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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’

Modern Farmhouse Open 12-3

We’re having open house 12-3pm Saturday and Sunday to find the buyer, and to keep the pressure on those who have seen it, and may be lurking (in case they’re thinking that waiting longer might mean a better price).

Relentless activity keeps the buyers hopping!

A week ago, the Red team’s estimate was $1,040,313, much like the list price:

After a flurry of hits on their website, they called it a Hot Home, and raised their estimate to $1,055,196.  But then we lowered the price to $999,000:

Conveniently, after we lowered the price, they dropped their estimate by $70,458 in three days, and is now is within $239 of the zestimate:

We can put to rest any question about how they determine their estimates – they just mirror the list prices.

Posted by on Oct 20, 2018 in Jim's Take on the Market, Listing Agent Practices, Tom Tarrant, Why You Should List With Jim | 0 comments

JtR Expands the Market Area

Our local associations of realtors are done suing each other, and as of today, those of us in the NSDCAR are officially using the nearly-statewide CRMLS.  We are going to share the other local option, SDMLS, for the next two years so consumers probably won’t notice any difference on the portals.

What does it mean?

It means Jim the Realtor is going state-wide!

Well, almost – the map above shows the areas of coverage.  While Temecula and the OC would be obvious markets that are closer to home, it’s not out of the question that I can sell homes anywhere.

When my Dad died in 2010, I sold my parents’ home in Concord for top dollar, and the long-timers here might remember my grandparents’ house.

My sister had just become a realtor in the Bay Area when it came time to sell the family homestead.  It was a custom home my grandparents had bought in the 1940s, and there had not been much upkeep or improvements:

Plus, like with many families, there was an overload of sentimental value.  It’s where we had most of the holiday gatherings, and there’s even a photo somewhere of me as a toddler sitting on Earl Warren’s lap in the living room!

My Mom and sister were convinced that it would sell for over $2,000,000.

I told them to send me the comps, and once reviewed, I said it was going to sell for $1,500,000.  They were outraged and hurt, and accused me of knowing nothing about the local market – how could I possibly offer any assistance?

Here’s how it turned out:

I don’t think it’s feasible to be able to help homebuyers in other areas, but I can offer my full compliment of sales skills to sellers – contact me and we can discuss. I already have a listing coming in Murrieta, and another possible one in the OC so we’ll see how it goes.  Tract houses and condos are a little easier to evaluate, but as you saw with my grandparents’ house, I can get pretty close on the custom estates too.

One other change with the CRMLS:

They have the same policy as Sandicor did about requiring that listings are inputted onto the system within 48 hours – but CRMLS only counts business days, not calendar days.  So listings taken on Thursday don’t have to be inputted until Monday.  Of course, agents are still welcome to use the SELM form to exclude the listing for days or weeks if they so desire.

Update on Wednesday morning:

Posted by on Sep 19, 2018 in About the author, Jim's Take on the Market, Listing Agent Practices, Realtor, Why You Should List With Jim | 4 comments

Risky Off-Market Scenarios

This is how the industry enforces the rules – run an article like this every once in a while that gives tips how to CYA.  We do have a form that absolves agents from wrong-doing, which just begs agents to ignore the rules:

From N.A.R.

If you or your client is interested in proceeding with an off-market listing, be aware of the potential peril of compromising your fiduciary and ethical responsibilities. Here are five scenarios to avoid, along with ways to reduce your risk.

  1. The real estate agent or broker, not the seller, is the one pushing for an off-MLS listing. Ensure the decision is made voluntarily, solely by an informed seller. Have a signed listing agreement that spells out to clients the limitations of not listing on the MLS (such as that it may reduce their chances of getting the highest and best price for their home by reducing its exposure more widely to the public).
  2. “Coming soon” marketing that limits the listing’s availability to a specified group of brokers during the premarketing period. Be certain all brokers and buyers have equal access to the listing.
  3. An agent fails to notify their member MLS when a client opts to keep the listing private. Most MLSs require that after a listing agreement is signed, the agent must file a certification—signed by the seller—noting the listing is not to be disseminated to other brokers using  MLS. Typically the notification must be filed within two to three business days after a listing agreement is signed.  Agents can be fined for failing to do so.
  4. An agent faces accusations of breaching fiduciary duty in order to earn a double commission. Off-market listings can lead to more dual agency transactions, as the agent may actively advertise the property only to his or her clients. While not illegal, the practice can be problematic if the prospect of a double commission is the reason an agent suggested an off-MLS listing. Agents risk being sued by a buyer client, for example, who might believe you didn’t seek the best price since you also represented the seller.
  5. Agents are accused of antitrust or fair housing violations by limiting listing exposure to a narrow buyer segment. Be sure  you are fulfilling your duty to “cooperate with other brokers except when cooperation is not in the client’s best interest,” as stated in Article 3 of the REALTORS® Code of Ethics.

https://magazine.realtor/technology/feature/article/2018/09/5-risky-off-mls-scenarios

Posted by on Sep 15, 2018 in Ethics, Jim's Take on the Market, Listing Agent Practices, Realtor | 0 comments

The Reality of iBuyers

The ibuyer is the sexy new shiny object in the real estate game.  While the idea of a quick and easy sale sounds great, the reality is already much different – and, as the market transitions, their quotes and repair costs should get more conservative (and home sellers be less enamored).

