Jim Smith's Golden blog

Sen. Bennet’s SAVE Act Will Bring Sense to Valuing Solar-Powered Homes

2012-01-24T14:30:00.000-08:00

[Published Jan. 26, 2012, in the Denver Post]

I had the privilege of representing the Realtor community last week at a press conference promoting the SAVE Act, an important (and rare) bi-partisan bill co-sponsored by Sen. Michael Bennet, (D-Colorado) and Sen. Johnny Isakson (R-Georgia).

“SAVE” is an acronym for “Sensible Accounting to Value Energy.” The act is long overdue, and let’s hope it does not become a victim of the partisan gridlock in Congress. Besides its bi-partisan sponsorship in the Senate, it costs nothing, merely instructs underwriters to modify appraisal guidelines.

On the one hand the Act will improve the underwriting of mortgages by requiring energy costs to be considered alongside property taxes and insurance. It makes no sense that lenders don’t factor in the cost of operating a house when determining whether a borrower can afford it. After all, the average energy costs of American homes today is greater than the average cost of property taxes.

The flip side, which is dear to me as the owner of a solar-powered home, is that appraisers will be empowered to assign extra value to homes which consume less energy, whether through extra insulation or on-site power generation.

As I’ve written in the past, appraisers — and the underwriters who must accept their appraisals — are not allowed under current guidelines to give value to such efficiency unless there are comparable sales proving that homes with these features have sold for more than homes without them.

Personally, I have sold two listings which had photovoltaic (PV) systems resulting in near-zero electrical bills. Both sold for no more than homes which lacked such systems, because there were no comps to support extra value. The result of those sales merely reinforced the problem, since they created comps which proved such systems have no value! It’s a catch-22 situation which the SAVE Act and a “greener” MLS can address.

Sen. Isakson, himself a 30-year practitioner of residential real estate in Georgia, points out that in addition to improving underwriting guidelines (which could reduce foreclosures), the bill could actually create jobs by improving the return on investment for energy efficiency and renewable energy improvement made by homeowners. Currently, you can expect far less (or zero) return from such investments than, say, for redoing a kitchen or bathroom.

Here's a story to remind us of when we were much "greener"

2012-01-23T09:38:00.000-08:00

My sister Janet, who lives in Sweden, forwarded this story to me, which she received from an 80-year-old Venezuelan friend of hers:

The Green Thing
In the line at the store, the cashier told an older woman that she should bring her own grocery bags because plastic bags weren't good for the environment.

The woman apologized to her and explained, "We didn't have the green thing back in my day."

The clerk responded, "That's our problem today. Your generation did not care enough to save our environment."

He was right -- our generation didn't have the green thing in its day.

Back then, we returned milk bottles, soda bottles and beer bottles to the store. The store sent them back to the plant to be washed and sterilized and refilled, so it could use the same bottles over and over. So they really were recycled.

But we didn't have the green thing back in our day.

We walked up stairs, because we didn't have an escalator in every store and office building. We walked to the grocery store and didn't climb into a 300-horsepower machine every time we had to go two blocks.

But she was right. We didn't have the green thing in our day.

Back then, we washed the baby's diapers because we didn't have the throw-away kind. We dried clothes on a line, not in an energy gobbling machine burning up 220 volts -- wind and solar power really did dry the clothes. Kids got hand-me-down clothes from their brothers or sisters, not always brand-new clothing. But that old lady is right; we didn't have the green thing back in our day.

Back then, we had one TV, or radio, in the house -- not a TV in every room. And the TV had a small screen the size of a handkerchief (remember them?), not a screen the size of the state of Montana.

In the kitchen, we blended and stirred by hand because we didn't have electric machines to do everything for us.

When we packaged a fragile item to send in the mail, we used a wadded up old newspaper to cushion it, not Styrofoam or plastic bubble wrap.

Back then, we didn't fire up an engine and burn gasoline just to cut the lawn. We used a push mower that ran on human power. We exercised by working so we didn't need to go to a health club to run on treadmills that operate on electricity.

But she's right; we didn't have the green thing back then.

We drank from a fountain when we were thirsty instead of using a cup or a plastic bottle every time we had a drink of water.

We refilled writing pens with ink instead of buying a new pen, and we replaced the razor blades in a razor instead of throwing away the whole razor just because the blade got dull.

But we didn't have the green thing back then.

Back then, people took the streetcar or a bus and kids rode their bikes to school or walked instead of turning their moms into a 24-hour taxi service.

We had one electrical outlet in a room, not an entire bank of sockets to power a dozen appliances. And we didn't need a computerized gadget to receive a signal beamed from satellites 2,000 miles out in space in order to find the nearest pizza joint.

We didn't have the green thing back then?

Supply of Homes for Sale Is Being Depleted; We Need More Homes on Market

2012-01-17T19:43:00.000-08:00

[As published on Jan. 19, 2012, in the Denver Post]

The statistics speak for themselves. Right now there are 31% fewer homes for sale on the Denver MLS than there were at this time last year. In the non-foothills portion of Jefferson County, the inventory of homes for sale is down 39% from a year ago.

Despite fewer homes to choose from, the number of homes under contract is up by 13% from last year. Thus, the percentage of inventory that is under contract is 27.5% vs. 18.8% a year ago. In Jeffco, that percentage is even higher.

The bottom line message could not be clearer. If you are thinking of selling your home, there is no better time than now to put it on the market. We need inventory!

Buyers are buying right now, and for a very good reason. The interest rates are at record lows. Look at these rates offered by a lender with whom I do business: 30-Yr Fixed—3.75% (Jumbo* 3.875%) 15-Yr Fixed—3.0% (Jumbo—3.125%) 5/1 ARM—2.125% (Jumbo—same rate) FHA 30-Yr Fixed—3.75% (no points)

The above rates all include one point, except for FHA. If you want to pay no points on the non-FHA loans, the rate is 0.25% to 0.375% higher.

As a guide, each 1% change in rate on a $250,000 loan saves or costs the borrower about $50,000 in interest over a 30-year term.

Not only should sellers consider putting their home on the market at this time, but buyers should get off the fence and buy before rates go up. Remember, you can buy a home with as little as $1,000 down in Colorado, thanks to the Colorado Housing and Finance Authority (CHFA). If you don’t have a good lender, I’d be happy to refer you to one. Call me at 303-525-1851.

*A “jumbo” loan is a loan over the conventional loan limit of $417,000.

Hiring an Interior Designer Can Pay for Itself

2012-01-17T19:39:00.000-08:00

[As published Jan. 19, 2012, with my column in the Denver Post]

Recently I dropped in on a client who had purchased a home last year. She was eager to show me the changes she had made, and they were stunning.

She told me that she had hired a great interior designer, and I said, “That must have been expensive,” but she replied, “No, actually it saved me money.”

Why? Because the interior designer she hired gave her access to her vendor discounts without any mark-up. My client literally saved more in discounts on the purchases which the designer recommended than she paid the designer for her professional advice.

I was convinced. I’m going to hire that interior designer the next time I make a move!

Arvadans Mobilize Against the Beltway - Public Meeting Jan. 19th

2012-01-17T19:37:00.000-08:00

[As published in the Denver Post on Jan. 19, 2012]

It continues to amaze me that Arvadans accept their political leaders’ pro-development, pro-beltway stance, since they’re the ones who will pay for it in so many ways — increased congestion, more pollution, and even the specter of air-borne plutonium from disturbing the contaminated soil in and around Rocky Flats.

Most current Arvadans weren’t here and wouldn’t remember the 1969 fire at Rocky Flats — at the height of its production of plutonium triggers for nuclear weapons. Because of that fire, people learned that plutonium had been spewed downwind toward Arvada.

Below is a map showing where soil was contaminated by plutonium releases. Disturbing the dirt on the eastern edge of Rocky Flats with its plutonium-rich soil poses health risks for all Arvadans.

A public meeting on this subject is being held Jan. 19th, at 7 pm at the Jaycee Building, 5640 Yukon St. in Old Towne Arvada. I’m one of the featured speakers.

Mortgage Cost Increase to Pay for 2-Month Extension of Payroll Tax ‘Holiday’

2012-01-10T23:52:00.000-08:00

[Published in the Denver Post on Jan. 12, 2012]

It was big news in December that the House Republicans caved in and agreed to extend the federal payroll tax “holiday” for two months, as agreed by Senate Republicans.

But what didn’t make the news was where the money would come from to pay for that tax reduction. It’s going to come out of the pockets of homebuyers in the form of increased loan costs.

I was first made aware of this by a Jan. 5 email from a respected mortgage consultant. I confirmed it this past Sunday in a conversation with Rep. Ed Perlmutter in Golden.

The mortgage consultant wrote: “For conforming products, it has been determined that something known as a Guaranty Fee that all lenders pay to the Government Sponsored Entities [Fannie Mae & Freddie Mac] will increase by 10 basis points in yield. Effectively, that means all conforming loans will increase almost .125% in rate. [Fannie and Freddie] are requiring this increase for loans delivered to them beginning in the second quarter of 2012. You will see the increase effective on Wednesday, Jan. 11, 2012. In some cases, the actual rate impact will be as little as 27 basis points. In other cases, the impact will be as high as 77 basis points. And the impacts will vary day-to-day, depending on the rates and the market’s attitude.” (A basis point = 1/100th of 1%.)

