Real Estate Agents Have a Responsibility to Report Wrongdoing

As with many professions, we real estate professionals are largely, though not completely, self-policing. Indeed, in a recent continuing education class, we were taught that we have an “affirmative responsibility” to report wrongdoing by our colleagues, whether the offense is illegal, contrary to real estate commission or MLS rules, or, in the case of Realtors, is unethical.

(Many real estate agents belong to brokerages where membership in the Realtor association is not required, and only Realtors are bound by the Realtor Code of Ethics and can be disciplined for violating it. Ask if your broker is a Realtor.)

Of course, the public can also file complaints against licensees. You can do it online here or you can mail a complaint to the Division at 1560 Broadway, Suite 925, Denver CO 80202. You can ask to remain anonymous, but an investigator will call to interview you.

Unless a broker is independent, you can also complain to his brokerage. Ask to speak with the managing broker. If he’s a Realtor, you can file an ethics complaint with his Realtor association. Here’s a link for doing so online.

I have filed complaints about illegal behavior with the Division. I have also sent numerous emails to our MLS about violations of MLS rules and regulations — including last week when a listing agent listed himself instead of one of our broker associates as the selling agent for his listing. (Email compliance@REcolorado.com.) I have also filed ethics complaints against a fellow Realtor through my Realtor association.

By accepting that “affirmative responsibility” to report wrongdoing of any kind by fellow licensees and fellow Realtors, we protect and advance the reputation of our industry and of the Realtor brand. As managing broker at Golden Real Estate, I promote this responsibility, as I did at our weekly office meeting earlier this month.

Although some people like to demean real estate licensees and even Realtors, I have found that the vast majority of us are true professionals who put our clients’ interests above our own, as required by both law and ethics, and I am proud to be a member of this profession.

What Do the Year-End Stats Tell Us About Denver’s and Jeffco's Real Estate Market?

As with politics, “all real estate is local.” News reports about the national real estate market going up, down or sideways may or may not apply to where you live. I don’t have the space to provide the stats for your subdivision, but I can certainly provide them for Denver and for the metro area using data from REcolorado, our MLS.

    The charts below contain what I consider to be the most useful statistics for assessing the health of the real estate market in the City & County of Denver compared to the rest of the metro area, which I’m defining as within a 17-mile radius of the state capitol.  That radius includes Aurora but not Parker on the east and southeast, Highlands Ranch but not Castle Rock to the south, Golden to the west, and Broomfield and Thornton but not Brighton or Boulder to the north. Basically, it includes most of what I consider urban and suburban Denver.

What we learn from these statistics covering the last five years is that the median sales price has continued to rise by a significant amount every year, both in Denver and the rest of the metro area. The same was true for the price per square foot except for a slight dip between 2017 and 2018 in Denver (and, by the way, in Jeffco) but not for the rest of the metro area as a whole.

The ratio of selling price to listing price has been on a steady decline in both charts, but the drop in 2019 was much sharper, sinking below full price. Meanwhile, the median days that it took listings to go under contract was pretty steady until 2019, when it surged by over 50% both in Denver and the rest of the metro area. The number of sold listings has remained steady for all five years, but notice the surge in expired (unsold) listings in both 2018 and 2019. 

Now let’s look at how this December in Denver compared to previous Decembers:

In that chart you see that there has been an improvement over past years in every indicator except days on market and the number of listings that expired without selling. Median sold price and price per square foot are at record highs for December. The ratio of sold price to listing price is slightly higher than in 2018, although still under listing price. It will be interesting to see how January shapes up. As I write this on Monday evening, there have already been 125 closings of Denver listings and there were only 907 Denver listings under contract, so it’s not looking good for matching last January’s number of 1,665 sold listings.

Now, let’s look at the same analysis for Jefferson County’s real estate market.

What we learn from these statistics covering the last five years is that the median sales price has continued to rise by a significant amount every year, both in Jeffco and the rest of the metro area. The same was true for the price per square foot except for a decline between 2017 and 2018 in Jeffco, as in Denver, but not for the rest of the metro area as a whole.

The ratio of selling price to listing price has been on a steady decline in both charts, but the drop in 2019 was much sharper, sinking below full price. Meanwhile, the median days that it took listings to go under contract was pretty steady until 2019, when it surged by about 50% both in Jeffco and the rest of the metro area. The number of sold listings has remained steady for all five years, but notice the surge in expired (unsold) listings in both 2018 and 2019. 

