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Carlsbad
(760) 434-5000

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


Category Archive: ‘Why You Should Hire Jim as your Buyer’s Agent’

Dumbing Down of Real Estate

It’s not just Redfin, most other agent teams are known to have newer realtors on the front lines these days.  Another start-up gives the lockbox code to buyers so they can take their own look around.  A recent survey showed that 1/3 of buyers are making offers on houses they haven’t seen in person!

Experienced agents are doing less and less, and in some cases, they aren’t involved at all.  We are being told that it’s good for the consumer too, because now they get to interact with ‘specialists’ for each phase.

But it appears that consumers may not care that much about getting good help!

Hat tip to GW and MF who both sent this in:

http://www.cnbc.com/2017/07/14/almost-half-of-americans-have-buyers-remorse-about-their-house.html

Of those surveyed, 42% of buyers regret the size of home they bought – but only 15% wish they had more information?!?!?!  You have to be kidding!!

Are consumers watching a few HGTV real estate shows and then wandering into their real estate experience thinking they know enough?  It appears so!

Good or lousy help costs the same – but the other prices you pay could be huge!

Posted by on Jul 17, 2017 in Jim's Take on the Market, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 0 comments

‘Perfect-House’ Characteristics

Of all the blog posts here, this one gets the most hits by random searchers.

Here it is unchanged from November, 2011:

Punky asked about what to look for in that “awesome I got everything going for me” house.

These thoughts are culled mostly from conversations with our buyers, personal observations, multiple bidding wars, with an emphasis on investment value and some anticipation of future trends:

 1.  Location – Because buyers are looking long-term, the flight to quality has never been so active.  Buying the best location you can afford will never go out of style. Being in a great school district is smart, even if you don’t have kids.

2.  Light and Bright – South-facing homes with ample windows that allow full sun are much preferred.  You may have to provide shade in the summertime, but you’ll save on heating bills in winter and overall have a sunnier disposition than those who live in a cave.  There will be more push towards solar panels at home, and they prefer a south-facing roof.

3.  Walkability – Being able to walk to shops is convenient, but also walking for exercise is smart too.  Does the location encourage you to walk more?  If so, I think buyers will consider it a preferred location, and might pay a little more.  If it’s close to the foothills, the mountain bikers will dig it.

4.  Security – Does the location make you feel safe? People already have concerns about their safety, and those could get worse in the future.  Is it a secluded spot?  Can anyone sneak up on you from behind?  Do the neighboring properties help or hurt?  Tracts with smaller lots can provide a ‘safety in numbers’ feeling.

5.  Privacy – No homes looking in, especially not looking down on you from above.  Up-slopes are acceptable as long as there is ample distance of flat area in between, and the houses above are set back so you don’t see them much.  The worst are the example shown at Viridian, where the house/stucco wall behind you is about 5-10 feet higher, and 20-30 feet away – it is an unsettling feeling.

6.  One-Story – My personal preference, and they are selling for an approximate 10% premium.  If you’d rather have a two-story, and then run into trouble later with stairs, know that you can always add an elevator – look for spots where you can devise a landing upstairs.

7.  Floor Plan – The most desirable houses are those with big open rooms that flow.  This can be fixed with an open checkbook, so use your imagination.

8.  Indoor/Outdoor Entertaining – For those who entertain, this is a big feature.  The outdoor kitchens are very popular, but just having a decent spot for a BBQ can satisfy many.

9.  ‘Visual Openness’ – Having a view is nice, but you should be guarded about how much premium you are paying.  The coast is so socked in with fog ‘marine layer’ these days that you’re not going to see the ocean much, so the very max I would pay is $100,000 extra for the best ocean view – and it drops off in a hurry.  Most people are satisfied with having something pleasant to look at, so if you can see beyond the backyard, then the resulting night-light view gives you a 24-hour view of something.

10.  Guest Suite – A downstairs bedroom/bath can usually double as a den/office area, but the primary use is for guests – especially the in-laws.  Having it separated from the rest of the house is ideal, and it doesn’t have to be detached.

11.  Great Room – Having the kitchen/family room combo is imperative, and money can fix.  Includes a big-screen TV that you can see from the kitchen sink.

