Agent Education

Real Estate Appraisal Hacks to Get Under Contract

Don't get outbid or underfunded due to appraisals. You might bid $20,000, $30,000, $50,000 or even $100,000 over the asking price, and it may seem obscene to you. But, if I pay $100,000 over asking, and overvalue, how long will it take to make that value back? You'll still make it back and quickly. Denver Metro appreciate lately at double digits during the past couple of years. Will you purchase this and is this the height or is this a bubble? 
We have a strong economy underneath to help ensure you will make back that additional money you spent to secure the home of your dreams. Prices of homes will not come down. Builders can't build their way out of this because of supply chain issues.
The largest group of home buyers is 30. We have the next 2 to 3 years of supply issues to contend with. So you may be asking, "How do I get in? What are some of the hacks I can use?"
Let's talk about appraisals.
Desktop Appraisals:
It had been that you could request a desktop appraisal if you know that a seller had COVID, or requests to have a desktop appraisal to avoid having people over. This means the information is gathered from comps, historical data, past photos of condition inside and out.
This has stopped, but a variation is restarting. The pandemic is no longer a valid reason. Sandra Thompson said she'd bring it back in January. That didn't happen until now. It's very small. You can request a desktop appraisal, AUS for conventional only, Fannie, Freddie, not FHA, purchased as a primary residence with a minimum of 10% down. If you do a desktop appraisal and it comes in low if it goes higher than 90%. Let's do the math. $600,000 home. You put $60m000 down. If the value comes in at $560,000, now the loan is no longer at 90% because of that. If that happens, Fannie and Freddie will keep using a desktop appraisal, it won't go away.
When do you want o use a desktop appraisal?
Absolutely you want one if the listing agent has pictures of the home that are better than the current conditions.
You've done the walk-through, you'll do the inspection. But from a value perspective if I know the house has gone through some wear and tear, if it's currently being rented, or there are extenuating circumstances that would detract from the overall experience of the appraiser when they walked through it. What if the home backs up to a grocery store? Is that a distractor? No. But if there's nothing hiding that. That may affect the experience of the appraiser again. They are supposed to be completely unaffected by these factors, but they are human.
When you do not want to use a desktop appraisal?
When you are on point, remodels done, etc. when you want measurements to be done, you want a full report.
The benefit of a desktop appraisal is that anyone involved can give it to the appraisal company - photos, comps, etc. to the appraiser to evaluate. The agents can meet the appraiser at the home with a comparables package. 
Speed and price are factors too. It may be faster if there are not many appraisers in the area. Denver - appraisers are bored. Not enough for them to do.
This is coming back as an option March  6.
Appraisal Waiver
An appraisal waiver can get when you run through the AUS and it tells you that data from Fannie and Freddie, had a loan, and it was insured by Fannie or Freddy. That database can determine the appropriate value of that home based on the appreciation numbers that exist and past history. The value that is put in the file was within the bracket too.
Example: listed $739k, $851k offer, and got appraisal waiver?
This means you do not need to order an appraisal as long as the parameters of that loan don't change.
What if you put 20% down, and then changed it to 15%,? You could lose the appraisal waiver because you changed the parameters of the loan.
They can be run before you go under contract. If you don't get it, the loan will be terminated based on the non-fulfillment of that contract.
 
Appraisal Gap Insurance.
If you go in with an asking price of$739,000 and offered $851,000, what if you don't get the waiver? "I'll cover the gap". 20% down, shift the loan to value and absorb the difference and not have that buyer bring extra to the closing table. This is also known as mortgage insurance.
Feels like cash is king. It's extremely competitive.
What are the disadvantages if I don't have cash?
In the last 30 days in the Denver market, 18.7% of the closings were done with cash. The remainder had a loan. You have only a slight disadvantage, but you are not in an end-all situation.
Know your appraisal options. The Rueth Team Fairway Mortgage can do a TBD underwrite before you find the property so you can close it in 8-10 days. Learn more about this option by calling our office.

Lending: Reverse Mortgage Style

Agents, do you want more listings? Who do you know who is retired, nearing retirement, in an age-inappropriate home, and has equity which gives them options? Our Retirement Mortgage Specialist, Gabe Bodner joins me today and we are discussing how you can help your clients take advantage of a Reverse Mortgage, and get you more listings, especially in the crazy low inventory Denver market!
Feel free to reach out to Gabe and his team directly at: gabe@bodnerteam.com or 720-600-4870

When should you back out of a deal?

Back out now? Or stay in the game? Well, the politician's answer is, "It depends." Every home and buyer situation is different, so this question should be assessed as such. If you or your buyer are unsure about anything in the inspection report, are unsure of any conditions, or feel it's just not the right move, have an "A-Team" on standby to answer questions and assess situations on a case by case basis. Get some quick tips to determine the best course of action in this episode of the Double Comma Club, "When should you back out of a deal?"
In this episode you'll also get a taste of Nicole's dream in an unlimited future ala Kenny Rogers.

