Thoughts From Attending My 50th Class Reunion at MIT

Forgive me for straying from my usual topic of real estate — I took some time off with Rita to attend my 50th reunion at the Massachusetts Institute of Technology last week, and I was super-inspired by the experience of returning to the Institute for what was more than just a party. It was an immersion  into the continuing impact that MIT is having on the world of science and technology.

Reunions at MIT are probably unlike those at any other college or university. Yes, there is partying, but roughly half the events were educational in nature, updating alums on current research regarding important topics of the day. This year the dominant topic was climate change — something I wrote about, quite coincidentally, in last week’s column.

Not only was climate change the subject of Michael Bloomberg’s commencement address (there’s a video link for it at http://news.mit.edu), but the 3-hour Technology Day symposium the following morning was all about climate change. The 1,200-seat auditorium was filled to capacity with alumni eager to be updated on MIT research about this important topic, and they were fully engaged to the very end.

Technology Day at MIT – click here for archived 3-hour video.

When I attended MIT 50 years ago, undergraduate men vastly outnumbered the undergraduate women, who barely filled the one dormitory provided for them.  Over the past 20 years, women have risen to comprise 46% of the undergraduate student body and 35% of the graduate student body, spanning every academic discipline. This gender equity was evident in Saturday’s symposium, too. Four of the six presenters, including the moderator, were women.

In his commencement address, the former NYC mayor observed that the technology for successfully addressing climate change is largely in place (except for bringing it to scale), and challenged graduates to go out into the world not just to expand upon it, but to build the political will to deploy it. I was reminded of that statement the following day while attending a Class of ’69 discussion about anti-Vietnam war activism at MIT during our time on campus. During the Q&A, a fellow ’69 alum said he had interviewed several undergraduates about political activism, which is not currently evident on campus. The impression he got is that the students are all “heads down,” concentrating on solving the world’s problems — such as climate change — undistracted by the politics that excite and divide those of us beyond the walls of academia.  Reflecting on that analysis, as someone who was very active politically as a 1960s undergrad and is still active now, I suspect it’s because nowadays, unlike in the 1960s, the Institute and its students are on the same page about such issues, sharing the same commitment to addressing commonly accepted world problems.

(In the unlikely event that President Trump were to stage a campaign rally in the Boston area, I get the impression there would be a sudden upwelling of activism at all local universities, including MIT, but the MIT activists would be focusing their vitrol on the President’s denial of climate change.)

Climate change, of course, is only one of the “world’s great challenges” which MIT is committed in its mission statement to addressing through academic research. We learned in Saturday’s symposium about ground breaking research on mass storage battery systems and alternatives to blast furnaces for creating steel. Those inventions likewise contribute in a big way to sustaining the livability of our planet.

A deceased member of the class of ’69, Bob Swanson, who cofounded Genentech, is generally credited with creating the biotech industry. Scores of biotech businesses now populate the high rises on Kendall Square, adjacent to the MIT campus. A tribute to his accomplishments during one of the luncheons was most inspiring.

It was hard not to come away from the reunion weekend without a deep appreciation of what MIT and its graduates can and are accomplishing in addressing the planet’s most important challenges.  I consider myself very fortunate to be among those who were given the privilege of being immersed in that environment for four or more years, however long ago.

A videographer asked members of my class what their biggest learning was from MIT.  My answer to that question referenced the chemical process of osmosis, a secondary definition of which, according to Google is, “the process of gradual or unconscious assimilation of ideas, knowledge, etc.” Just being in that environment amidst the faculty, administration and fellow students was its own education through osmosis. This may be hard to understand if you weren’t there, but my classmates would probably all nod in agreement.

I return from my reunion, renewed in my appreciation of science and technology and of all that my alma mater contributes to their positive application to society.

PS: I was honored when MIT chose to feature me in a pre-reunion “Slice of MIT” blog post, focusing on what I have done to transition Golden Real Estate’s office to “net zero energy.” Here’s a link to that blog post.

Here Are Some Questions Sellers Should Ask When Hiring a Listing Agent

Do you know what to look for in a listing agent, and the questions to ask during a listing presentation?

You’ll probably want to know their level of experience, competence and success in selling similar properties, hopefully within your city or neighborhood.

Like you, I monitor the real estate activity where I live, and I’m astonished how many homes are listed by agents I’ve never heard of. As I write this on Monday, there are 50 active or pending listings in my area, represented by 40 different agents!  No agent has more than three listings. And despite practicing real estate here for 17 years, I only recognize the names of 11 of them.

