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Are you looking for an experienced agent to help you buy or sell a home? Contact Jim the Realtor!

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Category Archive: ‘Why You Should List With Jim’

Why You Need Good Help

Price anchoringToday’s real estate market already suffers from having fewer sales to use when evaluating other properties.  We’ve seen how some buyers, particularly those using Big Cash are paying prices that are hard to justify using traditional methods.  As a result, the comps are more suspicious than ever as an accurate reflection of real value.

Now this article mentions the anchoring concept, and how the list price influences an evaluation.  Hat tip to reader JB who sent this in:

http://www.marketwatch.com/story/how-car-dealers-get-you-to-spend-more-2014-04-02?siteid=yhoof2

An excerpt:

Real-estate agents sometimes have outsized confidence in their ability to “price” homes that are put on the market, or to assess whether a price is too high or too low. In his great book “The Two-Headed Quarter: How to see through deceptive numbers,” Loyola professor Joseph Ganem described a study which proved that.

Real-estate agents were asked to appraise a home based on a 10-page packet of information where the only variance was the list price. When it was $119,000, the average appraisal was $114,000. When the list price was $149,000, the average appraisal was $128,700. In other words, simply by changing the first price suggestion made agents raise their perceived value of a home by $35,000.

Worse yet, the agents were blissfully unaware of the influence the list price had on their appraisal.

“Only 10 percent of the agents mentioned listing price as one of their top three considerations,” Ganem writes. “It is interesting that anchoring effects influence experts without their being aware of, or at the very least, willing to admit the influence.”

Get good help!

Posted by on Apr 7, 2014 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

Saturday Open House Report

orangeThere were enough open houses in the area that the streets of Encinitas were crawling with people today.  Thankfully, my listing was the cheapest!

I appreciate the big turnout for Padres-tickets contest too, and for 47 of the 48 guesses being higher than list price - thanks for your faith and confidence!

Here’s my open-house report, check back tomorrow:

Posted by on Apr 5, 2014 in Bubbleinfo TV, Encinitas, Frenzy, Jim's Take on the Market, Why You Should List With Jim | 0 comments

How to Sell for Top Dollar

You’ve decided to sell the house.  How do you get top dollar?

pending sign1. Don’t tell anyone yet.  To create maximum urgency - which puts the most pressure on buyers – you want to surprise them with your new listing.  Any ‘pre-marketing’ of the home diminishes your chances of getting top dollar.

Don’t install signs early, no flyers or ads - and none of the ‘coming soon’ nonsense.

Why?

Because urgency is a selling tool – it gets buyers to make a decision now, instead of hesitating. But any premature leaking of the opportunity drains the urgency.  Why? Because there is no fear of loss.

If the home isn’t on the MLS/open market, buyers won’t feel like they have to decide today.  Given the chance to hesitate, buyers almost always will.  If they don’t, it’s because the price is less than top dollar.

2.  Know where you are going.  Put your home on the market once you are certain about the next move. You will get the best offers to sell your home in the first few days it is on the open market – and you want to be ready to move!

3. Fix everything that is visible.  Most buyers don’t have the time or ability to repair or improve a home.  They’d rather keep looking, than to buy a ‘fixer’….at these prices.  Enhance the curb appeal, kitchen, and baths in that order.

4. Hire a great realtor.  Interview in person, and if you only ask one question, ask this: What is your bidding-war strategy and experience? (because their answer will tell you everything about their ability to get you top dollar).

Check their profile on Zillow, which has the best combination of the agent’s sales history, past-client testimonials, and current listings.  Look for an agent who has a consistently professional approach – and has time for you.  Any agent that has more than 75 sales in the last 12 months is using a team of agents, and you can get lost in the shuffle.

5.  Price attractively.  Buyers know the recent sales nearby – they probably have seen more than you, or your agent – and are tired of every seller inflating their list price to unrealistic levels.

Use this to your advantage – select a list price that is slightly higher than the comps.  You will look more attractive than those who are 5% to 20% higher, and buyers will come running.  Have your agent implement their sound bidding-war strategy, and you’ll sell for top dollar!

6.  Only sell once.  After winning a vigorous bidding war, the conquering buyer will feel some degree of buyers’ remorse – this is normal, and a part of every big transaction.  The effects are seen after the home inspection, when the buyer will make repair requests.

The contract states that the home is sold ‘as-is’, so you are not obligated to fix anything.  But the buyers don’t have to buy it either.

Do what you can to keep this escrow together – even if it means throwing a couple of bucks at it.  If the first deal fails, it is very difficult to re-create maximum urgency!

Remember the old adage – you only have one chance to make a first impression.  Following the steps above will ensure you make it a great one!

Posted by on Mar 21, 2014 in Jim's Take on the Market, Why You Should List With Jim | 0 comments

Bidding Wars

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bidding warsWhen there are multiple offers on one of my listings, I am happy to divulge the pertinent information to all parties – because transparency benefits the seller.  But most listing agents act like they are guarding Fort Knox, and won’t give any guidance on what it will take to win.

What do you do?

I ask these questions of the listing agent:

1.  “How many offers are there?”  To warm them up, start with an easy math question.

2. “How will you handle?  Will you request highest-and-best from each buyer, or just take the highest offer?”  In almost every case the agent hasn’t given it a thought, and is caught off-guard.  All that matters is how they feel about highest-and-best, and gauge whether they might just sign an offer.

3.  “Have you, or anyone in your office, written an offer?”  I have won a bidding war when the listing agent wrote an offer with their own buyer, but it takes guile and guts to pull it off.  But first, you need to know if that is the case.  P.S. If they hesitate, the answer is yes.

Secondly, rank the property.  Is it in the 95+ percentile of homes you have seen?  If so, big-cash and/or desperation could turn this bidding war into a freak show.  Determine an offer price that makes you uncomfortable, and then add some mustard.

If it is a nice home, but has some warts – then use this as a guide:

Posted by on Mar 9, 2014 in Bidding Wars, Frenzy, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 2 comments

Holdover Rent

There is an old-school habit in the home-selling business to give the seller a few days after the close of escrow to vacate.  Back in the day it would accomodate the cashing of checks, and closing escrows upstream – but with today’s standard of wiring funds and concurrent closings, the extra time isn’t always needed.

But some listing agents still insist on 3-5 days of occupancy for their sellers after closing – many times without any written agreement.  Usually it all goes fine, and they move out as planned – but I hate the potential liability for principals and agents alike.

Recently we had an example of what can happen when a seller doesn’t move.

An agent who works for me had a buyer who was getting their loan from an out-of-state mortgage lender (not recommended).  There was a delay, and all parties agreed to a two-week extension.

As the two weeks was coming to an end, it became obvious that closing in time would be tight, and the seller was asked to sign another extension fot an extra week.

He goes ballistic, and tells his agent to cancel the transaction, and put the house back at the market – at a higher price!  He thinks that, because the market is hot, he must have under-sold the property, and wants an additional $50,000.

The C.A.R. purchase contract says a seller must give a buyer a ‘Notice to Close Escrow’ that includes a time frame within which the buyer must close, or seller can cancel the deal.

He gave us one day to close escrow.

By this time, I am involved as broker/owner – all Klinge Realty agents know that I want to help determine our fate at the first whiff of a lawsuit.

I drive by the house and see that it is still occupied.  If we can close in a day, we still have a problem.  Miracles happen, loan docs get signed, and the lender goes to fund the loan the next day.

But the seller sends a letter to escrow demanding to stop the closing.  Even though we complied with his wishes, he still wants more money.

Everyone consults lawyers, and we give him a ‘Notice to Close Escrow’ and allow three business days.

His lawyer convinces him that he has to close this deal, but there is no movement at the house.  We are forced make a decision – either close with him still in the house, or cancel.

rockford1At this point, I haven’t met or talked to the seller – I’m discussing this with the manager of the other brokerage.  He tells me that they had to throw in their whole commission to try and make this guy happy – and he still isn’t.  But the message was clear – I’m on my own.

I do my best Jim Rockford impression and stake out the house.

When the seller comes back, I introduce myself and we discuss his troubles – he has work obligations. etc.  The C.A.R. form used for these situations is the SIP, seller-in-possession, and I am very familiar with it because I insist it be used on any of these possessions-after-closings.

The form calls for a rent and security-deposit amounts, but no provision for what happens if the seller doesn’t move – and without a specific agreement, this guy may never move.

We agree to give him five days free rent, and no deposit.  But I include a clause for holdover rent – if on Day Six the seller is still occupying, the rent is $500 per day.

Originally he objected, and suggested $200 per day.  But the holdover rent needs to include a heavy penalty for not moving to ensure compliance – and it doesn’t cost him a thing, if he moves out as agreed.

I stick to my guns, and he agreed.  He moved out on Day Five without fanfare, and buyers moved in.

