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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: ‘Bidding Wars’

Shopping Offers Around

It’s been an old wives tale that listing agents can’t disclose to a buyer’s agent the price and terms of competing offers. I found this at the N.A.R. website:

Real estate brokers may, unless prohibited by law or regulation, “shop” offers. Therefore, REALTORS® assisting purchasers in formulating purchase offers should advise those purchasers it is possible that the existence, terms, and conditions of any offer they make may be disclosed to other purchasers by sellers or by sellers’ representatives except where such disclosure is prohibited by law or regulation.

Link to NAR website

Competing buyers are more likely to respond favorably if you give them a number to shoot at.  Sharing the price and terms of other offers is a way to create a slow-motion auction effect, which benefits both sides.  Buyers gain some transparency, and sellers get top dollar.

Posted by on May 3, 2018 in Auctions, Bidding Wars, Jim's Take on the Market, Listing Agent Practices | 1 comment

Home Buyer Competition

What today’s home buyers are up against……from realtor.com:

Driven by frustrated buyers who rolled over from last year and record-breaking lows in housing inventory, the 2018 spring buying season is expected to be one of the most competitive in years—but buyers are still optimistic about getting into their dream home, according to a survey conducted for realtor.com®.

“We’re only a few weeks into March and already seeing the market heat up,” said Danielle Hale, chief economist for realtor.com®, in a statement. “Holdover buyers hoping for greener pastures this spring are likely to find sparse options that require them to pay top dollar or make other concessions.”

And those holdover buyers are driving a large portion of the demand, according to an online survey of more than 1,000 active buyers conducted in early March by Toluna Research.

The home search has dragged on for more than seven months for 40% of respondents, the survey showed, while 34% have been searching for 4-6 months. About a quarter have been in the market for three months or less.

More than one-third, or 35%, of those surveyed indicated they anticipate “a lot of competition” this spring.

Perhaps because of that, buyers are thinking strategically about turbocharging their home search and getting an edge on the competition.

When asked how they are trying to get ahead, 42% of respondents revealed they are checking listing websites every day, while 40% plan to put more than 20% cash down. The survey also revealed that 33% are setting price alerts, 31% plan to put down a larger earnest money deposit, and 26% are willing to offer above asking price. Only 6% indicated they are not planning to use any special tactics to cope with competition.

“The majority of buyers are aware of the tough competition they’re up against this spring. Having been in the market awhile, they’ve likely lost a few homes to better offers, which has given them more time to save and up their bidding strategies,” said Hale.

Link to Article

Posted by on Mar 22, 2018 in Bidding Wars, Jim's Take on the Market, Market Buzz, Thinking of Buying?, Why You Should Hire Jim as your Buyer's Agent | 0 comments

Leaving California

If enough people see this…..maybe more will leave? I can help you with that!

From cnbc.com:

Californians may still love the beautiful weather and beaches, but more and more they are fed up with the high housing costs and taxes and deciding to flee to lower-cost states such as Nevada, Arizona and Texas.

“There’s nowhere in the United States that you can find better weather than here,” said Dave Senser, who lives on a fixed income near San Luis Obispo, California, and now plans to move to Las Vegas. “Rents here are crazy, if you can find a place, and they’re going to tax us to death. That’s what it feels like. At least in Nevada they don’t have a state income tax. And every little bit helps.”

Senser, 65, who previously lived in the east San Francisco Bay region, said housing costs and gas prices are “significantly lower in Las Vegas. The government in the state of California isn’t helping people like myself. That’s why people are running out of this state now.”

Based on the U.S. Census Bureau’s American Community Survey data, “lower income Californians are the ones who are leaving, not higher income,” said Christopher Thornberg, founding partner of research and consulting firm Beacon Economics in Los Angeles.

He said housing is the chief reason people are leaving California, pointing out there are frequently bidding wars for what limited inventory of homes is available.

USC Dornsife/Los Angeles Times Poll of Californians last fall found that the high cost of living, including housing, was the most important issue facing the state. It also found more than half of Californians wanted to repeal the state’s new gas tax, which raised fees by 40 percent.

“The rate at which California has been losing people to other states has accelerated in the past couple of years, in part because of rising housing costs,” said Jed Kolko, chief economist with employment website Indeed.com.

Link to Article

Posted by on Mar 20, 2018 in Bidding Wars, Jim's Take on the Market, Market Buzz | 12 comments

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 | 23 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

Multiple-Offer Season

The graph above shows that we’re heading into multiple-offer season, and whether you are buying or selling, you should work with an agent who is an expert in handling a bidding war.

In a monthly survey of REALTORS®, seller’s agents who closed a sale are asked “How many offers were received for the most recent property you sold in the past month?

Among seller’s agents who closed a sale in December 2017, the respondents reported they received 2.2 offers (which means sellers received between two to three offers) on their most recent sale, according to the  December 2017 REALTORS® Confidence Index Survey.The number of buyer offers on a home has remained unchanged in the past two years. Why so?

