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Category Archive: ‘Listing Agent Practices’

Real Estate Kiss of Death

How do you know when your offer isn’t going to go too far?

When the listing agent tells you, “I sent your offer to my sellers”.

Come on Jim, don’t you expect the sellers to read it?  Yes, I do, but it would be nice if the agent also offered some advice.  I always include my own opinion on why they should take the offer, because I know the other agent probably won’t.

As a result, this is the phone call the following day:

Agent: Did you receive the offer?

Sellers: Yes.

Agent: What did you think?

Sellers: We didn’t like it.

Agent: OK, thanks, have a nice day!

Of course, they didn’t like it because it was less than full price.

After all the showings during the first week on the market, the sellers were telling all their friends and family that they were going to have a bidding war, and sell for over list price.

But nothing materialized, and a few days or weeks later this snot-filled punk has the audacity to offer less than list price?

It reminds me of the Realtor Facts of Life.

It is best to be:

  1. The first-born child
  2. The second spouse
  3. The third realtor

Once sellers hear the same thing three times, they might start believing it.

It is easy to forget or ignore the truth about real estate.  A property’s value is defined by what a ready, willing, and able buyer will pay for it.

Instead, we convince sellers that they determine the sales price.

I might have a solution though – stay tuned!

Posted by on Feb 19, 2017 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 4 comments

Best Seller Tip

What can a home seller do to help make a sale?

Respond to an offer in less than 24 hours.

Here’s what happens if you don’t:

  1. Once a buyer signs a contract, buyer’s remorse starts to set in. If allowed to fester for a day or two, buyers will talk themselves out of buying just because of the anxiety.
  2. There are just enough other new listings coming to market that the buyer’s wandering eye gets distracted easily.
  3. The longer it takes to get an answer, the lower the buyers want to counter.
  4. After about three days of waiting, buyers give up altogether.

On the other hand, when a seller does respond quickly, it gives the buyer the impression that the seller cares, and wants to make a deal.  Buyers respond more favorably to those!

I had buyers make an offer on Monday that was within 4% of the new list price (sellers raised their list price – our offer was $250,000 over their original list) and here we are on Friday with no answer.

In a different case this week, my buyers offered more than twice what the seller paid in 2002, and three days later it wasn’t good enough – the sellers had to have another $10,000.  This is a house that has been on the market for 100 days with no offers.

In both cases, we were sick of waiting around, and even a more favorable response wouldn’t have gone over that well.

Listing agents are notorious for not preparing their sellers on how to respond to offers.  You can predict the chances of a deal coming together purely by how quick the sellers respond.  If they are adequately motivated and the listing agent has their act together, you will get a response within 24 hours.

If not, there probably wasn’t much of a chance of buying it anyway.

Posted by on Feb 17, 2017 in Jim's Take on the Market, Listing Agent Practices, Tips, Advice & Links, Why You Should List With Jim | 2 comments

Homebuyer Torture

You’ve been thinking about moving for a while, and are sensing that 2017 is going to be your year.  What can you expect from the sales process?

We already know that to buy a house, you need four things:

  1.  Right house
  2.  Right price
  3.  Right seller
  4.  Right listing agent

How hard can it be? Won’t agents be helpful?

We know that most agents don’t sell enough homes – half of them haven’t sold anything in the last year – and that bumbling incompetence is everywhere.  In most cases, they literally don’t know how to get out of their own way.

Here’s what you can expect to happen:

  • Seeing houses won’t be convenient for you, they will be convenient for the sellers and listing agents. Last weekend I had two different agents tell me I couldn’t show their listing because their assistant was out-of-town, and many want a 24-hour notice to show vacant houses.
  • When you hear that a seller is motivated, it means that they are motivated to get their price.  They’re not going to give it away!
  • Have questions about the property or the process?  Rarely can you get a straight answer. Agents think they might give something away, so they specialize in vague responses so no one can pin them down later.
  • If you do make an offer, don’t be surprised if you don’t get a timely response. All offers have an expiration date, but it is regularly ignored because listing agents think you will put up with anything.
  • Expect a counter-offer. It is extremely rare that a seller will accept your offer outright – mostly because the listing agent feels they have to tweak it, just to say they did something.
  • It won’t matter how many hundreds of thousands – or millions – of dollars the seller stand to profit at your offer price, they will want more.  It will get ridiculous too, probably down to a difference of 1% to 2%, and everyone will just expect you to pay it.  Heck, every other buyer has.
  • The dickering won’t be just about price either.  The last time the listing agent had a buyer, they remember getting beat up on every term, so this is their chance for revenge.  I just had a listing agent counter over the home-warranty company on a million-dollar deal.
  • Don’t expect to move in to the house once the sale has closed.  The seller will need time to vacate, and that becomes your problem.  They will expect at least a few free days to gather up their stuff, or they will want to rent back for weeks or months at a below-market rate.  And no security deposit either – it’s not like they are a tenant or anything.
  • Repairs? You expect repairs for the outrageous price you paid? Fat chance the seller will agree to do much, and if they do repairs, they will cut corners.
  • Close on time? The buyer will be expected to close on time, unless the seller doesn’t feel like it. I saw one where the seller – who was an agent – refused to move out of the home because her new one wasn’t finished yet, and she made the buyer close the deal and stay in a hotel for a week-plus.

