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Category Archive: ‘Realtors Talking Shop’

Real Estate Made for TV

People want to see cut-throat realtors! Video here:

http://www.ocregister.com/2017/05/18/orange-county-real-estate-wars-to-debut-on-bravo-tv-july-6/

“Real Estate Wars,” a Bravo-TV reality show pitting Orange County agents against one another as they try to woo wealthy clients and settle bitter scores against a backdrop of luxury homes, will debut on Thursday, July 6 at 10 p.m.

The show “brings the cut-throat world of real estate in Orange County to life,” Bravo said in its announcement on Thursday, May 18. “With 10 agents, eccentric clients, multi-million dollar deals, old vendettas, and one common goal of winning, all is fair in real estate and war.”

Posted by on May 18, 2017 in Jim's Take on the Market, Listing Agent Practices, Realtor, Realtors Talking Shop | 1 comment

Real Estate Speed Dating

Real estate hysteria is reaching new levels:

LINK

It sounds like an unorthodox concept: Meeting complete strangers to see if you’re compatible to buy a house together. But as bizarre as it might sound, that’s exactly what happened on the third floor of the Toronto bar the Pilot in Yorkville on Thursday night.

Lesli Gaynor, the organizer of C-Harmony: Creating Co-operative Connections said the idea came to her when she watched her sons using dating apps.

“I have three young men and I was thinking about their reality and thinking about all of the apps they engage with on a daily basis and one of them has … used a dating site,” Gaynor said.

“It literally occurred to me that why can’t we take that kind of app or that style of meeting people and apply it to different things. It works for romance, so I think it could work for a mortgage.”

Gaynor said prospective buyers would combine financial resources to purchase real estate in Toronto.

“I combine my revenue with your revenue and your income with my income, we have more buying power and then we buy a property,” she said.

The former social worker turned real estate agent said while it seems unconventional, the idea of sharing space with strangers happens more often than you might think.

“People share homes all the time but there is a landlord,” she said.

“You might rent the bottom of a house and I might be your upstairs flatmate and it’s just that it’s controlled by a landlord as opposed to being controlled by you.”

Gaynor said she wants to stress that there is no expectation that participants need to exchange information and the evening was meant to open people up to the idea of co-operative purchasing.

“We are hoping people will meet and discuss their needs and they might go ‘hey, I really really like you and I could potentially buy a house with you’ with a solid legal agreement,” she said.

Posted by on May 7, 2017 in Jim's Take on the Market, Realtor, Realtors Talking Shop, The Future | 2 comments

Auction Questions

David from Louisiana sent this in:

Jim,

I just watched your first attempt at the auction and must say that you did a fine job as the auctioneer. I have been a real estate auctioneer/realtor for 30+ years and have often recommended an auction to fellow realtors in high demand situations such as yours. Of course, it usually falls on deaf ears as the realtors usually feel that they don’t need the service nor do they want to share the fee.

I hope you don’t mind the questions but I have been trying to work with realtors for many years and it seems to be a constant struggle.

I’m curious about what made you suddenly decide to utilize an auction when you could have easily achieved more than the asking price without it?

JtR:  Because there were multiple people at the open house that said they would be interested in purchasing the house, I thought this would be the best way to determine the winner fairly, and create maximum urgency.  The agents involved were willing, and so was the seller, so it worked out.  We did close escrow with the winning bidder at the price determined by the open bidding.

What was the seller’s opinion when you told them you were having an auction?

JtR: She was motivated to sell, so that made the difference.  Sellers who aren’t that motivated are suspicious of selling too quickly, thinking that this is like most jobs in the world where you work hard for weeks or months to achieve the desired result at the end.

But selling real estate in this low-supply, high-demand environment is the exact opposite – you stand the best chance of selling for top dollar in the beginning when the property is a hot new offering, and has max urgency. Buyers think something must be wrong with houses that aren’t selling in a hot market.

Did you consider actually marketing the property as an auction for a longer period of time and possible having more bidders?

JtR: No, because the highly-motivated buyers are there first.  There could have been other people interested later, but if they aren’t interested enough to come to the open house, then they probably weren’t willing to pay 4% or more over list price.  Yes, there could always be two in the bush, but our environment has trained buyers to race to hot new listings that might be a perfect match for them.  Not only will they be the most likely to pay more than others, but they are more likely to close escrow too.

