24 Apr Jon Cartu States Real Estate 2020: Questions Denver Buyers and Sellers…
Well, Denver: It’s been quite a journey.
Over the past decade, we’ve experienced what just might be the metro area’s most volatile period of growth ever and a record-setting real estate market. The ride hasn’t been smooth, but this past winter it felt like we were due to catch our breath and figure out what the heck just happened. “We’ve never experienced a run-up like that,” says Kerron Stokes with Re/Max Leaders. “We’ve had a decade with no punctuation.”
More from our May 2020 Issue
But then March came—and it brought with it so many question marks. COVID-19 dramatically changed Coloradans’ daily lives. We altered the way we do business. We filled our cabinets with toilet paper and booze. And we stayed home.
As such, your home is something you’ve probably spent a lot of time thinking about recently. Maybe you’re dreaming about more space. Perhaps you’re looking to downsize. Or it’s possible that life has shifted and home means something different to you today than it did months ago. Maybe, just maybe, you’re starting to think about buying or selling.
If you are, it’s difficult to predict what’s next. What we do know is that Denver’s real estate market was booming this past winter. Sellers were in charge, thanks to extremely low inventory, which forced buyers to compete against multiple bids at almost every price. Some buyers, however, had learned how to demand more concessions, giving them a modicum of control. Meanwhile, brokers obsessed over pricing so that a house wouldn’t sit on the market for too long.
As the market returns, some of those factors will remain relevant. Others won’t. So, we talked to real estate experts to find out some of the questions you should be asking now. “We’re going to keep buying and selling,” says Re/Max’s Lisa Nguyen. “We just need to figure out how.”
So, You Want to Sell…
The real estate market was tilted in your favor earlier this year—but that doesn’t mean you can just put your house on the market when things pick up again. Buyers are tired of Denver’s boom, and they’re taking their frustrations out by being a lot pickier about putting in offers. But with a little prep, you’ll be ready.
1. COVID-19 has changed everything. What will happen if I try to sell my home?
Even in the first days of social distancing suggestions, the real estate market was humming along (albeit more slowly). After all, people still needed to buy and sell homes. Agents offered extra booties to cover shoes during open houses and wiped down door handles. Others ramped up online tours and uploaded digital photo galleries. And then came the stay-at-home orders—and the market slowed down even more.
“I wish I had a crystal ball,” says Regina Jackson, the owner of Action Jackson Realty. “I think we have to wait and see how this is all going to shake out.” And while we wait, there was one thing many of the experts we talked to agreed on: You can expect more virtual solutions in the real estate market as it adapts. In other words, make sure your home is camera-ready.
Mark Your Calendars
Just in case, here are some key dates to keep track of for the 2020 election cycle.
June 8, 2020: Primary election ballots in the mail
June 30, 2020: Primary election
October 9, 2020: General election ballots in the mail
November 3, 2020: General election
2. If COVID-19 doesn’t derail my plans to sell my home this year, could the 2020 election?
Conventional wisdom tells us the real estate market slows during election years. And—before things get political—we should point out that the slowdown isn’t dependent upon which party is in power or who’s on the ticket. Buyers and sellers just hesitate when ballots are imminent.
Fortunately, Denver’s market has been relentless enough that the election may not be a major factor. In general, the Mile High City’s economy is more diverse (gone are the ’80s, when our fortunes were heavily tied to the unpredictable energy market); people continue to pour into the metro area and need homes; and major events that could have slowed sales in Denver, including trade war news and the government shutdown, didn’t halt metro-area sales in 2018 or 2019. Of course, COVID-19’s influence could be a different story. In short, the upcoming election may have less of an impact on home sales because Denver’s reality is more complex than it once was. “Regardless of what happens with the elections,” says Re/Max’s Lisa Nguyen, “I just don’t see Colorado’s market affected as directly [by that].”
3. My neighbor’s house sold for an outrageously high amount a couple of years ago. Does that mean I can price my abode above that?
