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Category Archive: ‘Thinking of Selling?’

Bounce Back

solana beach

You’ve heard me say that I think it is my job to conduct a proper bidding war between all buyers and push for top dollar – and I will give them ample opportunity to pay it!  In this case, it was 10% over list price.

But the houses that need work are more prone to falling out of escrow once the scope of the project starts to sink in.  It is part of the business, and you have to be able to bounce back quickly to maintain momentum.

Posted by on Jan 27, 2015 in Auctions, Bidding Wars, Bubbleinfo TV, Jim's Take on the Market, Thinking of Selling?, Why You Should List With Jim | 6 comments

Why Sell Your House Now

Dec2014

We need more homes to sell! From the DQ:

http://www.dqnews.com/Articles/2015/News/California/Southern-CA/RRSCA150114.aspx

“One month doesn’t make a trend, but December’s uptick in home sales might indicate renewed interest in housing thanks to lower mortgage rates and job growth in recent months,” said Andrew LePage, data analyst for CoreLogic DataQuick. “The gain came despite a continued decline in the share of homes sold to investors and cash buyers.

If demand continues to build, we’ll need more supply to keep up with it. One of the big questions hanging over the housing market is whether higher demand and home values will lead to a lot more people listing their homes for sale, as well as more new-home construction, which remains well below average.”

The ultra-low mortgage rates have gotten every buyer’s attention, and the sales are starting to reflect it – just like at the end of 2012.  If the December sales are the precursor, then we are at least looking at a frenzy-lite experience over the next few months:

NSDCC December Sales
# of Dec. Sales
Median SP
Median DOM
Avg $/sf
2010
205
$835,000
69
$388/sf
2011
220
$800,000
62
$351/sf
2012
294
$849,500
44
$402/sf
2013
211
$1,075,000
40
$485/sf
2014
243
$1,075,000
41
$486/sf

Around the NSDCC, you can sell your home for more than it has ever been worth.  But is that enough to cause people to sell?  For most people, no. We like living here, and have no place better to go.

We don’t need everyone to move.  All we need is about 10% more listings than last year, and we’ll hit full frenzy. The 2003-2004 era was the craziest frenzy of all-time, and it’s because we had more houses to sell:

Year
Number of New Listings, First Half (Jan-Jun)
2003
5,178
2004
5,162
2013
4,817
2014
4,681

In a region of 300,000 people, all we need is about 80 more houses per month to sell.  We need a few potential sellers to change their mind about selling later, and sell now instead.

If you know you are going to be selling in a few years anyway, but these ideal conditions look too good to pass up, here’s how you can justify moving now:

1.  Move before you retire.  If you were thinking about downsizing and wanted to stay local, then either buy a condo close to home, or move to the outskirts where you can still buy a home for less than $500,000 – and commute to work for a year or two.  The low-end market is much hotter, and prices moving up quicker.

2.  Sell and rent. If you know you are going to be leaving town shortly, sell when the market is red hot, and rent a beach hut for a year or two.  Yes, rents are outrageous – but your home’s sales price will be too!

3. Retire early.  You are making more money in the stock market than you are at that stinking job you can barely tolerate.  Cash out while you can!

4.  Sell and move when you are healthy.  If you’ve been in the same home for more than 10 years, you have a lot of stuff to sort through – physically, mentally, and emotionally.  It is much easier when you have your health.

5.  Move up when rates are low.  Obviously, if you are moving up and financing the next purchase, these low rates are advantageous.

6.  Sell before rates go up.  Remember that in June 2013, that mortgage rates moved back into the mid-4% range on a rumor that the Fed was going to tighten – which they never did.  It won’t take much to pull this punch bowl.

Historically, the market has been a ten-year cycle, and the SD trough this time was April 2009.  It got dragged out longer in the 2005-2007 era by Angelo’s nutty no-doc financing, and today’s low rates might extend the party a while longer.  But it isn’t going to last forever, and mortgage rates will go up before the Fed does anything.

