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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: ‘Listing Agent Practices’

List-Price Increments

 

We see people changing their price by $1,000 or $5,000, and it makes you wonder what they are doing.  They can’t actually believe that it will do any good, can they?

Here’s why they do it. Realtors tend to live off their MLS hotsheet, which is the day’s summary of listing activity.  Every time a listing has a price change, it gets back onto the hotsheet, which reminds agents that it’s still for sale, and to consider showing it again.

But that’s the only reason.  Nobody will be too impressed with a price change unless it is substantial, like 5% of the list price.

Back when houses sold in the $100,000s and $200,000s, a price change of $5,000 or $10,000 was 5% or more. But now that 94% of the NSDCC houses for sale are listed over $900,000, buyers get annoyed if you only change the price by a couple of bucks.

I used to think of pricing in easy-to-digest quarters.  For example:

$999,000,

$1,029,000,

$1,049,000,

$1,079,000

$1,099,000.

But now that we have fewer comps, more listings not selling, and overall buyer exhaustion, we might as well cut to the chase. Besides, it’s hard to know where the values are when they can change +/- $50,000 in an afternoon.

Let’s make it simple and just use two price points (half and full million):

$999,000

$1,049,000

$1,099,000

Today’s pricing is slushy enough that moving in $50,000 increments is a good way to keep a listing fresh and compelling!

Posted by on Aug 15, 2018 in Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Why You Should List With Jim | 2 comments

Sell Your Home Now, or Later?

So you’ve heard that the market is a little uncertain right now, and you’re wondering if you should just wait a year or two before selling your residence.

If you don’t mind keeping the home forever, then fine, the value will probably go up in the long run. But if you’d rather get your hands on your tax-free equity in the next couple of years, consider this.

In the strong seller’s market we’ve enjoyed over the last nine years, buyers had to pay the price.  There was enough competition that if you didn’t pay the seller’s price, somebody else would.

But lately we’ve seen the competition dwindle.

Let’s don’t call it a buyer’s market just yet.  Let’s call it neutral.

If buyers feel they have more negotiating power, they are going to use it.  They wait more patiently now, critique the comps more closely, and skip the fixers unless the price gap is appropriate.  Sellers of the fixers got away with selling for just a little under the superior homes, but now the 5% to 10% gap is back.

Once the market has turned that corner, it probably won’t just bounce back to being a seller’s market the next spring.

How do you know if you should sell now, or take a chance?

Sell now if you have good comps.

You’re not going to have better comps next year.  Why?

Because once buyers they recognize a slower market, they are going to dig in on price and only pay the same as the comps, or less.  They will wait patiently for the more-motivated sellers who price close to the comps or just under.  Those are the sales that will be setting the market.

So the best-case scenario is to have next-year’s prices be about the same as today.  So you should sell now while you have the certainty.

Posted by on Aug 14, 2018 in Jim's Take on the Market, Listing Agent Practices, Market Buzz, Thinking of Selling?, Why You Should List With Jim | 3 comments

“The business model is flawed”

They charge even less in America, and you need good help to handle the load:

“Broke” real estate agents are quitting British disrupter Purplebricks in droves as the fixed-fee agency’s low-margin, high-turnover business struggles to achieve enough sales amid a slowing Australian housing market.

Research by The Australian Financial Review found at least 27 agents had quit Purplebricks Australia since March with overall agent numbers now down to 88 from 105 reported by the company in October when it filed its British interim results.

Purplebricks territory owners (franchisees) and agents, who spoke to the Financial Review, said they were struggling to make a living and were preparing exit paths after the $100,000 to $180,000-a-year salaries they were told they could earn failed to materialise.

Employment contracts show Australian agents earn just over $1000 out of the $5000 to $6000 upfront fee vendors pay when they list with the Purplebricks.

Internal sales figures obtained by the Financial Review for NSW – where the market has slowed the most – paint a picture of struggle for many.

They show that 15 agents undertook a combined 768 home appraisals between February and April, but have so far secured just 189 listings between them

While two of these agents have 72 instructions between them, the remaining agents have won between zero and 18 new listings each over the three-month period.

“The concept is brilliant, but the business model is wrong for Australia,” said former Purplebricks Newcastle agent Steve Bashford, who quit in May. “There is a big difference between what they promised us and what we achieved.”

Many other current agents and franchisees, who asked not to be named, made similar observations.

“There’s no money in it. The business model is flawed,” said a current franchisee.

“I’ve sold 50 properties in 18 months and I’m broke,” said another agent who recently quit.

Apart from the $1000 instruction fee, agents can earn additional fees if a customer arranges a Purplebricks home viewing or signs up for a mortgage with one of its partners.

However, much of this additional income has vanished as franchisees have had to hire and pay sales assistants to help clear the backlog of listings.

In addition, agents told the Financial Review, Purplebricks clawed back money from them if a customer complained and obtained a refund.

They also said the company had been “turning off postcodes” in places such as Sydney’s eastern suburbs without notice as agents battled to manage their ever-growing number of unsold listings.

