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Category Archive: ‘Auctions’

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/

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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? 😆

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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/

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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

Contest for 4 Padres Tickets

Let’s have a contest for Padres tickets!

Guess the sales price of Matt Kemp’s house being auctioned April 20th with no reserve!  He paid $9,075,000 in 2013, and it has been listed for $11,500,000.

The person with the closest guess will receive 4 tickets to a Padres game!

From the latimes.com:

“[The auction] is going to be a better route for bringing legitimate interest to the property,” said Nartey, the director of sports entertainment division at Compass. “It’s an opportunity for someone to get an asset for less than its actually worth.”

The “asset” in question includes a 15,884-square-foot main house, a tennis court and an infinity-edge swimming pool on about 4 acres of grounds. A separate pool/guest house holds a gym and a roman spa.

Features of the home, which Kemp has spent about $3 million to update, include custom travertine floors, a cigar lounge with a humidor and a 1,200-bottle wine cellar with a tasting room. A custom home theater is outfitted with tiered seating and a snack bar.

Here is the Zillow listing:

https://www.zillow.com/homedetails/14105-Biscayne-Pl-Poway-CA-92064/38433937_zpid/

Here it is on the auction website:

https://www.conciergeauctions.com/auctions/14105-biscayne-place-poway-ca

Leave your guess in the comments section!

The Trophy at The Heritage | Concierge Auctions

Posted by on Mar 27, 2017 in Auctions, Bidding Wars, Contests, Jim's Take on the Market | 43 comments

Softness?

Perception is more important than the reality….if buyers read this stuff and decide to wait-and-see, then we could have a problem. But every day we are inundated with breaking news – this story will be forgotten by tomorrow.

Hat tip daytrip!

LINK to WSJ article

There aren’t any 2-for-1 deals or rebates yet, but high-end home sellers across the country are offering discounts as the luxury market softens. “Buyers are very price sensitive,” says Donna Olshan, a Manhattan-based real-estate agent who publishes a weekly report on the luxury market. “If it’s not priced right it’s going to sit until the cows come home.”

“We’ve priced to account for today’s market,” says developer Gary Barnett. “The market wants to see some discounting.”

In cities like New York and Miami, where an unprecedented luxury building boom over the past five years created an abundance of lavish condominiums and speculative homes, the market is in the midst of a full-on slowdown.

“The smart sellers today are pricing for now, not 2014,” says Jeff Adler, of New York’s Douglas Elliman.

In other regions, like Southern California, agents say the market is still hot but there’s concern about a potential supply glut on the horizon.

The strength of the U.S. dollar has also turned away some overseas buyers, which had been a large part of the market for high-end condos in Miami and in some new developments in Manhattan.

In San Francisco, where a tech boom and housing shortage have fueled a real-estate gold rush, the peak of the market was summer 2015, says Alan Mark, president of the Mark Co., which does marketing and sales for new developments. New-condo prices are down 3% compared with a year ago, and a few developers are offering incentives like higher commissions for brokers or free upgrades for buyers. But prices, he says, will likely hold steady since overall supply is still low. There are about 700 new condo units under construction that will hit the market this year—well below the peak of new construction in 2007, when 3,000 new units hit the market.

Stephen Shapiro, CEO of Westside Estate Agency in Beverly Hills, says the market for homes priced higher than $25 million is particularly strong in the L.A. area. And the ultraluxury spec-home building spree shows no signs of slowing. A couple of new properties will test the strength of the market, including a newly built home asking $250 million that hit the market last month—now the most expensive listing in the U.S. Though many real-estate agents doubt the home will sell for anything close to its asking price, even a sale at a 50% discount would still set a record in California.

Mr. Shapiro says that over the next three to six months, a number of fully furnished spec homes in the Trousdale Estates area are slated to hit the market, all priced in the $20-million-plus range. “They’re all building the same house,” he says, which may result in some discounting. “So maybe developers will make $5 million profit on a home instead of $10 million.”

