Feb. 21st Sustainability Session Focuses on Home Heating Methods

The second  session of Golden Real Estate’s sustainability series is next Thursday, Feb. 21st, 5-6 pm, in our South Golden Road office. Some seats are still available. Reserve yours by emailing  Jim@GoldenRealEstate.com.

At this session you’ll learn about the alternative energy-saving systems for heating and cooling homes and offices including our favorite method, heat pump mini-splits.

Our lead presenter will be Bill Lucas-Brown of GB3 Energy, who installed our mini-split system.

Some Home-Selling Advice Is No Longer Valid; Let’s Review the Literature…

On January 30th, Realtor.com published an article with the catchy headline, “That’s So 2018!  The Most Outdated Home Selling Advice You Should Now Ignore.”  I found it interesting to compare the author’s conclusions with my own opinions, many of which I have shared here before. Here is the author’s list of outdated home-selling advice that should be ignored, along with my response to what she wrote:

1) Wait for spring to sell your house.  I have written numerous times that winter can be the best time to sell a home, and it’s nice to see how other real estate writers have reached the same conclusion, albeit only recently. The writer for realtor.com made the same arguments I’ve been making for years — that there are fewer competing listings at this time of year, yet there are still many active buyers.

2) Price your home high and leave room to negotiate.  This, for sure, is not your best strategy in a seller’s market and even less so in a balanced market like we’re beginning to see in many areas. One agent she quoted in her article said it well: “If you’re not priced at the market, or at least very close, you’re not going to get that many people in the door to begin with. Price your property to sell.”

3) Sell your home as is.  The writer said this may have been true in the now-fading seller’s market, but argues that today’s millennial buyers in particular want a home that doesn’t need any work done on it.  I addressed the topic of what you should and should not do in last week’s column. Read it at www.JimSmithColumns.com or at www.GoldenREblog.com.

4) Amateur photos of your home are fine. The writer states that your smartphone pictures may have been all you needed during the seller’s market, but that you now need to invest in professional pictures. When it comes to high quality images, Golden Real Estate agents used magazine-quality HDR photos on all listings throughout the seller’s market, so this comment doesn’t apply to us.  However, the writer also promoted 3D tours of the home such as those using Matterport equipment, but I’m not a fan.  At Golden Real Estate, we believe it’s much more useful to produce a narrated video tour of a property. We’ve been doing narrated video tours for a decade or more and continue to be surprised how few other brokers have adopted the practice. And the Osmo camera we recently purchased makes those videos even more professional-looking. It’s equivalent to using a movie-quality Steadicam!

5) Holding an open house is a must. The writer says open houses only serve the broker and not the seller, but I disagree. You’ll notice that almost every listing we feature in this weekly ad mentions an open house. Since we price our listings to sell, these open houses serve to magnify buyer interest in our listings. (Indeed, the listing I closed last Friday was to a buyer who came to our open house.)  Open houses also fit into our strategy of not selling listings in less than 4 days. Our time-tested process is to put a listing on the MLS on Wednesday, advertise it on Thursday (with an open house), and to advise agents and buyers who submit early offers that the seller will wait until after the open house to choose the buyer.  Using this strategy, prospective buyers typically bid up the price, which is an obvious benefit to our sellers.  An example is last week’s sale of our Wheat Ridge listing for $561,000, which sold on that 4-day schedule for $36,000 over its listing price.  

Holding open houses also fits into our belief that you never know what will sell a house, so you should try everything.

You Can ‘Sell High/Buy Low’ and Stay in Colorado

We Coloradans love where we live, and few of us would ever leave it for another place. Our climate appears to be responding less quickly than elsewhere to global climate change, which is, like it or not, yet another reason people are drawn here from other states.  This steady influx of new residents inevitably has the effect of raising local real estate prices.

But there are other beautiful places in Colorado which remain affordable and which are drawing metro area residents. Last fall, a client sold their Arvada home for $385,000 and bought a bigger home on two acres in Cedaredge for only $230,500. A colleague of mine bought a 6-acre parcel with a home and two outbuildings in that same town for $270,000.  If you don’t have to be in the metro area and like living in a quiet (and beautiful) rural community on the western slope, Cedaredge sounds like a great alternative.

I have a client who sold their Lakewood home for almost $600,000 and are currently renting. They’re looking at lower-priced homes around the state and are ready to pounce when the right one pops up. Now that our MLS (REcolorado) serves much of Colorado (including Cedaredge), I set up a search for this client based on price per square foot under $200, and they are considering quite a few properties outside our metro area.

As more and more out-of-staters find the Denver metro area to be a desirable (and more climate-friendly) alternative to their current home, more and more current residents are looking to leave for greener and more affordable locales. This is a trend that is likely to increase over the coming months and years.

