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An Insider's Guide to North San Diego County's Coastal Real Estate
Jim Klinge, broker-associate
858-997-3801
klingerealty@gmail.com
Compass
617 Saxony Place, Suite 101
Encinitas, CA 92024
Klinge Realty
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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: ‘Realtors Talking Shop’

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

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

“The business model is flawed”

They charge even less in America, and you need good help to handle the load:

“Broke” real estate agents are quitting British disrupter Purplebricks in droves as the fixed-fee agency’s low-margin, high-turnover business struggles to achieve enough sales amid a slowing Australian housing market.

Research by The Australian Financial Review found at least 27 agents had quit Purplebricks Australia since March with overall agent numbers now down to 88 from 105 reported by the company in October when it filed its British interim results.

Purplebricks territory owners (franchisees) and agents, who spoke to the Financial Review, said they were struggling to make a living and were preparing exit paths after the $100,000 to $180,000-a-year salaries they were told they could earn failed to materialise.

Employment contracts show Australian agents earn just over $1000 out of the $5000 to $6000 upfront fee vendors pay when they list with the Purplebricks.

Internal sales figures obtained by the Financial Review for NSW – where the market has slowed the most – paint a picture of struggle for many.

They show that 15 agents undertook a combined 768 home appraisals between February and April, but have so far secured just 189 listings between them

While two of these agents have 72 instructions between them, the remaining agents have won between zero and 18 new listings each over the three-month period.

“The concept is brilliant, but the business model is wrong for Australia,” said former Purplebricks Newcastle agent Steve Bashford, who quit in May. “There is a big difference between what they promised us and what we achieved.”

Many other current agents and franchisees, who asked not to be named, made similar observations.

“There’s no money in it. The business model is flawed,” said a current franchisee.

“I’ve sold 50 properties in 18 months and I’m broke,” said another agent who recently quit.

Apart from the $1000 instruction fee, agents can earn additional fees if a customer arranges a Purplebricks home viewing or signs up for a mortgage with one of its partners.

However, much of this additional income has vanished as franchisees have had to hire and pay sales assistants to help clear the backlog of listings.

In addition, agents told the Financial Review, Purplebricks clawed back money from them if a customer complained and obtained a refund.

They also said the company had been “turning off postcodes” in places such as Sydney’s eastern suburbs without notice as agents battled to manage their ever-growing number of unsold listings.

According to its Australian website, since launching in September 2016, Purplebricks has secured more than 5200 listings and sold more than 3600 homes. It currently has 1563 properties for sale.

It reported a £5.1 million loss from its heavily marketed Australian business for the six months to the end of October 2017.

Read More

Posted by on Aug 11, 2018 in Jim's Take on the Market, Listing Agent Practices, Market Conditions, Realtor, Realtors Talking Shop | 1 comment

Real Estate Disruption

The idea of disrupting realtors has been around for years, but now several companies, backed with mega-millions in VC money, are making a dent.  They may not be taking a lot of the business away (yet), but they are being noticed.

It appears some of the big brokerages might be starting to feel it:

http://www.notorious-rob.com/2018/07/stages-of-decline-the-keller-williams-edition/

KW isn’t going anywhere – they have 180,000 agents.

But there is an underlying threat, real or imagined, that the entire real estate industry will be upended by technology that could change everything.

From the link above:

Zillow spent $320 million in 2017 on Technology and Development. In 2016, they spent $255 million on Technology. Over the past five years, from 2013 to 2017, Zillow spent a total of $893 million on Technology and Development with significantly more than 200 people who touch code.

The mom and pop brokerages are getting smashed by this tech steamroller.

Combine the tech advances with higher home prices and fewer sales, and we have a toxic blend for the old-fashioned veteran agents.  Many are getting out of the business, and others are left wondering what happened.

Realtors who plan to get out of the business in the next couple of years will just ride it out.  But those in for the long haul need to buck up.

If your not moving forward, your going backwards.

Nothing stays the same.

Posted by on Jul 20, 2018 in Jim's Take on the Market, Realtor, Realtors Talking Shop | 7 comments

Turbulence


https://twitter.com/bradInman/status/1011730002570719232

For an industry that has been stagnant and mostly unaffected by disintermediation/disruption over the last couple of decades, you get the feeling that change might be afoot now.

