Wednesday, March 28, 2012

The Term "Realtor" is Misused as Much as "Kleenex" -- Including by Realtors

[Published Mar 29, 2012 in the Denver Post]

The National Association of Realtors (NAR) has spent millions of our dues dollars on educational ads urging consumers to “make sure your agent is a Realtor,” but it’s clear to me that it hasn’t sunk in with the general public, which continues to use “Realtor” as a synonym for “real estate agent" — as do many Realtors!

“Realtor,” like “Kleenex,” is a brand name — a trademark — and, just as not all facial tissues are Kleenex tissues, not all real estate agents are Realtors.

It costs about $500 per year for a licensed real estate agent to join his or her local Realtor association, which also makes the agent a member of the state and national associations. As dues increase, more and more agents are wondering whether it’s worth paying those dues when they could save that money and still be allowed to join the MLS.  Our MLS, Metrolist, unlike some MLS’s around the country, does not require an agent to be a Realtor in order to be a member of the MLS.

Although I don’t consider it a smart move, each year more and more Realtors are dropping their Realtor association membership and joining non-Realtor companies  such as Home Real Estate Colorado LLC and Brokers Guild Classic.  (If I were a Realtor with Home Real Estate or Brokers Guild Cherry Creek, I think I would be upset that my Realtor status was being compromised in the minds of the public by having these like-named firms.)

As far as I know, no one at the Realtor associations or NAR is tracking how many ex-Realtors  quit the business or merely quit being Realtors. When I was on the board of the local Realtor association, I suggested that the organization do exit interviews to answer this question. I volunteered to do it myself, but simply never had the time to devote to that task.

As NAR and the local Realtor associations attempt to educate the general public that “Realtor” is a trademark and should be capitalized (like Kleenex), I’m sure it must be frustrating for NAR to see Realtors themselves not capitalizing the term as well as using it as a synonym for “real estate agent.”

Ann Turner, the executive director of the Denver Metro Association of Realtors, taught me several years ago that one should only use the term “Realtor” when it can be replaced with “member of the National Association of Realtors” without changing the sentence’s meaning.  That explanation has served me well, and if you look at my previous columns, you’ll notice that I rarely even use the word Realtor -- except in my byline.

Tuesday, March 20, 2012

How to Respond to Agents Who Send You Letters or Ring Your Doorbell

[Published Mar. 22, 2012, in the Denver Post]

There is a such a shortage of listings on the MLS right now that many agents (not mine) are flooding neighborhoods with letters claiming to have a buyer looking for a home there. Should you believe such letters, and how should you respond?

I know this is happening because recently I listed several homes (two of which sold in a few days for full price or higher), and the sellers told me about the letters they had received.  I was given one of those letters, and it turned out to be valid.  (The agent sold a nearby listing of mine to her reported buyer.)

I realize, however, (and so should you) that sometimes this approach is used by agents as a technique to get in your door and list your home.  The agent can always explain that the buyer they spoke of bought another house.

So what is a good way to respond when you get such a letter (or visit) from an agent?

If you are thinking of selling, I recommend that you call the agent and invite him or her over. The more agents the better, because they will then have seen your house if you end up putting it on the market.

The agents will probably come to “preview” the listing for their buyer, which is fine.  If they bring the buyer, all the better. Regardless, you should not list your home in order to sell it to their buyer. Rather, tell the agent that you won’t list with anyone until they have a chance to submit a for-sale-by-owner contract at a 2.8% commission.  If they can’t produce a contract under that arrangement, then I wouldn’t recommend listing with that agent, because they may have been bluffing about the buyer, and you want to demand complete integrity from any agent you end up hiring.

Since your visit from each agent will, in effect, prove to be a listing presentation, you need to be prepared to interview them and not just listen to their presentation.    To assist you with that process, I wrote a column in 2010 listing 18 questions to ask a potential listing agent.  That column was so popular that I gave it a URL of its own, www.The18Questions.com.  Use that column in your interview, and feel free to call me to verify any statistics agents provide about their own success as a listing agent, since doing so requires MLS access.

Believe it or not, we are in a sellers’ market right now, with listings — if they are priced right — going under contract very quickly. I urge you to subscribe to my blog (www.JimSmithBlog. com) where you will not only get this column before it is printed, but also get my monthly market activity reports.

