Our New Listing in Terramar!

5450 Los Robles Drive, Carlsbad

3 br/2 ba, 2,700sf

YB: 1976

7,200sf lot

No HOA or Mello-Roos fees

LP = $2,900,000

Open 12-3pm Saturday and Sunday, March 16&17.

Check out this ultimate retro-mod beach house at the quiet end of Los Robles Drive and at the highest point in Terramar, which means ocean and sunset views to the west, and flower-field views to the east! Wide-open floor plan with massive kitchen that has high ceilings and skylight, new light-tan colored hardwood floors, new roof, two fireplaces, bedroom/bath on ground floor, killer primary suite with big walk-in closet, and a fantastic backyard with sauna too! Forget those three-story sterile boxes – come dig this ultra-cool beach classic and enjoy the sights and sounds of the liquid blue enchantress just 100 yards away! Plus you have the private Terramar landing on Shore Drive too (last two photos).


If you prefer a single-level, this is for sale down the street: LINK

Moving Towards Single Agency

It’s been obvious that the entire real-estate-selling business has been deteriorating towards single agency. I see it every day on the street, and I’ve posted evidence of the shift regularly.

The trend is moving quickly now on multiple fronts.

The DOJ is going to decouple commissions, which will prohibit sellers from offering to pay the buyer’s agent. The buyers can include it in their offer, but it likely won’t get that far. The buyer-agents who are left will want a written agreement to get paid by the buyer if the seller won’t pay. How many agents will be able to demonstrate why they are worth it? Not many, but maybe the buyers won’t ask too many questions.

Homes.com is spending millions and billions on advertising their website to compete with Zillow. Their twist? They funnel all the leads back to the listing agent, instead of farming them out to the highest bidders like Zillow does. I’ve been called by several phone jockeys from Homes.com to sign up for their enhanced listing packages, and I’ll sign up. Robert Reffkin responded positively to the Homes.com program, and you can see how Gary Keller feels about it above.

Agents are giving up on representing buyers because it’s too hard and doesn’t pay enough. Most of the unsold listings are grossly over-priced and the occasional deal gets multiple offers within minutes. Agents have to spend months or years working with their buyers before they get lucky, only to then get a reduced commission from the listing agent. Now I have to convince the buyer to pay the commission too? Great, thanks.

Listing agents are advertising for buyers to avoid paying the buyer’s-agent commission by coming directly to the listing agent instead. Realtor cannibalization is what we deserve. (link)

This house priced at $1,985,000 in Rancho Penasquitos received 15 offers and likely sold for 15% to 20% over list (an offer that was 12% over with free rentback wasn’t enough).

I remember when $2,000,000 got you a decent house in Carlsbad!

Zillow Local Forecasts

Last month their annual appreciation guesses were in the 3% to 4% range, now they are up to 4.9% to 6.3% for the next 12 months!

We’ll probably exceed those in the first quarter of 2024!

Carlsbad NW – 92008

Carlsbad SE – 92009

Carlsbad NE – 92010

Carlsbad SW – 92011

Carmel Valley – 92130

Del Mar – 92014

Encinitas – 92024

Rancho Santa Fe – 92067

Off-Market Sale

I thought it would never happen.

I sold a listing off-market.

There wasn’t much hope that we could sell 1704 Azul Vista for $2,000,000+.

There had been only one sale over $2 million ever, and it was an off-market sale in May, 2022 – the absolute peak of the frenzy. The five sales since then had struggled too, with most taking weeks to sell and various discounts needed – in blue below:

The last sale of the 3,372sf plan was in August, 2022 for $1,669,000.

My sellers and I agreed that the $2,200,000 sale was an outlier, and with the subsequent sales ranging from $1,600,000 to $1,760,000, we would be satisfied with $1,900,000, so we listed for that amount:

Donna correctly pointed out that our clients had not done much since we sold them the home in 2017, and even though it was the former model, it’s now a 20-year old former model. We agreed to embark on a thorough kitchen remodel to dazzle the buyers and ensure we could get the $1.9 million. Thankfully, it would take 6-7 weeks to complete the work, and we planned to hit the open market in February.

Then Tanya came along with her new listing.

She inputs 1021 Camino del Arroyo as a Coming Soon listing, priced at $2,350,000 because it had a $500,000 down-to-the-studs remodel – so they figured they deserved to use the $2.2 comp. Here’s the best part – someone who was crazy about this floor plan and neighborhood made a full-price cash offer, sight unseen!