This is typical of every city. Where did the sellers find all those different agents to list their homes? Many, I suspect are friends and family — every agent’s biggest “competitor.” In some cases, the seller had just bought their replacement home elsewhere and was convinced by that listing agent to list their current home — not the best decision if that agent is unfamiliar with your neighborhood, lives far away, and is unable to show the home on short notice, answer questions from buyers, or keep your brochure box well stocked.

Or perhaps the agent sent a letter or taped a note to your door claiming to have a buyer for your home. That earned him or her an interview, in which the agent said that his buyer found another home but convinced you to list with them.

Let’s say, however, that you want to interview  listing agents and make a rational hiring decision.

First, choose the agents to interview based on their location and experience in your neighborhood or city. Second, study their active/sold listings to see (1) their geographic distribution and (2) how well they are presented on the MLS. 

For this you can use a shortcut I created,  FindDenverRealtors.com, which takes you to the page on Denver’s MLS for searching agents by name. In my case, you’d see a profile and my active, pending and sold listings. Search for the agent(s) you’re considering. Read their profile, if they created one. Look at their current and sold listings. Click on one or more of them to see how they described the home on the MLS. Did they list all the rooms, not just bedrooms and bathrooms, providing dimensions and descriptions, or just enter the mandatory fields? Keep in mind that, the best indicator of how they will serve you is how they have served previous sellers.

Looking at those listings will answer the most important questions which you’d ask in person, but you won’t have to take their word — the truth is there in front of you. You’ll learn, for example, whether they did point-and-shoot pictures or had a professional photographer shoot HDR (magazine quality) photos, and whether they created a narrated video tour or just a slide show with music.

Having chosen who to interview that way, ask these questions of those you invite into your home for an interview:

What commission percentage do you charge? Keep in mind, there is no standard commission. It’s totally negotiable, and the industry average is in the mid-5’s, not 6%.

See whether the agent volunteers that they reduce their commission when they don’t have to pay 2.8% to a buyer’s agent. If you have to ask them, consider it a red flag. They hoped you wouldn’t.

Ask the agent whether he or she will discount their commission if you hire them to represent you in the purchase of your replacement home.

Hopefully the candidate will have researched the market and make a sound recommendation of listing price. Beware of agents who inflate their suggested listing price so you will list with them.

When setting the appointment, ask the agent to bring a spreadsheet of their sold listings with dates, days on market, listing price and sold price.

Lastly, how will they promote your listing?  Measure their promises against what we do, published at www.HowWeMarketListings.info.

Climate Change, Our Planet’s Most Pressing Issue

Colorado has been blessed with probably the least impact of climate change, but eventually it will catch up with us.  Meanwhile, we watch, stunned, not only by the tornadoes, hurricanes, wildfires and flooding in other sections of the country, but also by the failure of the major networks to mention climate change as the culprit and to point out that it will only get worse over time.

Over 5 years ago, in 2014, the headline on my column was “We May Have Already Passed the Tipping Point on Climate Change.”  Here is what I wrote back then:

Each January, political leaders shower us with speeches on the State of the Union, the State, the City and other jurisdictions.  No one presents a State of the Planet speech, but if someone did, I suspect climate change would be topic #1 — and for good reason.

My friend and mentor, Steve Stevens, sent me a chart (below) showing the decline in late summer Arctic sea ice. It’s a wake-up call regarding climate change.

I don’t have a degree in science, but I do understand science enough to know this chart’s significance.

If you studied any science — or own an automobile — you know that white surfaces reflect solar heat, whereas dark surfaces (open ocean, for example) absorb it. The loss of sea ice does not just indicate global warming, it accelerates it, which makes one worry whether it’s already too late to reverse the effects of human-caused global warming.

Climate change deniers may celebrate the fact that the Arctic Ocean is becoming increasingly navigable in the summer, but they need to connect the dots between global warming and the whipsawing we now see in our day-to-day weather. 

I’d be curious to see the statistics on how many times the network news programs featured severe weather reports in 2013 versus previous years.  I can’t remember an evening in which weather wasn’t a major or lead story.

Our earth’s climate has been de-stabilized. Had you heard of the polar vortex before this year?  I hadn’t.  The uninformed will say that our cold weather proves that the earth is not warming, but how naïve is that?  It’s global warming that is causing extremes, both of temperature and precipitation — which is caused by warming. I don’t hear them questioning El Nino, in which natural changes in ocean temperature affect climate.

