Here’s one of the best listings I’ve ever had – a luxury one-story coastal estate in the gated community of Bella Lago in Aviara. Open this weekend 12-3pm:
Luxury one-story coastal estate and former model home in the prestigious gated Aviara community of Bella Lago, next to the Aviara Golf Club.. This beautiful home has features including: designer finishes, upgraded hardwood flooring, built-in cabinetry throughout, surround sound, electronic shades, water filtration system, three fireplaces, second story bonus room and backyard oasis with an outdoor fireplace, pool, spa, waterfall and putting green. Kitchen loaded with Tibetan Black Quartz from the Dalai Lama, himself. He told me “and when you die, on your deathbed, you will receive total consciousness.” So you’ll have that goin’ for you, which is nice.
Have you noticed that with any new gimmick, there’s always a catch? In this case, the program is centered around directing the buyer to the in-house lender – who also happens to own auction.com. With multiple profit centers, they hope to dominate the landscape.
It’s widely known in the industry that Trulia and Zillow don’t have comprehensive databases of homes, in part because they aren’t members of multiple listing services, which supply real-time data. The companies are currently working on resolving that, but in terms of coverage, Raman believes that is one area in which Solutionstar excels.
He said they will be getting the listings through direct and indirect relationships it has with the MLS’s. “We believe when we launch next month, we will have 80 percent of listings for all sales across the country, and by that time, we’ll have more active listings than any other site,” he said. “It will be closer to 100 percent by summer.”
Raman said for Solutionstar, the home-buying platform will make money by streamlining a process that’s full of inefficiencies and passing some of the savings along to consumers. “What we are trying to do is put them all together, so there doesn’t have to be any wastage in the process, he said. “There’s a cost savings, so we’ll get there [to profitability].”
Still, even with incentives like warranties and discounts, customers will have to become comfortable making a big decision online. Rabois’ OpenDoor is also counting on a shift in consumer thinking, hoping that a discount on closing costs will help persuade people to sell their house over the Internet.
For either company, it could take a while for the concept to gain traction.
“With home-buying the biggest financial transaction of people’s lives, that type of functionality to get widespread adoption, would take some time,” said Chris Merwin, an analyst with Barclays, who tracks Zillow’s stock. “There would have to be lots of transparency to be comfortable with what they are getting.”
Still, Merwin recognizes the power of closing the home-buying transaction online. “If they become the de facto place where consumers ultimately go to purchase the home, it’s going to be valuable to online real estate portals in the future,” he said. “This is the final frontier of e-commerce.”
Mortgage rates remain under significant pressure, having now moved higher almost every day in February. So far, this is the worst month for rates since Nov 2013. While that sounds pretty bad, in this case, the weakness has more to do with a reaction to previous strength. The trend toward lower rates in 2014 had been very slow and steady. January saw an acceleration of that trend and now February is simply bringing us back in line. Even the strongest long-term trends undergo these sorts of corrections.
On such occasions, the question will always be: is this just a correction in a longer term trend or are rates done heading lower? Based on where we are today, it would be far too soon to say that the long-term trend toward lower rates is defeated. Fortunately, the strategy is the same either way.
At times like these, the lock/float outlook is more defensive. For those of you who are intensely interested in catching the falling knife (i.e. deciding not to lock despite recent moves higher in rates), there’s still some room for that provided the risks are understood and that a ‘stop-loss’ level is understood. One of those risks is that things could still get worse before they get better (i.e. there’s more room for rates to move higher without violating the longer-term trend).
3.75% is still the most prevalent conforming 30yr fixed quote for top tier scenarios, but 3.875% is now not far behind. A week and a half ago, it was 3.5% and 3.625%.
It’s happening everywhere you go, and it’s in every conversation with agents – the market is buzzing with “lots of activity”.
What does that mean? Does it mean anything?
Here’s what it means:
Buyers are giddy about getting a 3.75% jumbo rate.
Agents are giddy about driving around.
Sellers are giddy about selling for more than the last guy.
