Instead of pushing a Code of Ethics that is 109 years old and is unenforceable, the National Association of Realtors should do the same thing and require a similar bill of rights.
Besides, once you ban blind bidding, then open auctions would evolve naturally!
https://liberal.ca/housing/introduce-a-home-buyers-bill-of-rights/
Hat tip to Bill W.
I had a good conversation this week with the people at Doorsey, and they are well on their way to providing a sharp and effective online home auction platform that could change how homes are sold. If/when Zillow buys them and provides online auctions nationwide, agents will be wondering what happened.
This article is from November:
https://www.spokesman.com/stories/2021/nov/05/spokane-based-online-real-estate-platform-doorsey-/
Excerpts:
Doorsey, an online real estate platform founded by a group of Spokane entrepreneurs, launched this week and secured $4.1 million in a seed funding round.
Founded by Jordan Allen, Nick McLain and Matt Melville, Doorsey is an online bidding platform they say takes the guesswork out of buying a home by providing real estate agents with real-time home prices and upfront sales terms and disclosures.
“Today’s home-buying offer process is rife with frustrations for all parties,” Allen said in a statement. “Buyers and their agents want to know whether their offer can win. Sellers and their agents want to know they’re getting the best offers. And agents want to close more deals in less time.
“Doorsey solves this by allowing sellers to define upfront what it takes to win, so that buyers can compete on a level playing field and sellers can find the right buyers.”
The co-founders sought input from the local real estate community and subsequently evolved the online platform into Doorsey, which provides buyers with such things as access to home-inspection reports, sale contingencies, photos, a 3D virtual tour via Matterport and a community forum for interacting with sellers and neighbors.
Buyers can also schedule showings and view desired closing dates on the platform.
Doorsey’s listings are posted on the Spokane Multiple Listing Service and distributed through national real estate websites, including Zillow, Trulia, Redfin and Realtor.com.
Doorsey has obtained $4.1 million in seed funding – an early stage of capital investment in startups – allowing it to build-out its product, hire more employees and expand to key markets nationwide within two years, according to the company.
The funding round was led by 166 2nd Financial Services with participation from Agya Ventures, Liquid 2 Ventures and SRM Development, among other investors.
Former NFL quarterback Joe Montana is a managing partner of San Francisco-based Liquid 2 Ventures, while 166 2nd Financial Services is led by former WeWork CEO and co-founder Adam Neumann.
Rob Hahn and I had a conversation about the state of buyer agency – which might only interest realtors, if anybody – but we also got into the idea of home auctions too:
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 won it with their highest-and-best offer of $2,100,000:
You should list your house with me!
Word on the street is that Lennar may attempt to sell their new San Marcos homes by utilizing the auction format. They don’t have anything on their website yet, and it may be a bit clumsy to roll out so we may not hear much about it until they complete a few.
They have 700+ people on their interest list, and they have grouped them into sets of 25. Why discriminate? Let all 700+ people have a crack at buying every house!
Hopefully the selling of homes by auctions will become more popular in 2022!
On February 27, 2019, our seller purchased 1463 Paseo de las Flores for $1,950,000. At the time, it was one of the top four highest-priced sales EVER in Encinitas Ranch, with two of the higher sales being $1,970,000 and $1,975,000 (plus a $2,100,000 back in 2005).
I have always kept an eye on a house further down the fairway because its first owner was Jill Kammerude, a close friend and fellow realtor. We had shared her Padres season tickets from 1998 to 2009 when she unfortunately passed away.
Her 4,612sf house on the golf course had sold again on April 8th of this year for $2,405,000:
https://www.compass.com/listing/694-cypress-hills-drive-encinitas-ca-92024/729228750807813929/
I had been to this house a few times, and though it had more of the older look, it was comparable to the home we sold on Paseo de las Flores. I sent the link to my client, and congratulated him on picking up a cool $500,000 in appreciation in just two years.
I asked if he would consider moving, to which he said, ‘Maybe’.
We began talking regularly about where to move, taxes, repairs, etc., and in mid-September he committed to selling. We began our 6-week tune-up, and on October 21st, we hit the open market listed for $3,395,000, because there had been a flurry of $3,000,000+ sales nearby.
I told the story previously……that I had received two solid cash offers during the open house, and was telling attendees that I was going to sell it that day. Both buyers were anxious, so once I left the open house, it was time to determine the winner.
I do take pride in utilizing sophisticated high-tech tools, and this day was no exception.
I pulled out my Super-Duper Bidding-War Bonanza sheet, and went to work:
I went back and forth between the agents on the phone, telling them the price to beat – and they filed the bids above. Buyer #1 delivered the knockout blow with their $3,760,000, and we had a winner – and Buyer #2 went right over to Lynwood and bought it instead.
How I handled the communication was critical – it takes more than a fancy notepad.
