Wednesday, February 26, 2014

Do Pocket Listings Make Sense in the Current Real Estate Market?

[Published Feb. 27, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

A “pocket listing” is a listing which is withheld from the MLS — kept in an agent’s “back pocket.” Why would a seller want to withhold a listing from MLS exposure, and why would a listing agent promote such a policy?

Although MLS rules require that any listing be put on the MLS within 3 days of signing the listing agreement, a seller’s instruction to withhold the listing from exposure to other agents trumps that rule.  The instruction to keep it off the MLS must be included in the listing agreement under “Additional Provisions.”

I myself have had pocket listings for various reasons, and installed a sign in the yard saying “Coming Soon.” I do this when the home is not ready for showing, to alert buyers and their agents about the home so they might choose to wait for it instead of buying another listing.  If an agent asks to see it, I will grant the showing after explaining what still needs to be completed, so he and his buyer don’t judge the home on its current condition. Sometimes, to increase such exposure, I will put it on the MLS with the notation, “No showings until _____.”

Another justification for a pocket listing would be if the listing agreement has a reduced commission when there is no buyer’s agent. This can be a win/win — the seller pays less commission, but the listing agent earns a bigger commission.

You might think that when homes sell easily like they do today (if they are priced right, of course) that a pocket listing is the way to go.  However, it’s even more important at this time to let everyone know about your home so that you get multiple offers. That means putting it on the MLS.  You could end up selling for a price that more than makes up for the higher commission rate.

Classic Brick Ranch in Excellent Condition Near Belmar

[Published Feb. 27, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

 
6425 W. 3rd Ave., Lakewood 80226
$250,000
Take a Narrated Video Tour at www.LakewoodHome.info
 
Country Club Heights is a subdivision of about 100 mostly brick ranches built in the late 1950’s just south of 6th Avenue between Jay Street and Pierce Street. This particular home is a good example, located on a quiet, one-block-long street with big trees. The main floor is finished with hardwood floors, except for the bathrooms, which are tiled.  A 16’ x 20’ patio behind the garage has been fully enclosed, for a total of 1,584 square feet. In addition, the 809-sq.-ft. basement has been partially finished with a 4th bedroom and 3/4 bathroom, plus a large cedar closet. The basement also has a second fireplace in an otherwise unfinished 15’ x 21’ family room.  It would take very little effort to finish this space. The south-facing covered porch is an example of passive solar design, providing shade in the summer and sun in the winter. The home is just a couple blocks from two city parks, too!
Open Saturday & Sunday 1-4pm.
 

There Is No Excuse for MLS Listings Without Photos

[Published Feb. 27, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

As you may know, Metrolist, Denver’s MLS, adopted a dramatically better platform last November, and one of that platform’s features makes it totally unnecessary to have new listings without any photographs.

With the old system, called Prime Access, agents had to enter each listing first, then upload photographs only after the listing was “active.”

The new platform, called Matrix, allows an agent to enter a listing as “Incoming” and complete uploading of photographs, virtual tours and all other details before changing it from “Incoming” to “Active.”

Agents need to use this feature so that their new listings have pictures immediately.

Why You Should Attend Your Party Caucus Next Tuesday

[Published Feb. 27, 2014, in the Jeffco edition of the Denver Post's YourHub section]

Selecting candidates is only part of what happens at the caucuses of both parties. Supporting issues is also important. This year Rita and I will be attending our caucus to vote in support of Jeffco5. That’s the ballot initiative which would change the county governance from three commissioners elected at large to five commissioners elected by district. Learn more at http://www.jeffco5.com and attend your party caucus.

To check on your voter registration and precinct:
https://www.sos.state.co.us/voter-classic/secuRegVoterIntro.do

Jeffco Republican Party Caucus Information:
http://www.jeffcorepublicans.com/index.php/en/about-the-caucus/caucus-overview

Jeffco Democratic Party Caucus Information:
http://www.jeffcodems.org/web/

Wednesday, February 19, 2014

Golden -- The Most Extreme Example of Depleted Inventory

In this week's column I mentioned the reduced inventory in Golden -- 6 active listings vs. 24 listings under contract.   I did not, however, include Metrolist charts showing the 5-year trends.




At right is the 5-year chart of Active residential listings in the City of Golden.


(Note: This includes only listings within the city limits, not listings with Golden addresses, most of which are not within the city limits.)


