Category: Uncategorized

Don’t Let Service People Take Advantage of You

It makes me angry when I hear of service providers telling a homeowner they need a new furnace, water heater or other major repair when they don’t. I got a call recently from a single older woman who has owned her home for a couple decades, the type of homeowner who is often targeted by sales persons to spend money they shouldn’t on repairs and replacements.

In her case, she was told she needed both a new furnace and new water heater, but, knowing I am in real estate, she called me for advice. I listened to her describe the issues she was facing, and recommended she call vendors I trusted. The result? She needed only some minor fixes and no big expenditures.

Women often encounter this problem when it comes to auto repair as well, since they tend not to be mechanically minded or experienced. It burns me up to hear about such stories, so here’s a little advice, in case you can relate to this situation.

If you need (or think you need) a home repair, whether it’s plumbing, electrical, painting, roof replacement, or anything else, call me or your favorite real estate agent (preferably a Realtor), and ask them to recommend a vendor. We deal with such vendors so often, and they count on our referrals for future business. If we refer you to a vendor — and you tell the vendor we did — he or she is less likely to take advantage of you, even if they wanted to, because they know that would jeopardize future referrals. We don’t get a referral fee from such vendors, so you can trust our recommendations.

Use this same strategy when, for example, you need service for your car. Call a Realtor you trust to get a referral to a trusted mechanic to enjoy similar protection against being taken advantage of.

Don’t Fall for This Gift Card Scam

This Monday, people on my contact list received an email that looked as if it was from me, asking for “help.” If they responded to the email, it went to a scammer pretending to be me who said I was in a meeting but could they help me purchase some Google gift cards for me and I’d reimburse them.

This kind of scam doesn’t hurt the person who’s being impersonated, but it hurts his/her friends and contacts who fall for it. Tell your family and friends about this scam and don’t let them fall for it.

Experts Are Predicting a Surge in Foreclosures, But I See the Situation Differently

With the continued high unemployment rate and the expiration of Pandemic Unemployment Assistance (PUA), many homeowners are hurting, so it makes sense that we may have a foreclosure crisis in our future.

CoreLogic reported recently that back in June (when the Feds were still sending $600/week in PUA to Americans) the share of mortgages with payments 90 to 119 days late had already risen to 2.3%, “the highest level in 21 years.” A rate that high could result in a foreclosure crisis, the report said. Not only could millions of families potentially lose their home, but that would also create downward pressure on home prices.

But I see the situation differently, and after consulting with Jaxzann Riggs of The Mortgage Network, here’s why I don’t expect that flood of foreclosures.

First of all, foreclosure should only happen when a seller owes more on their home than it is worth. That’s because sellers lose all their accumulated equity in a foreclosure, and most people have accumulated a lot of equity thanks for the sellers’ market we have been experiencing.

Secondly, federally mandated forbearance is in effect, which is unlike the forbearance which delinquent borrowers may have enjoyed in the past. Under the current plan, lenders add extra payments at the end of the loan instead of requiring any kind of catch-up payments. This mandate could be extended, too.

The only people likely to face foreclosure will be those who recently took out 100% VA loans or 96.5% FHA loans or conventional loans with only 3% down payment, and for whom there is hardly any equity to lose in a foreclosure action.

Being on forbearance doesn’t affect one’s credit rating even though you are not making payments (again, part of the federal mandate), but once you resume payments, you need to make a minimum of three on-time payments to qualify for a Fannie Mae or Freddie Mac loan, which will restrict your ability to sell your home and purchase a replacement home. Some lenders require six months post-forbearance loan payments.

That, too, will slow down any surge in what are known as “distressed listings.”

A Reader Asks How to Handle Inspection Objections

Inspection is the first and biggest hurdle in any contract to buy and sell a home. It’s an area in which experience by your agent really counts!

Usually the buyer will only ask for serious issues to be addressed by the seller. The seller rarely agrees to all the demands, nor is that expected. A common practice is to fix the easy items but give the buyer a price reduction or credit toward closing costs in lieu of making the big dollar repairs. When the buyer wants older appliances that are still working replaced, one solution is for the seller to purchase a home warranty covering those and other appliances.

Good luck with your inspections!

