Jim Smith's Blog

Want to Avoid Bidding Wars?

Sellers love bidding wars. Buyers not so much. If you’re a buyer and want to avoid a bidding war, simply ask one of our agents (below) to set up an MLS alert including this criterion: Days in MLS >9. As I write this, there are 1,021 listings that have been active on REcolorado 1 to 9 days on MLS, but 4,044 that have been active over 9 days. A listing that has been on the MLS 10 days or longer is far less likely to have multiple offers (unless it just posted a big price drop).

Jim Smith, 303-525-1851

Jim Swanson, 303-929-2727

Chuck Brown, 303-885-7855

David Dlugasch, 303-908-4835

Ty Scrable, 720-281-6783

Andrea Cox, 720-446-8674

All-Electric Homes (and Buildings) Are Central to Mitigating Climate Change

As much as we Americans love our gas fireplaces, gas ranges and gas grills, we need to recognize that the move to an all-electric home, with the electricity being generated using minimal fossil fuels, is central to the goal of mitigating the effects of climate change.

And it can be a good future, especially if you’re able to generate all the electricity that your home and cars use.

That’s the future Rita and I have created for ourselves. We have 10 kW of solar panels on our Golden home, enough to heat and cool our home and charge our two electric cars. Our forced air furnace only burns gas when the outside temp dips below freezing. Otherwise, a heat pump provides all the heat we need. And recently we replaced our gas water heater with a hybrid water heater that heats all the water we need using its built-in heat pump. It has a standard electric heater coil in case we need faster recovery. (We never have needed faster recovery.)

Yes, we still have a gas cooktop and gas fireplace, and our BBQ grill is plumbed with gas. I can picture us moving to an induction electric cooktop, electric fireplace and electric grill, but for now we comfort ourselves with the knowledge that we have drastically reduced our carbon footprint and our monthly energy bills with the use of heat pumps for heating, cooling and water heating, as well as by driving EVs.

A December article on axios.com reported that some progressive jurisdictions are now banning gas hookups in new residential and commercial construction. According the article, 40 California municipalities, starting with Berkeley in 2019, have banned the installation of natural gas service in new construction.

The most common argument against this anti-natural gas trend relates to the cost of electric heating vs. gas heating, but the people who make that argument are probably thinking of conventional resistance heating, such as baseboard electric heating.

Resistance heating is similar to your kitchen toaster, sending electricity to a coil causing it to generate heat. There is a more efficient way to heat, however, which is to use a heat pump. A heat pump moves heat instead of generating heat, and the cost is as little at one quarter that of resistance heating for the same BTU (heat) output. Here’s a article comparing the two kinds of electric heating.

Moreover, a heat pump can provide both heating and cooling, merely by reversing the direction in which it moves heat, replacing both the gas furnace and electric air conditioning unit which most of us have in our homes.

Another argument against increased electrification is that electricity is itself created by the burning of coal and natural gas. The current fuel mix of Xcel Energy in Colorado is 36% natural gas, 32.5% coal, and the rest renewable energy (mostly wind). The company’s goal is 55% renewable by 2026 and 100% “carbon-free” by 2050, so it makes sense to start now replacing gas appliances with high efficiency electric ones such as heat pumps.

Keep in mind, too, that we can generate our own electricity at home and on our office buildings, taking advantage of “net metering,” paying only to be connected to the electric grid. With net metering, Xcel’s grid functions like a battery, taking excess electricity from our solar installations during the day and delivering it back to us when the sun goes away — or when our solar panels are covered with snow!

‘Selling Agent’ vs. ‘Seller’s Agent’ Confuses People

Among the real estate terminology that confuses home buyers and sellers is the term “selling agent.”

The selling agent is, in fact, the agent representing the buyer in the purchase of a home, not to be confused (hopefully) with the seller’s agent, also referred to as the listing agent.

The reasoning behind calling a buyer’s agent the selling agent is that the buyer’s agent is the one who actually sells the home. The listing agent could, of course, sell his listing himself, but 90% of the time (actually closer to 95% of the time), the home is sold by another agent who shows the home to a buyer and then writes the contract to purchase it. In return for finding the buyer, the listing agent then shares his or her listing commission with the selling agent. It’s called the “co-op” commission, because the selling agent is cooperating with the listing agent to sell the listing.