On the one hand, an improving job market tends to prop up the number of buyer offers, assuming the same level of homes listed for sale. Yet in reality, the number of homes being offered for sale have fallen to their lowest level since January 1999 (3.2 months’ supply in December 2017), and this has pushed up prices, dampening demand. Since January 2012, the median home price of existing homes sold has increased by 60 percent.

The number of buyer offers exhibits a seasonal fluctuation, with the number of offers tending to peak in April through June, as households plan their move/relocation around the school opening in August/September.

Link to Article

Posted by on Feb 13, 2018 in Bidding Wars, Jim's Take on the Market | 0 comments

Way Over List Price

Here we only have to pay 5% to 10% over list….if at all!

It is no secret the housing market is on fire. Last year, almost a quarter of all U.S. home sales were above asking price, according to real-estate listings website Zillow. But the average premium over asking for those homes was $7,000—not $700,000. Even in the hottest real-estate markets, where there is a severe shortage of inventory, the highest bid typically isn’t more than a couple hundred thousand dollars over asking.

What often distinguishes the houses that go way above asking—half a million or more—is a feature that the other homes in the neighborhood just don’t have, says Toby Lumpkin, a real-estate broker with Realogics Sotheby’s International Realty in Seattle. That can be a better view, more southern exposure, an especially tasteful renovation, a three-car garage in a parking-challenged city, or a side yard, which is what set apart Mr. Malcolm’s house. It’s also often a price low enough to attract attention.

When Kerry Bucklin saw a house for sale on Mercer Island, Wash., on the waterfront, he thought its price of $1.995 million was too low. The Midcentury Modern home, built in 1959, needed updating and shared 210 feet of waterfront with five other houses. But it was the closest of the houses to the shore, offered unobstructed views in a parklike setting and allowed him to go paddling on Lake Washington without having to load a canoe on his car. At the same time, the property was close to the freeway, shaving 6 miles off his commute to work.

Mr. Bucklin, 55, a real-estate lawyer, had been looking for a couple of years to replace the large family home mid-island, where he lived alone since becoming an empty-nester. He bought the home in June by paying just over $500,000 above asking, beating seven other offers.

Read full article here:

Link to Article

Posted by on Feb 9, 2018 in Bidding Wars, Frenzy, Jim's Take on the Market | 0 comments

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

Treehouse Vibe

It’s only money!

LINK

San Francisco’s housing market is so out of control, the new owners of a cavernous hillside home in the city offered nearly $1 million over asking in order to pre-empt a bidding war.

1 Miguel Street went into contract after just two days on the market, closing for $2.6 million. The out-of-state buyers made the deal before any other bids were placed, according to the realtor.

This kind of over-bidding shows the extent of the housing bubble in San Francisco, where a perfect storm of demand, speculation, and exuberance drive real-estate prices sky-high.

Built in 1957, the mid-century modern home sits on an oversized lot surrounded by trees in the Glen Park neighborhood. Featuring three beds, two and a half baths, and roughly 2,040 square feet, 1 Miguel Street offers panoramic views through the floor-to-ceiling windows. Wood-paneled walls, exposed beams, and a wrap-around deck give it a distinct treehouse vibe.

The residence was a custom commission from local architect Worley K. Wong. The kitchen and bathroom went through a renovation before hitting the market, according to the listing.

Glen Park is a southern enclave of San Francisco that draws wealthy buyers because of its seclusion, picturesque streetscapes, and suburban feel. The median list price in the neighborhood is $1.8 million, and homes typically sell for 124% of the list price.

Posted by on Oct 25, 2017 in Bidding Wars, Interesting Houses, Jim's Take on the Market, Listing Agent Practices | 0 comments

Frenzy Fever

As the national drought in home supply dragged into its 21st straight month, competition among buyers drove prices up once again.

And the fiercest competition was in the Bay Area.

A new report from Redfin shows that 73.7 percent of homes sold above the listing price in the San Jose metropolitan area in June. That was the highest percentage in the nation, followed by the San Francisco metropolitan area (70.6 percent, second highest in the U.S.) and the Oakland metropolitan area (69.8 percent, third highest). They were followed by Seattle (62.3 percent) and Tacoma, Wash., (52.6 percent).

“Every record in market speed and competition that was set in May was broken again in June,” the report stated.

The Redfin report comes two days after the Mercury News reported on a rash of over-asking home sales in Sunnyvale and Cupertino. In the last month, more than 50 homes in those two cities sold for at least $200,000 over the asking price. One modest Cupertino house — 1,046 square feet — sold for $660,000 above its listing price.

According to Redfin, San Jose had the nation’s largest decrease in housing inventory, falling 42.2 percent in June from one year earlier. The second largest year-over-year contraction of the home supply was in Rochester, N.Y., where inventory fell 29.7 percent. The third largest shrinkage happened in San Francisco, where inventory fell 26.6 percent.

Read full article here:

http://www.mercurynews.com/2017/07/13/new-report-bay-areas-rocketing-real-estate-market-leads-nation-in-over-asking-sales/

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Posted by on Jul 13, 2017 in Bidding Wars, Frenzy, Jim's Take on the Market, Sales and Price Check | 0 comments