Despite Global Pandemic, Our Real Estate Market Was the Hottest Ever for August

Much to the consternation of observers, the real estate market in metro Denver was hotter this August than it was in any previous August, according to the Market Trends Committee of the Denver Metro Association of Realtors (DMAR). At this rate, 2020’s statistics at year end will likely exceed 2019’s statistics.

The report covers an expanded metro area, including 11 counties instead of the 7 urban and suburban counties that you and I think of as “metro Denver.” The non-urban counties included in the report are Clear Creek, Gilpin, Elbert and Park.

Detached single-family homes sold like crazy in August—up over 6% from August 2019, despite 50% fewer active listings at month’s end. The average sold price was up 13.8% from last year, and average days on market was down 23%.

Attached homes sold on a par with last year, although their inventory was also down — 19% fewer listings at month’s end. They did sell quicker, though, with days on market down by over 27%.

Unlike DMAR, I like to define the metro Denver market as within a 25-mile radius of the state capitol, as shown here, instead of by county. Using that method, the number of detached homes sold this August was up 13.7% from August 2019, and the sold price per finished square foot (my preferred metric) was up 7.0%. Average days on market dropped by 31%, but median days on market plunged 57% from 14 days in August 2019 to 6 days this year.

Even more interesting to me is that median days on market was in double digits until March 2020 — the first month of Covid-19 lockdown — when it dropped by 40% to 6 days, and remained in the 5- to 7-day range through August. It could be said that “Stay at Home” and “Safer at Home” really meant “Buy a Home” in the real estate business!

Average sold price within that  25-mile radius rose by 13.4% to $597,290, while median sold price rose by 11.6% to $505,000. The gap between average and median is attributable to a large number of million and multi-million dollar closings. I wish others would stop focusing on average stats for that reason.

The number of active listings (what we call “inventory”) plummeted from 6,483 in August 2019 to 3,444 in August 2020, a 47% decline.

Another measure of market strength is how many listings expire without selling. That number was 777 in August 2019, but it fell by 37% to 493 this year.

The average ratio of sold price to listing price was 100% both last August and this August — suggesting that roughly half the listings sold above full price. With half the homes selling in 6 days or less, it’s to be expected that there were multiple offers and possibly a bidding war on many listings.

This week my downtown Golden fixer-upper closed at $665,000, which was $40,000 over listing price. My Lakewood listing from last week is already under contract at $55,000 over full price. Clearly, the seller’s market is still hot despite the pandemic.

If you have considered selling your home, there couldn’t be a better time than now to put your home on the market. And you couldn’t do better than call one of us listed below to talk about it. Your home would, of course, be featured in my weekly Denver Post column and on this blog.

If you let us represent you in the purchase of your replacement home, the listing commission could be as low as 3.6% and qualify you for totally free moving!

Jim Smith— 303-525-1851

Jim Swanson — 303-929-2727

Carrie Lovingier — 303-907-1278

Chuck Brown — 303-885-7855

David Dlugasch — 303-908-4835

Carol Milan — 720-982-4941

If You Don’t Put Your Home on the MLS, You May Not Get What Your Home Is Worth

A reader wrote me last week complaining that some homes in her subdivision are being sold privately for less than they should, without putting them on the MLS. It bothered her because doing so creates lower comps that could affect what she is able to get for her own home when she sells.

Just as important, there are buyers who would like to move into her neighborhood who are frustrated when a home is sold before they can submit their own offer for it. And, of course, sellers are not getting the highest possible price for their home, as I’ll explain below.

Among the culprits are fix-and-flippers and “iBuyers” such as Open Door and Zillow Offers, who convince sellers to take a cash offer, claiming to save them the cost and inconvenience of listing their home on the MLS. More about them below, as well. (See my Jan. 2, 2019 and my Aug. 22, 2019 columns about iBuyers.)

If anyone offers to buy your home for cash without listing it, there’s one thing you can be certain of: they’re going to pay you a price that leaves lots of room for profit. That is money that could be yours if only you exposed your home to the full market by putting it on the MLS.

The worst thing you can do in a “sellers market,” which is what we have now, is to sell your home off the MLS. The next worse thing you can do is, after putting your home on the MLS, to sell it to a buyer who quickly offers you full price. If someone offers you full price on day one, you can be sure that there are other buyers who’d be happy to pay even more. Four days should do it.

