Don’t Fall for ‘Title Lock’ Services. They Are a Waste of Money and Don’t Provide Much Protection.

Perhaps you have seen advertisements or received a solicitation to purchase “title lock” service. A reader asked me to find out if it was a scam, so I asked my friends at First Integrity Title to check it out. Here’s what I learned.

The premise of the service is that the company monitors your public property information. It is supposed to alert you to changes to your home title (similar to credit monitoring) but is not as helpful or as necessary.

The truth is that it really isn’t as easy to steal your home’s title as they claim. Also, this is a monitoring service only. There is no “insurance” or help if your title is found to have changed, although Home Title Lock’s website does claim to provide a million dollars towards legal fees and costs to defend title from one of these scams. Doing so wouldn’t be terribly risky for the company, since the fraud is so rare and so easy to repair legally.

The reason a scammer would pretend to own your home is to take out a loan against it, pocket the money and disappear. The best target for such fraud would be a home that is owned free and clear. Any lender would require the purchase of title insurance, so if the scammer were successful in fooling a title company to insure that loan, it would be the title company at risk, not you.

Jerry Spaeth, a lawyer and the CEO of First Integrity Title, reported that in 22 years of doing title work, he has never seen a case where someone has been able to “steal” tile and then take out a loan, as they claim. And for only $15 a month, which such services typically charge, it would be difficult to be anything more than a monitoring service. 

It is difficult to find out how many such frauds have been committed, because they would be lumped together statistically with wire fraud and identity theft. 

The likelihood of needing this service is greater if you have several properties that you own, or if you own your home free and clear — and if you are elderly. The victim might not be able to receive the letters from the new mortgage company that a payment is late.

Again, you aren’t going to be getting support from most title lock services. They are just letting you know if something has taken place.

The title policy you received when you purchased your home does not provide protection for a fraud incident after the purchase of the policy. You can, however, monitor your property on assessment websites to verify that you are still the rightful owner.  Every year you should be receiving valuation and tax notices from your county assessor and treasurer. If you don’t get such notices, contact the county to find out why.

If you have a credit monitoring service, as Rita and I do, you would be notified if a new loan is taken out in your name, and a no-cost “credit freeze” with the three credit bureaus would stymie anyone seeking to obtain credit in your name. 

In conclusion, title lock service is not necessarily a scam, but it is questionable how useful the service is if there is little or no protection that comes with it.

Remember that Google is your friend. I found some useful information by Googling “title lock protection,” including a September 2020 piece from Fox 5 Atlanta calling title lock service a “Waste of Your Money.”

Real Estate Bidding Wars Are Not Abating

This is my monthly update on the real estate bidding wars. This week I chose to analyze the closings that occurred last Thursday, June 10th, to see how the bidding wars have evolved over the past four weeks. The source for this monthly analysis is REcolorado.com, the Denver MLS.

As I did in previous months, I limited my analysis to sales within a 15-mile radius of downtown Denver. I limited my search to homes, condos and townhouses that were on the MLS at least one day and not more than 6 days before going under contract. Those are the homes with bidding wars. I divided the results into homes which sold up to $500,000 and those that sold for more.

As you can see in this chart, the bidding wars only took off in earnest during February 2021, and they have kept accelerating month by month, enough that it raised the average ratio of closing price to listing price over all sales, not just the homes which sold in six days or less.

On June 10th there were 40 closings up to $500,000, compared to 44 closings on May 13th. The median home sold for 6.2% over its asking price, compared to 8.7% on May 13th. The highest ratio this time was 19.6% for a condo in Golden compared to 15.7% on May 13th for a home in southwest Denver. Only one listing sold for the asking price, and only two sold for less than listing price.

There were 37 homes that closed on June 10th for more than $500,000, compared to 56 homes on May 13th. The median home in that group sold for 7.7% over its listing price, compared to 8.1% on May 13th. Only three sold for the listing price, and none sold for less than the listing price. The highest overbid in this group was 20.9% for a one-story home in Lakewood on June 10 compared to 29.4% on May 13.

