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Inventory Watch – Gamblin’

We now have 20 NSDCC houses listed for more than $15 million, including this one owned by the gambler caught up with Phil in the alleged Clorox scandal (Phil was cleared last week):

http://www.redfin.com/CA/Rancho-Santa-Fe/17625-Via-De-Fortuna-92067/home/4183483

los mir

They are conducting a no-reserve auction on August 15th, which should be entertaining. He paid $8.5 million in 2010, so he has to be expecting at least that much. It’s open daily 1-4pm.

North SD County’s Coastal Region (La Jolla-to-Carlsbad)

The UNDER-$800,000 Market:

Date
NSDCC Active Listings
Avg. LP/sf
DOM
Avg SF
November 25
95
$376/sf
47
1,988sf
December 2
79
$371/sf
50
2,047sf
December 9
72
$383/sf
43
1,954sf
December 16
81
$378/sf
42
1,948sf
December 23
77
$374/sf
49
1,937sf
December 30
76
$373/sf
51
1,950sf
January 6
74
$370/sf
49
1,995sf
January 13
71
$381/sf
44
1,921sf
January 20
72
$384/sf
41
1,877sf
January 27
75
$399/sf
40
1,891sf
February 3
78
$409/sf
41
1,876sf
February 10
82
$395/sf
38
1,927sf
February 17
85
$387/sf
35
1,929sf
February 24
90
$383/sf
37
2,008sf
March 3
82
$397/sf
39
1,942sf
March 10
88
$377/sf
37
2,008sf
March 17
89
$366/sf
34
2,038sf
March 24
79
$369/sf
34
2,031sf
March 31
78
$367/sf
39
2,069sf
April 7
87
$373/sf
32
2,054sf
April 14
97
$380/sf
31
2,000sf
April 21
87
$377/sf
32
2,062sf
April 28
107
$379/sf
29
2,044sf
May 5
114
$376/sf
27
2,046sf
May 12
108
$385/sf
31
2,012sf
May 19
107
$385/sf
0
0sf
May 26
105
$375/sf
34
0sf
Jun 2
102
$376/sf
36
0sf
Jun 9
102
$377/sf
37
0sf
Jun 16
104
$369/sf
35
0sf
Jun 23
111
$380/sf
34
0sf
Jun 30
119
$376/sf
36
0sf
Jul 7
122
$387/sf
36
0sf
Jul 14
127
$388/sf
34
0sf

Read More

Posted by on Jul 14, 2014 in Inventory | 0 comments

Life Goes On

Tragedy helps us better appreciate the good things in life.

One great thing is the challenge of selling real estate, which is undergoing an evolution right before our eyes.  Agents themselves are contributing, and we could end up undermining –  or imploding - the current system ourselves.

A reader brought up the $100 listing model, where the agent accepts $100 as his fee to advertise a home on the MLS – and then the seller has to fend for himself to figure our the rest.

This week I’ve seen two other twists, and both were a hybrid commission model where the home’s listing is inputted into the MLS, but no commission offered to the buyer’s agent.

This is single-agency in disguise.

While it is possible that outside buyer’s agents will negotiate a commission with the seller and/or buyer, it’s more likely that they will be discouraged.

Meanwhile, the MLS exposure populates all the real estate portals – and these listing agents are hoping that internet buyers will contact them directly.  The agent gets paid their pre-arranged fee, and buyer is, in effect, unrepresented.

It sounds like a great new way to save on the commission.  But if buyer agents are discouraged, how do you know if you got top dollar?

The highly motivated buyers - the ones who pay top dollar – want and need the help of a buyer’s agent.  When a new listing pops up, some buyers aren’t going to burn their agent.  The resulting pool of motivated buyers is diminished.

Offering to pay all agents a specific commission amount (bounty) to sell the home is the most effective way to cause a top-dollar sale.  Listing agents who offer zero commission are NOT doing their sellers a favor.

The MLS rules prevent a listing agent from offering zero commission, unless it is an open listing.  My friend at Sandicor sent me this five years ago:

Entry Only, Open Listings. The law supersedes the rules for Open Listings and commissions in the MLS. The California Civil Code Section 1087 states the following:

1087.  A multiple listing service is a facility of cooperation of agents and appraisers, operating through an intermediary which does not itself act as an agent or appraiser, through which agents establish express or implied legal relationships with respect to listed properties, or which may be used by agents and appraisers, pursuant to the rules of the service, to prepare market evaluations and appraisals of real property.

If an open listing is placed in the multiple listing service, the total compensation that the owner is to pay shall go to the selling agent who procures an enforceable offer from a ready, able, and willing buyer on the terms accepted by the owner.  An open listing need specify no compensation to the selling agent, but may state that the compensation is to be negotiated between the selling agent and the owner.

This only applies to Open Listings and is not relevant for Exclusive Right and Exclusive Agency Listing contracts.

But do these listing agents disclose to their seller that it is in their best interest to appeal to all buyers and agents? It’s on the form now, but nobody reads it.  Will sellers see past the ‘commission-saving’ pitch and notice that the plan discourages the very buyer-agents you want selling the home – the ones with highly motivated buyers who pay top dollar.

Don’t get me wrong, I still think we are heading towards single agency.  But it should be one of the commission options, not the only.  We really need an auction format to weed out the agent-shenanigans, and enforce transparency.