Once mortgage rates go up, buyers will expect lower prices, and we saw prices stall out much of last year.  But do you want to sell for less?  Not until you test the market for a year or two, and by then, buyers will be in control.

Contact me today for a free consultation!  jim@jimklinge.com

Posted by on Jan 16, 2015 in Frenzy, Jim's Take on the Market, North County Coastal, Sales and Price Check, Thinking of Selling?, Why You Should List With Jim | 4 comments

Full Service Realty

2460-oakridge-cove-008_web

Del Mar Heights is an eclectic mix of older customs and tract houses, combined with some sensational remodels.  A super-custom 4,400sf house about 100 yards from my new listing sold for $2,650,000….in 2009! (house is now listed for rent at $8,500 per month).

Unique older neighborhoods are tough to comp in any year, but now with lower inventory and pocket listings, the actual values can only be determined by testing the open market – which we will do this weekend.

Justifying the price is the listing agent’s job – they meet the appraiser, and provide the comps.  Yet rarely do you see any evidence being provided to the buyers or agents – they want you to figure it out.

Not me – I want to help buyers and their agents come to the right conclusion.  It starts with knowing the comps, which is why Kayla and I look at houses together every week on broker caravan:

In less than 24 hours, we’ve had 333 views on Zillow:

http://www.zillow.com/homedetails/2460-Oakridge-Cv-Del-Mar-CA-92014/16763155_zpid/

Posted by on Jan 2, 2015 in About the author, Bubbleinfo TV, Jim's Take on the Market, Thinking of Selling? | 5 comments

Del Mar Heights New Listing!

2460-oakridge-cove-001_web

Here’s my new listing at the north end of Del Mar Heights, listed for $1,650,000.  Kayla and I will be there both days this weekend, 12-3pm, for the open house extravaganza!  If you are thinking of moving and wonder how we can help, this is a good chance to see how we work – come on by:

http://www.zillow.com/homedetails/2460-Oakridge-Cv-Del-Mar-CA-92014/16763155_zpid/

2460-oakridge-cove-011_web

2460-oakridge-cove-014_web

2460-oakridge-cove-057_web

oakridge map

Come by this weekend!

Posted by on Jan 1, 2015 in About the author, Bubbleinfo TV, Del Mar, Thinking of Selling? | 5 comments

Bidding War Strategy

open bidding

Reader 3rd Gen SD asked yesterday,

“You regularly mention pricing to engineer a bidding war. Do you have a post you could link to that describes your strategy, including how you manage same?”

There are no rules or regulations on how to handle a bidding war – each realtor is on their own to devise a strategy.  As a result, most don’t do more than spreading out the offers on the seller’s table and picking one.

Back in the REO days, the banks would insist on countering each bidder for their highest-and-best offer, and that is the most common solution.  But agents are reluctant to tell bidders how many offers there are, or at what price point – they just want you to bid blindly.  In those cases, at least every bidder has a chance to win, but without some guidance they are likely to be conservative.

When my sellers get multiple offers, I’m working the phones myself.  I am asking questions to qualify each buyer, and giving their agent some coaching on what it will take to win.

It’s the pitting of each buyer against each other that results in top dollar sales.  They are much more likely to pay a higher price if they have a number to shoot at – AND they feel like they have been treated fairly.

Here are specific examples of how I do it:

http://www.bubbleinfo.com/2013/12/15/how-jim-handles-bidding-wars/

http://www.bubbleinfo.com/2012/11/30/open-biddingtransparency-live/

http://www.bubbleinfo.com/2013/04/18/price-coaching-for-bidding-wars/

Why doesn’t every agent handle multiple offers this way?  Because they don’t have to – sellers still think they did well, price-wise, and they can tell their friends and family that their house was sold in a bidding war.

Thinking of selling? Hire Jim the Realtor!

