Which down payment strategy is right for you?

You’ve most likely heard the rule: Save for a 20-percent down payment before you buy a home. The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders.

But there can actually be financial benefits to putting down a small down payment—as low as three percent—rather than parting with so much cash up front, even if you have the money available.

THE DOWNSIDE

The downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage Insurance for years, and the lower your down payment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20-percent down payment, which will eliminate some homes from your search.

THE UPSIDE

The national average for home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20 percent or three percent, the increase in equity is the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment, while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.

THE HAPPY MEDIUM

Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20 percent and an investment-focused, small down payment. Your trusted real estate professional can provide some answers as you explore your financing options.

Beware the Standley Lake Monster

For the second year, glass eggs can be found on the Big Dry Creek Trail!

The Big Dry Creek Trail, which has been designated as a National Recreational Trail since 2003, runs from Standley Lake Regional Park all the way to I-25, covering nearly 12 miles. It is located on 800 acres of open space and 200 acres of Westminster park land.  The relatively level trail is partly gravel and partly paved and is a great way to get out and see Westminster.

     This year the Standley Lake Monster has returned and is laying eggs on the trail, specifically between Standley Lake and City Park.  Several lucky walkers have discovered these unique hand blown glass eggs, which can be found in plain sight, already this year.  Legend has it that the “Monster” is also leaving behind rainbow colored glass “poo.”  Anyone lucky enough to find the rainbow “poo,” is encouraged to stop by the Nature Center to report the find and receive a free t-shirt.  Treasure hunters who find an egg are encouraged to stop by the Nature Center for a certificate of authenticity and a display stand.  Both groups are free to keep the “Monster” treasure. 

     The “Monster” program is sponsored by the City of Westminster Parks and Recreation Divsion as a public art program as well as a way to encourage explorers to get out and use the trail.  These beautiful eggs are hand crafted by Corey Silverman of The Furnace, a hot glass studio in Lakewood.  Eggs can be hunted during normal open hours at the park throughout the end of the year.  Good luck on your treasure hunt!

It seems this year most of the country is experiencing a seller's market.  

Denver is no exception.  

In fact, Denver has been experiencing a seller's market for several years in a row now. Which is great news...if you are a seller!

What, exactly, is a seller's market?

Lack of inventory (i.e. homes for sale) creates an environment where homeowners can dictate the terms of the sale for their property--which keeps prices high, seller's concessions low and buyers frustrated.

My latest clients (I'll call them S&V) provide a powerful illustration of the power of a seller's market.  

The Power of a Seller's Market

Two children, a cat and six years after buying a condo in the Denver Metro area, S&V were more than ready for more room to stretch their legs.  Eager to create a new life, they listed their condo for sale one week after our initial meeting.  The following week, they were comparing/contrasting nine competing offers for their property--all over asking price.  The buyers did what buyers do in a seller's market--they got creative!  The offers contained a mix of escalation clauses, inspection waivers, rent-back options and personal letters of introduction in high hopes that THEIR offer would prevail.  

After careful consideration and comparison, S&V chose the offer that brought them a great deal of personal and financial satisfaction (they were moved by one of the personal letters). It's worth noting that they did not choose the highest offer; they honestly wanted to help another person in the process.

Personally, working with S&V was a wonderful experience for me.  Besides a great response time on paperwork and phone calls, their family dynamic was amazing, their children well-behaved and THEY ACTUALLY MADE REPAIRS ON THIER PROPERTY!  In a seller's market, many sellers are not willing to make repairs as they know buyers are lined up to purchase their property.  But this property that was soon to be under new ownership, was still a home to them and their pride was evident.

Ultimately, the buyer opted out of the contract for reasons that were not fully disclosed.  But the power of a seller's market came to the rescue; and the property was under contract again three days later!  And S&V were again able to sift through the offers and accept one that gave them personal and financial satisfaction.

Fast forward to closing day: S&V were very happy!  They were able to sell their home with less than a week of showings and close forty nine days after it hit the market (a slightly longer closing time period than our market normally requires in order to accommodate a VA appraisal).  

And the most amazing power of a seller's market?

                                                                                       
S&V sold their condo for 95% more than they paid for it six years previously.  Their sales price was almost double their original purchase price!!  

And the value it afforded my clients is immeasurable.  Not only were they able to purchase a bigger home, they also acquired a two-car garage and a fenced in back yard.  The money they leveraged from the sale of the condo was more than enough to generate a down payment on a new home.  And they were able to pay off their debts with the equity.  And they were able to make a few changes to the new property.  And they were able to put money into savings.  And the children can now walk to school.  And, thanks to record low interest rates, their new house payment is only slightly more than what their condo payment and HOA dues were (but now, no more debt payments!). And the best part, for me, was the tears in my client's eyes when she said she "never thought she would be able to afford a home in this neighborhood!"

No more HOA dues (and no more worry that the dues would increase).   No more storing the tools in the bathroom and the bikes on the small back patio.   No more shared walls with noisy neighbors.  No more competing with neighbors for parking. And, as I mentioned before, no more debts!   

And that,my friend, is the power of a seller's market! 

Background vector created by Cornecoba - Freepik.com 

Westminster Station Park

   Construction of natural park to begin in Fall 2017

The City of Westminster has plans to begin the  first phase of a nature park to be built around the train station. Hopes for the project are that construction will begin in the fall and to open the park in the Spring of 2018.  This natural park will be an oasis built from as many natural and native materials as possible, including trees previously moved from the area during construction.

 The park will include a mini mountain of boulders, treehouses connected by bridges, climbing ropes, a sandbox and a treated-water feature.  The playground will be on the west side of the park, near Lowell Blvd.

Funding for the park will be provided from a variety of sources— funds have been committed from the city budget; Great Outdoors Colorado had provided a grant. Also, Adams County Open Space and the Westminster Legacy Foundation have donated funds.  The park is only one part of the ambitious plans to create a vibrant and active Downtown Westminster.

 The city plans to build the park in phases starting on the west side and moving east through the park to Federal Blvd. Completion of all phases of the park could take four to  five years.  The final impact and value to the City of Westminster will be immeasurable!

Short Sale and Foreclosure: How are they different?

As unfortunate as it can be when homeowners fall behind on mortgage payments and must face the possibility of losing their homes, short sales and foreclosures provide them options for moving on financially. The terms are often used interchangeably, but they’re actually quite different, with varying timelines and financial impact on the homeowner. Here’s a brief overview.

A short sale comes into play when a homeowner needs to sell their home but the home is worth less than the remaining balance that they owe. The lender can allow the homeowner to sell the home for less than the amount owed, freeing the homeowner from the financial predicament.

On the buyer side, short sales typically take three to four months to complete and many of the closing and repair costs are shifted from the seller to the lender.

On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their home so the bank begins the process of repossessing it. A foreclosure usually moves much faster than a short sale and is more financially damaging to the homeowner.

After foreclosure the bank can sell the home in a foreclosure auction. For buyers, foreclosures are riskier than short sales, because homes are often bought sight unseen, with no inspection or warranty.

Downtown Westminster-The Next Urban Center on Colorado’s Front Range

The City of Westminster Colorado has embarked on a very ambitious plan to create a mixed-use downtown to rival that of Boulder or Denver.  Construction on this urban area began in 2015 with the groundwork of utilities and infrastructure. The new development will be roughly where the site of the Westminster Mall use to be.  (The JCPenney Store will be the one remaining reminder of the mall). The downtown will include parks and open spaces, retail areas, offices, hotels, restaurants and residential buildings.  

The ambitious 105-acre site project at U.S. 36 and Sheridan Boulevard connects to one of the region’s busiest bus rapid transit corridors and hundreds of miles of bikeways. It will redefine the future of suburban Westminster.   Read more about  this amazing city project at http://www.downtownwestminster.us/Vision.