In a Seller's Market, It's Tempting to Try to Sell Your Home Without an Agent

[Published June 21, 2012, in the Jeffco editions of the Denver Post]

Now that homes are selling quicker, I’m seeing more sellers who think that all they need is to get the home on the MLS for a flat fee (what is called a “Limited Service” listing), offer a 2.8% commission to the buyer’s agent and save 3% or more paid to a listing agent.

One of the homes I showed to a buyer this Monday was such a listing.  It was in the MLS, and the number to call for the showing was the seller’s cell phone.  He answered and said he’d be home — “just ring the doorbell.”  I seized the opportunity to interview him later about the “by owner” process.

This seller said he had gone to a “by owner” website which offers a free listing with one picture but also offers various upgrades including MLS listing—six months for $395 or one year for $495.  The seller didn't get to select his  listing agent, and, although he was able to write his own paragraph describing his house, he wasn’t given an MLS data sheet to fill in the non-mandatory data fields such as room dimensions and location, so those were blank on the MLS.

This seller is offering 2.8% co-op commission to the buyer’s broker, but he was told by the listing agent that this was negotiable, which is not entirely true. Technically, the buyer's agent is paid by the listing agent and the MLS listing is a promise of compensation which the listing agent can’t get out of.  The seller may indeed negotiate a lower commission than what was listed in the MLS, but after the closing the buyer’s agent could demand the compensation promised in the MLS at the time the contract was presented.  (This could come back to bite the listing agent, but not the seller.)

For pictures, the seller told the listor to use the pictures from the previous listing when the seller bought the house. This is not allowed without the previous listing agent’s permission, which, in this case, was not sought.

Currently, in Jefferson County there are 51 active “limited service” listings on Metrolist’s single-family database.  (I'm not including about 15 listings by home builders who pay agents to put one or more of their homes on the MLS, but have their own sales people with whom buyers must negotiate.) Most of the 51 non-builder listings are probably “by owner” listings where the seller paid a flat fee (usually $400 to $500) to be listed on the MLS.  Under Real Estate Commission rules, any offer must be presented to the listing agent, who then presents it to the seller.  Sometimes there are additional fees for negotiating the contract, the inspection notice and whatever else arises.

I checked on several of the listings and most were on realtor.com, which means the agents were Realtors.  Most of these listings, however, were not enhanced on realtor.com, and I didn’t find any with virtual tours.  All but 11 of the listings offered 2.8% or 3% commission to the buyer’s agent. One offered a penny, and two offered $1. 

But do those listing offering virtually no commission sell?  I checked the 103  “limited service” single-family sales in Jeffco for 2012 and only eight of them closed paying less than 2.8% and only two of those less paid than 2.4%.

To put it in perspective, then, sellers should realize that they’re only likely to save a little over 2% on commissions by going this route, since the average listing commission is reported by NAR to be just over 5% (of which most goes to the buyer's agent) and the seller is still paying various fees for service.

I’m sure "limited service" makes sense in the seller’s mind, but what is the seller giving up in return for saving 2%?

Mostly, one gives up marketing services — enhancement on realtor.com, advertising such I do with this column when I feature a new listing, syndication to consumer websites, virtual tours, video tours, color brochures, open houses, signage, free moving truck, etc. 

Of those 51 current "limited service" Jeffco listings mentioned above, only 16 had a showing service to handle showings, and most of the others had the seller’s phone number for setting showings. Two had no phone number. With a showing service comes the feedback process which can be quite useful, since the seller received no advice on pricing, etc.

Is "by owner" for you?  I suggest you interview one or more agents before making that decision.

Tasks I Perform to Market a New Listing

[Adapted from a much shorter column printed in the Denver Post on June 14, 2012]

One of my broker associates asked me to list all the things I do when I put a new listing on the market, so I decided to make that the topic of this week’s column.

1) After completing the listing agreement and the different disclosure forms, I consult with the seller to make sure the MLS data entry is complete and accurate. I don’t leave any data fields blank. Before shooting the pictures, I arrange for one of my broker associates, Karon Hesse, to provide a staging consultation. (She’s really good at this.) This helps the house to show its best.