I like to compare our industry to the automobile industry. Picture, for a moment, a sales person working for a Chevrolet dealership being able to bring a buyer to a Subaru dealership, get the keys to any of the cars on the lot, give multiple test drives and then get paid 40 to 50% of a Subaru sales person’s commission for selling one of that dealer’s cars. That’s how real estate works. The Mulitple Listing Service, or MLS, was created to facilitate such “cooperation and compensation” in the real estate industry. It benefits both buyer and seller as well as both real estate agents.

We Must Face the Coming Crisis of Transportation Funding

By JIM SMITH

I’ve been driving electric cars, buying little or no gasoline, since 2012, happy to be a freeloader when it comes to the cost of building and maintaining our state and federal roads and bridges.

But the adoption of electric cars is accelerating, as expected, to the point where we can’t continue to depend on gas and diesel taxes to pay for our transportation infrastructure.

Yes, I have paid a $50 registration fee each year for my EVs, but that doesn’t come close to paying my fair share of the costs, and it contributes nothing to the federal highway trust fund.

In Colorado, there is a 23-cent-per-gallon gas tax, plus an 18.4-cent federal gas tax. Rita and I drove our three EVs a total of 16,380 miles in 2020. If they had been fueled by gas and got 25 miles per gallon, we would have purchased 655 gallons, paying $271 in state and federal gas taxes.

Raising the gas tax makes no sense as fewer and fewer vehicles will be consuming gas in coming years.

As much as I’d like to keep being a freeloader in this regard, I am willing to pay 1.5 cents per mile traveled on my combined state and federal tax returns instead of paying $50 in annual registration fees per vehicle. This is referred to as a VMT (vehicle miles traveled) tax.

Critics of a VMT tax say people will lie about miles traveled, but our tax system is based on voluntary reporting, and mileage is easily audited now that cars, like Tesla, are connected to the internet.

CES 2021 Featured New Tech and Designs for Kitchen, Bath and Elsewhere

January’s virtual CES 2021 showcased some interesting new products for kitchen, bath and other rooms, which were described in an article by Melissa Dittmann Tracey of Realtor Magazine.

For kitchen appliances, there’s a move toward more intelligent and colorful appliances. Rita and I have one of Samsung’s Family Hub refrigerators, and we like it! You can display a slide show of pictures from a thumb drive, or even mirror your WiFi-connected TV from another room.

Samsung is offering its Bespoke refrigerators in eight glass or steel colors: gray glass; sky blue glass, navy steel, champagne steel, matte black steel, navy glass, white glass, and rose pink glass.

LG introduced its “Furniture Concept Appliances,” which make sense now that open floor plans are commonly combining kitchen, dining room and family room. Their appliances come in several materials and color combos.

Another trend featured in the article was toward a “wellness” design for bathrooms, inspired by the greater amount of time everyone is spending at home because of Covid. Kohler’s $16,000 “Stillness Bath” (above) is an extreme example of this: “It mixes water, light, fog, and essential oils and features an infinity-style water cascade that falls onto a Hinoki wood moat that then recirculates the water back into the bathtub.” No thanks!

LG also introduced a $2,599 “Wash Tower” which is nothing more than a stacked washer and dryer in a single unit with controls of both units between the two. I don’t like this because Rita and I are completely sold on the new style of high efficiency washing machines which are top loading with a glass top and no agitator, also sold by LG. They are smart units which, among other things, sense the size of your load and only introduce the amount of water needed for that load.

As you’d expect, there were lots of innovations displayed by TV manufacturers. I like the idea of Samsung’s The Frame (above): “An extra-slim 4K television, attempts to turn the TV into actual artwork that you can hang on your wall like a picture frame.” When you’re not watching TV, it can display a painting or picture of your choosing or, presumably, a slide show like you are used to viewing on the electronic picture frames available for years.

