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Jim Klinge
Cell/Text: (858) 997-3801
701 Palomar Airport Road, Suite 300
Carlsbad, CA 92011

Category Archive: ‘Realtors Talking Shop’

Operation Transparency

This is the fourth installment of my essay on the future of real estate sales.  I’ll send this along to Brad Inman, who is gathering thoughts for a leadership conference at the end of March, so they have my perspective from the street.

In summary:

The unconscious desperation among agents is ripping apart the formal agreement between brokers to share listings.  The environment is going the way of commercial brokers, where exposing listings to other agents is a last resort.

We see it happening – there is the occasional article – but without vigorous intervention by realtors themselves, the MLS will slowly disintegrate and be picked apart by outsiders.

Sadly, the sharing of listings is what is best for sellers, buyers, AND realtors, but the greed and desperation among agents gets in the way.

What Can Be Done?  What Are The Choices?

  1. Individual agents can adopt a full-transparency program, starting with publicly describing the specific services they offer, and their commission rates.  If consumers took the time to educate themselves about the differences between agents, at least they would make better decisions than they do now.  It’s unlikely that this will happen, because agents are lazy and won’t bother, unless forced to do so.
  2. We can hope that N.A.R., C.A.R., big brokerages and other industry titans will address this specific problem, and implement changes to save the MLS and broker cooperation out of a commitment of doing what’s best for consumers.  Probably the least likely of these five to actually happen.
  3. We can have big leadership conferences where outsiders will speculate how the disrupters will pick us apart, piece by piece.
  4. We can wait for the government to intervene.
  5. We can do nothing, and watch the broker cooperation via the MLS – which is the best thing for everyone involved – die a slow but certain death.

We can hope that somebody will find an answer.  But it would have to include ways to eliminate agent shenanigans, invigorate consumers, and be a forward-thinking solution that benefits all.

The inquiry might start with creating a national MLS, or electing a real estate czar, or encouraging agents to keep their word and quit cheating their own customers out of what’s best.

But what if a thing was the answer?

The solution is LIVE AUCTIONS.

We can easily incorporate them into our regular business as the process to select the winning bidder.   All other selection processes used today are subject to the listing agent tilting the table – with a live auction, all participants will be watching, and able to determine the actual winning bidder.

Could there be shill bidders who run up the price?  Yes, but let’s insist that every buyer is represented by a realtor – that way, at least the agent’s reputation is on the line.

Live auctions would keep listing agents and buyer-agents employed, though the fee structure may be in flux.  But our commissions are already under attack, so let’s take a chance that consumers will agree to pay a reasonable fee for these live auctions, and the other additional benefits provided by realtors.

A live auction doesn’t have to be a showy, champagne-filled soiree with a fast-talking auctioneer.  They can be as simple as gathering the buyers around the living room, in a rather informal setting.

I am offering the live-auction strategy to my sellers as the fairest and most effective way to select a buyer, and let the full transparency be the best way to reach top-dollar.

Here’s an example – catch the winning agent’s comments at the 9-minute mark:

Posted by on Feb 19, 2018 in Auctions, Bidding Wars, Jim's Take on the Market, Operation Transparency, Realtor, Realtor Training, Realtors Talking Shop, The Future | 23 comments

What A Realtor Does

Typically, if you want to know what a realtor does to sell your house, you have them over to make a listing presentation in person.  Because of antitrust laws that ‘promote fair competition for the benefit of consumers’, the commission rates charged by realtors are rarely seen in public.

Until the discounters came to town.

They advertise their rate because they want to appeal to the price-shoppers.  Consumers who shop for the lowest rate are attracted to this ploy, and don’t ask enough questions about what they get for the money.

Because the real estate industry refuses to publish any minimum standards, the discounters can get away with statements like, ‘full service for less’.  Today, you can ‘hire’ a realtor for $100 or less – but what do you get, and is it what you want and need?

Let’s start by outlining the levels of service available.


The Different Types of Realtor Service

Full Service – Expert

This is where you get a long-time veteran realtor – a full-timer who has closed hundreds of sales – to handle every aspect of your transaction.  Any assistants involved have a similar level of experience, and together they produce a smooth, seamless sale at the absolute highest price possible.

Full Service – Trainee

Every agent learns on-the-job.  Consumers deserve to know the differences, but because of the lack of transparency, there is no qualifying of how helpful an agent will be – you are taking a chance.  Agents can claim to be in the Top 1%, and say their assistants are ‘experts’, but there are no official standards.  As a result, team leaders are prone to hiring lower-cost employees with less experience to fill the gaps.  Because it is a fast-paced and complicated business, the trainees struggle to deliver the same results as the real experts.