To have a statistically significant number of closings over $1 million, I analyzed the 82 such closings over a longer period — June 1-13. The median closing for those high-end homes was 6.1% over listing price, compared to 6.0% in May. Four homes sold for the listing price and 9 homes sold for less than the listing price. The highest overbid was for a 1979 ranch-style home in Jeffco’s Sixth Avenue West subdivision, which was listed at $1,080,000 and sold in 6 days for $1,575,000, 45.8% over listing price.  

I’ll repeat this analysis on July 15.

Leyden Rock Home Backing to Greenbelt Just Listed by David Dlugasch

Welcome to this fantastic home at 16896 W. 85th Lane with 180-degree views of the foothills, mountains and downtown Denver. It was just listed by David Dlugasch for $749,000. This extremely well maintained home is like new. The open floor plan, views and fireplace makes it a great place to relax. Extensive hardwood flooring on the main level adds a luxurious feel to the main level. Enjoy the generous sized office space with French doors that makes it easy to work from home. Enjoy the gourmet kitchen with double ovens, gas stove top, quartz counter tops, stainless steel appliances, gorgeous white cabinets, and a bar area, great for entertaining. The main floor master suite has fabulous views to wake up to every morning. The second bedroom on the main level boasts a full bathroom and lots of closet space. The dining area off the kitchen has a walkout deck to BBQ and watch the sunset. A powder room and large laundry/mud room with sink, loads of cabinets and washer/dryer included, that rounds out the main level. The finished walk-out basement gives you another full sized family room to enjoy. The two very large bedrooms have great light, one of them with wonderful views. There’s a full tile bath, utility room with plenty of storage space and another large storage area. The owners also live on the east coast and spent only a little time in the home. Take a 3-D video tour at www.LeydenRockHome.info, then call your agent or David Dlugasch at 303-908-4835 for a private showing.

We and Our Truck Go the Extra Mile for Our Clients!

    Our clients have put a lot of miles on this box truck, saving them thousands of dollars on moving costs. They also get free moving boxes, packing paper and bubble wrap.  They only pay for the gas used.  The truck is also used twice a week by BGoldN to pick up food from Food Bank of the Rockies and by other non-profits, including Family Promise of Greater Denver and the Golden Chamber of Commerce.

We also use it ourselves every couple weeks to take truckloads of polystyrene (aka “Styrofoam,” a brand name) to a reprocessing center in Aurora, keeping over 200 cubic yards of the material out of landfills every year. People from all over Jefferson County (and beyond) bring their block white polystyrene to the Styrofoam Corral behind our office.

It’s Suddenly Much Easier to Qualify for a Refinance of Your Home Mortgage

Refinancing has been all the buzz this year. Many homeowners have taken advantage of record-low rates to refinance their homes. Unfortunately, lower-income borrowers, especially those who lost income streams due to Covid-19, were unable to refinance because of income requirements. According to the Federal Housing Finance Agency (FHFA), over two million families could not refinance in 2020 when they might have benefited from it. As of June 5, 2021, this is no longer the case. Lower-income homeowners may now potentially save hundreds of dollars per month on their mortgage under a government initiative called “RefiNow.”

I spoke with Jaxzann Riggs of The Mortgage Network to learn about this program.

We have all heard the term “refinancing,” but you may not know why someone might consider refinancing. Homeowners choose to refinance their mortgage for different reasons. Refinancing your home could allow you to secure a lower interest rate, which lowers monthly payments, to shorten the duration of your mortgage, to switch to a fixed-rate mortgage, or to access equity.