FHA loan costs will go up by an equivalent amount.

According to Rep. Perlmutter, you can thank the Republicans for this development. The Democrats wanted to pay for it with a tax on those earning over $1 million per year, but the Republicans would not allow it and, to honor their no-tax-increase pledge, came up with this non-tax approach to providing the required offsetting revenue. According to the email I received, it will take 10 years for this mortgage cost increase to offset that two-month payroll tax reduction.

I’m amazed that Republican leaders continue to think they can attract votes from the general population by doing whatever it takes to keep taxes low for the top 1% of the population. I suspect they are only providing ammunition that will cost them in the 2012 elections.

I lived in Washington, DC, when I was a reporter for the Washington Post in 1968. I’m keenly aware that the 550,000 residents (mostly Democrats) of our nation’s capital do not have voting representation in Congress. DC’s license plates declare “Taxation Without Representation.” Wasn’t that the rallying cry at the Boston Tea Party? Why isn’t today’s Tea Party working to right that injustice?

Jeffco Planning Commission Promotes Blight

2012-01-10T23:45:00.000-08:00

[Published with my column in the Denver Post, on Jan. 12, 2012]

What is “smart growth”?

In November, the Jeffco Planning Commission approved a revision to the North Plains Area Plan, designating over 1,000 acres of open land west of Highway 93 as a new “Urban Activity Center.” Although this didn’t constitute a rezoning of what is currently agricultural land, it means that a future request for urban-style rezoning would be justified as complying with the revised plan for that area.

I testified against the redesignation, and pointed out that promoting that kind of sprawl — the kind which has transformed the areas through which C-470 and E-470 pass — actually promotes blight in the older developed areas.

Creating more and more suburban opportunities for overbuilding merely promotes sprawl, but it also promotes continued abandonment of older areas. A “smart growth” strategy, in my opinion, would only open outer agricultural areas to development as a shortage of developable land is perceived in the inner urban areas.

By contract, the building of transit lines, such as TREX and FasTracks, promotes smart growth. I recently learned, for example, that there has been $6 billion of economic development along the TREX corridor since that transit line opened.

Fox News report promotes Denver as THE best place to buy real estate

2012-01-06T15:14:00.000-08:00

I don't watch Fox News, but I thank the Corrigan Group for sending me this link to a fascinating report about Denver that appeared recently on Fox.

Here's the link: http://www.youtube.com/watch?v=Y9frmEv-vPA

Yes, You CAN Buy a Home With Less Than a 20% Down Payment!

2012-01-04T14:17:00.000-08:00

[Published on Jan. 5, 2012, in the Denver Post]

One of the most prevalent misconceptions among home buyers is that you need a 20% down payment to get a mortgage. In fact, the majority of loans being written today are FHA-insured loans requiring only 3.5% down payment. The VA still offers 100% financing to qualified veterans, and one can buy a home with only $1,000 down through the Colorado Housing and Finance Authority.

Another misconception is that mortgages are less available. That, however, is only true if the borrower has a credit score under 620. That’s the big change from the “bad old days” of toxic loans — banks now make you prove that you can pay back the loan. Underwriters require so much documentation to prove you’re qualified that I’m glad I’m a Realtor, not a mortgage broker!

The FHA loan limit in our area is currently $406,250. You can buy a home for more than that amount, but that’s all the FHA will allow you to borrow. Although FHA loans are most typically used by the middle or lower middle income buyer, there is no income limitation to qualify for an FHA loan. FHA loans also carry no pre-payment penalties, and, best of all, they are assumable by qualified buyers.

The assumability of FHA loans is especially valuable now that a buyer can obtain an FHA loan for about 3.75%, which is below the rate on a non-assumable conventional loan. When you sell your home 5, 10, or 20 years from now when rates are much higher, wouldn’t it be great to advertise that you have an “assumable 3.75% loan”?

FHA also offers 3-, 5-, 7- and 10-year Adjustable Rate Mortgages. ARMs are currently being offered at rates under 3%, which is incredible! As someone who tends to move every five years or so, I’d jump at a 5-year ARM. Even with a maximum adjustment in years 6 and 7, it would take at least that long for a buyer to pay more than he would over the same period on a 30-year fixed-rate loan.

If everyone knew that they could buy a home with as little as $1,000 down payment — or, at worst, 3.5% — we would see a lot more buyers than we do in the market taking advantage of these incredibly low interest rates. And, indeed, there are already enough buyers in the market now to deem it “hot.” My end-of-year index [posted on this blog on Jan. 1st] shows that 26.8% of Front Range MLS listings are under contract. In Jeffco (minus foothills areas), 32.3% of the inventory is under contract. In Denver it is 34.2% and in Aurora it’s 48.9%. Now, that is what I call a hot market!

Our Real Estate Market Remains Hot - Over 1/3 of Denver Listings Are Under Contract

2012-01-01T21:08:00.000-08:00

My monthly analysis of Metrolist data shows that the market hardly skipped a beat during the holiday season, and at year's end over a quarter of MLS inventory was under contract. The region's two major cities came in much higher, with 34.2% of Denver listings under contract (up from 32.4% after Thanksgiving) and 48.9% of Aurora listings under contract (down from 52.6% on Nov. 30th). Here in Jefferson county, 32.3% of non-foothills listings were under contract at year's end, but only 15.6% of foothills listings were under contract. Here's a chart showing the figures for the entire metro area:

Real Estate Industry's Technological Revolution Really Accelerated in 2011

2011-12-27T12:23:00.000-08:00

[From my column published on Dec. 29th in the Jeffco editions of the Denver Post]

Recently I was asked, “What are the changes you’ve seen recently in the practice of real estate?” Immediately I recognized a great topic for my next column — and how fitting that it’s my end-of-year column!

Of course, most change is technological in nature. Maybe my ability to weather these changes despite my advanced age (64) has something to do with having attended M.I.T. for all four of my undergraduate years. There’s a culture of openness to innovation that stays with you when you leave the Institute!

This past year has seen an explosion in the adoption of mobile technology. It’s hard to imagine any Realtor not possessing a smartphone now, able to immediately respond to emails, text messages and internet leads without being near his/her laptop computer — itself a real estate essential.

Many if not most Realtors, myself included, have a 3G iPad as well. And when I have my laptop with me, I can be online simply by tethering it to my iPhone. This is the world of today’s real estate professional.

It used to be that when an agent went on vacation he/she would be expected to designate another agent to handle his/her business while away. We hardly even think of doing that today. Seven years ago, when I was in Paris for two weeks, I conducted business as usual with my Vonage phone. Today I could do that with Skype — or my iPhone, if I wanted to pay for the minutes.

In an earlier column I talked about the sudden ubiquity of eContracts. Since then, they have been adopted by the Colorado Association of Realtors and 90% of the contracts I receive are signed electronically now instead of on paper. A year ago, it may have been 10% electronic and 90% on paper.

This year has also seen the increased adoption of QR codes, such as this one, to allow passers-by to get information about a home on their smartphone. This one is for my listing at 1919 East Street. (Try it!) Another tool is SMS texting with auto-responders. If you text 135133 to 720-523-0300, you will get information and 32 photos for that same listing on your phone — and I’ll be notified that you did so! Look for more and more real estate signs — including my own — to display these new means of providing buyers with instant information and the ability to “see” inside a home while they’re standing in front of it!

I suppose there are some non-technology changes. I just can’t think of any off hand….

FHA Approval of Condos Has Other Ramifications (Long Comment from Don Opeka)

2011-12-22T10:45:00.000-08:00

Don Opeka of Orion Mortgage sent me this email, which is too long for a comment, so I'm posting it:

Historically, many agents and borrowers think of FHA approval as being important only for low down payment, first time buyers. FHA approval is also important for high end properties because most Reverse Mortgages today are FHA insured. If a property owner owes little or nothing on the property, and they are older than 62, they may want to eliminate their mortgage payment (they still have to pay for taxes, insurance and maintenance), or take cash out without a payment. For people who have equity in an expensive home, a Reverse Mortgage for purchase may be an answer for buying a condo when there isn't enough equity to pay cash for the condo. If the condo isn't FHA approved, a Reverse Mortgage won't be available.

I've already had this occur. The owner of a high end condo, one that would not normally be purchased with an FHA loan, came to me and needed a Reverse Mortgage to stay in the home. The condo was not FHA approved, so I could not offer a Reverse Mortgage.

Reverse Mortgages are also useful for moves that become necessary for health or other reasons. A person may have a home that's free and clear, but need one level living instead of multi-level living. The costs of the move can be covered with a Reverse Mortgage instead of withdrawal of retirement savings, or a move to a less expensive home.

I'm happy to separate the myths and facts of Reverse Mortgages. Both young and old should understand how they really work.

Condo association must take action so that members can sell their units!

2011-12-21T14:54:00.000-08:00

[from my Dec. 22nd column published in the Denver Post]

FHA loans fill an important gap in the financing of low-end homes, especially condos, because FHA requires only a 3.5% down payment. And here in Colorado, the Colorado Housing Finance Authority (CHFA) will loan first-time home buyers all but $1,000 of that 3.5%. But first the condo project must meet FHA approval on a few key factors.

First, if fewer than half the residents are owner occupants, forget about using an FHA — or even a conventional — loan.

Secondly, FHA and Fannie Mae look at the financial strength of the condo association. If more than 15% of units are behind on their monthly dues, forget about getting a loan on any unit in that complex.

