Delinquent Indicator

by Suzanne Ekeler

A leading indicator of the health of any real estate market is Mortgage Delinquencies.

Specifically, the percentage of mortgages which are at least 30 days delinquent can foretell the amount of distressed properties that may hit the market in the future.

The most recent research shows that only 4.11% of all loans are delinquent.

This number has dropped for seven quarters in a row and is now at its lowest level since the fourth quarter of 2019 (which was the lowest ever in 20 years).

It is worth noting that the delinquency rate in the years leading up to the housing bubble hovered between 5.5% to 6.0%.

Based on this data, the likelihood of a foreclosure surge or a glut of distressed properties hitting the market is minimal.

Buyers & Sellers • Sellers • April 25, 2022

Landscaping Tips That Can Increase Your Home’s Value

by Suzanne Ekeler

A freshly landscaped suburban home with multicolored shrubbery.

When you own a home, there’s a natural desire to invest in landscaping projects that help beautify your yard. But for those who are preparing to sell, the emphasis should be on specific projects that boost your home’s curb appeal and add to its value. The following landscaping tips can help you position your home to sell at the best price. We also recommend talking with your agent about the best landscaping ideas for your home that buyers in your area are looking for.

Landscaping Tips That Can Increase Your Home’s Value

Flower Beds

Beautifying your flower beds is a matter of making improvements in two areas: the flower beds themselves and the border surrounding them. Flower-lined pathways leading toward your home’s front door help guide buyers’ eyes and create a natural aesthetic order to your front yard. Plant colorfully to inspire a vibrant look or choose fewer flowers for a more uniform consistency. Add fresh mulch or beauty bark to your flower beds to make them pop. Creating a border with stone, brick, clay, or another similar material will help delineate flower beds from grass while delivering a clean, refined aesthetic to your property.

If you’re designing new borders to your flower beds, think about the traffic patterns, the orientation of the house in relation to the rest of your neighborhood, and your front yard’s location to ultimately settle on the best sight lines. Spend time weeding the area where your border will go. To dissuade future weed growth, consider adding a thin layer of sand or gravel between the dirt and your border pavers. Finally, clean your hardscaping with an outdoor cleaner or pressure washer to get rid of built-up dirt and moss.

A colorfully landscaped front yard on a sunny day.

Image Source: Getty Images – Image Credit: Elenathewise

Lawn Care

A fresh lawn will make a solid first impression on prospective buyers. Here are a few basic lawn care tips:

Fertilize at the appropriate time of year for your local climate
Set your lawn mower blades at the proper height to ensure you’re not cutting your grass too short
Water regularly to keep your lawn healthy

If you live in an arid climate, grass alternatives may be a more popular local choice. No matter where you live, once you’ve decided to sell, you can rest assured that spending time and energy on caring for your lawn will pay dividends once you’ve staked your “for sale” sign.

Landscaping Lighting

Once you’ve fixed up your garden beds and tended to your lawn, you’ve done well to ensure that your home’s landscaping will look its best—during the daylight, that is. To ensure that buyers feel the work you’ve put into your home around the clock, consider installing landscape lighting. This will help to put your home’s qualities on full display during the nighttime, while also adding a welcoming touch for potential buyers and passersby.

Front Porch

Add planters to your front porch to create flow from your front yard to your entrance. For the ultimate front porch aesthetic, think of ways that you can create symmetry with your planter boxes. Nest them along the borders of windows, select planter boxes with dimensions that compliment a seated bench, or place identical boxes on either side of your front door. This will direct attention to your home’s front entry and helps to instill that all-important first impression in buyers’ minds.

Buyers • Buyers & Sellers • April 18, 2022

The Different Types of Home Loans for Buyers

by Suzanne Ekeler

A woman sits down with her mortgage broker to look over different types of home loans.

Financing terms are the nuts and bolts of a successful home purchase. Once you’ve decided you’re ready to buy a house, it’s a matter of making the numbers work. So, which home loan is the right one for you? Knowing the different types of mortgage loans available to you will allow you to pinpoint the one that best fits your needs and is financially viable.

