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Category Archive: ‘Why You Should List With Jim’

Real Estate Disclosures

asis

The finer points about disclosures.  An excerpt:

When preparing the Transfer Disclosure Statement, the seller sets forth any property defects they know or suspect to exist. Defects to be disclosed in the TDS include any conditions known to the seller which might negatively affect the value and desirability of the property for a prospective buyer, even though they may not be an item listed on the TDS. Thus, disclosures to the buyer are not limited to classic conditions preprinted for comment on the form. [CC §1102.8]

Further, the buyer cannot waive the seller’s delivery of the statutorily-mandated TDS. Any attempted waiver, such as the use of an “as-is” clause in the purchase agreement, is unenforceable as against public policy. The words “as is” are never to be used in the context of real estate transactions.

“As is” implies a failure to disclose something adverse known to the seller or their agent, a prohibited activity. In contrast, “as disclosed” is the condition of the property as known by the buyer when the seller accepts their purchase agreement offer. [CC §1102.1(a)]

Thus, all buyers purchase property:

“as disclosed” by the seller, the seller’s broker and the broker’s agents; and

“as actually observed” by the buyer prior to entering into the purchase agreement.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Brokers and their agents who list one-to-four unit residential property have a duty to all prospective buyers, separate from the seller’s, to timely disclose any physical aspects of a property:

– observable by the broker or their agent on a reasonable inspection of the property; and

– affecting the property’s market value.

A buyer of a one-to-four unit residential property has two years from the close of escrow to pursue the seller’s broker and agent to recover losses caused by the broker’s or agent’s negligent failure to disclose observable and known defects affecting the property’s physical condition and value. Undisclosed and unknown defects permitting recovery by a buyer for the cost to cure the defect or loss of value are those observable by a reasonably competent broker during a visual on-site inspection. A seller’s agent is expected to be as competent as their broker in an inspection. [CC §2079.4]

However, the buyer is unable to recover their losses from the seller’s broker if the seller’s broker or agent inspected the property as a reasonable competent broker, did not observe the defect and did not actually know it existed. [CC §1102.4(a)]

For more on seller disclosures and case law, click here:

http://journal.firsttuesday.us/brokerage-reminder-the-as-is-clause-instigating-negligent-failure-to-disclose/52170/

Posted by on Apr 26, 2016 in Jim's Take on the Market, Listing Agent Practices, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 7 comments

How Many are Planning to Buy?

yes

Look at this trend of home-buying plans – roughly 6% of consumers are planning to buy a home in the next six months.  Look how it bumped up at the start of the year – and settled down since.

It also suggests that 94.1% of consumers have no plans to buy a home in the next six months.  How would you like to be a realtor, and face those odds every day!  A lot of striking out!

http://www.builderonline.com/money/economics/consumers-remain-hesitant-on-home-buying-decisions_o

Posted by on Apr 23, 2016 in Jim's Take on the Market, Why You Should List With Jim | 0 comments

First Offer is the Best Offer?

733-stratford-dr-076

Zillow and other internet tools are helping to generate maximum urgency early in the listing period (the Stratford buyer saw it on Zillow).

But sellers can be surprised to see an offer in the first day or two on the market, and may not be prepared mentally, physically, or emotionally to sell their house. There is temptation to wait for the two in the bush – and it almost always goes that route, even when a full-price offer is presented.

There is an old adage that the first offer is the best offer. But that sounds like sales talk, and is easy to shrug off.

Let’s change it to the first BUYER is the best BUYER.

Sellers should recognize that anyone who makes an offer in the first day or two must be on high alert, and is ready to buy. They have probably made offers on others, and lost out or couldn’t come to terms. Frustration is creeping in, and they want to get it done – these are the folks who pay top dollar.

Most importantly, all buyers are looking the same comps – and will usually come to the same conclusion on price.  Yes, you may get other offers, but will they be any better, later?

Are you going to turn down a full-price offer on a $2,000,000+ property in hopes that two in the bush might pay an extra what? $25,000? $50,000?

Part of what got you here is putting the right price on it from the beginning.  Motivated buyers will pay the right price, but balk at the wrong price.