It’s been a seller’s market for so long now that agents think there will always be another buyer; so if you don’t like the way they treat you, too bad.  Unfortunately, the inventory is so low that buyers are more likely to endure, rather than object.  Usually the agents don’t intend to be so unappreciative, they just don’t know any better.

Enjoy your beating!

Posted by on Feb 15, 2017 in Jim's Take on the Market, Listing Agent Practices | 6 comments

Ethics Violation

For the first time ever, I’m going to file a complaint against another realtor.  In this case, the listing agent discounted her commission so her buyer would win, even though my all-cash buyer had a higher offer.

It is in the vaunted Realtor Code of Ethics that any different commission deal needs to be disclosed to the buyer-agents:

7.22 Dual or Variable Rate Commission Arrangements. The existence of a dual or variable commission arrangement shall be disclosed by the listing broker by a key, code or symbol as required by the MLS. A dual or variable rate commission arrangement is one in which the seller or owner agrees to pay a specified commission if the property is sold by the listing broker without assistance and a different commission if the sale results through the efforts of a cooperating broker, or one in which the seller or owner agrees to pay a specified commission if the property is sold by the listing broker either with or without the assistance of a cooperating broker and a different commission if the sale results through the efforts of a seller or owner. The listing broker shall, in response to inquiries from potential cooperating brokers, disclose the differential that would result in either a cooperative transaction or, alternatively, in a sale that results through the efforts of the seller or owner. If the cooperating broker is representing a buyer or tenant, the cooperating broker must then disclose such information to his or her client before the client makes an offer to purchase or lease.

Of course, when taking the listing most agents don’t think they are going to discount their commission to screw another agent out of a deal, but once they get into the heat of battle, they lose their mind and forget.

Or they never knew it was against the rules.

The maximum penalty is a letter in the agent’s file for six months, so there isn’t a big deterrent to being unethical.  They say that the reason the MLS exists is to ensure cooperation and compliance between agents, which sounds good – right up until money is on the line.

I wonder how many agents have read the Code of Ethics?

Posted by on Feb 10, 2017 in Ethics, Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training | 20 comments

Screaming Towards Single Agency

Zillow and our local MLS provider Sandicor reached the Great Impasse a year or two ago when they couldn’t agree on terms under which Sandicor would keep feeding our listings automatically to Zillow.  Agents complain all the time about Zillow’s inaccuracy, but it’s our own fault – agents have to handle them manually, and many are unaware.

But Zillow out-foxed Sandicor, and went directly to the big franchises and made their own deals to obtain their listings.  Zillow is now reaching out to the little guys too – they called me and offered to upload my listings direct from the MLS, and all I had to do is sign one form.

What’s the point?

Zillow has the killer instinct, and will throw their weight around to get what they want.  They are willing to cross the line occasionally too, evidenced by their $130 million settlement in the Move, Inc. lawsuit, and their frat-house employee lawsuit they settled for around $5 million.

I mentioned briefly that the brokers are attempting to build a portal to rival Zillow, but it’s a waste of time and money.  Zillow already has the eyeballs, and they get it about advertising. Any new portal would have to build a better mouse-trap AND advertise as much as Zillow just to catch up.

Or deny listings to Zillow.

But Zillow has already out-smarted any attempts to block listings, because they have gone to the brokers directly and cut their own deals.  The Zillow Team realtors are going to stick with Zillow, not go to some broker upstart portal.

But here’s the catch:

The Broker Public Portal promises to send leads back to the listing broker.

