What Is A "Pocket" Or "Off-Market Listing"?

Hi, Dave.

Great columns. I always learn a lot. Can you explain exactly what "pocket" or "off-market listings" are, how they work, and how a buyer can tap into that segment of the market?

Thanks.

Bill F., Grand Junction

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Bill F,

The under used, but often successful "pocket listing"! One of my favorites! A pocket listing can be a sellers best friend and is something that we certainly use an awful lot each year. In fact, we will sell a dozen properties each year by utilizing the “pocket listing” status. A pocket listing is a listing that is not advertised and may be withheld from the multiple listing service until such time you are ready to go public with the sale of your home. With a pocket listing your listing agent can promote it to their peers and colleagues and will typically do so through word of mouth. If you go this route, you always run the risk of word getting out, but your chances of keeping it quiet are exponentially greater. A pocket listing can be a successful way to flying under the radar and still getting your home sold in a timely fashion and getting a jump start on selling before you are ready to put the sign in the front yard. If you go this route, I would suggest you be prepared to move as the results are often times quite good. 

The pocket listing is a great way to get your property exposure on the “down low” and buyers are generally excited to see these properties as they feel like they are getting a sneak peak at it before everyone gets a chance.  It’s a great option for those who dread the showing process or don’t want the hassle of showing after showing for several weeks. The traffic flow is often sporadic at best, but using this method allows you to hunt and peck for candidates that are most often much more targeted and many times pre-screened to help increase the chances they are a fit!  Keep in mind that a pocket listing may not always be the best option.

The pocket listing process does not provide the best environment for competition and multiple offers as the selectivity of who knows or has access can limit the big rush that many times occurs when a new property hits the market. This means that getting multiple competing offers that may drive the price up above the listing price is not common but getting an offer at the list price is a likely outcome because you can leverage the early access angle. Access to these properties is often times just being in the right place at the right time!  Many buyers are often frustrated when they see a house has sold before it even hit the market and feel cheated that they did not get a chance to view it.  One way we help our buyers get access to the ‘off, but on market’ properties is networking with other agents and e-blasting (email blast) to all the agents about what kind of property we are seeking! It’s amazing how many properties turn up when we e-blast for a buyer’s need if properties on the market at that time don’t fill the bill. 

I would encourage you to hook up with a real estate agent and have them start networking and e-blasting your specific property needs and see what turns up after doing so. You have to turn over every stone and sometimes turn them over time and time again to find just the right place! It does not always happen, but it sure can be an effective way to discover special/unique properties that are ready for sale, but just not in plain sight! Looking off the beaten path is sometimes where the best trails are forged! Looking in ways and places not everyone is looking is sometimes where real gems are found. Have a wonderful Sunday and thanks for your question.

Dave Kimbrough

The Kimbrough Team

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What Are Your Thoughts On Converting A Two Car Garage Into A Living Space?

Dear Dave,

I own an older home, built in the 1980’s. I’m doing some upgrades this spring and am considering adding on to it. I recently saw a home that was a similar age and when they remodeled they turned the two car garage into a living room and opened up the adjoining wall into the house. Something like this might suit our needs perfectly. What are your thoughts on this? Is it good for potential resale or would I be better off leaving it as a small garage and not adding living space.

Thanks. I would appreciate the advice.

 John - Grand Junction, CO

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John,

This one is a tough one. If you need extra living space, it does not get any more convenient or inexpensive than to convert the garage to a new living room or couple of bedrooms. Keep in mind that the conversion does come at the expense of valuable resale space, the garage. I am one of those who believe the garage is sacred space!  Where would one put his duck decoys, bikes (motor or pedal), ATV’s, kayaks, canoes, dog kennels, gun safes, hunting gear, tool boxes, work bench, etc.? I am sure you see my point. A garage, especially here in Western Colorado, is valuable space and hard to replace. Oh, and I nearly forgot, you might even have enough room to park your car!

For resale purposes I am of the belief that the conversion will generally cost you money and not increase your value. That being said, if you convert and add two bedrooms and go from a 3-bedroom home to a 5-bedroom home, you might find someone who has a large or blended family that has a specific need for the extra bedrooms. In this specific scenario I could see the possibilities of the conversion adding value. Outside of this specific situation I think the loss of the garage outweighs in cost and function the addition of added living space.  

For resale purposes I am of the belief that that a garage conversion will generally cost you money and not increase your value.

