Saturday Reporter-Herald October 9, 2010 E1
Real Estate Matters
www.homeandrealtyguide.com • Saturday, October 9, 2010 • Reporter-Herald
Divorce: Swapping house for refinance ILYCE GLINK TRIBUNE MEDIA SERVICES
Q
uestion: I am currently going through what I hope will be an amicable divorce. I’ve offered to let my wife have the house, along with the furniture, in return for her refinancing the mortgage. She is supposed to take my name off the note and give me $20,000 in cash to start over. That is if she wants to remain in the house that we actually purchased from her parents in 1998. We paid $210,000 for the house and had a first mortgage of $125,000, held by her parents, and a second mortgage for $75,000 that her father said he did not plan on executing. Anyway, we owe about $67,000 on the first loan and the second loan has long since been past due and he has not requested that payment. Can my wife refinance and take out $20,000? Her income is about $45,000 per year and mine is $85,000. The interest rate on the loan is 7 percent, and there are about eight years left on the loan. We have $20,000 worth of furniture that would remain with the property. I plan to split my 401(k) and profit sharing plan equitably, as we should be negotiating that through the attorneys soon. I have about $360,000 between the two and my wife has $40,000 in hers. With her receiving the house, I am looking to negotiate a total of $100,000 for her from my retirement plans. We are not really speaking at this point and have been pretty much separated living in the same house for well over a year. Does this seem like a fair distribution of assets? Answer: If I understand your question, you put down about $10,000 to buy the home in 1998. Your in-laws financed $200,000 of the $210,000 purchase price. You did not indicate what the home is now worth, but there is a loan balance on the first mortgage of about $67,000 and you probably never paid anything on the second mortgage. So, there is about $142,000 owed on the property. Whether your wife can refinance will very much depend on your inlaws, your wife’s credit history and credit score, and your wife’s other debts and household expenses. If your wife only has the balance of the first mortgage to refinance, she should be able to refinance as long as the taxes, insurance and association fees (if any) aren’t too high. But to refinance in today’s climate, the home must appraise well above the value of the first mortgage, your in-laws must be willing to release the liens on the home for both the first and second mortgage, and your wife’s income must be stable. Having said all that, the real issues for you will be whether you will get I See GLINK/Page E4
Q&A
with incoming LBAR president
Billie Jo Downing • As told to Jade Cody, special sections editor
Downing discusses challenges in today’s Northern Colorado market
B
illie Jo Downing, the incoming president of the Loveland/Berthoud Association of Realtors, agreed to answer some questions about the current Loveland/Berthoud real estate market and how she sees it changing in the next few years. Downing has 16 years experience as a Realtor, the last five of which spent as a Broker Associate with RE/MAX Action Brokers at Centerra.
market. What is happening in Detroit, isn’t happening here. An area of continuing concern when thinking locally is assisting and educating struggling homeowners who may be facing the possibility of foreclosure. We aren’t struggling from lack of effort in reaching out to those in need, it really is a matter of those in need raising their hand saying we need your help.
have some of the bank’s “shadow inventor y” come to the market as well as more struggling homeowners needing to sell to avoid foreclosure.
RH: How are Realtors dealing with the challenging market in Northern Colorado? BJD: In a challenging market, no matter RH: What properties are sellwhat the business ing in today's Loveland/ model, one always Berthoud market? Which ones looks at tightaren’t? BJD: Properties priced at fair ening the belt market value or below are what and thinking buyer’s are attracted to. Buyers, outside the box today, are very savvy, and they do to generate businot want to pay too much mon- ness. Realtors are RH: How do you envision the no different. In fact Realtors are ey for a home. Price, location Loveland/Berthoud market in and condition are still the three used to having to adjust stratethe next five years? BJD: The key to our market is factors in determining if a home gies based on a very cyclical really going to be determined by will sale. Sellers who wish to sell business. Our (LBAR’s) Realtors are getting educated in helping the ability to maintain jobs and and buy may need to look at homeowners in distressed situataking less on the sale of the create new jobs. Fortunately, home and gain on the purchase. tions, retooling their negotiaNorthern Colorado has a lot to tions skills and innovative maroffer, and our ability to stabilize RH: Month's supply of residen- keting strategies. They are cutand grow our economy will be tial real estate is steadily deting costs and looking at more easier than most parts of the creasing throughout Northern effective/efficient ways to concountr y. Colorado. How will this impact duct business. For at least the next few years, our market? I believe our market to be relaRH: How has the real estate BJD: It is difficult to detertively flat or slightly increase in industry changed, both for buymine what our supply of homes equity. ers and sellers, since you took will do. Right now the supply is RH: What does our market do being affected by many factors, office nine years ago? BJD: I don’t think any of us, well? What do we struggle with? i.e. the amount of homes purwhether buyers, sellers or RealBJD: When comparing our chased during the home buyer tors, could predict what has hapmarket to the rest of the countax credit, the various forms of pened over the past few years. try, how fortunate we are. We moratoria on foreclosures, the There are certainly some dark continue to attract more jobs, continuation of banks working spots that we wish we had the people to the area based on our with homeowners on loan modianswers for, and there are also quality of life. There is a saying fication. Sellers are sitting tight some glittering beams of light “Think Globally, Act Locally.” I unless they have to move. Howat the end of the tunnel. think that can be said about our ever, I believe that we will soon The government is more involved in real estate today than “The good deals are plentiful, all that is required they ever were nine years ago. While some help was needed is the ability to get a loan and some patience.” and there were certainly a widening support for the government to bring the banks to heel, in some cases the knee jerk reaction was too strong. It used to be Realtors had a good sense for market trends. The data could be studied and reasonable determinations could be made — for example, when the hottest selling season would be. Now it is difficult to determine from month to month whether it is a good time to sell or buy. For sellers, nine years ago was challenging because the American public was focused on the terrorism issue. Today, that same seller is focused on maintaining an income/job hoping that if they have to move they are not too upside down in their ThinkStock photo property. If they have experiDespite being in a “cold” real estate market nationally, Northern enced a hardship in some manColorado has a lot to offer, and could stabilize more quickly than ner, the average homeowner is fighting to stay in their home, other areas in the country.
exhausting every resource to hold onto what they have. Then if forced to sell, they are hoping that the consequences of selling are not too long lasting. The buyers, however, have a bit of a different outlook. There really has been no better time to buy. We are experiencing all time record low interest rates. The good deals are plentiful, all that is required is the ability to get a loan and some patience. RH: Why is it so important to use a Realtor? BJD: All real estate licensees are not the same. Only real estate licensees who are members of the National Association of Realtors are properly called Realtors. They proudly display the Realtor logo on the business card or other marketing and sales literature. Realtors are committed to treat all parties to a transaction honestly. Realtors subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84 percent of home buyers would use the same Realtor again. Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a Realtor. Downing can be reached at billiejo@billiejodowning.com.
Inside this week’s Home & Real Estate
Real Estate Transactions Listings from Front Range properties recently sold
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Foreclosures likely to remain constant Next five years will hold steady
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Realtor of the Week Kathy Beadell, Realtor with RE/MAX Alliance
Director y
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