Two years ago, the National Association of Realtors began the Clear Cooperation Policy, a directive that compels agents to submit their listings to the MLS within one business day after any public marketing.
It was an attempt to quell off-market sales, but Glenn says that it’s done the opposite.
Specifically, because the CCP allows brokerages to have ‘Office Exclusives’, he asserts that more companies are withholding their listings from the MLS and selling them in-house without any attempt to include outside agents or buyers.
Rob and Sam, two industry titans, conducted a livestream discussion to see what else can be done.
Rob has the likely solution – that any agent who wants to exclude their listing from the MLS will need to get a signed waiver from the MLS committee to do so.
Yes, it has come to that – agents can’t be trusted to play by the rules, and will need a permission slip from the principal to officially withhold a listing from the MLS.
But it gets worse – I left a bomb in the comment section here:
Hopefully this will come as a relief to home buyers here – hat tip just some guy:
When a house in Berkeley sold for more than $1 million over its list price in late March 2021, it was covered in media outlets across the Bay Area, including this one.
While the Berkeley sale was particularly sensational — it sold for double its list price and received 29 offers — these individual stories are becoming more common in today’s real estate market, according to recent data and anecdotes from real estate professionals.
And that’s especially true in the East Bay. “People are not surprised when a home goes $1 million over,” said Josh Dickinson, the founder of real estate agency Zip Code East Bay. “When my clients see a house for $1.9 million they’re almost conditioned to think it’ll go over $3 million in Piedmont or North Berkeley.”
While he acknowledges that overbidding has always been common in the Bay Area, this past year has been far more frantic, with additional bids per home and more aggressive offers.
“I think I could pull up the MLS and pull up a dozen [listings] that went more than a million over this year so far,” Dickinson said. “Most of them had the ‘it factor,’ but some of them were just in the right place at the right time.”
He said the “it factor” could include amazing views and a backyard (both in one property is rare) or room for a home office or two. For a recent home he sold in Berkeley, it was only the second time in 93 years the property had ever come to market after it was designed by a notable architect. Dickinson said given the history of the home and its lush and expansive backyard, he knew it would sell quickly, but he was nevertheless surprised when it sold for more than $1.2 million over the list price.
“Even we don’t know as savvy agents. We don’t know when the thing is going to go bonkers,” he said. “We just try to let the market do its thing.”
While an attractive financial offer is key, in true Bay Area fashion there are also plenty of offers that come in with extra pizzazz. Dickinson said one of the bids on the Berkeley home included free one-week stays at an Airbnb in Tuscany for the next 10 years. It’s not the offer the sellers accepted, but it certainly piqued their interest, he said.
Dickinson has also seen plenty of offers over the years that include stock options from major tech companies and a few that have included a glut of airline miles.
When the offers are that high, the accepted bid is often cash. A five-bedroom home in the Elmwood neighborhood of Berkeley closed in April 2021 for $3.15 million, all cash, with a listing price of $1.995 million. According to MLS data, since March there have been at least 20 properties that have sold for more than $800,000 over the listing price in the East Bay and six of those, (three in Berkeley, three in Oakland, one in Piedmont), went for $1 million or more over the asking price.
“The market still heavily favors the sellers, but there’s a lot of optimism for the buyers,” Dickinson said, adding, “There was a house in Berkeley this week that only got four offers. And that gives me hope.”
The trend of paying over the list price continues!
NSDCC Detached-Home Sales, % Closed Over List Price
January: 38%
February: 43%
March: 53%
April: 55%
Most sellers and agents are happy just to get 1% to 5% over list.