Is there time to reverse this situation?  Maybe not. But we certainly don’t have time to debate its existence with climate change deniers.

[End of my 2014 column]

Night after night, we see news reports of unprecedented severe weather around the country, but rarely is the connection to climate change mentioned. Our president’s failure to address climate change may be part of his legacy.

Finding the Right Senior Living Community for You Can Be Confusing!

Buying and selling a single family home can be confusing enough, but it pales in  comparison to shopping for the best senior living community.

According to Jenn Gomer of CarePartrol (more about her later in this article), there are no fewer than 400 senior communities in the Denver metro area, and the variety of living options and business models can be overwhelming.

There are pure rental facilities and rentals with buy-ins. The size and terms of those buy-ins can vary greatly, too.  Some facilities are on a campus with continuous care options as your health changes, ranging from independent living to assisted living to nursing home care, to memory care to hospice.  Personally, I like the idea of not having to move again if my health changes, but not all senior communities include that feature.

Financing, of course, is a huge consideration. If you own your current home and have lots of equity in it (little or no mortgage), that can provide a nest egg that could hopefully outlive you, if managed correctly and spent on the right facility. But not everyone has that luxury.

It’s important to get the right advice from someone who is not looking to drain more of your limited funds. We think we have found that person in Jenn Gomer. Jenn and her associates at CarePatrol don’t charge for their services.  Jenn’s company is paid by the communities that she helps you visit, analyze and ultimately select. She has all the important information about those 400 senior communities that I mentioned above. She knows their safety records, their health records, their reputation in the industry, their financial conditions, their charges, their amenities, and so much more.

If you own a home which you’ll want to sell, it makes sense to bring Jenn and me together to meet with you in your home and discuss your options.

Everyone’s situation is different. Let us learn your specific needs and wants. If working with Golden Real Estate and/or CarePatrol isn’t a good fit for you, we’re going to tell you so. Such a meeting carries no obligation to work with either of us.

Call me at 303-525-1851 to arrange such a meeting.

What Is Negotiated When You Purchase a Home? More Than You Might Think!

It’s easy to assume that the main (or only) negotiation in the sale or purchase of a home is the contract price, but it turns out that there’s a lot more negotiation — both before and after going under contract.

Most contracts are or should be countered, and not accepted as written. For example, there are 39 different deadlines in the standard contract — everything from when the earnest money check is delivered to when the buyer gets to take possession.

If the seller is given extended possession after closing, will it be free, and who pays the utilities?  It’s all negotiated.

If a contract falls, it’s usually because of inspection issues, so the seller will want that inspection deadline to be as early as possible — preferably within 5 to 7 days. And there are other deadlines which allow a buyer to terminate and get his earnest money back, so a good listing agent will make sure they are reasonable. For example, I have seen contracts in which the deadline for terminating based on the acceptability of insurance costs is a week prior to closing. That’s ridiculous, because it takes only a couple days to get that quote.

The second big negotiation in any transaction is over inspection issues. Some buyers will want to have the seller fix every single problem identified by their inspector. (Once my seller received an inspection objection notice that didn’t even itemize the problems but said, “Seller shall fix everything listed in the attached inspection report.”)

Negotiating what the seller will and will not fix and what the seller might give as a credit in lieu of certain repairs is different in every transaction, and your agent’s experience in handling that process can be critical in obtaining a favorable outcome, whether you’re the buyer or the seller.

As I have written before, I advise my sellers not  to fix many of the known problems prior to putting their house on the market, but to save some of them as bargaining chips during the negotiation over inspection issues. Getting a back-up contract in place also helps with negotiating inspection issues. If the buyer is asking for an unreasonable number of repairs, I’ll provide those demands and the buyer’s inspection report to the back-up buyer. Often that back-up buyer will agree not to ask for any of those repairs, giving the seller the ability to tell buyer #1 that he won’t fix anything. This can be an effective technique.

Having multiple offers presents a great opportunity for negotiating matters that are important to the seller.  For example, a downsizing seller may have lots of furniture he’d like to sell. Rather than have an estate sale, I recommend making a list, with prices, of the items “for sale outside of closing,” and leaving it on the kitchen counter for every visiting buyer to see.  Many times I have been able to have the winning bidder include in their contract that they will purchase everything on that list at the prices shown. In a recent case, the buyer asked that all the purchased furniture be moved to the garage prior to closing — a sure sign that they bought the furniture only so they would win the winning war for the house!