I consider the quality/suitability of the property too.  This was a 1,541sf two-story house with a steep slope behind, so it wasn’t for everyone.  There were 3x as many people who didn’t bid.  Sellers and listing agents should consider how many people who came and didn’t offer.

Will you consider using the auction method in the future?

JtR: Absolutely, it is the best way to achieve top-dollar sales.  The animal spirits are driven when competing with your opponent eye-to-eye.

But auctions aren’t commonplace yet, so when I have multiple offers on a listing, I create a similar experience by pitting bidders against each other to increase the price.  I tell them the price to beat, which nobody does. Realtors want you to think it is better to bid blindly, but buyers are much more likely to go higher if they have a number to beat.  I take advantage of the competitive spirit, which you don’t have with blind bids.

For those who might think an auction format would only work for lower-priced properties, let’s note that there have been three sales in Rancho Santa Fe that utilized the no-reserve auction process, and closed for more than $10,000,000.

Those three are the ONLY sales over $10 million in the last five years in the Ranch, and there are 30 for sale today.  Let’s give auctions a try!

Of course, I would be happy to answer any questions that you may have.

Thanks, David

JtR: David, if a trusted name-brand company brought a slick and easy auction process to home sales and advertised it properly, do you think they could succeed?  Do you think they could change everything, and potentially eliminate realtors as we know them today?

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Posted by on Feb 21, 2017 in Auctions, Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training, Realtors Talking Shop, Why You Should List With Jim | 6 comments

Disturbing Realtor Stories

Want to know what it’s like being a realtor?

There’s more to it than just driving around!

Walking in on people having sex, or discovering a body is part of life. But if you want to get a feel for some of the sickos out there, click on the link below!

https://www.reddit.com/r/AskReddit/comments/5lt1ae/realtors_of_reddit_whats_the_most_disturbing/

Not for the faint of heart!

Posted by on Jan 6, 2017 in Jim's Take on the Market, Realtor, Realtors Talking Shop | 0 comments

Most Realtors Don’t Sell

failure-rate

There are 80,000 realtors in CRMLS – Art Carter is the CEO. 

Here’s what he had to say about agent productivity:

But many of the MLS’s 14,000 or so member firms have no listings, he added. The vast majority of the firms are one-man offices.

“Typically, only about 48 percent of our members in any four quarters participate on one side of a deal,” Carter said.

“Historically since I’ve been here at CRMLS, that has been about the average.”

Get Good Help!

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Posted by on Dec 4, 2016 in Jim's Take on the Market, Realtor, Realtor Training, Realtors Talking Shop | 0 comments

Flippant

t-day

I agree with the author about answering questions casually – agents look like idiots when they make a flippant remarks about work. The condition of the ‘market’ is relative to your own personal situation – it could be good or bad.

http://www.bestrealestateblog.com/6-things-shouldnt-ask-real-estate-agent-thanksgiving-dinner

#5 “How’s the market?”

This is too broad of a question.

The market is never entirely good, bad, or somewhere in between. It’s always good for some people, bad for others. How the market is depends entirely upon you and your needs and circumstances.

Not a bad question really. But it certainly isn’t one that an agent can or should just answer flippantly. So if you ask it, maybe you should be prepared to get into your specific scenario so they can accurately answer it.

Too many people get flippant answers from agents and base their perspective on the real estate market, and overall economy, on off-handed answers to questions like this.

Posted by on Nov 22, 2016 in Jim's Take on the Market, Realtor, Realtor Training, Realtors Talking Shop | 0 comments

Dual Agency Case

cz

On the surface, this case seems unusual – the seller’s agent owes both the buyer and seller a fiduciary duty if the buyer’s agent works at the same brokerage.  It’s because the agents are working on behalf of the broker – hopefully this will cause better broker supervision of dual agency cases.

The big kahuna of cases will be when a class-action suit is filed against a brokerage for all of the ‘Sold Before Processing’ sales, where the sellers didn’t get open-market exposure.

http://www.sfchronicle.com/business/networth/article/California-high-court-decision-favors-real-estate-10629057.php

In a closely watched case involving dual agency, the California Supreme Court ruled unanimously Monday that a real estate agent representing the seller of a property owes a fiduciary duty to both the seller and the buyer if the buyer’s agent works for the same brokerage firm.

