Our new listing of a gorgeous one-story home west of the I-5 freeway in Del Mar!
This is the primary residence of a long-time custom-home builder, and it shows! There are several high-end finishes throughout the home, including the craftsman front door, deluxe custom kitchen with breakfast bar, hardwood floors, and a terrific master bath bathed in natural light! Custom fireplace, dual-pane windows, and interior laundry room too. Enjoy the 8,600sf lot with sparkling pool, herb garden and pano easterly views day and night – wow!
We ended up with four offers on our latest listing, and all came in over list price.
I’m always going to do a highest-and-best round – not to work over the already-beleaguered buyers who have probably lost others and just want to get it over with – but to make sure everyone felt they had a fair shot to buy it.
The winners also took the opportunity to submit a SECOND love letter that out-shined their first when they mentioned that they just found out this week that they were pregnant again (they had pointed out in their first love letter than their first kid was about the same age as the seller’s little boy) and they wanted their family to grow up with others they knew who had just moved into the same neighborhood! My sellers were pregnant when they bought this house so the connection was very real.
The agent who represents the winners was the first to call me about the listing, the first to show the house, and the first to write an offer – be ready!
The motivated buyers are on alert and will drop everything to come over for a look. Yet how often do we still see few or lousy photos (and rarely a real video-tour), no showings for days or weeks after MLS input, or listing agents who are nowhere to be found?
We are 24 hours into having our new listing on the market and it’s already been shown six times and we have three offers – and all are over the list price!
I heard a rate quote today of 2.55% with less than a point cost, which feels like free money. As long as buyers can get a 2-something rate, the market should be extremely active!
It’s more complicated to look at homes for sale these days. Open houses have been banned, everyone who enters must sign disclosures for each house in advance promising not to sue realtors if you get the bug, and of course you have to wear the PPE and sanitize before and after the experience.
It was already a challenge before Covid-19 to gather enough information in 10-20 minutes to make a decision that will affect the rest of your life. Compound the difficulty with a mask that makes it harder to breathe (and fogs up your glasses) while the listing agent is pestering you not to touch anything.
Today’s covid tip: TAKE A WORKSHEET WITH YOU.
Customize it with your own questions – here’s a start:
Is there a suitable downstairs-bedroom suite?
Is there extra space for office(s), or do I need to use a bedroom?
Is the floor plan suitable for longer quarantines?
Do I feel secure? Is it possible to improve security, and if so, how much cost?
Can I go in the backyard and relax day and night?
Does the kitchen have a gas or electric stove?
Is the fridge built-in, and if not, do I want the sellers to leave it behind?
Do I want the sellers leave the washer and dryer?
Does the garage have extra storage?
What improvements need to be done just to move in?
What improvements are needed long-term?
If the listing agent didn’t get the memo that matterport 3D tours are the worst thing for sales and is using them as a substitute for live showings, then use your worksheet while navigating the online tours too.
Enjoy unobstructed views from this upgraded gem in one of the quietest parts of Rancho Del Oro. The vaulted ceilings & numerous windows fill the home with lots of natural light, and once you get to the family room & kitchen, the view over the grassy backyard will make you start looking for your check book! Upgrades include flooring, paint, kitchen cabinets/granite counters – this home is tuned up and ready!
Only $599,000 – a model match at 1763 Avenida Alta Mira sold for $627,000 last month – wow!
One of the more-accurate forecasters is predicting that home prices will start dropping:
Strong home purchase demand in the first quarter of 2020, coupled with tightening supply, has helped prop up home prices through the coronavirus (COVID-19) crisis. However, the anticipated impacts of the recession are beginning to appear across the housing market. Despite new contract signings rising year over year in May, home price growth is expected to stall in June and remain that way throughout the summer. CoreLogic HPI Forecast predicts a month-over-month price decrease of 0.1% in June and a year-over-year decline of 6.6% by May 2021.
Unlike the Great Recession, the current economic downturn is not driven by the housing market, which continues to post gains in many parts of the country. While activity up until now suggests the housing market will eventually bounce back, the forecasted decline in home prices will largely be due to elevated unemployment rates. This prediction is exacerbated by the recent spike in COVID-19 cases across the country.
Expecting prices to fall that quickly is flawed, however.