The last thing to consider is to go ahead and make the conversion, but do so in such a way that you will be able to easily convert it back when/if you sell in the future. By doing this you will have a cost effective addition and keep the flexibility to convert it back easily. This is a common practice and is easy to remedy when the time comes to sell.

As you can see, I am a fan of garages and believe that having a garage is an important and valuable feature. I will close with this, if a conversion will fit the needs of your family perfectly, then go ahead and do it and enjoy living there with the added living space. Converting and then converting back in the future will surely be less expensive than selling and buying. If the rest of the house fits your needs, just convert and do so in a way that leaves you the flexibility to easily convert back if needed. Hope this helps! 

Dave Kimbrough

The Kimbrough Team

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Advice For Those Getting "Locked Out" And How Good Are Comparables In Naming Your List Price?

Dave,

I always look forward to your advice and try to file it away for future real estate transactions.

Today's advice for the folks that get "locked out" early in their search, neglected to advise them to find a realtor who gives them an alert the minute a home in their price range goes on the market!!

Also, how good are comparables in your neighborhood for naming your listing price?

Thanks for sharing your knowledge.

Cheers,

Janet, Grand Junction

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Janet,

Thanks for reading my column! I am blessed to have many loyal readers who enjoy it and I am very appreciative of your support and your question. 

You are right and I appreciate the reminder, because I did fail to mention one of the most important aspects of finding a good agent to help in a home search. In an active market, like our market now, making sure you have an agent that has you on, what we call a drip campaign, is vital. A “drip campaign” is imperative to any buyer who is seriously looking to be competitive and find the best properties first! When you are enrolled in a drip campaign, you will be immediately notified when a property that meets your criteria hits the market. This is how you beat other buyers to the best new properties! Now, when it comes to determining your list price, better not ignore the house around the corner.

I consider comparable sales from the same neighborhood the most important comparable properties when determining a properties list price.  Generally homes in the same neighborhood are the strongest comparable properties because they were built around the same time, many by the same builders and most likely used similar finishes and floor plans.  What price similar homes in the neighborhood are selling for are typically your most accurate predictor of what your home will sell for and the ones I look for first!  Of course you have to take upgrades or significant remodels into account when looking at each property and determining how they comparatively stack up.

Lastly, I love that you signed your question, ‘Cheers’!  Just such a friendly and positive way to sign off … I love it. Thanks again, Janet.

Dave Kimbrough

The Kimbrough Team

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With Publicly Available Price Data And Listings Online, Why Pay High Real Estate Commission Rates?

Hi Dave,

When I started the process of selling my house on the front range, I could not find any agent who would reduce his/her commission in order to compete for my listing. They all demanded the same 6%. Now if I went into three different grocery stores, and all their different items were exactly the same price, then wouldn't I be justified in believing that some improper price-fixing was going on?

Instead, I listed my house with a "flat fee broker" for $300 who put it on the MLS. I still had to offer 3% to buyers' agents, but I thought this was fair, since buyers want the help and confidence from a broker who works exclusively for them. Ironically, the eventual buyer found my house on the public MLS listing without assistance from his buyer's agent!

Bottom line is that the transaction went thru flawlessly, I got my listing price, and I saved $7,000 by not needing an expensive commissioned listing agent. Why, with all the publicly available price data and listings on the internet, do we still have to pay these very high real estate commission rates?

Best,

Al, Montrose

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Al,

Great question!

I will tackle it the best I can. First off, let me congratulate you on a successful sale on the front range and your relocation to the western slope! I am confident you will find the Montrose area not only beautiful, but also find the people very welcoming. It is a wonderful area. Let’s get right to it - not all agents charge the same commission rate. Interesting that you could not find any agents (on the front range) who would reduce their commission to a level you might have found acceptable. I know many who charge variable commission rates, even in my own office. Honestly, it’s just not very hard to find low commission rates if that is what you are looking for. I also find it interesting that you use the word “demanded” instead of “charged” or “requested”.

I don’t hear of many agents that “demand” a fee.  In our neck of the woods, we are all “just applying for a job”.  I do not think making demands while interviewing for a job is a proven path to success, but maybe that’s the way they do it over there. I will assume that most agents have a going rate of commission that they charge, and I will also assume that their rate is independently determined on their own, as is the way it is done at our office. My experience in commission variability certainly does not make a case for any type of price fixing, as you insinuate. It does not matter what product there is to be sold, there will always be less expensive options for those who rank price as their top determining factor! But price is not the be all end all for everyone…. at least not yet. 

“There are many reasons to use an agent and there are many ways that agents can help you make more money.”