2) I shoot the still photos myself (with a Nikon D3100), and then the video tour (with a wide-angle Sony HD digital Handycam). I then create the virtual tour (a slideshow with music) from the stills, and edit the video for uploading to YouTube.  I upload two versions of the video tour — the unbranded one required by the MLS, and one in which I provide my contact information for other websites. (In exchange for her staging consultation on my listings, I also shoot the pix and video tours for Karon’s listings.)

3) I create a web page for the new listing under “Our Listings” at www.GoldenRealEstate.com.  In addition to a lengthy description of the listing, I provide links to the YouTube video tour, the virtual tour, and to a printable PDF of the 2-sided flyer. On that web page I also promote the free use of our moving truck, even when the buyer has his own agent. If the buyer doesn’t have an agent, we promise free labor and gas, too, which has helped us “double-end” many of our listings. Since I discount my commission if I don’t have to pay a buyer’s agent, this is a win/win for the seller, the buyer and me.

4) I purchase a web URL from godaddy.com especially for each listing (for example, www.NorthGoldenHome.com), or I use one I already own, and I order the decal for a sign rider with that URL on it.  (Golden Real Estate currently owns over 60 URLs.)  The URL can’t be displayed on the MLS, but I can and do promote it on other websites.  I link the URL to the branded YouTube video tour and create a sub-domain (for example, http://details.NorthGoldenHome.com) that forwards to the listing’s web page on www.GoldenRealEstate.com.

5) I only enter the listing on the MLS when I have all the pictures to upload, and I write captions for all photos and put them in a logical order. If the seller has agreed to it, I order the home warranty from Colorado Home Warranty, and I promote it on the MLS and other websites, as well as on the listing flyer. When the home goes under contract, I alert the warranty company so they can provide the warranty policy to the buyer after closing.

6) I enter the showing instructions on the Centralized Showing Service website. I arrange for the seller to receive showing feedbacks as soon as I get them, and I provide the seller with a login on the showing service website so he/she can change showing instructions and review feedback. When an agent has not supplied feedback despite three email requests for feedback, I email or call the agent personally and obtain that feedback, which I then forward to the seller.

7) From the virtual tour software I create a flyer.  On the back of each flyer, I provide the full MLS print-out.  I print 30 or more two-sided color copies for the brochure box.

8) From the same software I create an html craigslist posting. I adapt that html code into an eflyer which I send to 7,000 other agents using eflyermarketing.com. .

9) I put a lockbox on the house and a sign in the ground, using a wooden yard-arm post (which my handyman Mark and I personally build) with a solar powered light fixture atop it. Instead of digging a post hole in the yard for this wooden post, I use a 24-inch spike which leaves no mark in the grass when the sign is removed after closing.  Below the main sign, I hang a "sign rider" promoting the URL for the listing’s YouTube video -- for example, "Tour This Home Online At www.NorthGoldenHome.com -- and another rider promoting the free moving truck and free moving boxes.  When appropriate, a third sign-rider promotes the open house.  I also mount a brochure box for the 2-sided flyer I have created. When appropriate, I also put one or two “Home for Sale” arrow signs with brochure boxes at nearby intersections.

10) I enhance the listing on realtor.com, trulia.com and zillow.com.  It costs Golden Real Estate about $1,500 per year to enhance all our listings on realtor.com, but it's well worth it.  It costs less on Trulia and Zillow. On realtor.com I have to upload the video tour.  On other websites, I simply link to the branded video tour on YouTube.

11) I order a jumbo “Just Listed” postcard mailed to 100 neighbors by Top Marketer.

12) I promote the listing in my weekly YourHub column, usually noting that the listing will be open on Saturday, 1-4 pm.  I then post that column on this blog, and I archive a PDF of the column to www.JimSmithColumns.com.

13) I hold that featured open house myself, or enlist a broker associate or unlicensed person, such as mortgage broker Daniel Raffield.  I promote each open house on the listing’s webpage, realtor.com, recolorado.com, trulia.com and zillow.com.

