Price Reduced on Rare Ranch Home in Littleton’s Trailmark

You’ll love this ranch-style home at 9379 S. Jellison Way. Not only has the price just been lowered by over $21,000 to $598,900, but Golden Real Estate is offering totally free moving (within Denver metro area) to help move this listing. Call 303-525-1851 for details! View a video tour at www.TrailmarkHome.info, or come to our open house this Saturday, Oct. 12th, from 11 am to 1 pm. At this price, this home won’t last long!

At Saturday’s ‘Green Homes’ Tour, You’ll Learn What’s Possible for Your Home

The Metro Denver Green Homes Tour is an annual event that happens on the first Saturday in October, which is this coming Saturday. For $10 per person, you get to go on a self-guided tour of 14 Jefferson County homes with a variety of green features.

I consider myself pretty knowledgeable about solar power and sustainability, but every year I learn things I didn’t already know by touring the homes on this tour.

Golden Real Estate is proud to be a platinum sponsor of this event each year. Also, I serve on the steering committee and help in a variety of ways, such as organizing the Electric Vehicle Showcase, which takes place during the post-tour reception, 4 to 6 pm in the CoorsTek parking lot at 10th & Jackson Street in downtown Golden. It coincides with the reception and Green Expo in the American Mountaineering Center (AMC) across the street.

You can register for the tour online at www.MetroDenverGreenHomesTour.org, but you’ll need to pick up your tour book and map, which you can do anytime on Friday at Golden Real Estate’s office, 17695 S. Golden Road, or on Saturday after 9am at the AMC, 710 10th Street.  If you don’t register online, you can do so at the AMC on Saturday morning.

Then you’re on your own, mapping out your own tour based on locations but also on what you read about each house in the tour book.

I couldn’t shoot video tours of every home, but I did choose two that the committee felt represented particularly interesting examples of sustainability. You can see those two videos on the website mentioned above. By watching those two videos you will learn things you didn’t already know, as I did by shooting them.

To quote from page 3 of the tour book, “In our ongoing effort to showcase a wide variety of solutions and lifestyles, you will see solar, of course, and also mini splits, ground source heat pumps and passive solar treatments. You can visit an Arvada sustainable new town home community [Geos] and enjoy many other sustainable lifestyle features such as co-housing, electric vehicles and water wise gardens. You will be viewing the tried-and-true in addition to the latest in innovative technologies, plus learning many steps used to eliminate red tape while going green.”

If you pick up your tour book at Golden Real Estate, let us show you how we transitioned to “net zero energy” using many of the features you’ll see on the tour, including heat pump/mini-split heating & cooling, solar panels, super insulation, and tankless electric water heating. Our monthly energy bill is $10.26 since having our gas meter removed two years ago. If you come in an electric car, you can plug in to our free ChargePoint charging stations — powered by the sun — while we show you around! Click here to read the Jan. 4, 2018, column I wrote describing Golden Real Estate’s transition to Net Zero Energy.

This Saturday’s tour is one of 79 such tours of 894 private homes happening this weekend as part of the National Solar Tour sponsored by the American Solar Energy Society (ASES). And that doesn’t include, for example, last Saturday’s Boulder Green Home Tour, which had 10 homes on it. This is the 25th National Solar Tour, and we have participated for 23 of those years.

Don’t forget the Green Expo during the reception, 4 to 6 pm following the tour. Many companies which implement green solutions will have booths, and there will be an Electric Vehicle Showcase in the parking lot across the street. If you have an EV, bring it for display! If you’re interested in going electric, there will be test drives available. Also, Pedego Golden is bringing electric bicycles which you can test ride.  I have an electric bike, and I love it!

Also at the event will be the CSU Extension 4-H Mobile STEM Lab. The primary focus of the mobile lab is energy production and conservation, energy conversions and mechanical advantage for youth and adults.  Should be interesting!

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Were Last Week’s “Climate Strikes” Enough of a Wake-up Call on Climate Change?

