Buyer’s Remorse Is Resulting in More Contract Terminations Than Usual

[Published July 3, 2014, in the Jeffco editions of the Denver Post's YourHub section. An abbreviated version also appeared in five Jefferson County weekly newspapers.]

Multiple offers are still very common because of the seller’s market we are in. The result was predictable.  Buyers find themselves frantic to submit the winning bid, only to realize a few days later that maybe they settled for a less-than-perfect home or paid more than they should for what they got.

Or perhaps a new listing came on the market that is more appealing, so the buyers use one of their many opportunities to terminate the contract so they can buy that better home.

As a broker, I have been on both sides of this dynamic.  Just last month I had a condo listing that went under contract for $10,000 above the listing price with four competing offers.  Naturally, my sellers accepted the highest offer, but the buyer terminated on the inspection deadline with an explanation that the condo was simply not big enough for their family.

Before accepting the next-best offer, I made a point of asking the buyer’s agent about his clients so I could assess their likelihood of going all the way to closing.  What do they do for a living? How big is their family? In short, is this 2-bedroom condo perfect for their situation? I shared their responses with my seller before they accepted their offer.

The lesson for me was that in future multiple offer situations, I will ask those questions of the first buyer, instead of the second.

As these charts indicate, we are still in an extreme sellers market, where there is only one month’s supply of active listings.  What that means is that the number of current active listings is equal to the number of listings which are selling in just one month. 

By contrast, many of the previous years were characterized by a buyer’s market. Until January 2013, the inventory was five months or more, reaching a peak of 19 months in January 2011. During 2013, the inventory declined gradually from 5 months in January to about 2 months in December, and you can see above how it dropped to just one month in the first half of this year.  I dare say that it can’t go much lower.

What will the second half of 2014 bring?  I don’t have a crystal ball, but I suspect that the number of new listings will continue to rise in coming months, but inventory will remain below two months.

Just Listed: Bailey Home on 0.9-Acre Lot

[Published July 3, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

 

179 Juniper Street, Baily

$250,000

www.BaileyHome.info

This home is located a few miles east of Bailey in Burland Ranchettes. 

Within easy commuting distance of Denver (30 minutes to C-470), you will be amazed by the quiet atmosphere and beautiful mountain views from the oversized composite deck and large windows. The kitchen has granite countertops. It also has hardwood flooring. The rest of the house features wall-to-wall carpeting. With 3 bedrooms and 2 baths, there is a bath on each level. There is a gas fireplace in the upper family room and also in the lower living room. Built in 1984, the total living space is 1,840 square feet, and the lot size is 0.9 acres. Take the narrated video tour on the listing's website, then call listing agent Mark Spencer for a private showing!  His number is 303-842-4480.

 

Just Listed: Lakewood Condo with Mountain Views

[Published July 3, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

 

441 Wright Street #226, Lakewood

$131,900

www.LakewoodCondo.info

If mountain living is not for you, and you’d rather look at them from your suburban balcony, perhaps you’d like the 971-sq.-ft. Lakewood condo pictured here.  It has 2 bedrooms and one bathroom. Built in 1982, the 18-unit building is part of the Telluride Condos, which feature such amenities as a community pool and clubhouse. You’ll like this community’s proximity to Red Rocks Community College and its light rail station, and to the restaurants on Union Blvd.  It is also close to the new St. Anthony’s Hospital campus.  Visit the listing's website, then call listing agent Mark Spencer for a private showing!  His number is 303-842-4480.

Just Listed: Another Excellent Home in the Sixth Avenue West Subdivision

[Published June 26, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

 

517 Holman Way, Golden

$399,000

www.6thAveWestHome.info

Step into this beautifully remodeled house and you will feel right at home. This 4-bedroom, 3-bath home features oak hardwood floors, maple cabinets, stainless steel appliances and travertine natural stone throughout.  Appliances, roof, heating, cooling and electrical have all been updated, so all you will have to do is move in!  A garden, featuring 24 types of vegetables, has been planted in the back, joining the peach, plum and apple trees.  Located in the desirable Sixth Avenue West neighborhood, this allergy-free home is just steps away from the pool, park and Kyffin Elementary. The light rail station is also within easy walking distance! Take the narrated video tour at the above website, then call your agent or listing agent Kristi Brunel, 303-525-2520.

