Originally listed last week at $850,000, the sellers of 1230 Wyoming Street agreed today to reduce the listing price to $795,000. There’s more info and lots of pictures at www.MesaMeadowsHome.com. Click on the YouTube thumbnail below for a narrated walk-through plus aerial drone footage, then call your agent or Jim Smith at 303-525-1851 for a private showing!
For some of us, our possessions seem to expand along with our waistline as we age. By the time we start collecting Social Security and enjoying the benefits of Medicare — woohoo! — our basements are full and we’re living in a house which is way too big for us.
At least that was true for Rita and me! Seven years ago we downsized into a two-bedroom one-story home, which will suffice for us until we need to consider assisted living. But our basement is still too full!
I’m pleased to say we’re also downsizing our physical bodies through exercise and diet — but that’s not my topic for this week!
As a Realtor, my expertise is in doing what I did for Rita and me — selling your current house and getting you into a smaller, low-maintenance home with main-floor living — but I also find myself helping with the second aspect, which is to downsize possessions.
There are three categories of possessions — stuff you want to take with you to your next home, even if it’s assisted living; stuff you want to sell because it doesn’t fit in your new home; and stuff you want to get rid of either by giving it to a thrift store or taking it to the dump. We’ve helped our clients with all three of these categories.
Perhaps you’ve considered employing an “estate sale” company to sell unwanted furniture and accessories — everything from dishes to sofas. There are several estate sale companies among the service providers on the Golden Real Estate smartphone app, which you can download on the App Store or Google Play. Just keep in mind that estate sale companies charge up to 40% commission on the sale of your possessions. I’m not saying they don’t earn what they charge, but I have been successful more than once in getting the buyer of a home to purchase the unwanted furniture in a separate deal outside of the real estate transaction. Let me explain how I do that.
I ask my sellers to list the items (with prices) of everything they want to sell outside of closing and leave that list on their kitchen counter so that prospective buyers can see it. Then, if we get multiple bids by pricing the house right, I can usually get the winning bidder to agree to buy all the furniture at the prices listed. I did that just last month on one of my listings, and I have done it multiple times prior to that. The buyer probably didn’t want the furniture, but agreed to buy it in order to win the bidding war we created by pricing the home to attract multiple offers.
Our free moving truck is useful for the other two categories of stuff that you want to take to a thrift store or dump. Our clients use our trucks for that purpose all the time, and I love that we’re able to provide these trucks at no cost.
Of course, it can be rather time consuming going through your possessions and deciding what to keep and what to throw away. Perhaps you’ve heard of the Netflix series, “Tidying Up with Marie Kondo.” She advises you to look at each item and ask, “Does this give me joy.” If it doesn’t, get rid of it!
Here are some other thoughts shared by co-housing advocate Deb Kneale:
>Remove the things that distract you from the things you love.
>Unburden yourself and your heirs!
>If you lost this item, would you buy it again?
>Allow important things to have the space they deserve.
>Keep in mind that it feels better to do stuff than to have stuff.
>We wear 20% of our clothes 80% of the time. If you’re not wearing it, why keep it?
If you’d like to learn more about downsizing or “rightsizing,” there’s a panel discussion with local experts being held on March 10th, 1-3 p.m. at the Arvada Public Library, 7525 W. 57th Ave. It is presented by the Ralston Creek Cohousing community. For more info, call Tori Baker at 303-704-1268 or visit www.DownsizingAdvice.info.
This 1-story home has an oversized 3-car garage/workshop, a 4-stall barn and multiple loafing sheds. The address is 14655 W. 78th Ave. It was just listed for $525,000. Think of it as a little piece of country heaven convenient to public transportation, shopping and dining. The home has an open floor plan with vaulted ceiling for the living room and kitchen. A covered patio area is located off the kitchen. It has a domestic well and a septic system. In addition to a 3-year-old propane forced air furnace, there’s a wood stove in the living room plus electric baseboards with separate thermostats in the 3 bedrooms. The Arvada Outdoor Equestrian Center is just south of this listing with 50 acres of riding areas free and open to the public — you can ride your horse there from this property along a canal path! To fully understand and appreciate this great listing, watch the narrated video tour, including drone footage, at www.JeffcoHorseProperties.com, then come of our open house on Sunday, March 10th, 3-5pm.