They are ignoring that for home prices to go down, we would need a load – probably a majority – of sellers who are willing to sell for less than the last guy got. In addition, it would take realtors who recognize what’s needed, and be able to properly advise their sellers on lower pricing.
It ain’t going to happen.
Listing agents only have one pitch – to berate the buyer agents into paying the seller’s price. If we ever get to the point where buyers object to the constantly-rising prices, and/or we run out of buyers altogether, then there will be a long stall before sellers and agents re-calibrate.
Recognizing that a shift in pricing is needed will be hampered by all the usual excuses.
The seller retorts of “I’m In No Rush”, “I Don’t Need to Sell”, and the classic, “I’m Not Going to Give It Away”, will be doused with coronavirus blame before any sellers – even the desperate ones – would consider selling for less than what they think they deserve.
Sales will slow first, so keep an eye on them – but it would take 1-2 years of stallout before sellers and agents start believing that they might not get their price.
The new Coming Soon feature in our MLS has been available since Tuesday.
Since then, there have been 32 new listings of houses between La Jolla and Carlsbad. Eight of the 32 have been inputted as Coming Soon (not active listings).
The common reason for having Coming Soons is to try out the price, and to build anticipation among realtors like a movie trailer does with moviegoers.
My random thoughts and observations:
Because the policy forbids any showings of the homes, the MLS agents will want to know when showings will be available. But the MLS doesn’t provide a box for that date, and none of the eight agents mentioned a date either. We know that Top Gun 2 is being released on December 23rd – which builds anticipation.
Four listings include the showing instructions as if they don’t know the policy, or are openly flaunting it. Will they allow showings today while listed as Coming Soon? I don’t know, but it looks like it.
Three listings had no photos, which would be expected of a listing that is in the works – it would be natural to follow with photos once the listing is ready. But it’s hard to build anticipation without visual aids. The movie trailers come with photos and video:
But the big question is what will the listing agents do when an offer is submitted during the Coming Soon period, subject to inspection? There are no written rules in the policy, so it is an individual choice.
Do you tell the buyer’s agent to wait until it’s active? Or do you take it to the sellers and negotiate a deal?
When do you let the buyer see the interior? Do you show before coming to an agreement, which would be smart but against the rules? Or do you make the deal, and then show them the interior and stay within the rules (it would be a pending listing now, not coming soon). Or once you receive an offer, do you flip the listing into active status so every agent and buyer can have a shot?
We have no rules, and no precedent.
We should ask the listing agents to answer these questions in the listing, so agents know what to expect.
If we don’t, here’s what will happen.
Buyer: Thanks for that coming-soon listing, it’s exactly what I want. Can I see it?
Agent: No.
Buyer: Can I buy it?
Agent: I don’t know.
Buyer: Send them a full-price offer.
Agent: Ok, but I’m not sure what will happen.
Is that sequence good for anyone involved?
While the MLS was cordial to respond to requests from brokerages to create a Coming Soon category, we need to go further. Let’s clearly define the rules of engagement, for everyone’s sake.
We’ve touched on two differences that the coronavirus is causing in residential real estate sales; the cumbersome arrangements now required just to see a house for sale, and how wearing masks will help buyers hide their interest in a home.
What else is changing?
The real estate flyers are gone now, and public open houses are heading for extinction too – and the 3D tours are being heralded as a worthy substitute. It’s too bad too, because the industry never fully grasped the biggest benefit of open houses – helping to create urgency in the buyers, especially when the home is fresh on the market.
The 3D tours are very crafty, and buyers should love them for offering maximum convenience within minutes – or seconds. Sellers don’t have to leave their house every Sunday afternoon, and agents won’t have to work weekends any more.
What’s wrong with that?
Have you ever seen a perfect house? Me neither.
The 3D tour allows the viewer to scroll around the home at their own pace, which is a plus. But it’s too easy for viewers to give up when they see something unusual or have trouble navigating.
You gotta give the house a chance.
Rather than relying on a thorough walk-around with an agent who is explaining every nuance, the home-buying decisions will be based on fancy imagery on a computer screen.
Won’t the interested parties pursue an in-home visit? Yes, and they are the most likely real buyers.