The big winners who got 20% or more over list:
Most % Over List Price
List Price
Sales Price
Percentage Over List Price
$1,900,000
$2,450,000
29%
$1,900,000
$2,400,000
26%
$1,999,900
$2,500,000
25%
$1,395,000
$1,740,000
25%
$969,000
$1,210,000
25%
$1,399,000
$1,700,000
22%
$1,099,000
$1,316,000
20%
NSDCC Sales, April: 343
(the number of sales was 29% higher than in April, 2019)
Average List Price: $2,396,667
Average Sales Price: $2,403,962 (100%)
Median List Price: $1,799,900 ($100k higher than it was at the mid-April checkpoint)
Median Sales Price: $1,828,000 (102%)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Over List By Price Range:
Under $1.0M: 23 (79% of all sales)
$1.0M – $1.5M: 65 (78%)
$1.5M – $2.0M: 63 (665)
$2.0M – $3.0M: 23 (32%)
Over $3.0M: 15 (22%)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Some people have asked about the biggest winner because I sold the same model up the street for $1,900,000 in March. It had listed for $1,800,000. and there were three comps around $1.8 million then. My buyers offered the customary $100,000 over list and a 17-day escrow to win it, and they did.
It was the same model, with similar upgrades (mostly original), and similar peak ocean view, though the biggest winner had a larger culdesac lot which allowed for a pool and good-sized grass area, and the sellers had smartly added new wide-plank hardwood floors and did staging.
I know an agent who had buyers in the running at $2,200,000 but bowed out at that point. But he thought there were three other buyers going higher.
It sold for $2,450,000, which was36% above the comps from the beginning of the year!
The frustration among buyers on how listing agents handle their multiple offers is continuing to mount. Because there isn’t any guidance from the industry, listing agents just make it up as they go – and in most cases, they just pick their favorite without any thought of other solutions available.
Here are more ways I’ve seen sellers leave money on the table lately:
Listing agents selling homes during their Coming Soon period, denying any other buyers.
Counter buyers for their highest-and-best, but then accept one within minutes before other responses are received.
Only countering some of the offers.
Off-market deals, which are great for the winning buyer, but bad for seller and other buyers.
The worst part is that sellers don’t have a clue – they are just happy to sell for more than expected.
When I’ve suggested my method to agents, they have trouble grasping the concept – that’s how deep the current snatch-and-grab mentality is ingrained in agents to make a quick deal.
How do the NSDCC active listings today compare with last year?
NSDCC Detached-Home Active Listings, First Week of May
Price Range
# Actives, May 2020
Avg LP/sf
# Actives, May 2021
Avg LP/sf
$0-$1.0M
59
$477/sf
7
$505/sf
$1.0M – $1.5M
122
$524/sf
34
$779/sf
$1.5M – $2.0M
151
$665/sf
38
$749/sf
$2.0M – $3.0M
165
$756/sf
49
$956/sf
$3.0M+
235
$1,194/sf
205
$1,414/sf
Even though pricing has skyrocketed, buyers are grabbing anything they can get their hands on, at any price. Sales last month are 27% above where they were in April, 2019 (336 vs 265).
Peak efficiency in this insane market deserves more examination.
Specifically, the listings that have so many showings that some buyers get shut out, but then only a small minority of them submit an actual offer vs. quality presentation and pricing that gets a better mix:
Every buyer and buyer-agent should get a chance to compete.
A cash buyer acted quickly to snag this 1978-built one-story at the top of the hill in Old La Costa. The sales price of $1,201,500 (list was $1,048,000) and a two-week escrow was good enough for the seller, who I think was the original owner:
Are you thinking of going somewhere that doesn’t have bidding wars? You need to go a ways!
Just in case you haven’t heard, snagging a well-priced home in today’s real estate market can feel a bit like winning Powerball. It’s all about beating sky-high odds. Scant inventory, worsened by a pandemic-crush to buy new homes, has led to prices reaching new records and competition bidding them up even higher. All-cash bids and multiple offers way above asking are pricing many would-be homeowners right out of the market, or leaving them feeling hopeless.
“Demand has actually been growing stronger than supply going all the way back to 2014,” says Doug Duncan, chief economist at Fannie Mae. “It’s just that in 2020, incredibly low interest rates augmented that demand.”