14) For many listings, when appropriate, I print up several "wall notes" -- like Post-Its that I stick around the house, alerting visitors to special features that may not be obvious to the casual observer.

__________

What you have read above is just the list of tasks related to putting a home on the market. Once a contract is received from a buyer or buyer’s agent, there’s a whole new list of tasks to be performed by the listing agent to produce a successful closing. If there is no closing, the agent gets no payment for the tasks performed, many of which required an outlay of money.

I have heard sellers complain that agents are overpaid because they put their listing on the MLS and do little else.  Perhaps there are some agents like that, but I hope, dear reader, that this list of tasks performed gives you an appreciation of the fact that this Realtor, at least, earns the commission which he is paid at closing.

It’s a Seller’s Market, as Buyers Put Half of Non-Foothills Listings Under Contract

[Published June 7, 2012, in the Denver Post -- expanded here]

My latest end-of-month statistical analysis shows that the buying spree in Jeffco and metro-wide has not slowed down as much as it has leveled off.  Here is my analysis by county or area.

At the end of April, exactly 50% of Jeffco’s non-foothills listings were under contract, and at the end of May, that percentage was basically unchanged at 50.4%.  Two other metro counties showed slight increases, although the percentage for the entire MLS showed it first decline since I started tracking this statistic in October.  With mortgage rates staying at record lows, buyers know that the time to wait is over.

Here is the breakdown by price range:

Last week I featured two new listings in this space. The one listed for $449,000 went under contract above asking price before we could hold the first open house, and the one for $399,000 went under contract to the first visitor at its first open house.  Other agents are witnessing the same phenomenon.

I have updated the “Buyer Needs” page on our website (www.GoldenRealEstate.com) and, like many other agents, have resorted to sending letters to homeowners asking if they’d be interested in selling to a buyer who is looking for a home like theirs.

Uncertainty in the Euro zone is reportedly contributing to keeping interest rates low in the United States, but, whatever the reason, buyers are definitely taking advantage of the increased affordability on homes in every price range due to low interest rates.

Here Are My Favorite Easy Improvements When Moving Into a New Home

[Published May 31, 2012, in the Denver Post]

I recently moved into a wonderful new (actually 10-year old) home in Stonebridge at Eagle Ridge.  It backs to Lookout Mountain open space, and Rita and I both love it.

Of course, a home is never perfect, so I undertook a number of quick, relatively easy improvements that I’d like to share with you.

First and favorite was to have my plumber install a hot water recirculation line so that I would have instant hot water at the farthest (kitchen) faucet and every faucet between it and the water heater. Now, when I turn on the kitchen hot water, it’s hot after drawing 1/2 cup water. In the master bathroom, I have to draw a bit more before it’s hot.  Cost: $500.

While the plumber was here I had him install a hot and cold water faucet in the garage.  $200.

I installed a photocell on my porch light so that my porch and driveway are always lit up when it’s dark.  $10 (part cost only).

I ordered a 9.75 kW solar system, as described in last week’s column. $11,000 upon installation to get free electricity forever.

My furnace needed replacing anyway, so I bought a Carrier Lightspeed air-source heat pump with matching gas furnace which will only fire up when it’s below 20 degrees outside. This way I’ll heat my home with my free electricity except on really cold days.  Not cheap, but a great investment: $15,000.

My driveway has that terrible “mountable curb” which is so typical of subdivisions. For $2,400 it will be removed and a smooth driveway entry will be installed.

My garage has no natural light, so I’m having a Solatube installed there and in a dark interior hallway. $500 each, including installation.

What are YOUR favorite home improvements?

Solar PV systems not subject to property tax

In my column about solar PV in today's Denver Post, I raised a question about whether leasing companies might be liable for "Business Personal Property Tax" on the PV systems which they own during the 20-year lease.  I asked Rep. Max Tyler about that, and he said that two years ago the state legislature passed a bill, HB-10-1267, which exempted these systems from property tax.  Whew!

