Compass intends to comply with NAR’s Clear Cooperation Policy MLS 8.0. In addition, the corporate staff will work the MLS to see if we can create a Coming Soon section, like many other areas are doing.
The 8.0 policy legitimizes the Coming Soon marketing, and allows for the Office Exclusives, which is already set up on our internal website. This is why we went to Compass, because it was clear that the game was changing, and the biggest brokerages with the best listing agents would be the most successful – while the little guys get squished.
After less than two years in business, here’s how Compass is doing in Encinitas. Year-to-date sales:
The MLS Statement 8.0 Clear Cooperation Policy is ‘a lightweight, middle-of-the-road policy that will just make the problem worse’ because it doesn’t go far enough. It’s so full of holes that it will only exacerbate the problem, and by the time they figure it out, it will be too late to fix it. It might be too late already.
The new policy just helps to define the ways that agents can avoid putting their listings on MLS:
Office Exclusives Are Allowed. Agents will shop around their new listings for days or weeks among their fellow agents in the office. Only once that avenue is totally exhausted will listings find their way to the MLS.
Submitted to MLS Within One Business Day. From now on, all listings will be signed on Fridays (or postdated).
Sellers Can Market Publicly. The listing agent isn’t supposed to publicly advertise the home, but……..
Showings Aren’t Required. Just because a listing is in the MLS doesn’t mean agents can show it. This is the oldest trick in the book. When an outside agents calls to arrange a showing, he/she is told that the property can be seen any time….as long as it’s between 5:00-5:05pm next Thursday.
No Penalties Mentioned. There has never been a MLS police, so any enforcement will be sketchy at best. But realtors love to rat out their fellow agents so complaints will be flying – but what will be the penalty? Most likely it will be the usual, which is a letter in the offender’s file for six months. Will it be that much?
Stop Using the MLS. If it gets too complicated to navigate the rules, agents will just stop using the MLS. This is why being on the right team is so critical now – if all the hot deals are sold in-house, then working at a small brokerage or being an independent broker will be detrimental. Those agents will only see the leftovers as the MLS becomes an afterthought.
Local compliance was first scheduled for March 1, 2020, but they pushed it back to May 1, 2020 so agents have six months to contemplate. Will we be sitting around discussing how important it is that we share our listings with each other via the MLS?
What’s missing is that no one in the industry is demanding that we share our listings with one another because that is what’s right for consumers and agents alike. Instead, our leaders come up with a lukewarm policy full of holes and no teeth. The spotlight will cause more people to find ways around the 8.0, and proudly conduct off-MLS sales because now they are the even-sexier option.
Yesterday, we entered into the final phase of the MLS implosion, with the latest blow being delivered by the National Association of Realtors themselves. Instead of strictly forbidding Off-MLS sales, they have tried to appease everyone by concocting a lightweight, middle-of-the-road policy that will just make the problem worse:
The National Association of REALTORS®’ Board of Directors approved MLS Statement 8.0, also known as the Clear Cooperation policy, at its meeting Monday. The policy requires listing brokers who are participants in a multiple listing service to submit their listing to the MLS within one business day of marketing the property to the public.
NAR’s MLS Technology and Emerging Issues Advisory Board proposed the policy as a way to address the growing use of off-MLS listings. The advisory board concluded that leaving listings outside of the broader marketplace excludes consumers, undermining REALTORS®’ commitment to provide equal opportunity to all. The policy doesn’t prohibit brokers from taking office-exclusive listings, nor does it impede brokers’ ability to meet their clients’ privacy needs.
Here’s the full text of MLS Statement 8.0:
Within one (1) business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing on public facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public.
MLSs have until May 1, 2020, to adopt the policy.
Rationale: Distribution of listing information and cooperation among MLS participants is pro-competitive and pro-consumer. By joining an MLS, participants agree to cooperate with other MLS participants except when such cooperation is not in their client’s interests. This policy is intended to bolster cooperation and advance the positive, procompetitive impacts that cooperation fosters for consumers. The public marketing of a listing indicates that the MLS Participant has concluded that cooperation with other MLS participants is in their client’s interests.
The National Association of Realtors is attempting to regulate a change in the Coming Soon environment – see above. The way it is written, however, will just take us back to the days when off-market deals were done behind closed doors because they are permitting the ‘office exclusives’.