But you have to add the holdover rent clause!

Posted by on Feb 27, 2014 in Listing Agent Practices, Market Conditions, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 3 comments

When to Sell Your Home

when to sellThinking of selling your home?

These items will have a direct impact on your ability to sell for top dollar, and make the sale more predictable too:

1. Sell When You Have Good Comps – There’s nothing wrong with letting a neighbor (or two) be the guinea pig, and sell their house first.  Once there are a couple of strong sales nearby, it is much easier to justify your top-dollar price.

Similarly, if there have been a couple of bad sales recently, wait at least six months after they have closed before selling.  Appraisers can’t use them if they are more than six months old, but buyers are known to have longer memories.

2. Sell When There Are Good Active Listings Nearby – Ideally you’d like to have recently-closed sales to help justify your case, but if you don’t have those, the next best thing is to undercut the unsold listings nearby. You will look like the ‘best buy’ only if you drastically undercut the competition….by at least 5%.  Buyers probably know the others are over-priced, so just under-cutting them by a few bucks isn’t enough.

3.  Sell Right After Home Improvements – Retail buyers (the ones who pay top dollar) don’t want the fixers, they prefer the cream puffs.  Shiny new improvements lose their luster quickly; so if you need to fix things, spend the money and then list your home the next day.

4.  Sell When New Tenants Move Out Nearby – Are you among the unfortunate owner-occupiers who have to endure tenants next door?  Did the renters with five kids and 14 yapping dogs just move out?  It’s a good time to sell!  Or conversely, if a great couple with no noise-makers just moved in, sell before they move out!

5.  Sell When You Go On Vacation – If it all goes right, dozens of strangers will be pouring through your house with little or no notice the first few days on the market.  If that idea bugs you, go on vacation the day your house goes on the market – especially if you have a lot of kids and pets.

6.  Sell Before You Get Old – You might chuckle, but it’s true.  For most sellers, moving means: a) having to sift through all the old junk that has been stored away for years and decide what is worth keeping, b) packing and unpacking, c) dealing with a lot of unknowns – strangers, moving, new home, getting settled again, etc., and d) making life-changing decisions.  Don’t underestimate how exhausting the transition can be.

7.  Sell Once You Know Where You Are Going – You have to be 100% committed to moving.  Why?  Because once a seller signs the purchase contract, you cannot cancel (only the buyer can).  In addition, if you don’t know where you are moving, you will price your home too high, and it won’t sell.

Many sellers need to leave town to make it worth it.  If you are thinking that you’ll just rent for a year or two and find a smaller place later for half-off, recent history has shown that it is very difficult to score a big discount in the great neighborhoods.  If you opt for that program, be prepared for the other option which is perfectly acceptable – you may rent the rest of your life.

8.  Sell in March or July – We are fortunate to enjoy a 12-month selling season in San Diego.  Everyone thinks that hitting the market during the Spring Selling Season is the most productive, but there is usually more competition too.

If you wanted to time your own move around spring or summer, then focus on March or July.  If you list in March, hopefully there were already 1-2 of your neighbors who were successful in Jan/Feb, and you can ride their coattails.  March is the safest bet, because April’s market has a lull due to taxes, May/June is graduation season, and summer is full of vacations.  Or wait until the last minute and list in July once all the good buys have been taken (and hopefully several of them sold for astronomical prices) and school is bearing down on the family buyers.

9. Get Good Help!  It was easy in 2013, but homebuyers are more particular now that we have much-higher pricing.  Spend a little more on sprucing up your home, be sharper on price, and don’t just hire any realtor off the street – get good help!

Posted by on Feb 21, 2014 in Jim's Take on the Market, Thinking of Selling?, Why You Should List With Jim | 2 comments

Handling An Off-Market Sale

off-market saleOff-market sales have a nasty reputation, and deservedly so because the sellers usually get screwed by their listing agent who spoons the sale to their own buyer.

A buyer for an off-market sale is typically found from pre-marketing done by the listing agent prior to inputting the property onto our MLS.  The trouble starts when the sellers, in their excitement about having an offer, don’t verify that the listing has been exposed to the open market.  If the listing agent doesn’t present that as an option, and instead enriches him/herself unjustly, then they should be held liable for the resulting damages.

Here’s how I inadvertenly found myself in this situation, and how I handled it:

Posted by on Jan 27, 2014 in About the author, Bubbleinfo TV, Listing Agent Practices, Realtor, Realtor Training, Why You Should List With Jim | 7 comments