Could you be giving it away?

Maybe – but you have to live with that thought no matter what price you take.  There’s no way to tell, because you can’t predict the future.

Until we go to an auction format, sellers will be faced with these prickly decisions.  Be prepared for the early action, and don’t be surprised if someone wants to buy your house right away!

Posted by on Apr 17, 2016 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 11 comments

Maximizing Zillow Views

If you want maximum exposure on Zillow, then list with a Premier agent who does video – Zillow puts listings with video at the top of the local searches.  My Stratford listing was inputted less than 24 hours ago, and already has 168 views and 9 saves!

But this also shows how buyers gravitate to the new listings:

Stratford views and saves

Stratford ranking zillow

Here is the update at the 24-hour mark. One day on Zillow and 510 views!

noon update

Posted by on Apr 15, 2016 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 2 comments

733 Stratford Drive

733-stratford-dr-076

I love my new Encinitas Highlands listing at 733 Stratford Drive, which is at the top of the hill and offers some of the best ocean views in EH!  This is another property that is ideally suited for the multi-generational buyers because there are bedrooms and full baths on the ground floor plus a detached 1br/1ba cottage out back.

This is my first real tour of a house with the new camera (and because I’m trying to move slower and smoother), so this is the extended full version of the whole property:

http://www.zillow.com/homedetails/733-Stratford-Dr-Encinitas-CA-92024/16718577_zpid/

Posted by on Apr 14, 2016 in Boomers, Bubbleinfo TV, Encinitas, Klinge Realty, Listing Agent Practices, Market Buzz, Osmo, Thinking of Buying?, Why You Should List With Jim | 3 comments

Price Reductions

lower price

Most sellers are happy to wait their turn, and have no worry about selling.  It will happen some day.

But for the folks who recognize that they might have shot too high on their initial price, what do you do now?  You don’t want to give it away…..and you have time. Besides, it’s only April.

When do you lower the price? And by how much?

If you’re in an area and/or price range that is looking a bit glutty, then let’s work it backwards.  The other listings around you that aren’t selling will start lowering their price once summer approaches – call it June 1st.

However, you want to beat them to it, in case there is only one buyer left at these price points (it could be).

And you don’t know if your next price reduction will be your last.

It makes sense to lower now, and then if that wasn’t enough, then hit it again in mid-May.  You should find the next buyer before your neighbor gets around to his first price reduction.

How much lower?

My basic rule-of-thumb:

  1. If you are getting offers, your price has to be close – probably within 5%.  Call the last offer back and re-consider his best offer!
  2.  If you are getting showings but no offers, then your price is 5% to 10% too high.  Lower 5% to see if that’s enough (it might not be enough).
  3.  If you aren’t getting any showings, then your price has to be 10% too high. There aren’t enough active listings for you to not get lookers.  Lower by at least 5%, and keep doing it until you get offers.

If you are content with your price and not in a rush, then ignore the above.  But if you want a formula to get you on your way, give it a try.

Lower your price by 5%, and see what happens!

Posted by on Apr 11, 2016 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 0 comments

NSDCC Higher-End Stalling?

panic

There has always been some sort of relationship between inventory and sales.

When inventory is tight, sellers have the advantage because buyers get frenzied up and just pay the price to win one.

With a smaller increase in inventory, the frenzy can soak up the supply – sales can increase too because more demand gets satisfied.

But there comes a point when a larger increase in the inventory causes the buyers to back off, and sales stall.

It is a delicate balance because buyers want more choices, but when it feels like not much is actually selling, buyers regain control of the market.  They adopt the wait-and-see approach – even with homes that appear to be well-priced.  They want someone else to go first!

