Have you seen a home sale close at a surprisingly-low price, and you said,
“Geez, I would have paid that!”
Usually the house has been on the market for months, and everyone else has forgotten about it. The seller doesn’t want to lower the price, but tells his agent, “Just bring me an offer”.
The agent revises the MLS remarks, adding gems like ‘Extremely Motivated’, and ‘All Offers Considered”. A buyer who saw it earlier with another agent decided to approach the listing agent directly with an offer 20% below list – take it or leave it.
With visions of two commissions twirling around in their head, the agent tells the seller this is the best they could do. The seller really is motivated, so after months of failure at a too-high price, frustration sets in and he signs it.
If any seller is tempted to take a lowball offer – more than 10% below list – they should instruct the listing agent to immediately lower their list price to the midpoint between the offered price and current list price.
Let’s see who else is out there!
Watch how many you see that close at 15% to 20% below list and the listing agent represents both parties. It isn’t enough to change the market, but a notable strategy.
You shouldn’t burn your old agent though – there are enough listing agents who are wimpy about dual agency and prefer that you have your own agent anyway. It is the same net to the seller, so he won’t care either.
For the Pinterest generation, which is used to browsing and pinning glamorous photos of home decor, showcasing their own magazine-worthy spaces online is now a must. And with good design easily accessible online on home decor sites such as Houzz.com, there’s an increased interest in a DIY approach. Furniture and other items are also more easily sourced than ever before, as some start-ups now cater directly to the consumer by selling wares online that were once only available to the trade.
When Jen Bailey, 33, moved in with her boyfriend, she was eager to incorporate both of their ideas when decorating their new Los Angeles home. But they faced a challenge: Bailey’s boyfriend held frequent American football parties, which didn’t exactly mix with her sophisticated tastes.
“Having 15 guys over watching football [was our] design issue,” Bailey said.
The couple turned to Laurel & Wolf, a one-year-old interior design start-up that allows customers to choose from at least four high-end interior designers who submit “first looks” of their ideas.
Customers choose the design they like and pay from $199 to $499 per room for design advice. Bailey and her boyfriend paid $299 for a package and communicated with their designer via an online platform that allowed them to chat and send photos during the process.
The first few house lotteries were shut down due to their gambling nature, but now there are new twists. First it was the flipper who is unloading a 1906 Craftsman-style home to the person who submits $100 and the best dessert-recipe HERE
Now these folks in Phoenix who paid $350,000 for their house want you to submit an essay and $150 to have a chance to win their flip:
PHOENIX — Valley residents with an extra $150 lying around might want to think about investing that in real estate.
That money could actually go a long way as a Phoenix real estate investor says that’s all it takes to have a shot at purchasing one of his properties.
“We purchased the house with the sole intention of making it beautiful and selling it for profit,” said Erin O’Connor.
O’Connor intends to make a profit by selling the nearly 4,000-square-foot, five bedroom home at 6517 W Lucia Dr. through an essay contest that costs $150 to enter.
Any adult can submit an essay up to 250 words, O’Connor will then narrow the essays down to the best 300 and an attorney will pick the final winner.
“If you win the essay contest, then you’re given the exclusive right to purchase the home for $10 and your normal closing fees,” he said.
Those title and escrow fees are estimated to be roughly $3,000, according to O’Connor’s website.
O’Connor said there needs to be a minimum of 4,500 essays submitted for the contest to be valid and only the first 5,500 will be accepted. That ensures at least $675,000 in revenue for the home and at the most, $825,000.
Michael Weinstein of the YourRealEstateWorld.com team at West USA Realty wrote in an email the property has an estimated value of $418,210, so 2,788 entries would be needed to simply break even on the property.
Weinstein called it a fun idea for those that have the resources but was skeptical about the business model for sellers. O’Connor however, said he hopes it is a business model that not only works, but also will catch on.
“I do believe that it could catch on (and) we could make a business out of it,” he said.
A portion of the revenue from the essay entries will go to benefit St. Jude Children’s Hospital, O’Connor said.
Fournier’s new home is about 3,840 square feet. Her superpantry is a perk that her previous home, also in Carlsbad, didn’t have.
In the old home, she didn’t even have a basic walk-in pantry. She kept her bulky Costco items and second refrigerator in the garage. As a result, most of the time, she could only fit one car instead of two in the garage.
“This way, we keep the garage neat and can fit two cars,” she said. The superpantry is a place for the family “to keep our mess organized.”
No longer just for storing potato chips and soup cans, the traditional kitchen closet is becoming bigger, more luxe and more multifunctional. Architects, contractors and real-estate agents say upscale homeowners are asking for walk-in rooms that serve as workspaces for everything from food prep to gift wrapping to bill-paying.
These new “super pantries” are becoming more common as American kitchens have become more open, merging with living rooms and family rooms—with kitchen islands serving as the entertainment hub of the home. Now, some homeowners are moving the clutter and clatter of kitchen activities behind the scenes, where they are less visible to guests.
