Category: Real Estate

Today’s Technology Is What Allows Real Estate to Keep Functioning

The practice of real estate has come a long way from the days when homes were only listed in books the size of a big-city telephone directory. (You do remember telephone directories, don’t you?)

Back then life was simpler, but that depends on how you define “simpler.” Purchase contracts were one or two pages instead of 20 pages, and they had to be hand delivered, as did subsequent documents such as inspection and appraisal objections. Mortgage applications and information was all faxed, if not delivered in person.

Actually, life is simpler today. All documents are typically emailed back and forth and signed electronically, except for closing (which has to be done in front of a Notary). 

As you know, homes for sale can now be searched and viewed online. An in-person showing or two is common before submitting an offer, but not always necessary. Because our narrated video tours are just like an in-person showing, led by the listing agent, I’ve had out-of-state or even foreign buyers ask me to create a purchase contract, knowing that they can always terminate (which they haven’t) when they fly in for the home inspection. Here’s an example of one of our current video tours:

Example of a Golden Real Estate narrated video tour – 1957 S. Taft St. – Listed last week

Facetime is also a great tool for showing homes. When one of our own buyers from out of state expresses interest in a home which they learned about from an MLS email alert — another new technology tool — our agent will use Facetime or take our video camera and do a narrated walk through of that listing (because the listing agent did not create such a tour), and post it on YouTube as a private or unlisted video, and send a link for it to the buyer. 

Zoom came along just in time for COVID-19, replacing GoToMeeting as the “go to” software for virtual meetings.  A classmate from long ago sent me a link for a virtual 6-person band performance of an adaptation of the Bee Gees’ “Stayin’ Alive” cut, with COVID-19 lyrics. What a hoot!

Even this column is made possible by technology that wasn’t available when I was a newspaper publisher. I create it on my laptop using MS Publisher, create a PDF of it, and send it to the newspaper on deadline, which is two days before you see it in print.  Then I post it on this blog, which has hundreds of subscribers, and email it to 900 people who have chosen to receive it by email because they no longer subscribe to a printed newspaper.

Of course, this newspaper, like most, is also available in a “digital replica edition” on its website, which reaches even more readers. I love technology and how it has made life simpler!

How Golden Real Estate Is Coping With COVID-19 Guidelines

We and our partners in real estate continue to work while adapting to the COVID-19 guidelines for physical distancing, minimized travel, and more. Inspectors are still inspecting, but they don’t want buyers or agents in the house with them. Title companies are still doing their title searches and conducting closings, albeit with attention to sanitizing rooms and some physical distancing. Mortgage companies are still doing their jobs, as are the appraisers they hire.

Meanwhile, real estate brokers like us are still showing homes, writing contracts, negotiating inspection issues just as we always have — that is, by phone and email — and going to closings, although even that could be more virtual, now that Gov. Polis has issued an executive order saying that Notaries can work virtually.

What’s different is the cancelation of all kinds of meetings, open houses, and in-person continuing education classes (which are still available online). 

That keeps us all at home, which is where most brokers work anyway, but with fewer reasons to leave.  I’m walking the dog more than ever.  My Apple watch tells me that I completed all three activity rings last week.  Woohoo!

Bottom line: I’m sort of liking this, although I do look forward to getting back to normal.

COVID-19 Will Certainly Impact the Real Estate Market, but By How Much?

By JIM SMITH, Realtor®

We Realtors are keenly aware that the COVID-19 outbreak will affect the real estate market, but we’re all waiting to see that happen in a more measurable way. We’ve seen a reduction in showing activity, but homes are still being listed and keep going under contract, especially in the higher price brackets.

I dropped in on an open house Sunday and spoke with the agent on duty. This was a million-dollar listing on Easley Road, north of Golden. I showed up two hours into the open house, and he said that he had already had about 10 sets of visitors. Indeed one visitor was in the house when I arrived.

Two Saturdays ago, I had my best open house ever at a $580,000 listing in Golden proper, and 18 agent showings had been set for that same day. Two days later, the home was under contract for $620,000. Other than bumping elbows instead of shaking hands, it was pretty much business as usual.

I’m under no illusion that the market won’t slow down as more potential home buyers are unable to get mortgages because they were laid off. Cash buyers may be less willing to sell depreciated stocks to buy a home. But that’s not happening a lot yet.  A local TV news program had a segment Saturday evening in which a local real estate agent gave a similar account of a busier-than-ever real estate market.

