We’ve been on the MLS for about 24 hours, and we’ve already had 600+ views and 14 saves of the new listing on Zillow. Homes that are presented well, are attractively priced, and whose urgency wasn’t wasted on a Coming-Soon campaign get the maximum attention from buyers immediately.
My listings are available to show right away, and three will be there today. Listing agents who stall for 5-10 days before allowing any showings are risking that buyers will cool off or buy something else. Why do that?
When this price point is about the entry level now for a decent house in Carlsbad, it is a pleasure to represent sellers who have such great pride of ownership. Come by open house this weekend, 12-3 both days.
When homeowners interview more than one realtor for the job of selling their home, how do they select a winner?
In almost every case, they pick the agent who quotes them the highest price.
It’s irresistible for those who aren’t that comfortable, and want to make a quick decision. Heck, you’d want more money if you can get it, right?
I’m convinced that it doesn’t even occur to people that they should investigate thoroughly – everything else is just a click away, let’s have money be the deciding factor! Greed is good!
But we’re into the stage of the cycle where if you over-shoot, the market may not catch up with you as fast – or at all. With fewer comps these days, it’s not easy for buyers to decide if that new listing is worth it, and don’t be surprised if we phase into a more-cautious marketplace. You’ll know because average market times start extending, and unsold listings begin to pile up.
How can sellers know if they are being high-balled on price?
The listing agent wants a long listing period – more than three months. We are in the prime selling season, and there are plenty of qualified buyers – especially in the under-$1,500,000 market. Any good listing agent should have enough confidence in their abilities – and pricing – that they can procure a sale within three months. Besides, you don’t want it to drag on – buyers will lowball the lingering listings.
When it comes to explaining their price, there isn’t a direct relationship to the comps. The conversation gets vague, or they make jokes about it. Pricing is not funny.
Their price is higher than your price. Sellers think highly of their house, and already have an opinion of value based on realtor postcards and internet evaluations. But it’s a value goosed with optimism, and if the realtor quote is even higher, something is wrong.
The listing agent has some special formula or new-fangled technology that delivers higher prices. Buyers have never heard of them, however, and will rely on the old-fashioned ways.
The listing agent wants you to rush your decision.
The listing agent doesn’t have bidding-war strategies, or gets vague.
You can’t tell if you are being highballed by the agent’s length of time in the business. Inexperienced agents can do it by accident, and experienced agents do it on purpose. I have had long-time experienced agents tell me that they deliberately go high on price and then take long listings as regular business – in spite of it being a violation of our ‘strict’ Code of Ethics.
How can buyers tell if the price is too optimistic?
There’s not a supporting comp for miles.
The listing agent has a recent history of listings taking longer to sell – and virtually no listings that sold quickly.
It doesn’t appear that anyone else is looking at it.
The condition of the house isn’t great, and no effort was made to stage it or make it presentable.
You felt the price seemed high from the beginning.
If you’ve been seeing a lot of homes in person lately, then your brain is a natural computer full of relevant data that gives you ‘gut instinct’ on pricing. It’s as good as anything else!
Every oceanfront condo with a view in Solana Beach has been selling for well over $1,000,000 – the lowest this year was $1,130,000. If you don’t mind walking a few steps to get to the beach, you can get a nice buy on my new listing – only $899,000!
We covered in my four-part series that there is a vicious undercurrent of fraud and deceit being imposed upon buyers and sellers alike, and that drastic action is needed to stop it. But such action is unlikely to happen – at least until the district attorney has a few perp walks to get everybody’s attention.
It means that Brad Inman’s conference needs to come up with a real humdinger of a solution. In the meantime, maybe we can improve on what we have?
I mentioned that traditional agents are reluctant to say anything in public about how they do their business. But now that the disrupters are spending millions on advertising, it’s time we step up to the microphone.
The disrupters’ underlying theme is that traditional agents charge 6%, and they will do the same for less. Here they focus only on saving money on the commission, and never talk about what they actually do to sell your home:
Agents who only talks about their rate, rather than the quality of services they provide, must not have much to offer. Their website has some data though – this is their main page:
We don’t have to look very far to see how trustworthy they are. They say Bethany has ’10 YEARS EXP’, but when you go on the DRE website, this is what you’ll see – she has been licensed since 2016 (you can always get a hint from the license numbers, which are issued sequentially):
I’m sure she is a nice person and means well, but to use her as your front person when she barely has two years experience as a licensee probably means that the other agents have less. Pardon me if I’m skeptical of how ‘intimate’ she, or any of their agents, know their LA/OC territory.
Companies who blatantly lie about the people on their main page will say anything to convince you they are legit. Ask yourself what you are willing to endure – you only have one shot.