We can thank Al Gore for educating us about global warming, but I wish a non-politician such as Carl Sagan had performed that service. I can’t think to any other scientific research which became partisan in a similar way.

Remember CFCs and the ozone hole? It wasn’t a partisan issue. The issue was addressed quickly in a bi-partisan manner.

It was meteorologists, not politicians, that taught us about El Nino and La Nina—the cyclical events in which changes in ocean temperature create weather patterns affecting our entire continent. No one has said El Nino is not real.  It is accepted science — like climate change.

It’s only because Al Gore introduced us to the “inconvenient truth” about climate change that his teachings were disputed and rejected as left-wing propaganda by those on the right. How sad, how unfortunate, and how deadly the consequences.

Last Friday I attended the “Climate Strike” event on the Colorado School of Mines campus and watched news coverage of bigger events around the world.  I’m 72 now, and, yes, the climate will worsen before I die. But those under 40 and certainly those under 20 are seeing the early effects of global warming and worry that their world will be unlivable by the time they’re my age.  For them, it’s a huge crisis.

Back in June, I attended my 50th reunion at M.I.T, during which there was a Technology Day symposium on climate change. One of the speakers, Prof. Noelle Selin, told us that the global concentration of carbon dioxide was 325 parts per million when we graduated in 1969, but now it was 410 ppm. She made us think about those who graduated in 2019 (who she dubbed “the Class of 410 ppm”) and speculated on the class that would be graduating at their 50th reunion. “Will it be the Class of 600 ppm or the Class of 700 ppm?” she asked. And what will life be like for them at their 50th reunion?

It was a sobering presentation. And you can be sure that it was even more sobering for the Class of 2019 and for M.I.T. students who have yet to graduate.  To view her 19-minute presentation, click here.

The impact on real estate — and national security — is apparent when you consider all the “climate refugees” who are likely to migrate from heavily impacted areas such as the Bahamas, Florida, Houston — and Syria, where drought, as much as civil war, contributed to the exodus of Syrians to Europe. Indeed, over a decade ago the U.S. Defense Department labeled climate change a threat to national security. You can understand why.  I do.

The headline of my column on Jan. 14, 2014 was, “We May Have Already Passed the Tipping Point on Climate Change.” That statement was based on the already dramatic reduction in summer sea ice in the Arctic Ocean, as documented by the Earth Policy Institute at Rutgers. I published their chart showing a correlation between the increase in atmospheric CO2 from 300 to 400 ppm since the Industrial Revolution, and the 50% loss of summer sea ice in the Arctic between the late 20th Century and 2013. 

The reason loss of sea ice creates a tipping point for our climate is that sea ice, being white, reflects sunlight, whereas open ocean, being dark, absorbs sunlight, causing more ice to melt and to melt faster. A warmer Arctic region in turn upsets weather patterns worldwide.

Almost six years have passed since I wrote that column, and now the Arctic Ocean is open and navigable for part of the summer. We have learned the term “polar vortex” and experienced the effects of wilder than normal fluctuations of the jet stream. Warmer oceans in the tropics have caused stronger, slower hurricanes, causing 100-year floods to become frequent, as we have already seen in Houston. These effects were already happening back in 2012 with superstorm Sandy in New York and New Jersey and even here in Colorado with the heavy rains and flooding of Sept. 2013.

Unfortunately, we have a president who will never admit he was wrong, so he will never admit that climate change is real, that it is exacerbated by CO2 emissions, and that the only hope, if there is any this late in the game, of reducing the impacts of climate change is to drastically reduce the output of greenhouse gases like CO2 and methane. Instead, inaction on climate change, and worse, may be this president’s #1 legacy.  How sad.