I’ve been friends with Tanya for years, so I called her to get the scoop. She also tells me that Paul had called and he has a new listing of the same floor plan coming up too. I’ve known Paul for a long time, and once we all start talking, we realize that each of us would have a listing of the same 3,372sf model hit the market in three consecutive weeks!

The $2.35 listing set off a buzz in the neighborhood, and when the moving trucks rolled up to my listing, the word really got out. Paul’s listing looked at power lines and water tanks, so he kept his price at $1,895,000 – and got $1,960,000. But an agent whose buyer didn’t like Paul’s listing called me.

We did a kitchen remodel and had the ocean view. But there was still plenty of the 2005 model-home look, and it’s known that ocean views from San Marcos are intermittent at best.

I tell the agent that our price is going to be $2,200,000, and she sends over a $2,175,000 cash offer!

The $2,350,000 was such a lucky sale that we resisted the urge to think we would get that much or more if we went on the open market – there wasn’t any other solid evidence.  This isn’t Carlsbad, and it’s not even San Elijo Hills – it’s Lake San Marcos!

We took the deal.

I did input it onto the MLS after the buyer released all contingencies, and let it sit for almost 24 hours to see if there was any other interest.

I didn’t get a call.

We agreed that we did the right thing!

Los Altos Price Explanation

There had to be skeptics to my Los Altos Adventure last weekend.

Did you mis-price the house by more than a million dollars on purpose – or just by accident? Come on – you were 440 miles out of your normal market area….dude….you got lucky!!

I like to pay close attention to the market activity in the days before inputting a new listing. This was the latest listing by the guy who has just captured nationwide attention of his lowball $10,000-commission offer to the buyer-agents. As of Wednesday night, this was still active, and I told my sister that I didn’t want to compete directly because mine would help to sell his. If it was still an active listing when I woke up on Thursday, then I’m not coming up and we will postpone the listing for at least two weeks due to weather:

https://www.compass.com/app/listing/764-parma-way-los-altos-ca-94024/1510956913476773969

Miraculously, when I woke up the listing was marked pending – so I left for Los Altos.

All I had to be was the most attractive new listing in a very exclusive area (Nvidia is based in San Jose). There had to be losers from the Parma bidding war who were motivated to buy the next one, and there was nothing else for sale at this price point.

I was talking it up with every agent who came to my open house, and eventually I found an agent who was in the same office as the buyer-agent of Parma – and they confirmed that it sold for $4,150,000! Do you think I told that to every person I met over the next 48 hours….yes!

Let’s note my options: Either price attractively and have buyers bid it up, or price at retail and wait.

Here’s an example. The size of house and lot are pretty similar to mine, and it’s a busy street too. How are they doing? They listed for $3,998,000, and 30 days later they are still unsold:

https://www.zillow.com/homedetails/1107-Covington-Rd-Los-Altos-CA-94024/19533609_zpid/

There is an easy guide for pricing:

The more obstacles that need to be overcome, the more attractive the price needs to be.

I’ve been showing houses to buyers the last couple of days, and this theory has never been more clear.  As we walk into a house that appears to be priced at the top of the range (or higher), the skepticism builds with every step – and we’re looking for any reason NOT to buy.

But when you walk into an attractively-priced home and see defects, they just confirm why the price is attractive – buyers don’t expect perfection when the price is attractive!

What happens once a home hits the open market depends on the listing agent. Yesterday, one was blaring his Jesus music, and another was chatting with the sellers who were still hanging around even though the open house started 15 minutes earier. Most listing agents aren’t implementing any bidding-war strategy – heck, yesterday there was one agent who didn’t even know the price of the home!

In reviewing the Los Altos comps, about half of them had closed over the list price, so I knew it was going to be hot. I knew that I was selling a house that looked all original, and was on a busy street. So we priced it attractively and I aggressively implemented my tried-and-true bidding war strategy that works!

List-Price Accuracy Gauge

Once a home is for sale but not selling, how do you know what to do?

Both buyers and sellers can apply my List-Price Accuracy Gauge:

Once the home is on the open market, if it is……

  • Getting visitors and offers, you are within 5% of being right on price.
  • Getting visitors but no offers, you are 5% to 10% wrong on price.
  • Not getting visitors, then you are more than 10% wrong on price.