Below is the 5-year chart showing the months of inventory for the City of Golden.

Did Your Home Fail to Sell Last Year? Consider This Current Market

[Published Feb. 20, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers. Metrolist charts appear only in this posting.]

I’ve written before about the dynamic real estate market we are currently experiencing, but I feel compelled to describe my experience with this market over the last couple weeks..

 
As I write this, I’m completely sold out — not a single listing to feature (although I have one lined up for next week).  At Golden Real Estate, we have two active listings and eight contracts.

You could say that we can’t keep product on the shelves.  As soon as we list a house, it sells, usually for more than the listing price.

The last two weeks saw identical scenarios.  Each week I put a listing on the MLS on Wednesday night, then featured it in Thursday’s newspapers. We had 20 to 40 agent showings by Saturday afternoon, when I held a 3-hour open house that was besieged by no less than 20 to 30 sets of visitors. By Sunday, each house was under contract for $3,000 to $8,000 over the asking price.  One of those contracts was cash, waiving appraisal, and closing in 15 days.  (As this is published, it already closed.)  The other contract was nearly as exceptional.

I also had the following buyer experience. A buyer from California was in for the weekend to look at homes in advance of a July relocation to Colorado.

We looked at a half dozen homes on Friday, then a new listing came on the market Friday afternoon.  It was a home that had been on and off the market since 2010 without selling despite multiple price reductions. It was listed this time for $5,000 more than last year’s attempt and got three competing offers, including ours, by Saturday noon.  By including an escalation clause in our offer, my buyer from California was able to snag this listing for $6,100 over its asking price.

It seems that Jefferson County is literally crawling with buyers looking at the few listings which become available and then competing to buy them.  As I write this, there are 6 listings for sale in the entire City of Golden, but there are 24 listings under contract. 

In all of Jefferson County, there are 1,008 active listings as I write this and 1,124 listings under contract. Here’s how many active listings there were on Jan. 31st in prior years:  [See 5-year chart]

     Jan. 2013 — 2,872
     Jan. 2012 — 4,312
     Jan. 2011 — 6,042

 Data and charts are provided by Metrolist, LLC.
According to Metrolist (Denver’s MLS), we have 2 months of inventory at this time in Jefferson County.  Here’s the inventory from previous years: [See 5-year chart.]

     Same time in 2013 — 6 months
     Same time in 2012 — 11 months
     Same time in 2011 — 21 months







How fast are Jeffco homes going under contract compared to prior years?  Right now the median time on market is 32 days. [See 5-year chart]

     Same time in 2013 — 45 days
     Same time in 2012 — 87 days
     Same time in 2011 — 82 days

Sellers who failed to sell their home in previous years could learn from these experiences over the past several weeks. The bottom-line message for sellers is that now is the time to put your home on the market.  Call us or another agent today.  Don't miss this opportunity!

Golden Real Estate Is an Agent-Friendly Brokerage

[Published Feb. 20, 2014, in the Jeffco editions of the Denver Post's YourHub section. An abbreviated version also appeared in five Jefferson County weekly newspapers.]

When I left RE/MAX Alliance and started Golden Real Estate back in 2007, I wasn’t sure how to be an employing broker instead of the individual agent I had been for the previous five years. 

Now that we have grown to having eight broker associates and a terrific office manager (who is studying to be licensed), I am increasingly willing to promote Golden Real Estate as a brokerage that works well for broker associates.

Consistent with that feeling, I have worked hard at expanding the services which we provide to our broker associates and can now offer to recruits. These include:

¨ Generous split arrangement — 85/15, plus a nominal transaction fee equal to 0.1% of the transaction price. There are no desk fees.

¨ Free use of our moving truck for themselves and their clients. They can even offer the truck free to sellers (clients of other brokerages) so that their buyers can get their contracts accepted.

¨ Free car wash/car vacuum facility located behind our building.

¨ Free Centralized Showing Service for all agents' listings

¨ Free color printing & copying in our office

¨ Free video tours, virtual tours (slideshows with HDR photos) and even aerial photographs

¨ Free “Showcase” enhancement of all listings on realtor.com.  Featured listings on Trulia and Zillow, too

¨ Free open house signs, balloons and helium

¨ Your listings featured with this weekly column in both YourHub and five Jeffco weekly newspapers

¨ Free sign riders (such as “Backs to Greenbelt” or “Under Contract” or “Buyers and Sellers Get Free Use of Moving Truck”)

¨ Free custom URLs for each listing (for example, www.HeritageDellsHome.info)

¨ Free Microsoft Exchange email accounts including the free download of Outlook 2010.