Third, no single investor can own more than 10% of the units. And there are other criteria that must be met by the condo complex.

Until February of last year, it was possible to get a “spot approval” to sell a condo by satisfying these and other criteria for the loan underwriter. However, since February 2010, the condo association itself must obtain certification from the FHA before any unit in that complex can get an FHA loan, even if those criteria would be satisfied. It takes time and it takes money for the association to get that approval, and many — indeed, most — condo associations have been lax is obtaining that certification. Moreover, certifications expire and the association must re-apply. Many have not.

For example, in Lakewood’s ZIP 80228 (the Green Mountain area), there were 18 approved condo associations a couple years ago, and now there are only six. In ZIP 80229, ten out of 12 are no longer certified — and not because they wouldn’t qualify if they applied.

Now that FHA loans are the only way that a significant percentage of home buyers can finance a home, and since condos are the most affordable way for most buyers to become homeowners, this failure by condo associations to obtain and renew their FHA certifications has potentially disastrous consequences for all current condo owners. If units can only be sold to cash buyers or with private financing, the values of the units are bound to fall. If you are a condo owner, pressure your association to get and remain certified with the FHA — assuming it qualifies.

Moreover, even if your condo association maintains its FHA certification, if other complexes don’t, they will affect your complex to the extent that they produce lower comps for your units.

I thank Norm Lewis of Peoples Mortgage (303-910-1629) for educating me on this topic.

Your are encouraged to add your own insights to this issue below!

Some Things to Keep in Mind When Buying a New Home vs. Resale Home

2011-12-13T22:17:00.000-08:00

[As published Dec. 15, 2011 in the Jeffco editions of the Denver Post]

New homes can be quite wonderful. Rita and I are the original owners of the home we live in now, so I speak from experience! As with a new car, all the components in a new home are new and will, generally, require less maintenance.

At the same time, it is important to go into the home purchase with your eyes wide open and realize some of the risks and hidden costs associated with purchasing a new vs. a resale home.

For example, unless you’re buying the model home (which I recommend when available), you will have a major expense in landscaping the back yard and sometimes even the front yard. That includes fencing and sprinkler system. We spent about $40,000 to landscape, irrigate and fence our half-acre lot.

Even model homes won’t come with window coverings. We spent about $12,000 on ours.

If you want upgrades in your new home, you will have to pay for them in advance, and the money will not be refundable if you end up canceling the contract. (Your deposit will also not be refundable in most cases.)

The builder will require you to sign a contract written by the builder’s lawyers, not the state mandated contract from the Colorado Real Estate Commission, which is very buyer-friendly. (State law mandates that its contract be used unless the contract is written by a lawyer.) As you can imagine and will discover if you read it, the builder’s contract is not at all buyer-friendly — and alterations won’t be allowed.

In most jurisdictions, the builder is required to do soil tests and to adapt the foundation to meet the demands of the soil. In some cases this means physically removing expansive soils and bringing in good soil. (This is how many berms have been given to municipalities like Golden, as developers need some place to take the dirt.) In some cases, the authorities will require the builder to build a structural wood or concrete floor instead of slab on dirt, as in most homes.

Despite these safeguards, keep in mind that most movement takes place in the early years of a new home, and a 10-year-old home likely gives you some peace of mind that this phase is past.

The most important investment you can make in purchasing a new home is to have it inspected. Don’t assume that because it is new and because it had to pass inspection by government inspectors that your new home has no problems and no code violations. Any experienced home inspector can regale you with stories of construction flaws he’s uncovered!

Golden's Mayor prepared to sell out to pro-Beltway forces

2011-12-13T07:52:00.000-08:00

Here's what I'm planning to include in my Denver Post column this Thursday, Dec. 15th. That's the same day as an important City Council meeting in Golden. I submitted this post to Mayor Smith's blog, but he moderates his blog and I'll be curious to see whether he allows it to appear. (I also invited him to correct any factual errors prior to my noon upload of the column):

Golden’s mayor made a strategic mistake last winter when he proposed that Golden accept a compromise with the County Commissioners regarding the ill-conceived toll road north of town.

The compromise was that if Golden dropped its opposition to the toll road, it would receive planning money for a grade separated intersection at 19th Street & Hwy 6. The strategic mistake was giving Goldenites a couple months to realize what a bad deal it was.

So now, after “negotiating” for a better deal following the City Council’s unanimous rejection of that compromise, Mayor Jacob Smith is giving the Council just one week to approve a revised deal which ignores virtually all the demands of that Council resolution in February.

I’ve said it before — to the annoyance of fellow Realtors — and I’ll say it again. Building the toll road serves no valid transportation purpose, as numerous CDOT-paid studies have proven. It is solely a means of promoting the kind of over-development that enriches developers and creates the kind of congestion which has spoiled other sectors of the metro area.

Join me at the Council meeting at 7 pm this Thursday and speak out against this corrupt proposal.

Is it fair to charge the same percentage commission on high end listings?

2011-12-06T18:24:00.000-08:00

[from my column published 12/8/2011 in the Denver Post]

It doesn’t take twice the effort or money to list a million dollar home than it does to list a $500,000 or $200,000 home, but sellers in all three price ranges are typically charged the same percentage commission.

Although we can’t refer to “standard” or “customary” commission rates, we can talk about “average” commission rates. There have been studies, most recently by RealTrends, showing the average listing commission to be about 5.4%.

At one time, before antitrust laws were enforced on our industry, I’m told there was a “standard” commission of 7% in Denver, and it was determined that the proper “co-op” commission paid to buyer’s brokers should be 40% of that figure, or 2.8%. When the feds told the real estate industry that we couldn’t fix commission rates, the rate started falling under competitive pressure. The co-op commission offered to buyers’ agents never faltered, however, because brokers knew that if they offered less than 2.8%, other agents might not show their listings. The result is that nowadays, the listing agent rarely earns as much as the buyer’s agent, who still, typically, gets 2.8%. It is this dynamic that in effect will keep listing commissions from going much lower.

Realtors are, as a rule, paranoid about discussing commission rates, so we only learn what a listing agent charged when we see the commission amount on the settlement sheet at closing. Occasionally I see that the listing commission must have been 6%, but usually it’s less. Only once did I see anything higher than 6%.

What brings this topic to mind is that I met a Realtor from Calgary at the Realtor convention last month, and she told me that in western Canada it is common to charge 7% on the first $100,000 and only 3% above that price, and the commission is shared 50/50 with buyer agents — 3.5% on the first $100,000 and 1.5% above that figure. Under this formula, the effective commission charged to a seller drops to 5% on a $200,000 sale, 3.8% on a $500,000 sale, and 3.4% on a million dollar sale. Listing agents could, theoretically, compete by charging less, but this doesn’t happen often because sellers realize that fewer agents will show their home — and sellers consider the 7/3 formula reasonable. Because it’s reasonable, I suspect fewer owners try to sell their home without a Realtor.

As reasonable as the above formula sounds, Realtors in eastern Canada have not adopted it, and I can’t picture U.S. Realtors doing so.

Yes, It's a Hot Market, But Your Home Isn't Selling. So What Can You Do?

2011-11-29T19:06:00.000-08:00

[My "Real Estate Today" column published Dec. 1, 2011 in the Denver Post]
By JIM SMITH, Realtor

This column is for those who have had their home on the market for months, but haven’t had many showings and have received no offers. Is it the market, is it the house, is it the location? Is the agent to blame? You don’t know. You’re just frustrated.

Yes, homes are selling now, but yours isn’t. In Jefferson County, as I write this column on Monday evening, over 35% of the homes for sale are under contract, not counting the foothills areas. That’s a lot of buyers buying homes — but not yours. So, what can you do?

Your listing contract binds you to work exclusively through your agent. You are to refer all brokers, buyers and other interested parties to him or her and not speak with them directly. And your listing agreement doesn’t expire for a month. But you want action NOW!

Well, there are things you can do to get things moving. Here are some suggestions.

1) You can hold your own house open more often than a busy agent can. Borrow his/her signs. You may not negotiate with anyone, but you can provide access and answer questions. You can collect names and contact information to give your agent. Unless the visitor knows you, I suggest you say you’re helping the agent without revealing that you’re the owner. If the person wants to talk price and terms, give them the agent’s cell number and card.

2) Google your home’s full address, including ZIP. There should be at least one or two pages of results, including realtor.com, Zillow, Trulia, and broker websites which contain your listing. Are the pictures good and plentiful? How’s the description? Are there any errors that need correcting? Do you get any ideas from the way other homes are portrayed that could be used on your house? Give this feedback to your agent. Ask him/her to do more, but be specific. If you have good pictures (flowers in summer, etc.), give them to him/her to use.

3) If you are unhappy with your agent, you aren’t stuck with him. If he’s an associate in a big firm, you can talk to the managing broker about assigning the listing to another agent, or at least coach the associate so he does a better job for you. Remember: the brokerage, not the associate, owns the listing.

4) If that doesn’t work, or if your agent is his own boss, you can ask to be released. If he refuses, you can instruct him to remove the listing from the MLS and cease all marketing of the home, at which point he might as well release it. Instruct the broker to list it as “expired,” not “withdrawn,” because the “days on market” starts over at zero after 31 days of being “expired,” but not if it’s “withdrawn.”