Posted by on Dec 30, 2014 in Auctions, Bidding Wars, Jim's Take on the Market, Thinking of Selling?, Why You Should List With Jim | 5 comments

Spring is The Best Time to Sell?

Everyone believes that the best time to sell your house is springtime.

But we threw out all the standard beliefs once the government stepped in and screwed up all the natural market forces.  Looked how it turned out this year.

If it weren’t for a blip that caused the June’s average cost-per-sf to be three percent higher than in October, the April-through-July stretch would have been the worst of the year:

graph (54)

Volatility is higher too. Look at how the cost-per-sf was bouncing around this year, compared to the previous years.  Thankfully, mortgage rates have had the biggest impact, and today they are in the threes:

int rates

In the summer of 2013, rates jumped 1/2% on a rumor – there is enough instability worldwide that it wouldn’t take much for rates to jump again.

Sellers should consider getting their house on the market sooner, not later.

Get Good Help, and get it done – January will be great!

Posted by on Dec 22, 2014 in Jim's Take on the Market, Thinking of Selling?, Why You Should List With Jim | 0 comments

Online Auctions of Homes

If these home-auction companies spent $100 million per year on advertising, they could go mainstream – and pressure realtors to justify their existence.  Thankfully, sellers resist anything that sounds like they might give it away:

http://dsnews.com/headline/12-12-2014/purchasing-real-estate-online-becoming-prominent-reality-homebuyers

According to comScore, online sales so far this holiday season (November 1 – present) have risen over 16% against last year’s figures from the same time. Housing prices are also accelerating month-over-month and are predicted to reach pre-recession prices by mid-2015 (cnbc.com). With the average online purchase sitting at $180.94 (as of this year’s second quarter), selling real estate online seems like an unlikely scenario.

However, heavyweights in the online real estate auction space such as auction.com and homesearch.com are thinking otherwise. Both companies use an online auction model to sell homes to investors and would-be investors online; however, during this holiday season, both seem to be testing ways to give online home buying more mass market appeal.

Are we witnessing the marriage of e-retailing to real estate?

One example suggests the answer to this is yes. Homesearch recently brought on a new CEO, Kal Raman whose background as an eBay/Groupon executive may foreshadow where the industry’s headed. Earlier this month, Homesearch joined the Cyber Monday craze by launching what seemed to be the industry’s first Cyber Monday sale packed with discounts and buyer incentives on homes. These properties were auctioned online through Homesearch’s typical online auction process.

Their most recent promotion though consists of a “buy it now” price, similar to that of eBay, so instead of actually bidding for a home through an online auction, consumers will call Homesearch to receive a price via telephone. If a consumer likes the price and the extra incentives offered, they can purchase the property before it goes to auction (Homesearch handles much of the downstream closing process already). As eBay’s strategy made clear, there are masses of people who are uncomfortable joining an online auction but who react very well to bargain-basement fixed prices.

Given that Homesearch continues to grow their network of real estate agents and broker partners, is it a stretch to imagine the day when an agent shows homes in the neighborhood and then takes their client online to purchase?

In a space where nothing like this has been tested before it’s hard to know for certain how successful Homesearch and others will be trying to scale mass-market retailing strategies to real estate. However, if they’re really able to go the retail merchandising route and apply discounts of 20%-50% off the list price of homes for sale, I can see how people might be inspired to buy their next home online.

http://dsnews.com/headline/12-12-2014/purchasing-real-estate-online-becoming-prominent-reality-homebuyers

Posted by on Dec 16, 2014 in Auctions, Jim's Take on the Market, Thinking of Selling? | 13 comments

Early Offers

Sellers and inexperienced agents are prone to panic when a purchase offer is received during the first 1-2 days the home is on the market.  They usually think something is wrong – like the price is too low.

But this is how the game works – the motivated buyers are automatically notified when a new listing hits the MLS, and they jump right on them.

Buyers may act quickly, but it doesn’t mean they are willing to pay the price.  Their decision is complicated by fewer closed sales, and generally flat prices – plus the sellers still want test new highs.

