Saturday, July 31, 2010


The overall absorption rate, which stood at 5.00 months when the tax credits expired April 30, now stands at 9.17 months. In simplest terms, the market is suffering from a post tax credit hangover.

Not entirely unexpected, but not enjoyable, either. For well over a year, tax credit incentives pullled first-time buyers off the sidelines and into the game.  The challenge that sellers face now is that without first-time buyers, who historically make up about 40% of the market, there simply aren't enough traditional buyers left to soak up the existing inventory.

We’ve seen the biggest drop in activity at the lower price points, which is not surprising, given that that’s where the tax credit “juice” was aimed. Market time for homes priced below $250,000 has risen from 3.36 months to 6.42 months, and for homes in the $250,000 - $400,000 range, it has increased from 5.20 months to 10.12 months.

While most of us believed there had to be an adjustment period in the post tax credit era, sellers need to know what's happening today, because the market that whisked homes away at a brisk pace in March and April is gone, even with rates now sinking into the mid 4’s.

So what is selling right now? Based on what I'm seeing, it's TURKEYS and TURNKEYS.

Turkeys are those “investor specials”, with moldy basements and broken windows, shag carpet and missing sinks, foot-high weeds and leaky roofs.

Turnkeys are those homes fixed up, or homes that have been updated and upgraded… with new electric panels, new roofs, new carpet, new granite, new paint, new appliances… there is still a market for quality, and in difficult economic times, buyers are drawn to value or quality, or both.

Turkeys make up about 10% of the market, and right now, they’re still selling.

Turnkeys make up about 10% of the market, and they’re still selling.

For the 80% in the middle, it’s not so easy.  In my opinion, sellers now need to determine if their home plays to value or plays to quality.  Whatever your home's strength is, play to it.  If it plays to neither, start cutting the price, or pull it off the market altogether and wait for the hangover to pass.

For the first time in three years, overall inventory is rising again.  Like it or not, you are in competition.  Serious, serious competition.  Which means only serious sellers will have success during this transitional period.

Monday, July 26, 2010


Let me start this post with a disclaimer - in the Colorado Real Estate Commission buyer agency agreement (sec 25), the contract plainly states that it is the buyer's responsibility to figure out who your neighbors are and whether or not you are comfortable with that.  When it comes to neighborhoods, buyers (and not agents) make the call.

I will always recommend checking with the Sherrif, local police or whatever other law enforcement agencies are important to you to get a feel for a neighborhood before you purchase a home.

Having said that, there's a good online resource I use to track what's happening in my area called "Crime Reports" ( 

Simply speaking, Crime Reports lets me type in a physical address and then asks me what kinds of crime I'd like to be made aware of.  Each week, I get an email report showing law enforcement activity that has occured in my neighborhood.  Not always pleasant, but very, very valuable information.

Keep in mind that Crime Reports data is pulled from public records and may not always be complete or 100% accurate.  But it's a good starting point for knowing what's happening in different neighborhoods and areas.

Thursday, July 22, 2010


Wanted to take a few minutes to promote a beautiful new listing at 7065 Ingalls Court in Arvada.  This is a meticulously maintained three bedroom ranch with a long, long list of updates and improvements made over the past few years. 

* new kitchen countertops and cabinets (2008)
* new roof (2007)
* new vinyl windows upstairs and in the basement (2005)
* 200-amp electrical service upgrade (2004)
* full sewer line replacement with outside cleanouts (2004) *
*permitted dining room addition (2000) that adds a 160 square foot dining space to the kitchen. 

Just down the street from Swanson Elementary and priced to sell now at $200,000.  Check it out!

Sunday, July 18, 2010


Late yesterday afternoon, I popped into Costco to scratch an itch that has been bothering me for 10 years. You see, while I am not a big television person, I’ve had the same 100 pound Panasonic box-monster color television set since the early 1990s. Uncool, I know. And yes, I’ve heard it from my family.

So we decided it was finally time to contemporize.

Being a deliberate person, I wanted to start by doing my research. Maybe look at a couple of different models, jot down some notes, then do hours of research on the computer. At least that was my plan, until I met Ron.

Ron is a man in his mid 60s who sells televisions at Costco. Nice guy, personable. Ron approached me as I was staring at the different models, which all looked strikingly similar to my untrained eye, save for price.

“What are you looking for?” Ron said.

“Just checking things out, taking some notes,” I said.

And from there, over the next 10 minutes, Ron proceeded to share enough information with me to make me an expert on flat screens. He explained the difference between plasma and LCD (plasma does better in dark settings, like a basement, while an LCD views better in a bright space), why higher HZ settings are better for sports or action (lower HZ settings blur during camera movement), and how many video games and Blu-ray players require 1080 pixels for the best image while most television channels are fine with 720 pixels.

In the end, we found a nice “mid-range” flat screen that is bringing joy to my household already.

Thanks to Ron, I didn’t overbuy for what I needed. I had confidence about what I was doing. And he let me make the decisions. Frankly, it was about the best sales experience I’ve had this year.

Which brings me back to real estate... because our clients certainly deserve to have at least as much clarity about what they’re doing in buying a home as I did in buying a flat screen. Ron took me from “apprentice” to “expert” in a short period of time, and because of it, I would buy from him again in a second.

I have always taken the “Ron approach” to selling real estate. I just didn’t know what it was called. My hope is that my clients feel the same way at the end of the process as I felt when I pushed that big cart out of Costco yesterday afternoon.

