Why Home Sellers Have A Lot of Leverage Right Now
Sharon: Hello, everyone, this is Sharon Heller with Network in Action in Denver, and I'm here today with Nathan Urquhart. Hi, Nathan.
Nathan: Hi, Sharon thanks for having me today.
Sharon: How's your morning going?
Nathan: It's going well. I'm just looking forward to speaking with you, and I'm glad I'm inside today because it's a hot one out there.
Sharon: It's a little hot and smoky. Well, Nathan is with Roet Realty, and one of the things I was thinking about, and I hate to get into the hard questions right at the start, but, you know, in Denver especially, I feel like every time I turn a corner, I meet a realtor, right? There are so many of you guys and so needed also because there's a lot going on in your industry here. But share with us a little bit about maybe how you got into the industry and what somebody could expect, maybe in terms of their experience if they decide to work with you.
Nathan: Yeah, absolutely. Well, I'm always dealing with objection handling all the time. So that's a good start. I mean, the real estate business is a very unique one, that many people can have a license. You don't have to be a realtor to directly interact with the community, just to simply have a real estate license in the state to buy and sell. Being a realtor is the next level, that you are working with the public generally. And so, you hit a spot on that, you, others probably know four or five people. And that's something that I'm always used to in this industry.
So where I come from and where I try to be different, and really just myself, is that I come from a long line of I.T. experience. I was in the data center, colocation private cloud space, in the high-end customer service relationship-building space. And that's really where my passion is. I've been doing real estate investing and passive income strategies on the side for many years, and so what was once my side gate for a long time and truly the passion, I found myself doing all market research, both commercial and residential, where I spend my time.
But as I just continue to dive into that space, Sharon, I just realized I had a lot to educate the community on. And where I'm different is I really focus on the passive income strategies, as I mentioned, which includes Airbnb, VRBO, may have heard house hacking. And then based on this market and just the education piece that I absolutely love, it's all about educating and being a value-added resource. And as long as you're doing that, you know, consumers can make their own decisions. But you know that's where I would start.
Sharon: Yeah. I'm thinking about this passive income thing because, you know, people right now, especially with everything going on in our economy, people are looking into lots of different alternatives. And anything you can share about how that has changed during this period of time or something that would be important for people to know, specific to things like Airbnb.
Nathan: Yeah, and it's a passion of mine, I really do consider myself an Airbnb specialist, but even though I say that it's not just the area that I focus on, the reason I say "Airbnb specialist" is because most of us are pretty familiar with standard leases. But then I look at mid-term leases or executive rentals, which are furnished places that are longer than short term rentals, as well as the short term Airbnb market.
The reason why you have to spend more time on the short term market is, that's a very much fast-changing fast-paced industry. We've all heard the stories about both good and bad within that space. And just like any app and a new model, there's a lot changing all the time. So working with local advocacy groups and sitting on within the city of Denver Department Excise and License, and understanding where the rules regulations are going, that's kind of the bigger piece where I kind of focus on.
To specifically answer your question of what has changed. The short term rental industry, I mean, when travel stops, you know, short term rentals for quite a while have stopped, but on the flip side, now that we're doing this in mid-August, you know, those are actually coming back faster than the hotel industry because people need to stay with their family unit or other close people that they're generally sheltering with or kind of within their bubble. And so they're willing to travel in that way. And a lot of the Airbnb communities in the more suburban or even rural communities are seeing a spike over the urban communities. But that's also similar to what we're seeing in the general real estate market.
So my big comment, you know, just like a stock portfolio. You have to have a lot of diversification. And that's kind of where I try to focus, the passive income strategies. I try to be that specialist in one area in terms of where the rest of the market is not focused on. But while keeping in mind that for some people, these other options and myself included in my own investments can be those traditional rentals. So it just gives you the flexibility, especially when the economics change and we really haven't seen anything close to what this pandemic has done in our lifetimes. And so, yeah, it's that ability to change course when needed I really feel like it's key. And that household in your house is just that one way to accomplish that.
Sharon: Yeah. Thank you. And it sounds like you're a great resource. If somebody needed somebody to talk to, to pick their brain, you know in many of the areas that you just described.
Nathan: Yeah, I made plenty of mistakes, but I also know I've made a lot of right decisions and sitting in on these committees, and honestly, just being an Airbnb host myself, I mean, this is my home, my townhome. I'm in Central Park, formerly the Stapelton Community of Denver, and this is a home on Airbnb when I'm not there. So I'm practicing what I'm preaching, and, I got my check-in sheet and follow all these processes, I'm an Airbnb super host. But through learning that, you know, I've learned a lot about the good and the bad. Even if it's just a simple education about what it looks like for a consumer to become an Airbnb host, I love that conversation.
And honestly, that's why I sit on some of those committees, because we all have to be good advocates to the community and good neighbors. And if I can do that, a customer doesn't have to be buying or selling a home for that, It's just about another passive income strategy.