It’s nothing personal, it’s just a simple guide to know how close the price is to being right.

The serious buyers rush out the first week to take a look, but after that it’s crickets, with only an occasional visitor. It is tough for sellers to cope, or make adjustments. But once the initial urgency has expired, you have to do something – don’t just sit there.

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How quickly should sellers make adjustments? The DOM clock is ticking!

0-14 days on market – Hot property, and when the sellers have their maximum negotiating power.

15-30 days on market – Buyers get suspicious, want to pay under list.

30+ days on market – Buyers will be expecting deep discounts, or ignore it altogether.

After being unsold for two weeks, sellers will suspect that something is wrong. But it is natural to resist changing the price and instead blame everything else – especially the listing agent.

Sellers, and agents, need to shake that off and act quickly to keep the urgency higher. The first price reduction should be for at least 5% and happen in the first 15-30 days for maximum effectiveness. If the home doesn’t sell in the next two weeks, then another 5% is in order, and by then the fluff is eliminated.

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Where do sellers go wrong?  They don’t properly price in the negatives.

Typically sellers just pick apart the comps to convince themselves why their home is the best around, and then settle on a list price that will show everyone who’s the boss.  If you don’t have any negatives, then you probably will get your price!  But typically sellers are forced to come to grips with the negatives of their house, and adjust accordingly.

Do sellers have to lower their price? No, not neccesarily.

There are other alternatives:

1.  Make your house easier to show.  Listing agents who insist on buyers jumping several hurdles just to see the home aren’t realistic about today’s market conditions. Make the home easy to see!

2.  Fix the problems.  New carpet and paint is the best thing you can do: 1) it looks clean, 2) it smells new, 3) you have to clean out your house to install it, and 4) you are managing a business transaction now – it is the logical solution.  Utilize staging too.

3.  Improve the Internet presence. Have at least a 12-25 hi-res photos and a simple youtube tour.

4.  Wait for the market to catch up.  If unsold for 60+ days, cancel and try again later – probably next year.

5. Reset the Days-on-Market stat.  As long as the MLS allows agents to refresh their listings, then it’s in the best interest of the seller to reset the DOM.  It is a gimmick, and instead sellers should concentrate on creating real value for buyers – that’s what will cause them to pay more.

The longer it takes to sell, the more discount the buyers will be expecting – usually about a 1% off for each week on the market.  When other homes are flying off the market, the buyers’ obvious conclusion is that your price is wrong, and they load up the lowball offers.

Even if you complete one or all of the five ideas above, don’t be surprised if you need to lower the price too. Keep it attractive!

Los Altos Full Tour

This video includes a tour of the house so you can see what $4,200,000 gets you in Silicon Valley. The eight pine trees are protected, and thankfully, they are isolated into two extreme areas:

What does that money buy around here? Examples:

https://www.compass.com/listing/7949-sitio-redonda-carlsbad-ca-92009/1517092298670492217/

https://www.compass.com/listing/237-la-mesa-avenue-encinitas-ca-92024/1491117530189624585/

https://www.compass.com/listing/3325-jasmine-crest-encinitas-ca-92024/1479802900127867913/

https://www.compass.com/listing/2286-oxford-avenue-cardiff-by-the-sea-ca-92007/1420369672828843897/

Uncle’s House Part 2

Once we raised the list price yesterday, the message spread quickly. I still had a good turnout at my open house – about half of the amount of attendees that I had on Friday – but many came just to ask why the price changed.

Agents appreciated the transparency though, and they were quick to realize the benefits. If your buyer is only interested in paying $3-something, there is no need to go through the process of making an offer and getting your hopes up if there’s no chance of being in contention.

It’s part of the slow-motion auction. Give everyone a shot to buy the home and have full transparency propel the outcome.

Uncle’s House

I don’t make it a habit to drive around the state looking for sales – my uncle lived here for 47 years and survived the last couple of years by himself. Every 90-year old needs to have people around!

He moved to a senior facility in Marin County to be closer to my mom and sister, plus have many other seniors around for engagement. Today, he’s entered into the big Saturday Putting Contest, and tomorrow he’s going with a group to the symphony!

Watch my video to the end for the cliffhanger:

https://www.compass.com/app/listing/45-springer-road-los-altos-ca-94024/1517137072886523177

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