Offer #6

We received the five offers and completed the highest-and-best round with all.

On the way over to the sellers’ house to discuss the results with them in person, Offer #6 arrives by email – and it’s all-cash with an escalation clause, which makes it a real contender. We have a horse race now!

Most agents would jump on the offer with the escalation clause, and call it a day.

But I had already discussed with agent of Offer #1 that escalation clauses aren’t fair to the losers  – because every buyer at this price point would gladly pay an extra $5,000 to $10,000 extra to win.

With the sellers’ permission, I tempted #1 to raise their offer again – for the third time – after telling them about the cash offer.  After a brief deliberation, they declined.

The cash offer was completing a 1031 exchange, and their relinquished property had already closed escrow – which means that they were in their 45-day identification period.  Buyers in that position are feeling the pressure, and they have to buy something. If they don’t identify up to three properties within the 45 days that they might purchase over the next four months (they have six months from their escrow close date), then they will be forced pay capital-gains tax on that previous rental property.

Time is of the essence!

It is crucial for me to ‘read the room’.  I’ve exhausted the other buyers #1-5, and the sellers are ready to sell their house. How much farther can I push it with the cash offer?

Rather than go back and forth with my auction format, we decided to just counter $50,000 higher, at $2,150,000, to the cash offer, instead of using the escalation clause.  I called it in to their agent and told him that if that was acceptable, we’d send him a signed counter right away.

But then 90 minutes went by with no response.

We have an acceptable offer on the table with owner-occupants (those are more likely to close) and a good agent.  The sellers had baked cookies and swapped stories with us for over an hour as we analyzed the different angles, and it was time to make the deal. During that time, the sellers got more comfortable with foregoing the extra $50,000 and opt for the sale that’s more likely to close.

I told the agent of the cash-offer that we were taking the other deal.

It happens regularly that sales are won and lost in hours, if not minutes. No lollygagging!

Get Good Help!

Me telling the story on video:

Squatter Thwarted

Haven’t seen one of these in a while. From nbc7:

“It’s alright,” Jeffrey Goddard said to a group of neighbors on the street as officers escorted him to a patrol car in handcuffs. “I’ll be back.”

Days earlier, neighbors said Goddard told them he deserves to live in the Clairemont house where he’d spent nearly every night for more than a week.

Thing is, he didn’t buy the house and he isn’t renting it either.

Goddard told officers he saw it on the news last month, after carbon monoxide poisoning sent the 84-year-old homeowner to the hospital. The homeowner’s adult daughter was found inside the home dead.

Soon after, neighbors tell NBC 7 they watched Goddard change the locks, replace the door and even receive Amazon packages.


Hire Jim To Sell Your House

We spent all afternoon with the sellers!

Our multiple-offer process is complete.

List price: $1,795,000

Offers, in order of receipt:

Offer #1: $1,850,000

Offer #2: $1,915,000

Offer #3: $1,945,000

Offer #4: $1,929,000

Offer #5: $1,950,000

Every other agent would have recommended that their seller sign the $1,950,000, which is a whopping $155,000 over list price. Who wouldn’t be happy with that?

My thought? We have five strong offers over list. At least one buyer will probably go higher.

Because I know how to properly handle a bidding war, we gave EVERY buyer a chance to submit their highest-and-best offer (unlike the Redfin agent who told me she only counters the serious offers after I submitted an offer that was $250,000 over list).

Guess who won.

That’s right, the $1,850,000 buyer topped everyone with their better offer:

You should list your house with me!


Inventory Watch

The buyers who want to spend $1,700,000 to $2,000,000 in Carlsbad today only have four choices:

Alba has an odd backyard, Merganser backs to Batiquitos Dr. and is next to the gate, and Packard is a single-story that should be going higher in price.

For those who need a house, it is perilous.

There will be others, but will the supply EVER get to healthy levels again? Buyers are worried that it won’t.


Open Houses Are Complete

We have three more showings today and then almost 200 people will have seen the house since Friday! Next we will engage in open bidding by phone with all interested parties and let the MARKET decide the winner, not the listing agent (which is how everyone else does it).

Here’s a buyer-agent strategy that can be really effective, especially with weaker listing agents:

Heavy Demand, 2022

To demonstrate the imbalance between the supply and demand, look at the view counts of our new listing on the two search portals in the first 33 hours on the open market:

Views: 3,051

Saves/Favorites: 171

I received three phone calls from agents letting me know that they have interested buyers and will be attending the open house today – part of the rapport-building process that some have included in their repertoire of buyer-positioning tactics. One agent implored me to do a James Bond video, and even though Mitch has his Aston-Martin available, I had trouble getting into my black suit!

