The Realtor Code of Ethics Exists to Protect You

You’ve probably seen the advertising, “Make Sure Your Agent Is a Realtor.” That’s because not all licensed real estate agents are members of the National Association of Realtors (NAR) and only members of NAR can call themselves “Realtors.” And only Realtors must swear obedience to the Realtor Code of Ethics and are required to take 4-hour biennial refresher classes about the Code.  (Note: All Golden Real Estate agents are Realtors.) The Realtor Code of Ethics has 17 articles that are divided into three categories. They are as follows.

DUTIES TO CLIENTS AND CUSTOMERS:

Article 1
Realtors protect and promote their clients’ interests while treating all parties honestly.

Article 2
Realtors refrain from exaggeration, misrepresentation, or concealment of pertinent facts related to property or transactions.

Article 3
Realtors cooperate with other real estate professionals to advance their clients’ best interests.

Article 4
When buying or selling on their own account or for their families or firms, Realtors make their true position or interest known.

Article 5
Realtors do not provide professional services where they have any present or contemplated interest in property without disclosing that interest to all affected parties.

Article 6
Realtors disclose any fee or financial benefit they may receive from recommending related real estate products or services.

Article 7
Realtors accept compensation from only one party, except where they make full disclosure to all parties and receive informed consent from their client.

Article 8
Realtors keep the funds of clients and customers in a separate escrow account.

Article 9
Realtors make sure that details of agreements are spelled out in writing whenever possible and that parties receive copies.

DUTIES TO THE PUBLIC:

Article 10
Realtors give equal professional service to all clients and customers irrespective of race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity. Realtors do not discriminate in their employment practices.

Article 11
Realtors are knowledgeable and competent in the fields of practice in which they engage or they get assistance from a knowledgeable professional, or disclose any lack of expertise to their client.

Article 12
Realtors are honest and truthful in their communications and present a true picture in their advertising, marketing, and in other public representations.

Article 13
Realtors do not engage in the unauthorized practice of law.

Article 14
Realtors willingly participate in ethics investigations and enforcement actions.

DUTIES TO REALTORS:

Article 15
Realtors make only truthful, not misleading, comments about other real estate professionals.

Article 16
Realtors respect the exclusive representation or exclusive brokerage relationship agreements that other Realtors have with their clients.

Article 17
Realtors arbitrate and mediate financial disagreements with other Realtors and with their clients.

Life’s Transitions Are at the Heart of Most Real Estate Needs

In my 17 years as a Realtor, I have learned that most people’s real estate needs arise from life’s many and varied transitions.  These can include relationship changes such as marriage and divorce, a birth or death in the family, health changes, and other reasons for upsizing or downsizing, as well as job relocation, job loss, and changes in income. People also relocate to be closer to grandchildren or other family members.

Clients have come to us because of most or all of these “transitions,” but perhaps the most common is, sadly, divorce. When couples divorce, one option is for one spouse to buy out the other, and al-though the court (in a non-amicable divorce) might require a valuation by a licensed appraiser, often we’ll be called upon to give a “Broker Price Opinion” of the home’s value. I don’t charge for this service, nor do I think most agents would. If a sale of the home is necessary, of course we’re available to assist in that, and the proceeds can be disbursed as the couple or the court dictates.

Medical changes or uncertainty, which can affect people of all ages, often necessitate a home sale. We can help the seller of a multi-level home find a wheelchair accessible home or simply one with fewer stairs, and discount the commission on the sale of their current home when we earn a commission on their purchase. If the seller is moving to a rental such as in a senior community, we can refer them to a specialist in that field.

Marriage or simply the combining of two households is a happier transition, and, again, look for your agent to discount the fee, as we do, for selling your current homes in return for earning a commission on your new home together.

Empty nesters (and others) come to us on occasion wanting to downsize. They may want to use their new-found freedom to travel, and ask us to find them a “lock-and-leave” home such as a condo or patio home, where you have no maintenance responsibilities and it’s not obvious when you’re away.

Relocation is a big area of need, too. This is a good time to “sell high and buy low,” by moving from Denver to, say, Goodland, Kansas, where a recent client of mine was able to buy a bigger house using only the equity from the sale of their Arvada home.  Now they have no mortgage!

Have You Owned Your Home a Long Time? Here Are Some Tips for Avoiding Capital Gains Tax

If you bought your primary residence back in the 1960s or 1970s, there’s a good chance that you’ll be pushing the limits of the capital gains tax exemption when it comes time to sell.

There is an exemption of capital gains tax of $250,000 (single) or $500,000 (married) for a home that was your principal residence for at least two of the five years preceding the sale. If you bought your house for, say, $30,000, in the 1960s, it’s quite possible that it’s worth 10 or 20 times that amount now, resulting in the possibility of capital gains taxation.

