2020 has been a hard year for so many Americans, but it has not been equally hard. Some people are suffering greatly, and food insecurity has become far too widespread. Everyone deserves to experience what the “American Way of Life” offers at its best. We wish that for all of you.
Andrea Cox, originally from Buffalo, has lived in Colorado for 6 years. She and her husband Matt moved here to start a family and enjoy the outdoors. Their 5-year-old daughter Andaline and their dog Pancake keep life interesting. Andrea also has a passion for photography and the arts. She continues to hold strong ties to the East Coast, with family in Western New York, Connecticut and North Carolina.
Andrea started her real estate career in Denver in 2015. She and her family moved to Golden in 2016 but subsequently moved to northeast Colorado seeking refuge from the climbing cost of living in the metro area. She has been living and selling real estate in the Ft. Morgan area, but she and her family will be returning to Golden in 2021 to make it their forever home.
There will always be people who are comfortable with selling their home without the assistance of a real estate professional. In 2019, 8% of sellers chose the For Sale By Owner approach. That’s an increased from 2018’s record low of 7%.
Here are some of the things with which you need to be comfortable if you choose the FSBO approach to selling your home.
Commissions: You will save on commissions, but not as much as you probably think. Listing commissions are negotiable, and the average commission is below the 6% you may think it is, and the listing commission includes the “co-op” commission paid to the buyer’s agent. In our market, that co-op commission is typically 2.8%.
Since most buyers choose to be represented by a buyer’s broker, you can expect that you won’t be able to save more than about 3% on commissions. Then you need to calculate whether selling without professional representation of your own is worth that reduced savings.
Net proceeds: It’s possible that you won’t get as high a price for your home without the marketing advantage of being listed on the MLS, which could attract multiple offers and even a bidding war.
Putting aside that bottom-line calculation, here are some other elements to be considered by the unrepresented seller.
Showings: How will you handle showings, including screening those who will be walking through your home? This is handled nicely by ShowingTime, the service utilized by virtually all agents in the Denver market. They make sure that only licensed agents are approved for showings. All licensed agents have been fingerprinted and passed a background check. In two decades of listing homes, I’ve never had an incident of theft or other crime associated with an agent showing of my listings.
Your time: Another consideration is the convenience of showings. Yes, you could purchase a lockbox and allow agent showings when you aren’t home, but you don’t want to give the lockbox code to buyers who don’t have an agent. Someone has to let them in.
Feedback: Another service provided by the showing service (only available to agents) is obtaining feedback after each showing and forwarding it to both seller and agent.
Disclosures: There are strict rules regarding disclosures of “adverse material conditions,” which real estate agents know well. If your home was built before 1978, there’s a 5-figure fine associated with failure to disclose possible lead-based paint hazards in your house, even if the disclosure would say there are no such hazards.
Pricing: Even in a seller’s market, an overpriced home can sit on the market for a long time and end up selling for less than if it were priced correctly in the beginning. Priced correctly, your home may attract competing offers, and an experienced agent (like us at Golden Real Estate) knows how to play those buyers against each other to get you the highest possible price.
“But it’s a seller’s market”: Yes, it’s easier in our long-running seller’s market to sell a single-family home (condos are stalling because of Covid-19), but that makes it all the more important to get your home in front of the full market to stimulate competition, which only a listing agent with access to the MLS can do for you. It’s no surprise that the number of FSBOs has fallen, not risen, because of this dynamic. Your net proceeds, even with a higher commission expense, could be much higher.
The term “virtual tour” was introduced to the real estate industry a couple decades ago, and early vendors wowed us with 360-degree still photos of each room The latest “shiny object” is a product by Matterport. I remember getting a demo of it at a trade show several years ago. They call their product an interactive virtual reality tour — still photos in which you can use your mouse or finger to rotate each photo manually left to right or up and down. Gray circles indicate new photo points. You click on them and are taken to that place where you can, again, rotate horizontally or vertically. Thus, you can, at your own pace, navigate around the entire property choosing which room you want to enter and leave. Here’s an example of a Matterport tour:
Still, it’s only a collection of still photos with no narration. Personally I find it kind of dizzying and nowhere near as useful as being walked through the home by the listing agent pointing out the features of the home.
