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Category Archive: ‘Thinking of Selling?’

Higher Prices = Harder to Sell


As home prices increase, buyers get more picky – and it makes sense.

If they have to pay more, then they want more for their money.

This should have some lasting effects on the market:

  1.  The sellers who upgrade their home to sell will be rewarded.
  2.  The gap between the turn-key homes vs. fixers should widen.
  3.  The home-selling failure rate will increase.

The stats show that we’ve had more listings this year, but fewer sales:

NSDCC Detached Homes between Jan-Sept.

Total Sales
Total Listings
Sales/Listings Ratio

Yes, the ‘re-freshing’ of listings does pad the Total Listings count, but it’s been a constant problem and helps to make the point – it’s getting harder to sell.

For sellers who don’t want to lower their price, there is an easy answer.

Do more to upgrade your home!

This is why financed buyers should consider a fixer – there is less competition, especially from cash buyers who have a better shot at the hot buys.

Posted by on Oct 18, 2016 in Jim's Take on the Market, Thinking of Selling?, Tips, Advice & Links, Why You Should List With Jim | 1 comment

Leased Solar Panels

Solar power is a great idea, but do you buy or lease the system?

If you purchase your solar panels, then when you go to sell the house, it should provide some extra value to the buyer.  Exactly how much is tough to estimate, but it wouldn’t be more than 50 cents on the dollar – it is a feel-good feature.

If you lease your system, there are pitfalls when selling:

  1.  The buyers have to assume the lease.  I don’t think the actual assuming of the lease is that big of a deal.  Buyers already have their financials handy to get their loan, and mortgage underwriters are tougher than solar-lease underwriters.  It is the additional hassle that can irk a buyer.
  2.  The seller and listing agent have to initiate the lease-assumption process.  The solar-lease company won’t talk to the buyers until the lease application has been submitted, which means the seller and listing agent need to request it. The leasing company has 10 days to respond, but the listing agent expects the buyer to release all contingencies within 17 days – which is only going to happen if the listing agent knows to request the lease application promptly.
  3.  There is a buyout.  This is where the fun begins.  On one hand, the buyer gets the benefit so the seller expects you to take the full package as-is. But the lease goes for 20 years, and the lease payments total around $34,000. Plus, there is a buyout on top of that?  Buyers don’t expect that additional buyout cost, and would like some negotiation.

Here is a typical buyout schedule:


4. The solar-lease company records a UCC-filing against the property, which prevents the seller from selling or refinancing without permission from the solar-lease company.

Do sellers fully understand what they are signing when they lease solar panels?  Probably not, and if they try to sell their house over the next 20 years, they will get a not-so-friendly reminder.

Below is a link to a general discussion about solar panels:

Solar Panels: Are They Worth the Cost?

Posted by on Oct 7, 2016 in Jim's Take on the Market, Listing Agent Practices, Thinking of Selling?, Tips, Advice & Links, Why You Should List With Jim | 1 comment

More on Real Estate Disrupters


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

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.


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.


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.


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.


“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.


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.


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.


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.


“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.


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?


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.


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.


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!









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

Smart Selling Tips


When you’ve decided to sell your home, the last thing you want to do is spend money to spruce the place up. After all, whoever buys it is going to replace those outdated kitchen cabinets and grungy bathroom tiles anyway, right?

“We’re often asked why any money should be spent freshening,” said Mickey Conlon, an associate broker with Douglas Elliman Real Estate. “The answer has to do with the psychological effect of assessing a renovation on a prospective purchase. Buyers assign dollar values to repairs that typically exceed the actual cost of remediation.”

To get the best return on your investment — and avoid turning off potential buyers — you need to ensure your home looks its best when it hits the market. At the same time, you don’t want to waste effort or money on improvements that won’t pay off.

Read full article here – good tips:

Posted by on Sep 18, 2016 in Jim's Take on the Market, Thinking of Selling?, Tips, Advice & Links | 3 comments

2016 Renter Survey


Worried we might run out of buyers? Plenty are waiting in the wings – and working with their parents to achieve!

Current renters value homeownership and want to buy a home but many are encountering affordability and financial obstacles that prevent them from buying, according to the CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “2016 Renter Survey.”

Nearly half of renters (48 percent) plan to buy a home in the future, with 10 percent saying that they plan to buy within a year. For those not planning to buy, an improvement in finances, lower housing prices, and saving enough for a downpayment would motivate them to buy now.

Of the 28 percent of renters who don’t plan to buy in the future, 50 percent said they can’t afford to buy, 20 percent will not buy because they prefer to rent, 19 percent said they can’t qualify for a mortgage, and 15 percent lack a downpayment. Job uncertainty (9 percent), economic uncertainty (12 percent), and housing market uncertainty (6 percent) were among other reasons renters cited for not buying a home.

