Menu
TwitterRssFacebook
More Links

Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

Carlsbad
(760) 434-5000

Carmel Valley
(858) 560-7700
jim@jimklinge.com


Category Archive: ‘Thinking of Selling?’

Making a Lower Offer

2016-06-25 07.26.42

It is rare in today’s market that you will find a truly motivated seller that will give it away (discount more than 10%).  Of the NSDCC sales closed over $1,000,000 in the last 30 days, the average sales price has been within 5% of the average list price.

Does it hurt to try?

Lightweight agents will warn you not to ‘offend’ anybody with a lowball offer.  But let’s assume that sellers have a thicker skin.  There is a tactical problem that makes it very difficult to come to terms when a buyer presents a low offer.

My rule-of-thumb is that we have two days or two counter-offers, whichever comes first, to make the deal.  If the initial offer is 15% or more below the list price, there is too much ground to cover.  You’re more likely to run out of time or counters, than to reach an agreement.

The biggest problem is that both sides become attached to their price once they put it on paper, and feel the need to defend it no matter how that price was determined.

Typical Example:

Buyer offers 85% of list price.

Seller thinks it is low, and counters 98% of list to send a message to the buyer that this house isn’t going to be stolen.

But the buyer becomes attached to his 85% offer, and he’s not going to be pushed around! The fight is on – and the buyer counters at 88% of list.

Seller thinks we’re going nowhere fast, and drops the negotiations.

Example that has a Better Chance:

The buyer offers 85% with low expectations, knowing the seller won’t be pleased.  The seller counters at his 98% number.

The buyer’s response to the seller’s counter needs to be at least 90% of list, for  two reasons: A) to impress the seller that a deal could be made here, and B) beat the clock.

Typically, the seller will then counter at 95% of list, and hope the buyer just signs it.  But the buyer splits the difference instead at 92.5%, and hopes the difference is small enough that the seller shrugs it off and signs.

The key is the buyer’s counter to the seller’s first counter – it has to be high enough that the seller stays in the fight.  If the buyer doesn’t come up much, it’s too easy for the seller to give up.

Tips:

  •  If you want to buy at 85% of list, then have the agents discuss it on the phone.  You have to convince both the seller and the listing agent, so you might as well start with the agent first – if they blow you off, just wait and see if they lower the price later.
  •  Determine a price strategy in advance, and respond promptly.  The egos on both sides will run out of gas within two days.
  •  Make a clean, crisp offer – include a solid prequal letter and proof of funds.
  •  Provide convincing data why your price is right, especially if there have been new comps since the listing began.
  •  Don’t justify your price by dogging the house, and all the repairs needed.
  •  Include other sweeteners like free rent after closing.
  •  Keep in mind that you are only fighting for the last 2% or 3%.

Having a strategy is important.  Too often a buyer will just throw a price out there, without having a path to follow – and the path is predictable!

The prevailing market theory employed by nearly every realtor is to wait until someone comes along to pay their price.  Your negotiations have to go perfectly to disrupt that belief!

Get Good Help!

Posted by on Jun 25, 2016 in Jim's Take on the Market, Listing Agent Practices, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 5 comments

Preparing Your House For Sale

scotts

When it comes to getting the best price for your house, there might be no higher-profile experts than Drew and Jonathan Scott, the personable hosts of several HGTV series including the long-running “Property Brothers.”

The 38-year-old twins started their real-estate ways while still in college, first leasing out a building to fellow students and then flipping a house for a $50,000 profit a short time later. They’ve put the lessons they’ve gleaned from nearly 20 years of buying, renovating and selling homes into their first book, “Dream Home: The Property Brothers’ Ultimate Guide to Finding & Fixing Your Perfect House.”

“Everybody always thinks that their house is nicer than the one that just sold for more money,” said Drew, a licensed Realtor. (Jonathan is a licensed contractor.) “But the fact of the matter is, most homeowners are blind about the flaws in their home. Which is why you have to value using professionals who will step back and give you an honest opinion.”

Here are the Scotts’ five top tips for getting your home ready to sell:

Read full article here:

http://www.latimes.com/home/la-hm-property-brothers-20160613-snap-story.html

Save

Posted by on Jun 24, 2016 in Jim's Take on the Market, Thinking of Selling?, Tips, Advice & Links | 0 comments

Handling Multiple Offers

offers

 

Our listing on Cherokee closed yesterday.

It was the 2,527sf three-story house that backed to the I-15 freeway – the one where we had 200+ people attend the open house.

The final tally at the Zillow page was 3,745 views, and 77 people had saved it as a favorite home, which are both extremely-high counts. (Josh was the seller)

2022-cherokee-ln-004_web

Yesterday, we marveled at how the bidding war ended up.  The listing had hit the MLS on a Saturday, we had the open house on Sunday, and by Monday we had six offers.

