Menu
TwitterRssFacebook
Klinge Realty
More Links

Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Jim Klinge
Cell/Text: (858) 997-3801
klingerealty@gmail.com
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011


Category Archive: ‘Auctions’

Operation Transparency

This is the fourth installment of my essay on the future of real estate sales.  I’ll send this along to Brad Inman, who is gathering thoughts for a leadership conference at the end of March, so they have my perspective from the street.

In summary:

The unconscious desperation among agents is ripping apart the formal agreement between brokers to share listings.  The environment is going the way of commercial brokers, where exposing listings to other agents is a last resort.

We see it happening – there is the occasional article – but without vigorous intervention by realtors themselves, the MLS will slowly disintegrate and be picked apart by outsiders.

Sadly, the sharing of listings is what is best for sellers, buyers, AND realtors, but the greed and desperation among agents gets in the way.

What Can Be Done?  What Are The Choices?

  1. Individual agents can adopt a full-transparency program, starting with publicly describing the specific services they offer, and their commission rates.  If consumers took the time to educate themselves about the differences between agents, at least they would make better decisions than they do now.  It’s unlikely that this will happen, because agents are lazy and won’t bother, unless forced to do so.
  2. We can hope that N.A.R., C.A.R., big brokerages and other industry titans will address this specific problem, and implement changes to save the MLS and broker cooperation out of a commitment of doing what’s best for consumers.  Probably the least likely of these five to actually happen.
  3. We can have big leadership conferences where outsiders will speculate how the disrupters will pick us apart, piece by piece.
  4. We can wait for the government to intervene.
  5. We can do nothing, and watch the broker cooperation via the MLS – which is the best thing for everyone involved – die a slow but certain death.

We can hope that somebody will find an answer.  But it would have to include ways to eliminate agent shenanigans, invigorate consumers, and be a forward-thinking solution that benefits all.

The inquiry might start with creating a national MLS, or electing a real estate czar, or encouraging agents to keep their word and quit cheating their own customers out of what’s best.

But what if a thing was the answer?

The solution is LIVE AUCTIONS.

We can easily incorporate them into our regular business as the process to select the winning bidder.   All other selection processes used today are subject to the listing agent tilting the table – with a live auction, all participants will be watching, and able to determine the actual winning bidder.

Could there be shill bidders who run up the price?  Yes, but let’s insist that every buyer is represented by a realtor – that way, at least the agent’s reputation is on the line.

Live auctions would keep listing agents and buyer-agents employed, though the fee structure may be in flux.  But our commissions are already under attack, so let’s take a chance that consumers will agree to pay a reasonable fee for these live auctions, and the other additional benefits provided by realtors.

A live auction doesn’t have to be a showy, champagne-filled soiree with a fast-talking auctioneer.  They can be as simple as gathering the buyers around the living room, in a rather informal setting.

I am offering the live-auction strategy to my sellers as the fairest and most effective way to select a buyer, and let the full transparency be the best way to reach top-dollar.

Here’s an example – catch the winning agent’s comments at the 9-minute mark:

Posted by on Feb 19, 2018 in Auctions, Bidding Wars, Jim's Take on the Market, Operation Transparency, Realtor, Realtor Training, Realtors Talking Shop, The Future | 21 comments

The Buyers’ Struggle

When you find the right home, don’t lose it. Get Good Help!

NAHB regularly conducts national polls of American adults and home buyers in order to understand new trends and preferences in the housing market. This is the third in a series of posts highlighting poll results, as presented during the 2018 International Builders’ Show in Orlando, FL.  See previous posts on tiny homes and driverless cars.

A recent poll revealed that most prospective home buyers actively involved in the search for a home have been looking for a significant amount of time. In fact, 61% have been trying to find a home to buy for three months or more, while the other 39% have been looking for less than three months.

The natural follow-up question to those who have been unable to find a home after searching for three months or longer is why?

