Don’t Let the Seller Install a New Furnace for Littleton Buyers

After spending a lot of the last month reconstructing my hard drive (yes, I did have an external back up-that failed), I’m finally to the point where I can get back to doing some post.

I wanted to share something I recently learned that can be a benefit to people buying homes in Littleton, Denver Metro, or anywhere.  Sometimes in the course of the home purchase, it may be determined that the furnace may need to be replaced.  In the vast majority of cases, the buyers request that the new furnace be installed prior to closing.  Usually, this is because the buyer doesn’t want to have to mess with it.  An old hand in the HVAC business recently shared with me that all furnaces come with a 20 year warranty to the owner of record when the furnace is installed.  Subsequent owners only have a 10 year warranty from the date of install, so if the seller to be installs the furnace a week before closing, the 20 year warranty will be cut in half with the passing of the deed.  To keep the 20 year warranty, the buyers should direct that the cost of the replacement furnace be placed in escrow, and install the furnace after they take possession.  The escrow account is then used to pay their contractor.

The Littleton Buyer’s Market Myth

We’ve all been used to hearing over the last handful of years that this is a buyer’s market.  Well, I want to tell you that’s changing fast.  It was reported in the press this week that the number of properties for sale has dropped by 3,000 last month, to around 17,000.  That may seem like a lot, but it includes homes, condos, investment property, and land.  Plus when you spread it around the entire metro area, it can start to run thin.

In my community of 10,000 residents, there are only six homes priced between $200,000 to $300,000, and some of them aren’t great homes.  This means bad floor plans or not well maintained.  As one Realtor told me, “they say it’s a buyer’s market but try finding something people want to buy”.   If you talk to 10 people you’ll probably get 10 different reason why this is happening, but I think people are finally realizing that this is a great time to buy, with rates and prices so low.

There appears to be more inventory in the higher price ranges, but the good stuff doesn’t seem to last long, even in the higher ranges.  Bottom line is, if you are thinking of purchasing a home, get started sooner and be patient.  Also, don’t totally dismiss a home that needs some up-dating.  There are loans now that will allow you to finance those cost into the total.  Be flexible!

Littleton’s Best Home Loan

I”m back in the office and I had some time to expound on the last sentence of my morning post about the best home purchase loan available in Littleton and Metro Denver.  About three plus years ago, I happened to be reading the weekend real estate section and I saw an article about a lender that was new to the area that had an unusual loan product.  I followed up on the article, did the training,  and got accepted by this lender to work with their program.  Only Realtors that have been pre-qualifed by the lender are able to use this loan product.  I”m guessing only about 1% of the area Realtors are in their approved pool.

This lender, for reasons I’m not going to get into, doesn’t market on the internet, doesn’t co-op with other lenders, and doesn’t advertise.  They want their business to be driven by word of mouth.

Because this loan is so unique, I only make it available to my clients, so please don’t call me if you have established a Realtor relationship.  You see, I also don’t want to become between a Realtor and their clients.

Alright, you’ve hung in here so far, not let me get into why this loan is so great.  First off, they don’t require any down payment.  You can put money down but it’s not required.  Coming up with a down payment has been the main stumbling block for people wanting to purchase a home at today’s low interest rates and prices.   Most sellers are willing to pay closing cost for the buyers, but it still leaves buyers with having to come up with $7,000 to $10,000 for a down payment.  Secondly, the lender pays the closing cost.  The only cost to close the loan, on the buyer’s side, is for prepaids.  These are things like their homeowner’s insurance, pre-paid interest until the end of the month, and pre-paid taxes.  Usually, this will be around $1,000 to $1,300.  That’s all a person would need!

This loan also has an interest rate that’s always below market rates.  In addition, there’s no mortgage insurance added on to the rate.  For example, FHA’s mortgage insurance will add about one half percent to the quoted rate.  Here’s the best part, you can buy the rate down.  For every 1% of the loan amount you pay at closing, you can buy the rate down 1/4%.  Since most sellers will agree to pay 3% for closing cost, you can apply that 3% and buy the rate down 3/4%.  I didn’t mention this, but the rates are always quoted for 30 years.  The rate you get is the rate you have for the life of the loan.

There’s other parts of this loan that I don’t have the room or time to explain, but let me add that this isn’t limited to first time buyers and the maximum purchase price is $406,250.  It’s also not limited to distressed properties or economic zones.

On the front page of this blog there is a page where you can compare this loan to an FHA, 5% down conventional, and two ways to do the NO DOWN program.  If you have a particular price in mind, I can do a break down sheet for that price.  Just let me know.  Unfortunately,  this loan can’t be used to refinance or purchase investment property.  You cannot own another home when you originate this loan.  You can sell another home to use this program, but it has to be your only home at the time of closing.

In summary, this loan would save the buyer of a home priced at $225,000, approximately $20,000 in the first four years, and then about $3,000 a year after that.  That’s what makes this loan so incredible.

I’m Back!

After writing a blog for three plus years, I found myself wiped out by someone that hacked my blog.  I was pretty bummed after this happened and wasn’t sure I wanted to do this all over, again, but after a couple of months, I decided to give it another shot.  I’ll mainly concentrate on Littleton news, especially as it pertains to real estate, but there’s always other items of interest that pop up.  If you as readers, would like me to address other topics, just ask.  I’ll be back later to discuss the greatest home buying loan available, today.