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Monday, April 29, 2013

House went under contract within 12 hours of putting sign in ground

Here's a story I'll be telling buyers & sellers!

The owners of a bungalow backing to South Table Mountain hired me to sell their home.  We decided on a price just under $300,000.  Seller still needs a week to paint and de-clutter, but asks me to put the sign in the ground with a "Coming Soon" rider, which I do just before sunset on Saturday evening.

Sunday morning, the seller calls me and says a passerby saw the sign and his wife walking their dog and asked to see the house.  Inside, the passerby asks what they want for the house.  Husband says $300,000 if he doesn't have an agent (because of variable commission).  He then calls me and says, "I have a buyer for $300,000 cash."

Two hours later, with paperwork done, earnest money check in hand and proof of funds, I change the sign to "Sale Pending." 

Seller is ecstatic.  The kicker for him was that the buyer told him not to do any painting, because he would be changing the colors anyway.

As I'm leaving the house, another car is stopped at the sign, asking about the house.  "We've been driving this neighborhood every day looking for signs," the woman told me.  I told her that if she had driven the street earlier in the day, she might have been able to buy it.  Sorry! (Not really.) 

Friday, April 26, 2013

Buyer Activity Staying Strong in All Areas & Price Ranges

I usually do these calculations at the end of the month, but I did these on April 26th in preparation for a radio appearance on AM760 Saturday, April 27th, 9am to 11am.

NOTE: The total inventory surged by about 3,000 between end of March and end of April, but eager buyers put nearly 4,000  more homes under contract in the same period.  Hence, the active inventory continued to decline. 

Wednesday, April 24, 2013

With Homes Selling So Quickly, It’s Tempting to Think You Can Do It Alone

[Published April 25, 2013, in the Jeffco editions of the Denver Post’s YourHub section and in five Jefferson County weekly newspapers]

It’s an interesting contradiction — thinking that you don’t need a listing agent in a seller’s market.  Put a “For Sale by Owner” sign in the ground and sell your home in a day or two, you think.

The fact is that you need an agent even more to deal with multiple offers, most of which will come from buyers represented by agents. In such a situation, you don’t want to be the only player without professional assistance.

Moreover, as with FSBO’s in any market, you’re probably going to be paying the buyer’s agent 2.8% commission, so it may be worth paying a couple more percentage points to level the playing field.

Lawyers (and their clients) are familiar with the expression, “a lawyer who represents himself has a fool for a client.”  That speaks to the importance of having a dispassionate professional on your side in what is likely the biggest transaction of your life — selling your home.  And when you have the possibility of a quick sale, you need the expertise of a professional in (1) setting the asking price and (2) weighing competing offers.

In last week’s column I described several ways in which a buyer can make his offer more attractive than competing offers.  I was reminded by a colleague that I left out one of the most powerful techniques, which is the “Dear Seller” letter in which a buyer sweet talks the seller into choosing his/her offer for personal reasons such as the buyer’s love of the seller’s garden or because the buyer’s mother dying of cancer wants to die in your home.

Should you accept the highest price offer with 3.5% down payment or the lesser offer with 50% down — or the cash offer which waives inspection and appraisal conditions?  If your preferred offer is contingent on the sale of the buyer’s house which is under contract, you need a professional who can assess the strength of the contract on that buyer’s house.

How about taking a back-up offer — and how does that work, anyway?  There are just so many reasons that you need an agent on your side more than ever in today’s fast-moving market — whether you’re the buyer OR the seller.

If you have negotiated (as you should) a variable commission rate with your listing agent, it’s also tempting to keep your home off the MLS to increase the chance that your agent will sell it himself, costing you less in commission. But, while the agent may bring you one buyer, your only hope of getting competing offers that increase the sale price is to let the world know about your listing.