“An open floor plan is great. But not all aspects of the kitchen are great to look at all the time,” says Peter Pfeiffer of Austin-based Barley & Pfeiffer Architects.
A report by the National Association of Home Builders last year showed 85% of respondents put a walk-in kitchen pantry on their “most wanted list,” with 31% saying it was an essential/must have” and 54% said it was “desirable.”
Last night we heard a proposal to raise the capital-gains tax. Can we cut to the chase and dive into reforming the tax code instead?
I don’t want to get into the politics of it, let’s leave that for other bloggers. Everyone can agree that some sort of tax reform is wanted and needed – and hopefully somebody will pull it off someday.
Realtors hear about it all the time, especially from the long-time owners of rental properties. The thought of paying a huge tax bill makes them immediately dismiss the idea of selling, because they know if their leave it to their heirs, the stepped-up basis will apply.
We shouldn’t have a tax code that influences real estate decisions. Tax reform should include a neutral stance on when you sell real estate – it should be taxed the same, whether you are dead or alive.
What about the MID, the mortgage-interest deduction? Let’s get rid of that too, and create a pure marketplace where people buy homes to live in, and raise a family, and not because they get a tax break.
If you have any other reason to buy a house – investment, etc. – then great, but tax benefits shouldn’t be one of those motivators, because they won’t apply to all citizens.
‘Oh Jim, now you’re asking for it. The NAR is going to punch your ticket and throw you out of the club for that kind of crazy talk.’
Yeah? The National Association of Realtors needs to play a bigger game. The millions they spend on lobbying could help champion tax reform, instead of sounding like a broken record on the MID.
Rabois’s startup was code-named HomeRun, and the seed for the idea was planted more than a decade ago, as VentureBeat reported in April.
“My friend [PayPal and Palantir cofounder] Peter Thiel suggested that I come up with an idea to innovate in residential real estate,” Rabois told VentureBeat in April. “It’s the largest part of the economy unaffected by the Internet. And that was definitely true then, and even with things like Trulia and Zillow, it’s fundamentally true today. But the process of [selling a home] hasn’t been transformed by technology.”
Now, that could change. OpenDoor will launch in July, its website promises.
The startup will “work with sellers directly to purchase home[s],” “work with local partners to rehab, maintain, and improve our portfolio of properties,” and “partner with local brokers and Realtors to market, list on [the multiple listing service], and resell to retail buyers and investors,” according to the site online now at opendoor.com.
That description sounds even more interesting than what Rabois told us originally. It shows that OpenDoor will do a lot more than just run a self-service website.
“We don’t have more information to add at this time,” Rabois wrote in an email to VentureBeat after this article was posted.
Receive an instant offer online and funding in as soon as three days.
They expect that sellers will contact them, looking to sell their house for a small discount in order to close in a few days. The I-News said HERE that the discount would be less than 8%.
But sellers already think their home is worth at, or above, actual market value, so the 8% will sound more like a 10% to 15% discount to them. If there are sellers willing to dump and run, then guys like Tom Tarrant will be much more efficient in procuring the sale, because the folksy personal visit will be more effective than a website offer.
Even though it doesn’t sound like he has sold homes previously, the opendoor guy has confidence in his model:
“We have to value the home, sight unseen,” he said. “You can put in your address and we tell you what it’s worth instantly. And we’ll want to buy it from you for that price.”
Underneath the covers, HomeRun will analyze lots of data — some being proprietary, some not — to make an split-second calculation, with minimal human interaction. It’s “pretty complicated stuff,” Rabois said.
To do such work at scale would be vastly more complicated. So, at least initially, HomeRun will focus exclusively on the U.S..
“This can be a $10 billion to $100 billion [business] if we just do the U.S. correctly,” Rabois said. “I don’t want to get distracted. Focus is the most important thing for startups.”
They are going to determine what to pay for your house from a central command tower, pay out the cash in a few days, and then rehab and flip?
A better idea would be for a start-up to hire the best agents in town and create an exclusive marketplace.
The University of Southern California is testing a giant 3D printer that could be used to build a whole house in under 24 hours.
Professor Behrokh Khoshnevis has designed the giant robot that replaces construction workers with a nozzle on a gantry, this squirts out concrete and can quickly build a home according to a computer pattern. It is “basically scaling up 3D printing to the scale of building,” says Khoshnevis. The technology, known as Contour Crafting, could revolutionise the construction industry.
We’ve heard all the hubbub about higher mortgage rates having a negative effect on the real estate market. But the non-taper has caused rates to come back a bit – we are now down around 4.375% for 30-year conforming rates.
For those who had their heart set on having payments lower than what you get with a 4.375%, 30-year mortgage rate, then there are options available:
Buyers can pay more points to lower their rate.
Buyers can have the sellers buy down their rate.
They can take an interest-only loan, instead of fixed-rate.
Buy a cheaper house.
Or, in this cash-happy environment, they can borrow less:
The stir-up from higher rates might cause some changes in the buyer psychology, but the baseline problem hasn’t changed – there aren’t any great buys available, and even the decent buys are loaded with compromise.