Sasha Galbraith, who runs a strategy and organizational design consulting firm, has two properties on the market in Colorado—a condominium at the Four Seasons in Denver and a contemporary ski home in Breckenridge—that she thought were priced to sell at $1.8 million and $4.75 million, respectively. The Denver property went on the market in October, and the Breckenridge property has been on the market for 16 months.

Tired of tidying up the properties for showings and ready to move on financially, Ms. Galbraith decided to auction both properties with New York-based Concierge Auctions. There will be no reserve, or minimum, price set. “It’s a risky process, there’s no question,” says Ms. Galbraith, who is 57. On Feb. 27, the auction date, “either I’ll be needing a box of Kleenex or popping a bottle of Champagne.”

Posted by on Feb 25, 2017 in Auctions, Jim's Take on the Market, Market Buzz, Market Conditions | 2 comments

Auction Questions

David from Louisiana sent this in:

Jim,

I just watched your first attempt at the auction and must say that you did a fine job as the auctioneer. I have been a real estate auctioneer/realtor for 30+ years and have often recommended an auction to fellow realtors in high demand situations such as yours. Of course, it usually falls on deaf ears as the realtors usually feel that they don’t need the service nor do they want to share the fee.

I hope you don’t mind the questions but I have been trying to work with realtors for many years and it seems to be a constant struggle.

I’m curious about what made you suddenly decide to utilize an auction when you could have easily achieved more than the asking price without it?

JtR:  Because there were multiple people at the open house that said they would be interested in purchasing the house, I thought this would be the best way to determine the winner fairly, and create maximum urgency.  The agents involved were willing, and so was the seller, so it worked out.  We did close escrow with the winning bidder at the price determined by the open bidding.

What was the seller’s opinion when you told them you were having an auction?

JtR: She was motivated to sell, so that made the difference.  Sellers who aren’t that motivated are suspicious of selling too quickly, thinking that this is like most jobs in the world where you work hard for weeks or months to achieve the desired result at the end.

But selling real estate in this low-supply, high-demand environment is the exact opposite – you stand the best chance of selling for top dollar in the beginning when the property is a hot new offering, and has max urgency. Buyers think something must be wrong with houses that aren’t selling in a hot market.

Did you consider actually marketing the property as an auction for a longer period of time and possible having more bidders?

JtR: No, because the highly-motivated buyers are there first.  There could have been other people interested later, but if they aren’t interested enough to come to the open house, then they probably weren’t willing to pay 4% or more over list price.  Yes, there could always be two in the bush, but our environment has trained buyers to race to hot new listings that might be a perfect match for them.  Not only will they be the most likely to pay more than others, but they are more likely to close escrow too.

I consider the quality/suitability of the property too.  This was a 1,541sf two-story house with a steep slope behind, so it wasn’t for everyone.  There were 3x as many people who didn’t bid.  Sellers and listing agents should consider how many people who came and didn’t offer.

Will you consider using the auction method in the future?

JtR: Absolutely, it is the best way to achieve top-dollar sales.  The animal spirits are driven when competing with your opponent eye-to-eye.

But auctions aren’t commonplace yet, so when I have multiple offers on a listing, I create a similar experience by pitting bidders against each other to increase the price.  I tell them the price to beat, which nobody does. Realtors want you to think it is better to bid blindly, but buyers are much more likely to go higher if they have a number to beat.  I take advantage of the competitive spirit, which you don’t have with blind bids.

For those who might think an auction format would only work for lower-priced properties, let’s note that there have been three sales in Rancho Santa Fe that utilized the no-reserve auction process, and closed for more than $10,000,000.

Those three are the ONLY sales over $10 million in the last five years in the Ranch, and there are 30 for sale today.  Let’s give auctions a try!

Of course, I would be happy to answer any questions that you may have.

Thanks, David

JtR: David, if a trusted name-brand company brought a slick and easy auction process to home sales and advertised it properly, do you think they could succeed?  Do you think they could change everything, and potentially eliminate realtors as we know them today?

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Posted by on Feb 21, 2017 in Auctions, Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training, Realtors Talking Shop, Why You Should List With Jim | 6 comments