Now let’s look at how this December in Jefferson County compared to previous Decembers:

In that chart you see that there has been an improvement over past years in every indicator, including a drop in the number of listings that expired without selling. Median sold price and price per square foot are at record highs for December. The ratio of sold price to listing price is slightly higher than in 2018, although still under listing price. It will be interesting to see how January shapes up. As I write this on Monday evening, there have already been 93 closings of Jeffco listings and there were 549 Jeffco listings under contract, so it’s looking pretty certain that we’ll beat January 2018’s number of 553 sold listings.

January Is National Radon Action Month. Here’s What You Need to Know:

Here in Colorado, about half our homes have elevated levels of radon, a naturally occurring gas created by the decay of radioactive radium in our soils. It is the leading cause of lung cancer in non-smokers. Here’s a link for an excellent YouTube video explaining radon and how it’s mitigated.

Most real estate professionals, including the agents at Golden Real Estate, are well aware of this issue and will always advise the buyers we represent to have the home they are buying tested for the level of radon gas as part of the home inspection process.

Notice that I didn’t say to test for the presence of radon gas, but rather the level of radon gas.  That’s because radon gas is present even in “fresh” air. But it can concentrate when it seeps into your basement, crawl space and even your above-grade living areas.

Since a high level of this gas is considered a “health and safety” issue, a seller is essentially obligated to accept responsibility for having the radon level mitigated or to compensate the buyer for doing it after closing. 

At Golden Real Estate, we have a hand-held device smaller than a TV remote which we can lend to sellers prior to listing their home so they’ll know in advance what level of radon a buyer’s inspector is likely to discover. Ace Hardware has this same device for sale for $199.

There are less expensive mail-in radon tests that you can purchase at Home Depot or Lowe’s, but they’re also free at multiple locations — including from our office at 17695 S. Golden Road in Golden. These DIY kits should not be considered adequate for use in a real estate transaction.

During the home sale, it’s best to have a certified radon measurement contactor do the official test. You can find a list at www.ColoradoRadon.info. The test utilizes an electronic device which samples the air every hour over a 48-hour period. It can detect whether the device has been disturbed and whether there have been changes in atmospheric conditions which might suggest that windows or doors have been opened to allow fresh air into the house. Inspectors charge between $100 and $150 for this test, but it’s well worth the expense, especially if the results of the test show that the level of radon gas exceeds the EPA action level of of 4 picocuries per liter of air. If the test shows a level greater than that, the buyer can demand that the seller have radon mitigated. That typically costs about $1,000, so the testing is well worth the additional inspection cost.

Below is a diagram showing how radon is mitigated use sub-slab depressurization:

(from Wikipedia)

Coming: Big Changes to Denver's MLS

It won’t be that obvious to consumers accessing our MLS at www.REcolorado.com, but agents who login to it will need to adjust to many changes that will take effect this coming Monday, January 13th. We at Golden Real Estate are studying the 45-minute instructional video provided to us by REcolorado.

The reason for the overhaul is to make the MLS database 100% compatible with national standards promulgated by the National Association of Realtors.

Another change coming within the next couple of months is an MLS rule restricting the use of “pocket listings” and “coming soon” listings, which are kept off the MLS, often to benefit the listing agent, not the seller. In a nutshell, the rule will say that any listing by an MLS member must be made active on the MLS within one day of any promotion of the listing, which includes putting a sign in the yard, promoting it online or on social media, or in any other way. 

Look for more details in this space on the roll-out of this rule when we get closer to its implementation. This rule was mandated in November by a nearly unanimous vote of the National Association of Realtors’ board of directors.

Learn the True Cost of Selling Your Home off-MLS to an iBuyer Like Zillow

Perhaps you’ve heard the pitch from an iBuyer firm such as Open Door, Zillow Offers, or another firm with the word “Offers” in their name.

These companies are promoting the convenience of selling your home quickly for cash, without putting it on the market or having buyers traipse through your home, or worrying that their financing might fall through.

But what is the cost of that convenience?

My column on Aug. 22nd reported on the “true cost of selling to an iBuyer,” but you can’t know that cost personally until it’s your home. So let’s talk about your home!

The next time you get a solicitation to buy your home direct for cash without putting it on the market, go ahead and ask them for a quote.  Then call us and we’ll analyze the offer for free, with no obligation whatsoever.

Here’s what you need to know about the offer you’ll receive.