12.  Style, Character, ‘Pizazz’ – These are hot features for selling, and can be added easily.

13.  Three-car Garage – Otherwise known as the California Basement, the third-car garage usually hold people’s junk.  Why people insist on having so much junk is another topic.

14.  Master with Walk-in Closet – This item is imperative for the ladies; guys could live with a gunnysack or cardboard box – or with leaving their clothes on the floor.  It is probably an efficiency thing – being able to see the available selections probably makes it easier to choose, especially with shoes.  A window, or ample lighting in the closet is a plus.

15.  Game Room – If you have teenagers, a separate room is better for video games.

16.  Cul-de-Sacs – I can do without the screaming kids, but cul-de-sacs are a big boost for re-sale.

17.  Green – Good for energy efficiency/cost savings, but not many homebuyers will spend crazy money here – I wouldn’t pay more just because a house has solar panels.  Being self-sufficient and off the grid is a big draw, but paying the right price for the house is #1.

Things to avoid:

1.  Extra-large backyards – They cost too much to maintain and you don’t use them enough.  My rule-of thumb still stands – if you can mow the lawn in less than a half-hour, you’re good.

2.  Pools are also out, especially at the coast – The weather is not hot enough that you will use them much (unless you swim for exercise), plus they take up too much of the backyard.

3.  Overgrown trees – If they are more than 20 feet tall, they’re probably too big and messy, and people are afraid that they’ll fall on the house.  People close to the coast would rather have sunlight.

4.  Condos – Unless they have exceptional other features, it’s better to rent, due to the difficulty in obtaining mortgage financing.

5.  High monthly fees – How long will it be before we see Occupy Mello-Roos?

6.  Three or more levels – Two-story is the max.

7.  Linoleum, single-pane windows, formica, 8-ft ceilings, etc. – all the old, dated stuff.

8.  Power lines nearby – Perceptions are particularly negative, whether accurate or not.

9.  Double-yellow-striped streets – Perceived as too busy, whether they are or not.

10.  Noise – Freeway, street, airport/jets, skateboards – not only are they a turnoff to potential buyers, they might drive you crazy.

11.  Close to a high school – The kids drive too fast, and don’t have respect.

The key is to find the right blend of ingredients for your particular needs.  If you can find most or all of the above, you will have an enjoyable house that will re-sell easily!  Focus on buying a house that already has items that money won’t fix (items 1-6 at top).  Your agent should be an expert at evaluating, and balancing the mix!

Early in the hunt, surrender to the fact that whatever house you end up buying, it will most likely need repairing/updating/remodeling – plan to spend $25,000 to $50,000 after closing.

Here are other links:

Trophy Properties: http://www.bubbleinfo.com/2011/08/15/trophy-properties/

Housing Trends of Future: http://www.bubbleinfo.com/2010/10/12/housing-trends-of-future/

Posted by on Jun 1, 2017 in Jim's Take on the Market, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 3 comments

Offering Too Low

Part of a realtor’s job is to help manage expectations – not only those of their own clients, but expectations of the other agents and their clients too.

Recently I received an offer on a listing that was 25% under the list price.  They also wanted my seller to carry the financing for 30 years – which is unheard of – and oh yeah, it was contingent upon the sale of the buyers’ home too.

I told the agent (whose email-signature noted they were in the Top 10 statewide for their company) that if I was the seller and that offer was presented, I’d fire my agent.

Just like when we’ve seen a home with range-pricing that is too wide, it becomes impossible to bridge the gap – for three reasons:

  1.  Once a buyer puts a number on paper, their mind starts believing it’s real.
  2.  Buyer’s remorse is real too, and they cool off quickly.
  3.  Sellers are skeptical, and don’t feel like negotiating much.

It may be discussed as just a place to start, but once a buyer submits their price in writing, it becomes a comfortable number.  Going much higher than where they start is usually a function of how fast agents respond.  My rule-of-thumb is two counters max for each side, in less than four days.

In this case, my sellers weren’t desperate, they had already determined that they wanted to sell for at least 93% of list and were willing to wait for it.  I told the buyer’s agent that our price gap was too big, and I nicely asked the agent and buyers to go back to the drawing board.

