It was so great to start the tour today with Pete’s new listing on the Encinitas Ranch Golf Course whose owners succumbed to the problem at hand. They get hit by golf balls, so provide a barrier and live with it.
This is way better than the alternative where potential buyers have to wonder about the impact. Know this – when a golf ball hits your roof, it sounds like a bomb went off.
We lost Gregg LeNoir Allman in 2017 at age 70, and we lost Dickie last week at age 80 – rest in peace. We won’t see anything like this again. (hat tip just some guy):
“Melissa” (sometimes called “Sweet Melissa”) is a song by American rock band the Allman Brothers Band, released in August 1972 as the second single from the group’s fourth album, Eat a Peach. The song was written by vocalist Gregg Allman in 1967, well before the founding of the group. Two demo versions from those years exist, including a version cut by the 31st of February, a band that featured Butch Trucks, the Allman Brothers’ later drummer. Allman sold the publishing rights later that year, but they were reacquired by manager Phil Walden in 1972.
The song’s title is frequently referred to incorrectly as “Sweet Melissa” due to the lyric being sung at the end of each of the first two choruses.
The version on Eat a Peach was recorded in tribute to Duane Allman, who considered the song among his brother’s best and a personal favorite. He died in a motorcycle accident six weeks before its most famous rendition was recorded.
Gregg Allman penned the song in late 1967. He had previously struggled to create any songs with substance, and “Melissa” was among the first that survived after nearly 300 attempts to write a song he deemed good enough. Staying at the Evergreen Motel in Pensacola, Florida, he picked up Duane’s guitar which was tuned to open E and immediately felt inspired by the natural tuning. Words came naturally, but he stumbled on the name of the love interest. The song’s namesake was almost settled as Delilah before Melissa came to Allman at a grocery store where he was buying milk late one night, as he told the story in his memoir, My Cross to Bear:
It was my turn to get the coffee and juice for everyone, and I went to this twenty-four-hour grocery store, one of the few in town. There were two people at the cash registers, but only one other customer besides myself. She was an older Spanish lady, wearing the colorful shawls, with her hair all stacked up on her head. And she had what seemed to be her granddaughter with her, who was at the age when kids discover they have legs that will run. She was jumping and dancing; she looked like a little puppet. I went around getting my stuff, and at one point she was the next aisle over, and I heard her little feet run all the way down the aisle. And the woman said, “No, wait, Melissa. Come back—don’t run away, Melissa!” I went, “Sweet Melissa.” I could’ve gone over there and kissed that woman. As a matter of fact, we came down and met each other at the end of the aisle, and I looked at her and said, “Thank you so much.” She probably went straight home and said, “I met a crazy man at the fucking grocery.”
Allman rushed home and incorporated the name into the partially completed song, later introducing it to his brother: “[I] played it for my brother and he said, ‘It’s pretty good—for a love song. It ain’t rock and roll that makes me move my ass.’ He could be tough that way.” The duo produced a demo recording of “Melissa” that later surfaced on One More Try, a compilation of outtakes released thirty years later. In 1968, the duo recorded it during a demo session with the 31st of February, a band that featured Butch Trucks, the Allman Brothers’ later drummer. That version is thought to have featured the debut recorded slide guitar performance from Duane Allman, and the entire session was later compiled into Duane & Greg Allman, released in 1972. Gregg Allman sold the publishing rights to “Melissa”, as well “God Rest His Soul” (a tribute to Martin Luther King Jr.), to producer Steve Alaimo for $250 (equivalent to $2,190 in 2023) shortly thereafter. He had been tied up in Los Angeles, contractually bound by Liberty Records (who had previously issued albums by the Allmans’ first band, the Hour Glass), and used the money to buy an airplane ticket to fly back.
When Duane Allman was killed in a motorcycle accident in 1971, his brother performed the song at his funeral, as he had grown to like the song over the years. Gregg Allman commented that it “didn’t sit right” that he used one of his brother’s old guitars for the performance, but he nonetheless got through it; he called it “my brother’s favorite song that I ever wrote.” Both because he did not own the rights and found it “too soft” for the band’s repertoire, he never mentioned the song to the members of the Allman Brothers Band. Following Duane’s death, manager Phil Walden arranged to buy back the publishing rights in order to record the song for Eat a Peach, the band’s fourth album. Gregg brought it to the studio the day following his birthday and the band recorded it that afternoon at Criteria Studios in Miami, Florida. They felt it lacked a compelling instrumental backing element so guitarist Dickey Betts created the song’s lead guitar line.
They are only three months into their mega-launch of Homes.com, and CoStar founder and president Andy Florance is already taking victory laps. He is also the #1 cheerleader for buyers going directly to the listing agent, which will be the end result of all the changes underway. Here’s Andy talking in front of a group of realtors:
Florance said Homes.com’s “Your Listing, Your Lead” model was the antidote to agent and consumer frustrations, as evidenced by triple-digit traffic growth during Q3 2023 that gave them a contested lead on Realtor.com as the second-most-trafficked residential portal.
