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Finding the Right Agent for You
Episode 1: Show Notes
Episode 1 ~ Finding the Right Agent for You
Agent, real estate broker = In Colorado, all agents are also brokers.Realtor = A broker that is also a member of the National Association of Realtors, which is a professional organization adding a layer of ethical and professional accountability.
Realtor = A broker that is also a member of the National Association of Realtors, which is a professional organization adding a layer of ethical and professional accountability.
Agency Capacity = All fiduciary duties are owed to the client, meaning this person’s job is to get the best price and terms for the client.
Transaction Broker = Permitted in states where non-agency relationships are allowed. These relationships vary considerably from state to state. Generally, the duties owed to the consumer in a non-agency relationship are less than the complete, traditional fiduciary duties of an agency relationship.
When hiring an agent what should they offer?
- Expertise in the areas you are looking to buy or selling
- Exhaustive research and searching power
- Strong negotiating skills
- Strong personal relationships within the industry and community
- Adhere to a strict code of ethics
- They’re your sage parent/data analyst/therapist—all rolled into one
Take your time, ask a lot of questions, and find a good agent that fits your needs. There are about 38,000 licensed agents in the state of Colorado and of that; about 7,500 of them are in the City of Denver.
How to get connected to the right agent?
- Ask around, talk to the people you know and trust, and see if they have an agent they can recommend
- You’re welcome to give me a call and we can see if we’d be a good fit, if not I’d be happy to help you find a great agent to fit your needs
- Check agent profiles on Realtor.com
- Visit open houses and meet some agents to chat with
When choosing an agent make sure to ask:
- What level of service do they provide?
- Are they a full-time agent or part-time, do that have another job?
- Are they a flat-rate or discount broker?
- What experience do they have in the area you are looking to buy in?
How do real estate agents get paid?
In most cases, the broker will be paid a percentage of the sale price at closing. I’ll walk you through this a little bit. As an example and for simple math we’ll use a sale price of $300,000 and commission rate of 6%. When signing the listing agreement, the seller and the listing agent agree to a percentage of the sale price to be paid to the buyer’s agent at closing. The listing agreement is the contract between the seller and the listing agent.
In this scenario, the commission will be 6% and the contract states that the listing agent agrees to pay 3% of the 6% commission to the buyer’s agent at closing on behalf of the buyers.
$300,000 x 6% = $18,000
3% of this is going to be paid to the buyer’s agent.
So, $9,000 is paid to the listing agent and $9,000 is paid to the buyer’s agent at the time of closing.
The Buyer Process
Episode 2: Show Notes
Episode 2 ~ The Buyer Process
This episode covers the general process of buying a home in Colorado.
You’ve most likely started your search even if just online. When you’re ready you’ll need to hire an agent to represent you. We covered how to find a great agent in Episode 1, if you’ haven’t listened to that one yet take some time to go back and take a listen.
When you’ve chosen the agent you’d like to work with you will sign a buyer agency agreement, this is the contract between you and your agent that hires them to represent you and outlines what services they will provide.
Step 1 – Getting pre-approved for a loan
Step 2 – Defining and narrowing down your search criteria
– What do you want your daily lifestyle to be like?
Step 3 – Search for the perfect home for you
Step 4 – When you find the perfect home and are ready to put in an offer you’ll sit down with your agent and go over all the details outlined in the purchase contract such as price, timeline, etc.
Step 5 – assuming everyone agreed to the terms of the contract and you’re moving forward the following will be roughly the order of tasks.
- Deliver earnest money*
- Send a copy of the contract to the lender
- Schedule inspections and inspection resolution with the seller
- Property insurance
- Survey or ILC
- Appraisal review
- Final walk thru on the property
- Final approval of the loan if using one
*Earnest money – when you execute a contract you define in the contract the amount of collateral you as the buyer are willing to put up to show you will work in good faith to closing. The contract specifies the amount and time of delivery. This check will be cashed within a day or 2 of being received and at closing the money is credited toward your down payment and closing costs.
Mortgage Basics Part 1
Mortgage Basics Part 2
Episode 4: Show Notes
Episode 4: Mortgage Basics – part 2 with Rebecca Hansen
What is a pre-approval letter?
- A pre-approval letter is what the lender will provide to you after they speak with you about loan product options, review your financials, credit, and work history. This letter will outline the type of loan you are planning to use, the loan amount you qualify for, and the amount of money you are using as your down payment.
Why is a pre-approval letter from a lender so important?