It’s asking a lot, but what we really need is transparency.

We are at the fork-in-the-road where agents and consumers alike want and need to choose between the traditional model of selling homes, or one of the newfangled disrupter ways.

But the services being offered are blurry.  The disrupters call themselves realtors, and say they provide the same full service.  Big teams say because they’ve sold so many homes that their way is the best.  Individual agents get caught in the middle somewhere.

If every agent described exactly what they do to earn their fee, then at least the consumers might be able to compare apples-to-apples.

Every agent has their 100-point marketing plan, a fabulous support team, and is in the Top 1%.  Let’s go beyond those basics.

To make it easier for consumers, let’s boil it down to the most important part of the equation – what is the one critical question to ask an agent?

‘Who and where are you at the point of sale?’

The frenzy has simmered down, and we’re back to the regular hand-to-hand real estate combat in the streets.  This is when buyers and sellers need real and effective guidance on when to make the deal.

If you choose a discounter, inexperienced agent, or get stuck with an assistant, you will get a tepid response.  Their lack of experience at guiding you to make the right decision when everything is on the line will cause them to be conservative, and not commit.  You will be left to your own devices.

When you choose a great agent, he delivers facts and opinions for you to use to make the right decision on the spot – that is real guidance.

This is where consumers need the real help, but the industry fails miserably because when you need us most, we’re not there.  We don’t insist on having top-quality help in place at crunchtime.

It hasn’t mattered in the full-blown frenzy – buyers just pay the price or higher, and everyone is happy.  You don’t need much help then.

But now that sales are receeding, and more homes are lying around not selling, real help is needed to figure out what to do.

Sellers are always prone to add a little mustard to their price, and without proper guidance on when to accept a lower offer or when to reduce their price, they can miss the selling window and chase the market down.  Buyers can pay too much and regret it later, or not enough and miss out on a good match.

Get Good Help!

Posted by on Jun 27, 2018 in Jim's Take on the Market, Listing Agent Practices, Market Conditions, Realtor, Realtor Training, Realtors Talking Shop | 2 comments

FTC and DOJ Realtor Workshop

The FTC and DOJ conducted a workshop this week about the competitiveness in real estate.  There hasn’t been much press coverage, but Rob has summed up the bulk of it here:

Link to Rob’s Blog

The actual proceedings can be seen here on the FTC Facebook page:

Link to FTC FB

In San Diego County, you can’t say there isn’t enough competition.

There are around 20,000 realtors, and last month we only sold 3,288 houses and condos!  You can list your home for sale on the MLS for as little as $95, and every agent offers their own service/commission package for the consumers who are willing to shop around.

The main beefs:

  1. Commissions aren’t disclosed.  The realtor community will fight hard to keep the actual amount of our commissions private, but it’s not that big of a deal.  The buyer-agent commission is disclosed in every MLS listing, so it’s just the seller-side – which is disclosed, and agreed to, by the most important person – the seller!  But if they were disclosed to the general public, we’d probably find that there isn’t as much difference between traditional and discount agents as we thought.
  2. Commissions haven’t changed with higher pricing. An ivory-tower professor ranted on and on about this topic, and cited two ancient studies of other industries that weren’t applicable. She needs to do a current study of actual commissions taken from the closing statements for accurate comparisons.
  3. Decouple the commissions, and have the buyers pay their own agent.  While this sounds like a great way to lower the buyer-side commission in theory, it ignores two critical facts.  A) Sellers are offering a reward, or bounty, to buyer-agents to sell their home, and should have every right to do that, and B) the likelihood of an agent being able to steer a buyer towards a home just because of a higher commission is extremely remote.  If the FTC didn’t agree, then publicly displaying the buyer-side commission could help, and allowing rebates pretty much covers it – no other change needed.

What wasn’t covered:

A. What you get for the money.  If the FTC and DOJ wanted to impose one thing to help the consumer, it would be requiring that every agent publish the exact services they provide for the money, and their actual recent experience in selling homes.  Realtors have fought every attempt at publishing the sales history of individual agents, but have somehow allowed Zillow to do it openly.  I think it’s time that consumers know the truth.

B. Enforcing the rules.  With no enforcement, there are no rules.  The FTC and DOJ could at least publish their opinions on pocket listings so agents know what is legal, and what’s not.