Homeownership remains important to renters, with nearly half (45 percent) rating it 8 or higher in importance on a scale of 1-10, with 10 being extremely important. The average was 6.8. Nearly all renters (95 percent) see advantages to homeownership; freedom to do what you want with your home, building equity, and having permanence and stability were the top benefits mentioned by renters.

One of the surprising findings of this survey is that more than one in four millennial renters said they plan to purchase a home that will accommodate their parents, and about one in five millennials indicated they plan to pool funds with family members to buy a home.

Other key findings from C.A.R.’s “2016 Renter Survey” include:

  • Forty-six percent of renters claimed they currently rent because they can’t afford to buy, and 13 percent said they have poor credit and can’t qualify for a loan. The remaining renters choose to rent because they like the flexibility, freedom and ease of renting, are concerned about the maintenance costs of owning a home, or are not interested or aren’t ready to buy.
  • Nearly four in 10 renters (39 percent) indicated they plan to purchase a home in the same county where they currently reside, and 23 percent plan to buy in the same neighborhood.
  • Fifteen percent of renters plan to buy a home out of their current area, with 7 percent planning to move to another state, 7 percent to another county in California, and 1 percent to another country.
  • Of the renters who are planning to leave the area where they currently reside, 27 percent are moving to find lower housing prices, 24 percent are moving for a better neighborhood, 14 percent want to be closer to family, 9 percent want a shorter commute, and 7 percent are moving for a better school district.
  • Two in three renters have made some kind of preparation to buy a home: 25 percent have searched for homes, 16 percent have searched online for information about the homebuying process, and 12 percent have spoken to a REALTOR®.
  • Thirty-one percent of renters previously owned a primary residence, and 9 percent currently own real estate. Of those who previously owned a home, the reasons for selling included family reasons (37 percent), financial difficulties (28 percent), and work (13 percent).


Posted by on Jul 17, 2016 in Boomers, Jim's Take on the Market, Thinking of Buying?, Thinking of Selling? | 0 comments

MID and Home Prices


This has my vote for the worst real estate article of the year:

Three Belgian economists have shown the world that they know how to work a calculator.  They concluded that if the mortgage-interest deduction went away, homes would be selling for 20% less.

They didn’t talk to any buyers…..they didn’t talk to any realtors…..and they sure didn’t talk to any home sellers.

There is more to it than that!

  1.  The benefit of the mortgage-interest deduction has been minimized by record low rates.
  2.  There are many other reasons to buy a home besides the MID.
  3.  Sellers will wait to get their price.

The MID is icing on the cake for home buyers.  It doesn’t impact their ability to get a mortgage, and if the if the government takes back a tax deduction, it’s not going to stop families from wanting to have a place of their own.

Don’t be surprised if you see this article flashed around by NAR types who want to keep their lobbyists employed.

Posted by on Jul 5, 2016 in Jim's Take on the Market, Thinking of Buying?, Thinking of Selling? | 1 comment

My Sellers and Buyers


Long-time reader (and client!) Just-some-guy asked about some where-and-why on my clientele to give folks a feel for who is doing what.


Reason for Selling
Excess Property
Six of those 7 got big tax benefit
3 in SD, 2 out-of-state. Four purchased
Moved Out-of-State
Three of the four have purchased a home
Moved w/i California
New jobs
Moved Up
I also sold them their move-up house
Proceeds benefited the Ayn Rand Foundation



Reason for Buying
Three of the 4 used 20% down payments)
Move Up
All were sellers and buyers
Relo from Outside CA
Relocating here from CA



A. One of the sellers who moved out of state took a job in Toronto.  The weekend we sold the house, the temperature in Toronto was 1 degree!  I told the seller to hang onto my card!

B. Four properties sold were dual agency – we represented both buyer and seller.  It sounds like a high wire act, but I am clear about my duty – I give advice based on what’s best for the person with whom I’m speaking with, and don’t disclose anything about the other party.  When you can keep it clear in your head, it’s not a problem.  None of them were ‘sold before processing’.

The commercial brokers do it all the time, and it’s likely enough to come to the residential side that keeping my dual-agency chops up will pay off someday.

C. Seven of the 24 sellers sold a house that I sold them.  I can’t rely on past clients as my only sellers – people aren’t moving like they used to!

D.  Two-thirds of the buyers expected to invest more than 10% of their purchase price into repairs and improvements.  Fixers provide additional inventory, and I think we did a good job to adequately discount the price paid.

E. All of my listings were featured here at, and my SP:LP ratio was 99%.  Do the video tours and blog exposure help?  They must!

F.  A sign that the frenzy is over and the market is flattening out is the second negotiation – the request for repairs.  None of them go down easy.



Posted by on Jun 29, 2016 in About the author, Bubbleinfo Readers, Jim's Take on the Market, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 3 comments

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.


  •  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


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:


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