The Different Types of Home Loans for Buyers

Conventional Loans

Conventional loans are the most popular type of home loan issued to borrowers. Offered by private lenders, they are not backed by the government. Conventional mortgages divide into two subsets: conforming loans; which adhere to Federal Housing Financing Agency (FHFA) guidelines, and non-conforming loans; which do not. Due to the added risk taken on by the lender, non-conforming loans typically have higher rates. A jumbo loan is an example of a non-conforming loan, due to its loan amounts being higher than the amount limits laid out in the underwriting guidelines. The two most common conventional loans are 30-year and 15-year fixed-rate mortgages.

15-Year and 30-Year Fixed-Rate Mortgages

The terms of your loan will drastically impact all aspects of your mortgage. With a 30-year mortgage, you’ll have lower monthly payments and a higher interest rate than you’d have with a 15-year mortgage, meaning you’ll pay more in interest over the life of the loan. With a 15-year mortgage, you’ll pay less interest, but you’ll have a higher monthly payment. Compared to a 30-year mortgage, a 15-year mortgage can save you money over the life of the loan, simply because you’re in debt for half the time; however, the higher monthly payments may be unaffordable for some.

A woman sits at a table signing her mortgage paperwork.

Image Source: Getty Images – Image Credit: guvendemir

Government-Backed Loans

Whereas conventional loans are not backed by a federal entity, there are several unconventional loans that are backed by the U.S. government. These unconventional loans can often provide a path to homeownership for borrowers who don’t have the credentials to qualify for a conventional loan.

FHA and USDA mortgages are two common types of government-backed loans. Instead of having to make a 20% down payment on a conventional loan to avoid private mortgage insurance (PMI), an FHA loan allows buyers to qualify for a mortgage with a down payment as little as 3.5%. USDA loans enable buyers to purchase a home with reduced interest rates. VA loans offer several benefits for active service personnel and veterans looking to buy a home, including not having to purchase mortgage insurance.

Fixed-Rate vs. Adjustable-Rate Mortgages

Fixed-rate mortgages allow you to lock in a specified interest rate for the life of the loan. With an unchanging monthly mortgage payment, a fixed-rate mortgage makes financial planning easier. Adjustable-rate mortgages’ interest rates will go up and down based on market conditions. Many ARMs will start with a fixed-interest rate period followed by a variable interest rate until the loan amount is paid off. Keep in mind that a sudden change in your financial situation could make your monthly ARM payments unaffordable, which could result in a loan default.

Other Home Loans

There are other more niche financing options available for prospective home buyers. For example, a construction loan can be useful if you’re planning on building a home. Balloon mortgages and sub-prime mortgages can make homeownership feasible for those who aren’t financially prepared for the typical repayment structure of a mortgage. These loans, however, come with greater risks. Talk to a mortgage broker to understand the terms of these agreements before making a final decision.

Buyers • Buyers & Sellers • Home Living • April 15, 2022

How to Prevent and Deal with Mold

by Suzanne Ekeler

A man and his son scrub off their kitchen counter.

Whether you are buying or selling a home, mold is something to be mindful of. Health concerns and potential damage make mold a red flag for buyers. Even if you’re not planning to sell any time soon, taking care of mold problems now can prevent even larger and more costly issues in the future. Contrary to what some people think, mold is not a geographic problem—it can occur anywhere, no matter where you live. Here is some basic information about mold and how to deal with it.

What is mold?

Molds are microscopic organisms that are found virtually everywhere indoors and outdoors. There are thousands of different kinds of mold. Their natural function is to help break down dead materials such as stumps and leaves so the nutrients can be used by the environment. For molds to grow, they need two things: an organic food source—such as leaves, wood, paper, or dirt—and moisture.