A couple of people mentioned that they should do another workshop with actual realtors working the street.  I’m available!

Posted by on Jun 7, 2018 in Ethics, Jim's Take on the Market, Listing Agent Practices, Realtor, Realtors Talking Shop | 0 comments

‘Litter On A Stick’

We won’t police ourselves, so…..

Hat tip to SM for sending this in:

Link to Article

Jerry Del Mauro hoped to score a $1.4 million sale last month when he staged an open house near the water in Huntington Beach.

Instead of a sale, the Re/Max agent got a $2,750 fine for putting out too many open house signs.

Del Mauro said he had no choice. The house sat on an island at the end of a semi-desolate street almost 2 miles from the nearest traffic light. To guide buyers to his open house, he put out some 18 signs — 11 more than the city typically allows.

A city code enforcement officer spotted the signs and issued a citation, fining him $250 per “excessive” sign.

“These open house sign laws are getting out of control,” said one of the 140 comments on Del Mauro’s Facebook post following the citation.

City officials are “Nazi Sign Police,” another commenter said, and a third called the citation “a Communist joke.”

The case is one of the more extreme examples of ongoing tensions between real estate agents and city officials throughout the region – and across the country.

On the other side of the controversy are city employees who have been inundated with citizen complaints about the virtual forests of open house signs sprouting up on corners, median strips and curbside over the past three years, fueled by a frenzied housing market.

“We have received pushback from residents,” Huntington Beach code enforcement Supervisor Rich Massi said in an email. “A few Realtors … started to blanket the city with open house signs at various locations, which created a nuisance and blight.”

Massi said several other agents also have been cited for violating city sign policies, with fines ranging from $250 to $3,000.

Similar tensions have cropped up in cities throughout the region, and across the country.

“We are being bombarded, and Realtors aren’t taking their signs down,” said Lula Davis-Holmes, a Carson councilwoman for 11 years. “It became an eyesore. And it became a public safety issue.”

In February, a Tulsa, Okla., city councilman called all temporary signs — including open house placards — “litter on a stick” and sought to have them banned on public rights of way, the Tulsa World reported.

Davis-Holmes called open house signs antiquated in the internet age, questioning why agents even bother to hold open houses.

“My impression from real estate agents is those signs attract more lookie-loos than actual buyers,” she said.

But Kissinger, the South Bay Realtor official, said they may be antiquated, but signs remain the most effective way to draw buyers to an open house.

Posted by on Jun 1, 2018 in Jim's Take on the Market, Open House, Realtor, Realtors Talking Shop | 11 comments

Ethics and ‘Sold Before Processing’

The selling of listings prior to MLS input has happened since the beginning, but in the era of inventory desperation, we’re now seeing companies openly advertising ‘previews’ of their listings before they put them on the MLS.  Before long, the MLS will just become the market of last resort, much like Loopnet is for the commercial brokers.

Home sellers expect and deserve open-market exposure, but nobody in the business wants to give up the hope of double-ending a commission, or making a quick deal and moving on to the next.  Many of these off-market deals involve an outside buyer’s agent, which is really mind-boggling that listing agents are so lazy that they are willing to compromise their fiduciary duty to their own seller just to make a quick buck.

Frankly, this issue is only going to get worse.  Redfin (dozens of times) and other disrupters are doing it too, and we are heading towards having only one agent per sale – which sounds efficient, but will sellers get full exposure?

 

Here’s a solution for those agents who insist on doing it, and a way to ease into a more-ethical era (hopefully):

DON’T PUT THEM IN THE MLS – EVER.

For agents who say that they have to input their listings per the rules, give me a break. You already broke all the other rules, don’t go holy roller on me now.

Here are the benefits of not inputting your off-market sales onto the MLS:

  1. Other agents won’t have to explain to their waiting buyers why they didn’t get a chance to make an offer.
  2. Other agents won’t think you’re a sleazebag.
  3. Other agents won’t be encouraged to do it too.
  4. You won’t leave a trail of evidence for the district attorney.
  5. Help preserve the MLS and our business.

How bad is it? An agent who sells 100+ homes per year recently told me that half of their listings sell before MLS-input!