The case involved the sale of a luxury home overlooking the Pacific Ocean in Malibu where the square footage was in dispute. The buyer and seller were represented by agents from different Coldwell Banker offices.

Under California law, a broker may act as a dual agent for both the seller and the buyer in a real estate transaction, provided both parties consent to the arrangement after full disclosure that the broker owes a fiduciary duty to both.

What was at dispute in the case was whether that duty extends to “associate licensees,” who are the individual agents/salespeople who operate under that broker’s license. The court ruled 7-0 that it does.

Read full article here:

http://www.sfchronicle.com/business/networth/article/California-high-court-decision-favors-real-estate-10629057.php

Posted by on Nov 22, 2016 in Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training, Realtors Talking Shop | 2 comments

More on Real Estate Disrupters

re

The latimes.com gave free publicity to a couple of real estate start-ups here:

http://www.latimes.com/business/la-fi-ditch-the-real-estate-agent-20161001-snap-story.html

Let’s examine piece by piece:

Real estate agents used to be privy to a lot of information that home buyers couldn’t obtain on their own.

But now property listings, photo galleries, historic sales prices, school ratings and neighborhood crime rates are freely accessible to anyone with just a few clicks. For some assertive buyers, that’s an invitation to bypass an agent and, in the process, cut out the pesky 5% to 6% commission that is traditionally split between the buyer’s agent and the seller’s agent.

To help buyers go it alone, or close to it, several real estate start-ups have emerged that promise an easier solution to a notoriously stressful and expensive purchase. By eliminating or limiting an agent’s role, customers save money and streamline the process.

Jim: New real estate companies have emerged every year, yet the landscape hasn’t changed.  Buzz words like ‘save money’ and ‘streamline the process’ sound sexy, but every agent can offer those.

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It’s also leading to tensions with the hundreds of thousands of real estate agents around the country, who say the companies are shortsighted and overlook the skills that a professional agent can offer.

Jim: Tensions?  Hardly – you aren’t even a blip on the radar yet.

We only get tense when a start-up is spending $100 million per year on advertising (like Zillow). It would take a huge investment in people and marketing to really disrupt the business – when you get to that point, let me know and we will revisit. Until then, you can nibble around the edges like Aunt Bea and most other small enterprises.

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When Wes and Laurel Duquette set out to purchase a home for the first time, the couple chose not to work with a real estate agent.

“We didn’t find an agent to be much of an advantage, yet they’re so heavily compensated for what they do,” Wes said.

Instead, they turned to Open Listings, a Y Combinator-backed start-up that replaces most of what agents do with an online platform. The Los Angeles company helps customers find a home on their own by creating a personalized feed of available properties that meet their requirements, and sending them emails of open houses.

It’s free for customers to use the service. Once a home has been purchased, Open Listings refunds customers half of the commission it receives from a successful transaction.

In April, the Duquettes purchased a three-bedroom, one-bathroom Manhattan Beach home for $1.34 million. Their refund from Open Listings was $16,000, which the couple put toward closing costs and bringing down their mortgage rate.

Jim: After this home was on the market for 28 days, Wes and Laurel paid $12,500 over list price for it.  When you aren’t willing to find a buyer’s agent who provides a real advantage, this is what happens – the listing agent will have his way with you.

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Real estate start-up founders say the industry is ripe for change.

Jim: Agreed, and with half of the realtor population near retirement age (median age is 58), the home-selling business could be completely redefined by anyone who is willing to spend $100 million or more on advertising every year.

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“Millennials expect things to be easy and transparent. They’re also used to making high-purchase transactions online,” said Shelley Janes, founder of SideDoor, an app that hopes to become the Ebay of real estate, where sellers can list their homes and connect directly with buyers.

Jim: More sexy talk that would work great as long as the buyer pays the seller’s price, there are no other competing buyers, and the house doesn’t have any issues with condition, financing, or appraisal.  P.S. Shelley Janes does not have a California real estate license.

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The recent wave of new real estate start-ups isn’t the first time the agent-assisted model has been challenged.

But shaking up the industry has been difficult. For one, the National Assn. of Realtors is an influential obstacle when it comes to change in the industry.

“It’s a powerful trade association, and its cohorts are brokerages, multiple listing services, real estate associations and individual agents. They all work diligently to keep a buyer and seller apart,” said Joshua Hunt, chief executive of Trelora, a full-service, commission-free real estate agency. He said those who are part of the outdated system fight to keep things as they are to preserve current commission rates.