The only local story I’ve heard was one where the ibuyer checked out the property in person, but then didn’t offer, saying it was outside their buying range. You can’t blame them for being picky, and only take the gravy. They will probably stick to the lower-end vanilla properties that are more predictable.

Here’s an article with more examples:

Link to Full Article

An excerpt:

Opendoor, which launched in 2014, says it’s not a house flipper. “We aim for fair market offers, making money on the fees we charge, not the profit on resale,” says Jim Sexton, head of Opendoor’s broker development. The company says it sells 800 homes a month across its 11 markets, with plans to expand to 50 markets by the end of 2020. Currently, it has nearly 3 percent market share in Las Vegas.

Opendoor eyes markets with ample volume, size, and liquidity, Sexton says, adding, “We’re looking for markets that don’t have many barriers to entry, such as hefty transfer taxes or other local or state regulations that make a transaction difficult.”

An Opendoor competitor, Offerpad, operates in eight markets with plans to expand, while Zillow, one of the newest entrants into the direct buying niche with its Instant Offer program, has been successful in Las Vegas and Phoenix, where it expects to buy and sell up to 1,000 homes by year’s end. The new Redfin Now program is available in two California test markets, and Knock, operating in Atlanta and in Charlotte and Raleigh, N.C., enables “trade-in” clients to buy a new home before their existing home is listed.

These companies all claim to speed up and simplify the real estate transaction while removing uncertainty and inconvenience for sellers and buyers. The appeal of the marketing spiel is easy to understand, but how applicable is this model for most consumers? And how likely is it that these companies will become significant players in many markets?

“The market is really driving this model,” says real estate consultant Victor Lund, founder of WAV Group. “The convenience factor, along with an alignment of circumstances are contributing to the growth of iBuyers. Consumers have built up a lot of equity in their homes since the recession, interest rates are low, days on market are low, prices are up, and there’s lots of competition, which puts cash buyers in a better position to buy.” These circumstances create the optimal environment for iBuyers to thrive. Lund believes that once prices slip and homes generally take longer to sell, consumer interest in iBuyers will fade.

Among agents who have interacted with these models, what are they finding? Despite iBuyers’ claims to revolutionize the real estate transaction, some agents are finding their transactions are neither quick nor seamless.

For example, after Ockey’s clients accepted the Opendoor offer, the next step was the inspection. A team of five Opendoor contractors—one for electrical, one for plumbing, one for foundations, and so on—went through the house with a magnifying glass, says Ockey. “They asked us to fix everything you could think of. They wanted bathtubs and toilets replaced if there was even the slightest blemish. They wanted showers retiled and regrouted. It wasn’t little projects; they wanted to remodel the home, and they wanted the seller to pay for it.”

The requested repairs came to about $16,000 on a $300,000 home. Ockey spent weeks negotiating that figure down, which added time and worry to the transaction. “Having representation saved my clients thousands of dollars, but in the end, they made about $10,000 less than they would have selling to a traditional buyer. It’s not horrible, but it’s a lot of money when you only have $20,000 or $30,000 in equity.”

The automated aspects of working with Offerpad didn’t faze Kellie Parten, an agent with HomeSmart Realty in Phoenix, who helped her clients buy a home from the company in May. “It was robotic, but in a positive way,” says Parten. “You can tell that they’re a little bit of a machine, but I didn’t mind because they were very responsive and organized. I never had to ask for something twice.”

Although Parten wouldn’t hesitate to bring a buyer to an iBuyer home, selling to one is a different story. “Offerpad and Opendoor offers on a couple of properties I’ve listed seemed exciting at first, but after you factor in the concessions they request and the additional credits in lieu of repairs after inspections, the net is usually too low and the deals never came together,” she says. One iBuyer recently offered $750,000 on a home that Parten later sold to a traditional buyer for $900,000.

