Buying & Selling a Home

Any time you are selling one house and buying another there are inherent risks over which you may have no control. Each one of the seven options below has pros and cons. Which option you pick depends on equity levels, qualifying ratios, etc.

1. List your home conditional upon finding replacement property.

We can list your home and put in the comments in the MLS that it is “conditional upon you locating a replacement property”. This method allows you to put your old home under contract, then find a re placement property within an agreed upon period of time. The disadvantage is that some of the best buyers, such as corporate transferees that have 3 days to buy a house, may not want to look at the house. The reason for this is that they don’t want to “wait and see” if they have purchased a house based on your ability to find a replacement. In my estimation you lose about 30% of the available buyers by offering the home “conditional upon finding replacement property”. If a buyer is willing to purchase your home “conditional upon finding a replacement property” they will usually give you 10 days or so to locate and contract on an other one. The difficulty is, what happens if the contract on the home you are purchasing falls apart after you have removed the condition of “finding replacement property”? A buyer might be willing to wait until you contract on another property but very seldom will wait for you to resolve inspection conditions or actually close on the “replacement property”.

If this option is selected, it is important for you to review the market so that when a contract does come in you can make a quick a nd informed decision on the purchase of your new home. If this method work s it could keep you from doing a double move.

2. Make an offer on new property conditional upon selling old property.

It is possible to make an offer on your new home “conditional upon your old home going under contract”. This method can also keep you from doing a double move. Our ability to structure the transact ion in this way is dependent on market forces. If the market is hot the odds are good that a seller of the home you want to buy will receive offers from buyers that do not have a house to sell. In a hot market having a house to sell before you can buy puts you at a negotiating disadvantage. If it is acceptable for the seller to give you time to sell your house, it is usually structured where you have 30 days to get a contract on your home and maybe another 60 days to close it.

Sometimes when you make an offer conditional upon the old house selling the seller might come back with what is called a “first right of refusal”. This means that you and the seller have agreed to the price and terms of the contract. The seller then can continue to market the property and see if they can find a buyer that doesn’t need to sell a home. In the event the seller receives another offer to purchase, most first right of refusals have 48 to 72 hours to remove the condition of selling your old home. In order to remove that condition we would need to have gotten your home under contract or arranged for “bridge loan financing”.

3. Bridge loan financing

A “bridge loan” allows you to activate the equity in your old home to use as down payment for your new home. The advantage of a bridge loan is that it gives you a strong negotiating position in acquiring your new home by not needing a contingency to sell your current home. A bridge loan will typically allow you to use from 80 to 90% of the value of your current home, minus your current loan balance for the purchase of your new home. If you are willing to obtain a bridge loan you can “beat out” other buyers that may have a home to sell before they can buy. This method can usually prevent you from doing a double move.

The disadvantage of a bridge loan is that if the old house doesn’t sell quickly and you close on the new home, you have the new loan payment, the old loan payment, and the bridge loan payment. Often times bridge loans can be structured so that there are no payments of interest due until the house sells or 6 months.

It is also important to remember that bridge loans typically require upfront fees that you incur once you close on the loan. For this reason it is normally best to market your home aggressively to try and sell it be fore you need the bridge and to close on the bridge loan at the last possible moment, if needed. Most lenders will approve you for the bridge loan upfront so that you can still remove your contingency.

If this alternative appears beneficial to you it is in your best interest to meet with your lender to determine that you qualify for the bridge loan and to discuss any questions that you may have.

4. Keep your current home as a rental, activate the equity with a refinance, and purchase the new home.

In some cases you can keep your present home as an investment. It is a good idea to visit with your tax advisor to see if owning an investment property helps your tax situation. The general benefits of keeping the property in your investment portfolio include:

  • No transaction costs to pay, only refinance costs.
  • Tax benefit-depreciation
  • Possible future appreciation of the value of the property. If this alternative is attractive to you, the next step is to visit with a lender that can determine if you would qualify for the financing. To qualify for structuring the transaction in this way the lender will usually consider 75% of the monthly rent to apply toward your income figures. Any negative cash flow using the formula: Rent x 75% minus monthly PITI of the loan secured by the rental, is considered just like any other debt payment and the appropriate ratios applied.