In other words, we’ve found ourselves in an extreme seller’s market.
But not everywhere. The Realtor.com® data team found the places where buyers could actually have the advantage. Buyers in these spots—which tend to be smaller cities and college towns—have more properties available to choose from, and prices haven’t risen too much (if at all) compared with where they were at the start of the COVID-19 pandemic. This doesn’t mean home prices haven’t risen and the competition isn’t fierce in these cities—they’re just better than the rest of the country.
Looking ahead, buyers may get some more relief in the coming months as sellers become more comfortable listing their homes. Rising mortgage rates and the increase in inventory could slow down price gains. And while prices likely won’t drop, or at least by much, it could lead to a bit less competition.
But where can buyers get at least a little relief right now? To come up with our list of places, we looked at cities where home prices had not risen more than 10% in the past year (compared with 16% nationally) and calculated the number of homes for sale per 1,000 households—the more the better. All of the cities had at least 50,000 residents, and we limited the list to one city per state to achieve geographic diversity.
It’s getting to the point where it is so competitive that buyers will be tempted to make offers without contingencies to improve their chances of winning. But let’s face it, they would do so reluctantly.
Sellers should be very cautious about taking an offer with no contingencies.
You will be making a deal that would have maximum buyer’s remorse. If the buyers change their mind, and they insist on fighting for the deposit, it will tie up the property so you can’t sell it to anyone else.
Are you going to chase them around for 6-12 months to try to get their deposit and risk missing the peak – and screw up your plans for moving too?
Part of the challenge of the low-inventory era is to find the hidden gems. Travel into south Vista just two miles from Carlsbad and look how much further your money goes!
Here’s our new listing that overlooks the private Shadowridge Golf Club for only $699,000!
1990 Spyglass Circle, Vista
3 br/2.5 ba, 1,835sf
YB: 1988
HOA fee: $165/mo
The former model home ideally located above the 8th green has been beautifully remodeled and is better than new! Hardwood floors, new carpet and paint, newer kitchen and tuned-up baths! Located in a highly-desirable community with low HOA and no Mello-Roos, plus community pool & spa. Check it out!
Eye opening comment on new home price trends from @RAHomes 1Q21 call: “In the first quarter, we increased prices by about 10% from the START of the first quarter to the END of the first quarter. For the fourth quarter, it was about 5%.” So...15% price pop in last 6 months.
Willie Mays has always been my favorite player, and I've seen a few. Happy 90th Birthday Willie! https://twitter.com/MLBNetwork/status/1390317724191055874
Who's moving out of California?
Poor and middle class people with less education.
Who's moving into California? Wealthy people with more education (via @PPICNotes) https://www.ppic.org/blog/whos-leaving-california-and-whos-moving-in/?utm_source=rss&utm_medium=rss&utm_campaign=whos-leaving-california-and-whos-moving-in?utm_source=ppic&utm_medium=email&utm_campaign=blog_subscriber
"Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor. more "
5.0/5.0
by gary t moyer
5315455
"When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since. more "
5.0/5.0
by drp2drp
5315455
"Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. more "
5.0/5.0
by AmberleePiercy
5315455
"Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. more "
5.0/5.0
by WAH08
5315455
"I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in more "
5.0/5.0
by bethamunce
4911411
"Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community... more "
5.0/5.0
by Ann Romanello
305973
"Jim educated us, helped us find the perfect house, and then negotiated us a great deal. I would hate to be sitting across the negotiating table from ... more "
5.0/5.0
by user6611938
332633
"Jim is thorough and will be brutally honest about the homes he shows you. He provides great service and follows through until the very end and even ... more "
5.0/5.0
by Melanie
351390
"I highly recommend Jim as a buyer’s agent. Working with Jim, we closed this week on a San Diego condo. Jim prepared a list of comparable sales to ... more "