Let’s examine the local data to see how we’re doing.  There isn’t a direct relationship between new listings and sales in the same time period, because many if not most of the sales were listings from the previous quarter or quarters.  But we can use the ratios to compare the velocities:

San Diego County Detached-Homes, 1st Quarter

1Q – Year
1Q New Listings
1Q Solds
1QNL/1QSolds Ratio
2014
8,544
4,556
53%
2015
8,752
4,794
55%
2016
8,607
4,626
54%

So far, so good. When we look at the whole county year-over-year, there has been a very similar relationship between new listings and sales in the first quarter.  Let’s check around the northern coast:

North San Diego County Coastal Region, 1st Quarter

1Q – Year
1Q New Listings
1Q Solds
1QNL/1QSolds Ratio
2014
1,235
581
47%
2015
1,275
629
49%
2016
1,372
549
40%

We are getting a little queasy now – there were 8% more new listings to consider, and sales dropped off 13% but we know that 2015 was a strong year so tough to keep up.

Let’s break down the NSDCC stats by price to find the trouble:

North SD County Coastal Region, 1st Quarter, UNDER $1,400,000

1Q – Year
1Q New Listings
1Q Solds
1QNL/1QSolds Ratio
2014
733
409
56%
2015
722
418
58%
2016
654
375
57%

No big problems there – the Under-$1.4M sales declined, but so did the number of new listings so the ratio was about the same as the previous two years.

But that means the higher-end market isn’t enjoying the same benefits:

North SD County Coastal Region, 1st Quarter, OVER $1,400,000

1Q – Year
1Q New Listings
1Q Solds
1QNL/1QSolds Ratio
2014
513
178
35%
2015
568
216
38%
2016
734
178
24%

Yikes, the number of new listings over $1,400,000 zoomed 30% higher than last year, and sales dropped 18% – an example of how too many choices are causing buyers to pause (the identical 178 sales in 2014 and 2016 was a fluke).

The higher-end market could be stalling just because of the additional choices.  If there were only 5% or 10% more listings (like last year), it probably wouldn’t be that noticeable – but the +30% is leaving a mark.

The extra listings may not even be ‘over-priced’ on paper (or by zestimate), but with so many active listings stacking up, the buyer’s confidence in the wait-and-see program is rewarded – and also causing their ‘picky-ness’ to increase rapidly.

There are 186 pendings listed over $1,400,000, so the market isn’t dead.

But last year at this time we had 564 active listings priced over $1,400,000, and today there are 695 listings – a 23% increase.

Having 30% more new listings overall this year but only 23% more active listings today means we were able to soak up some of the extra supply.  But the rest are lingering.

How should these sellers proceed?  Be sharper on price, and if you’re not getting offers in the first 2-3 weeks on the market, then do bigger price reductions faster.

You don’t want to look up in July and wonder what happened.  You know now.

Get Good Help!

Posted by on Apr 9, 2016 in Frenzy, Jim's Take on the Market, Listing Agent Practices, North County Coastal, Sales and Price Check, Why You Should List With Jim | 1 comment

Is It a Good Time to Buy A Home?

A twitter guy wants a yes or no answer to whether it’s a good time to buy.

He claimed that I said Yes, because of my post about it being a great time to buy if you’re selling a cheaper home and buying a more-expensive home. It’s because the higher you go price-wise, the colder the market gets.  Fred said it is a good time to buy as long as you don’t plan to move in the next five years.

It’s a question that deserves a full answer, not just yes or no.

The most common blog chatter is that history always repeats itself, and it will just be a matter of time before this cycle runs out.

The economic cycle will sputter again, but the housing market is different now.

Why?

Because distressed sales are well-managed. 

The California Homeowner Bill of Rights mandates that loan modifications be dangled in front of anyone in trouble.  The foreclosure process gets drawn out for months and years so we’ll never see a flood of trustee sales again.

As a result, making your mortgage payments has become optional.

If we have another economic downturn where homeowners can’t pay, then the government will insist that lenders give them a break.  The cast was set in the last crisis – the government will create bailout programs that allow everyone to kick the can down the road.

With distressed sales few and far between, the vast majority of home sales will be elective.  Sellers with the mantra – “I don’t have to sell, I’m in no hurry, and I’m not going to give it away!”

Prices will maintain a tight range of +/-5%, because the minute a seller thinks he is being forced to ‘give it away’, he will object.  Different neighborhoods will have periods of stall-out, where few or no buyers will pay what sellers want, and real estate loitering will be common.