This Climate Change Movie Is a Must-See

Of all the movies I watched during last month’s Colorado Environmental Film Festival, “Kiss the Ground” was by far the most impactful. It won the festival’s top award, and deservedly so.

You will learn so much, as I did, from this 84-minute documentary about agriculture, farming, carbon sequestration and climate change. Schools can stream a 45-minute version of it free, including if you are doing home schooling. Visit www.KissTheGroundMovie.com to stream it. The rest of us can rent it for a dollar, or find the full-length documentary on Netflix.

The central thesis of the movie is that the mass tillage and spraying of farmlands under industrial farming is destroying the soil’s natural ability to sequester carbon. By the end of the movie you’ll be convinced that “regenerative farming” is the solution of our CO₂ crisis.

The narrator of the movie is Woody Harrelson, who starts out by saying that he had given up on saving the planet from the effects of climate change, until he realized that the solution is “as old as dirt.”

A key character in the documentary is Ray Archuleta, a conservation agronomist with the USDA’s Natural Resources Conservation Service (NRCS), formerly the Soil Conservation Service created by FDR to deal with the causes of the “Dust Bowl” of the 1930s, when excessive tillage of farmland had caused massive erosion and dust storms.

The goal of NRCS agents like Archuleta is to reduce tillage and the use of chemicals that damage the soil. Achieving that counter-revolution would allow the soil to absorb and sequester enough carbon to solve the climate crisis, the film asserts. It’s a powerful argument.

I challenge you to watch the first 10 minutes of this film, and you will want to watch the remaining 74 minutes. You’ll get a huge education about the importance of soil health to the future of our planet. There’s a trailer on the website.

Big Battery-Electric Trucks Are Coming Soon

Previously I wrote about 2021 being “the year of the electric pickup.” Well, this year is also going to see the arrival of multiple box trucks, buses (including school buses), and big rigs with electric drive trains.

Rivian is already delivering on its order of 100,000 electric delivery trucks for Amazon, shown here. Nikola has an order from Republic Services for 5,000 trash trucks using the same platform as their semi tractor (below). Even Detroit Diesel, despite its name, is going to be producing a battery-electric semi tractor (also below) for its biggest customer, Freightliner.

The Tesla Semi (bottom) begins production by the end of 2021. Introduced with great fanfare in 2017, it has been field tested, I’m told, delivering trailer loads of Tesla cars to local Tesla stores. One was spotted last year at the Littleton store.

Want to keep up with EV news? Subscribe to a great weekly newsletter at www.GreenCarReports.com.

**Detroit Diesel electric tractor schematic**

NAR’s ‘Clear Cooperation’ Policy Is a First Step at Eliminating Pocket Listings

A “pocket listing” is a property which the listing agent does not put on the MLS, hoping to sell it himself or get it sold by other agents in his office. It’s not typically in the best interest of the seller, since the property is withheld from the full universe of potential buyers.

The organizing principle of the Multi-List System, or MLS, is “cooperation and compensation.” Every real estate agent working in the public arena needs to belong to the local MLS, because it’s only through the MLS that the agent can show and sell that MLS’s listings and be guaranteed the “co-op” commission displayed on the MLS.

A listing agent, naturally, would prefer not to give a big slice of the listing commission to the “cooperat-ing” broker who brings the buyer. He or she would much rather sell the listing, keeping the entire commission for him or herself. Meanwhile, other agents (and their buyers) are upset when they don’t have the opportunity to show a new listing and submit an offer, especially when there are so few listings on the market, as is currently the case.

The National Association of Realtors (NAR) took up the issue of pocket listings last year when it adopted a policy called Clear Cooperation. Essentially the policy says that if an MLS member advertises or promotes a listing in any way — including putting a “coming soon” sign in the yard or mentioning it on social media — that listing must be entered on the MLS within 24 hours. It can be listed as “coming soon” on the MLS, during which time it can’t be shown, including by the listing agent. Once it is shown, it must immediately be changed to “active,” allowing all MLS members to show and sell it.

Unfortunately for sellers, who are the big losers with pocket listings, this policy will never be completely effective. That is evident from the fact that over 7% of listings, by my count, are entered on the MLS only after they are sold. Unless a home remains active on the MLS for 3 or 4 days, it’s unlikely that all potential buyers will have had a chance to compete for it.