South Golden Half-Duplex Really Impressed Me

[Published April 25, 2013, in the Jeffco editions of the Denver Post’s YourHub section and in five Jefferson County weekly newspapers]

  This 2007 half-duplex at 16506 W. 14th Pl. is just a couple blocks from a South Table Mountain trailhead. It has many updates you won’t find in nearby listings. But you won’t be “settling” with this one! It has such popular upgrades as hickory hardwood flooring, travertine tile, a high efficiency furnace, radon mitigation, a mother-in-law apartment in the walk-out basement, slab granite countertops, a Solatube, hot tub, five-burner gas stove, and panoramic mountain views. Take the video tour to fully appreciate it. It goes on the MLS tomorrow, April 26th, with an open house on Saturday, 11 to 3.


Wednesday, April 17, 2013

There is only ONE condo and ONE townhome for sale in the entire City of Golden

Here are the only two "active" listings within the City of Golden to be found on Metrolist's Condo/Townhome database:

Compare that to the following list of condos/townhomes within Golden listed on Metrolist as Under Contract:

Under the column "Dom" (Days on Market), notice how quickly most of those homes went under contract.

There are only 17 single-family homes for sale in the entire City of Golden

Here are ALL the residential (single-family) listings in the City of Golden that are active on Metrolist as of today:

Now, look at the City of Golden listings (single-family) that are Pending or Under Contract on Metrolist as of today:

Explanation of column headings and abbreviations:
   St = Status (Active, Pending or Under Contract
   Styl = Style (Ranch, 2-Story, Story & Half, BiLevel, etc.)
   Bsmt = (1) sq. footage; (2) Walkout, Crawl Space, Garden Level
   Psf = Price/sq. ft.
   Pfsf = Price/finished sq. ft.
   Dom = Days on Market (before going under contract)
   # = Number of parking spaces
   Garage: G=Garage, A=Attached, O=Oversized, F=Off Street parking, T=Tandem, N=None
NOTE: Contract date is left blank for Pending listings, which are defined as pending lender or other third-party approval.

Tuesday, April 16, 2013

How Buyers Can Make Their Offers More Attractive Than Competing Offers

[Published April 18, 2013, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

As new listings continue to draw multiple offers, buyers’ agents are discovering a number of ways to make their client’s offer be the one which is selected by the seller.
You'd think that the highest price would be accepted, but there are other considerations.

I’ve written about escalation clauses, but let’s look at other ways to improve offers.

Cash, of course, is king.  Buyers able to do so are submitting cash offers and refinancing later. You need to submit proof of funds with a cash offer — a 401K, IRA, SEP, or stock portfolio statement all work for this purpose, even if you don’t want to use those funds at closing.  I’ve seen instances where a buyer got under contract as a cash purchase but then closed with a loan, without being contingent on loan approval

A large earnest money deposit can make your offer look stronger.

No contingency on the sale of another home is obvious, but how about no inspection or appraisal contingency either?  It doesn’t mean you can’t inspect or appraise the home, just that you can’t terminate for those reasons. As a buyer, you can change your mind as late as closing day and only lose your earnest money. When you have a compelling reason not to proceed, you may decide that it’s worth losing your earnest money to do so.

That, however, brings up another way to make your offer more attractive.  You can check the box “Specific Performance” on the contract.  If you fail to close, the seller will have the option of suing you to close the transaction.  In this market, however, the seller may wisely choose just to keep your earnest money and sell to the next highest bidder — or an even higher bidder — rather than go through that brain damage.  Meanwhile, the fact that you’ve checked that box will definitely make your offer more attractive up front.

The closing date can make your offer more attractive. If the property is vacant, you don’t even have to ask — the sooner the better. If you’re paying cash with no contingencies for inspection or appraisal, how about offering to close in two weeks?  That will make your offer very attractive!

If the home is occupied, always ask for the seller’s preferred closing date, or offer a quick close and a low-cost (or free) post closing occupancy agreement.

As you may know, Golden Real Estate offers free use of a moving truck to clients and to buyers of our listings.  Offering it to the sellers of a home that one of my clients wants to buy — and maybe providing the labor — could make him choose my buyer over others.

