My farewell to La Costa – the virus has delayed a new Compass office in Carlsbad, but it’s coming:
An interesting conversation yesterday with the guy who made one of the biggest deals in the history of residential brokerages when he sold his company with 1,700+ agents to Compass in 2018. His team developed the graph above on March 31st, and it looks like they are guessing that the selling season will just be delayed a couple of months. He will update it next week with more-current projections.
In this discussion, he talks about how today compares with 2009 when he purchased PUI from GMAC when it had 400 agents, and a $900,000 per month overhead. He thinks the market will bounce back quickly, and that it’s time to go on the offensive (IOW: many brokerages aren’t going to make it through this):
He has also been blogging:
When we joined Compass in the summer of 2018, it was clear that the evolution of residential resales was trending towards off-market sales. I said then, “we have to make sure that we’re on the right team”.
The National Association of Realtors tried to affect the outcome with their Clear Cooperation policy by making off-market sales acceptable as long as they are done in-house with no public marketing. Like all policy-making done by ivory-tower types who don’t relate to the reality on the street, they have legitimized a new opportunity for gaming the system.
I think the intention of NAR was to allow for the occasional private sale by celebrities. What they must not have considered was that all brokerages would design their own in-house system to provide privacy for anyone who wants it.
Then the coronavirus starts sweeping the country – won’t every seller want their privacy today? Are you going to let dozens of strangers into your house? You and your family could die! You need to sell your home privately.
The NAR policy makes sellers and listing agents pick a path – either the property gets listed on the MLS within 24 hours after public marketing begins, or you sell it off-market. If the private sale doesn’t work, sellers can opt for the more-public MLS sale later, so trying the safer route will be an easy choice for many.
Who do you list with?
What brokerage has the best chance of selling your home for top dollar now?
Compass has the in-house system, over 800 of the top agents in San Diego County, and we are ranked #1 in market share in Carlsbad and Encinitas. We are ideally suited to serve the private-sale market, and now we’re advertising it publicly.
Eventually, the MLS (and Zillow) will become the online marketplace of last resort like Loopnet, and buyers will be forced to work with an agent in every brokerage if they want to see all the inventory.
Why didn’t NAR see that coming?
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:
Click to enlarge
Robert is committed to building the end-all platform for real estate – more details on the AI feature haven’t reached the west coast yet, but the game plan is clear. Hire the best agents, give them the money to spruce up the properties, and feature those new listings on the company’s website first to build the audience.
We are going to out-zillow Zillow:
We used the Compass Concierge to pay for improvements at our new listing in Auberge just for the convenience. It meant that the seller didn’t have to bother with arranging and paying contractors – we took care of that for him, and Compass will get reimbursed out of the proceeds at closing.
The program has become very popular, and was just expanded:
Concierge Approval Guidelines for Residential Resales:
For new residential resale listings under $3 million, Concierge requests up to $150,000 are guaranteed to be approved if:
(a) the request is 5% or less of the list price (up from the previous 3%);
(b) the equity in the home is at least 2x the budgeted Concierge amount; and
(c) the home will be ready to list within 3 months of when Concierge starts paying vendors.
It makes sense to spruce up a home before putting it on the market, but it also works after we find the buyer because we can repair/improve/customize the home to their needs to help justify them paying a higher sales price.
The program is helping to grow the Compass brand too.
There are now 650 Compass agents in San Diego County, with six main offices and several satellite locations too. Here’s a look at the new office downtown:
The way this is going, Realogy is going to get stripped down and sold for parts:
With his back against the mats, Realogy CEO Ryan Schneider considered selling the brokerage to its chief rival: Compass.
In a statement Friday, the SoftBank-backed brokerage said Schneider even proposed a plan where the arch enemies would form a joint venture — a proposal Compass said it declined.
The statement was made in conjunction with Compass’ motion to dismiss an explosive lawsuit filed by Realogy earlier this summer. In the suit, Realogy accused Compass of illegal business practices, including “predatory” poaching and attempts at collusion.
“The motion reveals the lawsuit for what it is: an act of desperation in response to Realogy’s rapidly eroding market share,” a Compass spokesperson said in a statement Friday.
In the statement, Compass said if Realogy’s suit is not dismissed, Compass intends to file counterclaims against the New Jersey-based conglomerate, the parent company of the Corcoran Group and Coldwell Banker.Link to Full Article
The Compass office at the La Costa Resort began as a P.S. Platinum office, and then Julie and her team were there until a few months ago. The Klinge Realty Group is next!
It’s only worth being there if you can find ways to take advantage of the location and opportunity – and I have some ideas. Stay tuned!
We should be up and running there within the next 30 days. Stop in and say hello.
This sold for $1,778,000 in November – man, those one-story homes are hot:
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 agent Aaron 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.
More talk here:Link to Discussion of PLS.com