Three days later, I received a new offer with bank financing, instead of seller-carry, but it still had the original price of 25% under list. It came with the buyers’ love letter; a full-page of reasons why my listing was the perfect fit for the buyers.

Was the love going to make the looming price gap surmountable?

In spite of houses around the county selling for 99% of list this year, we countered with a price that is 4% under our list – not bad, considering the original offer price.  On their counter, the buyers came up to 82% of list, but it took two days to arrive.  I knew the remaining price gap and time left wasn’t looking good.

I always want to respond promptly, because of #2 above – buyers cool off quickly.  We dropped another 2% within a few hours, but it wasn’t enough.  Two days later, the agent emailed that they lost interest – no counter, no love.

Five days gone by (seven days since the original offer), and the initial 25% gap killed our chances.  They knew before writing the offer that it would take at least 93% of list to buy the property, and they still offered – so initially there was some willingness to pay that or close.

If they would have started at 82% of list, and trimmed the time spent to 3-4 days, could we have made it to escrow?  I think so!

Posted by on Apr 18, 2017 in Jim's Take on the Market, Realtor, Realtor Training, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 4 comments

Results from Bidding-War Video

The only thing harder than getting a listing is helping buyers win a house.

Last week I mentioned how there still isn’t any uniform process to sell a residential resale home – it is the wild wild west!  Even when a listing agent tells you what they are going to do to you, it is always subject to change!

We found this fantastic video by a Colorado guy who outlines the best ways to handle a bidding war.  Because I know that hardly any agents actually have a bidding-war strategy beyond spreading out the offers on the dining-room table, I have since been sending the video along with my offers.  Because the video is done by a third-party guy, hopefully it is viewed as a powerful new solution by agents who tend to think they know it all just because they’ve sold a few houses in their life.

Here are my results:

  1. The first listing agent who saw it took it well – he was the guy who asked if I utilize the same method (which I affirmed), and then proceeded to at least tell me what the other offers were.  They were too high for us, so my buyers surrendered.
  2.  The next try was to send the video along with our full-price offer (different buyers) into what we knew was going to be a dog fight.  There were at least 50-70 people at the open house when we were there, and the older house oozed with charm and character.  The listing agent insisted that to present our offer, we first had to state in writing that we would not ask for any repairs.  I replied that I’ve never heard that one before, but we complied just to see how crazy it would get. She didn’t respond to my second inquiry on whether she watched the bidding-war video.  She said they would pick a winner on Monday, which came and went with no seller response.  On Tuesday, she emails the buyer-agents stating that she had double-digit offers, and wanted everyone to submit their highest-and-best offer.  Obviously she didn’t watch the video – in which he compared her strategy as being the same as telling race drivers to just keep circling the track and we’ll tell you when the race is over.  My buyers loved the house on Saturday, but by Tuesday were fed up and we didn’t respond further.
  3.  On Monday afternoon a new listing hit the MLS which looked like a good match for a third set of buyers, and we were there on Tuesday morning to view. It met our criteria, and we knew it was hot, so we made a full-price offer that day with no appraisal contingency, no termite, no home warranty, and a month’s free rentback for the sellers if they needed it.  The next morning, the listing agent said he had received four offers in the first 24 hours – and ours was the lowest!  He watched the video but it was too late – the sellers had already signed the offer that was $50,000 over list.

Wouldn’t every party be better served if there was a uniform process?

Wouldn’t a live auction be the best solution for sellers and buyers?  It would take all the uncertainty out of the equation, and allow all bidders to compete face-to-face, and be driven by the animal spirits to pay what it took to win!

A side note, and fourth example: Buyers who are moving here from out-of-state put their current multi-million-dollar home on the market last week in a town that has had a similar frenzy environment as San Diego.  They were impressed with the immediate buyer traffic, and on Sunday an agent reported that he had a buyer who wanted to make an offer.  He, like me and every other buyer’s agent, was inquiring how the listing agent was going to handle the process, to which she responded, “We’ll be reviewing all offers on Wednesday”.  The buyer didn’t like that response, and went away. Here we are on Thursday, and no offers have been received.