Wednesday, March 14, 2012

Sellers Answer the Call, With a Surge of New Listing Activity

[Published Mar. 15, 2012 in the Denver Post]


Last week’s headline proclaimed that the percentage of MLS listings under contract had surged past the 40% mark.  Indeed, this Monday, I checked again and the percentage is over 42%.

Fortunately, sellers are responding to the call for them to list their homes now. In Jeffco alone (not counting the foothills areas) 408 new listings were entered on the MLS in the first 10 days of March.  The figure for the total MLS is 2,666 — and 537 of those are already under contract!

For comparison, more homes (3,425) were entered on the MLS during the same 10 days a year ago, but of those only 208 were under contract by the 13th of that month.   We still need to see more homes added to the active inventory.  As of press time, the active inventory was 11,139, up from the beginning of the month, but, as I pointed out above, the percentage of the total inventory that has gone under contract is still rising.

I can’t think of a better time, if you’re thinking of selling this year, to put your home on the market.

Here at Golden Real Estate, that surge in new listings is especially evident.  I have three new listings I’m featuring this week.  I already have two new listings to feature next week and at least one more to feature the following week — so far. I have been invited to meet with would-be sellers — often more than one — almost every day and have been kept busy creating video tours, slideshows, websites, etc.  I know my broker associates are equally busy, and I’m forced to look outside Golden Real Estate to find agents to help me hold open all these new listings on Saturdays.

Wednesday, March 7, 2012

Percentage of Listings Under Contract Surges Past the 40% Mark!

[Published March 8, 2012, in the Denver Post]

I’ve been tracking this statistic since October, and the trend is almost shocking. As of Tuesday, Mar. 6th, 42.3% of all MLS listings in the non-foothills areas of Jeffco are under contract.

Here’s how the percentage under contract for the entire MLS has risen in just 5 months:

      Oct. 31—23.9%

      Nov. 30—27.3%

      Dec. 31—26.8%

      Jan. 31—29.8%

      Feb. 29—39.7%

When I checked again just now(Tuesday, Mar. 6), that percentage had risen further to 41.2%.  Think about it — four out of 10 “for sale” signs you see are in front of homes that are under contract!  Back in November, I thought 27.3% was high!

How high can this figure go?  In Denver Southwest, Denver Northeast, the City of Aurora and Adams County it has already surpassed 50%. For condos under $100,000, 59.5% are under contract. In Jeffco, that figure is 64%.

Buyers are snapping up listings faster than sellers can put them on the market.  For example, the total inventory on Feb. 29 was 500 higher than on Jan. 31st, but the number of homes not under contract fell by 400 during the same time-frame.

Anyone who is thinking about selling their home should seriously consider putting their home on the market now, because, if it is priced right, it should sell quickly.

This is not to say that homes in all price ranges are selling quickly.  Here’s the percentage of inventory under contract by price range as of Feb. 29th:

     Under $200,000—56.3%

     $200,001-300,000—40.6%

     $300,001-400,000—33.7%

     $400,001-500,000—28.7%

     $500,001-600,000—22.8%

     $601,001-700,000—20.6%

     $700,001-$1,000,000—16.3%

     Over $1,000,000—11.1%

I attribute this prolonged winter-time spurt of buying primarily to the record low interest rates. (I just refinanced my home for 2.875% on a 5/1 ARM.)  The fact that interest rates recently started creeping upward has only pushed more buyers off the fence.

Think about it. The same dynamic that makes you buy gas this week if you know it will be more expensive next week is making buyers buy now before interest rates (and prices) go higher.

Like many agents, I have buyers who can’t find what they want, so I have created a "Buyer Needs" page on our company website, www.Golden RealEstate.com. That way sellers might actually be able to sell their home without putting it on the market.  Does it get any better than that?

My full statistical analysis by area and price range is posted just below this posting.

Sunday, March 4, 2012

Buyers are Buying Faster Than Sellers Are Listing

As of February 29th, the percentage of unsold MLS inventory that is under contract jumped by a third overall, as shown by the following chart.  What's interesting to me is that the number of unsold homes on the MLS was up by 500 listings over January, but the number of active listings was down by about 400!  This means that while sellers are jumping into the market, buyers are buying even faster.  This is a hot market!
It should be noted, however, that the buying spree is much stronger in the lower price ranges, as shown by this chart: