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Digital Showings

by The Colorado Springs Group™

Ask any real estate professional if they have sold a house without the buyer having physically seen it and they’ll most likely tell you they have. While it may have been an unconventional sale, it is more prevalent today than it was twenty or even ten years ago.

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The digital world of the Internet has changed the process of buying a home. It is evolving as people have become more comfortable with the reliability of the information available.

Getting in a car and driving around all day looking at homes that may or may not fit your needs or wants is not productive for buyers or the agents.

The quality and the quantity of pictures has dramatically improved in the last twenty years. Buyers and agents alike can view a property online and get a fairly accurate idea of the condition and layout of home and whether it warrants a physical visit. Videos can “walk” you through the house to be able to assess if the floorplan will work for you.

The 2015 Profile of Home Buyers and Sellers reports 89% of all buyers cited an online website as an information source with real estate agents being a close second at 87%. 42% of all buyers looked online for properties for sale as the first step taken during the home buying process.

Interestingly, 87% of buyers in 2015 purchased their home through a real estate agent or broker compared to only 68% in 2001. The agent services deemed most valuable to buyers were help finding the right home to purchase (53%) and help to negotiate the terms of sale (12%) and the price (11%).

A challenge for sellers is to understand that the digital showings are a critical part of today’s process. They save time and money for both buyers and are convenient because they can be done at any time of day and from anywhere. The difficulty is the seller’s feelings of inactivity when they believe their home is being shown frequently.

Agents can share statistics that show a variety of digital activity like number of unique visitors, length of time spent on the listing site as well as the other features that were accessed. 65% of all buyers walked through the home they purchased after they viewed it online.

Pay Yourself First

by The Colorado Springs Group™

The principle to pay yourself first has been referred to as the Golden Rule of Personal Finance.

The concept is that one of the first checks you write each month is for your own savings. The rationale is that if there is no money left after a person pays their bills, there is nothing to contribute to savings or investments that month.

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By establishing a priority to save, a person realizes that the balance of their monthly income must cover living expenses and other discretionary spending. This is a much different strategy than saving what is left over from monthly expenses and other spending.

Many financial experts have likened an amortizing mortgage to a forced savings account because a portion of each payment is applied to the reduction of the principal amount owed. Some homeowners have taken that concept further with a shorter term mortgage to build equity faster.

In the example below, a $250,000 mortgage at 4% interest is compared with two different terms. The 30 year mortgage would have payments of $1,193.54 each month with the first payment having $360.20 being applied to the principal. Each payment would have an increasingly larger amount applied to the principal.

The 15 year mortgage would have payments of $1,849.22 each month with the first payment having $1,015.89 being applied to the principal. The $665.68 difference in payments goes toward reducing the loan amount and acts like a forced savings.

A homeowner might opt for the longer term and intend to put the difference in the two payments in a bank savings account each month or make an additional principal contribution to pay the mortgage down. However, as any person responsible for paying household bills knows, there will always be something that comes up that could hijack your intentions.

By committing to the shorter term mortgage, a borrower is committing to make the higher payment each month and the benefit is that it will reduce your principal balance faster.

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2016 January Sales Activity

by The Colorado Springs Group™

Broken down by area to give a better prospective on the results for the January. Single Family & Patio Homes

Black Forest: 7 Sales for a total dollar volume of $4,202,925

Briargate: 50 Sales for a total dollar volume of $17,878,546

Central: 52 Sales for a total dollar volume of $11,884,570

East: 59 Sales for a total dollar volume of $11,549,236

Fountain Valley: 131 Sales for a total dollar volume of $28,235,224

Falcon - Peyton: 51 Sales for a total dollar volume of $14,285,108

Marksheffel: 22 Sales for a total dollar volume of $5,929,183

Northeast: 69 Sales for a total dollar volume of $16,387,625

Northwest: 31 Sales for a total dollar volume of $10,488,545

Northgate: 25 Sales for a total dollar volume of $11,175,762

Old Colorado City: 20 Sales for a total dollar volume of $5,281,154

Powers: 91 Sales for a total dollar volume of $21,964,871

Southeast: 46 Sales for a total dollar volume of $7,537,140

Southwest: 46 Sales for a total dollar volume of $14,359,501

Tri-Lakes: 34 Sales for a total dollar volume of $14,713,799

West: 17 Sales for a total dollar volume of $3,745,562

"Based on information from the Pikes Peak REALTOR Services Corp. ("RSC"), for the period 1/1/16 through 1/31/16.  RSC does not guarantee or is in any way responsible for its accuracy.  Data maintained by RSC may not reflect all real estate activity in the market."