I have been selling real estate now for 19 years and seen a dozen or more variations of the “virtual tour” concept, but none of them include narration like the video tours we have been creating since 2007.
For this article I studied 50 currently active listings by other brokerages and only half have any “virtual tour.” More surprisingly, only one of them had a narrated video tour. The rest were merely slide shows, most of them with music, but 10 were completely silent, which merely duplicates the MLS’s own slide show. (Example) Two had actual videos but they were drone videos. Eleven had the interactive Matterport slideshows described above.
The one narrated tour was quite good in the detail which the agent shared, but the agent chose to be in half the scenes, which struck me as a little weird. I prefer to feature the home, not myself, in my video tours.
Visit www.GRElistings.com to view our currently active and pending listings, each of which you’ll see has a narrated video tour.
Back in April 2019, I offered to set up Free Neighborhood Alerts for any reader who wanted to keep track of real estate activity in their subdivision or larger area. The response was overwhelming. I myself have 42 readers who currently receive such alerts for their neighborhood.
I’m not complaining. My broker associates and I are pleased to make this service available to everyone who wants it, and we’ve become pretty efficient at creating these free alerts.
The MLS allows members to set up an unlimited number of email alerts, designed to assist buyers in searching for homes. We have adapted it to provide neighborhood alerts. Once set up, the alerts are generated automatically by the MLS. Just give us your address and the boundaries of the area you wish to monitor. The initial alert will tell you all the coming soon, active, under contract, sold, withdrawn and expired listings in that area, going back 90 days or longer.
Future alerts will come to you within 15 minutes of a new or changed listing being entered on the MLS. You will literally be up-to-the-minute in your knowledge of real estate activity in your neighborhood!
I’m happy to handle every request I get from readers, but feel free to ask any of our broker associates to create a neighborhood alert for you. They are listed below with their email addresses and are more than happy to provide this free service. Send your requests by email only, please.
In addition to setting up the neighborhood alert for you, we can also send you valuation reports on your home using two different software packages — Realtor Property Resource (RPR), which is only available from members of the Realtor association like us, and Realist — that you will find are much more accurate than Zillow’s “Zestimates,” which home owners are used to seeing.
I also like to provide a spreadsheet of active, under contract and sold listings that are comparable to your own home, which serves as a double-check on those two software valuations.
Jim Smith, Jim@GoldenRealEstate.com
Jim Swanson, BrokerSwanson@aol.com
Chuck Brown, Chuck@GoldenRealEstate.com
David Dlugasch, David@GoldenRealEstate.com
Ty Scrable, Tyler.Scrable@gmail.com
Are you thinking that now’s the time to leave your big-house life behind? If so, you’re in luck. Despite the pandemic, the real estate market is strong, interest rates are low, and it’s still a great time to sell and buy. But you can’t go into the process blindly. Here are some tips to get you started on the right track.
First on your to-do list: Work with an experienced agent like those of us at Golden Real Estate. After all, an agent who knows the area can price your home correctly and help you find the right replacement home for you. We know the local market and whether a neighborhood is senior-friendly. You can ask us questions and get knowledgeable answers about local amenities, such as public transportation, fitness centers, and local senior facilities that will enrich your life.
If you prefer to downsize into a rental unit within a senior community, we can advise you on those communities and that process too, so feel free to ask us.
We can also help you determine a budget. As a buyer, keep in mind that it’s a seller’s market, and having us on your side can help get your foot in the door. If you’re moving locally, we can also save you a bundle with our free moving truck and our in-house movers.
You want to take a look at your budget to determine what you can afford. Our preferred lenders offer free affordability calculators. They allow you to input data, such as your home price, down payment, and monthly expenses. This can help you determine your potential future living expenses.