1)   They will tell you that you won’t pay a commission, but the contract will deduct a “service fee” which, in the case of the Open Door contract I wrote about in August, is 7%.

2)    There will be an inspection contingency. They’ll tell you that you don’t have to make any repairs, but the company will do an “assess-ment” and come up with a dollar figure they will deduct from the purchase price to cover “necessary” repairs. It could amount to tens of thousands of dollars–$38,563 in the case of the Open Door contract I reviewed in August.

3)   The good news is that you as seller are given the right to terminate the contract at any time prior to closing — at least according to that Open Door contract I reviewed.

Most of all, you need to know that these iBuyer firms are only buying your home because they expect to make a profit when they resell it. They will entice you with an offer that is reasonable, but in the following weeks that offer will be eroded by other provisions such as I’ve mentioned above.

Perhaps the convenience of selling a home for cash to someone who will resell it at a higher price makes sense for some sellers. My point is that you should know how much that convenience is going to cost you.

An “iBuyer” is nothing more or less than an investor who makes money by buying low and selling high, with or without making any improvements. For years I’ve been advising homeowners who receive unsolicited offers for their home to treat such an offer as the “opening bid,” and to talk to me or another Realtor about seeing how much more they can get for their home once it is exposed to the full market. That is only accomplished by putting a home on the MLS.

It’s all about maximizing exposure. The more potential buyers who learn about your home, the more offers you are likely to receive. I’m saddened to see how many homes are sold with zero days on the MLS.  Those homes were sold without entering them on the MLS, and the listing agent only puts the home on the MLS after closing as a courtesy to other agents (for market analysis purposes) and/or to receive credit for the sale in terms of personal sales volume.

Consistently over the past three years, between 60 and 160 homes per month in Denver & Jeffco have been entered on the MLS only after they sold. The majority of them sold at or below the listing price, because the home was not exposed to additional buyers, and a high percentage of them were “double-ended” by the listing agent, meaning that the agent doubled his commission by not giving other agents with willing buyers the opportunity to earn their half of the listing commission. 

Our policy at Golden Real Estate is to avoid selling a home before it has been on the MLS at least 3 or 4 days, during which all potential buyers have had a chance to see the home and consider making an offer. This is consistent with our responsibility under state law to put our sellers’ interest ahead of our own.

This policy is an expression of the value statement that appears on our yard signs — “Hometown service delivered with integrity.”

In my Aug. 22 column, I quoted a report on iBuyer transactions by Collateral Analytics. The final paragraph in their report is worth quoting again:

In all, the typical cost to a seller appears to be in the range of 13% to 15% depending on the iBuyer vendor. For some sellers, needing to move or requiring quick extraction of equity, this is certainly worthwhile, but what percentage of the market will want this service remains to be seen.”

Call me or any of our broker associates at 303-302-3636 before accepting an off-market offer for your home. And remember: even if you are already under contract with an iBuyer, you may have the right to terminate the sales contract.

Your Car Battery Could One Day Be Your Home Backup Power

Perhaps you, like me, have considered investing in a home battery system — not to go “off grid” so much as to survive blackouts. Simply having solar does not give you such protection, because when the grid goes down, your solar panels do not generate electricity. That’s required by power companies, because they don’t want you pumping electricity into downed power lines as their technicians work to repair them.

Personally, I’m holding out for a future in which the energy stored in my EV batteries can be tapped to power my home during a blackout.  There’s a term for this called vehicle-to-grid, but a more accurate term would be vehicle-to-home, since it would be done in isolation from the grid.

Because I have two EVs with combined battery capacity of 170 kilowatt-hours, I have a lot of stored power available to me at any time, even if those cars are not fully charged.  For example, 100 kilowatt-hours can provide 5,000 watts of household electricity for 20 hours.

There are commercially available inverters for creating a 120-volt outlet in any car, either gas or electric, but inevitably some automaker — probably Tesla — will create an interface that allows for the electricity stored in one’s EV battery to be tapped for household use during a blackout.

Several electric trucks are going to hit the market in 2020 and beyond, and each will have 120 and possibly 240-volt outlets for field power, which is a good start. You could run an extension cord to power critical home appliances. 

It’s January — Time to Think Again About Losing Weight and Getting Fit

By JIM SMITH, Realtor®

It was four years ago this month that Rita and I made a decision that has changed our lives for the better — we enrolled in a program called “8 Weeks to Wellness” at Body In Balance Wellness Center, located near our home in Golden.