“In the rest of the world, when an agent has a listing, their name is on the listing, their phone number is on the listing, and there’s branding happening,” he said to riotous applause. “Only in the United States is it the portals’ brand goes on the listing rather than the agents’ brand. That’s bizarre.”
Although CoStar didn’t reveal its exact plans for Matterport, Florance did outline a plan to capitalize on digital twinning, a term used to describe hyper-realistic 3D listing experiences.
Florance said digital twinning could enable homebuyers to visualize what their current home furnishings would look like in a new home, play with renovation options for a fixer-upper, or walk with a virtual agent through a virtual listing.
“In residential focus groups, homebuyers are telling us that they prefer listings that offer 3D digital twins so that they can best understand the property,” he said. “Adding virtual reality to Matterport, you can take a virtual tour of the property with your virtual agent who will walk into the space with you.
Florance spent a few moments of the call focusing on buyer-broker commissions and reiterated Homes.com’s potential value when NAR’s settlement terms go into effect this summer. Florance said Homes.com will give buyers an avenue to directly connect with listing agents to view a home, bypassing the potential pressure to sign a representation agreement before they’re ready.
“Currently only 30 percent of buyer agents ever get a written agreement at any point in the transaction process,” he said. “Homes.com connects homebuyers directly with the listing agent, so they can arrange to see the house with no paperwork or commitments.”
“We are increasingly confident in our ability to build out the number one residential marketplace in terms of traffic revenue and profitability in the years ahead,” he added.
CoStar owns LoopNet, the website for commerical listings, as well as ten-x.com/ which is an online auction house for commercial properties. It won’t be long before they bring auctions to the residential market, will it?
The locked-in effect has been bandied about for the last couple of years as the reason why the inventory remains thin. But it’s not stopping those who want to pay cash and avoid a mortgage altogether – every area is showing increases in the all-cash purchases.
If you don’t want to leave your local neighborhood, then yes, you’re locked in – the higher prices and rates make it prohibitive to move. But for the homeowners who don’t mind leaving town, they can take their winnings and pay cash for their next house!
Don’t let higher rates stop you. Thirty-eight percent of the homes in America are paid in full – join the club!
Yesterday, it was announced that CoStar is buying Matterport. Excerpts:
I look forward to welcoming Matterport to the CoStar Group family and believe that we will be stronger together, in pursuit of our common mission,” said Andy Florance, Founder and CEO of CoStar Group. “The world has changed and today a Matterport is the new open house or property tour. People now select their next home, apartment, office, store, hotel, or warehouse on their mobile device often without ever visiting the property. There is no better way to remotely experience space than via Matterport. CoStar Group intends to support and invest in research and development opportunities to further develop Matterport’s spatial technology, including the application of AI and machine learning to extract information from the 3D spatial data library as well as using generative artificial intelligence to imagine and reimagine physical spaces.”
CoStar Group operates some of the most effective and widely recognized real estate information solutions and online property marketplaces in the world including Apartments.com, LoopNet, CoStar, and Homes.com, all of which feature Matterport’s 3D virtual tours.
In March 2024, there were over 7.4 million views of Matterport 3D Tours on Apartments.com, with consumers spending 20% more time viewing an apartment listing when Matterports were available. CoStar Group intends to utilize Matterports in a similar fashion on Homes.com to further enhance the most comprehensive agent, seller and buyer friendly residential portal on the market.
Great timing! Just when a new rule is going into effect that requires home buyers to hire an agent before touring a home, CoStar will be pushing their 3D tours as a way to experience the home virtually. Buyers who haven’t signed with an agent or those who wish to be unrepresented will have a great tool to use to preview the homes online without commitment.
But then what?
What will happen when a buyer who has only seen the home online wants to buy it?
The renegade buyers will have their attorney draw up a contract. Good luck with presenting that to the listing agent! Others will finally grab an agent friend and comply with the new rule to tour the house in person with their hired buyer-agent.
If you are going to wait until the last minute to hire a buyer-agent, then make sure to check their Zillow profile to see how many buyers they have represented in the last 12 months. It won’t do much good to hire an agent, only to find out the hard way that they aren’t very good at getting buyers to the finish line.
The Unrepresented Buyer
Between the advanced online tools and the realtor implosion, more and more buyers will resist hiring a buyer-agent, especially with the real threat of having to pay them a big fee out of pocket now.
By now, you know where this is going.
More buyers will be going direct to the listing agent – a practice which listing agents will be encouraging!
But the buyers will be divided into two camps.
Those who want to go direct to the listing agent to ‘save the commission’, and those more desperate buyers who just want to buy the house. Guess which one will get the house.
But let’s say there is only one buyer, and he insists on being unrepresented and wants to save the commission. The conversation with the listing agent will go like this:
Buyer: I see you are offering a 2% commission to the buyer-agents, and I’m unrepresented so I want to save the 2%. Will you knock it off the price or give me a credit for closing costs?
Listing Agent: Every buyer has to be represented, sorry.
Buyer: Ok, adios.
Listing Agent: Now hang on, maybe we can work something out. I’ll talk to the seller.
Listing Agent to Seller: I have an offer of $2,940,000 on your $3,000,000 house. Close enough?
Seller: It’s only been 30 days – is that all we got?