There are people who value quality of service, negotiating expertise and transactional experience to help ensure smooth sailing through the process even when the process (and personalities) get difficult. There are many things that come into play that are often forgotten or overlooked when comparing agents or whether to use an agent or go it alone. I think it’s great that you are happy with your outcome, but is it possible that you could you have received an even higher price for your home and made even more money, by using an agent that provided accurate pricing and expert marketing? With proper marketing could that agent have created a competitive environment where multiple buyers potentially bid for your home, thus driving the price higher and making you even more money?  Could you have received a higher price by using your agent’s expertise in staging and getting your home dialed in to sell and therefore maximizing your home’s value? Could you have made more money by having an agent that not only helped you negotiate through the inspection process, but had access to vendors who could have saved you money with any required repairs? Could an agent have helped you sell faster, thus making you more money by reducing your carry costs by selling quicker (mortgage payments, utilities, etc.)? These are just a few of the questions that often time get ignored by those looking to make a case for not using a real estate agent to help them sell their home. As you can see, there are many reasons to use an agent and there are many ways that agents can help you make more money.

As for my experience of being a consumer (just like you), I tend to appreciate the difference in quality of services rendered and these things, many times, outweigh cost (for me) when deciding to purchase or not. It’s clear from your experience that nobody is forced to pay “very high real estate commission rates.”  Everybody has a choice to hire an agent or not. Clearly people sell their home on their own every day, but many like the confidence of knowing they are in experienced hands navigating what often time proves to be a treacherous process. I see agents make their home sellers money every single day and I know great agents offer great value.

Dave Kimbrough

The Kimbrough Team

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Can We Require Our Listing Agent To Inspect Our House After Each Showing?

Hi Dave,

This may sound like someone just complaining but it actually is more serious than that. Our home has been listed with a reputable firm for four months. Whether or not our house has sold by mid‑July, we will be relocating to Denver to start new jobs. The concern we have is that after leaving the house during a showing, we frequently come back to find a door unlocked, lights left on and occasionally our bathroom used. With us no longer in town, can we require our listing agent to inspect our house after each showing? Unfortunately, we do not have a relative or a friend nearby that we feel comfortable asking to oversee, or burdening them with our property. This issue is concerning now but was even more so when our house was being shown during winter with freezing conditions. How do you deal with these problems?

Thank you, 

Gayle and Tom, Grand Junction

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Gayle and Tom,

This is a common problem and a very real concern as it is too often for our sellers that they come home after a showing and find exactly what you describe.  The simple answer is sell your home, but I, as much as anyone I know, fully appreciate that sometimes it is easier said than done. 

First, I must point out that from time to time all showing agents make mistakes and overlook details like locking doors and turning off lights after they leave for a showing. I will admit that one time, as careful as I try to be when showing a house, we went in through the front door and out through the back door and I forgot to lock the front door and actually left the key in the front door lock!! Luckily the showing agent was extremely forgiving and showed me quite a bit of grace, but as good as my intentions were that day, I failed to show the attention to detail and respect for the seller’s home that I should have. My point is, it happens to the best of us, but will not happen to me again! Should it happen, no, but does it happen more often than it should, yes.  That being said you have hit on a couple of points that could help alleviate your concerns.

It is very reasonable to request your agent check up on the house after showings. This may be difficult for your agent to manage, depending on how busy he/she is and the frequency of showings. If you are getting 3-4 showings a week, this can be more difficult, but if it is 1-2, then becomes a much more manageable. Most agents want to make the selling experience as trouble free for their sellers as possible and thus are typically very quick to accommodate their seller’s needs, if at all possible. Do not be afraid to ask your agent for their help, that is what they are there for. 

You have options, explore them. First and foremost, ask you agent and his/her company to help you solve the problem and alleviate your concerns, as I am sure you will find them very resourceful and helpful in finding a solution you are comfortable with.

 You mentioned, you did not have any friends or family nearby that you felt comfortable asking for help, but I would consider a reassessment of your friends and family and re-think who might be able / willing to help. I understand you may not have close neighbors, but any neighbor or friend who has kids (teenagers) who would like to pick a few extra bucks each week for checking in on your house, may be just the ticket. As I recall, teenagers are eager to earn a few extra bucks, but I must admit there may be a generational gap between then and now. : ) Young people today do not seem as money motivated as I was when I was younger! You might even check around at church, as many times the youth group, etc... have folks who are looking for odd jobs and extra sources of income. As I have mentioned in this column before, you may see this as a burden to your friends or family, but believe it or not there are many people who love to help. There are also two types of house sitters, those who would live there while you are gone and watch over the property and those who you can hire to come out once or twice a week to check things over. 

