Last Week’s Column About Seniors Being Cheated Out of Their Home’s Equity Got Lots of Reader Response

One reader said they were offered a quick sale of $120,000 cash, but called me before agreeing to the transaction.  My research showed their home could sell for twice that amount.

I wasn’t contacted in time to save an elderly Arvada couple from being coerced into selling their home for half its worth by a developer who made a point of telling the couple not to tell anyone about their transaction. The couple actually felt threatened, not just coerced. Indeed it was a neighbor who told me about the transaction, because the couple still felt obliged not to reveal anything.

Call me if you have been approached by an investor urging you to sell your home for what sounds like a good price. I’ll tell you if it really is — or if you should get more money for it. Write to me at Jim@GoldenRealEstate.com or call me at 303-525-1851.

Investors Target Seniors & Others, Buying Homes Below Their True Value

As a long-time Realtor serving the Denver metro area, I am committed to protecting homeowners and especially seniors from being cheated out of their home’s true worth by investors who offer to buy homes for cash without putting them on the market.

Unsolicited offers in the mail or by phone should be a red flag for you. These people know what they are doing and depend on you not knowing the true value of your home.

I want to uncover people who seek to cheat you. If you get such a solicitation, call me at 303-525-1851, and I’ll tell you what you’re home is really worth. Keep in mind that investors will only make an offer that leaves room to make a big profit — at your expense.

It’s easy for any investor to go online and identify homeowners who purchased their home 30 or 40 years ago for a fraction of what it’s worth now.  It’s a sure bet that such an owner is a senior and would be impressed by a cash offer of, say, $300,000. But how will you feel a month later when that investor sells your home for $100,000 more without making any significant improvements to it? You’d feel “ripped off” — and rightly so.  Don’t let this happen to you!

You may not even want to sell your home, but the offer of a quick $300,000 could lure you into a sale which you would only regret later.

Seniors in particular can’t afford to be cheated out of their home’s equity. The money they receive needs to last through their remaining lifetime. As a senior myself, I make those same calculations about how much money I need to support Rita and me for as long as we both live.

Don’t feel that you’re imposing on me to ask for my advice, which I give free over the phone. Using my computer, I can tell you within a few minutes whether an unsolicited offer you receive is close to what your home is really worth. My computer is always on, and unless I’m away from it when you call, I can enter your address in two different programs and tell you during the same phone call what those programs say your home is worth.  If you actually do want to sell, I can refine those valuations by looking at your home’s condition and location and studying the sales of comparable homes in your immediate neighborhood. With my years of experience, this is easy for me, so please feel free to ask!

I promise that I won’t ask you to list your home with me. You’d have to raise that subject. I just want to save you from being cheated or scammed. 

In my 18 years of practicing real estate in the metro area, I have come across many scams perpetrated against homeowners of all ages, but especially against seniors.

For example, I remember how one caregiver in Lakewood convinced her elderly client with dementia to add her name to his checking account and to the title of his car and even made her a co-owner of his home. When he passed, this man’s relatives couldn’t do anything about it because all those acts were ruled legal despite the man’s dementia. That “caregiver” drained his checking account, sold the house after his death, and his relatives didn’t get a dime.

If you’re a senior, beware of people who befriend and pretend to love you. They may have ulterior motives. If you are not a senior but have a relative who is elderly and lives alone, keep in touch with him or her and ask questions. Don’t let your relative be scammed — or feel ignored by you. That only plays into the scammer’s hand.

Now, if it is time for you to give up owning a home and move into a senior community where you have no maintenance worries and enjoy the company of others your age, I have a colleague who specializes in helping seniors find the right facility. She will listen to your needs and wants and even take you to visit facilities which best meet your needs. She knows their services and their histories, both good and bad. She’ll keep you from choosing a facility that you’ll regret later. She’s motivated to find you a facility that you like, because the facility only pays her a commission if you stay there for at least 90 days.  She’s a sweet, caring person, and you pay nothing for her services.

Or perhaps you’d just like to downsize into a smaller home or one with the master bedroom, kitchen, living room  and laundry all on the main floor. That’s where I can be of service personally.  I can send you listings like that and show you ones that sound appealing.

Call my cell phone anytime at 303-525-1851.  I answer it day or evening.

Beware of Brokerages That Offer to List Your Home for 1%

Perhaps you’ve seen the ads from a real estate company promoting a 1% listing fee. Some would consider this deceptive advertising, since the details are buried in fine print. In Colorado, you’ll pay an additional 2.8% fee to compensate the agent representing the buyer. That alone brings the fee up to 3.8%.  Also, the advertised rate requires that you buy your replacement home with the company. It’s all in the fine print.