5) If you’re happy with the agent and his/her marketing of your home, try calling the agents who have not seen your home yet to get them to preview it. (This is not forbidden in your listing agreement.) Tell them your listing will be expiring eventually and you’d like their opinion about the home in case you decide to change agents. Ask them for pricing, staging, and marketing feedback. Ask them what they’d do that your agent isn’t doing. (I suggested this strategy to one of my own clients recently because it’s a great way to get agents to preview a listing they haven’t seen. And we’ll get some genuine professional feedback.)

6) If you have reason to think your agent may have overstated his track record, you could also ask these other agents, “Is it true that my agent sold 50 homes last year with average time on market under 30 days?” That would be useful to know, wouldn’t it? Only other agents can check that kind of data on the MLS.

7) Ask your agent to show you your competition. Put yourself in the shoes of a buyer. Ask yourself, “Would I buy my house versus this house which is listed at the same price?”

8) Share these ideas with your agent and brainstorm other ways to stimulate showings and offers for your home. You could be part of that 35% that’s under contract!

You can receive my column by email each week if you'd like. Just ask!

Thanksgiving Is a Gift We Give Ourselves, Reminding Us How Blessed We Are

2011-11-23T20:24:00.000-08:00

[Published on Thanksgiving Day, 2011, in the Denver Post]

With all the news from around the world, we hardly need a reminder that we have much for which we can be thankful. Thanksgiving is our opportunity to remember that. I don’t know of any other country besides Canada which has a day set aside solely to contemplate one’s blessings.

When I give the opening prayer at my weekly Rotary meeting, I like to say that “We are blessed, and we are a blessing.” In other words, it is because we are so blessed that we are able to bless others with our gifts of time, love, financial assistance and service. It is out of our gratitude for how blessed we are that we are driven to do good in the world — and Rotarians do a world of good!

What are you thankful for? It’s a metaphysical law that we draw to us more of what we think about, so let’s think positives, not negatives!

I’ll start with my family, especially my now-deceased father, Abbott Smith, who taught me values I still hold dear. He was never a Rotarian, but those values he taught me are entirely congruent with the values of Rotary.

My family moved from Maine to Colorado when I was in kindergarten, and for that I couldn’t be more grateful! Somehow I was lucky enough to be enrolled in St. Anne’s Episcopal School, where I was taught first and second grade by then-Sister Irene, the school’s now deceased founder. What a blessing that was!

Space doesn’t allow me to recount my other personal blessings, so I’ll limit myself here to listing some professional blessings. It starts with being introduced to real estate as a career by the fine people at Coldwell Banker, including Kathy MacLeod and Rich Sands. I still recommend that agents begin their career at CB, even though I moved on to RE/MAX Alliance and then launched Golden Real Estate.

Being rather outspoken, I know that I have irritated some of my colleagues in the business, especially in my early years, and for that I apologize. Nonetheless, I am grateful for what I have learned from many of them and from people in related industries such as lending, inspection, appraisal and repair. I am so much smarter than I was 10 years ago, thanks to them.

And, of course, I am thankful for the several hundred clients who have honored me with their business. Without the experience I gained from serving them, I wouldn’t be nearly as knowledgeable.

My wife, Rita, has been my love and inspiration since we met in 2003, and I wouldn’t be the success I am today without her presence in my life. I wish all could have the kind of relationship we enjoy.

Notes from the NAR Convention 11/11 thru 11/14/2011 in Anaheim CA

2011-11-15T20:15:00.000-08:00

1). Greening the MLS

Energy Efficiency Mortgages (EEMs) are 20 years old and hardly anyone knows about them. Lenders are overwhelmed or disinterested, and Realtors don't promote them. HUD's 203(K) program is only slightly more utilized. EEM dollars can be in excess do the $35,000 allowed for other improvements in the 203(K) loan. VA allows up to $6,000 in its version of the EEM, and more if savings justify the excess.

Fannie Mae has a "HomeStyle Renovation" program. Inexplicably, FHA eliminated the Smart Commute form from its package of forms.

Consumers are more conscious of indoor air quality and energy costs, which is a start.

Inability to obtain value for sustainability improvements upon the sale of one's home could be a disincentive for making such improvements, especially if a homeowner doesn't anticipate remaining in the home long enough to enjoy a return on their investment. Fortunately there is some movement in getting appraisers to give value to such improvements without the burden of finding comparable sales which demonstrate that increased value.

The problem is that no national player is engaged in the concept of EEMs, although I'm told that Fannie Mae does require consideration of energy efficiency when valuing a home.

The Appraisal Institute has released the first definitive approach for green appraisal with its Residential Green and Energy Efficient Addendum.

There is a rule in place that appraisers must be competent both geographically and in terms of features when valuing a property, but unfortunately no one involved in a conventional, FHA or VA transaction gets to be involved even peripherally in the selection of the appraiser, thanks to the Home Valuation Code of Conduct (HVCC) implemented a few years ago. Perhaps some regulation of the unregulated Appraisal Management Companies (AMC's) could help to correct this problem. Certification of appraisers in the area of sustainability could also be an answer.

Aside from the above issue of valuation, homeowners interested in increasing the sustainability of their homes can visit HouseLogic.org for help in choosing and valuing improvements for their home.

2) The One Thing Power Brokers Can't Live Without

Observations and advice from...

Margaret Kelly, CEO of RE/MAX International (also sits on the Federal Reserve Bank regional board of directors): there will be no double dip recession. Household formation has dropped from 1.2 million per year a few years ago to 500,000 and ultimately to 350,000 last year That represents lots of pent-up demand for homes. However you feel about immigration, know that every immigrant is seeking the American dream, which includes buying a home. The biggest buyers of homes in Arizona last year was Canadians. With immigration, our population would have declined.

TJ: We are in an epic battle against FUD -- Fear, Uncertainty and Doubt. One strategy is price protection. See what Syracuse has done in this regard. Now buyers can purchase price protection. Interesting!

3) Mobile apps class

www.mobilerealestateid.com has an app for tracking QR code users to capture inquiries.

Evernote: Take and store notes in any format

Voice: A dictation app

Skype: Face to face calling, Can add Skype button to your website.

Expensify: Easily categorise, tag and add comments to expenses. Saves you keeping receipts on the road

Milebug: Simple and IRS friendly tracking of mileage

Magic Plan: Create Floor plans using iPhone. Just hold in the air and take a spin. Creates a plan

My Measures: Take a photo and add dimensions to a room picture

Trulia, Zillow and Realtor.com apps: It's what consumers are using.

More info at www.amychorew.com/handouts

4) High Tech/High Touch

Use Google Alerts - sign up at www.google.com, click on More, then Even More to find it.

Do your social media posting at 8am and 8 pm, which is when most people are online. Use Hootsuite to schedule posts so you don't have to actually write your posts at those hours.

Check out Handwriting Pro app for iPad.

Make your client calls between 5:30 and 6pm when people want to get off phone, to keep these conversations shorter.

Use videos within emails.

Include interviews with neighbors about neighborhood in listing videos. Much more effective than just describing the house. People like to know that the neighbors are friendly and welcoming!

5) Branding Yourself

Learn from "Ritz Carlton Service":

Credo - it's all about the customer

Motto -"We are ladies and gentleman serving ladies and gentleman."

3 Steps of service - warm greeting by name, anticipation & fulfillment of each guest's expectations, fond farewell using guest's name

Make customer feel special

Demonstrate that you perceive and share their interests, values and priorities

Note: Branded products command higher prices

Leverage your broker's brand with your personal brand to create a unique selling proposition (USP)

Do's:

Be consistent

Be yourself

Be professional

Deliver what your brand promises; Don't try to be someone you're not

Ask yourself: How do you define your brand?

Who is your target audience?

How do you communicate your brand to your target audience?

Who is your competition and how do they communicate their brand?

Remember: If you're standing still, you're losing

One agent's motto worth stealing: "Your home, our expertise "

6) Marketing Masterclass

There is lots of pent up buyer demand.

Don't play it safe.

Include interview of owner describing what they loved about their house when they bought it and what they love about it now.

Have a historian write about house, when applicable.

Try walking tours or bike tours of neighborhoods which have concentration of listings.

Consider a travel time heat map. Website idea: link to Sigalert (http://denver.cbslocal.com/traffic/) so people can see if highways are congested.

Check out Loku, which provides local info.

Advertise in unexpected places - e.g., romance ads

Vary promotion of same house (especially main picture) on different websites

Use Vizzishots to change weather of pix (take picture with gray sky and turn it blue)

Make pictures full-screen with insets for info -- e.g., Te Atrium features million dollar properties with full screen pix

Promise specific service - e.g., "We deliver feedback within 24 hours." -- not just "We provide great service" or "We are available 7 days a week on our cell phones."

Check out "Get Satisfaction" - turn likes to loves

Check out "Twitter full" - capture key word activity on Twitter

Good Facebook app - PropertyPage

Set property search for sellers so they know about activity in their area.

Offer free signs for schools, events -- If they put your sign in their yard promoting a school event (with your name at bottom, "sponsored by..."), they're more likely to envision your sign in their yard when they sell.

Use DropBox to make flyers and other collateral material available to all -- keep it updated!

(Note: DropBox or other cloud applications are how to get documents onto iPad easily.)

Don't publicize website, so people have to call for info.