Listing agent: Yes, and rates are going up and Trump will be tweeting from jail soon. You should take it.
Seller: Ok, but I want to take my $4,000 toilet.
Listing Agent to Buyer: Ok, I got you the house for $2,940,000.
Buyer: Did you knock 2% off your commission?
Listing Agent: That’s between me and the seller.
The listing agents will be charging their regular commission rate well beyond July when the new rules take effect. They hope more buyers will be coming direct to them to buy their listing. At first, they will want all buyers to have their own representation (dual agency) so they can keep both sides of the commission.
If the buyer wants to be unrepresented, that will be ok too. The listing agent will keep the full commission and just get the seller to eat a little discount instead – and commissions are never disclosed to the buyer.
On Friday, the Plaintiffs’ counsel filed a Motion for Preliminary Approval of the commission-lawsuit settlement agreement with the federal court, so the two new rules will go into effect in late July, apparently. The plaintiffs have requested a hearing on final approval of the settlement by the court to be held on November 22, 2024.
The second rule about buyers having to hire a buyer-agent before touring a home is a done deal, mostly because nobody is objecting. At least not yet. It will become a major headache for all.
The first rule about home sellers not being required to pay a buyer-agent commission will be affected by the overall market conditions. Red-hot markets like Silicon Valley will likely be seeing zero percent (or close) being offered as a reward to buyer-agents. The demand is so strong there, the inventory is so thin, and the buyer-agents are so desperate that the sellers will get away with it. How much will buyers be willing to pay to hire a buyer-agent there? Not much – 1% tops – but the entry level there is $3,000,000.
But other markets will have different challenges – especially those that are slowing (or buckling under) from a heavier load of unsold listings and stingier demand.
The conversations will go like this:
Seller: It’s been thirty days, how come my house isn’t sold?
Listing Agent: I feel good, and it should be selling any day now. People are looking.
Seller: What are you doing to sell my home?
Listing Agent: I’m showering every day now in case someone wants to show your home.
Seller: Are you advertising in SF, LA, and NYC where all the rich people live?
Listing Agent: We are advertising world-wide.
Seller: Then what do you suggest we do?
Listing Agent: You should lower the price and pay more commission to the buyer-agents.
Seller: The last thing I’m going to do is lower the price. Aren’t I paying 4% commission already?
Listing Agent: Yes, because you saw in the news that realtors imploded, so commissions are less now.
Seller: You’re saying 4% isn’t enough?
Listing Agent: Correct, because I work for 3% and that leaves only 1% for the buyer-agents. You should increase it to encourage more buyer-agents to show it.
Seller: It sounds like you’re backing into a 6% listing.
Listing Agent: I’m sorry you feel that way, but yes. But hey, you got to try out lower commissions!
Seller: Well, I guess you got me because I want to sell. Knock off $5,000 off my price too.
Listing Agent: Off your $3,000,000 listing?
Seller: Ok, ok, knock off $10,000, but that’s it. I’m Not Going To Give It Away!
Realtors will still be holding all the cards, and will game any system you throw at them. I said this will blow over quickly, and a softer market will help keep the status quo. Listing agents may appreciate buyer-agents (finally), though paying them more won’t be an obvious solution for many. Expect a slower market instead.
The graph above should give us all some guidance on where the 2024 market is going.
Sales are hanging tough though. There have been 117 NSDCC closings this month, so we should get close to the 165 sales we had last April. The median sales price is running +5% above last April too.
This is the #1 reason I went to Compass, and I didn’t really feel like I had a choice.
When realtors get disrupted, this is the way the big brokerages can survive while the little guys die.
Hoard the listings in-house as ‘private exclusives’, like they do in the commercial real estate. The practice is legal (per the Clear Cooperation Policy) and is a choice for home sellers to make.
The big benefit for sellers is that they don’t get penalized by the days-on-market statistic, which buyers normally consider as the best way to know if the price is wrong after the first week on the market.
Compass has this option available for sellers, as do all the other brokerages, but nobody in management is pushing it around here. It’s used more like a Coming-Soon feature while homes are being prepared for open-market exposure. But there are deals being made.
If there was an organized, committed effort to use it as a survival tool, then I could see 30% of our sales happening off-market. But we’re not there yet.
Maybe next year?
First-time home buyers are a growing share of the market, making up half of all home buyers last year, according to Zillow’s Consumer Housing Trends Report. Homeownership is easier to break into in some markets than others, and Zillow has named this year’s best markets for first-time buyers, where their dollars go further and starter homes are relatively plentiful.
Affordability is a tough hill to climb in today’s market, and it is especially steep for first-time buyers who do not have equity from a previous home purchase to tap into. Markets with relatively more affordable rent, more options and less competition for starter homes provide the best opportunities.
Zillow’s 2024 list of the best markets for first-time buyers is based on four metrics:
More affordable rent shortens the time it takes to save for a down payment, and a higher number of active for-sale listings relative to the potential homebuyer population means more options – and more bargaining power – for potential first time home buyers in those markets.
These are Zillow’s 10 best markets for first-time home buyers this year:
https://www.zillow.com/research/best-markets-first-time-home-buyers-33901/
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