If one of a married couple moves out, the $500,000 exemption is preserved by the other spouse as long as the absent spouse is still alive, providing the couple sells the house within 3 years of both moving out.

Do not add your heirs to the title of your home as a “joint tenant” with right of survivorship.  That’s because your heirs inherit your original purchase price as their cost basis, whereas if they inherit the property through your will, the basis for them is stepped up to the fair market value of the home at the time of the inheritance, which will help them avoid capital gains tax when they sell it.

I am not a tax advisor, and am only recounting what I have been told by tax and estate-planning professionals. Consult your own tax professional before acting on anything I have written here.

Seniors: Learn What You Need to Know About Real Estate

Last month’s column was about the risk seniors face of being scammed or conned out of their homes.

Let’s face it — seniors need to be careful and knowledgeable about real estate as they age. There are issues of downsizing as well as inheritance. And you need to know how real estate works, how to choose the best Realtor and know that he or she is working in your best interest.

At Golden Real Estate we have two agents who have earned the Seniors Real Estate Specialist (SRES) designation as a result of special training on a multitude of issues facing seniors. One of them is David Dlugasch, shown at right during his PowerPoint presentation to a group of seniors. The other is Kristi Brunel.  If you belong to a senior group that welcomes outside speakers, please consider calling David at 303-908-4835 or Kristi at 303-525-2520 and arranging for a live presentation.  You may learn something that could help you in the future.

The Graying of the Internet — What About Readability?

I’ve written before about the subject of readability, both in print and online — a subject that is dear to me not only as a senior citizen with naturally reduced visual acuity, but as a former typographer trained in what makes one font more readable than another.

It’s bad enough that more and more publications and most web pages use sans serif fonts like Arial, but there’s another strange trend of graying those typefaces — literally.  Have you noticed?

This font is Times Roman. Most websites use sans serif fonts like Arial and they display them in gray type instead of black type, compounding the unreadability! Why publishers and webmasters would choose to reduce the readability of their product in this way is beyond me.

In an ideal world, sans serif fonts such as Arial would be used only for headlines, bigger and bolder. On the other hand, body text like you’re reading here should be in a serif font such as this Times Roman or, my favorite, Georgia.

You can join me in my quest. Start by changing the default font in your email program to your favorite serif typeface.

PS: I can celebrate that starting this week, the Denver Post is allowing my column to be in Times Roman instead of Arial, which was required previously, so we are making progress!

Wheat Ridge Ranch Home with 4-Car Garage Just Listed by Kristi Brunel

    You don’t want to miss this flawless 4-bedroom, 2-bath bungalow with a 4-car garage at 7005 W. 32nd Ave. The impeccable remodel has left no surface untouched. This ranch style home with a walk-out basement features concrete countertops, farmhouse sink, new appliances, lighting, hardwoods, bathrooms and railings. The outside space features a new front deck, stamped concrete driveway, patios, gardens and beautiful yard space. This one won’t last, so book a showing today or come by the open house on Saturday, Jan. 19th, 1-3 PM.  Or call Kristi Brunel at 303-525-2520 for a private showing. View a narrated video tour at www.WheatRidgeHome.info.

Even if You’re a Sophisticated Buyer or Seller, You Need Us — And Here’s Why…

Perhaps you’ve heard the expression, “A lawyer who represents himself has a fool for a client.” Most lawyers respect that truism, which is why you see lawyers hiring other lawyers when they are sued or criminally charged..

The same truism can be applied to real estate. Just this week I received a contract to buy one of my listings from a couple who are both real estate agents, but the offer was written by another agent.  (I suspect he will share his 2.8% co-op commission with the buyers.)

There are also many buyers and sellers who aren’t agents but who are sufficiently experienced at buying and selling real estate to be considered “sophisticated” buyers or sellers. These persons may understandably think that they don’t need professional representation, saving themselves (if they’re selling) 3% or so on a listing commission. If they are buying without representation, they may think they can negotiate a lower purchase price by sparing the seller the 2.8% co-op commission typically paid to a buyer’s agent.

Let me debunk some misconceptions about each scenario separately — first for buyers.

Buyers typically pay nothing for professional representation, since buyers’ agents are universally compensated by the listing agent at a rate spelled out in the multi-list service (or “MLS”) to which all agents belong. Our Denver metro MLS is called REcolorado. Its website is www.REcolorado.com, which has both a consumer-facing and agent-facing side.

If you’re a buyer, you can go to that website and see all the listings which are currently available for purchase, and you can click on a link to email or call the agent for each listing. After that listing agent has determined that you don’t have an agency agreement with another agent, he or she will be delighted to help you buy his (or her) listing because he won’t have to give away half his commission to another agent. And he’ll probably ask you to hire him as a buyer’s agent if his own listing is not what you choose to buy, in which case he could earn 2.8% on that purchase.