Limited Service

This is one service that is clearly defined here, because of everything the realtor doesn’t do for you. It is primarily for MLS entry only, where the realtors cash your check, input your listing onto the MLS system and hope you can figure out the rest on your own.


Consumers – and realtors themselves – would be well-served if the real estate industry had a definition of the services provided, and then had every agent publish the specifics of what they do to serve clients.

Zillow does allow agents to list their sales history, but there is no instruction for consumers to properly use the information.  Their agent profiles are full of fluff, with at least half of them promising to deliver your ‘dreams’.

If every realtor published their actual services provided (with fees) and a detailed profile of every team member’s experience, then consumers could make an educated decision about who they are hiring.

Posted by on Feb 16, 2018 in Jim's Take on the Market, Operation Transparency, Realtor, Realtor Training, Realtors Talking Shop | 4 comments

Rex And Reality

Somebody needs to say something, so I guess it will be me.

Though I’m still shocked that realtors and their management are willing to stay this quiet, for this long – their silence is deafening.  The disrupters are the only ones doing the talking, and because no one else objects, they are getting away with lies and deceit.  The consumers deserve better.

  1. This guy does what Glenn and the rest of them do – constantly reminds the viewer that the standard commission is 6%.  If you are selling a median priced home (or higher) in Southern California, and think you have to pay 6%, you haven’t looked very hard.  Myself and most other agents are happy to deliver full service for 5% or less.
  2. Rex listings aren’t in the MLS, and they are only making sales with buyers they find themselves.  But the highly-motivated buyers – the ones who pay top dollar – work with an agent.  Why? Because they like the advantages an agent offers, which include convenience and expertise.  Because Rex won’t deal with other agents, it narrows the potential buyer pool.  If your house isn’t being offered to the highly-motivated buyers, then your bidding war won’t be as robust, and you will sell for less than you could have if you would have hired me.
  3. The buyers they do attract are unrepresented, and deal with robots.  The comfort level of those buyers will be lower, and their offers will be too.
  4. It is a fact that buyers who get little or no representation are more likely to fall out of escrow.  It might seem sexy in the beginning to make a deal through a new-fangled disrupter, but only the perfect houses at the perfect price make it through escrow without issues.  Seen many of those lately?
  5. He agreed that lousy agents aren’t going to survive, but good agents will. In reality, the disrupters are offering an alternative to the lousy agent – for consumers who are willing to put up with minimum service with the illusion of saving a buck, plod ahead. Great agents deliver maximum service, which results in top-dollar sales for sellers, and the best houses for the buyers.

The disrupters have one thing in common – they want you to think that their automating of the process will deliver the same results, and make selling homes easier and cheaper.

But it takes an expert salesman to get personally involved with creating a bidding-war environment to cause a top-dollar sale for sellers. You don’t get that with disrupters (or lousy agents) who just want to process your paperwork.

These differences need to be clearly identified so consumers can make an informed choice. Get Good Help!

More to come later – I have to go beat a robot out of a sale!

Posted by on Feb 11, 2018 in Jim's Take on the Market, Realtor, Realtor Training, Realtors Talking Shop | 5 comments

Calls for MLS Change

More agents reacting to the current MLS situation, which is bleak:

Is the Realtor-run property listing service in California obsolete?

Several brokers, agents and “multiple listing service” operators expressed concern during a panel discussion Wednesday that commercial websites like ZillowRedfin and have overtaken the patchwork of industry databases agents use to find homes for clients.

“The world of big data doesn’t seem to have come to the MLS in any meaningful way,” said David Silver-Westrick, a partner at San Clemente-based Keller Williams OC Coastal Realty. “We’re missing the boat on lots of big data opportunities. To the extent that consumers have better tools than we do, we just become irrelevant.”

The California Association of Realtors sponsored Wednesday’s event, held at CAR headquarters in Los Angeles, to plot the future of broker-run MLS sites and to find ways to meet the association’s 12-year-old goal of forming a single, statewide database in California. There currently are more than 40 MLS’s in California.

Agents use the MLS to disseminate information about homes for sale, providing property details as well as insider information about showings and compensation.

The statewide MLS effort so far has led to the formation of the Diamond Bar-based California Regional Multiple Listing Service, which currently represents most of Southern California and the Bay Area. CRMLS includes more than 92,000 agents and 37 local Realtor associations. But that’s still less than half the local associations in the state and doesn’t include San Francisco, Ventura County and most of Santa Barbara County, according to the MLS’s website.