It is all they have to offer the brokerages, and it sounds tempting, because no listing agent wants the three-headed monster (Zillow’s three outside agents) advertising on their listings.

But such a system would encourage more in-house, dual-agency transactions.

It is where the industry is heading, whether it is ethical or not.  Zillow is already way ahead with their ‘Coming Soon’ ads, and every real estate trainer is prodding agents to ramp up advertising of hot new listings prior to MLS input.  Unfortunately, NOBODY talks about the listing agent’s fiduciary duty to the seller to expose the home to the entire marketplace via the MLS.

I see 2-3 listings per day being inputted as ‘Sold Before Processing’, the realtor marketing sessions tout that ‘deals are being made’ at their private meetings, and most brokerages offer their agents a better commission split if their listing is sold in-house.  The ethics of exposing a listing to the entire marketplace via the MLS is being ignored.

Dual agency is tricky for most, and it can be messy too if something goes sideways – the agent is squarely in the sights of every lawyer.

With the tight inventory, agents don’t feel the need to share their commission with an outside agent – especially one who might make repair requests or screw up the closing somehow.  It will be better to hog the listing, make higher commissions, and have easier closings.

We are screaming towards single-agency, where the buyer will get no representation.  If they want advice, they can pay for a buyer’s agent themselves, or just get dragged to the finish line by the listing agent’s clerks.

Hope you like the price and condition, because if you don’t, the next guy will.

Posted by on Jan 24, 2017 in Ethics, Jim's Take on the Market, Listing Agent Practices, Realtor, Zillow | 3 comments

Virtual Furniture

Do you want to add some pizazz to your listing, but don’t want to spend thousands on staging?  This company will add virtual furniture to your photos for $32 each:

http://boxbrownie.com/s/virtual-furniture-us

Buyers who see the virtually-staged photos and then visit the house in person are bound to be disappointed, but maybe they won’t remember?  It’s better than them not visiting at all.

I haven’t tried them yet – let me know how it goes!

Save

Posted by on Jan 22, 2017 in Jim's Take on the Market, Listing Agent Practices, Tips, Advice & Links | 0 comments

Realtors and Robots

By now we have all heard how robots will be supplanting humans and taking everyone’s job in the near future.  What about realtors?

Rich Barton had thoughts on the topic this week:

NEW YORK — Robots may be taking over the world. But they won’t eliminate real estate agents — at least not anytime soon.

That’s the message from Zillow co-founder Rich Barton, whose 10-year-old Seattle company transformed the real estate business by unlocking massive amounts of data about individual homes. Could artificial intelligence — AI-powered robot agents — be the next wave in real estate?

“I choose to believe that all (artificial intelligence) is an enhancement, not a displacement. Just pick your industry,” said Barton, speaking at the Inman Connect real estate conference in New York this week. “We do like to see the end of the world in every new technology that emerges, but, in fact, the truth is every new technology that has emerged has enhanced humanity, and created new kinds of jobs that are much better and safer than the factory jobs or whatever jobs were being displaced.”

http://www.geekwire.com/2017/robots-real-estate-theres-nothing-see-zillow-co-founder-says-agent-jobs-safe/

He chooses to believe it when he is speaking in front of a large group of realtors and his Zillow is king of the hill.  We’ll see what he says once the Broker Public Portal is launched, and realtors try to deny Zillow access to listings, which is inevitable – the only other choice to compete with Zillow is to spend the same $100 million on advertising, which we’re not going to do.

My guess is that Zillow will develop their own AI, or buy a company that does it, and then sell it to their top-spending agents.  We’ll have a realtor civil war – Zillow Teams (Zillow & big-spending realtor teams) vs. BPP/Big Franchises.

The big-box franchises will have to side with the BPP in order to keep their lower-producing-agents-with-the-most-favorable-commission-splits in business.

But I digress.

Would it be so bad if robots replaced realtors?

For the vast majority of old-school agents, the job of being a realtor is to properly complete a fill-in-the-blanks contract.  Those who are proficient at it then call themselves ‘great negotiators’.

This week I saw a newer house that has been on the market for months, and from the photos, description, and price, there wasn’t an obvious reason why it wasn’t selling.  I called the agent – she didn’t answer – so I left a detailed message asking questions about its salability.  The next day she sent me a text that said the house was still for sale, on lockbox, and if I showed it, to lock all the doors when I left.  All of her comments were stated clearly in the MLS – her only attempt at selling her listing was to regurgitate what was already obvious.