Coming Soons were the industry’s public admission that we do off-market deals, and to give you a chance to get your piece of them. But now the N.A.R. wants brokerages to pick a lane.
1. Comply with the new rule, and change the name of your off-market deals to ‘office exclusives’, where no one can see them.
2. Don’t do anything, and pretend that off-market deals aren’t happening at your shop.
3. Declare publicly that off-market deals are a vital part of your business, and keep marketing them as Coming Soons to the public, in spite of any changes in the N.A.R. rules. What are they going to do?
Numbers 1 & 2 above are the less-transparent choices, and the easier way to go for the agents who justify their off-market deals by saying the seller got what they wanted.
Number 3 is the fully-transparent admission of the truth – agents like to pad their wallets with off-market deals, and don’t see anything wrong with that.
Off-market deals aren’t going away, regardless of the rules. The existing rules already state that all listings are to be inputted onto the MLS within 48 hours, but it gets ignored and there is no policing or penalties.
It’s better for everyone involved – agents, buyers, and especially sellers – to put every listing onto the MLS to ensure full exposure so everyone can compete. Buyers would feel they had an equal chance to buy, sellers get top dollar, and all agents get a fair chance to earn a paycheck.
But N.A.R. and the industry’s upper management looks the other way. It will take a class-action lawsuit or new regulations from the federal government to bring real change.
Pocket listings should keep the excitement level higher for now.
From the Business Insider:
The ultra-wealthy are known for being exclusive, and the way they handle the purchases and sales of their multimillion-dollar homes is often no exception.
Now, that’s not to say the market hasn’t seen some very prominent, top-level listings. There’s the most expensive home for sale in the Hamptons, which is listed at $150 million, and, of course, Los Angeles’ Chartwell Estate, which was listed at $245 million and, before getting a major price cut, was the most expensive listing in the US.
But for those looking to keep the sales of their homes a little more under the radar, there are whisper listings.
Whisper listings, also known as pocket listings, are for-sale homes that aren’t available to the public. Off-market listings are popular among the ultra-wealthy and are bought and sold by word of mouth.
Los Angeles real-estate agentAaron Kirman recently told Business Insider that he’s a veteran whisper-listing agent -and revealed three main reasons why sellers keep their homes off the market.
Kirman is a top real-estate agent at the real-estate company Compass. He’s been in the industry for 24 years and has sold over $4.5 billion worth of real estate since the start of his career. In 2019, REAL Trends named him the 10th-best real-estate agent in the country by sales volume.
Here’s a look at what compels wealthy homebuyers to keep their houses off the market and to instead opt for whisper listings.
1. Sellers can list their homes for higher prices through whisper listings.
By not putting a home on the market, the seller avoids value expectations, Kirman explained to Business Insider. With whisper listings, sellers have the advantage of pricing their homes above an area’s median listing price.
According to Kirman, sellers see this as an advantage because they are able to price their homes as high as they want regardless of the current state of the market.
“If you go live on the market, you have to publish a price. By not going live, you’ve never been public on a price so you don’t necessarily have to go down,” Kirman told Business Insider. “I’ve had sellers up the price of a whisper campaign because they have nothing to lose.”
2. Whisper listings can be used to keep a seller’s personal business out of the public eye.
Whisper listings can serve specific purposes, particularly when it comes to privacy.
For example, if a seller doesn’t want to put a home on the public market for political reasons, such as a divorce, they’ll use a whisper listing instead.
“Sometimes there’s political reasons as to why people don’t like them on the market whether it’s divorce, business reasons, or they just want to keep it quiet,” Kirman told Business Insider.
3. Whisper listings are exclusive and often viewed as a symbol of wealth.
Some sellers prefer to use whisper listings because they are more exclusive than public listings and, as such, are oftentimes seen as a symbol of wealth. However, Kirman told Business Insider that he doesn’t think using a whisper campaign, for the sake of exclusivity, is effective in today’s market.
And within that, there’s the potential downside of missing a prospective sale simply because the agent is not connected to the right person.
“The thing is, I don’t know everybody. So I always tell people there may be that one multimillionaire or billionaire that, because you’re not out there [on the public market], you missed – and they will go buy another house that was public,” Kirman told Business Insider.
We’re excited to be hosting our first ever ZOOM meetup with James Harris (Million Dollar Listing Los Angeles & Founding Partner, ThePLS.com). We’ll be discussing Los Angeles real estate market trends for Q2 (and beyond) and James will be sharing his take on things.