- A pre-approval letter shows a seller that you have been through the process of speaking with a lender and have preliminary confirmation that the lender will allow you to borrow the necessary money to purchase the home.
How do you obtain pre-approval status with a lender?
- Meet with a mortgage professional such as a loan broker, a credit union, bank, etc.
- To get your loan application started you will need to provide your name, address, social security number, and your basic two-year work history. Work history can be shown with paystubs, W-2s, tax returns, and bank statements. These documents will help the lender determine what loan options are available to you, the interest rate estimate, and the purchase price.
Credit (FICO) score range estimates: Lenders use a tri-merge credit report (3 scores from 3 credit bureaus) to determine what type of loan you qualify for.
- A score of 700+ = Conventional
- A score of 620-700 = FHA
What does debt to income ratio (DTI) mean?
- Your debt to income is the relationship between all of your debts compared to your income.
For example: Current Outstanding debts (i.e. car payments, student loans, credit card payments, etc) + new mortgage payment / Income
- 40-45% or less ratio target.
What does your work history need to look like?
- A minimum of two years – these two years do not have to be with the same company. Gaps of unemployment are ok if you can patch together a total of two years. If you are right out of college and don’t have the minimum amount of work history, as long as you can prove that you have secured a job within your field of study, this will be adequate.
At this point, the lender will take all of this information and work with you on what amount you are comfortable with for your monthly payment, what you have available for a down payment, and what amount of cash you are going to need on the day of closing.
What are closing costs?
- 1-2% of the purchase price and this amount is in addition to the down payment. This total includes interest on the loan from the day of closing to the end of the month, title closing fees and insurance, your credit report, appraisal, underwriting fees, and loan escrows (pays your property insurance and taxes throughout the year).
What will the pre-approval process tell you?
- The loan type
- The total amount you qualify for
- The amount of your down payment
- Your monthly payment
What are Down Payment Assistance Programs?
- Most are income based and driven by your credit score.
- Grant program: These are where the funds are gifted to you and there is no repayment.
- Loan programs: The money is paid back when you sell the home or refinance the loan.
Please note – you do not have to be a first time homebuyer to be eligible for these programs.
What is the difference between pre-approval and an approval for a mortgage?
- Pre-approval: You have filled out a loan application and spoken with the lender.
- Approval: The under writer for the lender reviews all of your documents (paystubs, W-2, etc.) and confirms that you are qualified to receive the loan.
303.884.8481 | Email
The Seller Process
Episode 5: Show Notes
Episode 5: The Seller Process
This episode covers the general process of selling a home in Colorado.
A note about the timing duration of the process discussed: The amount of time this entire process takes depends on your individual situation.
Interview agents and look/listen for these key elements – thorough marketing strategies, will provide professional photography, is well organized, an effective communicator, and a skilled negotiator.
Schedule an initial visit for the agent to see the home.
Schedule a follow-up appointment with the agent to review the pricing analysis.
Choose your agent and sign the listing agreement.
Review property disclosures – these will include a general property disclosure, square footage disclosure, source of water, and possibly a lead based paint disclosure.
Schedule a staging consultation appointment.
The seller should take whatever amount of time they need to complete the items outlined on the staging report.
Schedule a pre-listing home inspection.
The seller should do a “deep clean” prior to any photography.
Agent will schedule the professional photography.
Agent will create print marketing materials.
Take another look at the pricing analysis and make and necessary adjustments.
Agent will make your home ‘active’ on the market.
Scheduling showings: The buyer’s agent will contact the listing office to set a showing. The seller will be notified of the requested showing day and time and can agree or decline that specific request. When the appointment is confirmed, the buyer’s agent will receive the access information for the property. It is best if the seller is not present at the home during showings. Following the showing, the listing agent will contact the buyer’s agent to get feedback on the property.
Offers to purchase: When a buyer wants to put in an offer on your property, the buyer’s agent will work with the buyer to put together the initial contract then provide the contract and any supporting information to the listing agent. The listing agent will present this offer to the seller and discuss the pros and cons of the offer. The seller can then decide to accept the offer, as it is, counter the offer with changes to the price and/or terms, or reject. At this time, assuming everyone has agreed to the terms of the contract and the process begins to move forward, the following list will be rough order of tasks:
- The buyer will deliver the earnest money*
- The buyer’s due diligence opportunities: review title documents, HOA documents, and inspection reports
- Schedule property inspections and inspection resolution with the seller
- Buyer will determine that the property is insurable for a price they are comfortable with
- Schedule a survey or ILC (Improvement Location Certificate)
- Schedule an appraisal review
- Schedule a final walk thru on the property
- Final approval of the loan if the buyer is securing a mortgage
*Earnest money: When you execute a contract you define in the contract the amount of collateral you as the buyer are willing to put up to show you will work in good faith to the final closing. The contract specifies the amount and time of delivery. This check will be cashed within a day or 2 of being received and at closing the money is credited toward your down payment and closing costs.