But it’s the internet viewers who click out too quickly who will miss out – and fewer buyers relying on less information isn’t a positive for home sales. Instead, the sales process gets dumbed down further, and those who support the 3D tours as an adequate substitute for agent advice are contributing to the downfall.
It’s all going that way anyway, but at least you can say you saw it coming!
We should take precautions during the coronavirus era, so let’s inform the buyers and sellers what to expect before showing a house. Here we go:
As you may know, the industry recently received guidance from the California Department of Health and Cal/OSHA (the “Guidance”) regarding the handling of real estate transactions, especially the showing of properties for sale. Pursuant to that guidance, we have created a Compass “Shown Property COVID-19 Prevention Plan,” (the “Plan”) attached below, which is to be used as follows:
1. The Plan is to be posted at the door of every property we show or enter, for each showing or entrance.
2. The Plan is to be forwarded to every person entering the property, including prospective buyers or inspectors, by email prior to the entrance. It should be emailed with the PEAD and the person entering should be required to both sign the PEAD and acknowledge the Plan, promising to comply with its requirements while at the property. Your cover email should state that entry to the property constitutes an agreement to comply with the Plan.
3. The Plan, or a link to the Plan, must be included in all online public and MLS listings of the Property.
Furthermore, the Guidance outlines certain other practices that should be followed at all showings and inspections.
1. Commonly used surfaces, like door and cabinet handles, counter tops, toilet and toilet handles, sinks / faucets, and light switches should be wiped down, preferably by the seller, before and after every visit.
2. Open doors, windows, and ventilation systems prior to each showing to introduce outside air to the property.
3. Open all interior doors and turn on all lights before showings so as to minimize the need for touching.
4. Wipe down any item you get from the seller, such as keys, after each use.
5. Schedule appointments with sufficient time in between to conduct the necessary cleaning.
6. If you provide sanitary wipes, face coverings, gloves, etc., place them at the property’s entrance so they can be used or put on prior to entry.
7. Require each person entering the property to wash their hands with soap and water at the sink closest to the property’s entry prior to touring or inspecting the property.
8. No flyers or paper are to be handed out or left at the property for circulation to prospective buyers.
I hope we don’t get so engrossed with adhering to the rules that we forget about selling the home!
It has never been made clear to realtors why the Clear Cooperation policy is needed in the first place – or agents didn’t understand or agree with its purpose. The new way to get around the rule is for agents to advertise their coming-soon listings with no address – instead, they just include the neighborhood or tract.
From the wsj.com:
The real-estate industry’s largest trade association, the National Association of Realtors, and two of its affiliates are facing a federal antitrust lawsuit challenging a new rule that effectively bans NAR members from marketing homes privately, or “off-market.”
The lawsuit was filed Monday in the U.S. District Court for the Northern District of California by Top Agent Network, a San Francisco-based, members-only platform for real-estate agents. The suit names as defendants the NAR, the California Association of Realtors and the San Francisco Association of Realtors. It seeks unspecified damages and to reverse NAR’s newly enacted “Clear Cooperation Policy,” which went into effect May 1. The new policy requires NAR members to share their listings through the local multiple listings service rather than shopping them privately to a few contacts, a practice increasingly preferred by wealthy and high-profile sellers. Members who violate the policy face punishment, including fines.
TAN, launched in 2010, is a members-only networking and communication platform for real-estate agents who can show that they are in the top 10% of producers in their geographic area, according to founder David Faudman. Its roughly 10,000 members, who pay between $475 and $675 in annual dues, frequently use the platform to share information about off-market listings, which are for sale but not in the MLS. That function is now against NAR rules, said Mr. Faudman. “We’re concerned that this could put a huge damper on TAN, to the point that it destroys the business,” he said.
Since the Clear Cooperation Policy was enacted, Mr. Faudman said some TAN members—most of whom are also NAR members—have told him they don’t plan to renew their TAN memberships for fear of penalties from NAR. He claims the new policy is an attempt by NAR to quash alternative marketing platforms like his. “It’s quite clear to us that they’re trying to eliminate competition,” he said.
In some markets, like the San Francisco Bay Area, off-MLS listings make up a significant portion of business, agents said. Silicon Valley real-estate agent Billy McNair of Compass said that in any given year, roughly one-third of his sales takes place off-market. Some buyers pay a premium to buy a house that hasn’t yet hit the market.