My broker associates have seen some impact.  One of them told me a buyer had terminated a million-dollar purchase because they were concerned that they wouldn’t be able to sell their current home.

Another broker associate reported that his buyers are moving forward with their contract on a home, but only because they have stable jobs — one a physician and the other a public defender.

A third broker associate has a vacant land listing that had failed to sell for three years but suddenly has multiple buyers talking to her about submitting offers for it.

Another broker associate has a buyer from Connecticut who is retiring and wants to move to Colorado but had to cancel her flight because of COVID-19. Her state has instituted a stay-at-home order. Meanwhile, she told our agent that she’s now thinking more about looking outside the metro area where there’s “more space.” Maybe she’d like Kim Taylor’s Cedaredge listing featured this week!

The same broker associate said that a buyer from Chicago had been planning to make a non-contingent offer on a home but now wants to make it contingent on the sale of his current home because of concerns that it may not sell as readily now.

Yet another agent has a client who was ready to list their current home and buy another but is a physician concerned about getting infected herself, so she is holding off on those plans.

Source: REcolorado

The MLS statistics above show that life goes on across our industry. Homes are still being listed, going under contract and selling. However, the 21 withdrawn listings and the 25 back-on-market listings are likely homes where a contract fell, perhaps because of COVID-19.

Like any business, Golden Real Estate is adjusting to the situation with new practices and procedures. We carry disinfectant wipes and rubber gloves in our cars, and we have buyers meet us at listings instead of carpooling.  At our office, we have disinfectant wipes handy for wiping down hard surfaces after we or visitors touch them.  When it’s warm outside, we keep our front door open so that visitors (and we ourselves) don’t have to touch the handles at all.

Title companies are adapting, too. I attended closings recently at which the closer handed out only new pens and wore blue gloves herself, and the rest of us were spaced out more than before around the closing table.  One title company is doing “drive-through” closings, in which the documents were passed through the car window for signing!

The real estate industry will survive and people will still buy and sell homes, but we expect the volume of sales to decline.  How much we can’t be sure.

Stay-at-home orders and the closing of businesses, as implemented this week, could have a big effect, but real estate was exempted from that ruling as an “essential professional service.”

For over decade, Golden Real Estate has created narrated video tours of its listings. For an example, click on any of the listings at www.GREListings.com. If all brokerages did this, it would greatly reduce the need for open houses and in-person showings.

The Narrated Video Tours of Our Listings Allow You to Visit Them From Home

For over decade, Golden Real Estate has created narrated video tours of its listings. You can find examples at www.GREListings.com. If all brokerages did this, it would greatly reduce the need for open houses and in-person showings.

Here’s the video tour from this week’s featured listing in Lakewood:

What Does ‘Open and Transparent’ Look Like in Real Estate?

For some reason I’ve never understood, most listing agents believe that they should not be open and transparent with buyers’ agents regarding the disclosure of offers in hand when there’s a bidding war for their listing.

At Golden Real Estate, we believe in being open and transparent. Here’s what that looks like.

Rule number one is to always tell the truth. We never mislead a colleague about offers in hand. If we don’t have competing offers, we’ll never represent that we do. This is a matter of ethics. The Realtor Code of Ethics, to which every Realtor swears allegiance, requires no misrepresentation about anything, whether it’s how successful we are or whether we have competing offers.

Agents from other brokerages, however, typically won’t disclose the price or nature of the offers they have for their listings. At Golden Real Estate, we not only disclose the price and terms of offers received, but we will let each agent know if their offer is surpassed by a better offer. We don’t want any buyer or their agent to have the experience of being blindsided.

This is good for both buyer and seller, and buyers’ agents invariably thank me when I explain this policy. After all, how would you as a buyer like to learn later that if you had only offered $2,000 more (which you were willing to do), you would have won that bidding war?

Similarly, how would you as a seller, like to learn that you could have gotten $2,000 more for your house?

Although this process essentially operates like an auction, where everyone in the room knows what they’re bidding against and chooses on their own when to drop out of the bidding, it doesn’t mean that we let the bidding go on forever.

After the buyers have raised their bids twice, it’s time to ask for a final bid, without offering to return if it’s not the winning bid. While this is our policy, the seller, of course, is the final authority on how long to continue the back and forth. By that time, however, they tend to be quite happy with the highest bid and agree to cut it off. To do otherwise risks antagonizing the buyers and their agents.

It’s important to us as professionals that we leave each party in a bidding war happy that we were transparent enough that they felt they had a fair chance to win a coveted listing.

