Let’s review what it takes to create a solid bidding war.
Maintain and improve your home constantly over the years.
Install a master bathroom like this!
3. List with Jim the Realtor for an attractive price, do $3,200 of staging, and take off for the weekend!
I inputted the listing at 8:30am on Saturday morning with professional photos, and got immediate results – over 100 people came to open house the same day.
Sunday’s open house had nearly as many people, and those who didn’t attend could watch my walk-around tour on video: https://youtu.be/LCEDYc4rkaQ
We’ve received EIGHT WRITTEN OFFERS (seven over list price), and going for more. Three showings set up for today, and Donna and I are fielding questions and encouraging higher bids all day long!
To ensure top dollar, we treat everyone fairly and give them every opportunity to bid up the price. The highest offer so far is $890,000, and others have said they are going higher so we raised the list price from $869,000 to $899,000 on the MLS for added exposure on the realtor hotsheet. I mentioned that we have eight offers too.
Want this kind of attention when selling your home? Hire Jim the Realtor!
The surge noted last week continued its hot streak, which should be expected as the selling season really gets rolling. The total number of pendings increased 6%, and those over $2,000,000 increased 24%!
Glad to see the $2,000,000+ market having some life, with 462 active listings – or 54% of the total inventory of houses for sale between La Jolla and Carlsbad.
Even though it might feel warmer, we are still lagging behind last year:
Weekly Total Pendings
What might contribute to buyers wanting to wait-and-see a bit longer is the lack of bidding wars. Instead of having to deal with the messy multiple-offer situations, agents who get a hot listing just sell it off-market now.
Without bidding wars, we don’t have those disappointed losers who get more determined to grab the next one, and move quickly to pay whatever it takes.
Home sellers who have been on the market for 30 or more days and are tired of not selling may eventually consider a price reduction – but by how much?
There are a number of reasons why a home isn’t selling. Thankfully, you don’t have to be an expert on why – because price will fix anything:
Funky floor plan
Few or no comps
Buyers are willing to pay within 5% of the list price. So if you are getting showings and offers, then the list price is about right.
If you’re not getting offers, then the list price must be more than 5% wrong.
Won’t buyers make an offer, even a low one? No – it’s too easy for buyers to stay on the fence while they wait-and-see, rather than make a low offer. In fact, we rarely see an offer that is lower than 5% below the list price because buyers would rather not bother – plus they don’t want to offend anyone.
A proper price reduction re-ignites the urgency and enthusiasm in buyers, which makes them want to write a good offer.
How much is needed to get buyers to engage?
Lower the price by 5%.
You see sellers lowering their price by 1% or less, but that’s not impressing the buyers – if anything, it reminds them that your price is still wrong because it still looks too much like the old price.
Lowering the price by 5% not only re-engages the existing buyers who are considering your home, but it also picks up a new set of buyers who weren’t looking as high as your previous price.
It may sound bold, but what else can a seller do to regain momentum?
Two things: a) Complete repairs/improvements to bring the home’s value up, or b) cancel the listing and try again a few month later.
If you don’t want to bother with repairs and really want to sell now, then do this exercise:
How does your home compare to the active listings priced at 5% below their current price – are you winning that test? Is your house the best of that bunch? Find the group of active listings where your house is the obvious winner, and you’ll know the price that will work.
If 5% sounds like too much, and waiting longer for that perfect couple with 2.2 kids to come along is easier to swallow, then no problem. It could happen.
But if you’re tired of waiting and will consider a price reduction, then 5% is the recommended amount – which isn’t giving it away. It’s just recognizing that the initial list price was too optimistic, and a more-realistic price is needed.
Smaller reductions won’t cause buyers into doing anything different than they’ve been doing – waiting for a fair price/value for today’s market.
Rob Dawg left this comment regarding the seniors who are aging-in-place:
Wait until autonomous vehicles add another ten years.
Self-driving cars have the potential to change everything about real estate:
Seniors be able to stay in their home longer.
Homebuyers could live farther away and get more home for their money.
Kids wouldn’t need parents driving them around.
But one of the big hurdles is whether people will trust computers to drive the cars for them. You may know that Mercedes-Benz has installed automatic braking systems, and I have one on my car – and hate it.
When I drive up slowly at an intersection, the computer is overly-sensitive, and brakes too early – and it’s not gentle. With no warning, the computer slams the brakes on, giving riders a whiplash, and in one case, causing the driver behind to hit me! The system has a manual turn-off button, but it’s hard to find and not permanent so it’s a constant battle. Donna agreed that I’ve altered my driving considerably, but I’m giving up. I’m going to get a normal car instead.
More hurdles that will cause autonomous vehicles to be delayed:
Have you seen homes going pending that weren’t selling a few months ago?
You could make a case that the market is somewhat seasonal, and just the increase in the number of buyers would improve the market. But junk is junk, whether you’ve been looking for days or months.
We already discussed how sellers of newly-listed homes are bursting with optimism now that the selling season is underway. But those sellers who have been lingering for weeks or months have already tested the market, and should be more realistic.
My theory is that some buyers are cutting deals on the older listings.
Multiple offers are back. Three examples from the last 24 hours:
One-story house that had been on the market for 30 days (plus Coming Soon)
Two-story house that just listed for $1M in SEH, plus
A contingent buyer around $2 million getting beat out twice to non-contingent buyers.
It is remarkable that in 2019, realtors still don’t have rules, laws, procedures, or any effective guidance on how to handle a bidding war so the sellers get the best deal while giving every buyer a fair chance to compete.
But we do have a summary form! We could do this on a napkin:
We ended up with three offers on our Gladstone listing, and a bidding war!
Bidding wars don’t just happen; somebody has to spur them on, coordinate them effectively, and keep the focus on winning and losing, and not the price.
The home had its foibles too.
It only has two bedrooms, the third ‘bedroom’ is unpermitted, the kitchen and bathrooms were gussied up but mostly original, and it backs to the full assortment of power lines. The worst part was not having any recent comps that painted a solid picture on value, leaving it up to the buyers to get comfortable – I helped, and thankfully they had good agents too.
We are listed for $499,000, and I nudged two offers north of $530,000!
The buyers cancelled the second escrow on Brava yesterday.
We have had a dozen cash offers, so after the first cancellation I went back to the others and got them to bid it up to $690,000, which is a miracle when the highest offer was $675,000 in the first round.
Other agents since have said, ‘oh, you picked the wrong buyer’. But I’m going to give the high bidder a chance to close every time – I think I have that obligation. If they would have stuck, I would have been a hero.
There is more of a chance that end users will hang in there, but with flippers it tends to be cut-and-dry, and all about the money. There has been some concern about the 2019 market being soft(er), but it’s not stopping them from wanting to buy. They just want to fine-tune the price!
This is a neighborhood with zero lot lines, which you can see in this photo (in yellow). Each home has the exclusive use of one side yard, instead of splitting both sides. You can touch your neighbor’s house, but it does give you more usable space.
I don’t think there will be a noticeable discount needed for the flipper to resell a zero-lot-line house. There are several neighborhoods in Carlsbad, Encinitas, and Carmel Valley that have the zero lot lines, so it’s not that rare.
A quieter Sunday at the open house – about half the people as the crowd on Saturday, which makes you think that the internet advertising is what brings them and they are happy to wait until the first open house:
"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 "
by Ann Romanello
"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 "
"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 "
"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 "