Sellers and agents who have lots of showings think their house is red hot, and they demand a premium – or at least they aren’t coming off their price much.
But they should be more realistic about those who aren’t offering.
If you have 10-30 showings and only 1-3 offers, it means the vast majority of buyers thought your home was over-priced.
Just because there are a lot of lookers doesn’t mean the eventual buyer will pay your price either.
Here are stats on the NSDCC closings so far this year:
Houses Closed Under $1,000,000
SP:LP = 96.3%
Average days on market: 51
Houses Closed Over $1,000,000
SP:LP = 92.5%
Average days on market: 86
Buyers want to pay a reasonable price, and those averages show that they are being patient. Of the 192 closed sales so far in 2015, only NINE PAID OVER LIST!
All participants need to be smart about how the market works now. You get a flood of interest in the first two weeks, and then the activity drops off to nearly zero – and those occasional showings are being used to sell the house down the street. Be smart, read the market signals, and keep egos in check.
A brief video tour of some new model homes in southeastern Carlsbad. The beauty of these smaller tracts is that they are only building 49 homes, which will probably take them two years to construct. At that rate, they only have to sell two houses per month.
One week into the selling season….how’s it going? With our spectacular weather and both Tiger and Phil out of the golf tournament, the streets were flooded with home lookers this weekend.
A few experiences so far:
1. An agent selling his own house gets seven offers within the first three days on the market. He counters all with a set price that is $8,000 below his list price, and gives the full three days to respond. Less than 24 hours later, he emails the losers that he has accepted an offer. No curiosity what the others might bring?
2. A listing agent – who has no sales on the MLS – lists a house for 5% over the last model-match sale. She hopes that buyers will ignore that the comparable sale was fully upgraded and had no road noise when hers doesn’t.
We offer just under the comp’s sold price, but she won’t counter – you see, she’s had ‘lots of activity’.
3. Another agent on her first sale says she will respond to our offer last night after the weekend open house. At 9:32pm last night, she responds to my inquiry by saying that she too had lots of activity, and multiple offers – and ‘we will not be accepting your offer’.
Don’t you at least counter everyone to see what they might have left in the tank? Our offer was 5.9% under list, and at comp value.
4. Remember a week ago when we sent in our best offer and the listing agent countered it $5,000 higher? The agent, who sells a solid two homes per year, called back yesterday, wondering if I might kick in the $5,000, or if we could split it.
It’s too late now – your bone-headed grab for less-than-1%-more-on-price repulsed the buyers, and they forgot all about you by now. She also divulged that the multiple-offer bidding war consisted of an offer contingent on selling another property, and an offer lower than ours. Meanwhile, this week her sellers will be entering Month Six of sitting on their vacant house, and approximately $2,500 per month payment.
5. With no serious nibbles on my Del Mar Heights listing – and not many desirable replacements to consider – my seller withdrew the listing this week after 35 days. Another example of why the inventory is low – the best alternative for many is to stay put, rather than pay outrageous rents, take out a new 30-year loan, or leave town.
Sellers shouldn’t get attached to any certain price – they aren’t the ones paying it. Instead, select an attractive list price, and judge the market’s reaction – and adjust accordingly.
In Carlsbad, Calif., Jeff Dowler, an agent with Solutions Real Estate, did a similar analysis on sales in two ZIP Codes. He found that Zestimates came in below the selling price 70% of the time, with disparities ranging as high as $70,000. In 25% of the sales, Zestimates were higher than the contract price. In 95% of the cases, he said, “Zestimates were wrong. That does not inspire a lot of confidence, at least not for me.” In a second ZIP Code, Dowler found that 100% of Zestimates were inaccurate and that disparities were as large as $190,000.
Spence has been seen everywhere promoting his new book – we might as well give him some coverage here.
His smugness gets in the way, and it seems that he’s really only looking to prove that he is king of the hill, not give tips that are actionable.
For example, his comparing male to female agents provides some sexy shock value, but he doesn’t go into what it means, or apply any common sense. If male agents are better at pricing, shouldn’t female agents be better at negotiating because their price is ‘wronger’?