But there is something worse than both those scenarios, and that is to put your home on the market at a price which does not attract any offers. I tell my sellers that they can overprice their home, but they can’t underprice it, because a low price can trigger a bidding war. An experienced Realtor like myself can help you set the perfect listing price. Just remember not to accept the first offer — unless that offer comes long after you put your home on the market, because you overpriced it.

What I see all too often is sellers putting their home on the market at a wished-for price, then lowering the price reluctantly over several weeks, and ending up getting only one offer, not multiple offers, at a price that’s lower than what they might have gotten if they had priced the home right initially.

It’s tempting, I know, to accept an unsolicited offer to sell a home without paying 6% commission, but I can’t even remember the last time I charged 6% commission. Remember, 2.8% of any listing commission goes to the buyer’s agent. Typically, sellers who try to sell “by owner” end up paying that 2.8%, so they only save the difference between 2.8% and the full listing commission, which is 5.6% on average. At least that is what I charge, and I reduce it if I sell the home myself, and I reduce it further when I earn a commission on the purchase of the seller’s replacement home.

If you factor in the totally free moving which I provide (locally, of course) when you sell and buy with me, it’s hard to justify not putting your home on the MLS with Golden Real Estate, thereby exposing it to all those bidders in this still-hot seller’s market.

Our Denver MLS, REcolorado, is now enforcing a new rule called “Clear Cooperation,” which was voted into being by the National Association of Realtors last November. It requires MLS members to put their listings on the MLS within 24 hours of promoting their listings in any way.

The rule is very simple: If a listing agent promotes his or her listing in any way — with a yard sign, tweet, Facebook post, or newspaper article, etc. — the listing must be on the MLS, either as “Coming Soon” or “Active.”  If it’s “Coming Soon,” the sign must say so, and it can’t be shown, even by the listing agent himself. Once shown, it must be changed immediately to Active status, making it available for showings by all members of the MLS. Prior to Sept. 1st, REcolorado only issued warnings, but fines are now being levied for violations.

So, yes, there can be off-MLS sales, but not involving an MLS member unless there was no marketing at all, not even emails to his/her clients. With “pocket listings” now banned, the focus now turns to the iBuyers, companies like Open Door, Zillow Offers and others which directly solicit homeowners to purchase their homes, charging a 7% “service fee,” with the intention of flipping the home for a profit.

Only time will tell whether this new rule, with fines being levied, will make a big difference, but it surely will make some difference.

Any Talk About Affordable Housing Must Include Mobile Homes

Mobile or “manufactured” homes are the original and enduring form of affordable housing. You see them in rural and, as workforce housing, near resort communities, but you also see them in the Denver metro area. Five mobile home parks are within two miles of our Golden real estate office.

More than 100,000 people live in over 900 mobile home parks across Colorado. If our goal as a society is to preserve and expand affordable housing, we must protect and even expand mobile home ownership.

But there are problems.

Mobile home owners pay upwards of $100,000 for their homes (mostly pre-owned), but they have to rent lot space in a park. I was told that zoning laws in Jefferson County (and probably elsewhere) don’t allow a mobile home not in a mobile home park.

Increasingly, mobile home parks are owned by big national corporations whose only interest is maximizing profit. Because it is financially prohibitive to move a mobile home, and you can only move it to another park, the park owner has the home owner over a barrel. They can increase the rent as much and as often as they want and the owner has to pay it or be evicted. Until the passage of HB19-1309 by the Colorado General Assembly last May, which strengthened the Mobile Home Park Act, a homeowner (who the courts treat as a tenant) had 48 hours to vacate for non-payment of rent, and if they left the home in place, it became the property of the park owners. Now they have 10 days to cure a notice of rent past due and then have 30 days to vacate, but the problem persists — you either pay or you surrender ownership of your home.

Now that mobile homes can be listed in the MLS, I found 11 such homes in the metro area that are active, pending or have closed in the past 6 months. Rents range from a low of $7,500 to a high of $10,920 per year. Many of the homes couldn’t be sold for that much and are depreciating every year, unlike “regular” homes, which appreciate.