Once you have an agent and a price range, it’s time to compare what you can afford with what you need, and then make adjustments to your list as necessary. Many seniors, according to Home Tips For Women, look for features including those which lower utility costs. These, along with things like single-level living and wide doorways, allow for greater mobility, an important consideration if you’ve already begun to experience mobility issues.
Something to keep in mind during the downsizing process is that moving into a smaller home will require downsizing your belongings as well. Once you have chosen your future home, you can evaluate the belongings in your current one. This is an emotional process which takes patience, and, ideally, you’ll have cooperation from your friends and family. It’s often best to give certain things to your children and grandchildren now so you’re not tight on space in your new home. You can use our truck for that, too (and for trips to Goodwill).
If you’re moving outside the metro area, choosing the right moving company is something else that deserves special attention. Movers charge different prices, even for what appear to be the same services. Your moving company will factor everything from whether you need an entire truck to how far you’re moving, to the overall weight of your household goods into the price. Previous clients have given us feedback on their experiences which we can share with you.
Finally, make your move while you’re in good health and don’t wait until you have to move. And let yourself enjoy the process. Your retirement is a time of change and to feel all the excitement associated with it. Moving is not always easy, but the end result of downsizing can be more financial freedom and a better quality of life during your senior years.
Downsizing as a senior presents a significant lifestyle change, but it’s one to embrace. If you still have questions, don’t be afraid to reach out to us. My broker associates and I (see below) are here to make the process as seamless as possible and can be a valuable resource not to be overlooked.
Jim Smith— 303-525-1851
Jim Swanson — 303-929-2727
Chuck Brown — 303-885-7855
David Dlugasch — 303-908-4835
Carol Milan — 720-982-4941
Tyler Scrable — 720-281-6783
Here’s a Good Resource for Seniors
Colorado doesn’t rank high in the percentage of our population that’s 65 and over. In fact, seniors represent only 14.2% of our population, ranking Colorado 46th among the 50 states.
Recently I was made aware of a website with tons of Colorado-specific information for seniors. Here’s that website’s address: https://www.seniorhousingnet.com/seniors/senior-living-us/colorado
It’s common for people to put stock in Zillow’s “Zestimates” of their home’s value, but any Realtor can provide a much more accurate estimate of your home’s value. Realtors have access to my favorite valuation tool, the Realtor Property Resource or RPR, as well as to the MLS’s Realist tool, which non-Realtors can access. (Not all agents are Realtors.) Also, we can use the MLS to create a spreadsheet of all the comparable homes which have been on the market in your subdivision or area. Here’s an example:
Up for Growth Action describes itself as the only federal advocacy campaign focused solely on breaking down the barriers to affordable and market-rate housing.
“Housing was on the ballot on November 3,” said Mike Kingsella, executive director of the organization. “The next Congress and new administration cannot afford to ignore the immediate and long-term challenges of housing in the United States, because we have a housing shortage that affects nearly every aspect of Americans’ lives. We will be on the front lines of advancing a bipartisan, pro-housing agenda that increases access to high-quality housing in vibrant neighborhoods at prices all Americans can afford,” he said. Their work “supports the creation of affordable homes, jobs, and transit-oriented development — all critical to our country’s economic recovery and growth.”
Up for Growth Action believes that America’s housing crisis is driven by two separate, but interrelated challenges: the nation’s increasing income inequality that prevents widespread access to quality and affordable housing, and a shortage of homes, requiring proactive legislation. The organization focuses on policies that enable communities to build housing needed to meet the country’s 7.3-million-home shortage, as shown by Up for Growth’s research .
“Improving housing accessibility and affordability across the full spectrum of American society is critical in transforming the communities in which we live, work, play and invest,” said UP for Growth’s Chuck Leitner. “Driving the real estate investment and operating industry’s deeper engagement in addressing these and other housing issues is fundamental in the process and is why our mission is so important.”
Up for Growth Action supports policies focused on tearing down systemic barriers to housing development such as exclusionary zoning, and increasing access to capital for affordable housing development. The organization promotes what it calls “accessible growth” – prioritizing housing production in areas of high economic opportunity, areas that leverage investments in transportation and infrastructure, and in areas where jobs already exist.