5. Buy new home using available cash for down payment, a first mortgage in the amount you want to end up with when your old home sells, and a second mortgage on the new home that you will pay off when the old house sells.

The advantage of structuring the transaction i n this way is that it gives you negotiating power to purchase the new home, doesn’t have a bridge loan “short fuse” and you can avoid mortgage insurance on the first mortgage if you limit it to 80% loan to value.

Another alternative is to use available cash f or down payment with a maximum mortgage. Then when the old house sells, invest the cash proceeds in other investments.

6. Sell, Move, Buy

If you want to have negotiating power, are willing to do a double move, and can wait for the right home to come along, then sell your old home, move into a temporary situation and watch for the right property to come along. Having your old home sold and the cash in hand, and a pre-approved mortgage gives you a strong negotiating position.

7. Shop for a new home, list old home, write contract on new home as soon as old house goes under contract.

The first step in structuring the transaction in this way is to shop and review the market to see if the types of home your are loo king for are generally available. Once you have a comfort level, you can put your home on the market. Once we have a contract on your old house we can go write a contract on a new one, conditional upon your old house closing. This puts you in a negotiating position stronger than having a house to sell, but not as strong as having the cash in the bank or the bridge loan method. To get an offer like this accepted we need to show the seller of the new home how strong the contract is on your old house. If we are able to structure a transaction in this manner we would try to close on both the old house and the new house on the same day.


Posted on November 10, 2017 at 11:10 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |

Staging starts with the Kitchen

Home Staging Secrets: The Kitchen

The kitchen is one of the hottest selling points for any listing, as it is the center of a lot of activity within a home. While you may renovate your kitchen before selling—or at least replace outdated appliances and add some fresh paint—staging is another crucial part of making your kitchen buyer-ready. Read on for some important tips for staging your kitchen.

Make it sparkle. Cleaning your kitchen top to bottom is the first step in home staging. Polish all fixtures, clean out the inside of the stove, dust that ceiling fan, wash windows, scrub your baseboards, clean cabinets and polish or replace knobs and handles.

De-clutter. Remove all appliances from the counter, take magnets and photos off the fridge and most of the photos off the wall. Don’t remove everything, or it will look cold and unlived in. Instead, allow an opportunity for the buyer to imagine their own lives enfolding in the room.

Make use of space and color. Replace your large kitchen table with a smaller one to make the space seem roomier. Replace heavy drapes with lighter ones to brighten the room. Make sure your color scheme is subtle and complimentary, not extreme or jarring. The less things shoved into your space, the larger it will look. Put something simple, like a cookbook or bowl of fruit on the counter or kitchen table.

Sweat the small stuff. Go above and beyond to make your kitchen look like a place where your potential buyers will want to spend time. Try not to cook anything with a strong odor in your kitchen during the time your house is on the market, like fish, bacon or curry. Of course, baking some fresh bread has always been a go-to home-selling secret. Also, be sure never to leave any dirty dishes in the sink or the dishwasher. Sellers like to open things, and your dishwasher is not excluded from this. Don’t turn them off with last night’s dinner dishes.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact meany time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.


Posted on November 10, 2017 at 11:09 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |

When you need a rood… choose the right roofer!

Choosing the Right Roofer

As we set our eyes toward spring, homeowners all across the country are looking forward to warm-season home sales, and the curb appeal projects that come with listing your property. One of the top pre-sale improvement projects is updating your roof.