A mobile home, by the way, is not real estate and can only be on the MLS if it is on owned land or has a land lease. Mobile homes are titled with the Department of Motor Vehicles, and yet they are taxed as “real property” by the county assessor rather than via “ownership tax” from the DMV, as with automobiles. The property tax on those 11 listings ranged from $142 to $803 per year.

Although last year’s legislation created a complaint resolution process for mobile home owners, it is not utilized as much as it could be, because residents are fearful of retaliation by management. If you get on the wrong side of management, you face increased enforcement and fines which are added to rent. Don’t pay the full rent, and you’ll be evicted. And you thought HOAs were difficult! One resident of a Golden mobile home park who has been outspoken told me that the number of “rule notifications” – known among residents as “nastygrams” – has exploded as a result of speaking up.

I was educated (in less than 20 minutes!) on this topic by a segment by John Oliver on his program “Last Week Tonight.” Do watch it using the link above.

While mobile home park residents may be reluctant to speak up for themselves, they have allies among progressives within the larger community, notably the Golden United Housing Task Force. They meet monthly on the first Wednesday of the month. One of the leaders of that effort within Golden United, Kathy Smith (no relation), sent me a super-informative email with the following information, much of which is reflected in my published column.

The state government’s website is https://cdola.colorado.gov/mobile-home-park-oversight.

Also, the Colorado Sun did a series titled “Parked.”  https://coloradosun.com/tag/parked-half-the-american-dream/

Golden United and the Jefferson Unitarian Church Community Action Network (JUC CAN) are collaborators on a 2-year grant made possible by the Community First Foundation to engage and inform residents of manufactured housing communities in Jefferson County about new statewide laws that provide protections for residents of mobile home parks. The main organizations for the grant are Together Colorado, 9to5 Colorado, and the Colorado Coalition of Manufactured Home Owners (CoCoMHO). We are just getting started and will be working at some mobile home parks in the Golden area, including Mountainside Estates, Golden Terrace, and Golden Hills. We will also be working at parks in Arvada and probably Lakewood. Here are some excerpts from the grant application:

Background:

An important aspect of housing options in Jeffco is preservation of existing affordable housing. Manufactured housing is the largest unsubsidized source of affordable housing and provides homes to seniors on fixed incomes, low-income families, people with disabilities, veterans, immigrants, and others in need of low-cost housing. More than 100,000 people live in more than 900 manufactured home parks (MHPs) across Colorado,  In MHPs. Home owners own their homes but rent their lot from the park owner. Because it is often nearly impossible to move their homes, when park owners raise lot rents, residents are trapped, choosing between paying the rent or abandoning their homes. Many MHPs are owned by corporate landlords.

The Colorado Department of Regulatory Agencies (DORA) performed a Sunrise Review of Manufactured Housing Communities (October 2018). The report states:

“Clearly, harm is occurring in manufactured housing communities… The harm largely stems from the lack of enforcement of existing laws, bad actors exploiting a relatively loose regulatory structure, and the inevitable tension that arises when the house belongs to one person but the land beneath it belongs to someone else. Conditions for Colorado owners of manufactured homes could be improved by increasing community engagement within the communities, including the forming of homeowners associations and cooperatives; educating homeowners about their rights and encouraging them to challenge community owners when appropriate or file complaints with the proper authority…”

This DORA report provided the justification for recent legislation that enforces the Mobile Home Park Act (MHPA) and created the Mobile Home Park Dispute Resolution and Enforcement Program (DREP). It also provides validation for our approach of community engagement and education.

As laid out in the DORA Review, residents of many MHPs are experiencing exploitation and numerous stressors. Recent impacts from coronavirus will further hamper the ability of families and individuals to meet basic needs. Some examples of current practices that create instability and stress include: (a) increasing rent, decreasing services, issuing mandatory fees, or billing for something not previously billed in an unequal way, (b) issuing warnings/citations/fines that are not justified, (c) serving notices or threatening eviction when not justified, (d) selectively enforcing rules/requirements, (e) conducting management visits or surveillance targeted at a complainant that is unjustified, (f) adding maintenance responsibilities for trees or fences, and (g) property rights capture (i.e., loss of autonomy over home and lot space).

These practices lead to instability and stress, both economic and emotional. Many of these practices can be addressed through enforcement of the MHPA and the rules for the DREP complaint process. Further policy changes can be sought through the state legislature and local jurisdictions. Ultimately, more oversight, protections, and enforcement can lead to systemic change which will, in turn, reduce expense burdens and the number of evictions, and improve the quality of life for Jeffco MHP residents.