“I think that there is an opportunity that is fast fading,” said CRMLS CEO Art Carter. “If we do not do it shortly, then we will forever be chasing others that will most likely take the handles and move forward.”

Other panelists lamented MLS problems include inaccurate and outdated data as well as the lack of consolidation.

Read More

Posted by on Jan 11, 2018 in Jim's Take on the Market, Realtor, Realtors Talking Shop | 1 comment

Off-Market MLS

We have convinced the public that buying and selling ‘off-market’ properties is sexy and cool, and the high-end agents in Los Angeles took it a step further to create a website to share listings privately.

The has 476 listings so far!

I’d expect some quirky things about a database that isn’t restricted by the usual MLS rules, but they have kept it very simple. The best part is that they have the ability to email a copy of any listing to buyers, which is helpful and feels like a regular MLS.  Agents can create their own hotsheets, search by radius or map, and upload new listings quickly.

While there could be anti-trust implications if it gets to be a dominant device within the industry, an agent-owned MLS club has several huge advantages:

  1. We depend on crappy-MLS companies now – no more.
  2. A high membership fee would be a barrier for marginal agents.
  3. Zillow would depend upon agent-uploading of each listing (if needed).
  4. Redfin’s website would be toast.
  5. For-sale-by-owners could get frozen out.
  6. No need for N.A.R. or C.A.R.
  7. It preserves the cooperation between agents.

It looks like heaven.

Posted by on Jan 11, 2018 in Jim's Take on the Market, Realtor, Realtors Talking Shop, The Future | 10 comments

More Shenanigans in 2018

The basic premise that drives the real-estate-selling industry is that agents ‘cooperate’ with each other, which is code for ‘I’ll share my listings with you, and you share your listings with me’.  We have a written agreement, and subscribe to the strict code of ethics, of course.

But these days, there just aren’t enough sales to go around.

These has always been an undercurrent of pocket listings and off-market deals.  But when the president of one of the largest brokerages in California gets quoted in the L.A. Times like this, it makes you think the whole system is unraveling.

Especially with the promise of vetting the properties, what does he mean?  Just the hot buys?  The easy sales to keep in-house for the new agents to sell? (upon whom the house makes max $$)

The sellers suffer from less exposure, and buyers have fewer choices.  But hey, at least the real-estate-selling business will survive, in some form.

Posted by on Jan 3, 2018 in Jim's Take on the Market, Realtor, Realtor Training, Realtors Talking Shop, Why You Should List With Jim | 3 comments

Goodbye Sandicor

There was a snafu in the rush to sign the tax reform bill:

“The Senate parliamentarian determined two minor provisions do not have budgetary impacts and had to be removed from the bill,” the representative told Business Insider. “The Senate will still vote tonight, and the House will vote tomorrow to send the final bill to the president’s desk.”

Republicans are using a process known as budget reconciliation to pass the bill without being subject to a Democratic filibuster. But that also means the legislation must comply with the Byrd rule, which stipulates that it must not be projected to add to the federal debt outside of 10 years and that all its provisions must deal with the budget.

The parliamentarian, a sort of umpire for Senate rules, determined that three elements of the bill violated the Byrd rule:

The name. The short name of the bill, the Tax Cuts and Jobs Act, appears to be placed incorrectly in the legislation.

Changes to the so-called 529 savings plan. The bill would have allowed money in the college-savings accounts to be used for homeschooling supplies.

The exemption for small colleges from a new excise tax. The bill had proposed a tax on college and university endowments exceeding $500,000 for every student enrolled, but it included a provision that would have exempted those with fewer than 500 tuition-paying students. The parliamentarian struck only the words “tuition-paying,” the Ways and Means representative said.

Even with the delay, the bill is expected to make it to President Donald Trump’s desk before the GOP’s self-imposed Christmas deadline.

We will wait patiently for Congress, and in the meantime find some good news in the Sandicor resolution, published today.  This isn’t much progress, but at least they are agreeing to something.

The two renegade associations will join the vastly superior CRMLS, and concede Sandicor to the only people who want it, the Greater San Diego Assocition of Realtors.

Read More

Posted by on Dec 19, 2017 in Jim's Take on the Market, Mortgage News, Realtor, Realtors Talking Shop | 2 comments

Five Out of 8 Years

As long as the House and Senate can agree, it appears that the tax reform bill will include the existing tax incentives for home buyers (M.I.D. and property-tax deduction up to $10,000).  The N.A.R. and C.A.R. aren’t happy though, and are still fighting the fight.