Give Your Buyers an Edge in a Competitive Market

This episode is for agents AND sellers.  With inventory so tight, we have to be on point with our lending solutions because BUYERS NEED AN EDGE.  Here's what that looks like appraisal gap insurance, appraisal waivers, earnest money guarantees, and loan objection waivers. PLUS all the creative loans to match the opportunity.
What is a TBD underwrite? This is where you disclose the loan, gather all income and asset documentation, we completely underwrite that file for a particular TBD purchase price, with estimated insurance, taxes and amount down, qualify to verify income and assets, then all you need is the property. That can give you the ability to waive the loan objection. Would this help you the buyer gain an edge? You bet it will!
Nicole and her team are specialists in this to help your buyers, agents. Buyers, ask your agent to get help with this. There are more tips in this episode that will help you purchase the property you have found. This will tell people you are good as cash when it comes to the loan.
We still need to go through the inspection and appraisal process, but as a verified cash buyer you have a huge advantage. She also covers appraisal gap insurance and the logic behind it.
There are bonus tips for credit repair.

Increasing Your Dollar Per Hour #TNBTCO

Do you know what your dollar per hour is? How do you value yourself and your time? Do you have a fear of delegation? These are just a few of the key points that this incredible panel will be speaking on at THE NEXT BIG THING. With how quickly our market moves, it's crucial to learn time (and money) saving tactics to increase your dollar per hour. LEARN MORE & PURCHASE TICKETS at: www.thenextbigthingcolorado.com

Leveraging Real Estate to Build Your Investment Empire

Say hello to Jay Clark, Nicole's personal financial advisor! Jay has been her advisor for some time now and specializes in portfolio management that includes real estate investments. He's a rare breed of financial advisors that is able to weave real estate into the big plan for building your financial empire. You'll want to hear this taken from an Agent Ignite panel discussion in October 2021.
About Jay:
Jay Clark, Founder of Lucet Advisors has been helping business owners and individuals since 2002. Certified Exit Planner (CExP™) and Financial Advisor. He focuses his practice on business owners, healthcare professionals, and pre-retirees. Not a Denver native, but grateful to call it home since 2000. Proud father of 3 boys, active outdoor lifestyle.

Short Term Rentals Made Logical and Lucrative

 
We hear about owning short-term rentals. Many of us take advantage as we have started traveling again. Gone are the days when you could grab some random property in a decent area, furnish it with Goodwill furnishings, and make a profit after covering your mortgage. Listen as Nicole's guest Michael Vialpando makes it simple to understand how to do this, and enjoy the process.

The Next Big Thing - Rueth, Kruger, Soto, Alba, Veden January 20 - 21 2022

I'm SO excited! The Next Big Thing is approaching and I can't wait. I will of course be there sharpening my own saw, but I will also be SPEAKING. I'll be giving the latest updates in Lending, and what to expect down the road. I hope you're as excited as I am; The Next Big Thing is coming, and we hope to see you there.
We are thrilled to have Katie and her expert panel speaking about Commercial real estate trends, and how that affects the Residential Real Estate Landscape. Katie is the CEO of the Denver Metro Commercial Association of Realtors, which represents 2,000 commercial real estate professionals across Colorado!

The Next Big Thing - A Real Estate Experience January 20 - 21 2022

The Next Big Thing is shaking up how Real Estate professionals will define business success. This two-day event will be far from typical. While our past may have shaped us, it is time to define the future. This energy-rich, content-driven event will introduce the biggest drivers shaping the industry, and instill how to harness the next big thing to catapult your own business.
Built on the foundation of helping others build wealth through real estate, The Rueth Team has created the ultimate tool that is The Next Big Thing. Over the course of two days, you will hear from industry leaders and pioneers who have paved the way and achieved the highest levels of success. They are leaders who inspire, and businessmen and women who are challeging the 'norm.' You'll discuss how the world is changing and what’s needed to stay two steps ahead. Together with four hundred and fifty other professionals, you will build a foundation to become the Next Big Thing.

Where did all the under $500K homes go?

The July DMAR Market Trends data was released this week, and there are two notable trends. First, when comparing 2021 to pre-covid 2019, our seasonality is falling back into normal ranges. We have a healthy influx of listings which were up 8 percent, 2 percent more homes went under contract, and there were 7.5 percent more closings when compared to 2019, yet we continue to see three times the price growth. If I return to our current month-over-month or year-over-year and stop there, we are bleeding red.
But the real story is in the green. Green month-over-month active listings are eluding to hope that more balance is on its way, yet green double-digit annual closed prices say that balance may not arrive too quickly. The second trend that stuck out is that year-to-date, homes priced over $500,000 are flying off the shelves compared to 2020 and 2019, with more homes at higher prices coming on the market, going under contract, and closing. Year to date 54 percent of all homes sold in the Denver market were over $500,000. In July, that number spiked to 74 percent. Where did all of the under $500,000 priced homes go?