What do you do when you get a quick offer that isn’t full price?

Here are my three thoughts when deciding what to do:

Posted by on Dec 7, 2014 in Bubbleinfo TV, Thinking of Selling?, Why You Should List With Jim | 6 comments

New Purchase Contract

gov

The C.A.R does make some minor changes every year to our purchase contract, but according to Gov Hutchinson, the lead attorney for C.A.R., they haven’t made any wholesale changes in 12 years.  Gov was in town yesterday to review the latest version.

Here are my notes:

1.  The form is written by C.A.R. attorneys and is meant to protect realtors.  There are 10x as many lawsuits filed today as there were thirty years ago, yet the State of California’s population hasn’t even doubled in the same time.  Home buyers file more than 90% of the lawsuits against realtors.

2.  Buyers used to have 17 days to release all contingencies, but now the new boilerplate gives 21 days to release the loan contingency.  Most lenders can hit the 17-day mark, but it’s usually tight; so the 21 days is probably more realistic. But it does add a second contingency-release date, and more paperwork.  We surmised that in the real world, all contingencies might drag to the 21st day.

3.  The separate termite form was deleted, and its contents added to the ‘Request for Repair’ form.  Previously it was customary to include the termite costs in the original offer (and assigned to the seller), but now they will be a negotiable item after the inspection, as is the custom in Northern California.

4.  You regularly see these remarks, “Seller is exempt from TDS”, which applies if the actual seller is a bank, or a successor trustee who has in effect inherited the house.  But they are only exempt from having to use our specific TDS form, they aren’t exempt from disclosing everything they know about the property.

5.  There are times when the sellers will occupy the home for days or weeks after closing (a subject to which I will devote a whole post), but it is now stated in paragraph 9F that keys and passwords be delivered to buyer on the day escrow closes, regardless of possession.

6.  The big-screen TVs have been excluded for a while, yet their brackets remain with the property.  But this version added a second choice, if the box is checked – “[bracket] will be removed and holes or other damage shall be repaired, but not painted.”  This is on the purchase offer that the buyer is submitting, so they will be guessing on whether the sellers intend to leave the bracket, or remove it and repair the holes or other damage.

7.  If the buyer adds a phrase about intending to occupy the property for 12 months, it will negate the 60-day notice required to give a month-to-month tenant who has been living there more than a year. Instead, only a 30-day notice is required.

8.  There are two stigmas that are required to be disclosed – death and meth.

9.  Sellers have to disclose any insurance claims over the last five years – whether they owned it or not.

10.  This is a first – they added verbiage about what happens when a party won’t sign off to cancel a sale.  If either party fails to execute mutual instructions to cancel, the other party can demand that escrow release the deposit.  Escrow shall promptly deliver notice of the demand to the other party, and give them 10 days to object.  If they don’t object, escrow can unilaterally release the deposit to the other party.  The form authors couldn’t resist adding a final paragraph that escrow companies can still require mutual cancellation instructions at their discretion, which we’re guessing that most will do.

11.  This rarely comes up, but if a buyer cancels after releasing all contingencies, and the seller gets their deposit – he has to split the deposit with the listing agent.

12.  It is in the boilerplate that every dispute goes to mediation.  If both parties initial the arbitration agreement, then the dispute goes there instead of going to court.  Arbitration is cheaper, quicker, and private, but it is binding – there is no appeals of an arbitration decision.  If you don’t like that, then don’t agree to arbitrate.  Small-claims court is excluded, so disputes under $10,000 can go there for resolution.

Once a seller has a signed agreement, there are no back doors – if the buyers can perform, then they are buying the house.  Once the buyers release all contingencies, they are committed too – and will lose their deposit if they cancel later.  There is always joking at these seminars that nobody reads the contract – including the agents.  Get Good Help!

Posted by on Dec 5, 2014 in Realtor Training, Realtors Talking Shop, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 5 comments