Home Staging with Roxann Lloyd
Episode 6: Show Notes
Episode 6: Home Staging
This episode will cover the basics of the home staging process. An interview with Roxann Lloyd with Red Chair Designs
What to look for in a home designer:
- Someone who is a collaborative designer who wants to work in partnership with the homeowner
Why hire a stager for a consultation?:
- Having a professional staging consultation can definitely help a home sell faster and for more money.
What is a Home Staging Consultation?
- Two types of consultations: A “walkthrough staging consultation” and a “vacant property staging consultation”.
- A walkthrough consultation is for a homeowner who is still living in their house and will have their belongings there through the selling process.
- A vacant property staging consultation is when the property is vacant and basic furniture and décor will be brought in to give potential buyers an idea of how the home will live.
The Walkthrough Staging Consultation:
- Consultant will take notes of what items need to be taken care of and leave the seller with a checklist.
- The list will start with what needs to be done for the “curb appeal”, then move to what the buyer will see when they walk through the front door. The list will be broken down room by room with tips for the to-do list.
- Remember: Selling your home “looks” different than “living” in your house.
- When staging your home for selling you’ll want to be “invisible” so potential buyers can have a better opportunity to see themselves living in the home.
Follow-through for the staging process:
- You will need to stay on top of keeping the house cleaned up and tidy. This will help you earn more money at the closing table.
- Try to see the staging from a buyer’s perspective.
The Vacant Property Staging Consultation:
- No need to stage every room – only those that are the “first impression” rooms. These include, rooms you see as you walk through the front door, dinning room, master bedroom, a bathroom.
- Only light staging is required. This will include basic furniture: a living room with a sofa and one or two chairs, end table with a lamp and light décor; a master bedroom with a bed, nightstand, a lamp and light décor; a bathroom with only a few towels hung; and a dinning table and chairs in the dinning room.
- All of these items can be rented based on the home seller’s budget and design scheme.
What are the most impactful things to do for a home staging:
- For those on a budget either for money or time or both is to PACK and DECLUTTER!
- Leave only the basics and do a thorough deep clean of the entire property. This will include professionally cleaning the carpets, cleaning the baseboards, cobwebs, etc.
- Take things out of the rooms that might indicate a problem with the property, i.e.: storage shelves, the plunger from the bathroom.
- Pets – take them out of the house for any showings – mostly because it can be very hard on the animals to have strangers in and out.
- If items are of sentimental value or of financial value – take it out of the home or lock them away.
- And items that have your personal information on it should be removed or locked up to protect your personal identity.
- Check your “junk drawers” as these often have things like keys, gift cards, money, or jewelry left in them.
To contact Roxann Lloyd, you can email or call her at 720.320.4029.
Financing for the First Time Homebuyer
Episode 7: Show Notes
Episode 7: Financing for the First Time Homebuyer
This episode will cover mortgage financing targeted towards first time homebuyers.* An interview with JP Gudka with Guaranteed Rate Affinity.
What are the major factors of mortgage financing?
- First apply either online or in person to fill in all the information needed and give the lender the ability to pull your credit report/history
- Credit is a predictor of your credit future
- Credit effects the interest rate you will receive
- Qualifying income – how do you earn your income. A different process is followed for different income sources.
- Debt to Income Ratio – this will determine the most amount of money a lender will loan you based on what the maximum monthly mortgage you can afford.
- The amount calculated is based on a few factors including: revolving debt, instalment loans like credit cards, car loans, etc.
- Down Payment – how much do you have? Do you have money for a down payment? Where is the money coming from?
What is the Down Payment Process?
- Minimum requirements vary by loan products
- USDA & VA loans – 0% down payment
- FHA (requires a 680 minimum credit score) – 3.5% down payment
- Conventional (requires a 680 or above credit score) – 3% down payment
What is Mortgage Insurance?
- This is insurance is to ensure the lender does not have to take the full loss in the event of a loan default.
- If you have less than 20% down for a conventional loan you must have mortgage insurance.