Mold Causes Damage

Mother Nature uses mold to decompose plant material. Unfortunately, when present indoors, it can be equally destructive. Mold growth can damage furnishings, such as carpets, couches, and cabinets. If it goes undetected or neglected, it can also cause serious damage to walls and structural elements in your home.

Mold is present everywhere, and most people tolerate exposure with no adverse effects. If allowed to spread, however, it may cause problems. As molds grow, they release thousands of tiny spores that travel through the air. When inhaled in large enough amounts, these spores may increase the risk of adverse health effects in some people, particularly respiratory problems. A less-common strain of mold called “black mold” can be particularly troublesome to those who are especially sensitive.

A closeup of someone scrubbing their tile floor wearing an orange rubber glove.

Image Source: Getty Images – Image Credit: wattanaphob

Common Causes of Mold Growth in Homes

No matter your local climate, your home is vulnerable to mold. There are many sources of mold problems, from faulty air conditioners to poorly positioned sprinkler systems. Here are the most common sources of mold inside the home:

Flooding
Leaky roofs or damaged gutters
Heating or cooling system problems
Poor drainage next to foundation
Plumbing leaks from toilets, refrigerators, and dishwashers
Damp basement or crawl space
Leaking windows or doors
Steam from shower or cooking
Indoor exhaust from dryer

Detecting Mold in Your Home

If you can see or smell mold inside your home, it’s time to act. Any area that has sustained past or ongoing water damage should be thoroughly inspected—you may find hidden mold growth in water-damaged walls, floors, or ceilings. Walls and floors that are warping or discolored can also indicate moisture problems, as can condensation on windows or walls.

How to Prevent Mold in Your Home

Since mold is always present, there’s no way to eliminate it completely. You can control indoor mold growth, however, by controlling moisture.

Remove the source of moisture by fixing any leaks or other water problems.
Make sure your bathroom fans and dryers are properly vented to the outside. Always use the exhaust fan when cooking or showering.
Use a dehumidifier to reduce moisture levels in the air. Make sure your AC system is well maintained and is the correct size for your home. A faulty AC system can cool the air without removing the water vapor, creating high humidity.
Insulate your home well to prevent indoor condensation.
Have your heating, ventilation, and cooling systems professionally cleaned annually. Air-duct systems can easily become contaminated with mold.
Regularly clean moist areas such as the bathroom with products that treat mildew.
Dry clean your carpets (as opposed to wet cleaning them).
Avoid carpeting bathrooms and basements.
Clean any moldy surfaces as soon as you notice them.

How to Deal with Mold in Your Home

Mold can be a manageable problem. If you have a mold problem that is isolated to a small area—less than a square yard or so—you can try to resolve it yourself. However, if your mold problem is severe or if you have extensive water damage, it’s best to call a professional contractor who specializes in mold removal.

Porous items that are hard to clean, such as carpet and drapes, should be discarded. Moldy sheetrock and ceiling tiles can be removed and replaced. Hard, nonabsorbent surfaces such as glass, plastic and metal should be thoroughly cleaned with soap and water and allowed to dry completely. For solid items that are semi-porous, such as floors, cabinets, and wood furniture, scrub with an ammonia-free cleaner and hot water to remove the mold. Rinse with water and dry thoroughly. After cleaning, apply a mildewcide to kill mold and spores.

When cleaning mold, remember to wear gloves, a mask, and eye protection, and work in a well-ventilated area. Never mix cleaner containing bleach and ammonia; this can result in the release of a toxic gas. And be sure to throw away any sponges or rags that you use for cleaning.

Buyers • Buyers & Sellers • April 11, 2022

What to Consider When Buying a Second Home

by Suzanne Ekeler

A young man looks at available houses on his laptop as his dog sits next to him.

In some ways, the process of buying a second home is like buying a primary home. However, there are several key differences that require consideration before you make an offer. Whether you have visions of curating your dream vacation home, are planning for retirement, or view the property as an investment property, a second home can be the answer to your real estate ambitions. Owning two homes, however, means your responsibilities as a homeowner will double. Keep the following information in mind as you work with your agent toward purchasing a second home.