A robot could have done it better – the robot could have at least responded within a minute with the same information, instead of the next day.

I know it’s demanding to expect realtors to process actual sales skills, but we’re not going to have much choice in the future – agents are going to need better skills to survive.  Filling out forms isn’t enough any more – a robot could do that, and frankly, robots might be an upgrade.

When you list with me, you can count on me to properly engage with other realtors, and give them several reasons why they should sell your house.

Get Good Help!

Posted by on Jan 22, 2017 in Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training, The Future | 2 comments

Celebrity Real Estate Sales

From the wsj.com:

http://www.wsj.com/articles/how-to-hide-a-celebrity-home-buyer-1484838701

Excerpts:

Code names. Clandestine meetings. Camouflage. High-end real-estate agents are increasingly turning to devices found in Hollywood thrillers to shield the identities of big-name clients.

When he’s taking a well-known client to a showing, Tony Sargent of Manhattan-based brokerage Core said he won’t tell the listing agent who the prospective buyer is—or he’ll offer a different name. In Hawaii, Matt Beall of Hawai`i Life Real Estate Brokers, whose firm has worked with Julia Roberts and Neil Young, will borrow his wife’s car for select showings, as paparazzi can recognize the autos of real-estate agents. During house tours, some agents impose a no-cellphone rule, or have the homeowner’s staff vacate the property. And in other cases, home inspectors, listing photographers and other vendors sign confidentiality agreements.

Some prominent sellers throw in the towel from the get-go and decide to use their fame to bring attention to a listing. That can potentially lead to a quicker sale and a higher price.

Read full article here:

http://www.wsj.com/articles/how-to-hide-a-celebrity-home-buyer-1484838701

Save

Posted by on Jan 19, 2017 in Jim's Take on the Market, Listing Agent Practices | 0 comments

Highest-and-Best Counters

Here we are in the second week of January, and I found myself in the middle of four competitive situations already this week – and it’s only Thursday!

My listing on La Costa Avenue has been shown regularly over the last 67 days, and we had a deal previously until the home-inspector saw the lumpy carpet and thought the home was falling down.

It must have been our turn as an attractive offering this week, because we received three offers, and two other threats.  I always want to counter for their highest-and-best offer, because that’s what is fair.  I want to give every buyer an opportunity to compete, because nobody knows how much they might pay until they are faced with the fear of loss.  I also want to give the agents the chance to earn a paycheck – hopefully they will do the same when the roles are reversed.

The three offers came in at $400,000 and under, and we ended up at $427,000.  All three buyers and agents had an equal chance to win, and my sellers are much happier with $427,000 than just taking the highest offer.

The highest-and-best process should be a standard in the business, but sadly, it is not.  I had buyers in the other three contests, and none of the three listings agents countered for highest-and-best.

Why don’t listing agents do what it right, and counter for highest-and-best?  Are they just fat, lazy, and stupid? No!

They haven’t been on the other side of the table enough and gotten burned to recognize how unfair it is to all parties involved – especially their own client, the sellers.  THEIR SELLERS DESERVE BETTER!

You can’t blame buyers for offering less than list price just a week or two into the new year.  It is typical for a buyer to mentally deduct repair costs, or base their offer on other comps they’ve seen when they think there won’t be any competition.  But when faced with the threat of losing the property, they might be willing to pay more – and they deserve the chance to do so!

Get Good Help!

Posted by on Jan 12, 2017 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 1 comment

Average Days on Market

You’ve probably heard the notion that a more-expensive house takes longer to sell.  Is that true in today’s fast-paced, low inventory era?

2016 Detached-Home Sales

Area
Median Sales Price
Average Days on Market
All SD County
$560,000
37
NSDCC
$1,170,000
45
La Jolla
$1,912,500
58

We know that the $560,000 market has been hot as a pistol, yet on average, it only takes three more weeks to sell a house in La Jolla.

What does the average DOM mean?

It’s the average time before a listing is the best deal in its marketplace.

Because sellers are so consistent about wanting more than the last guy, you could say it’s just a matter of time – you just need more listings to hit the market around you.

If a listing is on the market for months and not selling, something must be really wrong – but price will fix it!

Posted by on Jan 11, 2017 in Jim's Take on the Market, Listing Agent Practices | 2 comments