For years I have explained to metro area homeowners that they shouldn’t be afraid of high prices if they are buying and selling in the same market. If prices are high, they’ll probably sell high and buy high. If they’re low, they’ll sell low and buy low. (That was my experience in 2012 when I sold a home for less than I had paid for it but also bought my current home for a fraction of what it is worth now). Ideally of course, you’d like to sell in a high market and buy in a low one, something that is certainly possible for those who are willing to relocate. It’s nice to know you can find that lower market within Colorado.

Aurora Tri-Level Home Just Listed by Debbi Hysmith

You do not want to miss this highly desirable 4-bedroom, 3-bath home with a 2-car garage at 6070 S. Quemoy Way. It was listed this week for $418,000.

This home is in the Cherry Creek School District, near Canyon Creek Elementary and the mighty Cherokee Trail High School.  The master suite is on a separate level and features a  master bath and walk-in closet. The outside space features a 16’x18’ deck overlooking a beautiful yard. Book a showing today or come by the open house on Sunday, Jan. 10, 1-3pm. Take a narrated video tour at www.AuroraHome.info.

Remodeling Your Home to Help It Sell May Not Be the Moneywise Approach

Before putting your home on the market, it’s natural to ask for advice on what should be fixed or upgraded before doing so. Here’s how we re-spond when asked.

First, you need to know that every study we’ve seen shows that sellers almost never recoup 100% of the cost of remodeling, so you should only do so for your own enjoyment, years before you plan to sell. Don’t make updates expecting to get a higher price for your home..

Rita and I, or example, recently spent $40,000 to update our kitchen, and we love it! (It was done by Bonnie Kitchen Design in Golden, and we strongly recommend her!)  But that doesn’t mean our home increased its value and selling price by $40,000 or more. We made that improvement for our own enjoyment, just as we did when we spent $20,000 on our master bathroom several years ago.  Yes, it will increase the attractiveness of our home when we eventually sell it, but that will only be after years of happy enjoyment of those two improvements.

We’ll probably make additional improvements in coming years, but it will never be to dress up the home for sale. On top of not recovering the full expenditure upon sale, it’s a huge disruption of one’s life to engage in major renovations.

The most recent study I’ve read about cost vs. ROI (return on investment) was made by Remodeling magazine, as reported by RISmedia.

According to that report the 5 projects with the highest ROI in the mid-range cost category are:

Manufactured Stone Veneer (94.9%)

Minor Kitchen Remodel (80.5%)

Deck Addition (Wood) (75.6%)

Siding Replacement (75.6%)

Entry Door Replacement (Steel) (74.9%)

The 5 projects with the highest ROI in the upscale cost category are:

Garage Door Replacement (97.5%)

Window Replacement (Vinyl) (73.4%)

Grand Entrance (Fiberglass) (71.9%)

Window Replacement (Wood) (70.8%)

Bathroom Remodel (60.2%)

Lastly, here are the 5 projects with the lowest ROI in the mid-range cost category:

Backyard Patio (55.2%)

Master Suite Addition (59.4%)

Bathroom Addition (60.6%)

Roofing Replacement (Metal) (60.9%)

Major Kitchen Remodel (62.1%)

Master Suite Addition (50.4%)

Bathroom Addition (58.1%)

Major Kitchen Remodel (59.7%)

Bathroom Remodel (60.2%)

Window Replacement (Wood) (70.8%)

So, clearly you should only remodel when it’s intended to be enjoyed by you for years to come. If you know you’ll be selling this year, we advise our clients as follows.

First, only make improvements that eliminate a defect or an issue which will turn off prospective buyers.  I call these “eyesores,” things that stand out like a sore thumb, and not things that are simply “dated” or out of tyle.

Here are some examples:

Do refinish hardwood floors that are seriously and obviously in need of refinishing.

Do replace carpeting that is seriously old, such as 1970’s shag carpeting, or carpeting that is seriously worn or stained. (Again, think “eyesore.”)

Do replace damaged countertops.

Do repair damaged walls and replace damaged doors that can’t be repaired.

Do replace those 1990’s glass-and-brass lighting fixtures. (They’re so unappealing that Habitat’s thrift store won’t accept them as donations!)

Do replace burned out light bulbs.

Do repaint (inside and out) where there is peeling or discolored paint.

Do replace rotted timbers on your deck, then power wash and re-stain or repaint as necessary.

Do improve curb appeal (always the first impression), including weeding and pruning and freshening the front door. (It’s true that red doors sell homes…)

Do have someone with “fresh eyes” walk through your house and identify other turn-offs. (Our stager performs that function.)