Big Price Reduction on Golden Horse Property

If you drive Easley Road, perhaps you’ve seen this banner on the fence of my listing at 16826 W. 57th Ave.  It was originally listed at $750,000 — a great price, I felt, for a one-acre horse property within 4 miles of downtown Golden. Now, however, the price is reduced to $699,000.  Such a deal! In addition to the half-acre pasture, the property includes a 5-bedroom, 3-bath multi-level home with a 3-car garage. Separate from the pasture is a fenced backyard which is sheltered from any traffic noise. The master bedroom upstairs has a private deck with a view of North Table Mountain.  You’ll have the experience of being in the country here, close to bridle trails, bike trails and walking paths up the east slope of North Table Mountain. There’s no HOA, and you’re in unincorporated Jefferson County, so you’re free to build another outbuilding as big as you’d like or to use the pasture for storing your cars, RVs and other toys. You can take a narrated video tour at www.JeffcoHorseProperties.com, or call me for a showing.  Open this Saturday, 11am-1pm.

Nothing Would Spur the Real Estate Market More Than Relief of Student Debt

A recurring idea among many of the Democratic presidential candidates is the payoff of student debt combined with making public universities and colleges tuition-free.

If that were to be done, I think we’d see an amazing increase in home purchases by those who are currently saddled with tens of thousands of dollars in debt. Freeing them from monthly payments of that debt could unleash a lot of buying power, and not just for real estate. Dollar-for-dollar, there is probably no investment the government could make of equal scope that would have as great a stimulating effect on the economy.

According to the Center for Responsible Lending, “Student loan debt has topped $1.5 trillion in recent years, making it the largest type of consumer debt outstanding other than mortgages. The average student loan borrower graduates with nearly $30,000 in debt.”

Moreover, according to the Center, The CFPB estimates that over a quarter of borrowers are delinquent or have defaulted on their student loan debt. Such defaults wreak havoc on the borrower’s credit rating, making home financing impossible rather than just difficult.

It’s hard to imagine the impact of having literally millions of home buyers entering the market if this were to happen. It may, in fact, prove to be too much stimulation of an already tight housing market. Meanwhile, the rental market could have the depressing impact of so many renters vacating rental units to buy their own condos and homes.

Speaking of the economy, I read an article last week that the RV industry is experiencing a 20% decline in sales, and that it’s considered a leading indicator of recessions. In my Sept. 5th column I wrote about fears of recession stoking a reduction in home buying activity, although market statistics don’t yet show that happening .

However, the article on declining RV sales got me to thinking. What makes it a leading indicator of a coming recession is that RVs are an extreme example of discretionary spending, the kind that is reduced when consumers fear for their financial future.

Well, real estate purchases are often discretionary, too. People don’t always have to sell their current home or leave their rental to purchase a home. If they are in fear of economic pain, it’s understandable that they would postpone such a purchase.

So, although the statistics don’t yet reflect such a slowdown in real estate activity, I think the prospect of that slowdown is quite real, and I’ll be watching for statistical evidence of it.

If indeed a recession is looming, relief of student debt could have a strong countervailing effect on the economy as a whole, and not just the real estate market.

Note: Some readers of this column got the impression that I supported the forgiveness of student debt. I still need to be convinced that it would be a good thing to do. The point of this column was merely to speculate on the market effect if that idea were to be implemented.

What Is a ‘Variable Commission’ and Why Should Home Sellers Demand It?

This week’s column is intended to help those who might benefit from a better understanding of how real estate brokers are paid.  If you’re already well versed in this, please bear with me while I share some information with those who aren’t as well informed.

Before I explain what a variable commission is, let me explain who pays — and who receives — the commissions in the typical real estate transaction.

Normally, sellers pay the full commission to the listing agent, who then compensates the agent representing the buyer. How commissions are paid and shared is the primary purpose of the Multi-List Service, or “MLS” — to provide a system of  “cooperation and compensation.” If you’re a member of an MLS (a must if you want to do more than just word-of-mouth real estate), you commit to putting all your listings on it so that other MLS members can show and sell them. MLS listings disclose how much the “cooperating” broker will be compensated by the listing agent for procuring the buyer. 

Real estate firms may not dictate, share or discuss the commission rates that their agents charge sellers. To do so would constitute price fixing, a federal offense under the Sherman Anti-Trust Act of 1890. Brokerages may, however, dictate the amount each agent offers to other agents who sell their listings. At Golden Real Estate, we, like most brokerages, require that our broker associates offer a minimum 2.8%  “co-op” commission.  Offering less could result, I’ve found, in fewer showings by other MLS members.