Why? A new roof has the highest return on investment. In 2005, Remodeling magazine’s cost-value survey revealed that you could expect a return of nearly 85 percent on a quality re-roofing job. While the most recent survey showed a pretty substantial drop – stating the predicted return is closer to 63 percent – this is still an important project in terms of selling your home for the best price. So much of your project’s success, however, can hang on your hired help. Below are several tips for choosing a winning roofer.

Get at Least Three Quotes. It’s important to shop around before you make a decision. Don’t just hire your neighbor’s roofer or the first company that shows up in your Google search. It’s best to reach out to at least three companies, and compare quotes.

Do Not Feel Pressured to Take the Lowest Offer. This can be tempting, but you need to keep in mind that contractors with more experience and higher quality work may be pricier.

Ask for References. Once you have found your three companies, ask for references from all of them. And be sure to follow up, as well.

Don’t Pay Cash. Contractors should be paid with a credit card or check. Do not pay in cash, and be wary of anyone who demands that you do.

Leave Ample Time. If you’re rushing on your project, you may make a hiring mistake. Be sure to leave enough time to do research, call references, and meet with potential roofers before you sign anyone on for the job.

Get a Written Contract. Be sure to get your contract in writing before your roofer begins working. Your contract should go over the exact job that is being done, what materials will be used, all cost, any offered warranties, how all parties will be paid, and both the starting and end dates. You can also arrange for cleanup and disposal, so you’re not left with a yard full of roof scraps you have to lug to the dump yourself.

Inspect the Work. Once the job is done, be sure to check it out and refer back to the initial contract. Were all specifications met? Are you satisfied? Be sure you are fully pleased before making that last payment.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact meany time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.


Posted on November 10, 2017 at 11:08 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |

Reduce the stress in home buying!

How to Make Your Buying Process Less Stressful

Purchasing a home is one of the most exciting decisions one will ever make. Unfortunately, for many, that excitement is served up with a whopping side of stress. While you may never erase all of the stress associated with home-buying, with the right mindset, and the right toolset, you can certainly minimize the stress of finding and buying your dream home.

  1. Get pre-approved. Making sure you are able to get a mortgage will reduce the stress of the home-buying process, because you know you’re eligible before you even begin hunting, automatically taking that stress factor off your plate. That’s not the only way pre-approval will reduce stress – it also makes the home search easier. Many sellers won’t even work with a buyer who is not pre-approved, so you automatically open up your housing pool when you get pre-approved.
  2. Find the right budget and stick to it. Money is a huge source of stress when buying a house. Figure out exactly how much house you can afford, and refuse to even consider a home outside of that budget.
  3. Make a Needs vs. Wants list. Similar to sticking to a budget, understanding your needs (three bedrooms) in relation to your wants (a gourmet kitchen) can save you time and energy during the home hunt.
  4. Hire an agent you trust. Working with a professional real estate agent is the number one way to reduce the stress of buying—or selling—a home. Find an agent who specializes in your market and similar clients—first-time buyers, move-up clients, vacation homes, etc. While many think hiring an agent will make the home-buying process costlier, agents can help save money in the negotiating process. Regardless of money saved, working with an agent—who knows the process inside and out—will save you a great deal of stress.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.


Posted on November 10, 2017 at 11:08 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |

Reverse Mortgages

Reverse mortgages serve as a useful tool for the right circumstances.

Blog Talk Radio host George Thomas has Duane Duggan and Bob Groenig share some ideas on how Reverse Mortgages can be used to help Homeowners that are 62 or older.

Take a listen to this conversation on RE/MAX of Boulder radio!


Posted on November 10, 2017 at 11:07 pm
Boulder Property Network | Posted in Weekly Boulder Video Podcast |

Selling your home and Capital Gains Rules

Home Selling 101: Capital Gains

For those who sold their home this year, it’s important to understand how selling your home may impact your tax returns, now that tax season is upon us.  The following information explains how capital gains work for those who have recently sold a home.

If you sell your primary residence, you may be able to exclude up to $250,000 of gain – $500,000 for married couples – from your federal tax return. To claim the exclusion, the IRS says your home must have been owned by you and used as your main home for a period of at least two out of the five years prior to its sale.

