Buyers' Slice Realty

Good article in today’s Boulder Daily Camera about how the tight housing market is causing problems with appraisals coming in, and what options buyers than have.

I’ve heard the term “pocket listing” come up a lot lately.  In fact, one home buyer I have a closing with this week only went to me after bailing on their REALTOR® because none of the pocket listings they were expecting ever materialized.    And actually, the couple I’m closing with on the week following was hesitant to sign on with me at first out of a concern that they would miss pocket listings.

Pocket listings are essentially opportunities that a broker might keep in their pocket, so to speak, before they are announced to the whole universe on the MLS or online.    So in theory, there may be an opportunity for someone to move quickly before other buyers enter the fray.   Sounds great, right!?   I’ll take some of those for the good deals!   In fact, I’ve worked with commercial brokers for myself…waiting for that coveted pocket listing that was going to give me the inside edge.   I’m still waiting.

I’m sure there are pocket listings that end up working well for both the buyer and the seller, but my experience is that all the hype by some brokers about them being able to provide you pocket listings isn’t worth the oxygen they spend talking to you about it.   At the end of the day, selling brokers need to get the best deal they can for their sellers…which usually necessitates getting more than one buyer interested in the property…whether by spreading the word online or by word of mouth (which you might call a pocket listing.)

As you can see here, the average days on market for a detached single family home in Boulder was 56 in the month of March…down substantially versus 119 days in January!    And down from 86 in March of last year.     And this is average.    Seems like everyone has heard stories lately of how hard it is to get a nice home in the average price range…competition is fierce, and those desirable homes are going in a matter of days.

   As the attached graph shows inventory of homes in Boulder County is historically low right now.   And the same applies to the whole Denver market.   The good news is that we are in the season where more and more houses in the real estate market every day!    But I have buyers looking for property in Broomfield, Golden, Highlands Ranch, Erie, Boulder, and in between….and they all have been understandably frustrated lately.

Anecdotally, I can tell you it’s going to be a busy spring.   The data on low inventory is starting to be felt by buyers…I’m getting more calls with people saying “listings are disappearing, I want to be ready to move fast.”    Others are saying they are worried interest rates are starting to creep up, and that they don’t want to miss out.   On top of that I just had a lender tell me he can’t remember the last time he had a deal that was the result of only a single offer.    Not a particularly fun time to be in the market anymore if you are a buyer.

I recently joined AgentsForLess.com ….the latest and greatest in a number of websites designed to hook up smart home buyers with real estate agents that are willing to reduce or negotiate their fees (or real estate commissions.)    Looks like a great site, check it out!

Because my commission refund cannot exceed the closing costs, I figured I better address this topic.   (Even though closing costs typically run over 2% of the price of the home and my rebate is typically no more than 1.4% of the purchase price.)

Closing costs are generally considered to fall into three groups:   Loan fees, Title/Settlement Fees, and Prepaids.

Loan fees are self explanatory, but would include any origination fee you are paying on the loan.   If you didn’t pay for your appraisal before closing, you would consider the appraisal fee to fall into this bucket.

Title and Settlement fees are largely made up of what the title company is charging you to issue the title insurance FOR YOUR LOAN.   You see there are two title insurance policies generally…one for you, and one for the lender.    The Seller usually pays for the “owners’ policy” (for you), but you will have to pay for the policy that insures your lender.    Settlement fees are usually pretty meager, but most real estate contracts have the buyer paying something to the closing company for all their administration of the closing documents.

Lastly, prepaids include things that are due on the day of closing…which might include insurance or HOA dues, and always includes a tax proration…and an interest proration if you have a loan.

Lenders are the people to talk to in order to get the specifics and a better idea of how things may play out in your particular case…but this is your quick answer on how much closing costs are in Colorado.

…heard last night from Brian Williams that Denver is the hottest real estate market in the country!    This is good and bad news…certainly making it hard for buyers to find good product because it tends to disappear fast!

Buyers Slice Realty has a new website coming soon!     Colorado home buyers will be able to search on our state of the art listing search page, and we have stream-lined some of our processes to help you secure your commission rebate on your next real estate purchase.

Speaking of the word commission rebate…we have long known that the phrase buyer rebate has been used too.  More recently, we have mentioned that the phrase commission refund is being used.    And just yesterday, for the first time, I saw the phrase commission concession used by a home builder on a deal I’m doing in Broomfield.    Whatever you call it, it’s huge savings to you.     But from what I can tell from the calls I get, most people are still searching for discount realtor or discount real estate commission…..whatever works!

Easy enough, right?    Not always.    Some buyers either prefer to see homes with listing agents, or they need to because their broker may not be available at that required time.   But when buyers call listing agents, many seller’s agents balk at showing the home when they learn the buyer is already represented by another broker.   There are a number of reasons for this—and we’ll save that for another post—-but none of them are based on any legal restrictions.      Rule E-33 (of the Colorado Real Estate Commission) plainly states that listing agent may assist with such “ministerial tasks” under the premise that showing a home is (obviously) in the interest of getting a deal done for the seller.