Read the fine print! (You have 1 second to do so on this TV commercial.)

Would you really want to do business with a company that tricks you into granting an appointment by misrepresenting what they charge to sell your home?  We charge a little more, but you get far better marketing and, if we sell it ourselves, you could pay as little at 3.6% and get free moving to your new home.  Call Jim Smith at 303-525-1851 for details.

Note: Technically, the commission paid to the buyer’s agent is part of the listing commission even though it is paid by the seller at closing. Therefore advertising a 1% listing fee is in itself a lie. The listing contract would show 3.8%, not 1%. The fine print in the commercial also states that the 1% “listing fee” is increased if no commission is owed to the buyer’s agent. Therefore, 1% is not obtainable under any circumstance, although a listing agreement could be modified by the listing agent since commissions are always negotiable. I’m just referring to their “standard” commission arrangement as they are advertising it.

Here’s Why the Public Will Not Accept Driverless Cars

I have written before about why I think driverless cars should never be allowed, but this time I’m going to suggest why the public — you — would likely reject the idea.

During the transition to a driverless car, you’ll get to experience, as I already do, some of the features required for a car to drive itself. Those features include traffic-aware cruise control and lane management dependent on multiple cameras, radar and numerous sensors. I have been using those features on my Tesla for quite a while. 

The first thing to recognize is that a self-driving car will always err on the side of caution. Here are just three examples: Let’s say you’re driving a city street with parked cars but no line between the travel lane and the parking lane. Every now and then your car will mistake a parked car for a stopped car and simply stop.

Or you’ll be driving along and a car coming the other direction with make a left turn in front of you. Erring on the side of caution, your car will abruptly apply the brakes even though it’s clear to you that braking was not needed.

John Krafcik, CEO of Waymo, introduces driverless car

Or you’re driving on a road with no bike lane, but there’s a cyclist cruising along at 10 mph and no room to pass without crossing the yellow line, which your car won’t do. You car slows to 10 mph.

My Tesla knows the speed limit on all roads based on GPS information, but 1) sometimes the GPS information is wrong, and 2) sometimes there’s a lower speed limit in effect for school zones or construction. Your self-driving car will plow through those areas, totally oblivious!

Wildlife poses a special problem. As a human, you know to slow down if an unpredictable deer is next to the roadway. You driverless car doesn’t have that judgment.

Think of all the times you depended on exchanging eye contact or body language with another driver to know whether to yield or not yield. Think about two lanes merging into one, or about another car being driven erratically. Think about going off road. Think about anything other than driving on a dedicated highway with other driverless cars.

Think about seeing someone in distress on the side of the road or within sight of you. Think about witnessing an accident. Your car will want to leave the scene of the accident rather than stop.

Think of when the painted lanes have disappeared due to wear and only a human could figure out where to go. Or lines that have not been removed completely when new lines were painted.

Red light runner hits Waymo van in Arizona (ABC 15 photo)

In Golden, where Hwy 6 crosses Colfax Avenue, it’s not a 90-degree intersection. If I’m in the left lane traveling west through that intersection, my Tesla consistently misinterprets the dashed guide lines for the left-turn lane next to me and swerves into eastbound traffic thinking that it’s a left curve. Fortunately, I have my hand on the wheel and make the immediate correction.

I hope by now you have gotten the impression that self-driving software can not anticipate every conceivable (or inconceivable) situation and could lead a driverless car into desparate situations.

A Fair Housing Violation Could Ruin a Real Estate Professional’s Career

From my first classes in real estate, back in 2002, I was made aware of our obligation under law as well as under the Realtor Code of Ethics, to avoid even the hint of racial and other discrimination, including “steering” buyers to or from neighborhoods based on race or other criteria.

We continue to be warned about “testers” from the U.S. Department of Housing & Urban Development who pose as buyers to see whether we are in fact engaging in steering or other discriminatory practices.

I am reminded of this topic by an article in the current issue of Realtor Magazine about “The Gentrification Conversation.”  You are probably familiar with this term, which refers to the upscaling of traditionally poor and usually minority neighborhoods, resulting in the displacement of minority homeowners and tenants as they are priced out of their long-time neighborhoods.

While we don’t see a lot of gentrification in our suburban counties, it has been and remains an issue in inner cities such as Denver, and I see it a lot in West Denver, between Sheridan Blvd and I-25.

