Shake It Up

Chuck Ponzi on January 13, 2011 at 3:47 pm

I’m sure the dinosaurs thought they would never go extinct too.

Matt on January 13, 2011 at 4:24 pm

Hi Jim,

What incentives do listing agents have to sandbag their own listings by not including good photos? I see it all the time, but I thought it was just laziness or incompetence.

Art Eclectic on January 13, 2011 at 4:30 pm

I like all the suggestions. What amazes me is the continued reluctance of the RE industry to modernization. Just like the record companies thought, they seem to think if they drag their feet long enough this whole internet/video/real time information thingy will go away.

And we all know how that turned out for the record companies. Right now, control of distribution is the only way industries are holding on outdated business models. The titans of RE can keep trying to hang on to their distribution of information lock, but they will lose in the long run because the demand on the customer end (aka buyers) will force solutions in the marketplace and the existing dinosaurs aren’t going to like the solutions. Just like the record companies didn’t like their solutions either.

If you don’t get out in front of technology, technology will run your ass over.

Art Eclectic on January 13, 2011 at 4:32 pm

Matt, the incentive might be that they have a buyer already on the line so they can collect on both sides of the deal. They are just putting up pictures because they have to.

You either want to sell something or you don’t. If you want to sell it, you get out there are show it off in the best light possible to get it moving.

Could be incompetence as well, there seems to be a lot of that going around.

consultant on January 13, 2011 at 4:58 pm

Jim,

You are so far ahead of your fellow realtors and the real estate business in general. If today, all real estate agents had to have your qualifications, 99% of today’s agents would be gone.

Years ago, the first house my wife and I bought was sold to us by an agent like Jim. His name was Randy. We thought Randy was the norm (we were young and naive). Our careers took off and after several moves around the country, we quickly found out that Jim and Randy are endangered species in the real estate business.

As I’ve said before, a nightmare real estate agent in Northern California is what brought my lawyer and I out there to rescue my daughter from her clutches.

Daniel on January 13, 2011 at 5:21 pm

And what is about trying to steer a client to properties not meeting their criteria? You say you want a large lot and they take you to a development where the houses are just stacked up on one another. Waste of my time and thiers.

positive on January 13, 2011 at 5:38 pm

Anyone heard WellsFargo start to implement new Fannie Mae LTV Requirement: now best rate can be obtained only with 25% down payment. Those with 20% will incur 0.25pt cost or 0.125% hike in rate?

Jim the Realtor on January 13, 2011 at 6:34 pm

I’m sure the dinosaurs thought they would never go extinct too.

I can live with realtors going extinct – I’d like to expedite!

I want to be the only one left.

I am going to start my own real estate auction TV show, and live-stream it on the internet.

The houses will be open to the public for viewing the two weekends before the show. The sellers will pay for a house inspection, and copies will be available to all, and if you want to conduct your own inspection, feel free – they’ll be open 9-5.

We’ll have one of my video tours of the houses playing during the two weeks for the out-of-towners. I have already sold a couple of homes to buyers sight-unseen, thanks to the videos.

To bid, a $5,000 deposit is required that is non-refundable if you are the winning bidder.

During the live intro to the property, I’ll cover the important facts about the house and area, and take questions from the crowd.

No reserve prices. If you like the house, you can buy it that night if you’re the highest bidder.

Shows will be once a week, and work up to nightly, and include houses statewide eventually. If it catches on, it could go nationwide.

What are the keys?

1. The auctioneer (me) is a credible source, can talk intelligently about the house, the market, field questions effectively, and generally make buyers feel comfortable with the process. Hopefully I can develop a personality before it starts.

2. Full transparency – what you see is what you get. Properties sold as-is, have your bid reflect the current value to you. The competing bids will be on screen, so you know what you’re up against.

3. The no-reserve pricing is the key that’ll bring the buyers. Occasionally homes will be given away, other times they’ll sell for retail or retail-plus. It’ll have a game-show feel to it. I will watch reruns of the Gong Show for tips.

4. Being able to weed out shills. If a shill wins and backs out, they lose the deposit and the property is black-listed from the show. Shills can run up the price in any selling format, so the risk will always be present. Just set the price you’re willing to pay in your mind and don’t go above it.

5. No buyer premium tacked on to the winning bid. Seller and buyers pay their customary closing costs for title, escrow and lender fees, and seller pays my fee.

6. If the buyer wants representation, then they can pay their agent a fee that they negotiate in advance. It would force agents to provide valuable assistance, or go home.

If I can get some banks and servicers on board, look out.

Jim the Realtor on January 13, 2011 at 6:37 pm

Did you know that REDC paid $1.7 million for auction.com?

They are making a run, but the reserve prices are a turn off, especially if they don’t sell many properties in the next 1-2 months. I am watching them very closely though, their SD auction at the end of the month will be very telling.

Aztec on January 13, 2011 at 7:21 pm

Gotta have reserve prices or sellers will fear that bidders will collude and keep prices artificially low. Or if not collusion then force. Seen it in westerns a million times! I’d never allow my place to sell that way and I’m a free markets guy!

pemeliza on January 13, 2011 at 7:22 pm

JTR, are you doing any business in Fallbrook?

http://www.sdlookup.com/MLS-100059594-3969_Keri_Way_Fallbrook_CA_92028

This house in Brook Hills seemed like a give away. There is some nice stuff up in Fallbrook and Bonsall going cheap these days.