Sharon: Yeah. Yeah, good. And so what about those folks that are looking to buy or sell a home? Can you talk a little bit about some of the trends that you're seeing and why it's a great time for somebody to reach out and talk to you?
Nathan: Yeah, absolutely. Well, it goes twofold. One, even if you're not buying or selling real estate, if you haven't re-fied your home loan, you should start there. And that's where we have a team of people. It's not done through me or Roet Realty, but that's where we work with preferred lenders in the mortgage business, local lenders can give you a lot of leverage both in the refinance and especially in this competitive market. And to address that question in terms of what the market looks like, well, I'll try to give you a little example.
So Pre-COVID, we had all these buyers in the market and we had all these sellers, so, way too many buyers far too few sellers. And you know what actually happened in Denver, once COVID hit the stay at home? We kind of went like this, but the margins still stayed the same. And then once everything opened up, we had a lot of pent up demand and we're still kind of in that same arc again. And so what it's leading to is sellers have a ton of leverage right now. They're getting much more over asking price. Homes still have to be priced right. If a realtor or a seller has unrealistic expectations, you're still not going to get the price, it's just going to lead to days on the market.
But right now, buyers are in a very difficult situation. They have to be pre-approved. They got to be ready to go. And you really have to have a professional to know how to structure both the negotiation part of it, but also all the other contractual pieces, the inspection, the appraisal, and just all of these other due diligence documents that we go through, to give you as much leverage as possible. And really, that's about being educated and coming to the table early.
And as I keep saying, I mean, even buyers that are educated here, I say let's go get pre-approved. It's now never been more important to get that done, because if you find a place today and you need to get pre-approved over the weekend, that place is not on the market generally, on Monday.
Sharon: Got to be ready to move fast.
Nathan: You've got to be ready to move fast. And that is not a salesy type of tactic. That is how the market is right now. And if you talk to any of your five realtor connections, they will say the exact same thing.
Sharon: All right, good to know. Any other takeaways that you want to share before we finish up today?
Nathan: Yeah, absolutely, so we're talking customers, or are we just talking about just general business items?
Sharon: Whatever you think is the most important for people to hear.
Nathan: Well, the big thing with working with a local realtor is making sure they understand the local, the truly local market, that's on the buy or sell side. And it's not just the transaction itself that you're going to get a lot of additional information, It's really understanding the trends they've seen. But we're sitting on all these different lender calls and really these lender calls are much more than that. They're really economic forecasting calls and trends and what Fannie Mae and Freddie Mac and what the Government's doing with policy, and how recent policy changes, can change to impact what that final number will be.
And yes, we expect mortgage rates to stay really low. But that's what gives buyers a lot of power in this seller-heavy market. That's the one thing on the flip side of the equation that's giving buyers a lot of opportunities, but we understand from a real estate standpoint, the buyers come to us with more information than they ever had. All the third party sites, the Zillow, the Redthins and honestly, I partnered with some of those sites in some cases, and they're working with the local community because they understand that the philosophy of the boots on the ground mentality. What I would say is just, make sure you're talking to a local expert.
Even if you're looking at doing one of these, "ibuyer programs", the Zillow programs, or something like that, talk to a local expert to really understand what that means, especially if you're in the buy and sell mode. That's the only way we can give you a competitive offer or get you into a competitive offer, and then the flip side is because our inventories so low, we have so many buyers that start to get a little bit frustrated. So you got to give yourself time. And for those that want to move into the new builds, you know, this is another area where we had to go to much more instead of the general retail market, just because the inventory is not out there.
So, again, even in that situation, make sure to use a local realtor that's going to represent you on the buy-side. Otherwise, that seller developer is going to pocket that entire six percent commission, and you're not going to have any representation in that transaction. And so there are ways that we can even give that additional percentage if they're dependent upon their commission structure.
So just make sure in all cases you're represented. And honestly, you wouldn't go to court without a lawyer. Don't go to any real estate transaction without a professional sitting by your side and advocating for you and your best interest.
Sharon: Thank you, super important takeaways. So I suspect that there may be some folks out there who watch this video and want to reach out to you, what is the best way for them to do that?
Nathan: Yeah, absolutely. You know, if a realtor gives out his Fax information, I would say that you know, you can't go that direction anymore, we got to focus on the technology piece. That's where we've changed a lot. I don't go there anyway. All jokes aside. Yes, just my cell phone, 303-818-9751 call or text.
Sharon, just like this type of discussion. I'm doing so many more of these Zoom calls and even just pulling up a map and looking at just some needs versus wants. You can dive right into what they're looking for in a home, but honestly, it's so much more than that. And if you really get to know what is important in their strategy, then I can dive into my full toolkit and then my greater network of people to assist you in getting the house that you want. And so, yeah, the earlier we have the conversation, the better. So that's the phone number for call or text and I can provide my website information as well.
Sharon: Awesome. Thank you, Nathan. It was really great talking to you today. I hope you have a fantastic weekend and we'll talk soon.
Nathan: Absolutely. Thanks for the talk Sharon