In summary: Essentials + Separators + Gosh = success

7) Lead Generation Tips for the Green Market

Publicize the new Appraisal Institute green addendum, which most may not know about

Google "Appraisal Institute webinar" to learn more.

Be a green consultant to builders, whether green or not.

Find energy raters and introduce yourself.

Publicize availability of energy audits and HERS ratings

Speak about healthy homes instead of green features when prospecting to Moms.

Find out if your lender does Energy Efficiency Mortgages?

Check out Better Buildings program from Dept of Energy

Note: Energy Upgrade California pays agents for leads

Create a Green Homes IDX website.

Check out www.GreenHomesLA.org

Create a drip email campaign with suggestions and tips to send to prospects/clients

Put RSS feeds from others on website

Check out www.builditgreen.org - LA offers scholarships for certified Green designation

Calif. Assn. of Realtors subsidizes HERS ratings for members' clients.

Check out what Better Buildings benefits might be available in Colorado

8) Double Your Business Quickly (Walter Sanford class)

Have lenders call FSBOs for you (long explanation....)

Ask info on buyers before showing homes (has form)

Advertise buyer needs - will attract sellers

Advertise team - not just agents, but inspectors, lenders, title, etc.

Stress surety of close over price -- promote percentage of your contracts that close (unless it's not good)

Weekly to-do's:

Call buyers on Monday morning - find out what they did this weekend, where they visited, etc.

Give value every time you call - useful info, "thought you should know that..."

Get updates on pendings every Wednesday

Call Thursday for price reductions/value enhancements (for example, change in inclusions, carpet allowance)

9) Selling a House Using Madison Ave Methods

Realtors tend to talk features, whereas Madison Ave ads aim at emotions

What is it like to live in the house?

Do not ignore negatives -- "Some highway noise, but that's why it's priced $35,000 less than comparable homes!" "This home is for people who enjoy the freedom of no yard to maintain." Principle of sacrifice - (embodied in these examples)

Ask seller what they liked when THEY bought it.

Promote a primary theme that other properties can't match

Only 3 elements to a good ad:

Headline most important

Never put address in headline - it's not a feature!

Use decisive headlines -

Photo

Madison Avw would never accept a so-so photo. Don't upload so-so photos!

Wide angle photos essential

Do opposite of open house: Take the house to the buyers thru great photography

The Story:

Use conversational voice

Ogilvy: pretend you're talking across the kitchen table.

Sell lifestyle

All 4 Front Range Cities Rank Among Top 20 Healthiest Housing Markets

2011-11-09T14:43:00.000-08:00

{Published Nov. 10, 2011 in the Jeffco editions of the Denver Post]

Fort Collins/Loveland, Colorado Springs, Denver Metro, and Greeley were recently ranked #2, #7, #10 and #20 respectively by Builder Magazine as having the healthiest housing markets. The magazine projects that building permits will nearly double in 2012 over 2011’s.

While the report is focused on the new home market, the analysis applies also to the existing home market.

In a “mid-2011 update” posted on Sept. 15th, the magazine said “A housing recovery is blooming in Denver…. Decent job growth — the metro area is on pace to add 20,000 jobs this year — will contribute to strong income growth of 3.6% next year.” The report predicted a decline in foreclosures, which was confirmed this Monday in a report released by the Colorado Division of Housing. “2011’s median price, $233,100, is only $20,000 below 2006 levels,” continued the posting. It also says that the building of FasTracks is “creating new building opportunities all over town.”

It’s hard not to notice all the building going on around Jeffco and the metro area, not just related to FasTracks, although that project has certainly had an impact on the economy. Over the past two years, KB Homes succeeded in selling out its 60-home Canyon View subdivision in north Golden, at a time when the new home industry was considered stagnant. Richmond American Homes was equally successful during the same time period with its 30-home subdivision nearby.

In downtown Denver, the 42-story Spire skyscraper across from the Convention Center was built during this time and is now nearly sold out of its high-end condos.

A month ago, I reported that about a third of all current MLS listings are under contract. I just searched again and the figure is still over 30%. Although most of my under contract listings have now closed, another listing went under contract Sunday and I’ve been told to expect an acceptable offer on a $500,000 listing shortly.

In short, we are indeed in a healthy housing market now, and the promise of continued low interest rates suggests that it will remain healthy into 2012.

Newly Devised Real Estate Index Answers the Question, "How's the Market?"

2011-11-01T22:45:00.000-07:00

By JIM SMITH, Realtor®

When you are thinking of selling a home, the first question that comes to mind is usually, “How’s the market? Is this a good time to put my house on the market?”

Frustrated by the home sales statistics routinely published by the media — especially national statistics which may differ widely from our local reality — I have finally come up with a measurement that I feel answers that question.

My new index measures the percent of inventory that is under contract. It’s a snapshot that can be taken at any time, as opposed to a monthly report that comes out on the 10th or 30th of the following month.

Here is my index for this Monday, Oct. 31. Thanks to Metrolist’s new “advanced search,” it only takes a few minutes to generate the report. I’ll update it on the last day of each month and publish it here and online. Although it is generated on Metrolist, the Denver metro MLS, it counts all the listings on IRES serving northern Front Range and the Pikes Peak MLS serving the southern Front Range.

Jefferson County (Plains) 32.3

Jefferson County (Foothills) 16.8

Denver Northeast 41.9

Denver Southeast 25.4

Denver Northwest 30.6

Denver Southwest 42.2

Downtown Denver 15.3

Denver (all sections) 32.1

Adams County 39.0

Arapahoe County 39.8

City of Aurora 50.8

Douglas County 28.3

Broomfield 24.5

Boulder County 11.4

Clear Creek County 19.0

Gilpin County 10.3

Elbert County 23.5

El Paso County 17.2

Larimer County 9.1

Weld County 19.4

Total MLS 23.8

The percentages speak for themselves. They tell us that half the inventory in Aurora is under contract, while less than 10% of the inventory in Larimer County is under contract. It would be a great time to put a house in Aurora on the market, but not so good a time to do so in Larimer County.

Jefferson County (except in the foothills) shows about one-third of the listings under contract, but the foothills with half that percentage.

Colorado’s Front Range as a whole is doing quite well compared to the rest of the country, with almost one in four listings under contract. It will be interesting to track the monthly changes.

It’s easy to understand why the numbers are so high in Aurora and Denver Northeast/Southwest. These are areas which have been beaten up significantly by foreclosures and short sales. The values are way down from their highs of a few years ago. Combine that with record low interest rates and little wonder buyers are snapping up the inventory.

Call me if you’d like the calculation for your sub-market of Jeffco.

Colorado Leads Renewable Energy Growth, Employment

2011-06-01T06:55:00.000-07:00

I read this item today in Bill Sprigg's "Back Fence Newsletter".... It's from CleanEnergyAuthority.com

Colorado Leads Renewable Energy Growth, Employment
By Amanda H. Miller, May 26, 2011

Colorado is leading the nation in clean technology job growth with several new wind and solar energy companies relocating to and expanding in the state.

READ MORE.

"Today Show" portrays "tricks by Realtors" to promote their listings

2011-05-31T15:12:00.000-07:00

(To be published Thursday, June 2, 2011 in the Denver Post)

By Jim Smith, Realtor

Perhaps you saw the “Today” show this Tuesday (the 7 o’clock hour) in which Matt Lauer interviewed Barbara Corcoran about “tricks by Realtors to increase interest in homes.” Here are my notes on what was said, and my insights as a Realtor.

First of all, like so many people, Matt used the term “Realtor” as a synonym for “real estate agent.” As I have pointed out before, one should only use this term when you could substitute the phrase “member of the National Association of Realtors.” Every time Matt said “Realtor,” he meant “real estate agent.” Only half of the nation’s real estate licensees are Realtors, i.e. members of NAR.

Back to the substance of what was said…

1) There is no consistency among the hundreds of MLS’s in the country — no “gold standard” in Barbara’s words. In fact, NAR does have standards which it expects the Realtor-owned MLS’s (such as Denver’s) to adopt as rules and regulations. (I’m on the Rules & Regulations Committee of Metrolist, the Denver MLS.)

2) Listings only display the current listing price, not the original listing price, but if you ask, the “Realtor” (i.e., listing agent) will tell you. My comment: zillow. com, the popular consumer real estate website, accurately portrays the entire listing history of each home with dates, amounts and percentage of each price change. Realtor. com displays “Price Reduced” on such listings, but gives no details.

3) Listing agents will “refresh” listings and do other “tricks” to make a listing look like it is new on the market, when in fact it has been on the market a long time. My comment: Metrolist is about to implement a rule (pending Realtor association review) requiring that any listing be “expired,” not just “withdrawn,” for 30 days before the “days on market” counter resets to zero. Again, even so, zillow.com tells you the real story.

4) Square footage numbers can be manipulated. My July 15, 2010, column described how various websites will feature different square footage figures (main, finished or total) for the same listings. (Read that column at http://www.jimsmithcolumns.com/.) Our MLS is not misleading in this area.

5) Pictures can be manipulated to remove power lines, etc. My comment: Metrolist will fine any listing agent who does that. He/she may, however, remove trash cans and other non-fixtures from listing photos.

6) “Just available” in the description means owner died on premises — a strange and inaccurate comment to put on the air!