Jim the Realtor on January 13, 2011 at 8:32 pm

Seen it in westerns a million times!

OK, OK, I’ll take all the risk and guarantee you X price.

I get everything above X, right?

Lou on January 14, 2011 at 9:00 am

JTR, good to see you consider shills but IMO $5K is not much of a deterrent. I would consider %10. And how would a shill back out?

Chuck Ponzi on January 14, 2011 at 9:11 am

Uh,sorry … actually I was equating Dinosaurs with local regional MLS boards and realtor’s organizations, not the real estate agent. There is always place for an agent relationship (the price, I think will change, but it should stay intact for such an expensive, complex product)

I know a number of bloggers who constantly predict doom for realtors, but they’re conflating their disdain of paying 6% with the actions of an agent. There is value there, just not 6% of each and every transaction (especially in the place of tract housing which is common in Cali)

Chuck

chrisanthemama on January 14, 2011 at 9:22 am

@ positive: I’m a loan officer for a community bank in Portland, and the loan-level pricing adjustments (“bumps” to the fees for FICOs/LTV) have been around for the last several years. 2011 did indeed bring a .25 pt. bump to the fees, even with the highest FICOs, for a 75.01-80% LTV. FNMA is charging it, so that’s filtering down to the lenders offering FNMA loans.

Jim the Realtor on January 14, 2011 at 10:39 am

Lou,

I agree, and maybe $10,000 to $25,000 depending on the property?

Shill or otherwise, there will be times that the winning bidder doesn’t close and they should pay damages, because the second time through the auction the fever won’t be nearly as hot.

Nobody has commented on me getting the extra dough above the guaranteed price.

In effect it would be a net listing, which is legit and can be done today.

I promise you X net price and I pay closing costs and keep whatever is leftover for my commission. But I’ve never found anyone willing to try it.

Aztec on January 14, 2011 at 10:53 am

JtR… Sure, I’d be open to that. After all, if I like that price, shouldn’t I be happy with that? Of course, if you are lowballing then boo. And you’d be under a lot of scrutiny with likely accusations of “stealing” homes from the unknowing. I could see a split scheme being optimal. Something like a given minimum + 50% of the upside to the owner. You should still love that. The risks of messing with the fixed min are the same, just lessened because of the upside. I tried to get my agent in NorCal to base her commish on something like this but she laughed. Coward!

Aztec on January 14, 2011 at 10:56 am

There are other risks as well if non-auction. You could tank a listing and scoop it for the min. Then sell later. Or you could use super-risky negotiating methods that pay off huge once in awhile but blow up and hurt the seller most of the time. All that is fixed if you have a high enough min price to pay so it hurts if you eff it up.

Matt on January 14, 2011 at 11:06 am

Seller should be able to buy insurance that pays the difference between 90% of the estimated value and the sales price. That way the seller is protected from downside with the opportunity for upside while the insurance company can average losses with wins.

Buyers are happy without reserves and sellers are limiting their risk.

Jim the Realtor on January 14, 2011 at 11:12 am

Yes, there has to be a way to make sellers happy – maybe a few options with varying risks/rewards for the sellers to choose from?

so it hurts if you eff it up

This is why your agent would laugh at the thought – they are so used to screwing up that they have no confidence in their own abilities.

But they don’t fully recognize that it’s their screw up, they think it just the “unpredictable” market doing it to them.

I don’t have that concern myself.

AA on January 14, 2011 at 11:33 am

SD’s MLS system and rules are a joke. The current TEMPO (5) is the worst. The old version 3 was at least enjoyable. LA and OC have far superior systems and UIs that are at least useable. Hopefully with CARETS this becomes less of an issue. And the requirement that one has to use IE is pure laziness and a complete lack of foresight from the programers to the designers. At least there are virtual machine’s for Mac people. Overall, there is no excuse for such incompetence.

For me and my clients, we use Redfin about 95% of the time. Their site and phone apps are great. If there was a way to get to the public record, private remarks, and/or past listings, we could do away with all MLS’s. Their hold are strong but slowly it will change…

Jim keep up the good work. Among the 1% of good agents out there, you shine bright.

andrewa on January 15, 2011 at 2:56 pm

RE auctions are the norm in Australia and in South Africa there are no buyers agents, just sellers agents (caveat emptor or vootstoots in roman diutch law). Though there is almost always an advertised floor or reserve price in Australia.
Perhaps your role in the US RE business is that of advisor (buyers agent) who because he sees hundreds of houses a year knows all the pitfalls and traps that can spring up as well as all the types of structurall and market gotchas that can fool someone who maybe buys only 4 houses in a lifetime. A bit like why when I buy a used car there is ALWAYS 100 000 miles left in it but other people buy lemons (I see a LOT of cars and fix my own). I own 6 residences, fix them myself and know what to look for, from reading your blog you seem to be the type of chap who knows what to look for in a house so your advice to the smarter prospective buyer should be valuable to a client if he is not a builder or RE expert.

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Jim Klinge

Klinge Realty Group

Broker-Associate, Compass

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