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Top investment neighborhoods in Denver.

The revitalization process never seems to stop in Denver and new “neighborhoods to watch” emerge all the time. The key to any good real estate investment is to get in before the rest of the buyers decide this is where they want to “get in” as well… So since this has to be one of the most frequently asked questions by my clients, I decided to dedicate this blog to my opinion on top five Denver neighborhoods to watch for the next few years.

1. RiNo (River North Art District) is a small neighborhood located between Park Ave., I-25, 38th Ave. and Lawrence St. In my opinion this is the number one area to watch in all of Denver. Problem is, existing single-family dwellings are scarce in this neighborhood, but with industrial warehouses being converted to hip, pricey lofts by developers and restaurants/galleries/small businesses popping up left and right, any property you can get your hands on in this area is guaranteed to be a phenomenal investment. A light rail line connecting downtown to DIA is currently under construction, with RiNo Station on 38th & Blake scheduled to open in 2016.

2. Cole is an old, diverse Denver neighborhood bordering RiNo and is located between Martin Luther King Blvd., York St., I-70 and Downing St. Proximity to the East Line of RTD’s light rail, downtown and City Park has helped this area climb to the top of the hot-investment list within the last few years and the average prices per square foot on sold properties have nearly doubled since. The neighborhood is still a mixed bag, with plenty of rundown homes left and judging by the rate at which investors are purchasing everything they can get their hands on in this area, Cole isn’t about to cool off any time soon. My prediction for the highest future appreciation in Cole are a few north west blocks closest to the light rail station on 38th and Blake.

3. Strayer Shepards Park Hill is a small neighborhood pocket of post-war homes located between Colfax Ave., Monaco Pkwy., Martin Luther King Pkwy. and Quebec St. Its proximity to Stapleton and ridiculously low property taxes have recently put this quiet subdivision on the fast-appreciation and high-buyer-demand tracks. Inventory is currently low in Strayer Shepards, but if you are persistent and patient, it is possible to find a good deal (usually an estate sale or something in need of major updating) in this area.

4. North Villa Park/South Colfax is a great area to watch in North West Denver. Located along the West Colfax stretch between I-25 and Sheridan, the area has experienced a significant amount of revitalization lately with many more major projects scheduled in the near future. With the site of the old St. Anthony Hospital being redeveloped in the next 10 years, West Line light rail stations opening up this year, and proximity to one of Denver’s most popular lakes, I do not see this neighborhood jumping off the hot train any time soon. While I don’t predict property values here will rise as fast as some other neighborhoods on this list, if you are on a 10-year investment plan with your real estate purchase—you can’t go wrong with this area!

Our market has been saturated with short sales for months, yet some confusion amongst buyers and sellers remains… So what exactly is a short sale and how does the “short-selling” process work?

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s loan.

On the seller side, short selling usually occurs when a borrower can no longer pay the mortgage loan on their property, but cannot sell the property without having to bring money to the closing table either, due to the homes’ declining value. To ease the pain, the borrower asks the lender to authorize a lower marketing and selling price than what is actually owed on the note and forgive the difference. In most situations, a short sale is in both parties’ best interests because it allows them to avoid foreclosure, which involves hefty fees for the bank and poor credit report outcome for the borrowers.

In real estate circles short sales are sometimes mockingly called “long sales”—and for a good reason. The process is usually long rather than short and can be rife with problems and setbacks. Sellers and their agents have to be patient, practice superior negotiating skills and remain persistent throughout these bank transactions. Even when the lender agrees to a short sale, their agreement doesn’t necessarily mean that they will release the borrower from the obligation to pay the remaining balance of the loan (known as the deficiency) over time. Short sales typically enter the market at a very low price to attract a quick offer, and having the right strategy from the start is crucial. Not every Realtor is comfortable listing a short sale. A knowledgeable real estate agent will help the seller understand the many nuances of this complicated process, negotiate the best possible outcome with the bank and guide the seller through the entire transaction.

On the buyers’ side, short sales can be phenomenal deals for the right person—someone who understands the process and its pitfalls and can exercise the patience required to see the transaction through to its close. The Colorado Real Estate Commission recently became involved to protect buyers and ensure that they have the correct education and have considered the process thoughtfully and fully. The Commission requires buyers to read and sign special Short-Sale Addendums, Disclosures and Contracts before they offer on a short-sale listing.

The process is sometimes so financially and emotionally taxing that it results in lawsuits. For example, buyers pay to lock a loan at our historically low rates and their lock expires before the bank authorizes a contract (buyers may have been misleadingly told by the listing agent they will have an answer in two to three months when in fact it is likely to be five to eight months or more). Or the buyer waits six months only to then lose the home to another bidder, hear back from the bank that they will accept no less than $15,000 over the negotiated price or have the bank say no altogether. I always make sure my short sale buyer clients understand the “list” price of the home is not necessary the “sale” price the bank will agree to if and when they approve the short sale. The final price could be less and end up a good deal. But it could be more, too. In our fast changing market, the offer buyers made six months ago that seemed then like the deal of the century could no longer be that great of “steal.” Once again, when it comes to ensuring short sale success it is crucial for buyers to have a knowledgeable, dedicated Realtor working on their behalf.

Whether you are a seller thinking of short selling or a buyer interested in exploring the short sale process, contact me for the most up-to-date information—I’ll be happy to go over the entire process with you answer any questions you might have!

Contingencies are the formal clause in the Contract to Buy and Sell which state that particular conditions must be met by either the buyer or the seller in order for the parties to proceed to the next step in the contract. Unless the seller finances the deal, in the Colorado Contract to Buy and Sell, contingencies are generally written to protect buyers, not sellers. There are several standard contingencies which are commonly used in the Colorado Contract to Buy and Sell.

1. Home Inspection
Every contract should be written with the inspection contingency. The inspection should be completed as soon as possible (usually 5-7 days) after mutual execution of the contract. I like to structure my purchase contracts in a way that allows buyers to have three days following the inspection to try and resolve any unsatisfactory items found by an inspector. If resolution of the unsatisfactory finding is impossible, the buyers have two choices: continue with the purchase and accept the house “as-is” without any seller repairs or credits toward repairs, or cancel the contract and receive their earnest money back.

2. Appraisal
Appraisal contingency is very important in today’s real estate market. And since no lender will lend you more money than the home is worth, it can be nerve-wracking to wait for appraisal results. Your lender will have an appraiser go out to the property and perform an appraisal inspection to determine home’s value based on the building costs, square footage, condition and recent comparable sales before approving and funding your loan. In cases where the home appraises lower than its negotiated purchase price, buyers and sellers will face several choices including termination of the contract and purchase price renegotiation. HomePath properties do not require an appraisal, while the appraisal is always optional when paying cash.

3. Preliminary Title Report
Title contingency allows buyers to investigate property easements, chain of title, judgments and any monetary liens on record, including the ability of the seller to transfer clean title to the buyer. Sometimes homes can be located in special tax districts. Buyers get to review the tax certificate they receive with the title paperwork and have the right to back out of the deal if they do not wish to continue with the purchase of a property in the special tax district.

4. Survey or Improvement Location Certificate
Surveys and ILCs can help parties establish lot boundaries or, for example, show if a neighbor’s garage or deck are encroaching on the property. The survey and ILC are written onto the purchase contract as contingencies and allow buyers to back out of the sale if the findings are unsatisfactory to them and are unresolvable.

5. Examination of Homeowner Association Documents
Also known as CIC documents contingency, buyers get an opportunity to obtain a copy of all homeowner association documents, including rules, regulations and meeting minutes. If the buyers find HOA rules and regulations unsatisfactory for any reason, they may terminate the contract and receive their earnest money back.

6. Loan Approval Deadline
Also known as loan approval contingency, this clause in the contract means that the purchase of real estate is contingent upon or subject to the buyer getting a mortgage loan for the purchase. Typically this contingency calls for a buyer to apply for a loan within a certain period of time after the contract is signed. Since most people who buy a house require financing to complete their purchase, mortgage contingencies are one of the most common types of contingencies in real estate contracts. If financing is not secured, the buyer may unilaterally cancel the contract by stating that his or her condition has not or will not be satisfied.