Did you know? You don't need a landline for Qwest DSL service

2010-08-20T13:26:00.000-07:00

I suspect that quite a few Coloradans keep their landline with Qwest because that landline carries their DSL service. Recently I found out that this is not necessary. I canceled my landline and still have DSL service from Qwest. Saved about $40 per month. Since I didn't want to lose my home phone number, I ported that number to one of the secondary phone lines at my company, where it forwards to my cell phone. I could have also ported it to a cell phone. They assigned a new phone number to my landline, then canceled the phone service, leaving only DSL service. It went very smoothly. People still call my old home phone number and they still reach me!

Generating solar power on a rainy day

2010-07-07T16:37:00.000-07:00

I just checked my inverters and today (cloudy and rainy all day) my home system generated 13 kWH by 5 p.m. -- probably 15 kWH by sunset later. A lot of people don't realize that PV works even without direct sunlight.

My listing in Applewood, then one in Arvada, were hijacked for a rental scam

2010-06-13T14:30:00.000-07:00

It has become common for Nigerian scammers to post rental offers on homes they don't own. It seems that they find homes for sale online, then advertise them for rent at half the market value (e.g., $600 per month). When you reply to their posting, you get this story about how they took a sudden job as a missionary in West Africa or some such lie, and they can't show you the house. You're asked to fill out a rental application and send them two month's rent (by Western Union or Moneygram) and they'll then send you the keys. The rental application provides enough information for identity theft on top of losing your money. This scam has been attempted on enough of my listings (four in the last year or so, two in the last two weeks) that I created a small sign that says "NOT FOR RENT" to hang from my yard sign as soon as I get the first call from a would-be renter who was smart enough to call me. I also ask the would-be renter to find the posting again and flag it as a scam. I don't know if anyone actually fell victim to this scam, but would like to hear from anyone who has! Note: When you click on any posting on craigstlist, the following warning appears in a yellow box above the posting: "Beware any arrangement involving Western Union, Moneygram, wire transfer, or a landlord/owner who is out of the country or cannot meet you in person." Too bad most people don't notice that warning...

Beware of robo-calls claiming to be from Coors Credit Union

2010-05-31T08:24:00.000-07:00

Both my wife and I, within a couple hours of each other, received robo-calls to our Golden landlines from 207-289-2055 claiming to be from Coors Credit Union saying that due to several fraudulent attempts to access our account, our ATM cards had been deactivated. We were told to press "1" to be connected to the "security department" at which point we were prompted to enter our 16-digit ATM card number and probably our PIN to "reactivate" our account. This is a phishing scam, and neither Rita nor I fell for it, but if you have an ATM card, beware that you don't fall for it! It's a sophisticated operation that matches phone numbers to local banking institutions. I wonder whether they only launch these calls on weekends when they know victims can't contact their bank right away.

Great Opportunity for an Equine Veterinarian

2010-05-26T11:28:00.000-07:00

Rita and I just returned from a weekend memorial service for my brother, Pete Smith, a well-known equine veterinarian who created what is arguably the best equipped rural equine facility in the country. Now, the Milliron Clinic in Athens, Ohio, is in need of a new equine veterinarian to take over. The facility and staff can't be matched anywhere. To help the family find that new vet (who could start as a staff vet) I produced two videos while we were there. One video is a 13-minute guided tour of the facility. The other is a longer video of interviews with clients who are waiting for you to show up and saying how terrific the facility and staff are. (Both are in Windows MovieMaker format.) Please share this with any equine vet you know who might be interested in this great career opportunity!

Will We See a Slump Now that the Tax Credit Deadline Has Passed? I Don't Think So.

2010-05-04T23:36:00.000-07:00

Metrolist data for the first weekend in May provides an encouraging answer to the question that has been on all Realtors’ and sellers’ minds for months — would the housing market stall after the federal tax credit deadline of April 30th passed?

Keeping in mind that some contracts from Saturday and Sunday may not have been reported by Monday night (when I did my data gathering) here are the encouraging data: During the first weekend in May, 19 single-family Jeffco homes went under contract, including two million-dollar homes. The previous weekend, 40 went under contract, with the highest priced home listed at $775,000.

While this represented about a 50% decline in contracts from a week ago, it was actually higher than the first weekend of May 2009. During that weekend a year ago, 16 single-family homes went under contract.

But that was just Jeffco, which did better than the metro area as a whole versus last year. In the entire MLS last year, 107 single family homes went under contract that weekend, compared to only 85 single family homes going under contract last weekend. That’s a 21% decline, but not bad at all, considering how many homes sold last month.

But that was just single-family homes. Condos and townhomes are another story. The drop in sales for that sector is quite dramatic, although I’d point out that one weekend’s sales in this smaller market segment is not a good measure of the market. We should probably wait until mid-May or later to draw any conclusions, but here is the raw data.

During the first weekend of May a year ago, 29 condos (4 of them in Jeffco) went under contract and have since closed. This year, only 14 condos went under contract during the same weekend, none of them in Jeffco.

The poorer performance of condos and townhomes compared to single-family homes is understandable, given the fact that they are a common purchase for first-time homebuyers and there was a serious run on those listings during April. We should probably be pleased that there are even 50% as many of them selling this May versus last May, given last month’s sales activity.

One factor favoring home sales going forward is that many buyers not eligible for tax credits figured that prices would drop in May for those homes which didn’t sell by April 30th. They are now jumping into the market, targeting homes with major price reductions — and there are many such listings.

Do We Have to Put Up with Train Horns at All Hours?

2010-03-15T07:27:00.000-07:00

After hearing a piece about "Quiet Zones" on NPR this past Saturdary morning, I googled "quiet zones on trains" and found this page on the Federal Railroad Administration's website. I wonder whether we can implement horn-free zones here in Jeffco under this ruling instead of being wakened at all hours by these loud horns. Here's the web page text -- go to the page itself at http://www.fra.dot.gov/Pages/1318.shtml for links within FRA's website giving more details:

Final Rule on the Use of Locomotive Horns at Highway-Rail Grade Crossings

In response to a legislative mandate, FRA has issued a Final Rule on the Use of Locomotive Horns at Highway-Rail Grade Crossings. This final rule, which requires that locomotive horns be sounded as a warning to highway users at public highway-rail crossings, took effect on June 24, 2005. The final rule provides an opportunity, not available until now, for thousands of localities nationwide to mitigate the effects of train horn noise by establishing new "quiet zones." The rule also details actions communities with pre-existing "whistle bans" can take to preserve the quiet they have become accustomed to.

Qwest DSL does not require having telephone service

2010-03-12T08:16:00.000-08:00

Recently I asked Qwest a simple question -- Must I have a landline in order to have DSL? The answer was "no", and I bet a lot of people are keeping their Qwest phone line because they don't know that. You can save quite a bit of money ($30 per month or so, depending on options) by having Qwest discontinue your home phone service. If you have a cell phone, why not?

Anyone who calls your home phone number after you make this change will get a "disconnected" message instead of a "new number" message, so be prepared for that. I found a way around that problem by "porting" my home phone number to one of the secondary numbers at Golden Real Estate and having it forward from there to my cell phone.

Another consideration for me in not having a landline was my fax machine. As far as I know, you can't fax using a cell phone. The way I got around that is to scan outgoing documents to my laptop, then email them. For incoming faxes, I have an efax number.

My real estate column this week profiles Steve Stevens of Golden

2010-02-11T15:12:00.000-08:00

I'm really proud of this week's "Real Estate Today" column (published today in the Denver Post's Jeffco editions) because it profiles Steve Stevens and what he has done to push his home way past "net zero."

Read it at http://www.jimsmithcolumns.com/. It will inspire you to ask what YOU could do to improve the energy efficiency of your own home (and car!).

I'd love to hear your reaction to it.

Change of cell phone number

2010-01-03T19:22:00.000-08:00

Greetings. If you've been using my iPhone number, 720-273-3046, to call me instead of using my advertised number of 303-525-1851, please don't use that 720 number anymore. Effective on Monday, Jan. 4th, I am porting 303-525-1851 to my iPhone account. The 720 number will disappear, and there will be no forwarding information on it. Thanks!

Just Back from the Realtor Convention & Expo in San Diego

2009-11-20T09:57:00.000-08:00

[Published Nov. 19, 2009, in the Denver Post - Jeffco editions]

Those of us who traveled to San Diego last week for the National Association of Realtors annual convention and trade show really lucked out on the weather, leaving before the snow storm began and returning after it ended..

I did attend one of the educational sessions, and I did enjoy several non-real estate activities such as visiting the Wild Animal Park and cruising San Diego Bay. But, for me, the major value of such conventions is the “expo” — the opportunity to get current on technology and products being introduced. In that regard, the NAR convention is the “daddy of them all.”

Being an iPhone owner, I was particularly struck by how many vendors offered apps for this device which has already transformed the practice of real estate.

It was only a year or so ago that I had an ordinary cell phone — no email, no web capability, nothing at all, compared to today’s smart phones. Nowadays, it’s hard to imagine being a successful Realtor® without a smart phone. My wife, Rita, who is not in real estate, now realizes that she, too, must discard her cell phone and get an iPhone. I heard this weekend that there are 50 million iPhones in use today.

In a previous column I mentioned zillow’s great iPhone app which, curiously, zillow was not promoting at their booth.

Other vendors, however, offered something zillow doesn’t offer — a branded MLS IDX search engine, something I look forward to offering as soon as I can install it. Look for more about this feature after I get it up and running.