Forty-two percent say they ‘can’t find a home at a price I can afford,’ 36% ‘can’t find a home with the features I want,’ 34% ‘can’t find a home in the neighborhood I want,’ and 27% were able to overcome all these obstacles but ‘continue to get outbid whenever I make an offer.’

This result shows there are several important reasons why prospective buyers haven’t been able to pull the trigger, but the most important one is lack of affordability – not being able to find a home at a price point they can afford.

Link to Article

Posted by on Feb 14, 2018 in Auctions, Bidding Wars, Frenzy, Jim's Take on the Market, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 1 comment

Are Bidding Wars Legit?

Another reason we should sell homes by live auctions…..Hat tip SM:

A local developer and prominent real estate agency conspired to prey on Chinese nationals and inflate luxury home prices on the Eastside for their own profit, according to a lawsuit filed in Seattle on Thursday.

Two plaintiffs who bought adjacent newly built homes in Kirkland allege that their broker at Realogics Sotheby’s International Realty was actually working on behalf of the builder selling the homes.

Jie “Gabby” Jiao and the married couple Maoqi Zhang and Wei Fan hired Realogics Sotheby’s broker Connie Blumenthal to buy their first homes in the United States in spring 2015.

Realogics has aggressively targeted luxury homebuyers in China and is one of the top brokerages for foreign buyers in King County, and Blumenthal has a glitzy website where she boasts her connections in Hong Kong and million-dollar home sales locally. The company and Blumenthal call the claims “baseless.”

Both buyers relied heavily on the expertise of Realogics Sotheby’s and Blumenthal to understand the local market. They were told there were multiple offers on the table and that they needed to bid more than $2 million each to buy the homes, west of Big Finn Hill Park, the lawsuit says.

But when they arrived in the area after the deals closed, they discovered the homes weren’t as promised, and later found out there was no evidence that other buyers were interested in the homes — suggesting they had badly overpaid based on their agent’s advice, the suit says.

One of the buyers, Jiao, was so dissatisfied with the home’s condition — among other things, it did not have the promised backyard or bedroom lake views — that she put the house back on the market. Even with her new broker aggressively marketing the home and offering a free Mercedes to a potential buyer, she wound up selling it for $1.67 million last June — a $338,000 loss over a two-year period, despite the region’s red-hot real estate market.

The other buyer’s home is assessed at $1.46 million, or about $745,000 less than the couple paid.

The Chinese nationals’ attorney, Dave von Beck of Seattle, said he found “what looks like collusion” between Blumenthal and the seller of the home, Alex Dudko of homebuilder Unique Design & Construction Co.

After issuing subpoenas in discovery, according to the suit, the attorney found emails and check stubs showing Blumenthal — the buyers’ agent — was actually working directly with Dudko, the seller, at the time of the sale.

One check showed Dudko paid Blumenthal $20,000 after the sales for “services,” according to the suit. The suit calls the payment a “kickback” for Blumenthal bringing the buyers to the developer.

In an email to Dudko around the time one of the sales closed, Blumenthal referred to a “bonus just between you and I.”

“Let’s meet for dinner and margarita’s again when I get back!” Blumenthal wrote to Dudko. “I need a new handbag :)”

Read full article here:

Link to article

Posted by on Jan 5, 2018 in Auctions, Bidding Wars, Jim's Take on the Market, Market Buzz | 9 comments

This Week’s Disrupter

This start-up has the right ingredients, but their auctions do have a reserve amount and no buyer-agent commissions, which cuts out other agents.  They say  “No Double Ending’, but when the buyers are unrepresented it puts the listing agent in an agency position – if the buyers ask a question, and the agent replies, an agency relationship has been created. 

Every start-up wants to beat out realtors, and think that the consumers will trust their faceless, unproven venture instead:

LINK

TORONTO, Oct. 18, 2017 — There is a new way to buy and sell real estate in Ontario. With today’s official launch of On The Block Realty, the uncertain and often frustrating process of trying to navigate the home market has taken an innovative step forward. This brand new real estate brokerage based in Toronto, has opened its doors to the public, offering new unique approaches to the industry.

