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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: ‘Realtor’

The End is Near

click on image for their youtube video

Our broker-cooperation model of sharing listings though the MLS has been the lifeblood of selling homes since the early 1960s.  But it is breaking down right before our eyes.

It’s not going to happen all at once, or even happen out in the open.  Instead, the sharing of listings through the MLS will just quietly go away.

Whether it is the emergence of the PLS, or brokerages developing their own Coming Soon program, or individual agents doing off-market sales out of sight, the sharing of listings is doomed – even though it is what’s best for consumers and agents alike.

Can we just admit it, and carry on like the commercial brokers do?

Everybody for themselves!

The first thing to do is to stop the automatic listing feeds to Zillow/Trulia, and make it broker-optional, which is what’s happening in Las Vegas.

Agents may choose to upload their MLS listings to Zillow and other portals, or maybe not.  But what about Redfin and other brokerages who get their listings directly from the MLS?  Once agents see the benefits of eliminating portals, why would they bother with the MLS at all?

Maybe agents with a hot new listing will just wait a few days or weeks to see if they can find their own buyer first.  Or maybe another agent in the office might have someone?  We already see this happening every day.

The MLS will be the marketplace of last resort.

We should embrace this change, and tell consumers that they have to go to each company’s website – or even each individual agent’s website – to find the hot new buys.  At least they would know the honest truth!

I’m convinced that industry players don’t see this coming.  They don’t see what happens (or they look the other way) when listing distribution is left in the hands of the listing agents themselves.

Yes, thank you for giving us the ability to choose which platforms to use to market our listings – I appreciate having choices. But when you take the automation away, and make it a manual choice for each listing, agents will find it hard to resist the temptation to limit with whom they share their listings.

Posted by on Nov 9, 2018 in Jim's Take on the Market, Listing Agent Practices, Realtor, Realtors Talking Shop, Why You Should List With Jim | 1 comment

Pocket Listings / Coming Soon

More tip-toeing around the Coming Soon topic in Realtor Magazine yesterday:

The surge in off-market “pocket listings”—those held off the MLS in favor of secret channels and networks between agents or within a brokerage—is a growing issue in the real estate industry.

In markets starved for inventory, real estate professionals are struggling with being kept out of these secret dealings for homes that their buyers could potentially want.

In markets such as Los Angeles, for example, reports say that up to 30 percent of sales are being withheld from the MLS for the sake of more private channels, according to some brokerage estimates.

In response, some brokerages—and even MLSs—are looking for ways to expose these listings to a larger audience. One of many recent launches in the past month came from the brokerage Compass, which allows its real estate agents to post their listings to Compass’ website days before sharing them with the local MLS and third-party portals, like realtor.com®. “Compass Coming Soon” is available nationwide in markets where the brokerage operates.

“This will help our agents get a head start on marketing while still getting the property ready for market,” Compass CEO Robert Reffkin reportedly shared with Compass real estate professionals in an email. “By harnessing the power of pre-marketing, [the listing] actually shows up twice in everyone’s alerts: once when it hits Compass.com, and again when it hits the open market, doubling potential exposure.”

Pacific Union International, which Compass acquired in late August, had launched its own solution to handling the disruption from the growing prevalence of pocket listings in May with “Private View,” debuting $400 million worth of exclusive property offerings. But its portal of off-MLS listings can be viewed by any registered users—real estate professionals from other brokerages as well as the general public. Registered users can see exclusively signed listings before they’re publicized on the MLS. The portal is currently available in northern and southern California.

In September, Long & Foster launched its own exclusive Coming Soon Portal to promote upcoming listings to its agents before they are on the market. It’s a way to gauge interest and create early demand for a property before it hits the MLS.

“Our agent-to-agent portal allows our sales associates exclusive access to Long & Foster properties that are not yet in the MLS,” Barry Redler, chief marketing officer for The Long & Foster Companies, said in a statement announcing the portal. “Having this platform not only allows us to respond to certain seller requests but also gives our agents a leg up on the competition by helping their buyers more easily find a home in a tight inventory market.”

MLSs are searching for the answer to expose these homes listed for sale, which the seller may wish to keep secret. The Chicago area MLS, Midwest Real Estate Data, launched the Private Listing Network in 2016 as a separate feed to share information to registered brokers about “coming soon” listings. These are not displayed publicly. MRED officials cite it as a way for real estate professionals in their area to premarket listings that aren’t ready to show yet or that are in the process of being renovated, repaired, or staged prior to being marketed publicly. It’s also a way to test the price, as a range can be entered.

But some brokerages and MLSs are taking a firm stance against the practice of pocket listings or “coming soon” forms of premarketing. Since 2013, Northwest Multiple Listing Service—serving the Seattle area—has prohibited its members from promoting or advertising a property until it is listed in the MLS.