What will make such an app unbeatable will be a GPS component which allows you to search the MLS listings closest to where you are standing with your phone.

There were other technologies being promoted, of course, but the iPhone has definitely captured everyone’s attention and imagination — and with good reason.

Taking it all in at one trade show is like drinking from the proverbial fire hose — it’s simply impossible to do justice to what I learned this weekend. It’s only appropriate that the same kinds of technology allowed me to be completely in touch with my clients and business throughout the convention and expo. Indeed, I sold one of my listings while I was in San Diego.

I have never been more convinced that a real estate agent must be “with it” technologically to be competitive in today’s industry. If you’re unhappy with that fact, you can blame the iPhone.

18 (or more) Questions to Ask When Interviewing Your Next Listing Agent

2009-11-05T20:38:00.000-08:00

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Published Nov. 5, 2009, in the YourHub.com section of the Denver Post:

I completely sympathize with sellers’ frustration and sense of powerlessness when it comes to putting their home on the market. Should you try to sell it yourself and save on commission? How do you know which agent to hire — and what will it cost? Should you hire your brother-in-law or risk alienating him (and your spouse) by hiring someone more qualified or more familiar with your area?
Perhaps making the process more scientific will help (especially with the brother-in-law issue), so I have prepared a set of 18 questions to ask the agents you interview, including your brother-in-law, which will give you a little more confidence that the choice you end up making is fairest and makes the most sense.

I’m sorry that space limitations don’t allow a full explanation of all the questions, so feel free to contact me if you don’t understand any of them — such as the first one:

Do you subscribe to Showcase service on realtor.com, and will you make full use of it for my home? (Browse realtor.com’s listings in your ZIP code to see how this service can help to promote a listing.)
Do you promise to complete every possible MLS field describing my house, and not just the mandatory fields?
Will your MLS listing of my house be syndicated to 20 or more consumer websites? (The MLS has a free service called “ListHub” which does this, but each broker must opt into it for his listings.)
Will you also post my home for sale on craigslist.org — and how often will you refresh it?
Will you produce a virtual tour (what realtor.com calls a “Featured Tour”) of my home? If so, which vendor will you use? (If this agent has any current listings, they should be on realtor.com, where you can compare his “Featured Tour” with those created by other vendors for other agents. You’ll see that their effectiveness varies greatly. I favor visualtour.com’s.)
Will you produce a video tour of my home, and can you show me a video tour you have produced for another listing? (If he does videos, they will be on his realtor.com listings if he has “Showcase” service, which leads me to question #7…)
May I have the address of one of your current listings so that I can see how it is marketed on realtor. com and elsewhere? (Google the address for “elsewhere.”)
How many of your listings sold in the last year, and how many of them expired or were withdrawn without selling? (You may want to have another agent verify this data, since it requires MLS access to do so. This can also help you to verify whether the agent you are interviewing is being truthful with you.)
Will you provide a staging consultation to help make my home show its best?
Will you do email blasts or distribute printed flyers telling other agents about this new listing?
Will you promote my listing at the various weekly Realtor marketing sessions and/or hold a broker open house?
(Optional) Will you hold regular open houses for as long as I want you to do so?
What is your commission, and will you reduce it if you sell my house yourself (no co-op commission owed to a buyer’s agent)?
Will you reduce your commission further if I hire you to represent me in the purchase of my next home?
Will I get feedback from you on every showing by you, and will you actively solicit feedback from other agents who show my home and tell me what they say?
Will you mail out “Just Listed” postcards so that neighbors and others will know that my home is on the market?
Does your company, or you, have a website on which your listings are promoted?
How else will you advertise or market my home?

Bonus question: Will you pay a referral fee to my brother-in-law if I hire you despite family pressure?
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Fraudulent Claims of the $8,000 tax credit

2009-10-28T08:15:00.000-07:00

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I heard on NPR a few days ago that there is an enormous number of fraudulent claims for this tax credit and that the IRS is unable to challenge fraudulent claims for the $8,000 tax credit without doing a full-blown audit! No proof is required, it appears, that the taxpayer is a first time home buyer or that they have actually bought a house!

Any legislation extending the tax credit should include a provision putting some controls on this raid on the Treasury!

Technological Convergence Has Greatly Improved the Practice of Real Estate

2009-10-21T18:43:00.000-07:00

Published in the Denver Post, Oct. 22, 2009:

It’s awe inspiring how cellular and other technologies have converged to revolutionize the practice of real estate in recent years. The primary platform for this convergence is the “smart phone” — a generic term for the BlackBerry, Apple’s iPhone, Palm’s Pre and similar products.

Let me paint a few scenarios, and you’ll see what I mean.

Scenario #1: I’m in my car and my iPhone rings. I push a button on my steering wheel and the caller’s voice comes across my car radio, which is silenced automatically. (This is Bluetooth technology.) The caller is a client wanting to reserve my free moving truck for later in the week. Stopping at a red light, I consult my Outlook calendar on the phone and confirm a date and time. At the next red light, I enter the reservation on my calendar, confident that it will be on my laptop next time I look at it.

Scenario #2: I have a buyer in my car and we pass a home that sparks his interest. I open the Zillow application on my phone, and it displays a satellite view of that location with a red icon for active listings and green icons for every other home. I can touch the red icon and instantly get the essential MLS information about the house. Touching the other icons gets me a similar amount of information about them, including when they sold and for how much.

Scenario #3: Another client is a flight attendant who flies internationally, so calling her on her cell phone is not practical or affordable when she’s in Rio or Paris or Hong Kong, but I can text her and get a text response the next time she’s on the ground, without worrying about what time zone she’s in. (If she had a smart phone, we could exchange email on our phones.)

Scenario #4: I come across a property that a client in New York would really like. I pull out my phone, shoot a video with my own narration, and email it to him on the spot.

There are countless other scenarios I could share. Another favorite device is my car’s navigation system. When showing homes, I can enter several addresses at a time, view them on the map, re-order them as I wish, and then let the voice guide me from one listing to the next without taking my eyes off the road to look at maps or directions.

Technology continues to make me more effective and productive — and, fortunately for my clients, I readily adopt it!

The Job of a Listing Agent Is Not to Sell Your Home, But to Get It Sold

2009-10-13T17:13:00.000-07:00

Published Oct. 15, 2009, in The Denver Post

There’s a popular misconception that the job of a listing agent is to sell your home. I beg to differ.

The real job of a listing agent — prior to negotiating a contract and representing you through the transaction — is to maximize exposure of your home to buyers and to the agents who represent buyers. Understand this, and you will find it much easier to select the right listing agent, because it’s far easier to compare the marketing skills and practices of different listing agents than it is to compare their selling abilities.

First, recognize that fewer than 10% of listings are sold by the agents who listed them. That’s why we have an MLS. Next, don’t mistake simply putting the home on the MLS (which is all many agents do) with true marketing.

True marketing to other agents as well as direct buyers begins, but must not end, with full data entry on the MLS, beyond those few fields that the MLS requires. It means, for example, putting in room dimensions and locations and using the full public remarks field to describe the home’s selling points. It means uploading ten high-quality pictures, not just one exterior picture. And it means producing a “virtual tour” using a good vendor (I prefer VisualTour.com).

MLS data entry is just the start. True marketing must include non-MLS efforts that are still targeted to agents as well as buyers, such as flyers to the agents’ offices and email addresses. The agent’s listings must be syndicated to 20 consumer sites like zillow.com and trulia.com, and must be man-ually entered on craigslist.org. The virtual tour vendor will do its own syndication, so it’s important for the description on the virtual tour to be more extensive than just captions for each photo.

Then there’s realtor.com, which will carry every MLS listing for free, but only in stripped down format with just four pictures and none of the public remarks from the MLS. The only way to get good exposure on realtor.com is to purchase “showcase” service and then utilize it. Some companies (like mine) buy that service for all their agents, but it’s up to the agent to actually go into realtor.com’s control panel and enter those enhancements.

Don’t make the mistake of thinking that because most listings are sold by other agents that getting on the MLS is all it takes. It takes so much more, and that should guide you in your agent selection.

How to Evaluate a Listing Agent:

Performance Criteria

Of course, you’ll want to know how many listings the agent has (and where), and this you can easily verify online. The real question, however, is how many of his listings have sold in the last 12 months and how many expired without selling. How many homes did he sell himself, including his own listings? But beware: agents know that you cannot verify this data, so you should be skeptical. If in doubt, get a different agent to obtain this data for you.

NOTE: If the agent says he or she has a buyer for your home, make him or her prove it by signing a two-day listing agreement (not on MLS).

Marketing Criteria

Do NOT ask how he will market your home. Instead, ask for the address of one or more current listings. How he markets other listings is an absolute predictor of how he’ll market yours. Google the addresses. Look for them on realtor.com and REcolorado.com and see how they are promoted compared to similarly priced homes.

On realtor.com, make sure that the agent has Showcase service which allows for headlines, 25 pictures, virtual tours, video tours, extensive sales pitch, etc. If he doesn’t have those on his current listings, he won’t have them on yours.

Sewage Back-Up Not Covered WIthout Separate Endorsement

2009-10-08T09:24:00.000-07:00

Mike Bailey of State Farm tells me, in answer to a question, that sewage back-up is not covered in the standard homeowner's policy. If you have a finished basement, you'd be well advised to pay the extra $25 or so for an endorsement adding that coverage to your homeowner's policy. Good advice!