 

Visit Our Booth at This Saturday’s Golden Farmers Market

[Published June 26, 2014, in the Jeffco editions of the Denver Post's YourHub section]

One of summer’s finest pleasures for me is the one week when we get to have a booth at the Farmer’s Market in downtown Golden.  This Saturday, June 28th, is our date for this year’s booth.

We aren’t selling anything.  Instead, I’ll be there with my Yellow-Naped Amazon parrot, Flower, so named because she smells like a flower.  She is very friendly and likes to be held by and photographed with kids of all ages. She has her own business cards, which she likes to autograph with her beak.

Some of my broker associates will be there to talk real estate, and I enjoy meeting readers of this column.  Come say hello!

This Year's Surge in Home Prices Will Impact Next 2 Years' Property Taxes

[Published June 26, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

June 30th of every even numbered year is a key date for county assessors, because the value of homes on that date determines the taxable valuation of all homes for the following two tax years.

The taxes for this year are actually based on what your home would have sold for on June 30, 2012, determined from sales during the 24 months prior to that date.  Our taxes didn’t increase much or at all for the past two years because homes had mostly lost value during the 24 months leading up to that date.

This year, however, is a different matter.  The increase in home prices has been dramatic this year throughout Jefferson County, and the result will inevitably be much higher taxes on your home for the next two years — a real windfall for taxing jurisdictions without any increase in their mill levies.

That’s because no restriction is placed on how much your taxes can increase based on the value of your home. The mill levy — which is subject to voter approval — can stay exactly the same and your taxes can rise dramatically.

The valuation software employed by the county assessors looks at sales over the prior 24 months and “ages” those sales to come up with a valuation as of June 30th of this year. 

For example, let’s say that a comparable home to yours sold a year ago for $200,000.  The computer would calculate the increase in valuation for all homes during the last 12 months and change that comparable valuation, say, to $210,000 or even more when calculating what your home might have sold for on June 30, 2014.

We are blessed that our property taxes for residential properties are so low in Colorado.  People who relocate to our state from, say, Texas, are surprised and delighted at how low our property taxes are here.  In Texas, there is no income tax and people think that’s terrific, but governments cost money, and what Texans save on income tax has to be made up for in other ways.

A common misperception about property taxes is that incorporated cities have higher property taxes than unincorporated areas, but the opposite is the case.  The City of Golden, for example, has a mill levy of only 12.34 mills. That covers police, fire, parks & recreation, and more.  Just east of the city limits, homes in unincorporated Jeffco pay 13.63 mills for the West Metro Fire Protection District alone, another 3.2 mills for police protection, and another 10.9 mills for parks, water and sanitation.  That’s a huge difference.

Real Estate Commission Takes a Stand on “Coming Soon” Listings

[Published June 19, 2014, in the Jeffco editions of the Denver Post's YourHub section. An abbreviated version also appeared in five Jefferson County weekly newspapers.]

I’ve written before about the increasingly common practice in this seller’s market of listing agents promoting their listings well before they are put on the MLS. (See my April 24th column, which is archived at www.JimSmithColumns.com.)  This month the Colorado Real Estate Commission (CREC) took on this issue from a consumer’s perspective (which is their duty) and issued a position statement (CP-44) that addresses the matter well — and quite concisely.  The document recognizes that there can be valid reasons for promoting a listing as “coming soon,” but if the listing agent’s motive is to earn more money by finding an unrepresented buyer and thereby not sharing his commission with another licensee, then that violates license law by not serving the client well.

