These three homes in Aurora are located in the 80013 zip code which has been very active as far as homes being bought and sold. All three of these homes are in the $130K-$140K price range, and all of them have lots of potential.

Take a look at the video below to see a property with lots of potential.

There are millions of homeowners who are looking for answers and don’t know what to do. They are not alone and there are people with resources that can lead them in the right direction. As a Certified Distressed Property Expert, I have training and experience in providing solutions to homeowners facing financial hardship. There’s an overwhelming amount of misinformation about the options available, especially short sales. To give you a better idea of the short sale option, and to set straight some of the myths you may have heard, I’ve decided to post this blog to clear up some misconceptions. Hopefully this post will clarify the following myths:

Myth #1) The Bank Would Rather Foreclose Than Bother With A Short Sale This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.
The qualifications for a short sale include:
• Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
• Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
• Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

Myth #2) You Must Be Behind On Your Mortgage To Negotiate A Short Sale While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency. If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left.

Myth #3) There Is Not Enough Time To Negotiate A Short Sale Before My Foreclosure This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.
The foreclosing party—in most cases a lender—can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete.

Myth #4) Listing My Home As A Short Sale Is An Embarrassment It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, more than one out of eight homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.
With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone.

Myth #5) Short Sales Are Impossible And Never Get Approved This is a complete falsehood. Are short sales more difficult to execute? Yes. Do you, as a homeowner, need to learn about a new process? Yes. Are they impossible? Absolutely not. For example, agents with the Certified Distressed Property Expert® (CDPE) Designation receive thousands of short sale approvals on a monthly basis. These professionals have undergone extensive training in methods to help homeowners in distress and process short sales. While there are no guarantees in any transaction, more and more short sales are being approved regularly. This is far from an impossible process.

Myth #6) Banks Are Waiting On A Bailout And Not Accepting Short Sales You may have heard this, but the reality is that banks (and the U.S. government) are trying to do anything they can, within reason, to avoid foreclosing on properties. It is preposterous to believe they would deny a short sale in hopes that some future legislation would pass and pay them for losses.
Today, more banks are aggressively pursuing short sales and working with agents who understand how to process them. Freddie Mac recently hosted a national training Webinar for real estate agents where they expressly stated the organizational goal of “eliminating distressed assets through modification or short sale.”

Myth #7) Buyers Are Not Interested In Short Sale Properties This is a myth that potential sellers hear all the time. Thankfully, this is just not true. In fact, many agents are getting calls from buyers who say they only want to look at foreclosure and short sales.
For buyers, short sales and foreclosures have become synonymous with “good deals.” More specifically, international buyers are targeting these properties. Listing with an experienced agent who is educated in the short sale process will provide you with a great chance of quickly seeing a contract on your property.

In conclusion, these ideas are potentially harmful to homeowners seeking real solutions. I hope you’ll review this information for yourself or share it with a homeowner in need. In these times, we all need to know the truth to know how to get back on track.

Recent home buying trends are showing that there are more home loan applications right now than there have been in the past few months. Along with that rise in home loan applications, interest rates on home loans have dropped below 5 percent on a 30-year fixed mortgage, according to one industry group.

The increase over the past few weeks marks approximately an 8 percent increase in mortgage applications since the previous year. This is good news, as the housing market around the country has been hit pretty hard during the current economic crisis. This increase suggests that the housing market is starting to stabilize, after having been in a slump for the past three years.

Still, there is always the possibility that we may not be entirely out of the woods. Some argue that the government programs, such as the new home buyer credit, have propped up the market, and that the market will turn sour again once the program expires at the end of November. There is talk in Washington of trying to extend the program well into 2010.

The rise in the past few weeks comes on the heels of an unexpected rise in the sale of previously owned homes in September, according to statistics provided by the National Association of retailers. Previously owned home sales were at their highest levels in three years, in part because consumers are scrambling to meet the November 30 deadline.

In addition to the new home buyer tax credit, there are other factors that have contributed to the rise in new home loan applications, as well. Not the least of these is the drop in interest rates.

Along with those new home applications, rates have dropped significantly. The average rate on a 30-year fixed mortgage was 4.97 percent at the end of October. While this was still higher than the low of 4.61 percent set in March of this year, these rates are well below the 6.47 percent average of just one year prior.

Refinancing is also increasing, by almost 15 percent in October. These low interest rates are, at least in part, responsible for the increase in refinancing loans.

If you’ve been living in a rental property or apartment, you may not have given much thought to buying a new home. Sure, friends and relatives bug you about getting your own place, but you haven’t necessarily seen a good reason to do so.

Buying your own home, however, has several distinct benefits, each of which is appealing in its own right. Here are just a few:

Appreciation

While real estate values do cycle, overall real estate grows in value. Over the decades, real estate appreciation is consistent. Home ownership can be something of a hedge against inflation.

Tax Considerations

Buying a home has some huge benefits in terms of your taxes. As long as you owe less on your mortgage than your home is worth, you can deduct your interest from your tax return. This can add up to big bucks, as the largest portion of your mortgage payment goes to interest.

You can also get another tax benefit from buying a new home. As long as you have lived in a home for two of the previous vie years, you can reduce your capital gains. Specifically, you can exclude up to $250,000 for an individual or up to $500,000 for a married couple. There is no requirement to buying a replacement home, and there is no age requirement. You can do this every two years, which means you could literally buy and sell a home every two years (under those amounts) tax free.