There’s some history behind that 2.8% co-op commission.  Before the Justice Department forbade  the real estate industry from engaging in the fixing of real estate commissions, the Denver Board of Realtors fixed the rate at 7% and pegged the co-op commission at 40% of that, which is 2.8%. Listing commissions began falling due to competition once Realtors could no longer tell sellers there was a “standard” commission, but the  co-op commission remained at 2.8% to assure their listings got shown by agents.  As a result, it’s not uncommon now for listing agents to receive less at closing than buyers’ agents, even though they absorb all the costs of listing a home — signs, advertising, photos, video tours, showing service, staging consultations, etc.

Perhaps you’ve seen ads offering a “1% listing commission.” Such ads conceal (except in their fine print) the fact that an additional 2.8% is added to compensate the buyer’s agent.  As noted above, the listing commission includes what the listing agent will pay the buyer’s agent, so promoting a “1% listing commission” is, quite simply, misleading or deceptive advertising.

That said, let me now explain what a “variable commission” is and why sellers should demand it.

A variable commission is one which is reduced when the listing agent does not have to compensate a buyer’s agent — in other words when the listing agent sells a listing to his own buyer or to an unrepresented buyer, such as an open house visitor. Listing agents like to “double-end” a listing, because doing so can double what they earn on a given transaction.

Sellers certainly want their listing agent to be motivated to sell their own listings, but when that happens,  should the agent share his good fortune with the seller?  That’s the purpose of the variable commission.

Typically, I list a home for 5.6%, committing half of that (2.8%) to paying a co-op commission, but I reduce my commission to 4.6% when I sell the home myself. That way, I still earn more, but my seller pays less.  I want it to be a win/win.

MLS rules requires that each listing disclose the existence of a variable commission, so that brokers representing buyers know what they are up against in the event their buyer must compete with another buyer who doesn’t have his own agent.

Before submitting an offer, buyers’ agents typically ask the listing agent if there are other offers in hand. If the MLS indicates that there is a variable commission, the buyer’s agent will want to know whether any of the offers are from unrepresented buyers and, if so, the amount of the variable commission differential.  If the differential (as with my listings) is 1%, then the buyer’s agent knows that his client’s offer has to be 1% higher than an unrepresented buyer’s offer in order to be of equal monetary value to the seller.

Likewise, when meeting with unrepresented buyers, the listing agent can advise them that the variable commission makes their offer worth 1% more if they don’t engage an agent to represent them.

At Golden Real Estate, we have other rewards we can offer the unrepresented buyer, including “totally free moving” — free use of our moving trucks, free moving labor, gas and packing materials — if they choose to work with us instead of hiring a buyer’s agent.

As a matter of principle, I believe that a variable commission should be part of every listing agreement. However, my own research of sold listing on the MLS found that less than 20% of them indicated a variable commission.  In other words, more than 80% of sellers signed a listing agreement that allows their agent to keep 100% of their commission if they double-end the sale.

My research has also shown that roughly 7% of all real estate sales are double-ended. Thus about 7% of that 80% missed out on a multi-thousand-dollar discount in their real estate commission that they might have enjoyed by listing with, say, a Golden Real Estate agent.

Many homes are sold before they are made active on the MLS. Some, but not all, are put on the MLS after closing, showing zero days on market. I mentioned above that 7% of MLS sales overall are double-ended, but that percentage jumps to roughly 31% for MLS sales with zero days on market. Of those, 70% did not indicate a variable commission.  Many of those sellers, one can surmise, not only did not get as high a price for their home as they might have if it had been put on the MLS as an active listing, but also lost out on a discounted commission.

It should be noted that while the MLS considers a variable commission worthy of having its own data field, the standard listing contract lacks any place to specify a variable commission. If the contract had a section to enter that information, more sellers might ask about it before signing. Instead, unless your agent offers it proactively, as we do, you may not think to ask about including it as an additional provision.