Chief among these advancements is the development of a cutting edge online auction platform that is aimed at bringing much needed transparency to buyers and sellers. The home buying process has been protected by silent bids in many situations, leaving buyers confused about what price to pay, and sellers concerned that some buyers may not have offered their best price. Inspired by the successful practice of real estate auctions in countries like Australia and the UK, this new system offers an exciting alternative for sellers who want to be certain they have maximized every bid from prospective buyers. It also ensures that every buyer has an equal opportunity to buy without any secrecy guarding the process.

“This isn’t about changing or fixing anything, it’s about evolving,” says CEO Daniel Steinfeld. He adds, “People deserve a choice when they make the biggest financial decision of their life. They also deserve clarity about every aspect of the transaction. We provide that.”

While the auction platform is the most distinguishing feature of this premium brokerage, there are several other features that the company believes will set it apart from the traditional brokerages in Ontario.

There is a ‘No Double Ending’ policy that ensures both sides of a transaction are never represented by the same Realtor. President and Broker of Record Katie Steinfeld says, “It is impossible to fathom that people with perfectly opposite financial objectives could have their best interest adequately represented by the same person.” She continues, “This is especially so when that individual stands to make more money by being on both sides of the transaction.” While the Ontario government and real estate industry have diverted from the point of protecting the consumer’s best interest, On The Block has done what makes the most sense – disallow the concept from their business model.

Prospective buyers without representation can still fully participate in a purchase or bidding process, but will not have a client relationship with On The Block – and if they choose to purchase without representation, there is no additional commission payable by either the buyer or the seller. “Buyers are entitled to an understanding of how commissions work. Just because it is widely positioned that the sellers ‘pay’ commissions, that cost is directly coming out of the sale proceeds, and ultimately a cost to the buyer,” Mrs. Steinfeld explains. On The Block’s Transparent Commission Policy explains that buyers should only pay for the service they receive, and so purchasing without representation shouldn’t cost them the extra 2.5% that often get baked into the purchase price.

Beyond the increase in transparency, the company provides a first of its kind ‘all inclusive’ approach to selling a home. One of the most unique included features is that homeowners are given a week in a partner hotel during the selling process to take away the stresses of cleaning and constant vacating that come with showings of the property. This is in addition to perks including professional photography, home inspections, and one of a kind custom signage for every property. “We are trying to sell a home, not ourselves,” Mr. Steinfeld says. “The high end signage is the largest legally allowed, and it is completely focused on the property it is trying to sell, not the brokerage or the name of the sales representative.”

Interested sellers are invited to use the platform at an introductory rate that includes all the bells and whistles, but costs less than half of what traditional Realtors charge.

It has been well documented that the real estate market could use a new approach. Perhaps this is the big change everyone has been waiting for.

About On The Block

On The Block is a premium real estate brokerage and auction house offering prospective home sellers the option to sell by auction or traditionally. As platforms like Uber and Airbnb have disrupted their spaces, On The Block is positioned to challenge a real estate process that for too long hasn’t seen significant change. With home prices continuing to fluctuate widely, and affordability diminishing, it’s more important than ever to give people some choice and power in the biggest selling and purchasing decisions of their lives.

Posted by on Oct 18, 2017 in Auctions, Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 1 comment

Keep The Pink

This tops feeding the squirrels….H/T daytrip!

They’re selling up and moving 800km up the coast but one Lane Cove family is so attached to the bright pink bathroom in their current home they’re offering the buyer $25,000 to preserve it.

The Miller family’s unusual offer is designed to discourage the new owner from renovating the 1960s-era bathroom, with its blue bathtub and sink and mosaic floor. They will pay the cash in five years if an inspection reveals it has been left untouched.

