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I don’t think it is in the seller’s best interest to “pre-market” a home, but most REO agents insist on installing a for-sale sign in front of their new REO assignments at least several weeks before the price is determined. 

Callers who hear that there is no price get ticked off, and are quick to forget.  Oh, you got their number and you call them back with the price?  They are bored by then, and it’s harder to re-ignite any interest, plus the other agents don’t appreciate seeing you constantly trying to scoop their buyers on EVERY SINGLE LISTING YOU GET.

Wouldn’t it seem better to avoid ticking off buyers and other agents?

The future of real estate should include videos. 

If you just look at the comps on paper, there was the similar REO sale a few doors down (which we saw) that closed last month for full price, $792,000, but it was on the golf course, down off La Costa Ave.

The inferior location might not be obvious to an asset manager with 300 files on their desk, who is looking to make a quick decision.  If the initial appraisal or BPO only included a few “positive” photos, the true condition of the home might not be obvious either. But if there was a video presentation to pick up the good, the bad, and the ugly, the price might be sharper – here’s an example:

I had a listing last summer at the end of Steinbeck in Carlsbad, a 3,495 square footer with a great view of the ocean/smokestack (like you’ll see at the end of this video). 

The seller, who had already moved and wasn’t coming back, really struggled with the idea of selling for only $1,015,000.  But he relented after I presented a compelling case, and I promised that in a year or two that he’d be thanking his lucky stars, and that he’d probably want to buy me a beer.

We closed July 29, 2009.  Here’s the latest in the neighborhood:

Bruce Norris is a very knowledgeable and experienced player in the real estate arena. 

His focus is on the buying and selling of trustee-sale  properties around the Inland Empire, but he has other related business ventures, including the financing of trustee-sale purchases, and providing a vehicle for investors to participate in the hard-money returns. 

He has his own radio show, provides trainings, and even has a blog!  Here’s a link to his homepage:

http://www.thenorrisgroup.com/

He recently published a 61-page powerpoint presentation – link below.  It’s a remarkable research project regarding the current market conditions with plenty of charts and graphs covering the unintended consequences and false indicators that he is seeing:

http://www.tngacademy.com/pdf/sdcia-5-11-2010.pdf

There are mountains of data in his presentation, but I’d like to address page 59, where it notes that 60% of the buyers went through the listing agent to make their offer.

On page 61 it notes that only 7% of the sales were over $300,000. 

I regularly tell buyers who want to pursue homes in the lower price ranges to go direct to the listing agent – that market is too hot/competitive, and the failure rate of offers is extremely high. 

You’ve seen the stories here – when we have sold the cheapie REOs in Oceanside that garner dozens of offers, the buyer agents tell the same story, something like this:

“I have written so many offers with this buyer, please take this one, I’m begging you!”

There aren’t that many agents who are going to work for months and months to earn $2,000 to $3,000 after splits and expenses, so I wasn’t surprised to see that the listing agents are representing most of the buyers too. 

The big REO listing agents have plenty of buyers’ agents on duty, and most like to put their for-sale signs out prior to MLS-input, so they should be representing the buyers of lower-end listings.

How about in North SD County Coastal?

A check of the last 117 detached sales from Carlsbad to Carmel Valley revealed that 18, or 15% were marked as round-trippers, where the agent represented both seller and buyer.  Only a couple looked like they were a result of quick action in the first few days of the listing.  There were eight REOs, and none of those were sold by the listing office.

THOUGHTS ABOUT GOING DIRECT TO THE LISTING AGENT

1. It might make the difference when there are multiple offers – you could win the race, but you’ll probably still have to pay top dollar. I don’t think there are many legitimate, professional listing agents that would burn their sellers, and take their own offer when a better one is on the table.

2. Once the listing is stale, and the seller and listing agent are both fatigued but don’t want to lower the price, there might be an opportunity. But I think in both cases (1&2) you could still get the same deal and have your own representation if your buyer’s agent is really good.

3. If you go direct, don’t be surprised if the listing agent is more loyal to the seller, and acts like you owe them a favor. You’d think the listing agent would be grateful – but if they aren’t, it’s because they are uncomfortable with the situation, especially if they burned somebody else to make the deal. And don’t be surprised if they are resistant to sharing the commission either, they’ll think of it as their reward for getting you the deal.

4. If you were working with a buyer’s agent who was helpful, and for whatever reason you decide to go direct, do a little something for your previous agent. If they provided real assistance in your search, consider hiring them separately to consult on the deal, because you might need help along the way. If you feel uncomfortable telling them, then press yourself to at least buy them lunch or do something nice. If you don’t feel uncomfortable burning them, then they didn’t do much to help you anyway.

This is a touchy subject, agents don’t like to talk about it – and I don’t need commenters to load up please. But if there is more real estate revolution, it’ll probably be in this category – having just one agent facilitating the deal. Realtors will have to provide real value, beyond filling out pre-printed forms, and pointing out which room is the kitchen.

Is there a real estate revolution available, beyond just a fancy new MLS website?

Zip Realty has blazed the trail.  They offer:

1. Their own search website
2. Rebates
3. Phone Apps
4. Salaries to agents
5. Catchy name, and national exposure

Their website is of particular interest.  They mention:

Our ZAP technology also includes a customer relationship management system that identifies and analyzes user behavior on our website allowing us to provide more relevant information and service to clients and a business management system that allows our managers to monitor the activities of our ZipAgents to verify a high level of client service.

