Boulder CO Real Estate – What lies beneath?
The Boulder CO real estate market has been experiencing what can only be described as depressingly low inventory, for over 18 months now. As a seller this has been good news. You don’t have much competition and with all those hungry buyers out there, the competition for your Boulder CO real estate can be fierce if you play your cards right. By that I mean you still have to price it appropriately and even in a fast moving sellers market, you might want to consider the condition of the property!
In a sellers market a couple of things begin to happen:
1. Sellers assume that they can do a “for sale by owner” or FSBO to sell their Boulder CO real estate.
They hardly need a listing agent to put a sign in the yard when they receive letters through the mail on a monthly basis, asking them if they’d like to sell, do they? Why pay an agent to find a Buyer when you can do it yourself, right? Ha! If only that were the end of the story.
Sellers, finding a buyer IS the easy part in this market. Your Listing Agent is not getting paid the 3% to bring a buyer to an open house, they are earning their money when they prepare you to sell… Pricing and staging and then the real fun begins once the buyer(s) decide to deliver you an offer.
If I only had a dollar for every seller who thought they could price according to the Zillow “zestimate” or the county tax assessors valuation on! Seriously? No, no, no! Honestly you are better off to just guess and go low in this market. At least then the buyers would fight over it and bid it up! What you need is a qualified, experienced local expert. Someone who knows what buyers are looking for, how to make price adjustments according to features, location etc as compared to the competition and recently sold homes. Of course that agent must also have access to the latest market data…. So no, your cousin in Montrose with a Colorado real estate license is not your best bet. Unlike an appraisal, where the appraiser uses the “rear view mirror” approach to valuation by using only sold comparables, your local Realtor can use current market data and trends to predict what the house should sell it now or in a month (not 3 months ago).
Ok… So you got an offer. The FSBO might look at the purchase price and go “Yee-ha!” But let’s face it, you probably have no idea what you are looking at, agreeing to or risking, by signing that offer to buy. Yep, purchase price is certainly important, but it’s not even close to the whole story and could be the red herring that distracts you from the other terms and conditions that you are agreeing to. Your agent earns their commission by saving you money, reducing your risk and qualifying the buyer. What is the risk of this buyer terminating the deal way down the track? Can you afford to take that risk, stigmatize your home a little bit by having a record of a failed contract (reason for termination unknown to Joe Public = cause for concern for Joe Public) and lose another month in this good selling season? Don’t kid yourself – the answer is “probably not”.
The path from offer to closing is minefield. Your Realtor has the map and you, the inexperienced seller, probably do not. When is the best time to acquire a map? Before you set out for the hike in the woods, not when you are already lost!
Save face, save time, save money. Hire a Realtor. A good one. Moving is stressful enough and if you aren’t concerned about the risks of doing it alone, it’s because you don’t know what you don’t know. There, I said it! Sorry if I have offended anyone. 🙂
2. Boulder CO pocket listings
What the heck are pocket listings? They are listings taken by an agent and not put in the MLS or advertised the traditional ways, as soon as listed. The agent puts it on their website, maybe Trulia and Zillow… but not on the MLS where other agents are looking for new listings for their existing buyers. Why? Because the listing agent is hoping to attract the buyer all by themselves and work both sides of the deal, for more total commission in their pocket.
In some ways I totally understand this. The house is not quite ready for showings yet or the seller isn’t, but you want to create a little buzz, so a “Coming Soon” sign in the front yard and on you website will accomplish this. You are aiming to catch a buyer before they put an offer on another piece of Boulder CO real estate and get them to hold off until your listing is ready. Smart. And in the best interests of the seller, which is good.
However, then there is the scenario where the agent is holding off on letting other agents show the Boulder CO real estate for no other reason that to be greedy! Not in the best interests of the seller. The seller wants to SELL and the quickest way to do that is by opening up showings to all the agents who have qualified buyers. Its also the best way to generate multiple offers and get the seller a higher sales price.
The only time I see it in the sellers best interest to let their listing agent hog the showings, is if the listing agent has a deal with the seller to reduce the total commission in the event of that agent bringing a buyer. In this case, the seller should be aware also that the savings in commission may or may not be greater than the gain in purchase price in a multiple offer scenario. Yeah, it’s a bit complex. Call or email me for a better explanation of variable commission and the pro’s and con’s associated. Full disclosure and transparency is the way I work with sellers. Lay everything on the table…. Discuss the options and let the seller make an informed choice that is right for them.
3. Seasonality of the Boulder CO real estate market is less obvious
Typically we see sales numbers rise in the spring, peak in summer, drop in the fall and really go quiet from November through January. (A really picture perfect Bell Curve) It makes sense. As the days grow lighter and longer, more buyers are looking at Boulder CO real estate after work. They spend sunny weekends popping into open houses and have plans to move during the summer vacation period so their kids can move and settle in before heading back to school.
In a hot sellers market with low inventory we see more buyers left over at the end of the peak selling season that have not been able to find the house they are looking for – Or they found it but were too slow, and/or less well qualified than other buyers. Come summers end, they are still looking, still hoping to buy. And they will continue to watch for new listings and go see properties as they come up. They will buy in winter! (A more squashed looking Bell Curve)
Whereas a few years ago a seller might have been doomed to wait 2-4 months if they listed their home for sale in November, in the last 2 years my listings have bolted right off the shelf in the middle of winter – showing similar behavior to my summer listings. Buyers were still lurking and they were not content to wait til next spring! And why should they? Selling/buying in winter has its quirks but is completely doable and maybe even preferable for the buyer who is sick of the frenzy.