Jim: The idea that N.A.R. and its ‘cohorts’ have any influence on commission rates is an illusion.  Not only is nobody within the industry fighting to ‘keep things as they are’ (I wish they would), no one within the industry is fighting for anything.  Ten years after Zillow began, we are just getting around to having meetings to discuss what we might want to do about it some day.

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Commissions in the U.S. are especially high. In Britain, Singapore and the Netherlands, they usually fall between 1% and 2%, according to a report by the International Real Estate Review.

Jim: Those agents are paid by the seller to process the paperwork – they are transactional agents who don’t provide advice, and aren’t obligated to disclose anything.  It is a model that could catch on here, but buyers and sellers don’t mind paying for advice.  It would be more likely that real-estate consulting companies would evolve.  It’s where these disrupters miss the boat – good help is needed to get deals closed.

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Open Listings still uses real estate agents in the process, but in a limited way. No more driving prospective buyers around town, or keeping a lookout for the perfect house for clients. Those tasks all fall on the home buyer’s shoulders.

Jim: They are, in effect, transactional agents.  They employ eight agents in two offices – Los Angeles and San Francisco – and most are brand new agents (how much advice could they offer?).  The broker lives in Santa Barbara.

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“More resources and online tools are good for consumers —  they provide a good picture of current market conditions, but employing a Realtor to help find just the right home to purchase and to negotiate on your behalf is key to a successful buying experience,” DeSanctis said.

Open Listings understands this, which is why co-founder Judd Schoenholtz says the company hasn’t totally removed agents from the picture.

Jim:  I agree that it is difficult for consumers to appreciate the value of good help until after 1) they need it, and 2) they experience it.  P.S. Co-founder Judd has had a California real estate license for 19 months.

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The company is building tools to minimize the mind-numbing amount of labor that comes with home buying: viewings, forms and contracts, inspections. By saving agents time in the paperwork weeds, Open Listings allows its agents to concentrate on the piece where they can make a difference: getting an offer accepted.

“We’re able to refund that much of our commission because our agents only focus on the small but critical piece of the purchase cycle,” Schoenholtz said.

Jim: Just getting around to building tools?  You must mean robots and drones full of artificial intelligence, right?  In the meantime, who does the real work – providing advice each step along the way?

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He said the network answers a real need for some agents.

“We’re offering [agents] the perfect arrangement — buyers that will really buy and less of the paperwork,” he said.

Open Listings, which launched last year and became profitable last month, says it has saved California home buyers more than $1 million since its launch. Its revenue has also doubled every quarter, according to Schoenholtz.

Its independent agents work for $25 an hour, plus bonuses and a commission split between Open Listings. There are currently 12 independent agents in the start-up’s network.

Jim: Agents who can’t keep up will love this idea – and the hourly pay.

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But there have been hurdles. According to Hunt, agents and brokerages will go out of their way not to show a Trelora home, or have lied about the condition or availability of Trelora homes.

Jim: It is a very competitive business – it can get nasty.

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Christian Redfearn, a real estate professor at USC’s Sol Price School of Public Policy, said another issue is the high stakes involved in home buying.

“I have access to all kinds of data, but I’ve still got to talk to a human. I don’t want to overpay for property. Given how large the investment is, if I’m off by 5%, that’s a huge amount of money,” he said. “A good broker would know the market well, and it’s hard to put that kind of quality on a website.”

That kind of personalized hand-holding is one that Daisha Versaw, 38, missed when she used Trelora to sell her five-bedroom, two-bathroom home in Arvada, a suburb of Denver. The company saved her family more than $16,000, but it was hard on her nerves in some key moments.

Though Trelora agents were responsive when she had reached out, it was still up to her to ask for updates and to stay on top of things. When the resolution deadline drew near for inspections, for example, it was Versaw who informed her Trelora agent of its expiration. “I hated that I was the one reminding him of the deadline.”

Her advice to would-be buyers wanting to skip an agent: “Be prepared to take more initiative and advocate for yourself.”

Jim:  Get Good Help!

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Posted by on Oct 1, 2016 in Jim's Take on the Market, Realtor, Realtors Talking Shop, Thinking of Buying?, Thinking of Selling?, Tips, Advice & Links | 0 comments