This Genesee-built home at 1230 Wyoming Street has been the home of one of Golden’s pre-eminent families since just after it was built in 1997. Take a video tour at www.MesaMeadowsHome.com, including mountain views from both 1st & 2nd floors. This is a large house, with 4 bedrooms and 3½ baths spanning 3,596 finished square feet. It has a main-floor study, formal living and dining rooms, two family rooms (one in the basement) and an eat-in kitchen with access to a west-facing deck. There’s another 609 square feet of unfinished storage space in the walkout basement. It has a 3-car tandem garage, too. Access to a North Table Mountain trailhead is just 2 blocks north, and the path to downtown Golden (1.5 miles away) in Cressman Gulch park is one block west. It was just listed for $850,000. I’ll be holding it open Saturday, March 9th, 11 am to 2 pm.
That is a reasonable question, which I’m happy to answer. The fact is that listing commissions have been dropping ever since the Department of Justice told Realtor associations and their MLSs that they can’t dictate listing commissions. Prior to that, the Denver Board of Realtors, I’m told, dictated a 7% listing commission — 4.2% for the listing agent himself and 2.8% for the agent representing the buyer.
Since then, thanks to free market competition, listing commissions, on average, have dropped well below 6%, according to the National Association of Realtors, but the 2.8% “co-op” commission offered to buyer agents has hardly budged.
(Note: Brokerages advertising a 1% listing commission do so as a ploy to get a listing appointment, at which time they’ll explain the need to add 2.8% for the buyer agent’s commission.)
This week I got an anonymous letter from a “long-time reader” who asked why commission rates haven’t fallen as the selling prices of homes have risen. Since I can’t reply by mail, he (or she) will get to read my response here.
First of all, commission rates have fallen as alluded to above, but typically they are not progressive, meaning they don’t fall further as listing prices rise into the millions.
That does not mean, however, that you can’t make agents compete against each other based on commission. Indeed, you should do that. But don’t make the mistake of thinking you don’t need an agent, especially when it’s an “easy” time to sell homes. And remember that, because of the 2.8% given to buyer agents, even a 4% listing commission would only net the listing agent 1.2%, which is not a reasonable compensation if the agent is to do a proper marketing job and to provide you with the professional reputation you need and deserve.
A good agent doesn’t just get a listing, take snapshots of the house, put it on the MLS and wait for another agent to sell it. If you hire an agent like that, you are getting ripped off, and shame on you for hiring him or her!
I can’t speak for my associates, because that would constitute illegal price-fixing, but I myself charge well under 6% for the full service which I (and all Golden Real Estate agents) provide. “Full service” for us includes promoting your listing in my “Real Estate Today” column with its 200,000 circulation in five newspapers, magazine quality photos, narrated video tours including drone footage, free staging consultations, free use of our moving trucks and boxes for both seller and buyer, Centralized Showing Service, lockboxes, solar-powered yard signs, custom listing websites with their own URLs, well-supported pricing consultation, and effective negotiation with competing buyers, often resulting in a sold price that more than covers what we charge in commission.
The anonymous reader boasted of owning 18 homes which he/she has sold “successfully and safely.” I don’t doubt that at all, but he or she likely left money on the table by doing it without a Realtor who possesses the tools and expertise which my fellow Golden Real Estate agents and I bring to the process.
The key to getting the most money for your home is to price it right and then maximize exposure so it attracts the most buyers who will compete with each other on price. That process starts, but does not end, with being on the MLS.
Let me put some numbers to this discussion. When homes sold for $75,000, let’s say the listing agent netted 3% commission after deducting the “co-op” commission paid to the buyer’s agent. That equals a $2,250 commission. Let’s say there were 50,000 transactions per year and 25,000 MLS members, as there are now. With two sides to each transaction, that equates to 4 paychecks per year per agent, or just under $10,000 income per year for the average agent. And that’s without subtracting the 15 to 50% split taken by the agent’s brokerage. Nowadays, agents’ expenses alone can exceed that amount with our higher car, cell phone, computer and software expenses, plus MLS fees, showing service fees, Realtor dues, and errors and omissions insurance. Then add the per-listing cost of professional photos and videos, staging consultation, etc.
Our living costs have gone up, too. The homes we ourselves buy cost more than $75,000, and insurance and taxes have gone up just like yours.
Now consider today’s typical home sale price of $400,000. I charge 5.6% on such a listing, so I get the same 2.8% as the buyer’s agent. (I reduce it to 4.6% if I sell the home myself.) That nets me about $10,000 after deducting the per-listing expenses mentioned above. For the average 4-transaction agent, that’s an annual income of $40,000 before deducting the fixed costs and fees and the brokerage split mentioned above.