Do not replace undamaged countertops or bathroom fixtures just because they are “dated” — even those pastel colored bathtubs and sinks. (I tell buyers “You can’t buy these anymore!”)  The exception would be the toilets. A white chair height low-flow toilet can be replaced for a couple hundred dollars and installed by our handyman for $50 (but he only works for our clients).

Beyond the above advice, I tell my sellers to be strategic about major issues which they know need to be done. If these are likely to become inspection issues, don’t fix them prior to listing your home if they’re not the kind of eyesore which would deter a buyer from making an offer.

For example, I have a listing, currently under contract, which had damage to the concrete driveway. The seller was thinking he should repair it before putting the home on the market. We knew it would be an inspection issue, but by leaving it undone we could use it as a bargaining chip. Sure enough, we got under contract (well above listing price because of competing buyers), and the inspection demands included repairing the driveway. Because it was such a big expense, the buyer didn’t ask for a bunch of other repairs.  If the seller had fixed the concrete prior to listing the home, you can sure the buyer would have asked for those other repairs, but instead they were delighted that the seller agreed to pay for the concrete repair.

I have used the same strategy to save other sellers money on inspection items. For example, one seller knew that radon needed to be mitigated, but we knew that this issue (which we properly disclosed) would not deter buyers from competing for the home. Yes, it became an inspection demand, and the buyer was delighted that the seller agreed to mitigate it.

Your situation will be different, of course, and we are happy to meet with you in your home and discuss what’s needed and strategic to fix before listing. We consider such advice part of the free staging consultation we provide sellers.

Statistics Show a Slowing Real Estate Market — But Not at Golden Real Estate

The 4½-year-long seller’s market is clearly transitioning into a “balanced” market and may be moving toward a buyer’s market by 2020, judging from statistics garnered from REcolorado, the Denver MLS.

In December, for example, the median days on market for City & County of Denver sales was 20, the highest since Feb. 2014, and the ratio of sold price to listing price was 98.5%, up from 98.3% in November, but otherwise the lowest since Feb. 2012 — nearly seven years ago.

January statistics won’t be available until early February, but a study of the 403 homes sold in the first 21 days of January shows that the median days on market is even higher — 28 days — and that the ratio of sold price to listing price has dropped to 97.2%.

The number of sold listings in December was 783, the lowest for a December since 2011. This compares to more than 1,000 sales in every December from 2014 to 2017. The number of active listings for this December was 1,605, the highest for any December since 2013.

Now let’s look at Jefferson County statistics.

In December the median days on market for Jeffco sales was 24, and the ratio of sold price to listing price was 98.6%. Both stats were the worst (relatively speaking)  since February 2014, nearby five years ago.

As with Denver, a study of the Jefferson County homes sold thus far in January shows that the median days on market will remain above 20 and that the ratio of sold price to listing price will dip even further. With 307 sales thus far and another 308 listings under contract over 20 days, I predict that the number of sold listings will be the same as or higher than January 2018, when 553 Jeffco homes were sold.  The median sold price will continue to climb, though less quickly.

Given these statistics, you can imagine our surprise at how well our own listings have performed this month. 

For example, broker associate Kristi Brunel listed a home on a busy street (usually not a good selling point) for $520,000, which was above what neighborhood comps suggested. She got it under contract for 13% more in four days. There were 60 showings and 13 offers, but there were 20 or more other offers which weren’t submitted once buyers knew how high the bidding had gone. Saturday’s open house, just hours after Friday’s big snow storm, was so busy and with so many cars parked on the street that one neighbor asked Kristi if it was a church function!

I had a similar experience with another listing. I got multiple offers which bid up the home to 7% over its listing price within four days, and the open house was the busiest I can recall. A Golden listing of mine which didn’t sell in December sold readily in January for nearly its listing price, and a $1.1 million listing of mine in downtown Golden sold in less than a week with multiple offers driving the price up by $75,000 following an open house where I needed help to accommodate the flow of buyers. 

So you can understand why I don’t quite know what to make of the current real estate market — except perhaps that Golden Real Estate knows how to sell homes better than other brokerages!

What we do know with certainty is that there are many disappointed buyers who did not win the bidding wars on these Jeffco listings and that homeowners who think they should wait until spring to put their home on the market should consider doing so now — and with us!

As I’ve written in the past, there are multiple reasons why winter is a good time to list a home, but our experience with these few listings is surprising even me. But beware — the reason that the MLS statistics are not as good as our own experience at Golden Real Estate may be that other brokerages are not listing their homes at the right price and not providing the kind of marketing for which Golden Real Estate is famous.

Buyers are definitely getting wiser and not making offers on homes that are overpriced. Give me or one of our broker associates a call and ask us what we consider the right price to list your home. 

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.