Look How Much the Cost of Installing Solar PV Has Dropped

[Published May 24, 2012 in the Denver Post]

Last week I wrote about how your best deal on solar is to buy a house with an existing solar installation, because these homes do not sell for much more than homes without solar.

However, I recently moved from my solar-powered home in Fairmount to a home in Eagle Ridge with a great south-facing roof but no solar features. Naturally, I have looked into having a solar photovoltaic system installed and was pleasantly surprised to see how much the cost of doing so has plunged.

Nowadays, hardly anyone purchases outright a solar PV system for their home because leasing is so much more attractive financially. Here are the options that were presented to me for installing a 10 kW system on my home by three different companies. (I am using round figures, roughly averaging the prices quoted by the three vendors.)

1) Outright purchase: about $40,000 out of pocket up-front cost, with a net cost after tax credits and rebates of about $19,000.

2) Lease with zero up-front cost and a monthly payment of about $100 for 20 years.

3) Pre-paid 20-year lease with zero monthly cost  — $12,800 upon installation, with a fair market buy-out after 20 years (probably close to zero).

Leasing includes maintenance and repair, so if the inverter dies in year 10, you pay nothing to replace it under a lease, but you pay the full cost of replacing it if you purchased the system.

This looks like a no-brainer and explains why the vast majority of homeowners are opting for the lease.

So why is leasing so much cheaper than purchasing, especially if you can afford to pre-pay the full lease amount up-front? 

The answer, I found, is in the accounting. The leasing company gets all the rebates and tax credits for the installation plus they are able to depreciate the system, which the homeowner cannot do. (On the other hand, they probably owe business personal property tax on each installation.)

Whatever the reason, it makes sense for any homeowner with a decent south or southeast-facing roof to have a leased solar PV system installed on their home. Even with the monthly lease plan, you’ll pay less to the leasing company than you’d pay to the utility company, and you’ll be contributing to a more sustainable, less polluted environment. I’m having a 220-volt electric charging unit installed with the system so I can charge my Chevy Volt, too.

Own This Home and Enjoy Free Electricity

This home’s 7.2 kW solar photovoltaic (PV) system (barely visible in this backyard picture) meets all of the electrical needs of the seller and will probably meet your needs too. You’ll pay just $7 per month to be connected to the electrical grid. Inside, you’ll find a spacious home with two master suites, a family room which doubles as a home theater, hot water baseboard and radiant floor heat, dimmable LED can lighting, radon mitigation, hardwood and tile flooring, and more.  It sides to open space and backs to agricultural land. Very quiet!  It’s at 16488 W. 55th Drive. Take a narrated video tour at www.JeffcoSolarHomes.com. Open Saturday 1-4 p.m.

Home Builders Lead the Way on Solar, But You Might Get it Free on an Existing Home

[Published May 17, 2012 in the Denver Post]

Last week I attended an expo of new home builders and was impressed at the emphasis on sustainability, including solar-equipped or solar ready homes.

Most of the builders were promoting their “green” features and their low HERS scores.

“HERS” stands for Home Energy Rating System, and a HERS score of 100 represents the energy rating of a home built to current building codes.  A home built to “Energy Star” standards (which entails such things as improved insulation, windows and highly efficient appliances) would earn a HERS score of 70.  A “net-zero” home would have a HERS score of zero.

Meritage Homes is clearly the leader in building energy efficient homes, claiming such distinctions as “First Energy Star Production Builder,” “First Net-Zero Production Builder,” and “First Builder with Community HERS Rating Under 40.”  None of the other builders I met at last week’s expo were quoting HERS scores under 60, but all were boasting many “green” features and some were building homes with solar photovoltaic (PV) systems.

Meritage is not currently building anywhere in Jefferson County, but has a half dozen communities in Denver’s southeast suburbs and another half dozen in the northern suburbs. You can find them online at www.MeritageHomes.com.

It’s great that builders are creating this kind of market consciousness regarding energy efficiency and solar powered homes.  However, I am still finding that energy efficiency and sustainability is the last thing on the minds of the buyers of existing homes.