The position statement cites the requirement of licensees, when acting as agents, to “exercise reasonable skill and care for the seller” and, further, “pro-mote the interests of the seller or landlord with the utmost good faith, loyalty, and fidelity.” A licensee serving the client as a transaction broker instead of as an agent still has the obligation to “exercise reasonable skill and care,” and CP-44 states that failure to inform the seller of the “material risks or benefits of a transaction which are actually known by the broker” would violate that requirement to exercise reasonable skill and care.

The position statement states that “a broker who places the importance of his commission above his duties, responsibilities or obligations to the consumer who has engaged him is practicing business in a manner that endangers the interest of the public.”

The dilemma facing the CREC, the MLS, and Realtor associations as enforcement bodies has been how to determine whether the agent has informed his client of the “material risks” of not maximizing the exposure of the listing by putting it on the MLS — that is, the risk of not getting the highest price for his/her home.

In my April 24th column I pointed out that only the CREC can create mandatory forms, but while the commission did not create a form to deal with this issue, it did conclude by saying that “The manner in which the broker and seller… agree to market the property must be memorialized in writing in the listing contract prior to any marketing being performed.”

This is a reasonable and, in one sense, better approach than creating yet another stock paragraph in the listing agreement which could easily be overlooked by the client.  I would have liked an additional sentence in CP-44 along the following lines: “If said statement within the listing agreement contains a limitation of exposure to the full market, it should also contain a sentence that the seller acknowledges that such withholding of the listing from the full market could result in obtaining a lower purchase price for his/her property.”

Nonetheless, we do have a good start at making agents and transaction brokers comply with the law requiring them to put the client’s interest above their own.

The National Association of Realtors (NAR) found it newsworthy that Colorado’s real estate commission had taken this position, making it the lead item in a recent email to members and asserting that no other state’s real estate commission had taken such a position. I suspect other states will follow Colorado’s lead.

 You can read the full text of CP-44 at http://files.jimsmithrealtor.com/Columns/CP-44.pdf.

 

Two New Listings from Golden Real Estate

 

[Published June 19, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

 

The number of active listings in the City of Golden just increased by 20% with these two new listings from Golden Real Estate. The above home at 626 Texas Street backs to the Norman D Memorial Park in north Golden.  This home is currently a rental (at $1,200 per month), under a lease which expires on April 30, 2015, so it will probably be purchased by an investor, although a buyer who can wait until then to make it their primary residence might also want to consider it.  The listing price is $370,000. It is a bi-level home with four bedrooms, two baths, and 1,852 sq. ft. of living space. Although there are privacy fences between it and the neighboring houses, a chain link fence with gate is all that separates it from the park behind it, with its great playground equipment and gazebo.  You can take a narrated video tour of this home at www.NorthGoldenHome.com.

 

    Also just listed (by associate Suzi Nicholson) is unit #310 at 1350 Golden Circle in the Golden Ridge complex, pictured above. A big selling point for this 800-sq.-ft., 2-bedroom, 1.5-bath condo built in 1973 is that it’s within walking distance of the new light rail terminal across the newly built pedestrian bridge. You’ll enjoy the view of the foothills and downtown Golden from the west-facing balcony. It’s listed at $121,900. Take a narrated video tour at www.GoldenRidgeCondo.info. (Note: Act quickly! Multiple offers received before publication!)

Realtor Association Releases Latest Survey of Its Members

[Published June 12, 2014, in the Jeffco editions of the Denver Post's YourHub section]

The National Association of Realtors surveys its members each year. Here are the latest findings.

     Our median income was $47,700 in 2013, up from $34,900 in 2011.

     Only 3% of Realtors are under 30; 24% are 65 or older.

     Nine percent of Realtors have one year or less experience, up from 5%.

     53% of all brokers are women; 62% of sales agents are women.