What to Consider When Buying a Second Home

Costs of Buying a Second Home

Purchasing a second home will typically come with all the expenditures you encounter during the process of buying your primary home. However, you may have to pay more up front for a second home, since loans for a secondary residence are riskier for lenders. Consider how making a lump sum payment may affect your financial health before beginning the buying process.

To get an idea of what you can afford, use our free Home Monthly Payment Calculator by clicking the button below. With current rates based on national averages and customizable mortgage terms, you can experiment with different values to get an estimate of your monthly payment for any listing price. By adding your resulting figures to your current monthly mortgage costs, you can make a well-informed estimation of your total monthly mortgage costs for both homes.

Financing Your Second Home Purchase

Finding the right financing for your second home purchase will depend on how you intend to use it. You and your lender will explore the different home types of home loan availability to find the one that best suits your needs. Your lender’s rates and qualification requirements will vary based on how often you plan on living there and whether it’s an investment property, among other factors. If you plan to rent the property periodically, talk with your lender about what parameters would result in it being classified as an investment property. You’ll need to obtain a landlord insurance policy as well, on top of your existing homeowners insurance. These additional costs—along with rental maintenance expenses—need to be accounted for, even though renting out the property will help generate income.

Other Factors that Influence a Second Home Purchase

Besides being financially prepared, how will you know your ready to buy? For starters, finding and buying the right secondary residence is a matter of timing. It’s vital that the purchase of your second home aligns with your life goals. If you’re planning on purchasing the home for retirement, take time to investigate the area’s assisted living resources. If the area is a popular vacation destination, talk to your agent about how seasonality affects the local market conditions, whether you’re buying in a buyer’s market or a seller’s market, and how you can formulate your best offer.

If you aren’t familiar with the area, get to know the locale before you start sending offers. It’s helpful to schedule your visit off-season to get the clearest picture of what everyday life is like there. Plan to stay for enough time that you can get a sense of the atmosphere beyond a tourist’s first impression. Your experience there will help inform whether it’s the right time to buy.

Blog • Buyers • Buyers & Sellers • Colorado Real Estate • Friday Fun Facts • April 8, 2022

Active Average

by Suzanne Ekeler

While we frequently research and discuss average prices for properties that sell, it is also interesting to look at the average prices for properties that are active on the market but not sold yet.

These are the average prices, by area, for properties currently listed for sale and not sold yet:

Metro Denver = $954,000
Larimer County = $878,000
Weld County = $880,000

If you are surprised that Weld County is higher than Larimer County, it’s important to note that there are several large acreage properties listed for sale in Weld County which are skewing the average.

These average active prices are all roughly 30% higher compared to a year ago and further emphasize the strong activity in the Front Range market.

Home Living • Housing Trends • March 30, 2022

Gas Appliances vs. Electric Appliances

by Suzanne Ekeler

A close-up of a person’s hands cooking a meal on their kitchen stove.

Appliances are broken down into two main categories: gas- and electric-powered. You may be more familiar with one or the other based on personal experience, but when it comes time to choose appliances for your home, you’ll likely be weighing a variety of factors including the conversion costs, operation costs, safety, sustainability, and more. The following breakdown of the differences between gas and electric appliances can help inform your decision about what is ultimately best for your home.

What is the difference between gas and electricity?

Homes with natural gas are powered by a series of pipeline connections. The gas lines flowing from the property lead out to and connect with a larger pipeline farther away. Homes can also be powered by propane gas, which is stored in a tank on the property.

Electric power flows from generators to substations and eventually to individual homes, carried by transmission and distribution lines. In short, gas can power a variety of appliances in your home, but it won’t power your lights or electronics, whereas electricity can do both.

What is the difference between gas appliances and electric appliances?