Recently, the Colorado Legislature has updated laws that regulate MHPs. The Mobile Home Park Act (MHPA), circa 1985, provides protections under the law for mobile home residents, but has had minimal enforcement. In 2019 the legislature passed HB19-1309, MHPA Oversight. This law grants the Colorado Division of Housing oversight over the MHPA and the authority to administer a Dispute Resolution and Enforcement Program (DREP). The DREP provides a mechanism to submit complaints without the expense of hiring a lawyer and will begin taking complaints on May 1, 2020. An anticipated benefit of the DREP is to decrease evictions and housing insecurity in MHPs.

For more information or to join Golden United in their MHP initiative, you can contact Kathy Smith at 303-278-8025.

Improving Your Home’s Ventilation Can Reduce the Spread of Covid-19

An article I just read in the Colorado Sun, written by Shelly Miller, Professor of Mechanical Engineering at CU-Boulder, tells us something really important — that keeping the concentration of CO2 (generated by human breathing) under 600 ppm in indoor spaces has been shown to dramatically reduce the spread of Covid-19. Here’s a link to the source article:

https://theconversation.com/how-to-use-ventilation-and-air-filtration-to-prevent-the-spread-of-coronavirus-indoors-143732

Prof. Miller receives funding from the National Science Foundation, Environmental Protection Agency, Centers for Disease Control, National Institutes of Health, and additional nonprofit organizations. She is affiliated with American Association of Aerosol Research and the International Society of Indoor Air Quality and Climate.

Thanks to reader Jen Grauer for bringing this to my attention, and I’m happy to bring it to yours!

At Golden Real Estate it has been our practice since the beginning of the virus to keep our front doors open so that we and our visitors don’t have to touch them, but now we realize that this practice also makes our indoor air safer. We also have a CO2 monitor, which we’ll now plug in and display prominently in our office.

When It’s Time to Replace Your Gas Forced-Air Furnace, Consider the Alternatives

As I write this, I have just completed shooting videos of the 15 homes on this year’s Metro Denver Green Homes Tour.

The tour, currently in its 25th year, takes place on the first Saturday in October. Normally, you would register for $10 and get a book describing the homes, along with a map. Armed with that, you create a self-guided tour of the homes which interest you. You’d have to complete your tour by 4pm that day, followed by a reception and expo.

Because of the pandemic, this year’s tour will be totally virtual, which is actually better because you’ll get a link to view detailed videos of every home on the tour and not miss any of them due to time constraints. We won’t release the URL for the tour until October, but when we do you’ll be able to take your time to view all 15 — and the virtual tour is free! I’ll publish that URL in my October 1st column.

Meanwhile, let me share one particular lesson that you will learn from viewing the 15 videos: that gas forced air furnaces, no matter how efficient, are obsolete.

One thing you learn really quickly in the sustainability arena is that America is far behind other countries when it comes to energy-efficient technology. That’s because our fossil fuel costs have always been lower than in Europe and Asia, specifically Germany and Japan, where you’ll find the most innovation and product development. Just look at this chart from statista.com of electricity costs in different countries:

Germany 33 cents/kWH, Japan 22 cents/kWH, United States 13 cents/kWH

With our cheap energy, higher standard of living and higher incomes, Americans have long been able to waste money and energy with abandon. The result has been to leave it to other countries to create more energy efficient and less costly products.

Since home heating and transportation are the most energy-intensive aspects of modern life, that’s where we have seen the greatest innovation abroad. We in America continue to play catch-up and hang on to old technology. Our continued use of gas furnaces is an example of hanging on to old technology.

For a long time, I thought that higher efficiency gas forced air furnaces was the direction we should go to reduce our carbon footprint. However, after viewing the videos of highly efficient net zero energy and even energy positive/carbon negative  homes, I think you’ll agree that it is time to abandon altogether that method of heating our homes.