While refinancing may sound ideal for your situation, the process and guidelines post-COVID have been quite strict and restrictive. One important factor in qualifying for refinancing is your debt-to-income (DTI) ratio. Your DTI is the percentage of your gross monthly income that you pay each month towards your debt and other obligations, including mortgage, minimum credit card payments, car loans, and student loans. Traditional loans require DTI to be under a certain threshold to refinance — typically under a maximum of 44%. Many people, especially service industry workers and small business owners, lost their jobs and sources of income during the pandemic, and the regulation regarding DTI was an obstacle to refinancing. RefiNow may be able to change that.

RefiNow, Fannie Mae’s new refinance option, makes it easier for homeowners earning at or below 80% of their area median income (AMI) to refinance at a lower interest rate to reduce their monthly payment. This new program is designed to lower the barriers that keep low-income borrowers from refinancing, which have historically resulted in those borrowers refinancing at a slower pace than higher-income borrowers. With RefiNow, you are allowed to have a DTI of up to 65% (instead of 44%) and you will be given an appraisal credit of up to $500. The new program does not just benefit homeowners, it helps lenders because it improves the probability that homeowners who may have been struggling to make their current payments will be able to make future payments, resulting in fewer pandemic related foreclosures. Don’t despair if your loan is owned by Freddie Mac (FHLMC). Freddie is slated to offer a similar loan program in the next few weeks.

To qualify for RefiNow, you must have:

> A Fannie Mae-backed mortgage secured by a one-unit, principal residence. Unsure? Go to https://www.KnowYourOptions.com/loanlookup

> A current income at or below 80% of the Area Median Income (AMI) This varies by census tract, but your lender can look this up for you.

> Not have missed a mortgage payment in the past six months, and no more than one missed mortgage payment in the past 12 months.

> A debt-to-income ratio of 65% or less, and a minimum 620 FICO score (minimum 660 FICO score for manufactured homes).

> A reduction of at least $50 per month on the new loan and you may not access any of your equity.

If you are not sure if a RefiNow loan is right for you, reach out to Jaxzann Riggs at (303) 990-2992 with any questions and to discuss your best options.

Just Listed: Littleton Home Backs to Greenbelt

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Vintage Reserve is a special community in unincorporated Jeffco. This 4-BR home at 5359 W. Hoover Dr. (just listed for $875,000) has one of the best locations, backing to a greenbelt, with two trailheads just 4 doors away! Other trails lead to the neighborhood’s fabulous clubhouse, playground and picnic area. With a main-floor bedroom and 3/4 bath, this is a fine home for aging in place or for having senior guests. There’s a lot to like about this home, which requires little or no updating, unless you want to finish the walk-out basement, which has rough plumbing for a bath. Find more pictures and details at www.LittletonHome.info, then call your agent or Jim Smith at 303-525-1851 for a private showing. It will be open this Saturday, June 12th, from 11 a.m. to 2 p.m. Showings begin on Thursday, June 10th, and it will not be sold prior to June 14th.

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Just Listed: 2-Bedroom Arvada Patio Home

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Good patio homes are hard to find, and this one at 7575 Loveland St. in Arvada’s Saddle Brook subdivision is going to make some buyer very happy. It was just listed for $650,000. Like a true patio home, there is no mowing or yard maintenance to handle — it’s done by the HOA, along with snow removal from your driveway, walkway and front porch! It’s not a senior community, but seniors find the maintenance-free living to their liking, allowing them to “lock and leave” without anyone knowing they’re gone. Everything is on the main floor, including the laundry, and all appliances are included — even the high efficiency washer and dryer. The basement is unfinished, but does have rough plumbing for another bathroom and a second set of laundry hook-ups. You can take a video tour with drone footage at www.ArvadaPatioHome.info, then call your agent or Jim Smith for a private showing. This home will be open both Saturday and Sunday, June 12th & 13th, from 11 a.m. to 2 p.m.

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South Golden Home Listed by Jim Swanson

344 Poppy Street — Just Listed for $595,000

Golden Heights is a small residential subdivision nestled behind the industrial area west of the Jeffco Fairgrounds at the end of the 6th Avenue frontage road. It has its own city-maintained park with playground which is just one block west of this home. The seller has beautifully updated and freshened this 4-bedroom home at 344 Poppy St., which has a 24’x26’ undivided addition with its own 3/4 bathroom and exterior access suitable for a mother-in-law apartment, art studio, rehearsal studio or whatever you want. The large fenced backyard includes two sheds and space for a garden. The oversized garage is insulated, finished and painted, with an epoxy floor. The kitchen has new slab granite countertops. All in all, this home is move-in ready. With its newer vinyl windows and paint, you’d be hard pressed to find anything that needs improving! Take the video tour at www.SouthGoldenHome.com, then call your agent or Jim Swanson at 303-929-2727 for a private showing.   He’ll be holding it open this Saturday, June 5th, from 11am to 2pm.

Open floor plan, wood laminate flooring and slab granite countertops!
Updated eat-in kitchen with pantry
Backyard features this deck, two sheds, garden area and door to 640-SF addition.
The 640-SF addition has its own 3/4 bathroom and exterior door to street.
The oversized 1-car garage is insulated and finished with epoxy floor.

June’s ‘Green Home of the Month’ Is For Sale!

6776 Wood Rock Road — Just Listed at $795,000

Each month we feature another one of the homes on last fall’s Metro Denver Green Homes Tour. The home we chose to feature this month is the Van de Rijdt home at 6776 Wood Rock Road, 11 miles up Golden Gate Canyon, which Jim Smith just listed for sale. Rather than shoot a new video tour narrated by Jim, we suggest you view the video tour Jim created for the green homes tour, in which the homeowner, Martijn van de Rijdt, explains the many sustainable features of his Net Zero Energy home. You can find that video tour on this home’s listing site, www.JeffcoSolarHomes.com. The video describes, for example, the radiant floor heating via an air source heat pump (picture below) which is powered, like the rest of the house, by a ground-mounted solar photovoltaic array on the hillside behind the house. There are so many sustainable features that the video took 16 minutes. If you have longed to live in a passive solar designed net zero energy home, and if you like the idea of living on 10 acres off a gated back road in the foothills, this might be the home for you. Jim will hold it open this Saturday, June 5th, 11am to 2pm.  Or call your agent or Jim at 303-525-1851 for a private showing.

The air source heat pump above creates hot water for the 5-zone radiant floor heating system below.
80-Gallon heat pump water heater at left.
Seller took this picture of two moose in their meadow, plus another picture of the bull moose.
Wildflowers abound on the 10-acre lot, 2 of which are wooded.
A patio with outdoor kitchen is on the east and north (shaded) side of the house.
Main floor features polished concrete floors and kitchen with quartz countertops.
Enjoy this valley and mountain view from the patio on the east front of the house.
The seller’s woodworking shop has the same great view!
Master bedroom and 2 guest bedrooms all have great views, too!

NAR’s Member Profile Reveals Drop In Realtors’ Median Income

Despite the pandemic and the shortage of active listings, the membership of the National Association of Realtors (NAR) grew by 5.7% in 2020 over 2019. Perhaps it was because people lost their hourly or salaried jobs and moved toward self-employed occupations such as real estate.

Some of those new Realtors just might want to reconsider their career choice when they read NAR’s 2021 Member Profile based on 18,209 respondents. Here are some of the results, bearing in mind that roughly half of licensed real estate agents are not Realtors, a term only members of NAR can use. I consider NAR members (“Realtors”) the agents who are serious about real estate, since Realtor dues are about $500 per year. Licensees don’t join a Realtor brokerage unless they hope and expect to justify that expenditure.

Real estate has always attracted people who perceive it as a high income profession. They don’t realize that the “80/20 rule” applies as much to real estate as it does to any profession. While that rule would suggest that 20% of Realtors earn 80% of the income, it’s actually worse. I would estimate that 10% of us earn 90% of the income.