According to its Australian website, since launching in September 2016, Purplebricks has secured more than 5200 listings and sold more than 3600 homes. It currently has 1563 properties for sale.

It reported a £5.1 million loss from its heavily marketed Australian business for the six months to the end of October 2017.

Read More

Posted by on Aug 11, 2018 in Jim's Take on the Market, Listing Agent Practices, Market Conditions, Realtor, Realtors Talking Shop | 1 comment

Kayla and Manhattan RE

Selling homes in Manhattan is competitive, even without a central MLS run by the realtor board.  Once an agent uploads a listing onto their company system, it gets distributed immediately to the regular portals StreetEasy (owned by Zillow), realtor.com, etc. where agents and consumers access the same data.

So even though there isn’t an official MLS, there is a commitment to full market exposure, and giving every agent a shot at selling each listing.

William (KK’s new boss) said that if agents were keeping listings in-house, then the Manhattan board of realtors would step in and do something about it.

It’s going to be competitive everywhere, but if every agent was committed to doing what was best for their sellers, then we could all get along nicely.

He also said that it is very rare that they do a home inspection.  There isn’t a requirement for seller disclosures either – it’s up to the buyer’s attorney to include any questions about the property in the contract.

It has been a buyer’s market around Manhattan for the last couple of years.  Maybe a sign of things to come everywhere?

Kayla will start her new job there on August 27th!  I will let her share her experience here as she sees fit, but she couldn’t be more excited to begin this new chapter in her life!

 

Posted by on Aug 8, 2018 in About Kayla, Jim's Take on the Market, Kayla Training, Listing Agent Practices, Realtor | 7 comments

White-Boxing

Homes in original condition would benefit, but you can’t finance these:

Home shoppers usually want to see a property at its best. This means that sellers truck in staged furniture, slap on fresh paint, and repair potential problems for buyers.

“When you walk into a beautifully designed and furnished unit, people can much more easily place themselves in this atmosphere,” says Jade Mills, a real estate agent at Coldwell Banker in Beverly Hills.

However, there’s an entirely different alternative that home sellers are trying. It’s called “white-boxing”. Home sellers—especially those in luxury markets with high-end properties that are in great locations—are ripping out everything in a home before showing the property.

As counterproductive as this may sound, white-boxing lets prospective home buyers start from scratch. It allows them to focus on potential and maybe even the views outside the residence, rather than what’s inside the home, which may not suit their tastes.

“White-boxing” is the exact opposite of staging a home to enhance its appeal. Instead of using furniture and accessories to sell the space, it presents a blank canvas, without the aesthetic choices in place, and allows the buyer to dream up layouts and floor design.

White-boxing is most relevant in luxury markets like New York City and Los Angeles, where breathtaking views and a desirable location are common selling points of a house, Mills says.

“As recently as a few years ago, it would be relatively rare for a seller to go to market with unfinished luxury space, but now, there’s increasing recognition that ‘designer-ready’ is exceedingly more attractive than ‘move-in ready’ to the ultrawealthy,” Josh Greer of Hilton & Hyland told CNBC.

https://www.realtor.com/advice/buy/white-boxing-real-estate/

Posted by on Aug 4, 2018 in Jim's Take on the Market, Listing Agent Practices, Remodel Projects | 6 comments

Zillow Offers

Hat tip to Eddie89 for sending in this article on the prospects of Zillow’s ibuyer program, which looked a little sketchy to me too until it was divulged that these ibuyers are primarily in it to make the fee income, and if they can make a profit by selling the houses for more it will be icing on the cake:

Steve Eisman, an investor known for his correct bet against subprime mortgages a decade ago, told Bloomberg News that he’s taken a position against Zillow Group Inc. ZG, -7.08% calling its new venture into selling houses “a terrible business.”

That Zillow venture, then called “Instant Offers,” was announced in April, to mixed analyst reviews. “We are big fans of this pivot,” said Stephens’ John Campbell at the time. A few weeks later, RBC Capital downgraded the stock, saying the shift into what is now called Zillow Offers set the company up for a “transition year” even as the stock remained overvalued.

In response to a request for comment on Eisman’s remarks, a Zillow spokeswoman emailed, “we think Zillow Offers is an attractive service for sellers in all types of housing markets. In a slower market, our offer might seem even more attractive to a seller.” Zillow shares, which had been up more than 50% for the year to date, tumbled nearly 7% after Eisman’s appearance.

Link to Article

If Steve wants another reason, he should consider how realtors react to change in the market.  Yesterday, I saw an agent in a private realtor Facebook group ask for alternatives to the Zillow advertising he has been doing, which is exceedingly expensive.  Historically, the minute the market turns, realtors stop spending money, and I think that time is here.

Posted by on Jul 29, 2018 in Jim's Take on the Market, Listing Agent Practices, Realtor, Zillow | 6 comments

The Difference Realtors Can Make

Donna Klinge

Here are examples of some of the wacky stuff that happens in this business, and why it’s important to get good help:

We represented the buyers of House B, whose sellers were buying their listing agent’s personal residence (House A).

