Rob filed his report on Friday, and it’s a good summary of where we are. The winning solution? Not the big agent teams, nor the employee model like Redfin:
Category Archive: ‘Realtors Talking Shop’
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 Zillow, Redfin and Realtor.com 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Other panelists lamented MLS problems include inaccurate and outdated data as well as the lack of consolidation.
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 PLS.com 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:
- We depend on crappy-MLS companies now – no more.
- A high membership fee would be a barrier for marginal agents.
- Zillow would depend upon agent-uploading of each listing (if needed).
- Redfin’s website would be toast.
- For-sale-by-owners could get frozen out.
- No need for N.A.R. or C.A.R.
- It preserves the cooperation between agents.
It looks like heaven.
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.
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.
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!
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 realtor.com, 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.
In spite of his cheesy style and odds stacked heavily against him, Greg is still pushing for his realtor-owned search portal to take over the internet. He is shooting for $1,100,000 in donations to make it happen, and so far he’s generated $241,000 – more than I thought!
If 10% of all realtors donated $25, he’d have double the money he needs, and if the home-search app ends up being spectacular, we could be headed for an exciting 2018 for realtors and how we sell homes!
Hi, it’s Greg,
GUESS WHAT? You will be able to start taking buyers away from Zillow and Redfin February 19th.
IT’S PROVEN – Our new home search app is strongly preferred over Zillow and Redfin by 100% OF HOMEBUYERS surveyed (price range $200,000-$850,000).
NEW TECHNOLOGY – This app leverages a new technology that gives buyers a significant home search advantage if they deal with you.
ON SCHEDULE – As promised, the website and app will be in your hands February 19th.
MARKETING VIDEO – A top national ad agency is producing a $50,000 marketing video you can embed in your personal website to promote your advantage to buyers.
TO OUR CONTRIBUTORS – Thank you for sharing the vision and supporting this mission. Now it’s a reality.
NOT YET A CONTRIBUTOR? – Just $25 gets you full access to the website, app and $50,000 marketing video. Contribute HERE.
IMMEDIATE PERKS- A contribution of $50 or more gets you next-day access to training graciously donated by our industry’s leading coaches.Learn more HERE.
Stand up… it’s time to take back control!
Two things never discussed about off-market sales:
1) Every agent signed an agreement to share their listings with other agents.
2) Nobody reads the forms before signing.
When Barbara Hendrickson’s 90-year-old neighbor needed to sell her Berkeley home, crammed with 40 years’ worth of belongings, Hendrickson, a real estate agent, sold the house for her without putting it on the market.
“She was not up to the task of cleaning out all that stuff,” said Hendrickson, an agent with Red Oak Realty. The off-market sale enabled the neighbor to quickly dispose of the house and move to Baton Rouge to be closer to relatives. The buyers took on the onerous job of clearing out the accumulated furniture and possessions.
In general, selling a house off-market isn’t the best approach, experts say. The California Association of Realtors recommends against it, as do East Bay agents including Hendrickson. But sometimes, as in the case of Hendrickson’s neighbor, there are exceptions.
To be clear, “selling off-market” means not listing the house on the local Multiple Listing Service, and is also described as off-market sales or pocket sales.
The realtor industry has given a huge head start to Zillow and the others, so it would take a herculean effort to build a new/better portal to squash them.
Here is what Greg has said about the features to expect on his realtor portal:
* A “secret sauce” differentiator that attracts homebuyers away from Zillow and other websites.
* Only listing agents will appear next to their listings.
*No online valuations – you can’t value a home without seeing it.
* No FSBOs – only listed homes by licensed agents.
* No days-on-market disclosure – it hurts value perception.
* No price reduction disclosure – it hurts value perception.
* Managed by an elected committee of agents/brokers.
* Optimized to maximize lead flow for listing agents.
* Designed as the perfect website to sell homes faster.
To build a better portal than Zillow would require more transparency, not less. He wants to hide the days-on-market and price histories? Buyers would be slow to give up that information, and instead, click back over to Zillow.
I doubt his secret sauce will make up for the lack of transparency, and if the new portal doesn’t have active and sold comps readily available, he might as well pack it up right now.
They are supposed to send out an email today regarding the pre-launch:
Tomorrow we begin the pre-launch phase of our crowdfunding campaign. This will provide the seed money we need to build an industry unification website designed to sell our listings instead of using our listings to take advantage of us. It will be the first ever nationally marketed home search portal owned and managed by America’s real estate agents, a refreshing alternative to websites like Zillow that don’t care about our industry or our clients (beyond how they can profit from us).
This crowdfunding prelaunch is only being shared with a select few. It is being provided to you because you have volunteered to help as part of our leadership team. The main launch to the public will not take place until September 19th.
Only five more days to the main launch!