I’ve been a Realtor for nearly 20 years, so I know a lot of fellow agents, yet it continues to surprise me that most listings in my own city are by agents — usually Realtors — I’ve never heard of.  Looking at the six active listings in Golden as I am writing this column, I’ve only heard of one of the listing agents, and he had only 10 sold listings in the past 12 months. Another of the six had one sold listing, a third agent had two sold listings, and a fourth agent had zero sold listings in the last 12 months. (I had 25 sold listings.)

According to NAR, the sales volume per Realtor dropped to $2.1 million. With our median sales price in Denver’s MLS at $438,239 in 2020, that’s less than five closings per Realtor.

The median gross income of Realtors has never been over $50,000 per year, and it fell 13% from $49,700 in 2019 to $43,330 in 2020, according to the Member Profile. And that is gross income. Realtors are typically self-employed and have lots of expenses, with the median for 2020 being $5,330. That brings the median net income down to $38,000. For Realtors who specialize in residential real estate, the median net income for real estate activities in 2020 was even lower —$23,500. Depending on family size, that is at or below the poverty level!

73% of residential specialists said that real estate activities provided 75% or more of their personal income. 56% of residential Realtors say that it is their only occupation. 29% say it has never been their primary occupation.

Realtors with 16 or more years in the business had a median gross income of $75,000 in 2020, down from $86,500 in 2019. Realtors with 2 years or less in the business had a median gross income of $8,500, compared to $8,900 in 2019.  Welcome to your new profession!

Missing from the NAR report is how many members (who probably thought real estate was their path to wealth) dropped out in their first or second year of membership.

The largest expense for most Realtors is vehicle expenses —$1,200. (My largest expense is, no surprise, advertising!)

Of the respondents to NAR’s survey who specialize in residential real estate, 23% reported no transactions in 2020. Another 32% reported between 1 and 5 transactions in 2020. The median was 4 transactions for males and 5 transactions for females. Notably, the median for White/Caucasian residential Realtors was 7 transactions, compared to between 2 and 3 transactions for other racial groups.

Here are some other findings from the 2021 Member Profile that I found interesting.

The median age of a Realtor is 54, unchanged from when I entered the business (as a 54-year-old) 19 years ago.

The typical Realtor has 8 years’ experience. 17% of residential Realtors said it was their 1st career. 49% said it was their 2nd career, and 34% said it was their 3rd or more.

79% of respondents were “very certain” they would remain in the business another two years.

Most Realtors worked 35 hours per week in 2020, down from 36 hours in 2019. (I work at least 60 hours/week and am still married…)

Text messaging is the top method of communication that members use with their clients, at 93%, followed by phone (90%) and email (89%).

88% of Realtors work as “independent contractors,” meaning they live on commission income alone, have no tax withholding and pay all their own expenses.

Realtors change firms a lot. The median tenure of Realtors with their current firm is five years.

65% of Realtors are females, up from 64% last year. (As I understand it, RE/MAX broke the gender barrier back about 1970. Before that, our industry was virtually all men — and they wore suits and ties to work.)

82% of Realtors own their own home, and 37% own a secondary property.

86% of brokerages are independent, non-franchised, mostly with a single office and typically have only two full-time licensees.

The typical residential brokerage has operated for 14 years. (That’s us! Rita and I founded Golden Real Estate in July 2007.)

Brokerages typically got 30% of their customer inquiries in 2020 from referrals by past clients, 25% from repeat business with prior clients, 10% from their website, and 10% from social media. (Golden Real Estate gets well over 75% of its business from readers of this column, which has appeared every week without fail for over 15 years.)

Firms with only one office typically had 18 transactions in 2018. (Golden Real Estate does much better, closing 45 seller sides and 22 buyer sides in the last 12 months.)

Of respondents to NAR’s survey, 57% were White/Caucasian, 20% were Hispanic/Latino, 16% were Black/African American, and 8% were Asian/Pacific Islander. 60% were female and 38% were male. 89% were heterosexual, 3% were gay/lesbian, and 6% preferred not to say.