But days of drastic price dips are gone.

The other buffers to a housing downturn include reverse mortgages, rampant flipper business, and baby-boomer estate distributions.

If today’s buyers have assurances of pricing protection, is it a good time to buy? Well, yes, if that’s all that matters.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

But for most, it is a terrible time to be a buyer, which is different.

If you are on the low-end of your market, you can forget about buying your “dream house”.  The competition is fierce, and compromise required – if you can even get your hands on something.

2022-cherokee-ln-004_web

My listing at 2022 Cherokee in Escondido – the one priced at $549,000?  We had six offers, and four of them were all-cash.  All were at list price or higher.

It was viewed 3,198 times on Zillow since Friday, and I received 100+ phone calls and texts from agents.  I had over 200 people visit the open house on Sunday, and it was probably shown at least 50 times between Monday and Wednesday.

http://www.zillow.com/homes/2022-cherokee,-escondido_rb/

Almost all of the lookers didn’t offer, so they will be competing against each other on the next one – literally hundreds of buyers floating from new listing to new listing, hoping for a miracle.

Was it a giveaway?  Agent comments included, “Price was fair and reasonable’, and ‘The defects were properly discounted’ (defects included no direct access from house to backyard, master suite downstairs and kids’ bedrooms up, and it backs to the I-15 freeway – the rear fence was the CalTrans chainlink).

Buyers have to endure bidding wars on anything decent, no rules about how to win, and shady realtor tricks that seem to favor insiders.  Buyers are quick to jump to that conclusion, but it is more due to a realtor’s incompetence that bidding wars are vague and hard to win.

If you can get a house into escrow, it almost always happens that it’s condition is worse than imagined.  But sellers are in the driver’s seat, and do little or nothing to assist. Buyers usually end up feeling like they are buying an over-priced turd.

But it will probably be your turd forever!

Posted by on Apr 7, 2016 in Bidding Wars, Frenzy, Jim's Take on the Market, No-Foreclosure as Banking Policy, Thinking of Buying?, Why You Should List With Jim | 5 comments

Real Estate Triage

2016-04-02 19.03.56

We had a bonafide madhouse today at the open house in Escondido.  We had at least 200 people attend!

The granny flat was an important ingredient for a handful of groups, but not snazzy enough to be the sole reason to purchase.  It was a nice extra – a sweetener more then a must-have. At the open house we had at least 5 groups who had ‘granny’ in tow, and one will likely make an offer.

Posted by on Apr 3, 2016 in Bubbleinfo TV, Jim's Take on the Market, Open House, Why You Should List With Jim | 2 comments

NSDCC Avg DOM, 1st Qtr

sell

Our low inventory has buyers starved for houses to purchase.  When they see a good one, they react immediately – an attractively-priced house will have people driving by within the first hour or two on the market!

Sellers should be aware, and expect to sell their house right away.

Those who don’t shine up their house before listing, or those who get exuberant about price – thinking they have plenty of time – will miss a golden opportunity.  The most desperate buyers are motivated to pay top dollar in the first few days on the market!

Here are the number of NSDCC houses sold up to $1,400,000 in the first quarter, ranked by days-on-market:

Avg DOM
2013 #/SP:LP
2014 #/SP:LP
2015 #/SP:LP
2016 #/SP:LP
0
19/97.0%
8/98.2%
6/91.9%
9/97.4%
1-14
205/99.5%
169/99.4%
160/98.6%
125/99.3%
15-30
80/97.2%
58/97.7%
65/96.7%
64/97.7%
31-60
68/96.5%
78/96.5%
83/96.7%
72/97.0%
61+
157/95.5%
96//94.8%
104/96.1%
89/95.9%

Sellers – you want to get your price, right?

The houses that sell closest to list price are those that go pending in the first two weeks.  These SP:LP ratios are based on the list price on the pending date – the price which typically needs to be lowered first to get a buyer to offer, because they know it isn’t working after the first few weeks.

Hire a listing agent who can handle the immediate urgency – Get Good Help!

Posted by on Mar 31, 2016 in Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Thinking of Selling?, Why You Should List With Jim | 0 comments