Apparently they charge you the $3,200 fee whether they sell your house or not, and they take your credit card number up front.
Rex is another one – they claim to sell your house for 2% by themselves without cooperating with other agents. Here is reality:
You may like their sexy website, but who are the people handling your sale? I have spoken to both current and ex-Redfin agents, and it sounds like a sweat shop – much like our local IPayOne, which failed twice, or Roxtons. They are good people, but the employees are being asked to handle a high volume of business with minimal support.
Sellers should wonder if that will equate to a top-dollar sale.
An ex-Redfin senior agent told me that he quit when upper management insisted that he get ‘five more deals out of every agent’ this year.
Here is what one ex-Redfin senior agent from Florida said last year:
I worked for Redfin for two and a half years. First as a transaction / hybrid coordinator then as a senior agent in the field. The concept is amazing but the reality will drown you. As a licensed broker who has over a decade of experience my base salary was $20,000 after “bonuses” paid (only after a glowing review from the client) my W-2 showed $42,000 income. Keep in mind I closed over $7 million dollars in real estate transactions last year. If you can’t close minimum of 3 transactions in a given month you are promptly let go for poor performance. With no cushion or savings because again top pay was 42k in the year. Your expected to have your schedule open for tours 7 days a week. Ready to meet a new customer not vetted not approved within a 3 hour window. Vacation is offered but is never approved. And in my market we were required to span over 300 Mile radius covering 4 counties. You are paid for each tour but it’s $35 and again you’re expected to drive 3 counties away at no notice just to be stood up. You will need to have knowledge of that area as well. Because your clients will review per tour and they will not appreciate an agent who is not knowledgeable. Please please please if you are considering joining this company be ready to give away all of your commission and time and learn from my experience. I’ve never written a review before but I’m passionate about getting this out there. Don’t believe their hype. Thank you for reading and considering.
How do they handle the critical points of engagement?
Want to see a house? A trainee gets paid $35 to $50 to open the door.
Sellers hoping for top dollar? Trainees do the open houses.
The good agents there make around $3,000 per sale between salary and bonuses, while dealing with outside agents who make substantially more. If you were a great agent, wouldn’t you work somewhere else to make more money selling fewer houses?
Sellers have one chance to hire a great agent to sell their house for top dollar. Every agent can sell your house, and heck, you don’t even need an agent – just stick a sign in the front yard and you’ll get calls.
But houses don’t sell for the same price – there is a 5% to 10% range, depending on who is handling the sale. You’ll hear that the market is hot, and that houses sell themselves – but for how much? Will your agent do everything it takes, AND have the expert salesmanship to get you top dollar?
If not, you are going to feel like a chump for falling for their BS advertising.
When I first started this blog on a Saturday morning in September, 2005, I thought I needed to hurry up before every agent was blogging. Wouldn’t this be a great vehicle to educate consumers and demonstrate our expertise? Certainly, every agent will be doing it!
Instead, what blogging has exposed is that agents either have nothing to say, or transparency isn’t their friend. You rarely see much more than their recent successes – advertising of the properties they just listed or sold, with focus on how great the agent is.
Why doesn’t transparency catch on?
What do listing agents have to fear?
Exposing how sales are put together is like the proverbial sausage factory. Realtors don’t want you to know how the sausage is made.
Once an agent has a signed listing, how they procure a buyer is what makes the difference between a legitimate open-market sale, and an insider job. Even those agents who initially plan a legitimate open-market sale can get duped into an off-market quickie. How does that happen?
We operate in a desperate environment, and the most-desperate agents are making the market. Even the agents who AREN’T desperate, have to operate as if they ARE desperate, just to keep up. Unethical or illegal actions are commonplace, and with no enforcement whatsoever of the rules or laws, they continue unabated.
It’s always been like this, but after the fleecing of the banks during the short-sale/foreclosure era, we have become numb to the fraud perpetrated by realtors everywhere. Agents have brought their off-market fraud practices into the tight-inventory era, and expanded upon them.
Here are a few of the tricks being used by listing agents to deprive their own sellers of a top-dollar open-market sale. The most incredible part is that every agent implicates themselves by inputting these listings directly onto the MLS for all to see what happened:
Coming Soons that never come. Instead, the listing agent finds a buyer from just placing a ‘Coming Soon’ sign in the front yard, and once procured, they input the listing directly into the pending section of the MLS.
Sold Before Processing. We now see a few of these happen every day in North San Diego County’s coastal region. The listing agent takes advantage of the MLS loophole that states every listing to be inputted within 48 hours. It make take longer than that – but who will know or care when there is no enforcement of the rule – and office managers encourage the practice in order to keep both commissions in-house.
The listing agent prevents showings the first few days on the market.
The listing agent says house will be auctioned in three weeks, but then accepts an offer before then. Either auction the house, or don’t auction.