If the home doesn’t appraise for the contract price, the buyer can demand a price reduction on threat of terminating the contract. Since the appraisal deadline is usually very close to the closing date, the seller may feel compelled to accept the price reduction rather than lose the contract.  But a good listing agent knows that the same reluctance exists for the buyer, so oftentimes the seller can negotiate little or no price reduction.

Do You Practice Sustainability? Home Renovation Can Be Done Sustainably, Too

Tonight is the fifth in Golden Real Estate’s Sustainability Series. Previous sessions were about home insulation (January), home heating technology (February), solar power (March), and electric cars (April).

This month, the topic is sustainable renovation. Our presenter is an expert in sustainable practices when it comes to home renovation.  His name is Steve Stevens, and he has been my mentor regarding sustainable practices for nearly two decades.

A retired scientist from Bell Labs, Steve has made a lifelong project, it seems, out of reducing the carbon footprint of his 1970s brick ranch in South Golden.

Retired and living on a fixed income, he has developed several habits/practices that are not only sustainable but also have saved him a boatload of money.

For example, he only buys cull lumber from Lowe’s, and he buys returned products (typically mis-ordered) such as windows  and doors, which are then sold for a fraction of their original price.

Steve also seeks out salvaged goods such as windows and doors. As with buying cull lumber and returned products, collecting salvaged products means zero new carbon footprint for doing your renovation. 

Steve, being a scientist by training and passion, always considers the embedded carbon footprint of products, whether it’s food or building materials. How much energy is used to transport the goods you purchase?  For example, are you buying slab granite mined and shipped from Asia, or an alternative material mined or created closer to home?

Steve will share his shopping and construction tips that save money and are also sustainable.

For example, he emphasizes insulation, which should always be your first measure when it comes to saving energy. But what products should you buy, and where should you start?

The session will be held tonight, May 16th, from 5 to 6 pm in the Golden Real Estate office at 17695 S. Golden Road, Golden. There are still seats available. Reserve yours by emailing me at Jim@Golden RealEstate.com

Each of our sessions is video recorded by our friend, Martin Voelker, from the Colorado Renewal Energy Society.  You can watch videos of the first four sessions at Sustain-abilitySeries.info.  This session will also be recorded and posted there.

This Arvada Cottage Is ‘Cute as a Button’

You’ll feel like you’re in the country when you visit this home at 8050 W. 50th Ave., just 3 blocks west of the Arvada Costco store.  It was just listed at $475,000.

Built in 1949, the seller has owned it for 25 years. It is on well water, but connected to the public sewer system. The second floor, with its four dormer windows, has two bedrooms, in addition to the two bedrooms on the main floor. There is no basement. The main floor has original hardwood, except for the kitchen and bathroom.  Upstairs has all-new carpeting and has been freshly painted. The heated 2-car garage is in addition to a one-car garage in the backyard that a previous owner used to store his Model T. The seller uses if for storage. Take a narrated video tour at www.ArvadaHome.info, then call for a private showing.  Open Sat., May 18th, 3-5 p.m.

5-BR Littleton Ranch Has a Finished Basement

This 2,963-sq.-ft. brick ranch at 8006 S. Vance Court is in the Columbine Knolls South subdivision, north of Chatfield Ave. between Wadsworth & Pierce. It was just listed for $498,000.

It has four bedrooms and 2½ baths on the main floor, plus a 5th bedroom and 3/4 bath in the basement, along with a rec room and plenty of unfinished storage. It’s a super quiet location, as you’ll observe on the narrated video that you can view at www.ColumbineKnollsHome.info.  Some features that caught my attention include the three Solatubes and one skylight bringing natural light into the home’s interior spaces, including the kitchen, plus the beautiful family room with rock fireplace and vaulted ceiling. Watch that video tour, then call your agent or me for a private showing — or come to our open house this Saturday, May 18th, from 11 a.m. to 1 p.m.

Updated Golden Tri-Level Home Backs to Greenbelt

This 3-bedroom, 2½-bath home at 491 Somerset Drive is in the Lakota Hills subdivision, also known as Eagle Ridge. It was just listed for $638,000.