 

Read the full press release from NAR at:

 

http://www.realtor.org/news-releases/2014/05/nar-member-survey-shows-rise-in-realtor-income-and-sales-volume?om_rid=AABdcp&om_mid=_BTh5HKB86UR5UX&om_ntype=NARWeekly

 

 

 

Just Listed (but not ready to show): Tri-Level with Basement Near Kyffin Elementary & Light Rail

[Published June 12, 2014, in the Jeffco editions of the Denver Post's YourHub section and in five Jefferson County weekly newspapers]

 

481 Ellis Way, Golden

$395,000

Located on a 1/4-acre lot in Sixth Avenue West, this 1972 home is not only a short walk from the area’s most coveted elementary school, it is 1/2-block from one of the nicest neighborhood parks (below).

That park is unlike any other I know, because it has no streets bordering it. There are three cul-de-sacs which touch it, and another walkway between two homes, but the park is surrounded by homes, so quite literally, no one can drive past this park or even know it exists unless you drive into one of those cul-de-sacs. It recently had all new playground equipment installed, too. The home is also a short walk away is the Red Rocks Community College stop on the light rail line.

 

There’s lots to love about this home. For starters, it has an oversized 2-car garage. In the picture you can see that there is a large area to the left of the garage door. That has been walled off into a separate workshop.  The driveway is extra wide, as you can see, and you could park an RV there or through the double-wide gate next to the house.

 

Because the home is on a curve in the road, the lot is pie-shaped, making the backyard extra large. At www.6thAveWestHome.com you will soon be able to take a narrated video tour. Showings are expected to begin next week, not now.

 

The Final Push Is On to Get Jeffco5 Measure on November Ballot

[Published June 12, 2014, in the Jeffco editions of the Denver Post's YourHub section. An abbreviated version also appeared in five Jefferson County weekly newspapers.]

    

I have written before about an important petition drive that is underway to put a measure on the November ballot increasing the size of the Jefferson County Board of Commissioners from three to five.

Let me give you a sense of why you should care about this structural change and why you should sign the petition to let the voters decide.

 

None of the three County Commissioners needs to concern him or herself with your local issues, because you are one of 545,000 constituents.  Yes, each commissioner theoretically represents one-third of the county, but the entire county votes for all three commissioners.  That is the same way our School Board members are elected.  They have five members, each representing one-fifth of the county, but all five are elected “at large” by the entire county.  That is what made it possible for a block of three ideologically identical members to be elected at once, because they had the same constituency.

 

Imagine if our seven-member Colorado congressional delegation was elected statewide instead of by the one-seventh of the state they represent.  How much do you think your congressman would need to care about your issues?  That’s the situation we have with our Board of County Commissioners (BCC).

 

But it’s worse than that. Since there are only three commissioners, two of them constitute a quorum, and under Colorado’s “open meeting law,” a quorum of any elected body may not meet or discuss any issue with each other except in a meeting open to the public and announced in advance!  Only by enlarging the BCC to five members can we make it legal for them to talk with each other!

 

Under our state constitution, any county that attains a population of 75,000 or more may increase the size of its board of county commissioners from three to five.  Jefferson County is the only large county in the state which has not taken that step, which can only be done by a vote of the electorate.

 

The Jeffco5 Grassroots committee, of which I’m a member, has been circulating a petition since January to get a measure on the ballot to (1) increase the BCC from three to five members and (2) elect them by district instead of at large.

 

That petition drive ends on June 30th, so it is crucial that 18,000 eligible voters have signed that petition by the end of this month.

 

If you have not yet signed this petition, which merely puts the question on the ballot so that voters can decide, then come to any of the following Jeffco Public Library branches this Saturday and do so.  Those branches are: Belmar, Columbine, Evergreen, Golden, Lakewood and Standley Lake.  Our volunteers will be at tables in front of each of those branches to witness your signature. Tell your friends and bring them with you. This is important!

 

You can also come by our office on South Golden Road and sign the petition.