This approach takes more work on our part than doing what other agents typically do when multiple offer situations arise, which is to inform agents that they have multiple offers and ask buyers’ agents to submit their “highest and best.” Then the seller accepts the best offer and other buyers are upset and angry that they weren’t allowed to raise their offer.

We feel, however, that our approach is not only fairer to buyers’ agents but also produces the best price for our sellers.  We wish that other listing agents would adopt this practice.

Transparency, however, does not extend to disclosing the price at which a home is under contract prior to closing. The reason for that is that if the contract falls, we don’t want the next buyer to know what the seller was willing to accept. That’s because we have an ethical and legal obligation to work in our seller’s best interest.

The only time I would disclose the price at which one of my listings is under contract is when an appraiser needing comps calls me. If we are cleared to close — past inspection, appraisal and other contingencies — I’m willing to help that appraiser know the price so he can do his or her job in appraising a comparable listing for a different seller.

Thanks to this practice, Golden Real Estate has a better-than-average track record when it comes to closing price vs. listing price. In some cases this has resulted in our sellers netting their full listing price even after subtracting commissions and the other costs of selling.

Call me or one of our broker associates at 303-302-3636 if you like how we operate and would like a no-obligation market analysis of your home.

Renters Aren’t Taking Advantage of Rent-With-Right-to-Purchase Program

Renters face many problems that they wouldn’t face as owners.  Not only do they face uncontrolled rent increases, they don’t even know that their lease will be renewed. There’s always the risk that their landlord might sell the home and the new owner will want it for themselves or another tenant.

Both problems are made worse if the tenant has no lease at all or has transitioned to a month-to-month lease — quite common after the initial lease term expires. 

And the selection of new places to rent is small. If a tenant has to find a new place to live, he or she will be hard pressed to find a home they like — even more so if they have a pet.

Wouldn’t it be great if a renter didn’t face those problems of uncontrolled rent increases and having to move?  For a couple years now, Golden Real Estate has worked with a buyer who gives tenants a 5-year rent schedule and can’t be kicked out as their lease is renewed each year through that 5-year period. I’d like to see more renters take advantage of it, even if they aren’t buyers.

Our buyer is Home Partners of America. They not only address those challenges, they expand the number of homes from which to choose.  (And having a pet is not a problem.) That’s because Home Partners will buy any townhome or home on the MLS for which the renter has been pre-qualified as the tenant. Get your invitation to apply from Golden Real Estate, and once accepted as a tenant, you log in to HomePartners.com, which has every home on the MLS which you are qualified to rent.  Instead of just displaying the sales price of the home, it displays your personal rental price. 

Your contract with Home Partners, which is now your landlord, includes the rental amount for years 2 through 5, but you’re under no obligation to renew. Your contract also includes a purchase price for each year in case you like the home and decide to purchase it at any time during the 5-year period.

Call any Golden Real Estate agent at 303-302-3636 if you or someone you know is interested.

Guest Article from Money.com: The Best Home Security Systems for 2020

With technology continuously evolving and improving, home security systems today offer a wide range of protection and coverage options. Modern systems have features ranging from in-home motion and heat sensors to video doorbells and more, as well as apps and smart home integration that lets you monitor your home remotely.

Home security systems can range from basic with just door sensors, to comprehensive with fire and smoke sensors, glass sensors, and much more.

Many home security systems now feature smart home integration, allowing you to control lights, door locks, and more from your smartphone.

Some systems require professional installation, while others offer user-friendly do-it-yourself (DIY) installation. Before using a professional, make sure to know all the costs associated with the installation.

Your homeowner’s insurance may offer you a discount for having a home security system. Contact your insurance provider to see if you qualify.

In choosing the best home security systems of 2020, we evaluated each system using the following factors:

Security systems can range from basic to highly complex. We selected companies that offer a wide variety of security options, including everything from door sensors to video cameras and more.

We also made sure to include a selection of both professionally-monitored and installed options, as well as systems that embrace a DIY approach. Some of these DIY systems require no tools and install in under an hour, while some offer optional professional installation help.

While most security companies require contracts, we found some no-contract options for you, too. Most of the companies included that do require contracts offer at least a 30-day trial before commitment.

With 24/7 monitoring, a security company may summon help for you when you can’t. The companies included in this ranking all offer monitoring and emergency response.

We considered the company’s Better Business Bureau rating, user reviews and satisfaction ratings, and the company’s reputation for providing responsive customer support.