¨ Free charging of agents’ plug-in or all-electric cars such as Prius, Chevy Volt or Tesla.  It’s like getting free gas!

¨ Fair share of floor time in our office on Golden’s busiest thoroughfare.

¨ Paid contract clauses written by prominent lawyer Oliver Frascona.

¨ Knowledgeable mentoring & supervision from me and great support from our office manager.
 
Contact broker/owner Jim Smith for an interview -- 303-525-1851 or Jim@GoldenRealEstate.com

Wednesday, February 12, 2014

Walk to Old Town Arvada & Light Rail From This Brick Bungalow

[Published Feb. 13, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]


 
5420 Garrison Street, Arvada
$250,000

Open Saturday, 1-4pm.
From the street, your first impression of this home is a small bungalow with a 1-car garage, but peek behind and you notice an oversized 2-car detached garage of matching brick construction. This home is being sold by the same man who bought it in 1965 and did some amazing improvements. After returning from combat duty in Vietnam, he had the basement dug out, creating a 9-foot ceiling, walk-out stairs to the backyard, concrete floor and stone-faced wood-burning fireplace (see chimney in picture), and he later installed a French drain and built that garage, which is fitted with 220-volt outlets inside and out! The house itself has two bedrooms and two baths, hardwood floors, a high-efficiency gas furnace and includes all kitchen appliances plus washer & dryer.  There’s a large covered concrete patio behind the house, plus a grassy backyard enclosed by a new 6-foot privacy fence.

Voluntary Associations Are Being Created in Subdivisions Without HOAs

[Published Feb. 13, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

Buyers will often tell me they want to find a home with no homeowners association (“HOA”).  If the home is in a pre-1990 subdivision, that is quite possible.

HOA-averse buyers may have an RV or a boat which they want to park on their property. Most HOAs have rules against that.  Or such buyers might have had a bad experience with an HOA enforcing  rules or covenants they deemed unreasonable, and it left a bad taste in their mouths.

HOAs serve a valid purpose — to protect the property values of all member homeowners by not allowing individual homeowners to neglect the property or, yes, to store RVs, boats or large commercial vehicles where they can be seen from the street or by neighbors.

Back in the 1970s and 1980s subdivisions were created with developer-created covenants serving similar purposes, but it wasn’t until later that they included the creation of homeowner associations for the purpose of maintaining common property and amenities and enforcing those covenants.

When you buy a home in such a subdivision, you must agree to accept the covenants and pay dues to the HOA.  If you don’t pay those dues, they can become a lien on your property, and an HOA can even foreclose on your property if those dues go unpaid for long enough.

In smaller subdivisions, these HOAs might be self-managed, but larger subdivisions typically hire an HOA management company to handle the day-to-day business of col-lecting dues, maintaining and paying property taxes on common areas, etc.. The HOA itself has a board of directors consisting of homeowners elected at an annual meeting. This board hires (and can fire) the management company.

Seeing the need for rules governing both HOAs and their management companies, Colorado’s legislature created the HOA Information Office within the Division of Real Estate and gave it powers which I outlined in my Jan. 16th column, which is archived at http://www.JimSmithColumns.com.

I’m beginning to see neighborhood associations being created in those older subdivisions without HOAs.  They can call themselves “HOAs” but have no enforcement powers and are not overseen or regulated by the HOA Information Office. Heritage Dells is one such neighborhood. They hold social events and raised money for a sign on Kimball Avenue.

In last week’s column I mistakenly said that Lakehurst West has “no HOA and no covenants” — a common misperception of these older areas. Readers in that neighborhood quickly informed me that there is a vibrant “HOA” which publishes a newsletter distributed by 20 block captains and maintains an excellent website — http://www.LakehurstWest.org. They can’t enforce those old covenants, but they serve the community in a many significant ways.

So what about those covenants? They can only be enforced by one neighbor bringing a civil action against another in a court of law — but saying “no covenants” is wrong..

From now on, I’ll be more careful about describing a listing as having “no HOA and no covenants.”