In addition, if you get more profit than the allowed exclusion when you do sell your home, the profit is considered to be a “capital asset,” which gets preferential treatment for tax purposes.

Finally, you can also deduct property taxes for your home.

Equity

One of the best reasons to buy a home is to build equity. Every month when you make your mortgage payment, part of the payment goes to the principal. As you pay more of your mortgage, you build up a difference between what you owe on your loan and what the home is worth.

Eventually, you can use that equity for a number of purposes. For example, you can take out a home equity loan, which will allow you to get cash for home improvements, medical bills, start a business or even pay off credit cards.

More and more, new home buyers are taking advantage of the FHA-insured home loan options. These loans are insured by the Federal Housing Administration, and have some very specific benefits for home buyers.

The principle behind the FHA home loan is to be able to help families of moderate to low income level become homeowners. The FHA home loan accomplishes this by reducing some of the costs involved. In addition, the loan protects the lender, and encourages the lender to make loans to potential home buyers who might not qualify using conventional underwriting metrics but that still have good credit.

FHA home loans are designed to get families into homes with very little cash out of pocket. However, there is talk in congress that this may change. One bill would change the amount that a buyer is required to put down as a down payment. Currently, FHA home loan borrowers can buy their home putting down 3.5 percent and closing costs can be wrapped into the loan. The bill would raise the cost to 5 percent, and prevent buyers from wrapping in the closing costs.

Depending on the situation, this could astronomically increase the amount that a home buyer would need to put up to get their home. It could go as high as ten percent, including five percent for the down payment and around five percent for closing costs.

The bill’s sponsor, Representative Scott Garrett of New Jersey, says that the bill is “is aimed at shielding taxpayers from the risk that the FHA portfolio presents.” Whether or not the bill would accomplish this is, of course, being fiercely debated. Home buyers and lenders alike are waiting to see what happens.

If you’re thinking about trying to get an FHA loan, there are some things you can do to get ready. First, recognize that each lender sets its own terms on loans, so it pays to do some comparison shopping.

You should also recognize that the lender will want to make a decision as to your risk. They’ll look at your credit history and your debt-to-income ratio, just like if you were applying for a traditional mortgage.

You’ll need to have the same kinds of paperwork ready, too. You’ll need employment documentation, and for an FHA loan need to have been employed for two years in the same field. You should be aware of your credit score, and know that it should be above 620 if you hope to qualify for an FHA home loan.

There is no better time than now to buy a new home, especially if you’re a first-time buyer. We’ve talked before about how today’s current conditions create something of a “perfect storm,” making it the best time to make that all-important decision to buy a new home. Today, we want to look at one aspect of the process: pre-qualifying for your home loan.

Pre-qualifying for a home loan is the process whereby your lender takes a look at your credit profile, debt-to-income ratio and other factors to give you an estimate of how much they’re willing to loan you. Prequalifying lets you know how much you can afford to spend on a home, and makes the process of home hunting a much easier one. When you know that a home falls in your prequalified range, you can save tons of time looking at houses outside of your budget.

Your lender is going to need several things in order to prequalify you. You’ll need to provide a list of assets and liabilities, proof of your income and information about your monthly obligations. You’ll also need to give the lender permission to run a credit report.

You should also understand that prequalifying isn’t a guarantee or an actual loan; it’s just a tool to give you an idea of what kind of loan you can get. If your credit situation changes, or if your employment situation changes before you close the deal, the bank can refuse to follow through with that loan amount.

You also need to recognize that your actual budget may be less than what the lender is willing to give you, so make sure you know what you can really afford before you commit. If this is your first home, especially, you need to identify all of the regular costs that go with home ownership. In addition to possibly increased utility costs compared to a rental situation, you’ve got to factor in things like the cost of upkeep and maintenance. And, while the cost of insurance and taxes can be worked into the mortgage cost, don’t forget that they play a part in the overall picture, as well.

The recent economic downturn and subsequent efforts by government to loosen up the credit crunch have created a truly unique environment when it comes to home prices. In many places, housing prices have dropped dramatically. According to one study by Fiserv Lending Solutions the national media home price is down as much as 26% since home prices peaked in 2006. In some places, prices have dropped even more drastically.

Median Single Family Home Prices

Homes are selling in places that foreclosures are rampant, such as states like Arizona, California, Florida and Nevada. In the last quarter of 2008, almost half of all home sales fell into the “distressed” category, meaning that they were either foreclosures or short sales. As more and more foreclosures hit the market, traditional sellers have had to cut their prices in order to keep up.

This is, in many ways, a buyer’s market. You can make low home prices work for you, if you know where to look. Finding the right bank owned home, or finding a home where the seller is asking for less than they owe on their mortgage can get you quite a good deal on a home.

There’s another way you can make low home prices work for you, however. You can use the low home prices from short sales and from foreclosures to add pressure when making an offer on a home. Traditional sellers know that they have to compete with these homes, and may be willing to give a lot more in their negotiations than they would have just a couple of years ago.

By studying your local market and exploring all of the available options, you can make these low home prices work for you. You may be able to find the ideal home for your family, and to find it at a much lower price than you’d have hoped for.

The properties on these videos are located in the Highlands and Sunnyside neighborhoods. Both neighborhoods are in north Denver and have been very active markets.

For more information on the Highlands or Sunnyside neighborhoods, or any of these properties you can contact John at 720-353-0353.