Most buyers of existing homes are impressed by kitchens, bathrooms, stainless steel appliances (forget Energy Star ratings), hardwood floors, slab granite, etc., and are, for the most part, unimpressed by sales pitches such as for the solar-powered home I have listed at 16488 W. 55th Drive.  (Tour it only at www.JeffcoSolarHomes.com) .

The result of this disinterest, which I’ve complained about before, is that homes with solar systems and other energy features are selling for no more, and sometimes less, than homes without such features.

My solar-powered home mentioned above, for example, is priced competitively with homes which do not provide their owners with free electricity, even though that represents a savings of thousands of dollars per year to the homeowner.

Because of this disinterest, I tell those who are interested in solar, “Don’t install a PV system on your current home — buy an existing home with solar and you’ll get it free!” As a PV booster, I hate to say it, but it’s true. Sellers recoup little, if any, of their investment upon resale. They only recoup their investment by staying put and paying little or nothing for electricity.

I'm a big fan of eContracts, but look at what passes for a "signature"

[Published May 10, 2012, in the Denver Post]

A few months ago, I wrote about the greatly increased use of electronic contracts and electronic signatures. I myself have adopted “eContracts” as my primary software for creating real estate contracts.

Let’s say, for example, that I need to amend a date on a contract to buy and sell real estate. Using CTM eContracts, the official contract software of the Colorado Association of Realtors, I can create that amendment in about one minute and, in another minute email it to my client and to the agent for the other party. If the other agent forwards it immediately to his/her client, and clients on both sides of the transaction are at their computers, I can (and often do) have that document legally executed by all parties in less than five minutes. 

It’s a very eco-friendly technology, because none of the parties involved ever needs to print out the document. Except for the fact that most of us end up printing all these documents for our files, such technology has brought us quite close to the elusive “paperless transaction.”

I have just one gripe about it, and that is the recent introduction of using “fonts” to create one’s signature. To demonstrate what I’m talking about, I created a simulated document which my wife, Rita, and I have signed electronically.  I signed it by using my mouse, and she signed it by selecting a font (or typeface) and then clicking “Save.”

Here’s what my mouse signature looks like:

(Reminds me of what my signatures look like at King Soopers and Safeway! Those, too, are electronic signatures.)

And here is what Rita’s font signature looks like:

Like Rita, it's much prettier... but Rita didn't "sign" it. I signed it for her by selecting a type font.  I didn’t even have to type her name. I just clicked on the font option, and the full name appeared in the signature box. Anyone could have done that, and it would have looked exactly the same. Knowing this, it would be hard to defend such a signature in court.

The Colorado statute governing electronic signatures says that the signature must be “unique” and capable of “verification,” and that it is under the “sole control” of the signer.  It is hard to believe that using fonts for signatures meets any of those requirements.

Real Estate May Be Slow Nationally, But Front Range Buyers Are on a Tear

[Published May 3, 2012, in the Denver Post]

I’m always trying to develop new metrics — new ways of analyzing our local real estate market, especially when what I’m seeing and experiencing here is so different from the picture painted in the national (and Denver) media.

Below are two such metrics that I devised in the last six months. If you look at the changes over time for both metrics, you really get a sense that our market has sprung back to life, despite national reports to the contrary.

Developing such new metrics is made easy by Metrolist, Denver’s MLS, which has created an advanced search capability under “Prime Access” that allows unlimited search combinations.

Here’s another measurement I made just now: Of the 8,028 new listings entered on the three Front Range MLS’s this April, 2,955 or 36.9% were sold or under contract by the end of the same month. Of the 8,162 entered in March, 51% are now under contract or sold.

NOTE: A higher-resolution image of these tables is posted at www.JimSmithColumns.com.

Following Backlash, Jeffco Commissioners Drop Plan to Legislate Beltway

[Published April 26, 2012 in the Denver Post]

Last week I described the effort by Jefferson County’s Board of Commissioners to introduce legislation which would create an authority with “super eminent domain” powers to complete the beltway from northeast of Highway 36 though Jeffco and Golden to connect with C-470.

This Monday, that effort was killed by the Commissioners themselves, following quite a backlash from the public and from legislators who considered the proposal a massive overreach and an unwarranted gutting of long established local powers.