Homes This Nice Are Usually in Gated Communities

[Published April 18, 2013, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

16603 W. 56th Drive, Golden 80403
Just east of North Table Mountain is a hard-to-find subdivision of high-end homes called Table Mountain Meadows. This 5,246-sq. ft. home at 16603 West 56th Drive epitomizes the custom-built home with all the most popular upgrades. Slab granite, hardwood, stainless steel appliances, stamped concrete, epoxy garage floors, jetted tub, plumbed gas BBQ, 9’ and vaulted ceilings, dance floor, fitness center (equipment included!), huge cedar closet, skylights, high-end window coverings, crown moldings, roll-outs and 42” cabinets — the list of upgrades is unending!  Open Sat. & Sun., April 20-21, 1-4 pm.

Wednesday, April 10, 2013

Colorado Real Estate Commission to Review Use of Font Signatures in eContracts

[Published April 11, 2013, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

By now, I suspect everyone with a credit or debit card has had the experience of signing electronically instead of on paper at supermarkets and other stores.

Imagine if, instead of signing with the stylus, you could just check a box and see the name on the credit card appear in a script font. Now imagine that you could do that for purchasing a house, not just a bag of groceries or a jig saw.

That’s exactly what is happening every day in real estate transactions. CTM eContracts, the official provider of electronic contracts for the Colorado Association of Realtors, allows buyers and sellers of real estate to “Select Font Signature” on every document, unless the agent disables that feature. Mine is the only brokerage I’m aware of which has a policy of not accepting such signatures on contracts and last week I convinced the Colorado Real Estate Commission (CREC) to put the topic of banning font signatures on the agenda for their next meeting.

Electronic signatures should, by law, be verifiable. It’s not hard to imagine a disgruntled spouse or client saying in court, “I didn’t sign that counterproposal,” or “I didn’t approve that price reduction.” No one would be able to disprove his or her assertion that someone else must have clicked on that "font" option.  For that reason alone, such signatures should not be allowed.


Low Number of Homes for Sale Is Not Due to Sellers Failing to List Their Homes

[Published April 11, 2013, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

On Monday, the National Association of Realtors’ daily news alert carried the headline, “Housing Shortage Will Dampen Spring Market.”  However, I think the NAR analysts are coming to a faulty conclusion — at least as it relates to the Denver market. 

Yes, the number of homes listed as “active” on Metrolist at the end of March was down 35.3% from March last year, but the number of homes entered on Metrolist from January through March 2013 was down only 5.2% from the number listed in the same period last year.  And the number of homes sold this March was up 16% over last year. That’s the #1 reason for the reduced number of active listings.

What the NAR analysts are saying, in effect, is that because new listings are selling so quickly, resulting in fewer available homes, we’re going to have a slow spring.

Nothing could be further from the truth.  Homeowners, realizing this is a seller’s market, will continue to put homes on the market as quickly as practical, and those homes will continue to sell quickly, often with multiple offers.  The spring real estate market will be on fire, not “dampened,” by the shortage of active listings.

The market is so hot that, in two instances last month, I recommended to my sellers that they accept offers that were contingent on their buyer’s home being sold — and the buyers’ homes were not even listed yet.  I analyzed the market in the two neighborhoods where the buyers’ homes were located (Sloan’s Lake for one and Trailmark for the other) and even visited the Sloan’s Lake home to see its condition and updates.  Based on the proposed listing prices, I could see that each home would sell within a week, and both homes did sell within a week. As a result, my sellers are happily moving toward closing on their homes.

In a “normal” market, no agent in his or her right mind would recommend taking an offer that was contingent on the sale of a house that wasn’t already under contract, much less not even listed.  But this is not a “normal” market.

In another instance, I had a listing in Golden that didn’t sell last year or the year before, but I knew the owners still wanted to sell. Because of how the market had turned, I urged them to put their home on the market one more time. They were burned out from the process and said, “No.” At that point I said, “Sign a two-week listing agreement. If it doesn’t sell in two weeks, it’s off the market.” They were leaving on a 2-week vacation anyway, so they agreed.  That house, which didn’t sell last fall for $550,000, was under contract for $570,000 in 12 days.