They monitor your usage of their website.  They track the houses you’ve viewed on-line, and how long you spend looking at each house - figuring the longer you look, the more you like it.  Then they send a report to your designated Zip agent.

It sounds a little creepy, but from the agent/broker perspective, it is a very effective way to identify the clients who are motivated, and keep the agents focused on productivity.

If you were thinking about how you might create more than just a fancy website, and wanted to change the business, you’d admire Zip’s model. Redfin is another company that publicly set out to revolutionize the business with a very popular website and rebates. How is it working in San Diego?

Zip Realty started in 1999, so you’d think by now they would be gaining traction, but in 1Q10 they lost $6.2 million. Redfin is privately-held, but according to wiki they’ve poured $20 million of venture capital into their company.

Yet based on the number of sales, neither has been able to revolutionize the real estate world as we know it, at least not in San Diego. There have been 12,320 detached, attached and 2-4 unit sales in 2010, year-to-date.

Why? Because the more-experienced agents are able to beat the others to the punch – they recognize the best buys faster, their clients tend to be better qualified, and the respect/camaraderie between the veteran agents will trump the less-experienced agents in a close race.

Any revolution would have to embrace the more-experienced agents, or over-run them. A company like Google would have to set up an auction house with full transparency to topple the old guard.

P.S. I have never had a bad experience with any Zip or Redfin agents, and I mention my stats as a middle-of-the-road example – there are agents who sell a lot more houses than I do. Because it’s been mentioned here several times that the sales history of each agent should be out in the open to assist consumers with evaluating realtors, let it start with me.

If these sellers decided that they didn’t want to wait the 48 hours he gave people to submit their offers, then all he had to do was call back the other contenders so they could participate.  But instead, the agent blew off eveybody to make the quick deal, a common event with short sales:

Hat tip to Mike, who sent this from the nytimes – I wish the associations of realtors would be more exclusive, and kick out the scumbags!:

Several Hamptons real estate executives said Tuesday that they had been contacted by Justice Department officials seeking information about a listing service that has been criticized as an effort to keep smaller agencies from having access to the area’s best properties.

The service, known as Realnet, allows members to share their listings with other members. Last year, George Simpson, who runs his own real estate listing company, sued more than two dozen local brokerages and Realnet. Mr. Simpson said that because only larger brokerages could afford the annual fee, which he said ranged from $15,000 to $50,000, those brokerages ultimately controlled “80 percent to 90 percent of the exclusive real estate listings.”

Three brokerages named in the lawsuit — the Corcoran Group, Brown Harris Stevens and Prudential Douglas Elliman — declined to comment or did not return calls. Realnet did not return a call and an e-mail message seeking comment.

By August, Mr. Simpson had withdrawn his lawsuit and said that he planned to refile his case under “different circumstances” and continue “moving forward with the crusade.”

But the original case apparently caught the attention of Justice Department officials. Mr. Simpson said that in the past month, he spoke for 90 minutes by telephone with several department employees about the structure of the real estate industry in the Hamptons and which firms dominated the market.

Members of a multiple listing service post their sales listings for other members to see; nonmembers could be at a disadvantage because sellers generally prefer to have their homes placed on listing services and exposed to as many potential buyers as possible.

John Nickles, a broker based in Southold and the chairman of the multiple listing service for the Hamptons and North Fork Realtors Association, said that he was interviewed on May 5 by two Justice Department lawyers, an economist and a paralegal. Mr. Nickles said that his brokerage could not afford the more expensive system; he pays $160 a month for access to the local multiple listing service that he leads.

Joe Kazickas, owner of an Easthampton real estate company that runs a Web site called Hamptonsrentals.com, said he was scheduled to speak to Justice Department officials on May 24. He said that smaller brokerages that could not pay for the costlier listing database would find it “very difficult to compete.”

HAPPY MOTHER’S DAY!

When it is so competitive for the good buys, how does a buyer compete when he’s out of town?

Do you jump on a plane for every new listing?

There were multiple offers on this 3,454sf house, and according to the seller/agent, they were all very similar.  Typically when a buyer hasn’t seen the house they get eliminated immediately.  But in this case, I showed this video to the sellers too, and convinced them that it was close enough to a personal visit that my buyer was very comfortable proceeding.  They agreed!

He came in for the physical inspection and had the same impressions of the house as he did from the video.  He still liked it! We did the final walk-through by video too, and it closed escrow Friday for $685,000, with the buyer having to come to town just once.

Any house west of the I-5 freeway in our prime North SD County Coastal region, priced within range of Fannie/Freddie/FHA financing, is likely to find a large audience.  Here’s an example:

The first minute of this video was taken yesterday during our usual broker open house session on Wednesday mornings, and the remainder was shot today.

I am a proponent of realtors getting the word out, yet very few are willing to publish data or opinions to help consumers.  I don’t know if it’s because local agents live in Kris Berg’s shadow at her witty http://sandiegohomeblog.com/ or because agents generally have nothing to say?

But I support the agents who do blog – because consumers deserve more information, and every opinion is worth considering.

A few years back, Schahrzad Berkland, aka ‘powayseller’, a very vocal bear on the blogs, became a realtor.  Out of her commitment to help buyers and sellers, she runs her own blog:  http://www.californiahousingforecast.com/ 

I’ve been encouraging her to do more videos:

She has experienced how the homebuyers’ want and need for buying a house has been much stronger than she expected. We noted how hard it is to find the right house, at the right price – and how that difficulty makes buyers more determined, and more anxious. It takes everyone working together patiently to make smart, logical decisions.