Previous ‘Real Estate Today’ Columns by Jim Smith You Might Have Missed

All of Jim Smith’s previous columns can be found online at www.JimSmithColumns.com.  Here are some popular ones:

Mar. 31, 2016 — Listing Agents Seem Confused About How to Handle Multiple Offers

Mar. 24, 2016 — Did You Know? 5280 Magazine Doesn’t Choose 5-Star Professionals

Mar. 10, 2016 — Why Sellers Should Want Multiple Offers, and How to Get Them

Feb. 25, 2016 — Questions to Ask When Interviewing a Realtor About Listing Your Home

Feb. 18, 2016 — Here’s Some Different Advice for Buyers and Sellers in the Current Real Estate Market

Jan. 21, 2016 — As a Listing Agent, I Used to Think Buyer Agents Were Overpaid, But Not Anymore; Understanding the Resale Value of Roof-Top Solar PV Installations

Dec. 17, 2015 — Understanding Real Estate Property Taxes and Why They Vary So Much

Nov. 5, 2015 — Why We Believe in and Advocate for a Values-Based Real Estate Practice

Oct. 29, 2015 — How Do You Decide When It’s Time to Downsize?  It’s a Very Personal Decision

Oct. 22, 2015 — What Is the Value of Hiring a Realtor When You Can Sell Your Home Without One?

Oct. 15, 2015 — Is Your Denver Area Home Listed on the Right MLS?  Here’s What You Need to Know

Sept. 10, 2015 — Everyone Has a Friend or Relative in Real Estate, But Should You Use Him or Her?

Aug. 20, 2015 — In Our Internet-Connected Marketplace, What’s the Role of Realtors Now?

July 30, 2015 — A Familiar Challenge: Mom & Dad Need to Go to Assisted Living

July 16, 2015 — You’d Be Surprised How Many Real Estate Agents Compete for Your Business

July 2, 2015 — In Greening Your Home, Where Do You Get the Most Bang for Your Buck?

June 18, 2015 — National Association of Realtors Says That “Marginal Agents Threaten Industry”; What Is Marijuana’s Impact on the Real Estate Market?

April 16, 2015 — What’s Your Home’s Value? County Assessor, Zillow & Others Differ Widely

April 9, 2015 — Here’s Why Real Estate Bidding Wars Won’t End Any Time Soon

April 2, 2015 — A Seller’s Market Is the Worst Time to Try “For Sale by Owner”

Feb. 12, 2015 — Fifty Shades of Green: Big & Small Ways for You to “Go Green”

Feb. 5, 2015 — Going Green in Your Home Is More Doable Than Most People Think

Here Are Some Common Pricing Mistakes Sellers & Listing Agents Make

Why is it that some homes sell quickly with multiple offers — and therefore above full price — while other listings languish on the MLS for weeks or months with no offers? The answer almost always is found in how the listings were priced.

Here are some common mistakes that sellers and their listing agents make when pricing their home for sale.

Mistake #1: Basing the Listing Price on the Active (Unsold) Listings Instead of the Sold Listings.  Any home that is active on the MLS more a week is likely overpriced. You’ve got a choice. Price it based on unsold listings, and your house can languish on the market just like them.  Or price it based on the sold listings, and let those overpriced, unsold homes help your home sell more quickly and with multiple offers.  You want those homes to help sell yours, not the other way around!

 

Mistake #2: Basing the Listing Price on What the Seller Needs or Wants to Net From the Sale.  In this scenario, the seller is telling his listing agent how much he needs to net from the sale of his home -- and the agent is not pointing out that the market doesn’t care, and that the seller is dooming his home to sit on the market for a long time, ultimately selling for much less than it might.

 

Mistake #3: Basing the Listing Price on the Value of Improvements You’ve Made.  Again, the market doesn’t care what you’ve spent on the house.  That $50,000 kitchen is great, and I know you must have gotten a lot of pleasure from using it, but it doesn’t mean you’ll get $50,000 more for your house than if you hadn’t made that improvement. If there were competing listings out there — which is rare right now — the new kitchen might help your home sell first, but probably not for a whole lot more money.  In this light, I discourage sellers from making improvements prior to putting their home on the market.  You won’t get back what you spent, so why do it? 

 

Mistake #4: Expecting to get a lot premium for your home because you paid a lot premium to the builder.  Builders charge lot premiums for size, view, location, etc., but that premium is history now.  Yes, you have a nice view and maybe you paid a big premium for that lot, but this doesn’t mean that your house can now sell for that much more than the same house built a block away without the lot premium. 