Today, the C.A.R. issued this explanation:

We must reverse the decline in California’s homeownership rate. For over 100 years Congress has incentivized homeownership with the tax code; currently through the mortgage interest deduction.  Any effort at reforming the tax code should maintain and prioritize this incentive. The current proposal only pays lip service to incentivizing homeownership. The proposed changes will result in only top earners itemizing their deductions. Therefore, the vast majority of people will no longer receive any tax incentive to purchase a home. So, while the proposal keeps the mortgage interest deduction, the incentive effect of the deduction for Americans to become homeowners disappears.

If you don’t earn enough money to itemize your deductions, you’re probably not buying a house around the coast.  It would be nice if they included their math so we could see who they claim as the ‘vast majority’ of buyers.

The M.I.D. and the property-tax deduction are the two primary incentives for home buyers – and they should make it into the final version of the bill.

What about the five-out-of-eight years rule?  It is a concern for recent purchasers only. The long-timers who make up about half of our sales already qualify for the new rule too.

As you can see in the chart above, on average about 22% of our sellers are recent purchasers.  But the actual number of potential delayers is lower.

Today’s stats are from the 116 NSDCC sales we’ve had since November 15th.  The 24% equals 28 sales, but five of those were flips, and five others had bought in 2012, and happened to sell right after their fifth anniversary.  There were also a couple who sold in less than two years, so they paid the capital-gains tax anyway.

In summary, there were 16 sellers who sold between their two-year and five-year anniversary, or 14% of the total.

It suggests that roughly 14% of the potential sellers over the next 2-3 years might delay their plans to sell, in order to qualify for the tax-free profits.  Great, even less inventory – hopefully the estate sales will increase!

The year-over-year sales were already lower in October by 5%, and November isn’t looking any better – and the tax reform hasn’t happened yet.  I think we can expect 5% to 10% fewer sales in 2018!

This change to a five-out-of-eight benefit doesn’t really affect today’s buyers – most are planning to stay long-term.  The average length of homeownership is already eleven years, and likely to go longer.

The homeowners who will suffer are those who have several houses and planned to move into each for two years to qualify – like Rob Dawg.  But if it means you only get to take advantage of the rule once or twice instead of three or four times, at least some benefit came your way – sorry they changed the rules on you.  Maybe you can run for president, and fix it?  Lower the capital-gains tax while you’re at it!

Posted by on Dec 4, 2017 in Jim's Take on the Market, Local Government, Realtor, Realtors Talking Shop, Tax Reform | 3 comments

Pocket Listing Network

Let’s just quit N.A.R. and the rest of the bureaucracy and join together as a network of agents who share listings among ourselves! Hat tip to daytrip for sending this in:


For many high-priced and desirable properties, especially in metros such as LA, the sales process rarely involves actually going out on the market. Many realtors often rely on pocket listings—offering homes to a small circle of select potential buyers and brokers through connections or word-of-mouth—to float potential sale prices or restrict who has access to a particular sale.

The process has been widespread but informal (according to, pocket listings account for under 10 percent of home sales), at least until earlier this year. In August, a group of four Los Angeles real estate professionals, Chris Dyson and Mauricio Umansky of The Agency, and James Harris and David Parnes, stars of Million Dollar Listing Los Angeles, launched the Pocket Listing Service, a play off the multiple listing service (MLS), a national property database.

“There are many sellers that quite frankly demand a certain level of discretion,” says Dyson. “They’re selling but don’t want people to know their house is for sale. Other want to test a certain price point. The PLS gives them a more efficient platform.”

According to Dyson, who has been involved in LA real estate since 2005 and focuses on Hollywood Hills, Malibu and the west side, pocket listings have become an increasingly large part of his business. But there was an obvious void in terms of an organized, widely accessible way to find these listings. Before the PLS, he would announce, or hear about, such sales via emails sent to a handful of brokers and other friends in the industry. Now, his new site allows users to search a database that’s not open to the public.

“You’re only as good as your list,” says Dyson. “The PLS gives you wider access to an agent network.”

Since the site launched in August, the PLS has attracted 1,500 new agent accounts, covering all 50 states, and has had $1.4 billion in assets listed, according to Dyson. Most of the activity in facilitating sales has come from Los Angeles, though Austin, Dallas and Miami have also been very busy.

Agents must be licensed (for instance, agents from California need to enter their BRE number to sign up) and can give as detailed or vague a property description as they want on the site. After signing up, they’re given a year of free access.

Previous sites have attempted to create a similar database, such as Top Agent Network and offMLS, according to The Real Deal, but the personal nature pf pocket listings, as well as the oxymoron of a “public database of private listings” has proven challenging.

Posted by on Dec 3, 2017 in Jim's Take on the Market, Realtor, Realtors Talking Shop | 5 comments