While I need to keep getting listings just to maintain my own sanity, I will always have time for buyers who are blog readers here!  Congrats to our frequent commenter Eddie89!  We made offers on five houses before finally succeeding on the sixth.  We offered 9% under list price – a daring low offer on a new listing – and when the sellers countered 3% below list it was close enough – we’re in escrow!

Posted by on Apr 6, 2017 in Frenzy, Jim's Take on the Market, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 7 comments

Check the Master Bath

PoH

From January, 2016:

Anyone who has looked at homes lately can attest to the surprising conditions in which people live.  The lack of maintenance transcends all price points too.

But it’s nothing money won’t fix.

Buyers should surrender early on……and expect to spend at least $25,000 to $50,000 on any house they buy.  It’s easier than trying to find the perfect house that doesn’t need anything.

But looking at houses then turns into a job of making lists of the repairs required. Is there a way to short-cut that process, and just use one simple gauge to know if the house could be a money pit?

When I enter a house, I still walk straight to the backyard first.  It is there that you will find the items that are hard or impossible to fix; yard too small, road noise, neighbors looking in, over-sized pools, etc.

Once we’re past that test, and everyone is getting comfortable with the interior layout, I make my way to the place where you can find the most clues about the seller’s pride of ownership.

The Master Bath – a place where the sellers spend time every day.  The most extreme conditions exist too – high use of hot and cold water, steam and mold conditions, multiple plumbing functions, venting, several appliances in use, laundry processing, etc.  There’s a lot of action going on in the master bath!

With all the action, is somebody keeping up with repairs?

If any room is going to be well-maintained, it is the master bath.  It’s not that big, and the moving parts are simple – a towel rack, a toilet-paper roller, lighting, fan, grout, window, sinks – easy stuff.

Plus, every guy wants to keep his wife happy – so if he is going to fix anything, it will be here.

No need to get into any personal items – just checking the hardware:

  1.  Are the towel racks secure?
  2.  Toilet-paper roller intact?
  3.  Drywall outside the shower or tub wet or damaged?
  4.  Adequate electrical outlets?
  5.  Toilet secured tightly to floor?
  6.  Toilet works properly?
  7.  Sinks drain normally? (two sinks are a must)
  8.  Adequate water pressure at sinks and shower?
  9.  Fan is quiet? Window works well?
  10.  Any sign of biological discoloration?
  11.  Baseboards are dry and tight?
  12.  Mirrors look good?
  13.  Ample lighting?
  14.  Mineral deposits on glass doors?
  15.  Shampoo bottles have a home?
  16.  Solid coat of semi-gloss paint?
  17.  Crisply-applied caulk, especially around the shower faucet?
  18.  Solid and tight grout lines?
  19.  Door that locks easily?
  20.  Is the floor of the sink cabinet dry?

If you are in a hurry or tend to get caught up in the excitement of looking at houses, then just concentrate on what you see in the master bath.

If you check off every item above, then the rest of the house should be in good shape too.  But if the sellers aren’t maintaining this room that has complex features but simple fixes – especially when on the market – then they probably haven’t done much to keep up the rest of the house either.

Posted by on Mar 19, 2017 in Jim's Take on the Market, Thinking of Buying?, Tips, Advice & Links, Why You Should Hire Jim as your Buyer's Agent | 4 comments

Bidding-War Report

I am fortunate and grateful to have a group of home buyers willing to make offers during the off-season.  To give you a feel of what to expect ahead, here are the results of offers made since December 18th:

Purchase-offers submitted: 11

Bidding wars: 9

Bidding wars won: 3

My buyers tend to prefer the premium properties, so no surprise that other buyers would also be interested.  But to have multiple offers on 9 out of 11 properties during a historically quieter time in the market probably means that the selling season will be raucous and highly competitive – and it starts Monday!

I usually have a better win ratio with bidding wars, but we strive to get the right discount for fixers.  Today’s frustrated buyers make hasty offers without properly assessing the cost of repairs needed, and once the bidding war breaks out, they end up paying too much just to win a house.

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Posted by on Feb 1, 2017 in About the author, Jim's Take on the Market, Market Buzz, Market Conditions, Why You Should Hire Jim as your Buyer's Agent | 3 comments