Commissioner Don Rosier told me at press-time (Tuesday) that the Governor and CDOT requested that they drop the proposal and return to the negotiating table.

Prior to this short-lived effort, the Commissioners had essentially given up on forcing a beltway though Golden and had created a public highway authority to secure private investors for a toll-road north of Golden connecting Highway 93 and Highway 128 but leaving gaps south through Golden and between Highway 128 and the beltway’s current end east of the Boulder Turnpike. (Nevertheless, the Commissioners and the highway authority continue to promote their toll road as “completing the beltway,” and the press has generally picked up on that inaccurate and lame phraseology.)

The proposed legislation was perceived by toll road critics (including myself) as a desperate last ditch effort to get the beltway completed, since negotiation with Golden to drop its opposition to the toll road had backfired and even led to Golden filing suit against the use of contaminated Rocky Flats land for part of the right-of-way.

An equally questionable strategy (already in place) for establishing the “privately funded” toll road has been the use of Jeffco Open Space funds (from sales tax revenue) to facilitate purchase of the 300-foot right-of-way though Rocky Flats. Here’s how it was explained to me Tuesday by Assistant County Administrator Kate Newman:

The County gave $1.225 million in general funds to the toll road authority, which put those funds into escrow to buy the 300-foot right-of-way. Meanwhile, the County put $5.1 million of Open Space funds into escrow as its contribution to the purchase of another parcel (Section 16) to be deeded over to US Fish & Wildlife, but that fully-funded transaction only closes when and if the authority closes on the right-of-way purchase. I wouldn’t be surprised if this comingling of purposes were to trigger another lawsuit, this time over the misuse of Open Space funds.

Jeffco Commissioners Ask Legislators to Create a Beltway Completion Authority With Unprecedents Powers

[Published April 19, 2012, in the Denver Post]

Democracy and due process are all good and fine, but they do have their limits, don’t they?  The three Jeffco Commissioners, fed up with Golden’s refusal to back down on its opposition to the toll road boondoggle north of town, have decided to ask the state legislature to do away with “home rule” cities’ ability to block projects within their city limits.

This is ironic, since the commissioners gave up years ago on pushing a beltway through Golden itself and merely tried to build a toll road connecting State Highway 93 with Highway 120 south of Flatirons Mall.  Having failed to bribe Golden to drop its opposition to that toll road, they have decided to get the legislature to pass a “beltway completion bill” that would not only order construction of the toll road but extend it through Golden itself.

Sen. Betty Boyd, who chairs the Senate Transportation Committee, has been identified as the “sponsor” of the bill, but the Senator’s secretary told me on Monday that she has not received a draft of the bill and “there is no such bill.”

Nevertheless, the full text of the non-existent bill, drafted by the Jeffco commissioners, has been released, and is even promoted in the county’s own employee newsletter, Frontline. You can find links to the bill and an interpretation of its impact on Colorado cities at www.JimSmithColumns.com.

This brash attempt to short circuit the democratic process is reminiscent of when Colorado’s two U.S. Senators passed a midnight bill without hearings which mandated construction of the “super-tower” on Lookout Mountain. Regardless of how you felt about the tower, it was shocking that two politicians could, in effect, say, “enough of this democratic crap, build the damn tower!” Our county commissioners are now trying to accomplish the same feat on the state level regarding their pet development scheme/beltway.

It couldn’t be clearer by now that completing the beltway has nothing to do with meeting transportation needs in the northwest quadrant.  CDOT’s own multi-million-dollar studies proved that.  Rather, the beltway effort has everything to do with lining the pockets of developers and those real estate professionals who will profit from their development.  If they succeed, we can look forward to the kind of sprawl that has overrun the other three quadrants of the metro area after their sections of the beltway were completed.

I emailed and called Sen. Boyd’s office asking the Senator for comment on the bill prior to deadline, but she never called me -- and still hasn't two days later.

