Tuesday, March 31, 2009


With the deadline for filing federal tax returns fast approaching, I have clients asking about whether 2009 buyers can claim their $8,000 tax credit on their 2008 tax return. The answer is YES.

Even if you don't close by April 15, you can still claim the credit this year. Read on to find out how...

The basic eligibility requirements for the credit are: the home must have been purchased on or after Jan. 1 and before Dec. 1, 2009; the buyer may not have owned a home in the three years prior to the purchase; and the buyer must have a modified adjusted gross income (MAGI) less than $95,000 for single tax payers or $170,000 for married filers.

Two factors affect the amount of credit qualified buyers can claim: it can only be equal to 10% of the purchase price of the home, up to a maximum of $8,000; and it is reduced for buyers with an AGI (adjusted gross income) of more than $75,000 for single filers, and $150,000 for joint-filers.

To claim the credit, buyers must complete IRS Form 5405 to calculate the amount of the tax credit, and enter it on line 69 of the IRS 1040 income tax return.

Qualified buyers have several options for when to claim the tax credit, but they can claim it only after the purchase of the home is complete.

Buyers who complete their home purchase prior to April 15, 2009, can easily claim the credit on their 2008 income tax return.

If the qualifying home purchase will be completed shortly after April 15, buyers can file an extension for tax year 2008 and claim the credit when they file their 2008 return, which must be done by October 15. Or home buyers can claim a qualified purchase on their 2009 income tax return, which they will file in 2010.

Some things qualified buyers should take into consideration when deciding whether to claim the credit on their 2008 or 2009 returns include how quickly they need the refund and their expected income for 2009.

For more information, visit http://www.federalhousingtaxcredit.com/, or give me a call and I'll put you in touch with a qualified tax professional.

Sunday, March 29, 2009


First-time buyers continue to drive the activity in our market.

There are less than two active listings under $250,000 right now for each one under contract. Below $150,000, it's basically a one-to-one ratio. Half the homes on the market under $150,000 are under contract - the rest are either unrealistically priced, too beat up, or stuck in short sale pergatory.

The fact is, if it's clean, priced right and not next to the Interstate, it's probably under contract.

That's why HAVING A PLAN is so important right now.

If you are a first-time buyer, you need to do a couple of things in order to get the outcome you desire.

First, you must get pre-approved. This is not optional. In a multiple offer environment, sellers (often banks) want buyers who are rock solid. If you can't produce a pre-approval letter from a known, reputable lender, chances are it won't be you going under contract.

Second, I strongly encourage you to get together with your agent (preferably, me) for a serious heart-to-heart before you begin looking. Understanding how the real estate contract process works... understanding your rights and responsibilities as a buyer... and understanding how to deal with the competition in our market is critical to your success.

A well-written real estate contract protects you... a poorly written contract put you and your earnest money deposit at risk. If you don't understand what you are signing, don't sign.

Your agent should clearly explain the differences betweeen traditional resales, short sales, foreclosures, and HUD homes. The process for each is unique, and the strategies you employ will be different for each type of seller. Your agent should be able to clearly articulate how each of these types of sales works, and how your approach should differ from situation to situation.

Real estate agents are not commodities. They are a collection of ethics, experiences, expertise and problem-solving abilities. Some excel, some are terrible.

The agent you choose is as important as the home you buy... because if you select the wrong agent, your odds of ending up in the wrong home go up dramatically.

Thursday, March 26, 2009


It was about 12:40 this afternoon when I drove down the embankment off of Highway 36 at the Broadway exit, scrambling to get to off a completely gridlocked freeway and on to the frontage road alongside the highway so I could take my chances getting home via surface streets.

I followed a pickup truck, drawing courage from his successful navigation down a short bumpy hill and off the freeway, and by the time I left Broadway and turned on to 70th Ave I was feeling pretty unstoppable. Of course, it took another hour and 15 minutes to get home from there, but I had successfully freed myself from the snowy, gridlocked prison known this afternoon as the Boulder Turnpike.

What a day!

I had a closing scheduled for 4 p.m. this afternoon downtown, but with the bad weather blowing in and predictions calling for it to get worse during the day, I started things off this morning by coordinating an earlier closing and we all agreed to meet downtown at 10:30 a.m.

By 9 a.m. it was coming down in blankets in Arvada, but we were already committed and our closer was travelling up from Highlands Ranch to meet us halfway. In real estate, a closing is like a wedding, and there are so many moving pieces that must be aligned perfectly that cancelling or postponing is not an option we like to exercise.