You may recall the featured listing in last week’s column. It was listed at $375,000, a price consistent with comparable sales, and we received a full-price offer on the first day. Our policy, however, is to get our sellers to wait four days before going under contract. We had 30 showings and received six offers by day four. By being transparent about the offers received, we were able to bid up the property by more than $55,000 by day four. We did get an offer $35,000 over listing price on day two, but we waited. Our seller benefited from waiting 2 more days.

Sadly, most listing agents haven’t adopted this practice. They sell their listings too quickly, potentially costing their sellers thousands but also frustrating would-be buyers who might pay more.

I have calculated that in addition to the 7% of listings being sold with zero days on the MLS, 15% are sold after only 1 or 2 days on the MLS.

One technique for minimizing showings by other agents has been to make a listing “active” but block showings with the showing service. Because the listing is “active,” the listing agent can show the property him or herself without technically violating the clear cooperation policy.

Another technique is the “office exclusive” option. A listing can be marketed within a brokerage without putting it on the MLS. But once any kind of public marketing takes place, the listing must immediately be put on the MLS as either “coming soon” or “active.”

Division of Real Estate Warns Homeowners About ‘Equity Skimming’ Schemes

By now, we should all be wary of people offering to “help” us financially, usually via the internet or email, but also by phone. As the saying goes, “If it sounds too good to be true, it probably is.”

Last week the Colorado Division of Real Estate (DRE) issued a warning about scammers cheating homeowners out of their home’s equity on the pretext of helping them pay HOA liens on their home.

Yes, an HOA can place a lien on your home for failing to pay your HOA assessments or fines, and an HOA lien takes priority even over the lien of your mortgage lender.

It is possible for an HOA to foreclose on your $600,000 home because of unpaid dues or fines, no matter how small. But if you can’t pay, what do you do? Those liens and subsequent foreclosure actions become public records, making you an easy-to-find target for a scammer wanting to “help” you.

Here’s a link to the full DRE warning. It describes several scamming scenarios. According to the DRE’s warning, those scenarios “can leave a homeowner losing their property, becoming a renter in their own home, having their credit rating severely damaged, and having the possibility that the lender may pursue a deficiency judgment against them if the property is foreclosed upon, as well as the HOA pursuing a personal judgment against them for unpaid HOA dues.”

Homeowners are urged to look for the following red flags:

> Anyone wanting you to act fast with a quick-fix to your financial difficulties.

> Promises to resolve your financial problems and to leave your cares behind.

> Someone wanting you to transfer your ownership in the property to them.

> Anyone asking you to sign a power of attorney for them to act on your behalf.

> Proposing that you’ll be a tenant in the home that you now own.

> Someone telling you that there is no need to consult with an attorney, accountant, real estate broker, lender or anyone else.

Feel free to contact me if you find yourself in this or a similar situation. My intention is not to convince you to list your home with me. I just want to give you my own layman’s feedback on what others may have told you, and I can, if appropriate, refer you to a trusted real estate attorney. First, however, read that DRE warning, which has lots of useful information and links for reporting suspected scams or getting other advice.

And, as I like to say, remember that “Google is your friend.” When contacted by someone you suspect could be a scammer, do a web search for the person and/or company and/or email address and/or phone number. Also, we have a special app called “Forewarn,” only available to licensed Realtors like myself, where I can instantly search by name or phone number. My broker associates and I use that app to check out people who want to do business with us, instantly learning their age, properties owned, bankruptcies or liens, criminal charges, and even cars they own. I’m happy to do such a search for you, too.

Lastly, I’d like to put in a good word for my cell carrier, T-Mobile. My previous cell carrier was AT&T, which didn’t provide Caller ID on people not in my contact list, but I do get Caller ID with T-Mobile. If a number does not have a name associated with it, I let it go into voice-mail, and those callers rarely leave a message, suggesting, I believe, that it was a “spoofed” number by a solicitor or scammer. Thank you, T-Mobile! I’m wasting a lot less time than I used to on answering unwanted calls.