There was a CB realtor from Santa Monica who said his market has slowed down, with many price reductions, fewer multiple offers, and longer market times. A discussion ensued – my takeaways:
A. The market is level (at best) and sellers need to be realistic. You can spend a million dollars on advertising, have the best photography and videos, and do open house every day, but if the price isn’t right, it still won’t sell.
B. James thought open houses are a good way to expose a property to the market, and for knowledgeable agents to impress the attendees about the value.
C. James also said that when it’s slower, it’s better to test pricing off-market first. (But wouldn’t it be natural for sellers to say, ‘let’s test the price on the open market to find out for sure.’)
D. When a home is on the open market but not selling, it’s better to lower the price in weeks, not months.
Those sum up the basic fundamentals for today’s market.
I suggested that to enhance the value of private-listing clubs, they should limit membership to the top agents only, but they didn’t want to get into it. They did like my idea of having more webinars where agents can discuss topics and listings.
The club hasn’t made much of an impact yet in the San Diego area. There are only 34 listings county-wide on the website, and some are older and/or already sold. Curiously, one had been on our MLS this year, but expired and is now on the PLS only as an off-market opportunity at virtually the same price.
The other large private listing club, Top Agent Network, is limited to the top 10% of agents in a region (based on volume). They were thinking of opening in San Diego, but I haven’t heard any updates lately:
There may come a day when the private listing clubs have an impact, but it would take their leaders to constantly sell the benefits to agents – and those are people who have become wary about the benefits from the traditional MLS (if any). If an agent wants to pursue an off-market sale, then it’s too easy for them to throw a sign in the yard and wait (if the price is right).
I was the 160th agent hired in the region. Now there are 565 Compass agents in San Diego County!
In the beginning, we thought that Klinge-Realty-Powered-By-Compass had a nice ring to it, but it proved to be a mouthful, so we changed to the Klinge Realty Group for ease of use.
We’ve hired Brittnie Dixon to be our licensed assistant. She has been doing a wonderful job with marketing and special projects!
We’ve joined the company’s sponsorship of the Del Mar Thoroughbred Club, which means you will see Donna and I in the race program this weekend.
We are also contemplating a move to the office at the La Costa Resort.
We have a new website being developed that should launch in the next few weeks. I was hoping to combine it with bubbleinfo.com but formatting them together is still being explored. There will be a blog!
Most of all, I’m glad Compass has a strategy to dominate the real estate universe. It’s not perfect, but at least we have a strategy! I’ll get into our Coming Soon program in more detail as time goes on, but consider how the entire industry has rushed to Coming Soons as a primary marketing device.
Want a sample of how the public perception has changed about selling homes?
A consumer (not an agent) said this month, “If you don’t sell your home off-market, and have to put it on the MLS, then people think something is wrong with it…..or the price.”
Home prices have been on a tear for ten years straight, and are at their highest levels ever.
Is this bubble going to pop too?
Let’s look at the statistics first. I took the most recent 45 days to get the latest scoop, plus the MLS prefers to calculate the smaller sample sizes.
NSDCC Detached-Home Listings and Sales, April 1 – May 15 (La Jolla to Carlsbad)
# of Listings
# of Sales
It is remarkable that all-time-high prices aren’t causing more people to sell!
In previous markets, once prices started reaching new highs, homeowners would jump at the chance to move. The inventory would grow and cool things off, and/or we’d hit an economic downturn and foreclosure sales would direct the market. But not today!
We are a mid-level luxury market. The more-expensive areas like Los Angeles, Orange County, and the Bay Area feed us downsizers who think we are giving it away.
Homebuying has de-coupled from jobs. We do have substantial employers like Qualcomm, bio-tech, etc. but not near enough to justify these lofty prices. How do we keep afloat? It’s the big down payments; either from previous home sales, successful business ventures, or the Bank of Mom & Dad.
They changed the rules. Banks have to give defaulters a chance to qualify for a loan modification before they can foreclose. With everyone enjoying their equity position, they will find a way to hang onto their house or sell it for a profit, instead of lose it.
Reverse mortgages are an alternative for those who need money. They might crank down the amount of money you can tap, but as long as homeowners are flush with equity, they will be able to get their hands on some of it via reverse mortgages or the typical equity line.