They had included in their listing agreement that the sale of House B would be contingent upon the successful purchasing of House A – but the listing agent forgot to include the contingency form in our documents.  As a result, the sellers were locked into selling their House B to my buyers.

When the discussions of repairs and termite work of House A got testy, it was revealed that the contingency form had been omitted from our House B deal.  The client called their listing-agent/owner, ‘unprofessional’, which set her off and she refused to do any repairs to her house.  The clients backed out of the purchase – but she was still their listing agent on our sale of House B, and the sellers only had two weeks left to get out of their house.

The listing agent went quiet, so the seller of House B called me directly for help.  Sorry, but my buyers wanted the house, and wanted to close on time.  He offered us $20,000 to cancel, but because the house and timing was such a good fit, we declined.

But I came up with a package deal. We would give him a rentback for up to 60 days at market rate plus deposit, if he gave us a credit for $7,000 for repairs on House B.  He took the deal.

2. When I’m the listing agent, I always meet the appraiser – no exceptions.  If you don’t, you’re just asking for trouble.  Another one where I had the buyers for a listing agent selling her own primary residence, and she doesn’t show up for the appraisal of the house she lives in!  The appraisal came in $12,000 under the sales price.

3. We are experienced at handling difficult situations, many of which are regarding repairs.  As the market slows down, the buyers will be more demanding about the condition of the home, and want things done their way (or the way their agent wants them done).

We sold a tenant-occupied condo that had a regular attic – how often does a tenant go into the attic?  In this case, the answer was ‘never’, and even if he had, he might not have noticed that lint was building up because the dryer vent did not extend through to the exterior.

The buyer had a logical concern about it being a fire hazard, and because we were happy with the price he was paying, Donna went to work on getting it resolved. We needed HOA approval to go through the roof, and they insisted on having a longer warranty.  Our roofer gives extended warranties because he has pride in his work, and the HOA was impressed.  Our roofer will be getting more work there!  The buyer’s agent appreciated the effort, and said most listing agents would offer a credit or shrug it off, which isn’t smart with fire hazards.

4. I was holding open house and a couple arrived who had been sent by their agent.  I had received a phone from the agent that her buyers would be attending, and would I mind showing them around? As always, I said I wouldn’t mind at all, as long as you don’t mind if I talk them into buying the house!  Not only did they buy it, they also told me that it was the first time in the five years they had been looking for a home that they thought they got real help.

5. I represented the sellers of a home that had undergone extensive foundation repairs.  The buyer had concerns which were understandable, and he arranged for thorough inspections.  Then we had the contractor who did the work come out for an on-site explanation, and discuss the one-year warranty.  At the end, the buyer’s father came over to me and stuck his finger in my face and said, “What do you think?”  Most agents can’t handle confrontations, and think their job is to dodge liability and be responsible for nothing.  Not me, and not when the sale is probably riding on me delivering a solid response.  I told the father that I had several previous experiences with the engineer and foundation contractor, and found them reliable and trustworthy.  I also said that because the house had been extensively remodeled, the overall package was a good deal.  They closed escrow (with 95% financing).

6. The first day on the MLS, a buyer’s agent asked what it would take to purchase a new listing of mine.  Most agents would be satisfied with full price, and hurry off to their next deal.  I told her $50,000 over list – and her buyer paid it.

7. Our seller moved out, and the buyer came to complete their final walk-through the day before closing.  They discovered a water leak, and a dis-functional garage-door opener. We handled all of the above on behalf of the seller for less than $500, and closed as expected the next day – with no inconvenience to the seller, who kept their focus on their new home.  While the event seemed minor, it was only because we were readily available and jumped right on it that no momentum was lost.

Every sale has hitches – some are smaller, and others can kill the sale.  Your agent’s commitment to full service makes the difference on which is which!

Posted by on Jul 21, 2018 in Jim's Take on the Market, Listing Agent Practices, Market Conditions, Realtor, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 2 comments

Faster Selling in NSDCC

How fast are houses selling between La Jolla and Carlsbad this year?

Number of Days On Market Number of Houses Sold Percent of Total
0-14 days
719
47%
15-30
278
18%
31-45
153
10%
46-60
97
6%
61-75
73
5%
76-90
44
3%
91+
180
12%

We may be selling fewer homes, but they are selling faster!  Nearly two-thirds are finding a buyer in the first 30 days on the market.

How does this compare with previous years?  For the first 6.5 months:

2015: 39% sold between 0-14 days on market (675/1,711).

2016: 39% sold between 0-14 days on market (651/1,662).

2017: 45% sold between 0-14 days on market (770/1,707).

2018: 47% sold between 0-14 days on market (719/1,544).

Sellers should expect immediate action, and take advantage of it! If you don’t want to sell in the first couple of weeks, then you should wait until you get closer to your preferred exit date.

This is also why the re-freshing of listings is so widespread – buyers want the new meat. Check the history of every new listing!

Posted by on Jul 19, 2018 in Jim's Take on the Market, Listing Agent Practices, Market Buzz, North County Coastal | 0 comments