Hot real estate market hard to resist

Dollar signs in their eyes, residents fill local classes, hoping to become Realtors

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— Waiting tables is a tough way to earn a living and raise a family in Steamboat Springs.

Penny Hass, a 25-year-old graduate of the University of Iowa, has been living in Steamboat for two years, and relying on a waitressing job at the Steamboat Brewery and Tavern to make ends meet. She wants to stay in Steamboat, but she can't see herself living on tips for much longer. That's why she recently joined a growing number of residents who are making a career switch to real estate.

At the end of June, Hass finished a three-week class at Colorado Mountain College to get her real estate broker's license.

"I needed a change in my status-quo," she said. "I took the class because I was looking for a way to stay in Steamboat. I don't want to be a waitress forever. I was looking for a career, something that might be compatible with raising a family some day."

Hass isn't the only resident in town she is not even the only waitress trying to find a newer, more lucrative lifestyle in the valley's real estate business. Some two dozen people signed up for the real estate classes at CMC this summer.

"Bartending is fine," Steamboat resident Sue Weber said, "but it's not enough."

Weber, who has been bartending at the Old Town Pub for eight years, just completed a three-week course at Colorado Mountain College to help her get a real estate broker's license. She passed the broker's test days after the end of the class, and is already working for Old Town Realty as an associate broker.

Weber said she'd rather not sell outside of Steamboat, but that way the city's going to grow anyway.

"Even out by (Colorado) 131, there are going to be houses everywhere," she said.

The Colorado Mountain College class was a diverse one; students ranged in age from 18 to their 60s. Business owners, developers, investors, several waitresses, and college graduates including Steamboat natives were all drawn to the class for, in one way or another, the doors that a broker's license seems to promise to open.

Although some of the reasons for working toward a broker's license varied in the class, the overwhelmingly prevalent thought amongst the students was that the real estate market might offer the necessary means to live and work comfortably in Steamboat Springs.

Local brokers, however, assure these folks that tackling a career in the real estate business is no easy task.

"Just because 20-some people took the class in Steamboat, doesn't mean they're all going to be brokers," President of the Steamboat Board of Realtors Jill Limberg said. "Statistically, only about 50 percent of these people will pass their broker's license test anyway."

This one group of CMC students weren't daunted by the statistics.

"People see brokers making a lot of money. They read the weekly real estate revenues in the paper. They think, piece of cake, I'll be a broker," Limberg said. "But a lot of people become brokers and join the Board of Realtors because of the myth."

The myth that Limberg refers to is the perception that selling real estate, which according to the weekly real estate list of transactions for Routt County runs to several million dollars a week, is a guaranteed way to make big bucks.

"There are 225 realtors in town," Limberg said. "Of those 225, 10 percent are making good money." By "good money," Limberg meant six-digit salaries. "90 percent of the brokers in town are not making that kind of money."

According to the National Association of Realtors, the average broker makes $16,000 annually.

Even though this average includes brokers who don't sell real estate full-time, Limberg, a broker for nine years, thinks it's a pretty shocking statistic.

"When you get down to basics, not many of these people are going to last. Those who think, 'I'll just be Realtor to make money,' don't survive unless they really do their homework," Broker Associate at Steamboat Real Estate, CIPS, MRE, and CRS Ruth Krinke said.

Doing the necessary homework seems to mean, first and foremost, seriously committing to a budget. The brokers' saying, "You have to spend a lot of money to make a lot of money," is no joke.

New brokers and associate brokers can expect to pay annual dues of about $400 to join the Board of Realtors a requirement in Steamboat and to get access to a bimonthly multiple listing service, or MLS, whereby brokers can keep up with the local market, Limberg said.

To open an office costs about $1,000. To join the board, new brokers are required to take an ethics and orientation class for another couple hundred dollars. Brokers are required to take 24 hours of continuing education to renew their licenses every three years, Krinke said.

"What I would spend the most money on initially would be advertising," Limberg said. "Name recognition is everything."

Some of the top brokers in town reinvest up to 40 percent of their annual salaries into more advertising, she said.

"If you want to survive and do well in this business, you have to have some things. You'll need Errors and Omissions Insurance, which is usually a couple hundred dollars a year," Krinke said. "You need special auto insurance, maximum liability, because you'll be chauffeuring people around. You have to pay your own health insurance, too. And you have to keep up with new technology."

As if all of this weren't enough, Limberg added that the average new broker doesn't sell a house for six months, on average. So having expenses covered during that time is a must. Although Limberg tells up-and-coming brokers not to work real estate part time, residents like Hass and Weber don't have a choice.

Costs of becoming a successful realtor aren't the scary issue, according to Limberg.

"The market is scary," she said.

For the past seven years, interest rates have continued to climb, and the local market has been strictly a seller's market. This means that there are a lot of buyers, and that sellers can set home prices high and stick with them.

"Sellers set the costs, they drive the costs," she said. "It's not going to change anytime soon. In a non-resort city, high interest rates and costs would knock out four of 10 potential home buyers. In Steamboat, it's not a closed market. People are coming in from big cities all the time, and they can afford the rates and costs."

People who are looking for second homes and can't afford the high costs in Vail or Aspen can afford the Steamboat prices. Limberg said she doesn't expect the increasing cost of homes to drop until they've caught up with Vail and Aspen.

"Lots of buyers keep waiting, because they think what goes up must come down. Although that's true, it's not true in Steamboat. Buyers come in and are shocked at the prices. They leave and come back in five years, and are even more shocked. They say they should've bought five years ago. A house that was selling for $300,000 a few years ago is now half a million. It's that dramatic."

To reach Bonnie Nadzam call 871-4205 or e-mail bnadzam@amigo.net

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