You have options, explore them. First and foremost, ask you agent and his/her company to help you solve the problem and alleviate your concerns, as I am sure you will find them very resourceful and helpful in finding a solution you are comfortable with. Here’s to praying for a worry free move and your home selling soon!

Dave Kimbrough
The Kimbrough Team

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Does The Type of Retaining Wall Change Resale Value?

Dear Dave,

Now that spring is upon us and summer is fast approaching, we are getting some projects lined out for our property. We have an area that needs a retaining wall, 25 feet long and 4 feet high, and we would like some advice on what might be the best route to take. We have access to railroad ties but we aren’t sure if those will have as good of resale value for the property as a rock or stone retaining wall. What are your thoughts on this?

Much Appreciated,

Jim and Ruth - Loma, CO

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Jim and Ruth,

Again, many issues to uncover and consider here.  First, you are thinking resale and I always love it when people think resale!  What you do to your home while you live there will significantly impact the value of your home either positively or negatively.  By focusing on resale, it does not guarantee anything, however it will help ensure your actions have a positive impact on your bottom line when you do decide to sell. 

A retaining wall can be a definite value ad to a property from both the function side and the aesthetic looks of our landscaping. The most important thing, in my mind, is to have it done by a professional, so it looks like it was done by a professional. Case in point, I added a pond to my property five years ago and around ¾ of the pond we had a boulder retaining wall that went from ground level at a 90 degree angle up the side of the pond to the top edge. It looked awful! I had a visitor ask me one time, “Why did you build an elephant watering hole?” Yikes! Needless to say, we did not feel very good about our “pond”.  This spring, we hired a landscape professional, Keith Lowdermilk of Lowdermilk Landscaping, to re-do some of our landscaping. While he was looking over the job, he asked if he could “re-do” our retaining wall around our pond. He thought he could make it look better. We said, “Absolutely!” After all, it was a total eye sore and we don’t even own an elephant! Long story short, he completely rebuilt the retaining wall around our pond and now it is a highlighted feature of our landscaping rather than something we were trying to hide. The cost was ridiculously reasonable, especially considering the end result. He used the same boulders we had and simply re-stacked and reshaped the contour and the finished product is amazing! The moral of the story - don’t be afraid to hire a professional!

“Regardless of the medium used, railroad ties, boulders, or rocks, I think it can be a valuable addition. “

Regardless of the medium used, railroad ties, boulders, or rocks, I think it can be a valuable addition. Try to pick a medium that is in line with the style of your home. If you have a more country or cottage feel, then maybe a rail road tie wall would look best. However, if your home is newer and is stucco and stone then maybe something with boulders would look best. From a pure cost perspective, if you have the inside track on some cost savings on railroad ties, I would suggest you follow that route. As I learned, spend a bit extra and go with the professional to, at a minimum, help you design the wall, but potentially also install your wall. 

Do it right the first time and it will really pay off and look great! Remember, not everything is about resale - you are going to have to look at it for many years and if it is done right you will look at it as a feature and not an eyesore. My bet is you (and your back!) won’t regret it. Hope this helps.

Dave Kimbrough
The Kimbrough Team

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How to choose the right agent for your Grand Junction real estate goals

Hello Dave, 

Let’s assume that I have done my homework and I have decided on a Realtors office based on brand name recognition, market share, aggressive marketing, reputation and other factors. Now what? Is there a way that I can pick an agent within that company based on their success, professionalism, enthusiasm, abilities, etc.?

There are good, better and best (most productive) in any office. How can I decide who or which company is better for me to list my home with? 

Thanks,

Dave, Cedaredge

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Dave,

I could write a book answering your question, however, I am going to do my best to not be overly verbose or opinionated and stick to facts and try to be as objective as possible. First, I applaud you for doing your homework! For most people, their home is one of, if not their largest investment and it always shocks me how little “real” homework people do when choosing an agent or real estate company. If you stop and think about it, trusting such an investment with someone who does not have a proven track record just does not make sense however, people make that choice every single day! All of the qualities you listed in your question are important when evaluating agents and companies.