Though a relatively new organization, Up for Growth Action already boasts progress in enacting its legislative agenda. In my Oct. 15th column I wrote about its YIMBY (Yes in my Backyard) proposal that was passed by the US House of Representatives but stalled in the Republican-controlled Senate.
The incoming Biden-Harris administration has already outlined a comprehensive housing plan that is aligned with Up for Growth Action, including a focus on reducing exclusionary zoning to increase housing stock, direct investment in housing, and recognizing the relationship between where people live and their wellbeing.
By JIM SMITH, Realtor
Both the Federal Housing Authority (FHA) and the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac, have been in the headlines in the past couple weeks with their respective announcements that they will be raising mortgage loan limits for 2021. I exchanged emails with Jaxzann Riggs, owner of The Mortgage Network in Denver, to learn more about loan limits and what their implications are for potential purchasers. Here’s what I learned from her.
Although loan limits have been around for many years for both conventional loans (loans that conform to Fannie Mae and Freddie Mac’s loan standards) and FHA loans, (loans insured against default by the Federal government) the Housing and Economic Recovery Act (HERA) of 2008 has largely shaped how we know them today. The 2008 act established a base loan limit of $417,000 for conventional loans and, due to the declining price trend in the real estate market at the time, also included a mandate that this baseline limit would not increase until prices rose to previous levels. In 2016, FHFA increased loan limits for the first time in ten years, and they have increased every year since. HERA also mandated that FHA set loan limits at 115% of area median house prices, with a floor and ceiling on both limits.
2021 will see conventional loan limits for single-unit properties increase from $510,400 to $548,250 as a baseline. High-cost areas (which always included places like Aspen and Boulder, but now also includes the metro area) have a maximum loan limit that is a multiple of the area’s median home value, up to 150% of the baseline. Denver, Jefferson, Adams, Arapahoe, Broomfield, and Douglas counties will all be seeing an increase from $575,000 to $596,850. Boulder county increases to $654,350. The increase in these limits means that more borrowers will be able to qualify for a conventional loan versus having to obtain a high-balance or jumbo loan, which typically come with higher interest rates.
It’s important to remember that purchase price does not necessarily correlate with loan limits. If a borrower plans, for example, to purchase a $750,000 property but puts a significant amount of money down, thus bringing their loan amount under the conforming limit, they can still qualify for a conventional loan.
The FHA has also increased loan limits for 2021, with a national conforming limit of $548,250. In the majority of the Denver metro area the loan limit has increased to $596,850, up from $575,000 in 2020. The FHA’s loan limit increases are tied closely to the FHFA’s conventional loan limit increases.
Although loan limits are most frequently mentioned in terms of single-family homes or one-unit properties, both conventional and FHA loans also impose limits on duplexes, triplexes and fourplexes. These increase at the same time and at the same frequency as single-unit loan limits. In the case of the FHA, which also insures Home Equity Conversion Mortgages — also known as HECMs or Reverse mortgages — there will be a 2021 limit increase to $822,375. Unlike traditional loan limits, this increase applies across the board, regardless of what market the home is located in.
2021 is sure to be a year of changes, and mortgage loan limits are no exception. The increase in limits for both FHA and conventional loans matched with historically low rates and 3-3.5% down payment options just might be the ticket to purchasing your dream home.
Regardless of what loan type you are seeking, I recommend giving Jaxzann Riggs with The Mortgage Network a call today at (303) 990-2992.
It’s surprising to me that online newsletters and ‘magazines’ keep publishing in a vertical 8½x11 or ‘portrait’ format instead of in the horizontal or ‘landscape’ format of the typical computer screens on which most subscribers read their work.
When the publication is single column, portrait format might work, but if the page has two or more columns, the reader has to scroll down and up to read from one column to the next. If the newsletter were is landscape format, this annoyance would be eliminated. You could view the full page.
Please, online publishers, join me in changing to landscape format out of consideration of your readers!