In the meantime, maybe it will go the other way? See below:

giving bentley to buyers agent

The commission war will continue, but one thing won’t change.

If the price isn’t right, it’s not going to sell!

Posted by on Jul 13, 2014 in Commission War, Jim's Take on the Market, Listing Agent Practices | 3 comments

Zake Morgan, R.I.P.

richard and zake

Richard and Zake

****************

We have been in the midst of a terrible tragedy over the last few weeks.

The unexpected tragedies are the worst, and when they happen to the nicest people who are committed to doing the right things, then it is even more devastating.

Richard Morgan (my valued friend and fellow realtor at Klinge Realty for the last five years), and his wife Anneliese, have devoted their lives to raising their 21-year old son Zake Morgan the right way, and it showed.

It is very sad to report that unfortunately a few weeks ago, while enjoying his junior year of college in South America, Zake passed away while swimming in the hostel’s pool with friends.

Over 200 people attended Zake’s Celebration of Life yesterday, and half of them were those who knew Zake from school.  Kid after kid spoke about the warmth and depth of the friendship they had with Zake – he was beloved.

He had a great outlook on life, and everyone loved him – check out the comments and pics by clicking on the “Posts to Page” in the left-hand column:

https://www.facebook.com/home.php#!/pages/Zake-Morgan-Memorial-Page/290839331040884

Those who would like to send a private message to Richard and Anneliese can email them here: richard@klingerealty.com

They intend to set up a scholarship fund in Zake ’s name at his alma mater, San Dieguito Academy.  Anyone who would like to donate, please click below - any amount would be appreciated:

http://www.gofundme.com/akosj4

Most of all, let’s appreciate how delicate life can be, and hug those around you a little tighter.

Posted by on Jul 11, 2014 in Richard Morgan | 1 comment

Bet Your Boots?

Another attempt to corral the off-market pocket listings into a profitable venture – this by grouping the top producers together into their own MLS Club:

http://www.bloomberg.com/news/2014-07-10/pssst-wanna-sell-your-house-can-you-keep-a-secret-.html

An excerpt:

Wall Street traders aren’t the only ones who like to circumvent the conventional marketplace. Real estate agents are increasingly pitching sellers on their version of secretive dark pool trading: Skip the multiple listing service (MLS) and let the agent market the home privately.

Privately can mean everything from an agent bringing in a buyer and collecting the entire commission (typically 6 percent) rather than splitting it with a buyer’s agent. Or it can mean posting a Coming Soon sign on a property before listing it on the MLS. Then there’s the growing number of private agent clubs, closed networks of agents who deal among themselves, often using “pocket listings,” or homes they have yet to — and may never — post to the MLS.

No national data exist on the percentage of residential transactions happening off the MLS. Two small surveys that looked at transactions in a few counties — one focused on California, one multi-state — put it at more than 20 percent of sales. Steve Murray, president of RealTrends, a real estate consulting and data company, says he sees more private agent networks popping up, and expects them to become a bigger presence.

“Twenty percent of agents do 80 percent of the business, so why wouldn’t the big agents want to work just amongst themselves?” he asks.

That’s the pitch for Top Agent Network, which accepts only agents who are among their region’s top 10 percent in revenue generation. It runs 30 chapters of private agent-to-agent online communities in seven states, including California, Massachusetts and Illinois.

Members are part of a closed email loop and have access to online listings and a database on which only they can post and search. Founder David Faudman says he has 4,300 members and expects steep growth as the trend grows. He says the networks are a complement to the wider net of the MLS.

“You can bet your boots that in this market where a listing is as good as cash, some agents are looking to use that as a way to double their income,” says Murray.

Read the full story here:

http://www.bloomberg.com/news/2014-07-10/pssst-wanna-sell-your-house-can-you-keep-a-secret-.html

Posted by on Jul 11, 2014 in Listing Agent Practices, The Future | 5 comments

Rates to Rise?

The Fed is going to stop buying bonds in October – that should give the national media some more fodder to kick around during the dog days of summer!

They will be suggesting that mortgage rates will be rising soon!

A few thoughts:

1. The last time the Fed halted their QE a couple of years ago, mortgage rates went DOWN, due to private investment picking up the slack.

2. Other factors have an effect on rates. A good example is today’s news about Portugal which sent our 10-year treasury yields to 6-week lows:

10-year yield July 10th 2014

3.  Wars and elections tend to keep rates down – and both are brewing.

What will it mean for real estate?  Rates could certainly rise, and if they get close to 5% we can probably expect to pack it in until springtime.  Buyers will appreciate the break, and sellers aren’t that motivated anyway.

If rates stay where they are today (or maybe drop a little?), we could see a vibrant 3rd quarter and buyers feel a press to get ‘er done before rates potentially go up.  I don’t think rates will go up much if at all – the range has been pretty solid the last couple of months.

This is where I get my mortgage news:

http://www.mortgagenewsdaily.com/

Their ‘Daily Mortgage Rate Survey’ shows the zero-points rate, and yesterday’s was 4.18% – which is great.  Let’s see where it goes!

What do you think will happen to rates?

Posted by on Jul 10, 2014 in Interest Rates/Loan Limits, Jim's Take on the Market | 2 comments