“Brand name recognition, market share, reputation and other factors are all key elements in choosing a real estate company and evaluating those factors should allow you to narrow down your choice in the real estate company you choose. ”

Brand name recognition, market share, reputation and other factors are all key elements in choosing a real estate company and evaluating those factors should allow you to narrow down your choice in the real estate company you choose. You mentioned aggressive marketing and I suggest you use that element of evaluation as one you use when evaluating agents, not your real estate company. The reason I suggest this is that each individual real estate agent markets their properties differently. No two agents do things just alike and to ensure your agent of choice has an “aggressive marketing” plan you MUST evaluate every aspect of how they will market your property and the vision they have for YOUR specific marketing plan.  How an agent presents and prepares your marketing plan will tell you all you need to know about your potential for success and their abilities.

When you evaluate the agent’s specific marketing plan you will learn a lot about their professionalism, enthusiasm and track record of success…or lack thereof. My suggestion would be to choose your agent on all the aspects you have listed! Trust me on this one, the level of marketing expertise and understanding displayed is likely a VERY strong indicator of your chances of a positive outcome. Just putting a property on the MLS does not cut it anymore! They should have a strong plan across many mediums like internet, social media, agent to agent promotion, direct to consumer programs, newspaper, radio, television and more. If they have this in place, you can bet they are enthusiastic about their job and work at it as a profession, not a hobby or way to collect some extra vacation money. Search for someone who is full time and HAS A PLAN for you and your property and does not simply try to lure you with the “high price” candy!  Luring a seller to list by providing a high price is the best way to take the focus away from a real marketing plan.

If the agent checks the boxes listed above, then I can almost guarantee they are productive and achieve results on a high level. Really, who doesn’t want a top level agent working on the sale of their home? I would pray that nobody ever hires an agent based on an average marketing plan or expecting an average result. Don’t settle! Follow some of the selection methods I have listed and you will find the best agent in any office or town. It is just like anything else, the cream rises to the surface and typically it’s pretty clear who performs and who doesn’t. Remember, success does leave clues. Don’t take the decision lightly as choosing the right agent or company can have a significant impact on your success or lack thereof! Best of luck.

Dave Kimbrough
The Kimbrough Team

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Will a New Roof Improve Resale Value?

Dear Dave,

We are looking at putting a new roof on our home this summer and I wanted to get your opinion on different materials.  I typically see shingles or metal roofs, what is your opinion on which of those is best?  Are there any other materials that you would recommend that might be better? 

We will be retiring and selling our house in a few years, so we want to get our money’s worth.

John and Kate, Grand Junction, CO

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 John and Kate,

When making home improvements it is always wise to consider your return on investment prior to making any selections or firm decisions. However, selecting a new roof and basing your decision on return on investment can be a tricky proposition. One thing I have learned over the years is, there are a few basic characteristics every home buyer expects as a given when purchasing their home and having a “decent” roof is one of those expectations. Buyers expect, and rightly so, that the roof will be in good condition with a minimum of 3 years remaining on the anticipated life expectancy.

“Because it is a basic expectation for any buyer that the roof be in good repair, you can assume that very few, if any, buyers are going to be willing to pay significantly more for the home because the roof is new or newer. ”

Because it is a basic expectation for any buyer that the roof be in good repair, you can assume that very few, if any, buyers are going to be willing to pay significantly more for the home because the roof is new or newer. They will appreciate that your roof is in better condition and it may help sell your home faster or help it beat out another competing house, but as long as the life expectancy is more than 3-5 years don’t expect to reap any real tangible monetary benefits. That being said, you do have the opportunity to impact the price of your home, monetarily, by replacing your roof with a different material or texture that will impact your home’s appearance.  

Buying a home is an emotional experience and homes that have a unique appearance or unique characteristics certainly can get a leg up on the competition during the sales process. Consider using a standing seam metal roof or a thicker architectural shingle for your next roof!  Metal roofs provide a fresh look and are becoming very popular. If your home lends itself to mixing the surfaces, you can create wonderful street presence that will help you stand out from the other homes that are for sale and even other homes in your neighborhood. You can also provide a pop of color, but don’t go too crazy with the color. A thicker architectural shingle can also look wonderful and provide some depth where none previously existed. These thicker shingles generally are used when replacing shake shingles, as they help maintain some of the original look. You can also go the way of a tile roof, but be careful that you do not over build your neighborhood or over improve your property. 

There are options out there to dabble with some new looks, however note that these options will be more expensive and less budget friendly than a standard 30 year architectural shingle. Be mindful of your budget and anticipated return and don’t be afraid to ask for other professional opinions prior to making the leap on your next roof. Hope this helps and I bet it turns out great!

 Dave Kimbrough
The Kimbrough Team

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