If there’s one thing brokers can agree upon, it’s that pricing a house is an art form. But, you might ask, hasn’t that always been the case? Isn’t that what we pay agents to do? Those are fair questions, but in the past 12 months, pricing a house in the metro area has become increasingly tricky. Here’s why: Appraisers gather prices from nearby sales (“comps,” in real estate parlance) to estimate a house’s value. But they typically use data less than six months old, which means the maximum sale prices we saw in 2018 are no longer relevant (and the impact of stay-at-home orders this spring could impact prices later this year). Put another way, the mega price tag on your neighbor’s house from that time period isn’t as applicable as you probably want it to be. “There are a lot of people who didn’t catch up to the fact that the market was different last year, and they were pricing incorrectly,” says Jill Schafer, a Realtor with Kentwood Real Estate and chair of the Denver Metro Association of Realtors’ market trends committee. “They were trying to top the last sale when you needed to be slightly under it.” Now, brokers will need to be even more savvy to figure out pricing as the market recovers.
4. The buyers are going to do their own inspection, so why do I need to get a pre-inspection?
Surprises, while lovely when you’re celebrating a birthday, aren’t as much fun when you’re trying to sell your biggest financial asset. Why not learn ahead of time that you really should trim that tree, replace the roof, fix the sewer line, install a new water heater, or repair the trip hazard on the sidewalk? You’re probably not going to do all of that, but figuring out what you might want to patch up beforehand can make the negotiating process smoother—and buyers will appreciate a move-in-ready, up-to-date listing.
“When I have high-dollar properties, I will say to the sellers, ‘You need to get an inspector in here and fix all the stuff that needs to get fixed now,’ ” says Action Jackson Realty’s Regina Jackson, “so when the house is ready to sell we don’t have all these hiccups around inspection.” Although a pre-inspection can cost between $300 and $400 for an average-size house, the outlay is often worth it to avoid disruptions in the negotiation process, which could include anything from a buyer requesting a price reduction to cover a drywall repair to a deal dissolving completely over a questionable roof. And putting a house back on the market isn’t ideal. “The sellers lose all their leverage after that,” says Kentwood Real Estate’s Britt Armstrong.
5. My house looks amazing—at least, that’s what my 50 Instagram followers say. Do I really need to hire a stager?
We know you love displaying your collection of pint glasses from Colorado craft breweries, keeping Grandma’s hand-sewn quilt thrown over the sofa, and positioning the coffee table the perfect distance away from the couch to use it as a footrest. The problem is, buyers might not. By the time they find your oh-so-cozy abode (potentially solely via virtual tour due to COVID-19), they’ve seen plenty of others and might be feeling a little judgy. Your house could feel dark. Your guestroom paint might not be this year’s trending Pantone hue. The pricey carpet you just installed might look “cheap” to them. “They’re looking for reasons to check something off their list,” says Sarah Lewis, who owns Sarah Noel Interiors, a Denver-based staging and design Jonathan Cartu and (services for occupied homes start at $900). “You want to gain a competitive edge to make a home [feel] as move-in ready as possible.” And, with the increase in virtual tours, you need to stand out on screen. “The visual impact is more important than ever,” Lewis says, “because people are shopping from their couches now.”
Buyers often have a different take on your space, so we asked Denver designer Sarah Lewis to help you see things from their perspectives.
What you see: A comfy couch perfectly positioned in front of the TV for Netflix binge sessions.
What a buyer sees: Stars. They just bumped their knees on the couch’s frame when they walked into the room.
The fix: Concentrate on how it feels to walk through the room. Rotate—or remove—furniture to give buyers (or a videographer filming a tour) plenty of space to move.
What you see: Ah, memories! There’s that family photo taken in front of the Flatirons. The picture of you holding your newborn baby. Aw, a picture of your very first puppy….
What a buyer sees: All the details of your life, while missing the built-in bookshelves, walk-in pantry, and charm of your beautiful bungalow.
The fix: You don’t necessarily need to hide your personal photos (focal points are good!), but remember that a lot of strangers will ogle your precious moments. Swap out and pare down to keep your private life, well, private.
What you see: A fully restored Denver…