- This insurance can be removed from a conventional loan when you can prove that you have 20% or more equity in your home.
- An FHA loan will always require mortgage insurance regardless of the down payment amount.
- This maybe the best loan to get you into the house immediately, but you can refinance into a conventional loan once you have 20% equity in your home.
What are Down Payment Requirements?
- Preferably would be money in a current checking or savings account.
- Can be a gift from someone but will require a letter stating that the amount is a gift and does not have to be paid back.
- An investment account can be used if the plan administrator allows you to borrow from your 401K.
- A down payment assistance program
- Check with your local city and county for programs available.
- In CO – the most common organization is CHFA (Colorado Housing and Financing Authority).
- These can be a grant that does need to be repaid or possibly a 2ndmortgage that does not require current payments but will have to be paid back when you sell the home.
How credit scores affect your interest rate?
- 850 is a perfect credit score
- Lenders can work with a range of scores.
- 580 is the minimum for an FHA loan
- 680 is the minimum for a conventional
- To positively affect your credit score:
- Monitor your credit use.
- Ensure that someone else is not using your credit without your knowledge.
- Lenders can suggest what you can do to improve your score
- Lenders can use a “What If” scenario tool
- Can run scenarios to see how changes can affect your score.
- Lenders can use a “Rapid Re-Score” tool
- Making a change for the purpose of specifically obtaining a loan.
- Bankruptcy or Foreclosure
- Either of these events are called a “credit major”.
- Foreclosure most likely would not be a factor for a typical first-time home buyer.
- Bankruptcy is where you’ve worked with an attorney to try and wipe your debt clean and start over again.
- Foreclosure is when you’ve not been able to pay your mortgage and your home is taken and foreclosed on.
- You can still obtain a loan based on factors including:
- Bankruptcy – for a conventional loan a four-year waiting period
- Bankruptcy – for an FHA loan a two-year waiting period
- Foreclosure – for a conventional loan seven year waiting period
- Foreclosure – for an FHA loan a four-year waiting period
What is Title Insurance?
Episode 8: Show Notes
Episode 8: What is Title Insurance?
This episode will cover the details of title insurance for a property. This is an interview with Courtney Rogers, Escrow Officer with First American Title company. This interview covers the process used for Colorado.
What does the title insurance company do for you?
- There are two parts to title insurance company process in Colorado.
- Insures the property (the land that the structure sits on).
- Manages the escrow transfer process for the buyers and sellers from the title of contract to purchase to the closing and transfer of the title and money (including earnest money) from the buyer to the seller
- What is escrow? Escrow holds the money that needs to payed during the title and property transfer process.
- The title company handles all questions during the process of preparing the deed that will transfer the title between the seller and buyer.
- The title company acts as the “scriber” which is the process of preparing the documents needed to be signed.
- Additional items the escrow officer and title company complete are:
- Any HOA documents that are needed if the property is part of an HOA.
- Works with the lender to insure all fees and funds are collected.
- Handles all documents that need to be signed for the lender.
- Works with all parties to ensure there is a successful closing on the property.
- Organizes and schedules the signing of all of the closing documents.
- After closing the title insurance company disperses all funds to the proper parties.
- They also file and record all of the documents regarding the sale and title transfer of the property to the county as it is considered a “public record”.
- Transfer deeds include:
- Warranty Deed – covers all historical records of the deeds of transfer for the property.
- Special Warranty Deed – mostly for “fix and flips” or when an owner only is going to own the property for a short amount of time.
- Deed of Trust – secures the note/mortgage that the buyer is taking out on the property.This gives the lender first position to collect on the property in the event of a foreclosure.
- Colorado is a “table funding state” which means once all documents have been signed, all funds are released to the proper parties involved.
What is a title insurance policy and what does it cover?
- When a property goes under contract, the title company requests a title search for the property.
- This is to commit that a title insurance policy will be purchased.
- There are two types of policies that are purchased:
- A lender’s policy: Insures the lenders interest in the property.
- An owner’s policy: Insures the title transfer will go smoothly and that all interested parties have previously been satisfied.
- Each policy has a different cost associated with it.
- Searches for any outstanding liens or judgements on the property and pays them to make sure the title transfers clean and clear to the buyer.
- Includes and “exceptions page” which explains what is NOT covered by the policy, including any easements on the property.
- Also covers any possible future liens that are a previous owners responsibility once they have been verified.
What is the difference between a title insurance policy and a homeowners (hazard) insurance policy?