Zillow Offers 4 Predictions About Real Estate in 2014

[Published Feb. 13, 2014, in the Jeffco editions of the Denver Post's YourHub section]

Each year, Zillow.com makes predictions about the year ahead, and I had to nod in agreement when I read their predictions for 2014:

1)  Home prices will increase in 2014, but at a much slower rate than in 2013, which showed a 5% national increase and over 20% in some markets. (Our market rose about 7%.)  The slower rate of price increases will be due to higher mortgage rates, already increased prices, and more supply as more homeowners find themselves able to sell without bringing money to the closing table due to rising valuations.

2) Mortgage rates will reach 5% by year’s end, for the first time since 2010, causing some markets to become unaffordable.

3) Lenders will make it easier to get a purchase money mortgage, as refinances start to dry up due to rising mortgage rates.

4) Homeownership rates will fall to their lowest point in 20 years, according to Zillow, as foreclosure and other factors increase the number of renters. (About two-thirds of us own our homes.)

Postscript for Last Week’s Column on Low Inventory


Last week I reported on how the market has suddenly taken off like never before. I noted that last week’s featured listing was in a neighborhood where 8 of the last 10 sales had gone under contract in 5 days or less, all for full price or higher.

Sure enough, that featured new listing drew 37 agent showings and five offers within 72 hours. The Saturday open house drew at least 30 sets of visitors. One visitor said that there were 20 couples simultaneously in another open house he visited that day.

By Sunday that listing was under contract for $8,000 over listing price, for cash, with a 10-day closing.

Wednesday, February 5, 2014

You Thought Housing Inventory Was Tight Before, But Look at This!

[Published Feb. 6, 2014, in the Jeffco editions of the Denver Post's YourHub section. An abbreviated version also appeared in five Jefferson County weekly newspapers.]

In the description of this week’s featured listing, I mention that 8 of the 10 most recent sales in that subdivision took place within five days of going on the MLS.  And the other two listings sold in less than a month.

That inspired me to log into Metrolist, our local MLS, and see how representative those numbers are of the total Jeffco market.  I discovered that they are, in fact, a reflection of how hot the real estate market remains throughout Jefferson County and perhaps beyond, even as we enter our snowiest, coldest month of the year.  Here are some of the statistics on the different parts of the county.

In my home town of Golden, there are currently six active listings, but four times as many are under contract — and half of them went under contract in 6 days or less.  Not so long ago, there were consistently 20 to 25 active listings in the City of Golden.  That number has been steadily declining.  Six active listings is almost unfathomable to us long-time Golden Realtors.

Among homes with Lakewood addresses, 188 are active, but 242 are under contract, 70 of them in a week or less.

Among homes with Arvada addresses, 193 are active, but 259 are under contract, 72 of them going under contract in a week or less.

Among homes in Wheat Ridge, 46 are active, but 48 are under contract, 11 of them in a week or less.

Among homes with Littleton addresses, there are 278 active listings, but 315 are under contract, 100 of them in a week or less.

The one area of Jeffco where this pattern breaks down is the foothills, where homes are still taking a long time to sell, and active listings far outnumber those under contract.

Among homes with Evergreen addresses, for example, there are 68 homes under contract, 14 of which went under contract in 6 days or less, but there are 162 active listings — the complete inverse of the ratio in the non-foothill areas of Jefferson County.

The sharp drop in inventory can be attributed in part to the floods we experienced last summer and fall. People whose homes were destroyed needed to find someplace to live, whether or not they were rebuilding. This put an additional demand on both the rental inventory and the inventory of homes for sale.

Frequently we receive inquiries from out of state buyers wanting to rent for a year while they get the lay of the land and decide where to buy. In more normal times, this would be a reasonable approach to relocation.  Now, however, they quickly discover that the supply of rental properties is quite small, and they have to change their strategy.  What I usually suggest is that they move into an “extended stay” hotel for a month or two and get that “lay of the land” more quickly so they can buy rather than rent.  The cost of those hotels is quite high, but so are the rents — if you can find a house to rent — and although the selection of homes for sale is quite limited, they will have to compromise their needs and wants far less than in a rental, where they’d be stuck with a lengthy lease.

I have arranged with one “extended stay” hotel a reduced rate of under $100 per night for buyers who work with me or one of my agents.