At the time, we were 68 years old and technically obese. I had a bit of a “beer belly” and weighed in the mid-240s. When the program ended in March 2016, I weighed under 220. At right are before and after pictures showing that much of my belly fat was gone.  As I write this, I weigh 206, because I have continued with the lifestyle which I learned during the 8-week program.

What is that program?  It’s a holistic program combining nutritional training, mindfulness, regular chiropractic adjustments and massages, and twice-weekly workouts with a trainer.

Since January is a time of year when we all think about shedding the weight we gained over the holidays and making other healthy resolutions, I thought it appropriate to share my personal story of making lifestyle changes that I know are leading to a longer, healthier life, and I invite you to learn about “8 Weeks to Wellness” and if it’s right for you — whether or not you’re a senior like us.

Let’s talk about nutrition first. Rita and I learned things we didn’t know from Drs. Leah and Scott Hahn during the program and at free lectures which they give each month. 

Dr. Leah’s class on sugar was particularly enlightening. We learned how much sugar is in processed foods and how bad it is for us.  Cancer feeds on sugar, and because so many foods contain sugar, Americans are consuming an average of 57 lbs. of added sugar per year.  That’s eleven 5-lb. bags of sugar per person! Our bodies can only metabolize between 1/2 and 1/3 that much sugar, so the rest of it has to be stored as fat — belly fat.

The key, I learned from the doctors, is to learn where that “added” sugar is hidden. They taught us about the glycemic index, which ranks carbohydrates according to how they affect blood glucose levels. Carbohydrates with a high glycemic index (such as in many snacks, bread and potatoes) raise blood glucose levels too quickly. The body needs time to absorb the sugar created by carbs, so you want to choose foods with a low glycemic index such as green vegetables. Also, sugar is literally addictive, creating appetite rather than satisfying it. It’s true — you can’t eat just one potato chip!

We also learned about “good fats” and “bad fats.” Did you know that the low-fat movement created by the government had the unintended consequence of increasing our sugar intake?  Since removing fat from foods makes them less tasty, food producers started adding sugar to low-fat products they sell us.

Obesity, we learned, is caused by all the excess sugar in our diets, and Type 2 diabetes is a natural biproduct of obesity caused by excess sugar intake.

So, in addition to reducing the granulated sugar we add to our foods, Rita and I have dramatically reduced our intake of added sugar by eliminating fast foods and soda beverages from our diet. We purchase only “real” foods, avoiding processed foods as much as possible, and we buy organic food, grass-fed beef and eggs from free-range chickens. (We shop at King Soopers, not at Whole Foods or Natural Grocers.)

It’s funny to think that we’re more concerned about the fuel we put in our cars than the fuel we put in our bodies. My handyman buys premium gasoline for his truck because he thinks it’s better for his engine, but you should see the food in his pantry!

Nutrition, however, is only one component of keeping our aging bodies healthy. We’ve all heard that we should exercise, but the doctors at Body in Balance have given Rita and me more context for its importance.

As we age, we all experience a loss of muscle mass. One evidence of muscle loss is the loose skin hanging from most old folks’ out-stretched biceps. That’s why I kept up my twice-weekly training sessions after the end of “8 Weeks to Wellness.”  And it’s working.

I used to think that hiring a personal trainer was a waste of money, but I was wrong. My Monday afternoon and Friday morning sessions last one-hour under the guidance of a certified personal trainer who creates a “workout of the day” that works all the different muscle groups in my body in a manner that never gets tedious or repetitive.  Through “bio-impedance analysis” I have seen the actual results of continuing this program — decreased fat and increased muscle mass in my body. Combined with my good nutrition and reduced weight, I will continue to age in good health and be less prone to falls and breaks. We should all strive for that as we age, and I urge you to consider the benefits.

Body In Balance Wellness Center, located in Golden, is a chiropractic office specializing in Network Spinal Analysis (NSA), which is more gentle than traditional chiropractic. In addition to their three chiropractors, they have two personal trainers in their fitness center, a functional medicine nutritionist, and two massage therapists on site. See www.BodyInBalanceChiropractic.com.

Because “8 Weeks to Wellness” made such a difference in Rita’s and my life, I encourage you to attend a free introduction to the program to be held at Body In Balance’s Golden facility, 755 Heritage Road, on Wednesday, January 22nd, at 6:15 p.m.

Call 303-215-0390 to reserve a seat. I’ll be there to share my story and answer questions.