By the time we finished signing our papers and completing the transaction, it was 11:30 and the snow was intensifying in Denver. By noon I was on I-25 and the snow was blowing horizontally, straight out of the north. I fiddled with the radio dial, without luck, trying to find a traffic report.

My Honda Pilot shook as gusts of wind blasted by, my frozen windshield wipers pushing smudge back and forth across my line of vision. I tried to lower the driver-side window to clean the windshield with my towel, but the window was frozen shut. The next time we came to a standstill, I got out of the car and did a rapid fire scrub on the windshield, which only helped a little.

Interstate 70 was completely shut down because of a 15 car pileup at Sheridan, so I continued north on I-25. The Boulder Turnpike had been the scene of a terrible pileup earlier in the day, but it was open now and so I figured I could take it for a little ways and then get off if things got bad. As soon as I exited I-25, the Turnpike came to a frozen stop. Thirty minutes and about 200 yards later, I made my run down the embankment.

Note to self for future blizzards: do not get on the Boulder Turnpike during a whiteout!

I made it home around 2 p.m. It took a little over two hours to go 17 miles, and I considered myself lucky.

I know there were thousands of others out there today who were suffering with me in the Blizzard of 2009. It was not fun.

But when the skies clear out and the spring sunshine returns tomorrow, we'll have one more two or three-day winter wonderland, giving my kids a final (?) chance to sled, slide and make snow angels in the backyard.

That's Colorado. Whether you love it or hate it, you always have to be ready for it!

Sunday, March 15, 2009


I just finished a book by Bob Burg called “Endless Referrals”. It’s not that referrals are new to me – cultivating and attracting referrals has been at the core of my business model for over a decade... but in the market we are in, and in the economy we are in, we all need to work on getting better at everything we do every day.

Many of you know I am very active with the Arvada Chamber of Commerce. Specifically, I meet with a group of business owners every Tuesday for lunch where we network, share information and work to build one another's business.

I gave about 15 copies of this book away last month because I think that learning how to cultivate referrals is absolutely essential to long-term success in any business. And one of the proven ways to generate referrals is to be a "giver".

Not a manipulative, calculating "giver"... no, that will never work.

Jim Rohn says that "we attract what we become". It's easy to roll over that comment and not get it... but I have internalized it to where it's part of who I am.

If you want to be surrounded by kind people... be kind. If you seek to attract honest, ethical people, you must become honest and ethical. If you want to work with well read people, be well read. If you desire to associate with compassionate people, be compassionate.

It's really a simple formula, and I have found over and over that my best referrals come from the people I have the most in common with. So work on becoming more, becoming better, becoming more humble, honest, and hardworking... and you will find that "Endless Referrals" isn't just a book title - it's a business model for long-term success and prosperity.

Monday, March 2, 2009


Inflated appraisals have been a huge issue in real estate for many years, and real estate commissions all over the country have had enough...

In response to complaints about too many appraisers being too cozy with lenders who routinely ask them to bring properties in "at the number" in exchange for more business, new regulations are coming soon that will force lenders to give up their existing appraiser relationships and, instead, order appraisals from "pools" of pre-screened appraisers who will not be permitted to have direct contact with the loan originator.

The two arguments against this are as follows:

1) appraisers who specialize in certain areas or certain types of properties will not be readily available to appraise in their areas of expertise, while those "out of their league" on certain types of properties will be asked to submit binding appraisals, and

2) this "appraiser pool" system will break down accountability between appraiser and lender and probably lessen the overall responsiveness of appraisers, who often will expedite appraisals or otherwise accommodate clients working off of tight timeframes for lender partners they know, trust and value.

The upside, in turn, is a perceived end to corrupt appraiser-lender relationships that are focused more on saving deals than protecting a buyer's interests.

In my opinion, however, the answer here lies with the consumer. If buyers do their research and choose to work with ethical, trustworthy lenders, these problems would not exist. I understand there have been plenty of not-so-ethical people in the lending and appraisal business, but any buyer should do some research on who he or she is dealing with before signing anything.

In the age of the Internet, there are very few secrets. Seeking out a personal referral from someone you know and trust is always the best way to find a competent service professional. Ratings agencies like the Better Business Bureau or a simple "Google Search" of a person's name or company may be all you need to do to get the answers you need.

Every piece of legislation always has unintended consequences, and while I'm sure there will be cases where shady appraisers are squeezed out of the market, we're all going to have to be prepared for extra delays and a few more headaches with some of our appraisals.

Since full licensing (with fingerprints and background checks) for mortgage lenders went into effect in Colorado two years ago, we've already flushed most of the cheaters out of our business. Now new regulations are just making it harder to do business.