Wednesday, July 14, 2010


With all of the older homes in the Denver metro area that have turned over in the past few years, one recurring point of caution for buyers is checking the condition of the sewer line.  For any older home, I will almost always recommend that this service be performed during the inspection period to ensure there are no costly breaks or "bellies" (sags) in the line that could lead to a sewage backup.

Sewer scopes are not glamorous events.  And not all companies are reputable.  Here are a few tips for protecting yourself from sewer scams.

* Check references and obtain price quotes from several different companies before contracting with a plumber or drain cleaning company

* Find out what warranties, if any, are offered with the service

* If your line needs to be cleaned, make sure the plumber or drain cleaning service uses a three or four inch cutting blade, as most residential sewer lines are four inches in diameter.  A small blade may be easier for the technician to use, but it may not effectively cut the roots and the line will clog again in a shorter period of time.

* If your sewer line is scoped (inspected with a video camera), make sure you get a copy of the DVD showing the camera's journey through the line, and that the DVD you receive is actually for your sewer line and not someone else's.

Finally, realize that there is no such thing as a "perfect" sewer line, and that different inspectors may have slightly different opinions about the severity of a situation.  By all means, if you are concerned, get a second opinion or make sure that the inspector has adaquately explained his findings. 

Sewer line repairs and replacements are costly... and I am stunned at how often buyers (and sellers) of older homes don't even know that they should be inspected and cleaned.

One last thing... some local municipalities (like Arvada) will actually volunteer wastewater division staff members to review your sewer line DVD with you to help you assess the condition of your pipe.  Check with your city or municipality to see if they provide any similar service.

Sewer line repair scams are costly.  The best protection against scams is a solid education, so make sure you understand the situation precisely before making any major decisions. 

Saturday, July 10, 2010


In the After Tax Credit world of real estate, I find myself being asked the same question again and again... how's the market?

And, much to the dismay of my audience, my answer remains... it depends.

A good home in a great location at the right price will sell in any market, including this one.

A good home in a great location that's not priced right will get activity, but it won't sell.

And an "okay" home in an "okay" location that isn't priced aggressively is a dead listing, at least right now.

Buyers tend to be ahead of the market.  Sellers are living behind it.

By that I mean, most buyers today are operating from a very cautious perspective.  They have seen others get burned in the market.  They are attuned to the negative headlines in the news.  And bottom line, they want a deal. 

They assume things will get worse and they want pricing based on calamity that isn't here yet.

Sellers, on the other hand, are married to the past.  I have probably talked to a half-dozen sellers this year who have referenced appraisals that were done in 2007.  An appraisal done in 2007 isn't worth the paper it was printed on today.

There is a very large perception gap in the market, and it's a difficult one to bridge. 

Therefore, for many buyers and sellers, we are now in standoff mode.  People make decisions based on how they feel.  Buyers feel cautious.  Sellers feel angry.  Bad match, a lot of the time. 

Agents need to bridge the perception gap.  If you have a listing, you need to explain why it's priced where it is.  You need to provide current comps.  You need to itemize the features and sell the benefits.  Do not send me an appraisal from 2007.

If you are working with a buyer, you must provide a reality check.  Interest rates are in the 4's (are you kidding me?).  Values at the lower price points have adjusted and corrected.  Values in mid-market are steady.  Values at the high end are soft and getting softer.  

Educate, educate, educate.

Deals are getting done in this market, even after the expiration of the tax credits.  But it's reasonable sellers and reasonable buyers who are meeting at the closing table.  For everyone else, it's a standoff.

Monday, July 5, 2010


I have been privileged to know a lot of smart people in my life, and I have been blessed with the collective wisdom of a lot of very successful real estate professionals during my 16 years as a broker.

One of the most important lessons I learned early on in my real estate career was the difference between "winning" and "being right".

In simple terms, winning is solving a problem.  Being right is being right.

What I have found is that solving problems pays extremely well, and being right often pays little or nothing.

So what does this conversation have to do in the context of real estate transactions?  A lot, especially now, especially since deals are harder to put and hold together than they have ever been before.

Every deal is going to have some drama, somewhere along the line.  It's a given.  Whether it's inspection drama, appraisal drama, financing drama, buyer drama or seller drama, there's no such thing as a clean deal anymore.

And in every situation that calls for communication, negotiation or interpretation, we have a choice to make.  Is our choice to solve the problem (winning), or is our choice to skillfully assign blame on whoever we perceive the offending party to be (being right)?

Sadly, I have seen many transactions where people have blown up perfectly salvagable deals because ego overrides purpose.

Our purpose, as I define it here, is to protect the interests of our clients, negotiate on their behalf, and leave them in better shape than when we found them.  We should know enough about our clients to know what their interests are, and if we don't, we haven't done enough frontwork to adaquately represent them.

The truth is there are "difficult" people in the world.  Sometimes they dress up as buyers.  Sometimes they are dressed as sellers.  Sometimes they are agents.  Our job is to navigate around personalities and focus on solutions, which exist to almost every problem. 

Sometimes those solutions are painful.  Sometimes they just take different thinking.  But if you are focused on "who's right" instead of "what is the best outcome I can devise for my client", you're missing something. 

We're not paid to be right.  And our clients don't hire us to win ego wars.  We're paid to advise, consult, negotiate and close.  We're paid to defend and protect our clients.  We're paid to solve problems. 

Every day, you will find someone standing in the road, blocking traffic, in the name of "being right".  If you can skillfully learn to drive around that person, you will never be at a loss for business.