On a million or multi-million dollar listing, you should certainly feel free to ask any listing agent you interview to justify or reduce the commission rate he or she quotes you. Negotiate as you would with any service provider. The bottom line, however, is that a great agent earns what he or she is paid.
Maybe you saw the coverage last week of the American Automobile Association’s warning that electric cars lose up to 30% of their range in very cold weather. This happens because the battery in an electric car is also used to warm both the cabin and the battery itself. This loss of range matters more, of course, when EVs have only 100 miles of range than in the newer electric models with over 200 miles of range.
Having driven EVs for seven years now, I can report that an EV is, in fact, the best car for winter driving. Here are just a few reasons:
You’ll never have trouble starting your car. It’s a battery and motor! Turn it on, put it in drive and go — no warming up. Also, you can warm up the cabin before you unplug. Even if you don’t, the cabin will be warm in less than a mile.
You’ll never stall or get stranded. And you’ll never break down. There are only 50 moving parts in an AWD Tesla. The only time you’ll find an EV on the side of the road is when it has a flat tire or has been in an accident.
You won’t have to gas up in the cold. Think of your EV like your smartphone. Plug it in at night and you always leave with a full charge in the morning.
It handles better in snow. An AWD EV has a 50/50 front/back weight ratio and a lower center of gravity, which translates to great traction.
If stranded in a blizzard, you’ll have heat. Even if your EV is upside down in a snow drift, the heater will keep you warm, burning only 5 miles of range per hour. And no worry about carbon monoxide poisoning!
Talk to any EV owner to learn more. If you don’t know one, call me!
Colorado owners of investment real estate have built up a lot of equity over the last several years through appreciation. Selling those properties outright would subject the seller to significant capital gains tax, but there are several strategies for deferring — and in one strategy reducing — that capital gains tax liability.
Many property owners have inquired about selling their investment property in a way that locks in their gains — including owners who are looking to exit the landlord business altogether.
Whether your rental property is a single-family home, a duplex, other multi-family dwelling, or a commercial property, you may well be looking to cash out while values are high, but how do you do so while minimizing your tax exposure? There are several strategies for doing so, but one that was created by the Tax Cuts and Jobs Act of December 2017 is particularly attractive, both for its flexibility and the fact that it allows for reduction of the deferred capital gains tax and elimination of future tax.
There are four exit strategies that simply defer capital gains tax obligations. They include the traditional Installment Sale, the Monetized Installment Sale, the Deferred Sales Trust and the Delaware Statutory Trust. By using one of these exit strategies, you can defer the amount of tax you pay on the sale of a rental property, putting your pre-tax capital to work elsewhere. A fifth tool, the Opportunity Trust Fund, created by the Trump tax bill, is likely to become every investor’s favorite. Let me explain why.
The Trump tax bill allowed states to identify “Opportunity Zones,” and Colorado identified 126 such zones, 40% of which are in the Front Range, including Denver and Jefferson County. Altogether there are now 8,700 Opportunity Zones in all 50 states, the District of Columbia, and in five U.S. territories.
If a new investment in an Opportunity Zone property — or in an Opportunity Zone Fund which invests in such properties for you — is held for 10 years, you pay no capital gains tax when you sell.
There’s a further advantage when you roll the capital gain on your current investment property into an Opportunity Zone investment, because you can sell your current property, take out your basis on that property tax-free, while rolling only your gain into an Opportunity Zone Fund. Your basis on the rolled-over gain is increased (and tax liability reduced) by 15% after 7 years, and your gain on the new investment is tax-free if you hold it for 10 years. I’m told that these tax benefits decline on investments made after 2019.
In this article, I’m only telling you what I understand from reading up on the subject, including at https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questionso. You’ll want to speak to your tax advisor before making any changes in your real estate investment portfolio.
I thank broker associate Andrew Lesko, who specializes in duplex and multi-family properties, for bringing this and the other tax-saving strategies to my attention. If you’re thinking about selling your duplex, triplex, townhome or condo, contact Andrew for a current market analysis at 720-710-1000 or visit www.DuplexAlerts.com, where you’ll find more details about all five tax deferral/reduction/elimination strategies.
If you have a commercial property to sell, call me at 303-525-1851 so I can refer you to a trusted commercial broker.