Posted by on Sep 13, 2018 in ibuyer, Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Why You Should List With Jim | 2 comments

Open Chaos

Opendoor, the ibuyer who purchases your home for cash and closes escrow at your leisure (as long as you don’t mind paying their 6% to 13% fees plus home repairs) has made a deal to acquire a discount brokerage:

Opendoor announced Tuesday morning that it has acquired Open Listings, a real estate site that offers homebuyers a 50% refund on the fees their real estate agent would have received.

With the acquisition, Opendoor will now be able to buy a home directly from a seller, then help that seller find a new home (whether it’s a newly built home or an existing one), offer them a mortgage, and close on the sales through its own title operations.

Basically, buyers who use Open Listings find, tour, and buy homes through the platform. Real estate agents only come into the process when it’s time to make an offer on the home.

Link to Article

They are building a platform similar to the Red team’s, and both are weak in the beginning – they both offer inexperienced agents or no help at all at the initial showing of the home.  These guys expect you to go to the listing agent’s open house, and then make an offer with their online agent.

I believe that every buyer should receive professional advice from their agent while at the property – and reflect those details into the offer price.  Otherwise, you pay too much!

The online agents haven’t seen the house in person, and can’t offer the same expertise.  Besides, if you are an online agent, you just want to hurry up and write the offer and expect any defects to come out during the home inspection.  The buyers end up basing their entire investigation on a $500 guy who has no fiduciary duty to them and whose job is limited to the moving parts of the house.

But let’s say you can live with that.

These types of disrupter platforms are entirely dependent upon all agents sharing their listings on the MLS.  But as the major brokerages continue to input their listings on their company website first (Redfin’s publicly-stated policy), the MLS will soon become a relic, and the marketplace of last resort.

All of the market conditions are pushing in this direction.  We are transitioning from the Wild, Wild West to Full-Tilt Chaos!

Get Good Help!

Posted by on Sep 12, 2018 in ibuyer, Jim's Take on the Market, Listing Agent Practices, Realtor, The Future | 1 comment

The Long Road Ahead

Things that blow out deals are usually avoidable, and are easy to identify in hindsight. In this case, the agent let the buyers pick a roofer out of the book, which is a terrible way to do business. He gets paid the same whether he blows the deal or not, so of course he tells the buyers the house will fall down some day. No wonder he has great reviews – think of all the homebuyers he saved from buying a regular house, and are still renting!

But the most important lesson is how the agent handled the situation once a concern has been identified.  Buyers are counting on their agent for expert guidance, which should include pointing out that there are no perfect homes out there, and let’s find a way to deal with the imperfections – because in this case, the house had far more positives than negatives.

But instead, the agent – who had been telling me that everything was fine – just sends over the cancellation form in the dead of night.  She didn’t give me any more opportunity to address the concern (even though I has already provided ample evidence), or try to fix it herself.  Instead, once her buyers objected, she just cancelled.

This is where we will see the last nine years of a bull market come back to haunt us.  There are plenty of agents who got into the business since 2009 that not only consider themselves one-percenters, but have built teams and are riding a high horse.  But they have never had to handle buyer objections.

Expect a long, stagnant, bumpy market ahead.

Get Good Help!

What did I do? I went back to the second-place finisher and sold it to them.

Posted by on Sep 5, 2018 in Auctions, Bubbleinfo TV, Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 2 comments

More on Pocket Listings

For those who ‘specialize in the off-market space’, here’s a new excuse to justify your unethical and probably illegal practices: “some buyers don’t want photos of the home they’re purchasing on the internet”.

http://rismedia.com/2018/09/04/brokers-turn-pocket-listings-rising-markets/

The real estate market has heated up so much in certain regions that brokers are taking transactions into their own hands—or, rather, their pockets. With increasing prices and, seemingly, more buyers willing to pay an amount that’s leaving sellers with nice profits, the question these sellers keep asking is, “Why bother with the MLS?”

While the answer to that question varies greatly depending on who is asked, more and more brokers are saying don’t list on the MLS, or even Zillow, for that matter.

“It’s an opportunity for a savvy agent, who uses his or her network properly, to make more money for their client,” says Jon Paul Molfetta, a broker with Keller Williams Realty in New York and New Jersey.

“If sellers aren’t familiar with the concept of a pocket listing, I would expect that their area/location doesn’t warrant it. Savvy sellers know when they live in a hot market. They understand the value of having a strong broker with a large network. If they contract with the right agent, they can realize top dollar without the hassle of having every nosy neighbor or unqualified buyer through their home,” says Molfetta.

“Agents who lose touch will lose deals (and) miss opportunities,” says Molfetta. “When someone misses out on a property, they might be willing to overpay for the next one. Regardless, people will not underpay for a pocket listing. If you’re a strong listing agent who controls a portion of the inventory, you provide added value to both the buyer and seller. For the buyer who wants into the neighborhood, you offer the unique opportunity of finding a home before it hits the market. For the seller who is ready to list, you provide a pool of qualified buyers from months of successful marketing and proper lead capture. It’s a win-win.”