Because not every bidder knew there was competition, we gave everyone the chance to submit their highest and best offer by Tuesday at noon.  I like to keep a tight timeline and promise buyers that we’ll select a winner promptly in order to retain as much urgency as possible.

The list price was $549,000.

At the end of the highest-and-best round, we had a $565,000 financed offer, a $570,000 cash offer, and a verbal $571,000 cash offer (the other three stuck with their $549,000 or $550,000 original offers).

The agent who wrote the $570,000 offer was 80 years old, and was using forms from five years ago.  I actually had to hand-write his original offer for him, but thankfully he was able to scratch out a one-sentence H&B.

Because I had concerns whether he could make it to the finish line, I pressed the $571,000 agent to get his deal in writing.  But he called back with bad news – his buyer, a savvy, multiple-property owner, decided it was too rich.

I called back the $570,000 agent, knowing that I’d be carrying his luggage for the next three weeks.  But he had more bad news – he took his buyer’s family to the house, and they vetoed the sale.

With the other three bidders unwilling to budge, we signed the $565,000 financed offer…..before they changed their mind!

Most people would have been tempted to hold out.  Yes, it would have been sexier to close escrow in 2-3 weeks with a cash buyer. But after 200+ open-house attendees and 50+ showings, are there two in the bush?

Though my phone hasn’t rang like this since back in the REO days, there was no disputing the facts – most people didn’t make any offer, and those that did weren’t in love enough to go crazy.  It was a trend that was likely to continue.

In spite of casual observers telling me we were giving it away, or it was too cheap, the actual results were telling.  The duty of the listing agent is to check the ego at the door, and focus on the facts.

We made the deal at $565,000, and it stuck.

Posted by on May 10, 2016 in About the author, Bidding Wars, Frenzy, Jim's Take on the Market, Listing Agent Practices, Market Conditions, Thinking of Selling?, Why You Should List With Jim | 3 comments

NSDCC Avg DOM, 1st Qtr

sell

Our low inventory has buyers starved for houses to purchase.  When they see a good one, they react immediately – an attractively-priced house will have people driving by within the first hour or two on the market!

Sellers should be aware, and expect to sell their house right away.

Those who don’t shine up their house before listing, or those who get exuberant about price – thinking they have plenty of time – will miss a golden opportunity.  The most desperate buyers are motivated to pay top dollar in the first few days on the market!

Here are the number of NSDCC houses sold up to $1,400,000 in the first quarter, ranked by days-on-market:

Avg DOM
2013 #/SP:LP
2014 #/SP:LP
2015 #/SP:LP
2016 #/SP:LP
0
19/97.0%
8/98.2%
6/91.9%
9/97.4%
1-14
205/99.5%
169/99.4%
160/98.6%
125/99.3%
15-30
80/97.2%
58/97.7%
65/96.7%
64/97.7%
31-60
68/96.5%
78/96.5%
83/96.7%
72/97.0%
61+
157/95.5%
96//94.8%
104/96.1%
89/95.9%

Sellers – you want to get your price, right?

The houses that sell closest to list price are those that go pending in the first two weeks.  These SP:LP ratios are based on the list price on the pending date – the price which typically needs to be lowered first to get a buyer to offer, because they know it isn’t working after the first few weeks.

Hire a listing agent who can handle the immediate urgency – Get Good Help!

Posted by on Mar 31, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Thinking of Selling?, Why You Should List With Jim | 0 comments

It’s Go Time

springkick

We’ve all heard the rule about listing your home for sale in the spring.

But when are buyers actually buying?

Are there any times when the demand could wane, and sellers should avoid?

There are three events that could cause a lull in the demand:

  1.  Easter/Spring Break
  2.  Tax Day/Season
  3.  Graduation Season

If all we had to worry about was Easter Day, then we might lose a few hours – there were plenty of open houses on Saturday.  But families with school-age kids get 9-10 days off, which is tempting for them to spend on vacation.

Should sellers wait?

Then you have the tax-day slowdown, which is usually the 1-2 days that people waste having to arm-wrestle with their income taxes.

Keep waiting?

Graduation season is more than it used to be, with every kid from pre-school through college getting the pomp and circumstance fit for a king.

Good grief – it will be mid-summer by the time every distraction clears!

Let’s examine the most important fact – when are buyers buying?

These intervals below were based on the hunch that the combined spring-break/tax-day season (3/16-4/15) might show some weakness:

NSDCC Detached-Home Closed Sales – Dates They Were Marked Pending:

Year
2/16-3/15
3/16-4/15
4/16-5/15
5/16-6/15
7/16-8/15
2012
264
297
309
307
231
2013
293
362
340
326
248
2014
231
271
303
261
264
2015
264
318
308
311
289
Avg
263
312
315
301
258

How about that!

The spring-break/tax-day season was the hottest of the year in 2015, and on average about as good of a time to sell as any!

It’s Go Time!