The Realtor Magazine article talked about the large-scale gentrification taking place in Detroit and about the deployment of HUD testers:

“An investigation by Newsday [a Long Island daily newspaper] published in November found disparate treatment and evidence of fair housing violations when undercover testers posing as home buyers visited real estate agents throughout Long Island, N.Y. A total of 93 agents were tested over three years, and the probe found unequal treatment occurred 49% of the time with black testers, 39% with Hispanic testers, and 19% with Asian testers. Unequal treatment included showing minority testers fewer properties, steering testers toward certain neighborhoods, and refusing to serve minority testers who weren’t preapproved for financing but not requiring the same for white testers. Agents also used euphemisms to communicate the racial makeup of an area and imply racial bias.

“[National Association of Realtors] President Vince Malta says he was deeply troubled by Newsday’s findings…. ‘NAR maintains its strong support of fair housing testing to unmask housing discrimination and hold our industry to the highest standard,’ he says.”

It should be noted that race is only one of several “protected classes” under both state and federal laws.  The federal Fair Housing Act of 1968 also prohibits discrimination based on sex, color, religion or creed, national origin and disability. Colorado law goes further, prohibiting discrimination based on sexual orientation (including transgender), gender identity, and familial status (single, married, having children under 18, being pregnant, etc.).

Avoiding fair housing violations can be tricky. Did you know that hoarding and peanut allergies are classified as disabilities?  Or that age discrimination is not prohibited in Colorado?  Or that drug addiction is protected as a disability, but illegal drug activity isn’t?  Or that you can’t discriminate based on how a person earns their income?  Or that you can be held liable for violating the Fair Housing Act even if you did not intend to discriminate?

The Realtor Magazine article provides guidance on how to avoid committing a fair housing violation.  For example, we cannot answer questions about a neighborhood’s demographics, but we can provide a neighborhood report from Realtor Property Resource (RPR) which does provide such information. We cannot characterize a neighborhood’s level of crime, but must refer the buyer to the local police department.

We can avoid “steering” by entering the buyer’s search criteria into the MLS and letting the computer pull all listings matching those search criteria.  We can enter geographical criteria such as city or draw an area on a map, as long as we are following the buyer’s request and are not knowingly avoiding one area or another based on discriminatory preferences.

If a buyer asks us to help them identify areas based on discriminatory criteria, we are advised to decline to serve that buyer. Since I have never had a buyer make such a request, I would suspect such a buyer to be a HUD tester.

The trickiest conversation to navigate would be one asking about the trends in a given neighborhood.  Is it “going up” or “going down”?  All we should do is provide actual statistics about the past few years, just giving the numbers, but no interpretation of them that could include demographic changes.

I can’t recall dealing with a buyer who presented a fair housing challenge, and I make an effort to stay aware of fair housing laws and understand the importance of non-discrimination.  However, it can be a challenge keeping up with current housing laws, as suggested by those questions I posed above.

More People Are Considering Electric Cars and Trucks As the Number of Brands and Models Surges in 2020

2020 will be a “watershed year” when it comes to the adoption of electric cars and trucks. By the end of this year there will likely be twice as many models of EVs being sold, including by the major automakers.

Mustang Mach E trunk under hood

Ford, for one, is now selling the Mustang Mach E, an electric crossover with up to 300 miles of range, selling for $43-50,000.  Tesla is now delivering its Model Y, a crossover built on the same platform as the successful Model 3. It too boasts a range up to 300 miles and sells for $43-56,000.  I predict it will be Tesla’s best-selling model so far.

Jaguar I-Pace

Mercedes is bringing its EQC 400 4-matic crossover to market this year, joining the already successful Jaguar I-Pace and Audi e-tron. Volvo is bringing to market the XC40 Recharge SUV, as well as the Polestar 2 sedan, which is marketed in partnership with the Chinese firm Geely.

Rivian platform for both its truck and SUV is cleaner than most because it has four motors, one in each wheel hub.

Rivian is bringing out both an SUV and its electric pickup this year. Instead of one electric motor between the front and rear wheels, it has a motor in each wheel hub, allowing it to do a “tank turn” – literally turn on a dime like a tank! Another electric pickup is coming next year from Bollinger, when the Tesla Cybertruck is also expected.

The Porsche Taycan is already in its second year of production.

Mini Cooper has already started selling its SE Electric. Hyundai is in the second year of selling its Kona electric, which has a 258-mile range and sells for just under $37,000. The latest Nissan Leaf has a range up to 226 miles for $38,200. Chevrolet continues to sell the Bolt.

Kelley Blue Book first drive – click on picture to see 5:26 YouTube video.

The newer brands of electric vehicles still enjoy the $7,500 federal tax credit plus the $4,000 Colorado tax credit, making them less costly than equivalent gas-powered cars.