Homeowner Advisory

by The Colorado Springs Group™

Similar to an annual wellness physical, homeowners should consider an annual review of the financial elements of their home. It’s particularly valuable based on the fact that their home and its equity is generally, one of their largest assets.

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  • List of similar properties recently sold and currently available
  • Information on challenging property tax assessment
  • Refinance Analysis to:
    • lower your rate
    • shorten the term
    • make improvements
    • eliminate mortgage insurance
    • remove a person from the loan
    • eliminate credit card debt
    • combine loans
    • take cash out of the equity
  • Equity Accelerator to retire the mortgage within a specific period of time
  • Repairmen and contractors recommendations
  • Information on rental property opportunities
We’d be happy to provide this information at no obligation as part of our on-going commitment to providing homeowner information, both in general and specifically, to our contacts. It is part of a long-term strategy whereby we hope to earn your loyalty and referrals when you do need our services to buy or sell.

Happy Valentine's Day

by The Colorado Springs Group™
Happy Valentines Day


Love is a promise, love is a souvenir, once given never forgotten, never let it disappear.
- John Lennon
 

It's a Big Difference

by The Colorado Springs Group™

Let’s say that you just won $8,750 on a lottery scratch-off ticket. You’ve decided to be frugal and invest the money and have decided on three alternatives: buying a certificate of deposit, a mutual fund or use the money as a down payment for a $250,000 home.

To compare the three alternatives, let’s look at the equity in each one three years from now.

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The certificate of deposit can be invested at 1.3% in today’s market and you believe you can reasonably earn 5% on a mutual fund. You expect the home to appreciate at three percent a year.

The certificate of deposit would be worth $9,096 at the end of three years and the mutual fund would be worth $10,129. However, the equity in the home at the end of three years would be $45,204. That is a four time’s higher yield on the home.

One of the main reasons for the big difference is that the buyer benefits from leverage: the use of borrowed funds to increase the results. The $8,750 down payment is controlling a $250,000 investment. The appreciation is determined by the price and not merely by the cash invested. Another factor is that the loan balance is smaller at the end of five years than originally borrowed due to amortization.

There are certainly other factors to consider such as maintenance and other expenses but when the financial benefits are as strong as they are, it certainly deserves a much closer investigation. One of the first things to consider is whether the borrower can qualify for a mortgage and the only satisfactory way to be certain is to get pre-approved by a trusted mortgage professional.

Use the Your Best Investment calculator to make your own projections.

Is Understanding Costing You Money?

by The Colorado Springs Group™

People tend to fear what they don’t understand. Homeowners understand fixed rate mortgages and remember the horror stories of people who lost their homes because they could no longer afford them when their adjustable rate mortgages went up.

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Interest rates on fixed-rate mortgages have be so low for enough years, that borrowers haven’t even given much consideration to an adjustable rate mortgage. Changes in the way adjustable rate mortgages are now made make them much safer for borrowers who understand not only how they work but know they’ll only be in the home for a limited period of time.

Adjustable rate mortgages can go up or down according to an index that the lender has no control. The amount that can be adjusted is limited by caps for each period and for the life of the loan. While there are different periods for ARMs, the most popular lock the first period for five to seven years and then, can adjust annually after that.

One quick and easy way to determine whether an adjustable may be a viable alternative to a fixed would be to determine the maximum payment adjustments possible to find out when the savings from the early years are exhausted which would be the breakeven point. If the borrower is certain they’ll move prior to that date, the ARM will definitely provide a lower cost of housing.

The breakeven point for a $250,000 mortgage would be 8 years 3 months comparing a 2.9% 5/1 adjustable-rate with 1 and 5 caps to a 3.8% fixed-rate mortgage. In the initial five-year period, the payments on the ARM would be $124.32 lower and the unpaid balance would be $3,522 less than the fixed-rate to make a total savings of $10,981.

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Whether you’re buying or refinancing, get some good advice from a trusted lending professional about the adjustable-rate alternative. If you’re only going to be in the home a short time after the mortgage is made and your tolerance for risk allows you to feel comfortable, the ARM may be the best choice for you. Check out this ARM Comparison to use your own numbers.

Displaying blog entries 1-7 of 7

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The Colorado Springs Group™
6665 Wild Indigo Drive
Colorado Springs CO 80923
(719) 799-3686

Kevin & Jessica
The Colorado Springs Group
6665 Wild Indigo Drive
Colorado Springs, CO 80923
(719) 799-3686