The listing agent provides lousy MLS input – bad or no photos, etc.
Instead of lowering the price publicly on a listing that has languished for months, the listing agent lowballs his seller with a buyer he has procured.
The listing agent gives the appearance of an open-market sale, but then plugs in his own buyer at the last minute.
The worst part about this situation is that we accept it.
Other agents who see these tricks happening on the MLS are subconsciously thinking that it must be permissible, so they set out to do it themselves. After all, who wouldn’t want to make two commissions, instead of one? It is a self-perpetuating cycle that no one is talking about, let alone doing something.
We are racing towards the end of broker cooperation as we’ve known it.
By joining the Association of Realtors, every agent has agreed in writing to share their listings with other agents, and adhere to a strict Code of Ethics – to cooperate with each other. But the opposite is happening – it is cool to NOT share listings, and round-trip the commission instead.
The disrupters are taking full advantage of the opportunity, and capitalizing on the greed of agents by designing vehicles to perpetuate this vicious cycle of self-serving off-market sales, in spite of seller and buyer fiduciary duties.
Examples of how this has evolved are the listings inputted as ‘Sold Before Processing’, but then the listing agent DIDN’T round-trip the commission; instead, a different agent represented the buyer. They don’t recognize the harm being done to their own seller by not exposing the home to every buyer and agent. Yes, I’m sure there is an occasional instance that warrants an off-market sale, but not as many as we see today.
Because we see all of these listings on the MLS without explanation, it makes unsuspecting agents believe it’s all legit. Our buyers see listings come and go in five seconds, and they get more desperate:
Even the real estate maverick (who has been promising to StopZillow and save real estate for months), rolled out his answer last night. Incredulously, it is a mobile app designed to funnel all buyers directly to the listing agent within minutes (I skipped the first 20 minutes of backslapping):
This is my series of blog posts to address the situation, and my final installment is coming next.
Redfin publishes their commission rate on their website, and it makes sense. All brokerages should make it easier for the consumer to evaluate the choices.
Here are my commission plans for home sellers:
Full Service – Expert (2% to 2.5%)
I handle all of the critical details that result in a signed contract. Preparing the house, guidance on attractive pricing, effective marketing, and implementing bidding-war strategies are the key categories. More details HERE.
The exact percentage is determined by price point, condition of home, and my involvement in the seller’s next move.
Kayla has been a realtor since March, 2014, and has been an active participant in our 122 sales since then. She possesses the best skill in a realtor – she is a natural salesperson – and I have been training her myself. For those who demand less commission but still want top-notch, quality representation, Kayla is an excellent choice.
Transaction Coordinating – Included in Both Above
For the last twenty years, Donna has been our expert in making sure your sale closes successfully with as little disruption as possible. To make sure everyone involved does their job correctly (escrow, title, lenders, and all other supporting cast), Donna tactfully tracks and encourages the 50+ people involved on every sale.
I don’t offer a limited service plan. The buyer-agents resent having to do both sides of the deal, and will penalize a seller along the way with lower offers, and heavy repair requests. Better to pay a reasonable commission to get adequate or expert representation.
Buyer-Agent Commission (2% to 2.5%)
Sellers also want to offer enough money to the buyer’s agents to be competitive with other listings nearby. A house listed with a below-market commission for the buyer’s agents will still get shown, but it will be used to sell the house down the street. Offer a ‘bounty’ that incentivizes agents to give priority to selling your house.
In all cases above, no money is required up front, and commissions are only payable if a transaction closes. The commission rate charged by an agent is a direct reflection of how serious they are about helping you, and their effectiveness. I will pay for myself every time!
When you find the right home, don’t lose it. Get Good Help!
NAHB regularly conducts national polls of American adults and home buyers in order to understand new trends and preferences in the housing market. This is the third in a series of posts highlighting poll results, as presented during the 2018 International Builders’ Show in Orlando, FL. See previous posts on tiny homes and driverless cars.
A recent poll revealed that most prospective home buyers actively involved in the search for a home have been looking for a significant amount of time. In fact, 61% have been trying to find a home to buy for three months or more, while the other 39% have been looking for less than three months.
The natural follow-up question to those who have been unable to find a home after searching for three months or longer is why?
Forty-two percent say they ‘can’t find a home at a price I can afford,’ 36% ‘can’t find a home with the features I want,’ 34% ‘can’t find a home in the neighborhood I want,’ and 27% were able to overcome all these obstacles but ‘continue to get outbid whenever I make an offer.’
This result shows there are several important reasons why prospective buyers haven’t been able to pull the trigger, but the most important one is lack of affordability – not being able to find a home at a price point they can afford.