There are a few catches: You also must not have excluded gain on another home sold during the two years before the current sale. However, special rules apply for members of the armed, uniformed and foreign services and their families in calculating the 5-year period.

If you do not meet the ownership and use tests, you may use a reduced maximum exclusion amount. But only if you sold your home due to health, a change in place of employment, or unforeseen circumstances.

An extra perk? If you can exclude all the gain from the sale of your home, you do not report it on your federal tax return. If you cannot exclude all the gain, or you choose not to, you must use Schedule D of Form 1040, Capital Gains or Losses, to report the total gain and claim the exclusion you qualify for.

How about for those with more than one home?

You can exclude the gain only from the sale of your main residence. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is usually the one you live in most often.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.


Posted on November 10, 2017 at 11:05 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |

How soon can I buy a home after being foreclosed upon?

Life After Foreclosure: When Can You Buy?

For those consumers who have a foreclosure on their record, it may feel like they will never repair their credit enough to become a homeowner again. It can happen, but it will depend on a variety of variables.

Bouncing back after a foreclosure will depend greatly on your individual circumstances, as well as the mortgage interest rate you are willing to pay. Foreclosures can remain on your credit record for seven to 10 years. Most lenders will consider your request for a home loan two to four years after your foreclosure, although your interest rates will be higher.

Keep an eye out for predatory lenders that will issue a home mortgage in less time than average, but will charge you obscenely high mortgage interest rates, fees, and penalties.

A quality lender will expect you to show that you have cleaned up your credit. In this light, a borrower who has worked hard to reestablish good credit may also be shown some leniency by the lender.

Repairing your credit is possible, although it can be a slow-moving process. Act as quickly as you can to take care of any outstanding delinquencies, tackling a little at a time until you get back on the right track. Make an effort, if at all possible, to repay your debt in full and on time for six months to a year to prove you are working hard to repair any damage.

It will also be helpful to provide a reasonable explanation about the circumstances that led to the foreclosure, such as exorbitant medical expenses or lifestyle changes beyond your control. If you declared bankruptcy because you were laid off from your job, the lender may be more sympathetic. If, however, you went through bankruptcy because you overextended personal credit lines and lived beyond your means, it is unlikely the lender will readily give you a break.

If you’ve waited several years after your foreclosure and you’re still having trouble obtaining a traditional mortgage, consider other options, such as subprime mortgages, which are made to borrowers who do not meet traditional credit criteria at a higher interest rate.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.


Posted on November 10, 2017 at 11:05 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |

Mortgages! What you need to know today!

What You Need to Know About Mortgages Right Now

Weeding through all of the available information on mortgage rates can be exhausting. From trends to current percentage fluctuations, there is always a surplus of information at your fingertips. Below are three things you should know about today’s mortgage arena.

They’re on the way up – but still look good. Today’s rates are higher than they were a year ago, but they’re still relatively low. Recently, mortgage rates were weighing in around 4 percent, which isn’t as low as 2012’s 3 percent, but is still a great rate.

They shouldn’t stop you from buying. If you’re waiting to purchase a home because you think mortgage rates may drop – don’t. While mortgage rates do increase and decrease slightly from month-to-month, larger changes happen extremely slowly. If a fraction of a percent increase or decrease dramatically changes how much house you can buy, then you may be shopping a bit out of your price range.

There could be upcoming changes. The Federal Reserve has been keeping interest rates low by purchasing billions of dollars’ worth of mortgage-backed securities every month, called Quantitative Easing. The Fed admits that this program may not be around much longer, and that when it is eliminated, mortgage rates will spike. This is only a speculation, but it is still something to keep in mind if you’re deciding on the right time to buy.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact meany time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.


Posted on November 10, 2017 at 11:04 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |

Home Seller Tax tips!

