By JIM SMITH, Realtor ®
It’s well documented that the inventory of homes for sale is at historic lows. Just look at the 5-year chart at right of active listings from Denver’s MLS, www.REcolorado.com. The green line represents the number of active listings.
However, look at that lower line which seems largely unchanged over the past five years. That’s the number of new listings being entered on the MLS.
In other words, it’s not that there’s nothing to buy, it’s just that the homes are going under contract very quickly. That’s demonstrated by the second chart, where the green line represents the number of sales each month and the blue line represents the median days on market, which is currently a mere 6 days.
Thus, your challenge as a buyer is knowing right away when a new home is listed and having an agent who can help you win the bidding for that listing.
Fortunately, today’s MLS makes it possible for your agent to let you to know (by auto email) within 15 minutes when a home is listed that matches your search criteria. Your challenge is to check your email, tour the homes you like, and be ready to make an offer. Then you need an agent who can structure your offer to beat competing offers.
Let’s address these tasks/challenges one by one. Knowing about the listings right away is easy. We set you up on the MLS with the proper search criteria and check “ASAP” for notifications. You will get emails immediately as each listing comes on the market. The alerts are “mobile friendly” so you can look at them on your smartphone, not just your computer screen.
Being ready to “pull the trigger” can be more complicated. If you own a home, there are several strategies you can employ to avoid making the sale of your current home a contingency in the contract that we prepare. For example, I’ve had sellers take out a HELOC (home equity line of credit) against their current home (which they will be selling) so they can pay cash for their replacement home, or at least have a smaller loan. This allows them to put their home on the market only after they have gotten under contract for their replacement home. This is just one strategy.
Buyers have an understandable fear of selling their current home and being unable to buy a replacement home. A good Realtor can help you design a strategy to avoid that unhappy scenario.
No agent can guarantee success in beating out competing offers for their clients. However, we at Golden Real Estate have a pretty good track record. One of our not-so-secret weapons is our free moving truck — we just bought a second one — and our willingness to provide totally free moving (labor, gas, moving boxes, packing materials) to a seller who accepts our buyer’s offer.
In today’s seller’s market, it’s common for buyers to include escalation clauses in their contracts, offering to pay $1,000 or more above the best competing offer. With our offer of totally free moving (metro area only, of course), we can usually offer to match instead of beat the highest competing offer, thereby saving our buyers at least $1,000 on the purchase price. The free moving, by the way, is at Golden Real Estate’s expense, not our clients’.
Published Aug. 4, 2016, in the YourHub section of the Denver Post and in four Jefferson County weekly newspapers.