Personally, I recommend buying used EVs, which are as good as new (because they have so few components that can fail), for under $10,000 to $30,000+.  Green Eyed Motors in Boulder specializes in the sale of used EVs and has 15 in stock as I write this, including several under $10,000 and this 2013 Model S Performance below, which probably sold new for $125,000. Asking price: $35,999.

https://www.greeneyedmotors.com/inventory/2013-tesla-model-s-performance/181059

Most Feedback Requests Ask Unproductive Questions

Just a few years ago, there were several services which handled showings of homes for sale so that listing agents and their offices didn’t have to handle showing requests themselves.  Each of those showing services would send email feedback requests to the showing agent beginning right after the showing.

Last year, a company called ShowingTime bought Centralized Showing Service (which we used) and now virtually all brokers are utilizing that one company to send feedback requests to showing agents and to forward responses to listing agents and their sellers.

As I’ve written in the past, the best feedback request is one which asks a single question — “What’s your buyer’s feedback on this listing?” — and provides an open text area for the response.

Instead, ShowingTime’s default email asks a few stock questions such as rating the showing “experience” and saying whether the listing price is high or low. It looks like this:

Asking the buyer’s opinion of the price is useless and not smart — if I were submitting a contract I’d say it was high even if it’s not. If I were previewing the house before listing a competing home for sale, I might say it’s too low. Here’s the custom feedback template I created for all my listings:

Agents can change the default to one question with open text, but it’s not easy to do.  I had to ask support how to do it.

Here are the instructions for readers who are agents using ShowingTime: 1) Log in to ShowingTime. 2) On the left, expand “Feedback” 3) Below “My Feedback,” click on “Form Design & Settings.” 4) Enter name of your template. 5) After making any changes to the Settings, click on the tab “Feedback Form.” 6) Click on “Add Free Text Question.” (You can enter more than one.) 7) Click “Save Changes” 8) Click on Preview Survey to make sure the form you designed is the one that will be sent to all showing agents.

If You’re Surviving Covid-19 Financially, This May Be a Good Time to Buy or Sell

Despite the best efforts of state, local and federal governments, there will surely be people who are suffering financial hardship and have had to put their dreams of homeownership on hold.  I wish them well as they dig themselves out of this terrible situation.

For those who are surviving Covid-19, however, and don’t get sick from it in the coming months, the continued record-low interest rates are making home purchase more attractive and more affordable.

As you’ve no doubt heard, the Federal Reserve has plunged hard into softening the impact of the virus and its attendant effects on the economy by reducing the Fed Funds interest rate used by banks to near zero. While this rate is unrelated to mortgage rates, we are also seeing those rates staying below 4% and approaching 3%, which is propping up the real estate market in a big way.

People who can afford to buy a home and have the income to qualify for a mortgage are getting off the fence. This is evident from how many homes are going under contract quickly, often with competitive bidding.

In the first 10 days of May, there were 2,306 homes within 25 miles of the State Capitol entered on Denver’s MLS. 615 of them were under contract by May 10th. Another 171 homes were entered as “Coming Soon” as of this Tuesday.

May 5-12 Stats within 25 miles of State Capitol

While that’s less than the first 10 days of May 2019, when 3,348 homes were entered on the MLS and 795 of them went under contract by May 10, it’s still an impressive amount of activity, and is probably due in part to the excellent mortgage situation.

Another factor that will stimulate purchasing among the wealthy is that the stock market has recovered more than half of its early losses due to the virus. That makes it more likely that investors would be willing to liquidate stocks to finance a cash purchase of real estate.

In April 2019, about 48% of homes sold at or above their asking price, and 46% of them sold in a week or less. This year’s performance is better. Of the homes that closed during April 2020, about 58% sold at or above their asking price, and about 62% sold in a week or less. Those statistics tell me that we have a pretty active sellers market, which stands in contrast to the gloomy economic situation caused by Covid-19.

It’s hard to believe that the real estate market will tank later this year if it is not tanking already.

I’m seeing that dynamic myself. As of this writing, all my own listings are either under contract or closed, including the Wheat Ridge home featured as “coming soon” a couple weeks ago.  That $550,000 brick ranch was only listed as “active” on the MLS last Tuesday, and showings didn’t begin until Saturday, but our first offer came in on Sunday, and it was under contract at better than full price by Tuesday morning.

Zillow Shortchanges Both Agents & Buyers on Video

Despite the increased emphasis on virtual tours because of stay-at-home orders, Zillow continues to stymie those of us who want to provide narrated video tours of our listings.

Unlike our MLS — and most other MLSs around the country — Zillow does not let us link a YouTube video to our listings on their platform.  Zillow gets those links from our MLS but does not display them.  Instead it wants agents to become Premier Agents (which costs money) and then makes agents use a Zillow app to shoot a walk-through video using their smartphone.