 

Mistake #5: Pricing your home based on Zillow’s “Zestimate” or some other computer-generated valuation.  Zestimates are fun to look at, but they are rarely accurate. Such valuations don’t come close to a broker-generated Comparative Market Analysis (“CMA”) using appropriate comps from your own subdivision when possible.

 

How I Price a Home:  I do use two computer-generated valuation systems as a starting point. They are the Realtor Property Resource or “RPR” system and the Realist system that is built into our MLS internet platform. I do not use Zillow.  I run valuations on each of these systems, making note of the “confidence index” for each and how close the two valuations are to each other.  If they are within, say, 5% of each other, it gives me a good start at pricing the house, recognizing, of course, that the software has little knowledge of the interior finishes and whether it’s a seller’s vs. a buyer’s market in that location.

 

Next I Google the address of the subject property to see if there’s a defined subdivision in which I can search for comparable sales.  Then I use another software package, Virtual Office, to run a map search of that area for sales of similar style homes (ranch vs. 2-story, etc.) over the last 12 months.  I create a spreadsheet of those listings and run a “sold price analysis” which tells me the average price per square foot and other metrics. I look at the recommended price from RPR and Realist and see if the price per square foot is in line with the average PSF from Virtual Office.

 

I then recommend to my Seller that we market the home at the resulting valuation and no higher, even though it’s a rising market.  That way we have a better chance of attracting the multiple offers which are essential to making their home sell for more.

Variable Commission Can Benefit Sellers

One important question any seller should ask their listing agent is, “Will you reduce your commission if you don’t have to split it with a buyer’s agent?”

This is known as a “variable commission.”  My listing agreements usually include a one percent reduction of my commission when I do not have to compensate a buyer’s agent — in other words, when I produce the buyer.

When a listing agent doesn’t have to split his commission with a buyer’s agent, he earns about twice the commission.  I think that windfall should be shared with the seller.  That’s why I don’t wait for a seller to ask me to reduce my commission if I sell their home myself.

The existence of a variable commission must be disclosed in MLS listings so buyer agents know whether a contract they submit is at a competitive disadvantage to a contract from an unrepresented buyer.

 

In the event of multiple offers, a listing agent who has disclosed a variable commission must also disclose, when asked by another agent, whether any offers are from the listing agent’s own buyer and the percentage differential. That helps the other agent craft a competitive offer.

Since variable commission is a searchable field on the MLS, I ran a search and found that fewer than 25% of agents are reducing their commissions when they “double-end” their listings. Make sure a variable commission is part of your listing agreement.

Published April 21, 2016, in the YourHub section of the Denver Post and in four Jefferson County weekly newspapers.

 

On a Personal Note: How I Shed 25 lbs. in 8 Weeks

By JIM SMITH

This is an unpaid testimonial for a program which my wife Rita and I started right after New Year’s and completed on Mar. 1.

The program is called “8 Weeks to Wellness.”  It’s a program created by two Pennsylvania chiropractors, that is licensed to about 100 wellness centers across the country.  One of those centers, Body in Balance Wellness Center, is just a mile from our home.  Rita and I, who are both 68 years old, learned about the program at an introductory event and decided our quality of life was worth investing in this 8-week program. We saw it as sort of an out-patient “fat farm” experience, but it turned out to be far more than that. 

Rita and I were each obese, but now we are merely overweight and continuing our progress toward a healthy weight for each of us.  For myself, I weighed in the mid-240’s last December. Today I weigh 214 — even less than at the end of the program. Rita went from 192 to 165 during the same period. With what we learned and the habits created, we’re still losing weight.

 

You can learn about this holistic approach toward wellness at www.8ww.com, or come to a presentation (over a complimentary dinner) on Wednesday, April 27th, at Abrusci’s Italian Restaurant, 3244 Youngfield Street, Wheat Ridge.  RSVP at 303-215-0390.  Rita and I will be there.

Just Listed by Kristi Brunel: North Table Mountain Village Home

 

6109 El Diente Circle, Golden

$518,000 

Video Tour at www.NorthTableMountainVillage.info

This 2,393-square-foot home at 6109 El Diente Circle in North Table Mountain Village has 4 bedrooms and 3 baths. It sits on a large corner lot with easy access to multiple trails. Priced to sell, this one-owner home has been meticulously cared for. Featuring a bedroom and a full bath on the main level, a 3-car garage, an open floor plan for entertaining and an unfinished basement, you can put the finishing touches on this home to make it your own.  Showings begin Thursday, April 21^st. To schedule a private showing, please call Kristi Brunel at 303 525-2520.  

Published April 21, 2016, in the YourHub section of the Denver Post and in four Jefferson County weekly newspapers.