Did you have special circumstances that required an off-market sale, and you insist on MLS input? No problem – mention the special circumstances in the remarks so others don’t jump to their own conclusions.  But special circumstances are rare – most common and unsuspecting residential home sellers deserve open-market exposure.

We’d like to believe that realtors are ethical – heck, we have a Code of Ethics!  But when tempted to make a quick and sexy off-market deal, most agents can’t resist, even if it’s not in their sellers’ best interest.  I’m convinced that the vast majority of agents don’t even know the difference.

Posted by on May 30, 2018 in Auctions, Ethics, Jim's Take on the Market, Realtor, Realtors Talking Shop | 3 comments

The Trojan Horse of Real Estate Sales

What never gets mentioned is that every realtor has signed an agreement to share their listings with one another.  This is how realtors are destroying the industry from within – because we foster the illusion of having a cooperative MLS but are happy to deprive our own sellers of open-market exposure in hopes of making two commissions. 

The practice is so common that I don’t think realtors give a second thought to upholding their fiduciary duty to their own client, the seller:

Pacific Union International, California’s second-largest residential real estate broker by volume, is launching a new service this week that will give the public a peek at its “off-MLS listings,” meaning homes for sale that aren’t on a Multiple Listing Service.

It’s the latest in a growing number of ways home sellers can test the market — and maybe get an offer — before embarking on a full-on marketing campaign.

Putting a home on the MLS is usually the best way to get top dollar because it provides the greatest possible exposure. But in a red-hot market, some sellers figure they can bypass the MLS — and the real estate websites that repost their listings for the whole world to see.

Currently, agents circulate these “off-MLS” or “pocket” listings inside their firm and with other agents through Facebook groups or email lists. Some share them with groups such as Top Agent Network or Marin Platinum, which restrict their membership to high-volume agents.

Instead of holding a public open house — with strangers and neighbors traipsing through — agents arrange private showings.

Pacific Union estimates that 20 percent of its home sales in the Bay Area and 30 percent in Los Angeles last year closed without appearing on the MLS.

Mark McLaughlin, Pacific Union CEO, says Private View will help buyers and sellers by giving greater access to his firm’s off-MLS listings: “We are taking secrets in our filing cabinet and exposing them to the public.” He agreed that the MLS provides “maximum exposure,” but for clients who don’t want that, this is “an incredible” alternative.

“Once we get critical mass, I think more sellers will be part of this,” Segal said.

In a market starved for inventory, that may not be welcome news.

Pocket listings have always been used, mainly by celebrities and people selling extravagant homes that only a few could afford. But their use in California has grown since 2013, as the housing market rebounded and bidding wars broke out.

“As inventory goes down, off-MLS practices go up,” said Jim Harrison, president and CEO of MLSListings, the listing service for Santa Clara, San Mateo, Santa Cruz, Monterey and San Benito counties.

He estimates that 21.6 percent of all homes sold in those counties in the first quarter did not hit the MLS before they closed. That compares with 12.6 percent in the first quarter of 2012. (Many agents enter a sale into the MLS after it has closed to help establish comparable prices for an area).

The California Association of Realtors discourages pocket listings. In a 2013 press release, it said most sellers want the highest possible price from a well-qualified buyer, and the best way to get that, the association said, is to put the home into the MLS.

Most Multiple Listing Services are owned by local Realtors associations. Agents who join an MLS generally must post homes on the MLS within a few days of signing a listing agreement, unless the seller signs a waiver.

Every member of an MLS has access to those listings. They also go out to real estate websites such as Zillow and Redfin.

Pocket listings can lead to ethical, antitrust and fair-housing issues, the state Realtors association said in 2013.

Sellers typically pay a commission to their agent, who shares the commission with the buyer’s agent. In pocket listings, it’s easier for agents to keep the entire commission to themselves, or within their brokerage firm or a small network of outside agents.

Agents say there are many reasons to keep a home off the MLS, at least temporarily.

“My preferred way is to market heavily off-market for a week or two, and then go onto the MLS,” said Cathy Youngling, an agent with Paragon Real Estate Group of San Francisco. That way “I have built a level of excitement and enthusiasm” before the “time on market” clock starts ticking.

Link to Full Article

Posted by on May 24, 2018 in Jim's Take on the Market, Listing Agent Practices, Realtor, Realtor Training, Realtors Talking Shop | 12 comments