That walk-through is limited to 2 minutes and does not carry sound, which is ridiculous, since the whole point of a walkthrough is for the agent to point out the features of the home. “Don’t worry about barking dogs,” we are advised, “since your video won’t have any sound.”  Isn’t that comforting?

In my opinion, there is simply no substitute for a narrated long-form video tour of a listing.  We’re told that videos should be short to match the short attention span of online lookie-loos, but I do the videos for people who like what they see in the description and photographs and want to take a deeper dive into the features of a home before seeing it.

Last month I sold a $1,250,000 home in the foothills to a couple from Washington, DC, who never saw the home in person. They had a daughter look at it in person, but they only had my 18-minute video tour to go by before signing the contract. They didn’t even come for the inspection or closing.  And that’s not the first such instance of a Golden Real Estate video tour selling a home to an out-of-state buyer who didn’t see it in person until at least the final walk-through.

We can thank Zillow for getting us more comfortable with shooting a two-minute silent walkthrough video, but all agents need to become comfortable with doing a video tour that functions like an actual showing.  Who would show a home in two minutes — and without saying a word?  Not me!

Some agents are simply shy about being on camera or speaking into a recording.  Well, you don’t need to be in front of the camera, so let go of that excuse. And if you simply think of the camera as a buyer that you’re showing the home to, you know exactly what to say as you go through the home. Point out the flooring, the counters, the view out the window.  It will come easily.

Lastly, don’t use your smartphone. Buy an HD video camera such as the Osmo Pocket (shown here), which we use. It has a gimble so that your video does not have the shakiness of a handheld camera. It costs about $350 at Best Buy, where we purchased it.

New Listings and Showings Surged Last Week After Governor Eased Showing Restrictions

By JIM SMITH, Realtor(r)

Sellers who had been holding back during most of April put their homes on the market during the calendar week ending Saturday, May 2nd. And showings of listings also surged.

Listing Activity – 7 Days ending 5/6/20 within 25 miles of the Colorado State Capitol

Altogether, 1,648 homes within 25 miles of the State Capitol were listed on Denver’s MLS between Sunday, April 26th and Saturday, May 2nd. That’s pretty close to the 1,885 number entered on the MLS during the same 7-day period in 2019, and more than double the 819 homes listed two weeks earlier. (During the week of April 19th to 25th, only 993 homes were entered on the MLS.)

Of those 1,648 listings, 29 were withdrawn from the MLS by week’s end for unknown reasons, and 10 were entered as “sold” without ever being active. That still left 1,609 new active listings, 511 of which were already under contract by Tuesday noon. That’s significantly above the 405 homes that went under contract by the end of the same period last year.

By the deadline for this column at noon on Tuesday, 233 additional listings had been entered as “active” on Denver’s MLS. 

Not included in the 1,648 number are 176 listings that were entered on the MLS as “coming soon,” a status that didn’t exist until this year. One of those was my $550,000 listing at 2950 Jay St. in Wheat Ridge. It went “active” this week. Showings begin Saturday, May 9th.  There are more pix on the website.

So, while we can hardly say life is “back to normal,” the real estate business is certainly showing renewed signs of life. Frankly, I’m surprised at the size of this surge in listings and signed contracts.

Like most agents, I have many buyers who have given me their search criteria, and the MLS automatically sends them alerts of homes matching those criteria as they are entered on the MLS. In my case, I have nearly a hundred such email alerts in effect. Since Gov. Polis replaced “stay-at-home” with “safer-at-home,” which allows in-person showings to resume, I have seen a spike in the number of buyers clicking on the links for listings sent to them.  My listing at 1957 S. Taft Street in Lakewood saw five showings set on May 1st and 2nd alone.  With this week’s price reduction, I wouldn’t be surprised if it goes under contract quickly.

Listing agents are expected to take extra precautions to protect the health of both buyers and sellers under the “safer-at-home” guidelines. For example, there can be no overlapping showings, and only 3 persons (typically two buyers and their agent) are allowed in a listing at one time. Our showing service, ShowingTime, is enforcing these rules by not allowing overlapping showings to be set.

As a listing agent, it is my responsibility to sanitize a home between showings, which I do by using Clorox wipes on all hard surfaces that visitors might touch, such as door handles and light switches. I leave the lights on and most doors, including closet doors, open or ajar, so that touching them is minimized. If the home is not vacant, sellers can perform these safety functions themselves.

Buyers and their clients are asked to wear face masks and gloves and to wear booties, which they’re asked to take with them when they leave. By following these guidelines, agents and their clients can feel as safe as, or safer than, for example, at a supermarket.