The costs of gas and electric appliances vary region-to-region, both in upfront and operation costs. Having said that, gas is the more efficient heating fuel, and using gas appliances could save you up to 30 percent on your utility bill (consumeraffairs.com). Keep in mind that gas furnaces tend to be noisier but will usually heat up your home quicker, while electric furnaces are quieter but may take more time to warm your home.

So, what do you do if you want to convert your home from one fuel to the other? To switch from electric to gas, you’ll need to route gas lines, purchase the new appliances, and install them. Switching from gas to electric will require installing an electric line and capping the gas line(s). Each of these conversion methods will require an investment, so be sure to budget for these costs before you switch.

Gas and electric have their own unique safety hazards. With gas, you’ll need to take a couple extra steps to protect your home’s air quality. You’ll want to make sure you have a good ventilation system and that your carbon monoxide alarm is functioning properly to alert you of any potential poisoning from the furnace or the appliances themselves. With electric appliances, you won’t run the risk of a gas leak, but if the appliance’s wiring is faulty or neglectfully maintained, it could start a fire.

A close-up of a person’s hand starting their dryer.

Image Source: Getty Images – Image Source: SolStock

Gas vs. Electric Range

The range tends to be the focal point of the gas-versus-electric debate for many homeowners. While some prefer the quick-heating power of an open-flame gas stove, others view an electric stove as safer for their household and therefore better. While some enjoy the even-heating quality of an electric oven, others prefer gas ovens with traditional coil burners. Electric stoves are usually easier to maintain; especially glass tops since you only have to clean one smooth surface.

Gas vs. Electric – Dryer & Fireplace

In general, gas dryers can heat up faster than electric dryers, which means they are more efficient and can save you money on your energy bills. However, gas dryers tend to be more expensive than their electric counterparts.

Electric fireplaces are usually cheaper to install but may not be as effective as gas fireplaces for heating larger spaces. And apart from all the financials, some people simply enjoy the feeling of a natural flame (gas) coming from the hearth, while the electric heating element appeals to others.

At the end of the day, choosing between gas and electric appliances depends on your situation. Saving on energy bills may be your number one priority, or perhaps you can’t stand the idea of not cooking on an open flame. Whatever your choice, it’s helpful to know the pros and cons of each option.

Home Living • Housing Trends • March 28, 2022

What is Spanish Style Architecture?

by Suzanne Ekeler

The front exterior of a Spanish colonial style home with green grass and several plants in the flower beds.

The Spanish style of home design and the architecture from which it originates goes by many names but is commonly known as “Spanish Eclectic” or “Spanish Revival.” This distinct style has a long history that has helped to shape the residential aesthetic of certain parts of the United States, predominantly the Southwest. By digging into the history and design elements of this unique look, we can understand a bit more about why these homes are so special.

Spanish Eclectic

The Spanish Eclectic aesthetic is an amalgam of Native American, Mexican, and Spanish missionary styles. The first appearances of this housing style on American soil trace back to the days of the earliest Spanish settlers as they began to build out their dwellings. These homes were built with the materials that have become defined by their appearance: adobe, stucco, and clay. In this way, Spanish Eclectic shares some similarities with the Mediterranean style of architecture. Over time, this style saw periods of revival, during which construction of these homes experienced an uptick. Throughout these revival periods, additional features were added to the homes to accommodate the needs of modern living at the time.

The front exterior of an orange-tinted Spanish colonial style home with plants and trees in the front yard.

Image Source: Getty Images – Image Credit: felixmizioznikov

What is Spanish style architecture?

The Spanish Eclectic style has several distinct characteristics in both its interior and exterior design. The thick stucco walls provide the backdrop for their unique look, but also help to keep the home cool during hot days and insulated at night. These homes typically have low-pitched terracotta roofs, exposed wooden support beams, and arched entryways and corridors, reflecting the features of their missionary origins.

Additional design details include wrought iron, colorful tile, and small windows. Though they may not be present in every Spanish Eclectic home due to limited space, courtyards are a common feature of this house style. You’ll often see a courtyard in the center of the home for a plaza-like arrangement, on the side of the home, or in the back.