We first encountered Jim back in 2010 when we were looking to move from Pismo Beach, CA to to San Diego area. We had been having a difficult time finding (1) finding a realtor and (2) being able to see a home since we were so far away. Then we found Jim. He made the process really easy – he was able to take incredible video tours of the homes and it was as if we were there touring the homes ourselves. once we found homes we really liked, we took a trip to see it in person. One of the things we really liked about Jim was that he was honest with us about the homes and advised us weather a home was a good buy or not. He was not just out to quickly sell us a house just to make a commission. He really cared about ensuring we found the right one. more “
I have followed Jim’s BubbleInfo blog from the early days of the bubble when “real estate could only go up in value” and I knew him to be a straight shooter who would not sugar coat properties nor gloss over their faults.
So when we decided to move back to California after 7 years in the more “
Jim met with us prior to listing – provided guidance on preparation, detailed information and stats regarding local market conditions. He was invaluable for providing contacts for repair and improvements that would provide return on investment. Our combined efforts, strategy and his attentativeness more “
Jim and Donna Klinge are an impressive team. They work extremely well together and back each other up, as well as their clients, along every step of the way. Their expert guidance made a tremendous difference in the experience we had, both buying a new home and selling our previous home of 40 more “
Since Zillow only allows me to write 1 review per real estate transaction, per team of agents we worked with, this is going to be a super long review.Review on Jim Klinge:
Jim Klinge is the quintessential real estate agent, the “broker’s, broker” of real estate agents. My husband and I reached more “
by Louie and Tim Cook
Jim and Donna are the BEST of the BEST! Their knowledge, professionalism, work ethic, and devotion to their trade are unrivaled. It was refreshing to have worked with a pair of professionals who truly understand the meaning of customer service, a lost art in our opinion. Despite living over 3,000 miles away on the opposite coast, Jim and Donna were with us every step of more “
Jim found me a multi family property that we purchased as an investment (Please see my review of Donna Klinge for details on how it went). But the bottom line is this: I never would have found this property, which cash flows right out of the gate, if it weren’t for Jim pointing me toward that house. It just was not on my radar, even though I consider myself a savvy real estate troll. Jim is giving of his time, and his intelligence. And he is also transparent and truthful. And I think he is funny, which is helpful in stressful situations like RE transactions. Jim and Donna have earned every last penny they made from our deal — and in fact they deserve more. And that is why I will use them for my RE transactions the rest of my life. Thank you, Jim and Donna! more “
I can’t say enough about Jim and Donna. Jim got a great price for us and negotiated well. Donna walked us through escrow, handling vendors, and negotiating everything we asked for in the request for repairs. They are know exactly what they are doing and I’ve already recommended them to two other people. more “
I followed Jim’s blog for several years and decided to contact him (along with several other realtors) when an out-of-state work relocation required me to sell my home in San Marcos, Ca. At our initially meeting, Jim spent a significant amount of time discussing pricing options, strategy, as well… more “
Honesty. Integrity. Professionalism. Dedication. Commitment. Jim and Donna Klinge hold these attributes in abundance. They have acted as both our buyer agent and our seller agent delivering highly relevant insight into local market conditions, spot-on advice to maximize the home’s value, and unparalleled management of the transaction process… more “
I cannot imagine a better experience! Jim was our broker when my husband and I bought our first house. Jim never pressured us or glossed over anything. He was patient, knowledgeable, and helped us buy our dream home. His office was detail-oriented, always responsive and we closed in 30 days! The excellent service didn’t end when we bought our house, either, the Klinges have given us excellent and fast referrals along the way. We feel privileged to have worked with such a consummate professional and appreciate how rare this level of skill is. Jim is simply the best in the field. more “
Jim and his team are top flight. He knows the market better than anyone, and his team ensures the deal goes through without a hitch. There’s always something at the last minute, but you’d never know it with Jim and his crew. I’ve bought and sold houses with Jim as my agent over the years, and I wouldn’t use anyone else. Save yourself the headaches and potential costly mistakes… more “
Buying a house is one of the most emotional,exciting, and sometimes confusing milestones you’ll reach for in your life! Being a buyer in this market can make it even more interesting! My husband and I have been looking to buy for a year, and when the time came we wanted a realtor team that would be on our team! Being that I’m a business woman and was 7 months pregnant, I wanted, NEEDED, communication, dependability, and consistency! The Klinges went so far above and beyond … more “
Jim was recommended to me when I bought my first house here in the US five years ago. He and Donna explained the whole process and it was a great experience to work with them. Not surprisingly, when my company asked me to relocate my first choice was to work with them again… more “
I have followed Jim’s real estate blog for years and by the time I got ready to sell my townhouse I felt I knew him both personally and professionally. At our first meeting he was prepared with recent comps and listings for the area… more “
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