocky Mountain National Park near Grand Lake and about 85 percent of the Colorado River originates as snow or rain in the mountains. 

Snow atop the Rockies

I don’t want to drown you, (HA HA) with all this information on water and we haven’t even talked about ditch companies and their roles, ground water or wells.   Wells were never registered in Colorado until 1957.  All wells should be registered and the cost to do so is $100.  Properties with wells should have a well permit and ownership must be transferred when the property is sold. 

Did you know, without a water right, flowing water of any kind must be allowed to flow without interference including rain off of a roof!  Stay tuned for more exciting information on Colorado’s prescious water.  Next time you take a drink , think about where your glass of water is really coming from!

Today’s Market Commentary:

Interest rates increased slightly this past week as the US Treasury auctioned off $55 billion of debt. Economic data continued to be negative. Weekly jobless claims jumped by 32,000 claims on expectations that claims would actually fall by 2,000. Continuing claims increased to 3.9 million from 3.84 million the previous week. October Retail Sales fell by 2.8% on expectations that sales would fall by 1.2%. Excluding auto sales, Retail Sales fell by 2.2% on expectations that sales would fall by 0.9%. Fannie Mae and Freddie Mac reported third quarter losses of $29 billion and $25.3 billion respectively. Markets increasingly expect the Fed to cut short term interest rates by 50 basis points again at their FOMC meeting December 16.

The Dow Jones Industrial Average is currently at 8,503, down about 440 points on the week. Crude oil futures are currently trading at just over $56 per barrel, down almost $5 per barrel on the week. China announced a $586 billion stimulus package to keep their economy growing.

Next week look toward Monday’s Industrial Production, Tuesday’s Producer Price Index (PPI), and Wednesday’s Consumer Price Index (CPI) and Housing Starts as potential market moving events.

Click here to view the embedded video.I came across this video that someone emailed me and I just had to post it. It’s not something I produced but I thought it was pretty funny. It’s Fannie Mae Math explained to Americans and it’s probably the best explanation I’ve seen so far! Does anyone have a better explanation?