Best Home Security Systems

ADT – If you’re looking for versatile package options that cover home, commercial, and even small business

SimpliSafe – With easy setup and a no-contract option, SimpliSafe is a user-friendly home security system

Frontpoint – Easy to set up and no need for professional installation, Frontpoint is a versatile choice for many homeowners.

Protect America – With everything from water monitoring to glass sensors, Protect America’s wide range of options means you can customize your security system to your specific needs.

Vivint – Home security doesn’t just cover homes, anymore. With Vivint, your security system can extend to your vehicle, too.

Ring – Looking for a comprehensive security system that you can monitor on your own with no contracts and extra fees? Ring delivers exactly that, and 24/7 monitoring is available if you choose.

Google Nest – Need a system that integrates with your entire smart-home system? Google’s Nest does this, while also adding on variable options to help outfit your house.

This is abbreviated from the full money.com article which you can read at https://money.com/best-home-security-system/

The Licensing, Regulation and Ethics Requirements for Mortgage Loan Officers

By JIM SMITH, Realtor

In a recent column, I described the legal and ethical obligations that come with working in real estate, particularly as a Realtor. The mortgage lending industry has a similar obligation to protect consumers from unethical and fraudulent practices. Both industries are regulated by the Colorado Division of Real Estate, but the mortgage industry is subject to additional regulation on the federal level.

I spoke with one of my preferred mortgage brokers, Jaxzann Riggs,  owner of The Mortgage Network, to learn more about the subject. Here’s what I learned.

There are four main sources of mortgage financing for home buyers — credit unions, banks, mortgage companies and mortgage brokers. While there are many differences between each, the most significant is the additional training and regulation that mortgage  brokers must go through. Whereas “loan officers” or “loan originators” working at a bank or credit union are not required to be licensed, all mortgage brokers must be licensed at both a national and state level.

Registration and licensing (which are different) is completed through the Nationwide Mortgage Licensing System (NMLS), created in January 2008 in response to the housing market crisis occurring at the time. The Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act, enacted in June 2008, further mandated licensing by prohibiting individuals from originating loans without obtaining and maintaining their status as a licensed mortgage loan originator (MLO) through the NMLS, unless employed by a depository bank or institution such as Wells Fargo, Chase, Bank of America, to name just a few. All individuals originating mortgage loans must register with NMLS and obtain a unique identifier (NMLS number, which allows monitoring of performance), but not all “loan officers” must be licensed. While mortgage brokers must be licensed, loan originators working for banks are not required to complete the additional licensing and testing that mortgage brokers must go through. 

Before applying for a license, potential mortgage brokers must complete twenty hours of pre-licensing education, which consists of training on Federal laws and regulations, ethics, and general mortgage origination basics. Many states, including Colorado, require additional state-specific training.

After a prospective MLO has completed his or her pre-licensing education and passed the SAFE test with a score of 75% or higher, they are required to submit their credit report and their fingerprints for a criminal background check.  Only then can applicants apply for a license.  Once the individual has obtained their federal license, he or she is required to take additional classes to obtain their Colorado license, and there are annual continuing education requirements on both the state and federal level.

Another great benefit to working with mortgage brokers is that they must legally disclose all fees upfront, including how much they will be compensated for their services. By contrast, banks are not held to this same standard. Banks are not required to disclose how their loan officers are compensated.

The most important “take away” from this discussion is that it benefits the consumer to shop for a mortgage. In addition to the loan costs, ask your potential lender about their education, experience and licensing status. When working with buyers, I always recommend working with a mortgage broker for the reasons mentioned above. I recommend calling Jaxzann at 303-990-2992.

Do You Think a Big Down Payment Is Needed to Buy a Home? Think CHFA.

One of the most enduring misconceptions among home buyers is that a large down payment — typically 20% — is required in order to buy a home.  Nothing could be further from the truth.

FHA loans only require a 3.5% down payment, although they come with a mortgage insurance requirement which lasts for the life of the loan. Because of that, you’ll need to refinance with a conventional loan once you exceed 20% equity in your new home.

Conventional (non-FHA) loans don’t necessarily require a 20% down payment either. To compete with FHA loans, there are lenders who require as little as 3% down payment, often without mortgage insurance. If they do require mortgage insurance, it can be eliminated once your equity rises to 22%, although that requires a new appraisal, which can cost $400 or more.