Buyers have been full of money, and willing to blow it. I’ve seen sales close for 10% to 25% above the comps this year, so it doesn’t seem like people are worried about a bubble. Those sales could be creating unsustainable comps, and be short-lived values, but will the next buyer question them enough?
Coming Soon vs. ibuyer. We need a gimmick to transition us to the ibuyer era, and the ‘Coming Soon’ off-market sales will be the sexy distraction. The price of an off-market sale isn’t necessarily lower than retail, and in some cases they can be higher when the buyers get jacked up about the opportunity.
The ibuyer era could be the last hurrah for open-market real estate. If the big-money corporate buyers can build enough credibility and begin to dominate the space, they will be able to dictate the prices paid for their flips, and control the marketplace. If so, they will make sure we won’t have another down market!
In the meantime, we might see prices start to bounce around, instead of the constant trend higher. But if it gets harder to sell, then many will just sit tight instead.
If you think a bubble pop will happen, ponder this question. Who is going to give away their home now?
Thanks to reader Just Some Guy for sending in this article from last week – and who wondered why more people don’t live here and commute to the Bay Area?
Buyers like off-market listings because it lessens the competition. All agents have to do is convince sellers.
After five-plus years of aggressively putting money away in savings, Jason Baker and his wife recently accomplished the seemingly impossible and purchased a four-bedroom house in a high-performing school district in the Bay Area.
The process to find a home base for their growing family took three months. They considered both the East Bay and North Bay and quickly learned the competition is tough in communities with desirable schools such as Lafayette and Mill Valley.
The couple made offers on four houses that they didn’t get, before finally uncovering an unlisted home in Marin County and making an offer that was accepted.
“The three months when we were looking was the most stressful time of our life,” said Baker, 38, who works as an engineering manager. “It was more stressful than the wedding, more stressful than the first month at home with a newborn.”
Open houses at properties that were affordable by the Bay Area’s crazy standards were mob scenes.
“When you went to a house and there was a crowd, you just set your expectations to know you’re not going to get the house,” Baker said. “When there were a lot of people, you knew the odds were high someone is going to make a really high offer.”
Through this ordeal, Baker got an inside look at the buyer’s side of the Bay Area’s real estate market and below he shares what he learned.
1. Listing prices are just “marketing” prices. In a region where homes frequently sell for well over asking and agents often list homes with low prices to encourage bidding wars, you can’t trust that a listing price reflects a home’s value. Buyers can find the true value of a home by looking at recent comps, said Baker. “Redfin and Zillow do an OK job of estimating these,” he says. “One of the problems is there is so little turnover in good school districts that there may only be two or three comps in the last one or two years.”
2. Money wins over everything. Love letters to the sellers are nice, but moot within the Bay Area’s market of high price points. “Unless your bid is significantly higher than the second place bid (more than $50,000), expect the seller to ask you to go into a bidding war,” he shared.
3. Forget about contingencies. “We lost a bid on a house that had no inspection report in its disclosures packet, very rare for the Bay Area,” said Baker. “The seller was not willing to accept any offers with an inspection contingency, and there was water in the basement.”
4. All-cash offers win. If you want the slight edge of all-cash, and you don’t have it, Baker suggested a service called Flyhomes that makes all-cash offers on your behalf. “They buy the house, then sell it to you immediately after closing with a traditional mortgage,” he said. “Ultimately we did not end up buying with them, because they don’t have knowledge of Marin like they do San Francisco and the East Bay, but I would recommend them if you were looking there.” They act as the buyers agent, and their fee is paid by the seller.
6. The price point where the crowds thin out at open houses is about $1.5 million. Priced below that, hordes of people will go to the open house. Above that, it’s more like one or two dozen families.
7. Look for unlisted homes. Try to find a well-connected agent who has knowledge of upcoming listings, and use sites like aaltohomes.com to find unlisted properties, advised Baker. “Some sellers don’t want to deal with listing on the MLS or open houses,” he said. “The house we bought was unlisted, and there was only one family bidding against us instead of six.”
8. Get fully underwritten by your lender, not just pre-approved. “Many houses go on/off the market in a matter of days, so you’ll want a letter ready to go in your offer packet with the bank saying ‘Yes, we are prepared to loan them the money,'” Baker shared.
9. You will most likely lose your first offer, and it will crush you. “It will be sadness on the level of a pet dying,” he said. “Try to remember the family that just outbid you is no longer in the market, and you just moved up a spot.”
"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 "