The family is moving to Byron Bay and the three-bedroom house is set for auction on September 23 with a price guide of $2.3 million.

The $25,000 was based on what they figured would be a higher amount than the cost of upgrading the bathroom.

Read full story here:

LINK

A different article on a pink kitchen:

https://www.littlethings.com/original-1950s-kitchen/

Save

Save

Posted by on Sep 10, 2017 in Auctions, Jim's Take on the Market | 2 comments

Kemp Struck Out

I went on the auction mobile app shortly after the auction should have started today, and there wasn’t a trace of any action.  On the MLS listing there is no mention of any auction, and it is an active listing, priced at $11,500,000 just like it has been since December 9th.

Did anyone else see or hear of anything?

The clip above from the auction-house’s website shows it being available for offers tonight, so it appears that the postponed auction was actually a dud.

Our reader elbarcosr described what might have happened after the first auction postponed on April 20th:

We all know the story. He wants 10 mil + and there aren’t any takers. If you open the bidding and there are no bids, is it really an auction?

Until we get to a point where sellers will commit to a reasonable opening bid with no reserve, auctions will remain a gimmick or a small refuge of the uber-houses. Problem is the opening bid needs to be below ‘perceived’ market value to generate the buzz and most sellers aren’t willing to do that.

But it was George T. that guessed specifically on the afternoon of April 20th that the auction would fail:

JtR: I am guessing it might not have a deal – a failed auction. George T

Pending any other evidence to the contrary, George is the winner of the Padres tickets!  Congratulations George – great guess!

This doesn’t look good for the auction house either. If they are going to be advertising no-reserve auctions – which they did in this case – then they need to let ’em fly and the sellers need to bite the bullet.

Posted by on Apr 25, 2017 in Auctions, Jim's Take on the Market | 3 comments

Failed Auction?

The no-reserve auction of Matt Kemp’s house in Poway today was postponed until April 25th.

Why would you postpone for 5 days?

There has to be buyers. This company has been very successful in selling seven and $8-figure homes throughout the world, and they have grown exponentially. The auction process is a big hit, and it is the best solution for selling homes.

George guessed that it could be a failed auction before I saw it get postponed on the website.  He’s looking very astute now….or is George an insider? 😆

Save

Save

Posted by on Apr 20, 2017 in Auctions, Bubbleinfo TV, Contests, Jim's Take on the Market, View | 9 comments

Live Auction April 20th

The auction of Matt Kemp’s house in Poway is Thursday!

You can watch the auction live at 4:00pm Pacific Time on the Concierge Auctions mobile app, where you can also find their rules list.  They will add a 10% buyer’s premium to the winning bid to determine the final sales price.  If you didn’t know that and want to change your bid, feel free!

Kemp has $12,000,000 invested.  The person with the closest guess will receive four tickets to a Padres game!  Here are the guesses:

$4,200,000 – Rob

$4,735,000 – BAM

$5,325,000 – Amy

$5,700,000 – elbarcosr

$5,900,000 – Real Estate Rookie

$6,200,000 – Nick LB

$6,250,000 – Tom

$6,500,000 – LT

$6,519,000 – Matt V.

$6,900,000 – Daniel

$7,050,000 – Susie

$7,126.000 – Ed

$7,350,000 – Mark H.

$7,423,200 – Goughy

$7,875,000 – Kerry

$7,900,000 – kman

$8,000,000 – Name

$8,800,000 – Mike M.

$8,888,888.88 – JakeL

$9,100,000 – Lifeisradincarlsbad

$9,210,000 – CJ

$9,400,000 – Derek

$9,500,000 – Joe k

$9,600,000 – Mike Call

$9,750,000 – bode

$9,800,000 – Jenny

$10,000,200 – Janet

$10,527,000 – Eddie89

There is still time – leave your guess in the comment section below.