Tax Tips for Home Sellers

Tax season is approaching fast, and for those who sold a home this year, it’s important to start thinking about how this may impact your taxes. Below are several of the need-to-know facts about tax season for home sellers.

Under $250,000? You may be able to exclude gains. Just because you profited on your home sale does not mean you have to pay taxes on it. In fact, if you’re eligible to exclude your gains, you don’t even need to note that you sold your home at all when you file.

To be eligible, you need to have made a profit of less than $500,000 on a joint return or $250,000 on an individual return, and the home must have been your primary residence for at least two years prior to sale.

You may not have to report your home sale at all. If you can exclude all of the gain–meaning it was under 500,00 on a joint return or $250,000 on a single–you probably don’t need to report the sale of your home on your tax return at all. Double check this with your accountant, but this is the case in most situations.

But you can’t deduct your losses. While it’s great you can exclude financial gains, you can’t deduct financial losses, which is unfortunate.

The more homes, the more complicated tax-time can be. Several complications can arise from owning more than one property, be it an investment or vacation home. The home you live in the majority of the time is considered your primary residence. This is important because it’s necessary for you to report any gains you may have made on your second home.

If you can’t exclude gains…If you can’t exclude all of the gain because it was over the allotted amount, or you choose not to exclude it, then you will need to report the sale on your tax return. Keep an eye out for Form 1099-S, Proceeds From Real Estate Transactions.

If you’re selling your first home…One more reminder about selling your home and tax season: special rules may apply when you sell a home for which you received the first-time homebuyer credit.

Keep in mind that tax time can be stressful and busy, so it’s always a good idea to have a professional look over your paperwork if you had an unusual financial year.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact me any time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.


Posted on November 10, 2017 at 11:04 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |

Home Improvements!

Keeping Up with Home Improvements

Being a homeowner is one of the most rewarding parts of life, but it is also a large undertaking. From the day you move in to the day you sell your home, there will always be something that will need to be repaired or remodeled. You may want to undertake some changes simply to elevate your comfort level – like installing central air conditioning – or to spruce up the home’s aesthetics, such as adding a few stained-glass windows.

But other work will need to be done to maintain the property and minimize problems later on. These may include replacing a hazardous roof, fixing broken windows, and repairing leaky pipes. These are all necessities. Left undone, they can lead to major problems and damages within the home.

If you decide one day to sell, other improvements will likely be made to increase the home’s value and appeal to potential buyers.

From the very beginning, get in the habit of taking an inventory, at least once every year, of every nook and cranny of your home to check for potential problems. Examine the roof, foundation, plumbing, electrical wiring – basically everything. Try to fix trouble spots as soon as you uncover them.

This proactive approach will help you avoid larger expenses later on, so leave no stone unturned when taking your inventory.

You may expect to spend one percent of the purchase price of your home every year to handle a myriad of tasks, including painting, tree trimming, repairing gutters, caulking windows, and routine system repairs and maintenance.

An older home will usually require more maintenance, although a lot will depend on how well it has been maintained over the years.

Tell yourself that the upkeep of your home is mandatory, and budget accordingly. Otherwise, your home’s value will suffer if you allow it to fall into a state of disrepair. Remember, there is usually a direct link between a property’s condition and its market value: The better its condition, the more a buyer will likely pay for it down the road.

Adopt the attitude that the cost of good home maintenance is usually minor compared to what it will cost to remedy a situation that you allowed to get out of hand. For example, unclogging and sealing gutters may cost a few hundred dollars. But repairing damage to a corner of your home where gutters have leaked can potentially cost several thousands dollars.

As a Member of the Top 5 in Real Estate Network®, I have a wealth of real estate and homeownership information that may be of help to you. Feel free to contact meany time to learn more about this important information, and be sure to forward this article on to any friends or family that may be interested as well.


Posted on November 10, 2017 at 11:03 pm
Boulder Property Network | Posted in Boulder Real Estate Blog |