Carrier Hybrid Heat Pump

When Rita and I purchased our current home in 2012 and installed the maximum solar photovoltaic system allowed by Xcel Energy (10 kW), we looked into how we might heat our home using the free energy we were creating from the sun. That’s when we learned about and purchased the Carrier Hybrid Heat® system, which uses an air source heat pump paired with a gas furnace to heat our home in the winter and cool it in the summer. It looks just like a gas forced air furnace, but the gas flame only comes on when the outside air is below the temperature at which the heat pump can generate heat from outside air.

Although Carrier still sells its hybrid system, heat pump technology has advanced far enough that gas back-up is no longer needed in our region. However, since our hybrid furnace uses natural gas so seldom, we won’t replace it anytime soon.

When your gas forced air furnace needs replacing, don’t make the mistake of replacing it with a newer and better gas forced air furnace. Instead, look into the many alternative ways of heating your home, which you’ll learn about when those 15 video tours are released in October. (If you can’t wait, Google “heat pumps” and investigate the options.)

Heat pump systems (Wikipedia link) can use your existing ductwork (as in our home), or they can be ductless (like at Golden Real Estate’s office). My January 4, 2018, column (link) described the transition to the ductless system at our office.

Solar thermal (Wikipedia link), using both flat panels and evacuated tubes, is another technology, typically augmented by electric and heat pump units, which can provide heating as well as domestic hot water. A few of the homes on this year’s tour have solar thermal systems.

Geothermal heating (link to vendor), present in other homes on the tour, takes advantage of the earth’s temperature below the surface. In our latitude that subsurface temperature is about 55°F  year-round. It is extracted by running a liquid-filled loop 300 feet or so into the earth and using a heat pump to heat that 55-degree liquid for radiant floor or forced air heating, or using it at 55 degrees for cooling in the summer. That takes less energy than our air source heat pumps, which take much colder air from outside and extract heat from it in the winter, and can then cool your house (like A/C) in the summer.

The thing to remember about heat pumps is that they don’t create heat (such as from burning fossil fuels), they move heat. The difference between a traditional A/C system and a heat pump system is that a heat pump moves heat in two directions, not just one.

Blower door test during a home energy audit. Credit: Holtkamp Heating & A/C, Inc.

There is so much more to learn about efficient heating and cooling of your home. But first, to provide the highest return on investment (and lowest heating cost), you will want to improve your home’s insulation. A blower-door test (energy.gov link), conducted by an energy efficiency professional, identifies where the leaks are in your home, so they can be sealed. A heat recovery ventilator (HRV) (Wikipedia link) can then help you bring in fresh air without losing your home’s heat.  (A heat exchanger within the HRV transfers the temperature of the outgoing air to the incoming air.)

Thermal mass (Wikipedia link) can play a big role in reducing the energy needed to heat a home. You’ll see thermal mass applications in many of this year’s videos. Concrete, brick, water and even dirt can function as a thermal mass to accumulate heat from the sun and then release it slowly after dark. (There is an example of a “climate battery” (vendor link) using dirt on this year’s tour.) With the proper roof overhang on south-facing windows, your thermal mass is shaded from the sun during summer months but exposed to the sun in the winter, when the sun is lower in the sky.

The best way to heat and cool your home may be different than the best way to heat and cool someone else’s home, and it’s hard to do justice to this subject in a single article.

Here are a couple vendors I’ve used who would, I’m sure, be happy to give you some free advice about the best heating system for your home.

  1. Bill Lucas-Brown, owner, GB3 Energy – www.GB3energy.com, 970-846-4766 or bill@gb3energy.com. He sells and installs heat pump systems, but also does energy audits, including blower-door tests and will super-insulate your home as he did for my current home and for the Golden Real Estate office.
  2. Dennis Brachfield, owner, About Saving Heat – 303-378-2348 or info@aboutsavingheat.com. Dennis does blower-door tests and will super-insulate your home, based on what the test reveals. He does not sell or install heat pumps or mini-splits, but he can refer you to someone and probably give you good advice about their applicability to your home. I have known Dennis for 30 years, and he has tested and insulation several homes for me.
  3. Note: HomeAdvisors would be a reasonable choice for such a project. I have not used them, but I am impressed at their quality control regarding the vendors they work with. Did you know this national company is actually based in Golden? Originally called ServiceMagic. (888) 921-3034
  4. For geothermal heating, see the link in the paragraph about geothermal heating for a vendor who sounds great to me, but whom I haven’t used.