It sits on top of a ridge overlooking Rooney Gulch and offering unobstructed views of Lookout Mountain.  It has been beautifully updated with slab granite countertops, new stainless steel appliances, new carpeting and paint throughout. The sellers purchased it earlier this year, but personal developments make it necessary for them to sell it.  Their loss is your gain. Take a narrated video tour, including drone footage, at www.SouthGoldenHome.com, then ask for a private showing. I’ll be holding it open this coming Sunday, May 19th, from 11 a.m. to 1 p.m.  Or call me at 303-525-1851 for a private showing.

Here’s What You Need to Know About Appealing the Assessor’s Valuation of Your Home

By the time this column appears in print, all Denver and Jefferson County homeowners will have received in the mail a letter from their County Assessor declaring the “Actual Value” of their real estate holdings. The same is happening in all Colorado counties. The letters give taxpayers until June 3rd to file an appeal of that valuation which, if successful, could lower the “Assessed Value” (explained below) against which taxes will be levied for 2019 and 2020.

Property taxes in Colorado are paid in arrears, which means that the property tax for 2019 isn’t payable until April 2020, and the property taxes for 2020 will be payable in 2021. The valuation you just received in the mail, however, is not a statement of your home’s current value.  Rather, it is a statement of your home’s market (or “Actual”) value as of June 30, 2018, based on its condition on January 1, 2019.

In other words, if your house was significantly improved between June 30, 2018 and January 1, 2019, the assigned value should be what your home in its new condition would have been able to sell for on June 30, 2018, based on what comparable homes did sell for prior to that date. (You may need to read these two paragraphs a few times!)

The good news is that even though your home’s value has continued to increase since last June and will likely continue to rise for the next year or two, you will only pay property taxes for the next two years based on what it might have sold for in June of last year.

Nevertheless, many of us (me included) are going to be shocked at how much the assessor claims our homes have increased in value.

Additional good news for homeowners is that, because of both TABOR and the Gallagher Amendment — too complicated for me to explain here — the percentage of “Actual Value” against which your local mill levy will be applied keeps going down—from 21% of actual value in 1982 to 7.15% today. That percentage creates the “Assessed Value.”

To keep it simple, here’s an example using round numbers. If the assessor said the market value of your home as of June 30, 2014 was $500,000, your “Assessed Value” was 7.96% of that, which equaled $39,800.  If your mill levy was 100, then your tax bill was $3,980 (100 x 39.8).  Let’s say your home’s “Actual Value” as of June 30, 2018 rose to $600,000, a 20% increase. Your new “Assessed Value” is 7.15% of that, or $42,900. Thus, your tax bill, at 100 mills, will be $4,290, a 7.8% increase in your property taxes despite a 20% increase in market value. That’s only $90 more than if your home was worth $200,000 in 1982 when the assessment rate was 21%!

And it gets even better. Unless the voters in a particular tax district voted to “de-Bruce” the mill levy, that tax district must lower its mill levy as much as necessary to keep its revenue from increasing beyond TABOR limits based on population growth plus any increase in the cost of living.

Nevertheless, since your property taxes are the sum of multiple mill levies from various districts, that hypothetical rate of 100 mills that I used above might actually be lower this year, further reducing your property tax bill.

Here are two key points you must keep in mind when appealing the valuation assigned to your home by the Denver assessor:

1) You can only appeal the assessor’s valuation by citing comparable sales during the 24 months prior to June 30, 2018. Unless your home was mischaracterized (wrong neighborhood, style, etc.), all eligible comps are listed under “Comparables” on the assessor’s web page for your home.

2) You must “age” every comp you cite in your appeal by about 1% per month, since the median increase in our residential property values was about 24% over that 24-month period.  Thus, if a comp sold in January 2018 for $500,000, you can’t cite it as a comp at that price, but must increase that price by 6% to obtain its value as of June 30, 2018.

To find your home on the Denver assessor’s website, visit http://www.denvergov.org/property and enter your address. When your property is displayed, then click on the address and you’ll be able to click on a “Comparables” tab where you’ll be able to see exactly how the value of your home (the “Subject” property) was determined against three or more comparable sales identified by address. If you feel that those comps are not truly comparable to your home, you can click on the “Neighborhood Sales” tab and choose three or more other comparable sales and cite those in your appeal. You have to file your appeal by June 3rd.  Over the years, I’ve found in-person appeals to be most successful.

To find your home on the Jefferson County assessor’s website, visit http://assessor.jeffco.us and click on “Prop-erty Records Search” in the lower middle of the screen, then click on “Address” on the left of the screen.  “Sales” is on the top center. This is all explained on a website that I created for Jefferson County appeals, www.HowtoAppealValuations.info.