There were THREE other agents who requested an earlier showing time, so I’m getting started at 11:30am today to accommodate. On a Friday morning!

How pent-up is the demand coming into 2022?

Sacramento isn’t the same as us, but consider:

If there are multiple offers, what else can buyers do to compete, besides price?

  1. Butter up the listing agent. It doesn’t work with me, but most listing agents want to select somebody who they like to be the winner. They justify it with it being a ‘good match for the neighborhood’ or some other garbage, but it is pure discrimination – though completely unconscious.
  2. Bring the kids, for the same reason above. If you don’t have kids, grab an infant on your way over.
  3. Figure out if there is any predetermined process for selecting the winner. When I ask a listing agent this question, at least 90% of the time the answer is “I don’t know, I let the seller decide”.
  4. Big down payments, and big deposits. Though the chance of the buyers cancelling is the same, the naïve listing agents think those mean something.
  5. Ask for seller disclosures, and if there is anything unusual, then waive that contingency.
  6. Spend a lot of time at the house. It makes you look like you’re serious.
  7. Be one of the first visitors, and the first offer. It impresses most listing agents, and mentally they have designated you as the probable winner.
  8. At an open house last year, an agent brought me a sandwich. He still lost, but I’ll never forget it!

I heard an agent say, “If my buyers like the house, I tell them to offer $100,000 over list. If they love it, I tell them to offer $200,000 over list”.  A great example of how dumbed down the business is!

Besides, buyers are doing better than that:


Our New Listing in SW Carlsbad

1065 Goldeneye View, Carlsbad

4 br/3 ba, 2,706sf

YB: 1998

LP = $1,795,000

This 4-bedroom (plus loft/office), 3-bath home has been meticulously maintained and upgraded with stylish light-colored wide plank hardwood floors, plantation shutters, crown molding, newer central A/C and high-grade artificial turf, front and back. Downstairs bedroom and full bath, newer kitchen with walk-in pantry, 3-car garage with workbench and loads of storage! The larger backyard is a real treat, and the mature landscaping provides unusual privacy – you’ll love it! The only house for sale in the coveted Seabright community, which is walking distance to Poinsettia Park and the highly-acclaimed Pacific Rim Elementary School. The house three doors down just closed for $2,125,000 on Jan. 4th!

Open house 12-3pm on this Friday and Saturday!


Above are the views & saves between 10pm and 6am!

Here is the Zillow 12-hour count:

Rising Mortgage Rates

Mortgage rates have been rising steadily:

2022 has gotten off to a bad start for the bond market and consequently, mortgage rates.  The pace has been on the aggressive side with the average lender seeing an increase of more than a quarter of a point in a week and 3/8ths of a point in 2 weeks.  The most prevalent 30yr fixed quotes are now in the 3.625% range, up from 3.25% at the end of December.

How many guessers had rates in the mid-3s in the first half of January?

Lawrence Yun, chief economist for the National Association of Realtors, projects that mortgage rates will increase to 3.7 percent in 2022, pushed up by persistently higher inflation.

Danielle Hale, chief economist for Realtor.com, expects the 30-year fixed mortgage rate to average 3.3 percent for most of the year and be at 3.6 percent by the end of the year.

Daryl Fairweather, economist for Redfin, expects rates to rise slowly from around 3% to around 3.6% by the end of 2022, thanks to the pandemic subsiding and lingering inflation. That would mean about $100 more per month in mortgage payments for the median home.

MBA economists predict that the 30-year fixed-rate mortgage will rise to 4 percent by the end of 2022.

Bankrate.com predicts that the 30-year fixed mortgage rate will peak at 3.75 percent during the year and fall back to 3.5 percent by the end of the year. “Long-term rates will move higher in the first half of the year, but by the close of 2022, concerns about slowing economic growth will be unwinding that and bringing them back down,” he said. “This will be higher than where mortgage rates started the year but ending at levels previously unseen before the pandemic began in 2020.

Lending Tree predicts that the 30-year fixed mortgage rate will rise to near 4 percent by the end of the year.

If their predictions are right, then rates should flatline for the rest of the year and be a non-issue.


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