Thursday, April 4, 2013

Realtors Took a Preview Ride Yesterday on the Light Rail Line Between Denver & Golden

Click on the thumbnail above to view a YouTube video I created of this event, three weeks prior to the line's public opening.

Here's the link itself:

Wednesday, April 3, 2013

Featured Listing: This Bear Valley Home Has Two Master Suites

So often buyers will tell me that they want new-home features — five-piece bathrooms, granite countertops, and the like — but also RV parking and “no HOA!” Those buyers will love this 1980’s home at 3239 S. Newland St., which backs to a Lakewood park and is 2 blocks from a Bear Creek Park bike/pedestrian trail. Upstairs, three bedrooms were converted to a huge master suite and one guest bedroom. On the lower level, the 2½-car garage was converted to another huge master suite, and an oversized 2-car garage (not visible above) was added to the backyard.  Open Saturday, 1-4 pm.


Homes Over $500,000 Are Going Under Contract Much Faster Now

Here is my monthly calculation of the percentage of inventory under contract by MLS area, county and city:

Look at the bottom two lines on this above chart.  They show that while the number of unsold homes on the MLS (what I call "total inventory") increased by 4.5% in March over February, the number of those that are under contract increased at over twice that rate -- 11.7%.   That is why the "inventory" defined by other analysts (i.e., active listings only) fell by 1.8%.  It's not that sellers aren't putting their homes on the market, it's just that buyers are snapping up listings faster than they can be added.
In the above chart, I have highlighted in red the only areas and months when the percentage of inventory under contract was higher during the past 12 months than it is now.  And notice that for the first time ever (that I know of), over 50% of the total MLS listings are under contract.
Now, look at this chart:

What surprises me most is the dramatic increase in buyer activity in the homes over $500,000.  The percentages in the top four price ranges have increased by nearly half, even in the very highest price ranges.  In Jeffco, the percentage of million-dollar-plus homes under contract has nearly doubled.  How much higher can these calculations go next month?  Stay tuned!

All Price Ranges in Jefferson County Are Benefiting From Seller’s Market

[Published April 4, 2013, in the Jeffco editions of the Denver Post's YourHub section and in five Jeffco weekly newspapers]

By JIM SMITH, Realtor®

On my blog [in a separate posting], you can see the statistics for every MLS area along the Front Range, including, of course, Jefferson County, which I divide into the non-foothills and foothills areas.

What I calculate is the percentage of unsold listings that is under contract, both by area and by price range.  61.9% of the listings in the non-foothills area of Jeffco were under contract as of March 31st, while 36.5% of the foothills listings were under contract. Those figures are up from 48.6% and 28% respectively a year ago.

How Jeffco's statistics break down by price range — and how that has trended over the past three months — is shown in the chart at left. (This is part of a larger chart on my blog which also shows Denver and total MLS figures.)

While the lower and middle price ranges appear to be leveling off in the high 60’s, the higher price ranges are now moving in that same direction more dramatically than before.

Since beginning this index in October 2011, I’ve never seen million-dollar Jeffco homes reach a level of 10% under contract, yet in March, this price range leapt to 14.5% under contract, while other homes over $500,000 increased their percentage under contract by almost half in just two months. 

As you can read on my blog [in that other posting], these same trends are seen both in Denver and in the overall figures for the total front range MLS.

Next week, other analysts will probably lament how inventory fell in March by 1.8%, but they only define inventory as “active” listings. I define inventory as unsold listings — active plus under contract. The number of unsold listings at the end of March was 4.5% higher than at the end of February, but the number of listings under contract increased by 11.7% in the same period.  Yes, sellers are putting homes on the market, but buyers are snapping them up quicker than they can be added.

Now that’s what I call a hot real estate market! One of our current listings drew 71 showings and 28 offers in 2 days and went under contract for $55,000 over list price.