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Journal

Celebrity Real Estate Sales

From the wsj.com:

http://www.wsj.com/articles/how-to-hide-a-celebrity-home-buyer-1484838701

Excerpts:

Code names. Clandestine meetings. Camouflage. High-end real-estate agents are increasingly turning to devices found in Hollywood thrillers to shield the identities of big-name clients.

When he’s taking a well-known client to a showing, Tony Sargent of Manhattan-based brokerage Core said he won’t tell the listing agent who the prospective buyer is—or he’ll offer a different name. In Hawaii, Matt Beall of Hawai`i Life Real Estate Brokers, whose firm has worked with Julia Roberts and Neil Young, will borrow his wife’s car for select showings, as paparazzi can recognize the autos of real-estate agents. During house tours, some agents impose a no-cellphone rule, or have the homeowner’s staff vacate the property. And in other cases, home inspectors, listing photographers and other vendors sign confidentiality agreements.

Some prominent sellers throw in the towel from the get-go and decide to use their fame to bring attention to a listing. That can potentially lead to a quicker sale and a higher price.

Read full article here:

http://www.wsj.com/articles/how-to-hide-a-celebrity-home-buyer-1484838701

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Posted by on Jan 19, 2017 in Jim's Take on the Market, Listing Agent Practices | 0 comments

Multiple Realtors Showing the Same House

We have compared the home-selling business to the wild, wild west – where there is virtually no enforcement of the few rules in place. The Code of Ethics is a farce that regularly gets ignored when a big commission is on the line, and the environment on the street is so competitive that someday we’ll see realtors break into hand-to-hand combat over a deal.

Part of the reason that the motivated buyers hurry to a new listing is because they want to see it alone.  If it’s an open house, and/or there are several people milling around, buyers, who might be making the biggest decision of their life, can get distracted.

If it’s a busy open house, there’s not much you can do except hone your skills of evaluating homes under all circumstances.

But what is the protocol when a realtor is showing a house, and another realtor arrives to show it to their buyers?

Those who are polite will wait outside, out of respect, but many if not most will barge right in.  Usually they will attempt to ask permission, but when they are their clients have already bull-rushed the house, it’s hard to run them out.  What can you do?

I cordially invite them to take a look around.

If I get the feeling that my clients like the house enough to make an offer, then I tell them to ignore what I’m about to say.

Then within earshot of the competing buyers, I say to my clients,

“Did you smell that?”

The ears on the other buyers perk up, and they set out to find a smell, but it’s already too late.  Doubt and fear overcome their senses, and they leave wondering what just happened.

Posted by on Jan 19, 2017 in Jim's Take on the Market, Tips, Advice & Links | 1 comment

Short-Sale Scam

From C.A.R.

While we all are concerned about cybercrime and identity theft, it appears taking someone’s money the old-fashioned way has reappeared in a short sale scam in Southern California.

The alleged scam appears to follow the same basic format.  A short sale agreement was entered into four to six months ago.  The buyer made an initial deposit in the $5,000 to $15,000 range into the listing broker’s non-independent broker escrow.  As with most short sales, the process takes several months and the selling agent is assured that the listing agent is working towards lender approval – it is just taking more time.  Then the communication slows down, the selling agent begins to get concerned and calls the listing broker’s escrow.  There is no answer, no return call, no other number to contact, and the earnest money deposit is gone.

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Posted by on Jan 18, 2017 in Fraud, Jim's Take on the Market, Scams | 6 comments

Trump and Local Real Estate

The inauguration is almost here – Trump will be your president on Friday!

How will he affect our local real estate market?

His detractors are aghast over his tweets, but Trump keeps them coming.  In spite of their bombastic nature, I think we are already numb to his tweets, or at least getting used to them being part of the landscape.

At this point, I don’t think the Trump Effect will have much, if any, impact on us – positive or negative.  If rates stay under 5% (today’s 30Y is 4.12%), buyers should shrug it off and keep buying.

I also think sellers and agents are getting smarter about price, which will help tremendously.  As you saw in the previous post, they might screw it up a bit once they hit the market, but eventually buyers and sellers should both be happy with a modest appreciation rate of 2% to 4% this year.

The #1 thing that should keep our market stable is the buyers’ focus on getting the right house for the long-term.  Before the 2007 downturn, buyers thought they could always sell for a gain, and, as a result, any house would work for the short-term.  But after our so-called ‘crisis’, we recognize prices can go down – but it only hurts if you sell.

Sales and prices may bounce around, but with the focus on the long-term as a foundation, our market should keep cooking.

Posted by on Jan 17, 2017 in Forecasts, Jim's Take on the Market, Market Buzz, Market Conditions, North County Coastal, Sales and Price Check | 2 comments

House Hunters is Fake

I had clients check it out, and they were told that if they want to get on House Hunters, just go buy a house and then they will come film you looking at two dogs, and then go to the home you already bought and pretend you are seeing it for the first time.

The good doctor has some thoughts:

http://www.doctorhousingbubble.com/house-hunting-shows-staged-buyers-budgets/

Fake it until you make it.  No truer words have ever been uttered especially when it comes to Hollywood and the make believe of reality TV.  Just because you put the word “reality” in front of TV doesn’t make it so.  Yet people flock to housing shows in mass because it feeds into their world view that real estate is always a winning bet.

Whether the show is about a couple looking to buy their first home or a show where prospective investors take a chance at rehabbing a former meth home and turning it into a puppy daycare, these shows put out some unrealistic scenarios especially for those that actually buy and invest in the real estate market.  Yet that is the rub.  Most people never purchase investment property.  Most that do own real estate own it as their place of residence.  And that is why these shows do so well because they highlight an alternate reality that only works out in scripted reality.

Read full article here:

http://www.doctorhousingbubble.com/house-hunting-shows-staged-buyers-budgets/

Posted by on Jan 17, 2017 in Jim's Take on the Market | 2 comments

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.

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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.

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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