Tag: Jim Smith

How Do You Know the Real Estate Agent You’re Interviewing Is Telling You the Truth?

This is a difficult topic, but it’s one that deserves discussion. As I’ve pointed out before, there are so many licensed real estate agents that fewer than half of them earn a living solely from brokering real estate transactions. (FYI, all ten Golden Real Estate agents are full-time, earning enough from their real estate careers not to require a second job.)

That means that the agent you are interviewing may feel lucky to have two or more transactions per year, and capturing you as a seller or buyer could be super important to him. This could cause him (or her) to exaggerate their level of success as well as their experience and market knowledge.

I can safely recommend every Golden Real Estate broker associate, not only because they are full-time and successful, but because they adhere to the Realtor Code of Ethics. I have let go previous associates when I observed or learned about ethical lapses. Unfortunately, all of us can recount times when we have observed ethical lapses by agents on the other side of a transaction.

The Pareto principle applies to real estate agents as it does to other occupations, with 20% of us doing 80% of the transactions.  And since the average real estate agent has only four closings per year, the median number of closings is probably closer to two. In other words, half of the licensed agents have two or fewer closings per year. That does not translate into a living wage.

In researching this topic, I googled the phrase “what does the average Realtor make,” and I urge you to do it, too — especially if you are considering real estate as a career.  It’s very discouraging.

A posting on www.TheStreet.com, for example, includes the following: “If you think you can just devote a few hours a week and make a nice income as a real estate agent, you are badly deluded. A national survey of agents and brokers who belong to the National Association of Realtors finds that agents who put in 60 hours or more a week have median earnings of $100,000 a year. By contrast, for those who put in less than 20 hours a week, the median is $8,930 a year.

    At Golden Real Estate we had about 100 transactions in both 2017 and 2018, or an average of 10 transactions per agent. We don’t need to mislead a buyer or seller regarding our level of experience and success. Also, we have weekly office meetings where we discuss all aspects of the business, often with guest speakers. We take the annual commission update class and the biennial Realtor Ethics class together in our office, so we’re all on the same page.

REcolorado.com, the Denver MLS, makes it easy to verify the level of experience of its members, and I have made it even easier by creating a shortcut URL, www.FindDenverRealtors.com, enabling you to search for an agent by name and not only see active and under contract listings but also their sold listings going back several years. Then you could click on a listing to see the quality and thoroughness of it.  That’s the best indicator of how well they’ll serve you.

One common mistruth told by agents is, “I have a buyer for your house.” All too often it’s a ruse to get your listing, after which they tell you that the buyer found another house, “but we’ll find you another buyer after it’s on the MLS.”

Another lie is “Our listing fee is 1%.” If you pause the end of that commercial (as I did), you’ll read that it doesn’t include the commission owed to a buyer’s agent (2.8% in our market), and if a buyer has no agent, the 1% fee is increased to 2%. Below is that freeze frame. The “fine print” is so small that I have transcribed it below the picture:

“Minimum commissions apply. 1% listing fee not available in all locations. Commission is subject to change. Buyer’s agent commission not included. For example, if the buyer’s agent commission is 2.5%, seller will pay a total commission of 3.5%. Listing commission increased by 1% of sales price if buyer is unrepresented.”

Downsizing: One of Those Big Issues That We All Face As We Age

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.

A Reader Asks: With Home Prices So Much Higher, Shouldn’t Commissions Be Lower?

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.

EV’s: Yes, They Have Lower Range in Winter, But Consider the Offsetting Benefits

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!

You Can Defer Capital Gains Tax on the Sale of Investment Properties — Or Reduce It

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.

Security Devices Could Allow Sellers to Eavesdrop on Buyers During Showings

The increasing prevalence of smart speakers like the Amazon Echo and security cameras inside and outside of homes, has introduced the possibility that sellers could be watching buyers and their agents and listening to what they say during showings.

The Colorado Real Estate Commission considers the privacy implications serious enough that this year’s annual update class for real estate brokers includes a section on legal jeopardy and practical advice.

Imagine, for example, that a buyer is overheard by a seller telling his/her broker, “I must have this home. I’ll pay whatever I have to!” The seller would immediately have an unfair negotiating advantage over the buyer.

The next time you are being shown a home, consider the very real possibility that the seller is parked nearby, watching and listening on his smartphone as you walk through the home, monitoring everything you and your agent say.

Although Colorado is a “one-party consent state,” meaning that only one party to a conversation needs to know it is being recorded, the implications of such technology are serious.

Given that people have rapidly embraced the use of internet-connected video and audio devices, enabling homeowners to monitor the goings-on in their homes, buyers and their agents would be well advised to minimize talk about the property and their level of interest during showings. Don’t count on being able to spot the devices. 

Also, to avoid possible breach-of-privacy litigation, sellers should consider disabling such devices when putting their homes on the market or, at a minimum, placing a notice on the front door advising visitors of the presence of monitoring devices that might be active.

Rita and I have a Ring video doorbell on our house, and we love it. It rings on Rita’s cell phone, enabling her to see and speak with the visitor. Chances are, the person at the front door would think we are home, even if we are not, which is advantageous from a security standpoint. This feature accounts for the rapid adoption of Ring and other brands of internet-connected video doorbells and security cameras.  Not everyone is a fan of these devices, as some believe that if your doorbell faces the street you could be violating the privacy of someone walking or driving beyond your front property line. (That was a point made during the annual update class which our agents took last month.)

In the update class our agents were advised both to warn buyers that sellers could be watching and listening, and to ask sellers during listing appointments whether they have video and audio recording devices in their home and, if so, to advise them of the implications of their use.

What are the legal arguments? A buyer’s lawyer would argue that a buyer, alone in an unoccupied house with his broker, has a “reasonable expectation of privacy.”  A seller, on the other hand, can claim a legitimate interest in monitoring – and even recording — the activities and conversations of strangers in his home, as the possibility exists that someone could be casing the home for a subsequent burglary.

It’s likely that these arguments will play out in front of judges in the not-too-distant future, at which point we’ll have case law to guide us. Until then, both buyers and sellers should understand that the issue of privacy is real and that the use of eavesdropping equipment could put sellers in legal jeopardy.

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.

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.