Off-MLS deals amplify concerns about limiting exposure of the property “to a select group of agents to the detriment of the seller and other MLS members,” Tom Hurdelbrink, president and CEO of NWMLS, told REALTOR® Magazine.

Nobody wants to project how this will play out, but it seems obvious.  Every brokerage will operate a Coming Soon program, and the MLS will become the marketplace of last resort.

https://magazine.realtor/daily-news/2018/10/23/brokerages-wrestle-with-growth-of-pocket-listings

The photo from the article:

Posted by on Oct 24, 2018 in Coming Soon, Compass, Jim's Take on the Market, Listing Agent Practices, Pocket Listings, Realtor, Realtors Talking Shop | 1 comment

Prop 5 – Will It Pass?

It’s one thing to talk about whether Prop 5 will make a difference, because it’s very speculative – we won’t really know unless it passes.

Will it pass?

The powers that be are pushing their agenda on either side, but I doubt there are voters sitting on the edge of their chair awaiting the outcome.

If voters just go off the voter guide for direction, this is what they will see:

The ‘con’ argument starts with two zingers and then fingers the ‘corporate real estate interests’ as the culprit.  If voters go to their website, this is the first image they see, which will make an impression:

Because the C.A.R. is already gearing up for a revised initiative in 2020, this may just be a test run.  But it would be helpful to have it pass, and see if there is any positive impact on the statewide market that could provide additional data for the 2020 initiative.

If it does pass, but the market doesn’t change much, then the C.A.R. will be able to say that we need the next round – which eliminates the inheritance tax break for vacation and rental properties, and clamp down on businesses that avoid higher property taxes when they buy commercial real estate.

Posted by on Oct 19, 2018 in Jim's Take on the Market, Local Government, Prop 13, Realtor | 4 comments

Prop 5 – Who Needs It?

As election day nears, let’s take a look at Prop 5, sponsored by the California Association of Realtors – who is encouraging agents to help get the vote out.

I’ve been skeptical that, if passed, Prop 5 would bring many more long-time owners to market.  The benefit only helps those who have a low property-tax basis currently, and won’t move unless they can take the same low tax basis with them.

The latimes.com featured a typical example here:

After Robert Holland’s knee surgery a few years ago, he’s had a harder time climbing the stairs in his trilevel home in the Tujunga neighborhood of Los Angeles.

Holland, a retired stagehand, wants to move from his residence at the foot of the San Gabriel Mountains to a one-story place nearby with a yard large enough to raise a goat and a couple of chickens.

But one big thing is holding him back: taxes. Holland purchased his home in 1995 and owes $4,500 this year in property taxes. If he buys a new house where he wants, his tax bill will more than double.

“It’s a matter of the quality of life,” he said, chuckling about his dilemma about whether to move. “I’m 63. I’m thinking what do I got, 20 good years left?”

The California Assn. of Realtors has a solution to Holland’s problem. It’s sponsoring Proposition 5, a statewide initiative that would provide property tax benefits for homeowners 55 and older as well as the severely disabled and natural disaster victims if they move to a new home.

Under the measure, qualifying homeowners would no longer have to pay property taxes based on the purchase price of their new home. Instead, they’d pay based on a combination of their new and old home values, lowering their property tax payment. The Realtors’ group, which has raised $13 million for the campaign, contends that the tax breaks are needed to help older residents and could free up larger homes that young families could use.

But a host of Proposition 5 opponents — including economists, local governments and labor unions — argue that older homeowners already receive disproportionately large property tax benefits in California. They say that providing additional breaks will exacerbate those disparities while costing cities, counties and schools billions of dollars a year.

Fernando Ferreira, an economist at the University of Pennsylvania’s Wharton School who has studied California’s property tax system, called Proposition 5 “completely nonsensical.”

“Right now, you’re giving a gigantic tax break to older homeowners who live in the best houses in the richest parts of the state,” Ferreira said. “This new proposition unfortunately will just perpetuate this inequality.”

Read full article here:

http://www.latimes.com/politics/la-pol-ca-prop-5-housing-tax-break-20181011-story.html

Upon further review, we see that the Hollands have it pretty good.  Their tri-level house is 2,400sf on a 9,216sf lot, and their zestimate is $810,083:

Link to Zillow page

But once you’ve lived in a house for 20+ years, it has become very unlikely that you will move again.  Just the cost and hassle is mentally challenging, and the usual result is to make the old knee last a few more years.

Here’s why.

These folks could move right now, and take their old tax basis with them – all they have to do is buy a house that is less-expensive than the one they sell.

If they sold their house for $810,000, they could buy this one-story house on a flat half-acre that would seemingly suit all their needs, listed for $799,999:

Zillow page of house for sale

If they were that committed to moving to a one-story house where they can  have “a yard large enough to raise a goat and a couple of chickens”, they could do it today – and take their low tax basis with them.

Do they need a swankier place?