California seems to be a haven for pocket listings, where sellers are coming to their brokers and demanding it. Lori Steele is a specialist with Beverly Hills, Calif.-based The Agency, which launched a private national off-market platform last summer called The Pocket Listing Service (PLS). Steele says it’s been incredibly popular among sellers who value privacy and speed, and it helps all the agents under The Agency roof generate business for clients and cultivate their networks.

Steele is involved with The Agency’s expansion through Orange County, Calif., and she says The PLS is a big part of the appeal.

“About 40 percent of all of our deals are done off-market,” she says. “It’s important for seller discretion, and some buyers don’t want photos of the home they’re purchasing on the internet.”

Link to Full Article

Posted by on Sep 5, 2018 in Ethics, Jim's Take on the Market, Listing Agent Practices, Realtor | 5 comments

Early and Often

Speaking of the Oracle, how did you like his price reduction?

He was listed at $11,000,000 for 19 months with no adjustment, and then drops the price by 28% to $7.9 million?

Is it a good strategy to drop that much, all at once?

It would be, if you were convinced that it would work.  What must have happened for the 3rd richest guy in the world to dump like that?

  1. Listing was very stale.
  2. They haven’t had any action. Few, if any, showings, and no offers.
  3. Agent was confident and recommended ‘hanging in there’.
  4. Seller recognized that something drastic was needed.

Warren probably suggested the dump – listing agents wouldn’t go that far.

But what will buyers think?  Will they jump on it now?

There was a local property that dropped 14% this week, and my interested buyer said, “I can’t wait to see what they do next month!”

There is shock-and-awe effect with a big price reduction, but there’s no guarantee it will work. If it doesn’t, then in Warren’s case he just blew $3,100,000 – and you’re begging buyers to take the chance that it doesn’t sell.

I’ve recommended price reductions of 5%, which would still get attention.  If Warren did that every week, it would hold the buyers’ attention better too.  They would be reminded – and encouraged to step up – every few days.

Are you going to remember his reduction a week from now?  If you do, and it still hasn’t sold, it will be a reminder that it didn’t work!

He’ll need to lower it again!

Posted by on Aug 31, 2018 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 0 comments

Typical Home Seller?

Formica counters and first-gen built-in refrigerator

Hat tip to Kerry for sending in the latest on the Oracle’s house in Emerald Bay.  The listing has run a typical path – while ignoring the current condition of the home, and able to make gobs of profit at half the price (the original $11M list price was 7233% above purchase price), they list for the highest imaginable price during last year’s selling season – and let it sit, in spite of the results. Now that the market has passed, they lower the price – but is it too late, and just cause buyers to keep waiting to see if they are right that it’s really a teardown on an awkward lot?

Billionaire investor Warren Buffett is slashing the price of his California beach house to $7.9 million, after putting it on the market for $11 million in February 2017, according to a spokeswoman for the listing agent.

If the property sells for its new asking price, Mr. Buffett will still make an impressive return, having paid just $150,000 for the home in the early 1970s.

The 87-year-old Berkshire Hathaway chairman, the third richest man in the world according to Forbes magazine, spent holidays at the beach house. He said in an interview last year that he bought the house because his late first wife, Susan, loved it. Since she died in 2004, he hasn’t spent much time there, which prompted him to list the property.

He said the Laguna Beach area had changed dramatically since then, becoming more developed. The house was renovated several times through the years but not recently, said the spokeswoman for the listing agent. Mr. Buffett also purchased an adjacent house, which he called “the annex,” to make space for house guests, and connected the two homes with a staircase. The annex was sold in 2005.

Mr. Buffett recalled hiding out in the home’s master bedroom to write Berkshire Hathaway’s annual reports during Christmas holidays, and visiting Disneyland with his children.

The roughly 3,500-square-foot, three-level Laguna Beach home is in Emerald Bay, a high-end gated community with views of the beach. It has six bedrooms. Two of the bedrooms have their own separate entrances for guests. The house fits Mr. Buffett’s famously understated tastes, with gray carpeting and white laminate countertops.

Link to Article

Another intriguing piece is the listing agent.  The seller owns a major real estate brokerage, but he lists this house with an outside company and an agent who has had nine sales since 2009.  But all of his sales are in Emerald Bay, and he weaves a tale of being a third generation realtor.

Telling grandma stories and pining about the past may have been alluring 18 months ago, but now what?

Posted by on Aug 29, 2018 in Jim's Take on the Market, Listing Agent Practices, Thinking of Selling? | 4 comments