In particular, because we did the bidding verbally on the phone, I had to get the buyers to commit to their price in writing before they cooled off – which I did, and it closed today for $3,760,000.
Keeping the buyers happy for a month, helping the seller move, and delivering the house in excellent condition was all part of the process too. Thank you Donna!
It would have been easy to discard the first cash offer of $3,395,000 because the buyers saw the house via FaceTime, and instead taken the $3,500,000 cash offer from the buyer who saw it in person. Almost all other agents would have done so. But with me at the helm, my seller made an extra $260,000.
It sold for $700,000 more than the model-match that sold on October 25th, one block over.
It sold for $992,100 more than the zestimate!
It sold for $1,360,000 more than its approximate value in April, which is a 56% pop in six months!
It sold for $1,810,000 more than the seller paid, which is a 93% return in 32 months!
Get Good Help – Hire Jim the Realtor!
We are wrapping up our sale in Encinitas Ranch, so I thought it would be a good time to comment more on the unconventional and remarkably transparent open-bidding process I employed to determine the winner.
Here’s where I described how it went down:
https://bubbleinfocom.wpenginepowered.com/2021/10/25/bidding-war-part-3-auction/
Because nobody else does open bidding, some may question it’s merits. Here is why it is so much better than the current blind-bidding used throughout the nation:
Compare my method to the features of blind-bidding:
The messy non-transparency of blind-bidding makes you want to go take a shower.
Unlike the black hole that is usually presented by listing agents, I explain rules of engagement in advance to the agents involved – specifically, that they will always have a fair chance to win, which is welcomed!
Will I change the real estate world with my method?
Maybe – if enough sellers list their home with me. I’m available – contact me today and we’ll get started!
The first time I used open bidding to sell a home was in 2012:
BI picked it up, and here is their blow-by-blow account:
https://www.businessinsider.com/southern-california-home-auction-2012-11
Some may wonder is there is a separate auctioneer license. In California there is not an auctioneer license, but a $30,000 bond is required, which I filed years ago.
You know there are agents out there thinking, “Jim, you sniveling little baby – why don’t you just get your buyers to offer more money so they can win the bidding war?”
First off, a bidding war is when participants are bidding against each other.
What is practiced around here is blind bidding, where buyers just guess at what offer might win.
Nobody wants to pay more than they have to, or more than they should. With no other influence, buyers will submit their bid based on the comps, or their comfort level.
But when presented with a price to beat, emotion takes over. With the fear of losing the property being a real possibility, buyers are much more likely to go higher than they originally thought, in order to win.
It becomes more about winning and losing, than paying a comfortable price.
There will be an occasional blind bid that swamps the boat, and produces a sales price that others wouldn’t have touched. But how do you know? You don’t.
Conducting an auction-like process where bidders are pitted against each other and know the number they have to beat is the most reliable way to reach top dollar. The fear of loss is real, and motivates people to do things they wouldn’t have done on their own.
Yet, realtors around here won’t consider! Why not?
Most everyone thinks it’s against the rules, but this is in the contract:
Offers not necessarily confidential: Buyer is advised that seller or listing agent may disclose the existence, terms, or conditions of buyer’s offer unless all parties and their agent have signed a written confidentiality agreement. Whether any such information is actually disclosed depends on many factors, such as current market conditions, the prevailing practice in the real estate community, the listing agent’s marketing strategy and the instructions of the seller.
Agents can include the confidentiality agreement but it doesn’t mean anything unless all parties agree.
In my bidding war on Saturday, the agents were happy to participate. They enjoyed the transparency, and the chance for their buyers to determine their own fate!
I mentioned the cash offer we made on Saturday on behalf of buyers hoping to purchase a home in Carlsbad. It finally came to a conclusion last night.
It went the same way all of the other multiple-offer situations have gone:
After a day of being kept in the dark, I suggested to my buyers that we should improve our offer and just hope for the best. We submitted a new offer above the list price, 14-day closing, and free 30-day rentback. A worthy offer!
I got the call late yesterday – Sorry, we’ve gone in a different direction.
I appreciated the call because they usually come by text so the listing agent doesn’t have to offer any explanations. Because I had the agent on the phone, I pleaded with him to give me the winning sales price, which he did.
When I told my buyer about the winning bid, he said,
“I would have paid that.”
“IN FACT, I WOULD HAVE PAID MORE THAN THAT.”
It’s not just about treating all buyers and buyer-agents fairly (part of the Code of Ethics).
It’s about LEAVING MONEY ON THE TABLE, which is happening everywhere because listing agents are too lazy or inexperienced to conduct a proper bidding war. Even if you don’t have the guts to do open bidding like I do, then at least give every buyer a chance to make their highest-and-best offer, which used to be the standard up until this year.
Now, the listing agents only worry about grabbing their favorite offer, and going back to sleep.
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
CA DRE #01527365, CA DRE #00873197