Blog • Buyers • Buyers & Sellers • Colorado Real Estate • Economics 101 • Friday Fun Facts • Greeley Real Estate • Housing Trends • Johnstown Real Estate • Sellers • Severance Real Estate • March 26, 2022

Rate Perspective

by Suzanne Ekeler

MARCH 25, 2022

Given the recent increase in mortgage interest rates, we think a little perspective is in order.

The average 30-year rate for the last 40+ years is 7.5%
Rates are now back within the range where they were between April 2018 and February 2019
Between January 2000 and December 2009, the high was 8.15% and the low was 5.05%
Between January 1990 and December 1999, rates never went below 6.25%

Bottom line, while the increase in rates is challenging for active buyers, rates are still incredibly low historically speaking.

Buyers • Buyers & Sellers • Sellers • March 23, 2022

What are Closing Costs?

by Suzanne Ekeler

March 23, 2022

A real estate agent looks at her phone in her office.

The closing process in a real estate transaction finalizes the terms of an agreement between the buyer and seller, leading to the transfer of the property’s title. This step of the buying/selling process comes with its own set of costs. Before a buyer can hold the keys to their new home, and before a seller can celebrate the sale of their property, closing costs must be paid.

What are closing costs?

The term “closing costs” refers to the various expenses, taxes, and fees paid by both the buyer and the seller to finalize a real estate transaction. The purchase agreement—signed by both parties—will dictate the terms of how the closing costs are paid, but there are some standards about who pays what.

In general, buyers can expect to pay about 2-5% of the total purchase price in closing costs, while sellers’ costs can range anywhere from about 6-10%; the difference being that buyers are using extra cash to pay for their closing costs while the amount sellers owe is typically deducted from the proceeds of the sale of their home. Note—these percentages may vary depending on property taxes, insurance rates, and other factors involved in the transaction.

Closing Costs for Buyers

Typical mortgage-related closing costs for buyers include an application fee, an underwriting fee, and prepaid interest (the accrued interest cost between your settlement date and first monthly payment). If you make less that a 20% down payment on the home, you can expect to pay your lender for private mortgage insurance (PMI), as well.

Two main property-related closing costs for buyers are the appraisal and the home inspection. Lenders will require an appraisal to double-check that the value of the property matches your mortgage loan amount, which will typically cost you a few hundred dollars. A home inspection provides the buyer with a clear understanding of the home’s condition and what repairs need to be made, either in the future or before closing. In competitive markets (a seller’s market), it’s more common for sellers to conduct pre-listing inspections and for buyers to waive the inspection contingency to make their offer more appealing. Buyers will also pay a variety of title, insurance, attorney, escrow, and property tax fees to finalize the home purchase. Usually, your lender will require you to purchase homeowners insurance before settlement to protect against insured disasters that may occur on the property.

These are just some of the costs inherent in the closing process for buyers, which are a fraction of the total costs of buying a home. Working with a Buyer’s Agent will help you stay organized as you navigate through these crucial final steps of your home purchase.

A young man and woman shake hands with their real estate agent at their kitchen table.

Image Source: Getty Images – Image Credit: PeopleImages

Closing Costs for Sellers

The seller will pay the agent commissions on the sale, typically to both the buyer’s agent and the listing agent. Agent commissions usually come in at around 4-6% of the sale price of the home. Other closing costs for sellers may include attorney fees, title insurance, a transfer tax, and the home’s property taxes for the current year if they have not yet been paid. The terms of the agreement will spell out what the seller is additionally responsible for, including HOA fees if applicable and any escrow money promised to the buyer.

Typically, escrow fees are shared between the buyer and seller, which cover the costs of distributing the funds involved in the transaction. In buyer’s markets, it’s more common for sellers to agree to pay for a portion of the closing costs—what is known as “seller concessions.” A common example of a seller concession is when the seller agrees to pay for repairs discovered during the buyer’s home inspection.