If you, as a buyer, work with the listing agent, he or she will not, by law, be working in your best interest. At best, he’ll be a transaction broker, advising neither you nor his seller in the transaction. He won’t be able to advise you on the true value of the home or what you should offer, or how to respond to a counterproposal from the seller. He also won’t be able to advise you on inspection or other issues that arise during the transaction.  You’re on your own — literally helpless.

Moreover, the chances are that you’re not saving the seller any money by being unrepresented, since the listing agent gets to keep the entire commission when he doesn’t have to share it with a buyer’s agent.  My own research has shown that only 15% of listing agreements have a provision in which the commission is reduced if the agent doesn’t have to share his commission with a buyer’s agent. I know this to be true, because the MLS requires listing agents to disclose the existence of a “variable commission” in their listings. That’s one of the fields that is not displayed on the consumer-facing side of the MLS.

There are additional reasons why a buyer (in my opinion) should hire an agent instead of working directly with a listing agent — except when it’s a Golden Real Estate listing, as I’ll explain below. The most important reason is that a buyer’s agent, in addition to being your advocate in a transaction, has more access to information about listings than you have as a consumer.

For starters, agents have valuation software not available to consumers and can create a spreadsheet of comparable sales, so you’ll know whether a home’s listing price is reasonable. Zillow’s famed “zestimates,” by themselves, are not a dependable indicator of a property’s value.

Second, agents can do searches using any field on the MLS, not just the fields that are available to you as a consumer. Do you require a main-floor master? A second master suite? A fenced yard for your dog? An unfinished (or finished) basement? An agent can set up MLS searches on virtually any criterion that is important to you, and the system will notify you and your agent within 15 minutes of a new listing matching your specific search criteria.

As a buyer working with Golden Real Estate, you’ll enjoy added advantages to having representation, up to totally free moving using our own moving trucks, boxes and packing materials. With our focus on sustainability, one of my favorite closing gifts to buyers is a free energy audit of your new home — a $350 value. And if you have a home to sell, we reduce our commission on selling your current home. These benefits also apply when you’re buying one of our listings without your own agent. Call us for details.

Now let’s look at why sellers need to have professional representation.

Understandably, sellers have a huge incentive not to use an agent — they pay the commission for both agents in a transaction, which they assume (wrongly) is fixed at 6%. That would be a violation of federal antitrust laws. All commissions are negotiable. My personal rate is 5.6%, which I reduce to 4.6% if I don’t have to give 2.8% to a buyer’s agent. And I reduce those figures by another 1% if I earn a commission on the purchase of your replacement home. Because of federal laws against price fixing, I can’t dictate (or even discuss) what our other agents charge.

That’s still a lot of money, so you need to know what you’re getting for it.

At Golden Real Estate, sellers enjoy a free staging consultation, magazine quality still photos and professional quality narrated video tours which are posted on YouTube, the MLS, consumer real estate websites and on the custom website which we create for each listing. (Visit www.GRElistings.com to see the custom websites for our current active listings.)

We also provide free use of our moving trucks and moving boxes both to our sellers and to whoever buys our listings, even if their agent is with another brokerage. And, of course, all listings are featured in this column, which appears in eight editions of newspapers throughout both Denver and Jefferson counties.

We also have a proven track record of getting the highest possible prices for our sellers because of our skill at negotiating with buyers and their agents. Most agents will not reveal the offers they have in hand when they get multiple offers. We treat that situation like an auction, where everyone knows the highest current offer, and we regularly bid up the purchase price for our sellers — and the buyers and their agents appreciate not losing out in a blind bidding situation.

In Defense of Journalists — They’re Working for You!

I’ve written about the rules of journalism before. (See my Feb. 2, 2017, column at JimSmithColumns.com.) Being a journalist myself, educated in the importance of keeping personal opinion out of news articles, as distinct from columns or editorials, it continues to bother me that the general public doesn’t recognize these distinctions.  Because of that, it’s too easy to dismiss factual news articles as “fake” based on a publication’s editorial position.

Yes, the Washington Post and New York Times express liberal positions in their editorials and many op-ed columns, but the news writers are solid professionals who report just the facts, uncolored by their own or their editorial board’s positions on a given topic. 

While tradition may dictate that each newspaper have opinion pages vs. news pages, it doesn’t have to be that way. I think that newspapers might do themselves, their readers and society a favor by deleting editorial and op-ed pages and publishing only signed letters to the editor.

Denver Business Journal features Golden Real Estate’s “Net Zero Energy” office

We hope our story inspires other businesses to “go net zero.”

https://www.bizjournals.com/denver/news/2019/01/09/dbj-offices-net-zero-emissions-and-11-energy-bills.html?ana=e_ae_set1&s=article_du&ed=2019-01-09&u=gT9Gd0V9RKSf%2F5GRvgBa9Q0f103559&t=1547077587&j=85956691