15-Year Fixed Rate Mortgage Hits New All-Time Record Low

[From Realty Times this morning]

In Freddie Mac's results of its Primary Mortgage Market Survey®, average fixed mortgage rates declined for the third consecutive week on the heels of a weaker than expected employment report. The 30-year fixed averaged just above its record low while the 15-year fixed averaged a new all-time record low of 3.11 percent breaking its previous low of 3.13 percent on March 8, 2012.
Full Story: http://realtytimes.com/rtpages/20120413_freddierate.htm

Radon Gas in Your Home -- Its Risks and Its Mitigation

[Published April 12, 2012, in the Denver Post]

During the current legislative session the risks of radon gas in our homes and what to do about it was raised when two state legislators put forth a bill — killed in a House committee — to require sellers to test for radon before putting their homes on the market and to provide those test results to prospective buyers.

The bill’s sponsor described radon as “a radioactive gas that kills hundreds of Coloradans each year due to lung cancer.” I have seen no studies, however, that provide reasonable documentation of this claim. With so many other contributing factors to lung cancer, how do you prove that someone got lung cancer specifically because of exposure to radon in their home?

Regardless of the validity of the danger, requiring sellers to provide test results would only endanger Coloradans further, which is why I testified against it. The bill would have allowed sellers to buy a $10 radon kit, place it anywhere in their home and mail it into a lab for analysis, then provide the report to prospective buyers as an indicator of the radon level in their home.

Radon is a naturally occurring gas that seeps out of the ground virtually everywhere. As such, we are exposed to it in highly dispersed form every day when we are outdoors. The danger comes when it seeps from the ground into your home, where it is contained instead of being dispersed into the atmosphere. If the level is high enough, it could certainly pose a health risk, especially to children who sleep in or spend significant time in that area.

A proper test for radon is done with an electronic device, placed by a professional in the lowest living area of a home, which samples the air once an hour for 48 hours. If the device is unplugged and moved, or if windows and doors are left open during the test, it will be obvious in the print-out. Such a test costs $100 to $150, but it is virtually tamper proof. Every buyer should pay for such a test instead of depending on a seller’s $10 test. Tests provided by sellers would only result in fewer buyers spending money on a valid test.

If radon is shown to be above the EPA’s “action level” of 4 picocuries per liter, mitigation can cost $800 to $1,200, depending on the home. The process involves installing a constantly running fan which sucks air from the gravel bed under your home’s concrete slab and expells it at the roof line. Cracks in the concrete slab are also caulked and sump pits sealed. If the home has a crawl space, ventilating it (which also controls humidity and mold accumulation) can also reduce the radon level.

If you don't think the housing market is improving, ask any Realtor!

[Published April 5, 2012 in the Denver Post]

At the end of every month I run a count of active and under contract homes on Metrolist, the Denver MLS which also displays listings from the other two MLS’s serving Colorado’s Front Range. I post my findings on my blog (see previous posting), but this week they deserve mention in my column, too. 

The trend since I started doing these reports last October has been steadily up, depleting available listings faster than would-be sellers can replenish them.

Back in October, 23.9% of all unsold listings on the three MLS’s were under contract. The remaining 76.1% were available.  Today, 44.1% of unsold listings are under contract, leaving only 55.9% available to purchase. In other words, the single biggest contributor to the shrinking inventory is that buyers are snapping up listings faster than new ones can be added.

Everyone in our little office is busier than they’ve ever been.  We have far more buyers and sellers under contract than we have active listings.  It’s common to have other buyers competing with our buyers for listings. Just last week, I submitted a full price offer for a client on a home, and even had an additional provision that she would exceed any competing offer by $1,000.  We lost to another buyer who offered a cash closing in 6 days at $5,000 over asking price.  That’s the kind of market we’re experiencing now.

The supply vs. demand ratio is so unbalanced right now, that homes are selling for more than they might appraise for based on last year’s sales. This is not necessarily a problem, since appraisers do give some weight to the offer itself when determining value.

Percentage of Listings Under Contract Surges Ever Higher

I have just completed my end-of-month analysis as of March 31st, based on data from Metrolist but including listings from all three Front Range MLS's.  Here are the shocking statistics: