Menu
TwitterRssFacebook
More Links

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

Carlsbad
(760) 434-5000

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


Category Archive: ‘Why You Should List With Jim’

Traffic Doesn’t Equal Offers 2

Don’t feel bad for that last seller – somebody will come along and pay him what he wants.  Many homes are sold to buyers who are represented by one of the new-age realtors fresh out of real estate school who work for a team.

The good veteran agents are so sick of the frustration that they’re scrambling to build a team of inexperienced agents who will do the grunt work.  There isn’t much oversight on whether the price paid is fair; instead, there is more pressure to get another sale on the board.

New and inexperienced agents get so excited about showing a new listing that if it has any shiny stuff, they go berserk and puke all over the listing agent, giving the impression that the buyers will pay anything for the house.  When I’m showing a house, people think that I’m just a boring old dude because I don’t say much.  It never occurs to them that I’m protecting my fiduciary duty to my buyer by NOT spewing superlatives.

The problem starts when listing agents don’t properly prepare their sellers for the initial onslaught – instead, they get caught up in it too, and think that all the jumping around means that offers will be pouring in any minute.

It used to be that way, but not any more.

If lookers don’t make an offer within 24 hours, they usually don’t make one.  It’s too easy to play it safe, and wait for the next one.

Save

Posted by on Jan 17, 2017 in Jim's Take on the Market, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 0 comments

Traffic Doesn’t Equal Offers

By now, the low-inventory/fast-market has trained the motivated buyers to be on red alert.  If a new listing pops up that looks remotely interesting, those buyers know to get over there quick for a peek.

This presents a major problem for the sellers and listing agent.

Once the parade of lookers descends upon the new meat within hours, it is irresistible for the ego to go wild, and it causes sellers and listing agents to have visions of lottery-type money.

It is so much fun, they want it to last forever! They are so excited!

Savvy buyers know that if this is THE house, they need to make an offer promptly.  It makes the equation quite simple – sellers will receive offers from the motivated buyers within the first 2-3 days.  All you have to do is counter for every buyer’s highest-and-best offer, and by Day Four the buyer who will pay the most will emerge.

But what usually happens?

The overly optimistic buyer-agents get all giddy and tell the listing agent that they think they will be making an offer.  But a funny thing happens to buyers once they roll down the street for a couple of blocks – all the reasons NOT to buy that house come up, and most buyers talk themselves right out of it.  At least half of the people who threaten to make an offer never do.

What if you are a motivated buyer, and make a great offer in the first 1-2 days?  It happens regularly that sellers and listing agents will pooh-pooh a great early offer, and hope that there are two in the bush.

What can buyers do?  You only have one option, and that is to walk away if you don’t get a response by the time the offer expires.  At least if you threaten to quit, it should hopefully get their full attention.

Sellers and listing agents think that lots of visitors = lots of offers.  But most visitors don’t offer – they’re just visiting.  In virtually every case, the no-offer rate is at least 90%, but sellers ignore that and are convinced there has to be two or more in the bush.

Here’s today’s example:

The seller paid in the low $700,000s in late-2012, and didn’t add anything but lipstick since. We initially offered $1,275,000 last week, and sure got the feeling that we were getting shopped around – the listing agent kept reminding me that there were other offers expected.  So we put a deadline of 1:00pm today to accept our $1,300,000 counter-offer.  Two hours after our deadline, the seller countered $1,339,000, which was just $6,000 under their first counter.  They called it their final offer, and it wasn’t a multiple-counter, so no other offers were on the table.

The sellers paid low-$700,000s, and couldn’t live with $1,300,000 – they had to have an extra $39,000, or the deal was off.

My buyers stuck to their guns, and instead we were off to a new listing that was priced well under this one.

Get Good Help!

Save

Save

Posted by on Jan 16, 2017 in Bidding Wars, Jim's Take on the Market, Market Buzz, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 2 comments

NSDCC 2016 Days on Market

Here we have the 3,019 NSDCC houses sold last year, categorized by how many days it took to find their buyer:

Number of Days On Market Number of Houses Sold Percent of Total
0-14 days
1,126
37%
15-30
582
19%
31-45
342
11%
46-60
245
8%
61-75
169
6%
76-90
134
4%
90+
421
14%

Buyers are frustrated and anxious, and they want to buy a house now. Last year, more than half purchased their home in the first month it was on the market.

Sellers should expect immediate action, and take advantage of it! If you don’t want to sell in the first month, then you should wait until you get closer to your preferred exit date.

This is also why the re-freshing of listings is so widespread – buyers want the fresh meat. Check the history of every new listing!

Posted by on Jan 15, 2017 in Jim's Take on the Market, North County Coastal, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 1 comment

Selling Early in the Season

The N.A.R. economist/cheerleader gives his reasons on why sellers should list early this year.  Like Yunnie, I don’t think Smoke consults with realtors, instead he just shoots from the hip.  It’s not a bad thing, but it leads to lightweight, obvious answers – see article here:

http://www.realtor.com/news/trends/sellers-in-2017-may-benefit-from-listing-early/

I’ll add my reasons why sellers should get started earlier:

  1.  With few other choices and with the school schedule allowing some latitude on timing, buyers have been tolerant about sellers renting back the house.  Selling earlier and renting back the house enables sellers to bank their equity and make non-contingent offers on their replacement home.
  2.  Motivated buyers have been anxious for months to see the selling season arrive – and those are the buyers you want!
  3.  Some day we could see a surge of boomers looking to cash out of their lightly-maintained, long-time residences. With loads of equity, they (or their heirs) could undercut you on price for a quick sale.
  4.  Historically, demand has been known to turn on a dime.  Currently there is little evidence of that, but if the season gets off to a slow start, the psychological ‘animal spirits’ could recede quickly – especially on price.
  5.  San Diego weather allows buyers to hit the street earlier.
  6.  Trump!

The best time to sell?  When no one else is!

Save

Save

Posted by on Jan 14, 2017 in Jim's Take on the Market, Thinking of Selling?, Why You Should List With Jim | 0 comments

Highest-and-Best Counters

Here we are in the second week of January, and I found myself in the middle of four competitive situations already this week – and it’s only Thursday!

My listing on La Costa Avenue has been shown regularly over the last 67 days, and we had a deal previously until the home-inspector saw the lumpy carpet and thought the home was falling down.

It must have been our turn as an attractive offering this week, because we received three offers, and two other threats.  I always want to counter for their highest-and-best offer, because that’s what is fair.  I want to give every buyer an opportunity to compete, because nobody knows how much they might pay until they are faced with the fear of loss.  I also want to give the agents the chance to earn a paycheck – hopefully they will do the same when the roles are reversed.

The three offers came in at $400,000 and under, and we ended up at $427,000.  All three buyers and agents had an equal chance to win, and my sellers are much happier with $427,000 than just taking the highest offer.

The highest-and-best process should be a standard in the business, but sadly, it is not.  I had buyers in the other three contests, and none of the three listings agents countered for highest-and-best.

Why don’t listing agents do what it right, and counter for highest-and-best?  Are they just fat, lazy, and stupid? No!

They haven’t been on the other side of the table enough and gotten burned to recognize how unfair it is to all parties involved – especially their own client, the sellers.  THEIR SELLERS DESERVE BETTER!

You can’t blame buyers for offering less than list price just a week or two into the new year.  It is typical for a buyer to mentally deduct repair costs, or base their offer on other comps they’ve seen when they think there won’t be any competition.  But when faced with the threat of losing the property, they might be willing to pay more – and they deserve the chance to do so!

Get Good Help!

Posted by on Jan 12, 2017 in Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 1 comment

RSF Tennis Estate

A pure California Ranch on 2.79 acres!

Park-like estate with a stunning 5br + den, 4.5-bath single-level main house that was redesigned and extensively upgraded in 2009. The large but intimate great room has soaring wood-beam ceilings, wide-plank hardwood floors, and french doors that open wide to let the sunshine in! Pool/spa, 3-car garage, detached 2br guest house, lighted tennis court, detached office, RSF schools, no HOA, and the master suite was highly upgraded in 2016! The floor plan is perfect for multi-gen families, with a 2-bedroom wing on one-side with the master suite + 2 bedrooms on the other side! Plenty of room to spread out and enjoy the Ranch – horses OK too! $2,950,000

Call or text Jim Klinge, broker 858-997-3801

Posted by on Jan 5, 2017 in Bubbleinfo TV, Jim's Take on the Market, Klinge Realty, Rancho Santa Fe, Why You Should List With Jim | 4 comments

Measuring the Start of 2017

Every prognosticator has released their cautious predictions for the year, but how will we know what’s happening in the meantime?

  1. How will buyers know if it’s safe to go back in the water?
  2. How will sellers know if they can pack another 5% on to their price?

There are two ways we can get a sense of the initial enthusiasm, and by the end of January it should become more clear on which way the market is breaking.  Last year, our start was already slightly slower than the previous two years, but close enough that there wasn’t any panic.  Buyers kept buying, and for the most part, they paid what the sellers wanted.

NSDCC Monthly Sales

Year
December
January
February
Totals
2013-14
211
182
180
573
2014-15
250
165
170
585
2015-16
253
168
144
565
2016-17
215

If we close 150 sales in each of the next two months, and hit 515 for our 3-month total, I think we can say our market is surviving. But we can dig deeper to see what will have caused those results.

January New Listings and New Pendings

Year
January New Listings
January New Pendings
2014
307
176
2015
273
163
2016
320
140

Yes, there will be several old listings being ‘re-freshed’ this year – in the first week of last year, about 70% of the new listings had been re-inputted.  But it is like that every year.

Keep your eye on the number of new pendings. If we can get close to last year’s 140, we should be fine, but the wait-and-see trend has been building.

The new listings will play a role – if there is a surge of fresh meat, it could cause rate-sensitive buyers to jump in now if they see something decent. But rates should moderate, keeping buyers picky.  If there aren’t many current owners willing to sell, then we could have fewer pendings but healthy conditions. Let’s compare the two as we go!

Posted by on Jan 3, 2017 in Jim's Take on the Market, Market Buzz, North County Coastal, Sales and Price Check, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 0 comments

More 2017 Predictions – Disrupters

It is assumed that the real estate industry is ripe for disruption.  We see a new whiz-bang website just about every week that was developed by two guys in a garage who think they have the answer – but then are never heard from again.

The reason is advertising.

Zillow got to the top because they were spending $100 million per year to advertise. Anybody who is willing to spend that type of money can dance their way into the hearts of consumers.

Bigger players will be looming in 2017.

1. We talked about Opendoor, the flipping company who buys your house for cash in 3-7 days at a below-market price based on algorithms.  Their fees range from 6% to 12%, which would only appeal to desperate sellers – which have been few and far between in San Diego.  Opendoor is only operating in Dallas and Phoenix, so expanding to the tony coastal regions might take a while.  But they just received $210 million in venture capital, and have 200 employees closing $60 million per month in transactions currently.  They are expanding to 10 unnamed cities, and hope their fast money can attract a homeowner’s first phone call.  But once sellers hear their (low) bottom-line, only a great salesman could convince them to not shop around.

2. Another big-money contender is Quicken Loans, the second-largest retail mortgage lender in the country.  They just announced that they are acquiring a ‘technology platform’ to appeal to more home buyers directly.  LINK

“Finding a reputable agent and a great home go hand-in-hand,” said Ron Frankel, OpenHouse Realty CEO. “I am confident that the work John Kvasnic, OpenHouse Realty’s Chief Product Officer, and his team have done in both arenas will help In-House Realty become the premier destination for those looking to work with the best agents in their community, while also helping them find the home of their dreams. It’s the perfect fit.”

They don’t mention that their recommended agents are paying Agent Ace a referral fee of 35% of their commission.  There is a big difference between the ‘best agents in their community’, and ‘best agents in their community who are willing to pay a 35% referral fee’.  The second group is much smaller, and typically they are the realtors who are getting outworked by the ‘best agents in the community’.  But consumers won’t figure that out until it is too late.

Quicken Loans spent $21.1 million on Google advertising alone in 2014, more than any other mortgage lender.  They could become a major player if they spend enough on advertising – they already spent it in the mortgage space, and are up to the #2 mortgage-lender nationwide (look for their Super Bowl ad).

3. The founder of Uber is another potential disrupter, but only because of their previous smashing success.  Their real estate package follows the course of most outside disrupters who think transparency is something the sellers want – but they don’t.

An excerpt:

When a seller receives a few good offers on a home, the sellers agent will ask for best and last offer by noon tomorrow, for example. If buyers were able to see the terms of all the other offers, as they would when using Haus, then this could drive the price of the home up as buyers enter into a bidding war. Not to mention, unethical sellers or agents could artificially inflate the price of a home through shill bidding, as an offer is not legally binding.

While Haus helps sellers measure the demand on their property, it might also drive away potential buyers who don’t want to get in a bidding war over an already-expensive purchase. Or, on the other side, this might short a seller who would have received a much higher best and final bid from a buyer, but saw that offer drop to barely beat the next-best offer.

Once sellers figure out that disruption/transparency may not be in their favor, selling the old-fashioned way where they hold all the cards will sound like a safer choice.

We already know that the industry is in retreat.  The old-school realtors who think they deserve a five-figure paycheck for completing fill-in-the-blank contracts will think retirement sounds better than ever.  Mid-range and better agents are scrambling to build teams and be Redfin-ish in their conveyor-belt approach, even though the pitfalls are obvious.  It wouldn’t take much to tip the whole thing over at this point.

Zillow feels like an old friend by now, but who knows what they might do?  Amazon or Google could jump in too, and if they did, look out.

Whoever spends the most advertising dollars, wins!

Save

Posted by on Dec 31, 2016 in Forecasts, Jim's Take on the Market, Listing Agent Practices, Why You Should List With Jim | 1 comment

2017 Market Conditions


Our Carmel Valley sale closed yesterday, with two notable lessons for me.

Note #1 – We had seven offers, but couldn’t get anyone to pay 1% over list – the list price was $729,000, and it closed for $735,000.  Usually when there are multiple offers, one or two of them will break out and pay 5% to 10% above the list price because they gotta have it.

But the willingness to pay over list was subdued.  It was probably a function of it being a two-bedroom, 1,410sf two-story home, so the demand is specific, but these are the least-expensive detached homes in Carmel Valley!

It has been the trend in the neighborhood though.  There have been 6 sales over the last six months, and they have all closed right around list price.

Note #2 – When homes are selling for a record prices, buyers expect more.

We’ve seen it all year now.  The lists of repair requests have grown longer, and more detailed – and buyers are checking to make sure the work was done to their satisfaction.

Yesterday, I was over there installing a new door knob myself!

In our hot seller’s market, listing agents were able to blow off any buyer requests, and the deal closed anyway.  Not any more.

We’ll see the same in 2017 – buyers are going to be more reluctant on price, and they will expect a house in better condition.

Get Good Help!

Posted by on Dec 23, 2016 in Jim's Take on the Market, Listing Agent Practices, Thinking of Buying?, Thinking of Selling?, Why You Should List With Jim | 8 comments

Wait-And-See in 2017?

It’s easy for me to say our local real estate market should get off to a fast start.

It’s what we do every year!

Let’s theorize why the pricing pops in Spring:

  1.  Demand has been pent-up for 3-6 months; and buyers come out hungry.
  2.  Virtually all sellers come out greedy, and tack on the extra 5% or so.
  3.  But only the spectacular homes sell – those that deserve a price hike.
  4.  The inferior homes don’t sell, and clog the inventory.

You can see in the graph above that in the last two years, the cost-per-sf has jumped early.  But buyers only buy early if they see a spectacular house – it is too tempting to wait-and-see, rather than buy a fixer that’s priced retail-ish.

As the selling season matures, the inventory swells with inferior homes that don’t deserve the new pricing premium.  As buyers keep passing on anything that has been on the market for more than 30 days – figuring there must be something wrong if nobody else bought them – the demand intensifies around each of the occasional creampuffs that come to market

Home Sellers

Creampuffs – You can sell your well-appointed, attractively-priced home for a premium all year round. But this year, waiting until summer didn’t get you any more money than you could have gotten in April, according to the graph above.  The San Diego Case-Shiller Index has risen only a cumulative 1.3% over the last five months, reflecting sales data back to March.

Inferiors – Those selling homes with partial or no remodeling/upgrading, bad locations, hard-to-show, or listed with bad agents will face increasing competition as time goes on – and they’ll be piling up by May-June.  Most importantly, the pricing will be more suspect the longer that yours and others are lingering unsold.  List early, and get it done.

Home Buyers

Creampuffs – Buy early.  The competition for the well-appointed, attractively-priced homes will increase as the season rolls on.

Inferiors – Buy late.  Hope that fixer pricing is crushed by supply overload.

It will probably get harder to tell the difference between the creampuffs and inferiors as the selling commotion starts rumbling down the road.

Get Good Help!

Save

Posted by on Dec 10, 2016 in Jim's Take on the Market, Thinking of Buying?, Thinking of Selling?, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim | 2 comments