Here are more details on the house:

http://www.bubbleinfo.com/2017/03/27/contest-4-padres-tickets/

Save

Posted by on Apr 19, 2017 in Auctions, Contests, Jim's Take on the Market | 17 comments

San Diego County Tax Sale

An online auction to sell real estate? Maybe it will catch on!

Gone are the days of the quick talking auctioneer, paddles and shouted bids. Today, San Diego County Treasurer-Tax Collector Dan McAllister announced he is moving the annual property tax sale auction online.

“With this new system, people sitting at home can browse and bid on more than 1,600 properties currently available, including timeshares starting at $900,” said McAllister. “The online auction aligns with our ‘e-nitiative’ to make it easier and more efficient to do all business with us electronically.”

The online tax sale auction will take place May 5-10. Interested buyers can register as a bidder beginning April 5, and registration will end April 27. Bidders must put up a $1,000 advance and a nonrefundable $35 bid processing fee.

“Moving this tax sale online will cut our operation costs compared to a live auction,” said McAllister. “We also hope to sell more properties as we open the auction up to bidders outside the San Diego region – even around the world.”

All sales are final, so this is a buyer beware sale. Before April, the Treasurer-Tax Collector’s Office (TTC) encourages everyone to research the selection of available properties by clicking here.

Right now, there are about 1,600 parcels available, roughly four times the number we have put up for auction in previous years. The majority – 1,231 – are timeshares, many with minimum bids as low as $900.

The remaining 393 parcels are improved and unimproved properties, 39 of which have owners living in them. Owners of the for-sale properties can redeem them by paying owed taxes and fees until 5 p.m. on May 4. Over the past five years, TTC notices and late bills to these owners have not been responded to. In early April, each of the properties will be personally contacted by TTC staff who will warn them of the impending sale.

The TTC has not held a tax sale auction since 2015, and on average, sales have generated more than $1.1 million each year.

http://www.sdtreastax.com/content/ttc/en/press-releases/Tax-Sale-Auction-Moves-Online.html.html

Posted by on Apr 5, 2017 in Auctions, Jim's Take on the Market, Local Government, REOs, REOs Coming to Market | 2 comments

Realtor Rules of Engagement

We are in the business of selling thousands of homes every year (last year in San Diego County we sold 23,962 homes worth $17,168,811,888).

Wouldn’t you think that there would be a set of rules to guide us?  There isn’t, and what’s worse is that you don’t know what to expect on each house for sale:

  • Will the listing agent create a bidding war?
  • Will the listing agent take the first offer?
  • Will they do their advertised open houses, or not?
  • Will the listing agent tilt the table, and take his own buyer’s offer?

Each sale is different, and there is no telling what will happen.  The uncertainty creates an environment where qualified buyers are denied the ability to compete, and the chaos helps to fuel the buyer frustration, which keeps the frenzy going.

Think if we had a marketplace where you knew that every home was going to be sold the same way. Pick any process – it would bring a logical, business sense to the market if everyone played by the same rules!

I believe that the auction format is the process that is the fairest, but there isn’t a consensus among the big industry players to change anything about the current environment.  Will it ever improve?

This week I submitted an offer on behalf of a buyer, and the listing agent reported that he had multiple offers.  I asked:

“Are you the kind of agent who discloses the other offers?” and included this video from last week:

He said he would need to ask someone, and then wondered, “Are you one of those agents who would”?  I said, “Absolutely, it’s in everyone’s best interest – agents, buyers, and especially sellers.”

Twenty minutes later, he tells me the price and details about the offers on the table, and the price of a previous escrow that didn’t work out – it was the highest of the bunch. He also said that he expected more offers, and that they will just take the best one.

He also added, “You were the only one to ask for more info, so there you go 🙂  Good job working for your clients.”

The industry will be reluctant to adopt the auction format, but maybe we can take baby steps and get there eventually.

Posted by on Apr 1, 2017 in Auctions, Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training | 3 comments