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Ask the Expert: Golden Opportunities




Amy Dorsey, president of the Colorado Association of Realtors, offers advice on how to navigate today’s listings.

Amy Dorsey, president of the Colorado Association of Realtors, offers advice on how to navigate today's listings.

Q: What should homebuyers keep in mind if they're considering buying a foreclosed home?
A: A smart realtor is going to do the homework for you, so you know who you're dealing with on the foreclosure and how much time it might take . Obviously, the realtor will have looked at the property and will know what condition it's in; oftentimes, foreclosed homes aren't in great shape. Maybe they've sat empty for a long time, and they might have a lot of deferred maintenance and exterior work that needs to be done. A really smart realtor will give buyers an accurate picture of the home. Even if you're buying for investment only, you should know what kind of money you have to spend after the purchase to make the home desirable for renters or future buyers.

Q: Do you have any tips for homebuyers interested in buying a home at auction?
A: All the auctions are different. Typically, you're buying the home ‘as is.' You have the right to go through the home and have it inspected, but the sellers aren't going to do anything on the home, so it's kind of the ‘buyer beware' scenario.

Sometimes it works very well and buyers get an incredible deal—and it works well for the seller because then the seller is done. In resort communities, that's often why an auction happens. The seller just wants it over with. They're tired of waiting to sell, so auctions can be great ways of obtaining your second home, too.

Q: Can you offer any advice on negotiating a short sale?
A: A short sale, sometimes, is a much better option for a buyer because the homeowners are still in their home. They can't sell the house for what they paid for it, but the home probably has been taken care of.

The hard part is the length of time. An auction is over quickly, but in a short sale, it could take months to try to work through the [negotiation] process with the seller's bank. Sometimes people give up and move on.

Q: To put all of this in perspective, this market offers homebuyers some great deals, right?
A: It does. It is a buyer's market. There are motivated sellers out there. If you've got a good realtor or broker, that person's going to help you find those deals and help you negotiate them. There are so many sellers who would just love to have an offer, so they will try to make the deal happen.

We have had some issues with finding financing, but I think most people are finding the money to buy if they want to. There's always a way to get the deal done if someone is ready to buy.

Barbara Schirkofsky, president of residential lending at Denver-based Vectra Bank, explains the money matters behind today's home-buying process.

Q: What's the state of the lending market these days?
A: It's back to the basics. It's about assets, income and good credit. You actually have to qualify and demonstrate that you've earned the right to own a home.

Q: What incentives does the stimulus package offer to homebuyers?
A: The stimulus package has a [first-time homebuyer] tax credit of up to $8,000, which does not have to be repaid, for homes bought after Jan. 1, 2009, and before Dec. 1, 2009.

And the stimulus package offers a refinance opportunity for people who have had a decline in home value and now want to refinance because, possibly, they were in an adjustable rate mortgage and it's ready to adjust. There's an opportunity for people to refinance their mortgages in areas where home values have sharply declined—if those people have good credit, have never missed a payment and have demonstrated that they can make the payment.

Mike Rinner, executive vice president of Englewood-based market research firm the Genesis Group, examines the state of the housing market from the Front Range to the Western Slope.

Q: How is the Colorado real estate market faring?
A: The lower-priced segments saw the first round of price declines. What happened was we started having higher rates of foreclosure three years or four years before the rest of the country did, and we suffered with it for a long time. But our upper price segments held firm quite a bit longer.

What we've seen over the last six months or a year is increasing pressure on the upper-end market, which was fairly healthy until the stock market drops started last fall. That really reduced demand at the upper price ranges. People who had a lot of their assets in equities markets are just not as willing to buy.

The other thing that happened was we were getting quite a lot of speculative custom home building at the upper price ranges. There are a number of custom-home builders who are going to be losing their spec homes this year to the lenders; those homes will come back on the market as foreclosures. It's not a huge, huge part of the market, but it is happening.

Q: Where is the housing market headed this year?
A: It's hard to tell because what we've seen is a lot of pent-up demand. ... [Many homeowners would] really like to sell, but they don't want to sell in the down market, so there's a lot of waiting. It's going to take a significant economic turn to shake that loose, an economic turn that doesn't include an increase in interest rates.

Q: Looking beyond the doom and gloom, are there any positive notes?
A: There are opportunities, especially in second-home markets. Where you see more than a year's supply of housing—40 months' supply in Ouray,  28 months in Pitkin County, 26 months' supply in Archuleta County—there are likely to be some opportunities in those markets.

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