2009-10-03T17:47:00.001-07:00

I learned SO MUCH from today's Tour of Solar Homes in Golden and Denver! I'll share some of what I learned in next week's column.

Don't Miss "The Diary of Anne Frank" this weekend at Golden High School

2009-10-02T21:16:00.000-07:00

I was blown away by how good this production was. I happen to sit next to the aunt of the 16-year-old student, Jamie Nagode, who played Anne Frank so amazingly, and I got some inside info -- like the fact that her prom date is the boy who plays Peter in the production. In one scene Anne and Pete share the first kiss for each of them... Their roles appear to have drawn them closer to each other.

The cast was uniformly great in their acting, and were great at staying in character while the action was elsewhere on stage. Especially nice was the fact that they all stayed in character and on stage throughout the 15-minute intermission. As Jamie's aunt explained, "They couldn't leave their hiding place, after all."

The audience gave Jamie in particular a standing and prolonged ovation at the end, and she certainly deserved it.

Don't miss this production. The last two performances are Saturday, Oct. 3 at 2pm and 7pm. And if you do miss it, ask to borrow the DVD of tonight's performance which I ordered during intermission!

Appraisers Don't Give Value to Solar Installations -- Here's Why

2009-10-02T16:42:00.000-07:00

I spoke today with Beth Hanlon, an appraiser active in Jeffco and the Foothills, and she said that she cannot assign more than token value (under $5,000) to a photovoltaic installation on a home, because the underwriters would disallow it. This, she said, would apply regardless of how recent and how productive the PV (or solar thermal) array is. For instance, I installed a $60,000 PV and $10,000 solar thermal system on my own house a couple years ago, and these two systems save me hundreds of dollars on my electric and gas bills every month. (My energy bill for this 3,600-sq.ft. ranch is about $50 per month.) No matter, she said. She couldn't get even a reasonable percentage of that investment approved by any underwriter. Moreover, if the installation detracts from the curb appeal of the house, Beth will actually deduct for it. (Since my house faces north, you can't see either of my solar installations from the front.)

If the Obama administration wants to promote clean energy such as PV and solar thermal (not to mention geothermal, which is never visible from the street and an even greater investment), it should consider regulating the valuation of these systems by underwriters. For example, assign a reasonable life (15 years at least) to these systems, and require a minimum valuation based on its bona fide installation cost, depreciated over that lifetime.

A homeowner who installs an energy-saving, greenhouse gas-reducing system should be able to recoup at least as much on that investment, percentage wise, as they do by updating a kitchen or bathroom! The kind of regulation I'm proposing has the additional advantage of not costing any federal tax dollars.

Moreover, why spend tax dollars incentivizing people to install such systems when the return on investment only applies if you keep the house forever and not if you sell it! Under the current situation outlined by my appraiser friend, I would NOT advise anyone who isn't going to live in their house for at least 10 years to invest in a PV or solar-thermal or geo-thermal system other than just to feel good about doing so.

Keeping Listing Agents Honest - A Modest Proposal

2009-09-29T17:35:00.000-07:00

Recently I was competing for a listing with another agent. We were both asked how much real estate we had sold in the last 30 days. For myself I guessed (correctly) about $1 million, but the other agent said $1.7 million. When I got home I looked him up on the MLS. He had sold one small property in January and another in February -- nothing since! Agents can indeed lie to prospective sellers and the seller has to take their word, because there is no way to verify past sales, only current listings!

Back in April 2008, I competed with an agent for a $685,000 listing (which I got). The seller showed me the listing presentation which the other agent had left behind. That agent claimed to be the city's top selling agent for over 10 years straight selling over 100 listings per year. Since I'd never heard of him, I looked him up on the MLS and found that he had averaged under 20 sold listings per year in the last three years and had not sold any of his own listings or any other agent's listings in the previous 2 years! (He claimed he had a database of buyers waiting to buy a "home like yours.") It was outrageous, and I wrote about it without naming him in my newspaper column. (www.ecentral.com/members/jimsmith/Columns/Apr24YH.pdf) A couple colleagues guessed who I was talking about, which surprised me! My only regret is that I didn't file an ethics complaint against this agent, because he is a Realtor and bound by the Code of Ethics which says you should not lie about your statistics.

I'm thinking of creating a website on which sellers could get accurate performance statistics on any agent usng the MLS. It would involve the seller giving the agent's name and someone with MLS access would look the agent up on the MLS and send a report. Do you think this is a good idea?

PS: I don't want to do the analysis myself -- and don't have the time, either. But it requires access to the MLS to do the analysis. One solution would be for the local Realtor association to farm out the assignments to volunteer members whose reports would be anonymous. This should not be a way for one agent to win clients away other agents, just to keep agents honest and give sellers some way to verify perfomance claims. I think we owe this integrity check to consumers. Don't you?

Regulators Prove the Road to Real Estate Hell Is Paved With Good Intentions

2009-09-23T15:42:00.000-07:00

When I was a journalist in New York City, I was drawn to interview the highly successful police commander of The Bronx, Tony Bouza. I’ve never forgotten the secret of his success which he shared with me. He said — paraphrased here — that if you want to find out what’s not really working in any organization, don’t talk to the chiefs, talk to the indians.

I am reminded of Chief Bouza every time I read about the regulatory “fixes” being handed down from on high. It’s as if those in power are grasping tor dramatic fixes without any input from those involved in the day-to-day business of real estate..

Twice, for example, I have written about the new appraisal nightmare called the Home Valuation Code of Conduct (HVCC) forced upon our industry by New York Attorney-General Andrew Cuomo. Under threat of litigation, Fannie Mae and Freddie Mac agreed to institute rules to keep loan officers and real estate agents from selecting or communicating with appraisers, as the “cure” for appraisal fraud.

The result has been disastrous. Everything we in the business had predicted (and more) has come true, such that 37% of Realtors surveyed by NAR this June — just one month after implementation of the HVCC — said they had had at least one transaction fail to close because of this stupid regulation. Space doesn’t permit me to go into all the details, but you can read them in my Jan. 22nd and May 14th columns at www.JimSmithColumns.com.

Now here comes yet another ill-conceived regulatory change threatened for Nov. 1 implementation, this time from the FHA, pertaining to condo approvals.

For years, it has been the rule that in order to qualify for FHA financing, a condo must be in a complex with at least 50% owner occupancy. This was easy to calculate because the condo management office could readily provide this information.

Well, starting Nov. 1, 2009, it will also be required that no more than 30% of the units in that complex be financed by FHA loans. The management company won’t have this information. The only way to verify this would be to pull from public records ALL the deeds of trust for all the units in the complex — an inconceivable hurdle.

Applying Chief Bouza’s lesson, I’d ask regulators to talk to Realtors and loan officers, not just themselves, before issuing such regulations.

[Published Sept. 24, 2009, in the Denver Post's YourHub.com section. Previous columns can be found online at www.JimSmithColumns.com.]

Mortgage Issues Exacerbate the Already Difficult High-End Real Estate Market

2009-09-20T12:43:00.000-07:00

(Published 9/17/09 in the Denver Post)

By Jim Smith, Realtor

My August 27th column detailed the seller’s market for lower-priced homes and the buyer’s market for higher-priced homes. In that column, I attributed this dichotomy primarily to the $8,000 first-time home buyer’s tax credit, which naturally favors low-priced homes (and which expires on Nov. 30th).

One could reasonably argue that the real estate recovery we’re witnessing now is artificial due to that tax credit, especially when you look at the slowness in the market for homes over $400,000. For example, I have a wonderful solar-powered home in Golden’s Mesa Meadows subdivision listed at $500,000 that hasn’t had a single showing in the last three weeks, even though it is well priced — without factoring in the free electricity from the sun!

Yet, homes under $250,000 are getting multiple offers and even selling above their listing prices.

So what’s going on?

Yes, the tax credit is disproportionately stimulating the lower-priced market, but financing has become disproportionately more difficult for the higher-end market.

When you have to borrow over $417,000, you are in the “jumbo” not “conventional” mortgage market, and what was possible just two years ago is no longer possible, according to the mortgage brokers I deal with most.

Previously, a common strategy was to get a $417,000 first mortgage plus a second mortgage covering the balance up to 90% of the purchase price. Putting 10% down in that market was much more doable for buyers than today’s requirement of getting a single jumbo mortgage for only 80% of the purchase price. Second mortgages are simply not available anymore. FICO score and debt-to-income requirements are also far more stringent now.

At the low end, buyers can put down as little as $1,000 (see my previous columns), but 20% of a high-end home is $100,000 or more, and those buyers are often unwilling to liquidate depressed stocks or other assets to come up with a 20% down payment.

Such buyers could take out a home equity loan against another property to provide additional cash, but nowadays, unlike before, you can only borrow up to 80% of that other property’s current value, vs. 90% or 100% in the past.

Until these financing constraints are addressed, a recovery in the high-end market seems unlikely to me.

My first blog - taking social networking workshop

2009-08-21T07:23:00.000-07:00

Today I begin a five-week social networking workshop with Susan Stewart. I'm looking forward to expressing myself in new and different ways. I already write a weekly real estate column which appears every Thursday in the Jefferson County editions of the Denver Post's YourHub section. You can read the past 2 years' worth of columns at www.JimSmithColumns.com. I'll start posting them each week in my blog.