- A title policy covers the actual land that the structure sits on. It does not cover the building, other structures, or any personal items on the property. You will need a separate homeowners/hazard insurance policy for those items.
What are good questions to ask to make sure of a reliable title company?
- Know who the title company is and who is underwriting their policies?
- Make sure the company is able to cover any large claims that may come their way.Make sure they have enough financial reserves to cover any claims.
To contact Courtney Rogers, you can email or call her at 303.209.6350.
The Importance of Homeowners Insurance
Episode 9: Show Notes
Episode 9: The Importance of Homeowners Insurance
Interview with Cody Benisch with Benisch & Company Insurance
973-992-3005 | Email Cody Benisch
Why is homeowners insurance important?
- Your home and its contents are usually your most valuable assets
- If you have a mortgage on your property, your lender will require proper insurance coverage
How do you pay for a homeowners policy?
- You can choose to pay out of pocket directly to the insurance company
- Or you can have the monthly cost included in your escrow and the lender will pay the policy
What is homeowners insurance and what does it cover?
- There are six different sections of the policy
- The dwelling
- Other structures – anything detached from the house
- Loss of use – when your home is determined to be un-livable
- Liability coverage
- Personal property
- Medical Payments
What information is needed to start a policy estimate?
- Address of the property
- Material of the roof
- Construction material of the home
- Loss history of the property
- How far is the nearest fire hydrant and fire station?
- Home security features
What is the difference in coverage for condos vs. single family homes?
- When purchasing a single-family home, you purchase the entire structure
- When purchasing a condo, there is typically a HOA involved with the ownership
- What the HOA is responsible for can vary for each HOA so it is encouraged that you request the HOA documents and your agent can review
- Most HOAs are responsible for everything from the drywall out
- Owners are typically responsible for everything from the paint on the walls inward
How is the cost of the policy determined?
- Your credit score
- Location of the home
- Age of home
- Safety and security features
- Bundling of additional insurance policies
Personal property coverage
- May benefit having your agent being local, i.e. Colorado, to understand what the local lifestyle may require for personal belongings
- Look for an agent who asks lots of questions
- Make sure all of your personal items are listed and you schedule very expensive items
How do you let your agent know about big home improvements?
- When doing a remodel or when you purchase new appliances let your agent know to ensure there is enough coverage
How do you assess risks for liability coverage and how are they covered?
- Risks are different for each client so it is a good idea to have a conversation about coverage specifics
- Liability coverage can cover you both on and off of your property
- You may be able to have a policy that extends liability coverage world wide
What is Renters Insurance and what does it cover?
- The cost is very minimal – about $125-$300 per year
- Will cover all of your possessions
- Has similar liability coverage as homeowners insurance
Remember to use your agent/broker as a resource. Check in with them yearly and update them of any changes to your property or even big life changes.
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“Coming from out of state, we were nervous about finding a place to live. Amanda not only made the process easy but helped us to get to know the areas in which we were looking to buy. Amanda was very accessible and dedicated to helping us find a place that we loved, even with our time restrictions. She went out of her way to ensure all aspects of the transaction were completed to our satisfaction.”
Fred and Megan
“Amanda was wonderful to work with. She is knowledgeable, prompt, organized and kind. She helped me find a wonderful home during a time when the market was very competitive. Thanks to her advice, negotiating skills and support the sellers chose my offer over higher offers.”
“Amanda was responsive and knowledgeable regarding the market! She was accessible by phone, email, or text 100% of the time that I worked with her. I really appreciated her insight and guidance!”
“I had the fortunate experience to work with Amanda on both buying and selling. Quite simply she was amazing to work with. She is incredibly insightful and friendly and her expertise is what brought success through the entire process. Even post-closing she has reached out to make sure everything is well including helping resolve some issues on her own time. I highly recommend Amanda to anyone that wants to ensure a successful, fun, and positive experience whether buying or selling.”
“Although the market is hot right now, I believe that because of working with Amanda that we received a higher price for our property then we may have received otherwise. We had more showings and offers than we could fathom. Amanda is laid back, patient, and is likely working for you when you don’t even know it and she has a definite expertise of the downtown Denver area.”
Allison and Luke
“Working with Amanda made buying our first home a great experience! She is extremely knowledgeable not only about the process, current market, and neighborhoods but also in looking at the houses themselves; able to give solid advice. She was very quick to respond to all of our questions, and a great negotiator. I highly recommend Amanda!”
Brent and Sarah, First-time Home Buyers