Posted by on Mar 28, 2016 in Jim's Take on the Market, North County Coastal, Sales and Price Check, Spring Kick, Thinking of Selling?, Why You Should List With Jim | 4 comments

Pricing Triangle

pricing triangle

Sellers who price their home above market value will appeal to a smaller number of potential buyers.  But there are other variables too, the most important of which is timing.  Once the listing has been on the market for a month or so, buyers expect sellers to lower the list price.

From this article:

http://www.keepingcurrentmatters.com/2016/02/29/how-to-get-the-most-money-when-selling-your-house/?

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price it so that demand for the home is maximized. In that way, the seller will not be fighting with a buyer over the price, but instead will have multiple buyers fighting with each other over the house.

Realtor.com, gives this advice:

“Aim to price your property at or just slightly below the going rate. Today’s buyers are highly informed, so if they sense they’re getting a deal, they’re likely to bid up a property that’s slightly underpriced, especially in areas with low inventory.”

Posted by on Mar 1, 2016 in Jim's Take on the Market, Thinking of Selling?, Why You Should List With Jim | 0 comments

Premier Agent Home Video Tours

zpa

Here’s a great reason to list your home with Jim the Realtor – Zillow is giving ‘special preference’ to listings by Premier Agents that feature a video tour.

  1.  Hopefully this will help bring home video tours into the forefront of real estate marketing.  It is time for agents to embrace video – finally!
  2.  This will help to further magnify the superiority of Zillow’s website over our local MLS, who refuses to allow agent videos to be publicly displayed.
  3.  It demonstrates how Zillow will keep developing exclusive benefits for the Premier Agents who pay them to advertise.

Home sellers will have one more way to evaluate which listing agent to hire – who does the best video tour!

The home video tour also gives the listing agent direct access to the buyers, allowing them to sell the house using video and audio – which might be the more important benefit of the two.

Posted by on Feb 16, 2016 in Bubbleinfo TV, Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Why You Should List With Jim, Zillow | 0 comments

Klinge Realty Goes to China!

shanghai

China’s leading international real estate show is coming up next month.  The 11th Annual Overseas Property & Immigration & Investment Exhibition will be March 5-7 at the Shanghai International Conference Center Natatorium.

It is the #1 real estate exhibition in Mainland China!

Buyers were purchasing properties right off the photos at the display booths last year, and they expect another good year in 2016.

Klinge Realty’s listings will be prominently displayed – join in!

If you want your property to receive direct exposure to Chinese investors, contact Jim the Realtor at (858) 997-3801 or jim@jimklinge.com.

Posted by on Feb 10, 2016 in Jim's Take on the Market, Klinge Realty, The Future, Thinking of Selling?, This Is America, Why You Should List With Jim | 3 comments

3D Home Tour

3D camera

Carlos Hernandez from www.touritnow.com did a 3D home tour of my new listing, using his Matterport camera.  Here’s how it turned out:

http://www.touritnow.com/3d-model/7249-ocotillo-street/skinned/

This technology will be the next step in selling houses from afar – do busy people really need to visit in person after seeing these video presentations? It helps to screen out the actual showings too, because there is no hiding anything – if a viewer sees something they don’t like, they can save themselves a trip.

Big picture?  Eventually, the Matterport company will have a library of every house in America….but wait, it’s my listing, and I paid for the tour!

Here is Carlos describing what he does:

Posted by on Jan 28, 2016 in Bubbleinfo TV, Jim's Take on the Market, Listing Agent Practices, The Future, Thinking of Buying?, Thinking of Selling?, Tips, Advice & Links, Why You Should List With Jim | 6 comments

Downsizing/Multi-Gen

multi-gen

Not only are retirees trying to downsize, but the kids are hanging around longer too.  The excellent research by John Burns has put some numbers on the one obvious outcome – multi-generational living.

Percentages in the 40s and higher are more than a blip – the vast amount of downsizing and multi-gen households is a game-changer:

14% of all US households (16.5 million households!) now live multi-generationally, and the numbers continue to rise for three reasons:

A. Delaying marriage has increased the number of young adults living with parents.
B. Surging retirement has increased the number of retirees living with children.
C. Significant immigration from countries where multigenerational living is the norm has also helped boost the numbers.

Most of the US housing stock was not built for multigenerational living, providing a tremendous opportunity for home builders. According to our Consumer Insights survey of more than 20,000 new home shoppers, 44% would like to accommodate their elderly parents in their next home. Additionally, 42% of today’s shoppers plan on accommodating their 18+ older children in their next home.

This focus on providing housing to extended family or friends may also account for 65% of respondents desiring a bedroom with bath on the ground level and 24% wanting a suite with a kitchenette and small living area.

Click below for full article and designs:

http://realestateconsulting.com/multi-generational-households-on-the-rise/

Posted by on Jan 26, 2016 in Downsizing, Jim's Take on the Market, One-Story, The Future, Thinking of Buying?, Thinking of Selling? | 0 comments