Best of all, however, the Colorado Housing & Finance Authority (CHFA, pronounced “Chaffa) can get you into a home with as little as $1,000 out of pocket cost. CHFA loans have income limits, but they are reasonable, up to $120,100 in the metro area. Their website is super helpful and easy to navigate at www.chfainfo.com.

At that website you’ll learn the complete process involved in getting approved for a CHFA loan. One of the first steps is to take a free buyer education class that covers every aspect of the home buying process as well as ownership responsibilities after closing.

CHFA loans are only obtained through mortgage lenders, not from CHFA directly, and Golden Real Estate can connect you with a CHFA-approved lender. 

If you’re a veteran with an honorable discharge, you are eligible for 100% financing, but there’s a funding fee.  That fee, however, is waived if you have a service related disability. Even if it isn’t waived, the fee can be included in the mortgage so that you can literally close on a VA loan with zero money out of pocket. Earnest money submitted is refunded to you at closing! We can also connect you with a VA-approved lender.

Big Entities Target Mobile Home Parks, the Last Bastion of Affordable Housing

I just finished watching John Oliver’s riff on mobile homes. If you’re not familiar with his HBO show “Last Week Tonight” or don’t get HBO, the good news is that his single topic take-outs* are archived on YouTube, where you’ll be glued to your computer screen for an unending series of  take-outs that only starts with his take-out on mobile homes.

Here’s what I learned from watching John Oliver’s piece and was able to confirm by talking to others. Sometimes I wish I could be a full-time journalist again so I could really do investigative reporting, but I’m a Realtor now and have to depend on others like John Oliver and David Migoya of the Denver Post doing the heavy lifting. So, instead, Google is my friend. And there’s so much to learn just by Googling.

The big trend in mobile homes is the influx of big corporations like Warren Buffett’s Clayton Homes in the mobile home park business. Historically, such parks were “mom and pop” operations, but it was inevitable that mom and pop got old and, even if their children had an interest in taking over the family business, it was more profitable to sell the park to a developer or to a company like Clayton Homes.

What makes a mobile home park a great investment is that, while people own their mobile or “manufactured” home, they rent or lease the land on which it sits. The land owner can raise the rental fee without limit because, while the home can technically be moved, it would cost thousands of dollars to do so, and there’s little choice of where to move it. You can’t just buy a lot somewhere and put your mobile home on it. I checked with Jefferson County, and you can only install a mobile home on land zoned for mobile home parks. That rule feeds right into the greed motivating those corporations which, like Clayton Homes, are buying up every mobile home park they can.

Another thing about mobile homes is that, while they can be really nice when they’re brand new, they do not appreciate in value like regular homes. Rather, they decline in value like a car or like the “personal property” they are. Also, since they’re not “real property,” you can’t get a mortgage on them for 4% over 30 years, you get a chattel loan at 15% and for a shorter term.

Thus, if a mobile home owner can’t afford an increase in land rental for their home, their only choice often is to simply abandon the home that they paid thousands of dollars to buy. Since it becomes abandoned property, the mobile park owner can then assume ownership of it, or scrape it depending only on what makes financial sense. And down the road (so to speak), they can kick out the remaining occupants and sell the entire mobile park to a developer.

This is a heartless process, but it’s how our free enterprise system works. So, what can be done about it?

On January 21st Golden United sponsored a public meeting on the subject of manufactured housing which I attended, along with several city councilors and civic minded people. Sadly, only a handful of the attendees were residents of a mobile home park.

The main presentation was by an organization which organizes residents of mobile homes parks to form an owner’s association which might then outbid other buyers of the park when the current owner attempts to sell it. This organization, called Resident Owned Communities (ROC), was featured briefly in John Oliver’s piece.. (Fast forward to 13:10.)

What local governments could do to address the problem, Oliver said, was to legislate a “right of first refusal” by which an owner’s association or other non-profit entity serving the interests of mobile home park owners, would be able to match any bona fide offer by a for-profit buyer, and purchase the mobile home park. I’m not aware of any such legislation or other public policy aimed at protecting manufactured house, which is, after all, the last bastion of affordable housing in most cities.

Mobile home parks have few friends among owners of conventional real estate, but however you might feel about them, I hope you feel they are worth preserving.

————-

*“Take-out” is a journalistic term for an in-depth look at a single topic. During my 1968 internship at the Washington Post, I was tasked with writing a 3-part series on the solid waste industry in the District of Columbia. I enjoyed telling people that I did a “take-out on trash.”