If this house isn’t good enough, and they need a single-story that costs a whole lot more, than they should pay the regular property tax.

What is behind the scenes is the C.A.R. intent to put this measure back on the ballot in 2020 with another initiative:

After gathering signatures to put the initiative on the ballot this year, the Realtors lobbied the Legislature for a deal. The group wanted to replace Proposition 5 with a separate measure that included the same tax breaks for older homeowners, but eliminated the inheritance tax break for vacation and rental properties, and clamped down on businesses that avoid higher property taxes when they buy commercial real estate.

The California legislature didn’t go for it – and this year’s initiative just seems like a trial run to test the waters.  Can’t wait for 2020!

Posted by on Oct 19, 2018 in Jim's Take on the Market, Local Government, Realtor | 5 comments

Robotic Real Estate

Below is the evidence put forth by a Bay Area realtor to show two things:

  1. Redfin home-value estimates are tied to the list price, and their estimates are increased as they gauge the traffic.
  2. Buyers are assuming the Redfin estimates to be accurate, and rely on them when making an offer.

In the beginning, zestimates were thought to be wildly inaccurate, and dismissed. But now that portals have been around this long, are consumers putting too much trust into the data received? It appears so.

Are buyers satisfied with internet values now?  Are they subconsciously thinking that the estimates are close enough AND that everyone else does too?

Will future home values be determined by internet traffic?

Click below for his case:

Read More

Posted by on Oct 2, 2018 in Jim's Take on the Market, Realtor, Realtors Talking Shop, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 5 comments

Pocket Results

When the bluff-top mansion at the end of Malibu’s Sweetwater Mesa Road sold for more than $30 million in 2016, it looked like the end of a years-long intrigue involving the playboy son of the president of an oil-rich African nation.

Instead, the sale and a quick flip of the property for nearly $70 million has opened a new, scandalous chapter. This time, instead of an accused kleptocrat and the U.S. Department of Justice, the key players are a celebrity real estate broker and an insurance company.

Read More

Posted by on Oct 1, 2018 in Jim's Take on the Market, Pocket Listings, Realtor | 4 comments

$400 Million x 2

The most fascinating thing about working for Compass is how many people ask about Compass (especially other agents).  I signed up primarily for the future potential, and where big money might lead us.

We got another sense of how big yesterday:

Compass, a real-estate marketplace startup, raised $400 million in an investment round that will bring the company closer to an eventual initial public offering.

After the investment, the New York-based company will have a $4.4 billion valuation, a person familiar with the matter said. The financing will help Compass expand its real-estate technology into more cities, including outside the U.S., the firm said in a statement.

The Softbank Vision Fund and Qatar Investment Authority are leading the round, Compass said.  The company expects growth in 2018 to double to almost $1 billion in revenue, according to the person, who asked not to be identified because the information is confidential. Compass makes its money by taking a small cut of each transaction coordinated by its real-estate agents. The company said it’s on track to post more than $34 billion in sales volume this year.

“We will continue to capitalize on our momentum nationally and internationally,” said Ori Allon, the company’s co-founder and executive chairman.

The latest funding brings the total raised by Compass to $1.2 billion. Besides international expansion, Compass is seeking to enter related businesses beyond property listings, such as mortgage title transfer and moving, CEO Robert Reffkin said in a June interview.

“What books were for Amazon, the brokerage model is for us,” Reffkin said at the time.

Link to Bloomberg Article

On the same day, the same bank announced the same for OpenDoor:

Growing direct homebuyer Opendoor now has $3 billion in financial backing (yes, that’s “billion” with a “b”) thanks to a sizable new investment from Japanese technology company SoftBank Group.

Opendoor announced Thursday that it secured a $400 million investment from SoftBank Vision Fund, SoftBank’s investment arm.

That investment pushes Opendoor’s total equity capital raised above $1 billion – $1.045 billion, to be exact.

In addition, Opendoor said Thursday that it also recently secured $2 billion in debt financing from unnamed “top banks,” meaning the growing company now has more than $3 billion in total funding since it first began buying and selling houses in Phoenix and Dallas-Fort Worth in 2014.

Since then, Opendoor has been growing by leaps and bounds and raising money hand over fist.

Opendoor is now operating in nearly 20 markets, including Atlanta, Charlotte, Dallas-Fort Worth, Las Vegas, Nashville, Orlando, Phoenix, Raleigh-Durham, Tampa, and San Antonio, and has plans to into California, the Pacific Northwest, and several other areas over the next few months.

Opendoor’s next market expansions will be in Sacramento, California; Riverside, California; Denver, Colorado; Portland, Oregon; Austin, Texas; and Jacksonville, Florida.

And the company plans to be operating in 50 markets by 2020.

Link to Article

It looks like the future of real estate sales will be determined by how these big-money players spend their dough!

Posted by on Sep 28, 2018 in Compass, Jim's Take on the Market, Realtor, The Future | 2 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