One of the most insane MLS rules prevents agents from including videos in the remarks. The MLS police is afraid that agents will slip in their contact information, and buyers will rush to purchase direct from the listing agent – but they can do that anyway. How hard is it to find a listing agent’s phone number in 2020?
Our MLS is temporarily allowing virtual tours and virtual open houses, but let’s hope it will be a permanent change. The real estate world is well on the way to eliminating the buyer-agents that provide no value, and those that give good advice don’t have to worry about losing a client to a video message.
In addition, allowing video tours in the remarks would cause more agents to do them!
Listing agents hire Showingtime to schedule appointments for cooperating agents to show a house for sale.
As of yesterday, California showings were down 55% from the first week of the year, which doesn’t sound so bad for a state that is lockdown. But next week will probably be worse.
The California Association of Realtors, one of the most powerful lobbying groups in Sacramento, has petitioned the governor to change the status of realtors to be essential workers – with stipulations. We can’t apply for unemployment, so there has to be a way for us to keep working.
You better be an all-around expert at fixing stuff in this environment – and be able to present a reasonable case to the buyers that’s easy to digest. We’re not out of the woods yet, but this video kept a situation from turning into a problem:
Kayla flew home from Manhattan this morning on Delta – there were only 20 people on the plane!
Her Douglas Elliman offices are closed through March 31st and probably longer. Hopefully she didn’t bring the bug back with her, but it’s better than her catching it there and having to cope with it alone.
She loves being in Manhattan, and plans to go back, of course.
But what will the market be like for newer agents everywhere?
The big, successful agents will use this off-time to prepare additional marketing materials, and be ready to go once the virus is done. We’ll have 1-3 months of pent-up supply and demand, so we’ll try to squeeze the whole 6-month selling season into 60 days. The crafty experienced agents will be glad to facilitate those sales, but there won’t be enough to go around for everyone.
I’m guessing that we will probably sell 20% to 30% fewer homes this year, and it could be less. The sales will drop off long before sellers think about dumping on price, and because the virus isn’t a permanent change in the marketplace, it will be too easy for sellers to wait it out instead. It will be tough on every agent who is on the edge.
Somebody said today that they expect to see big price declines and foreclosures in the next 2-3 months, but that’s not happening. The moratoriums are in place, and homeowners who can’t make payments will get as much time as they need. It’s more likely that we will experience the Big Stall-Out, with the market still airborne and just waiting for the engine to kick back on.
The California Association of Realtors published their coronavirus addendum/amendment today.
Those with an existing contract aren’t obligated to sign it, but they mentioned the ‘Force Majeure Clause’, which is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, plague, or an event described by the legal term act of God(hurricane, flood, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract.
I did whip through our standard contract, but didn’t find the words “force majeure” anywhere in the text, but it is probably in the Civil Code. In practice, most force majeure clauses do not excuse a party’s non-performance entirely, but only suspend it for the duration of the force majeure.
The CAR form suggests a 30-day extension, but whatever works for you. If the good-faith deposit is at risk, they are asking the sellers nicely to give it back to the buyers if they can’t qualify due to COVID-19 issues.
Glad to see the NAR promoting this point – considering what other agents think of you:
David Weldon empathized with his client’s growing desperation to sell her home, a three-bedroom house in Southern California’s Riverside County. But he was uncomfortable about her suggestion for boosting the listing’s appeal.
The seller listed the home with Weldon last July at a list price of $600,000. After nearly 70 days on the market, the property hadn’t received an offer she would accept. She also was under contract to purchase another property contingent on the sale of her home, which added to the pressure. The seller asked Weldon, a broker-associate at RE/MAX One in Moreno Valley, Calif., to take steps that sounded to him like “gaming the MLS” to draw more eyes to her listing and get it sold faster.
She had learned from another agent in a prior transaction that there are ways to manipulate MLS data to the seller’s advantage. Loopholes in many MLS systems make it possible for real estate professionals to reset a property’s recorded days on market—making a listing appear newer than it is—or surface a home on an MLS’s “hot sheets” with, say, a $100 reduction in list price. While these practices can help raise the visibility of listings in the MLS, they’re also deceptive marketing techniques that have the effect of skewing real-time MLS data—a problem the real estate industry is working to solve—and cast a poor light on agent professionalism.
“The MLS platform is not the tool to refresh a listing,” says Rene Galicia, director of MLS engagement at the National Association of REALTORS®. “You’re not treating the underlying issue—perhaps you need to revisit your pricing strategy, for example—if you’re relying on gaming the system to get action on your listing.”
Weldon says it’s not uncommon for agents in his market to inappropriately cancel and resubmit a listing to the MLS with an inconsequential edit to the property’s address—such as changing “Street” to “St.”—which resets days on market in the system. That’s the type of action his seller was requesting.
“There’s no way to do what the seller was asking me to do that I’m comfortable with,” Weldon says. “I said, ‘You want me to cancel the contract and start over after I’ve put in a considerable amount of time marketing your property.’?” When his client was unrelenting, Weldon decided to end his professional relationship with her. The seller relisted with another agent, and as of mid-January, the property had been on the market for 106 days—more than a month longer than Weldon had the home listed.
Your Good Name Is on the Line
While not necessarily a violation of the REALTORS® Code of Ethics, these types of tactics may “work against the duty of honesty in Article 1, and the ‘true picture’ mandate for all advertising, marketing, and other representations in Article 12,” says Rodney Gansho, NAR’s director of engagement and staff executive to the Multiple Listing Issues and Policies Committee.
Not all practitioners see it that way, though. “In some markets, people consider these practices to be wrong, while in other markets, it’s tolerated,” Gansho says. “Most agents can look up a property’s history to see exactly what’s changed or when it was first put on the market, so gaming the MLS is a limited strategy anyway.”
Galicia takes particular exception to the idea of lowering a list price by a minuscule amount to boost its standing on MLS hot sheets. “Most MLS technology will display the dollar amount of the price reduction, and savvy consumers can see that a $100 price drop is not a legitimate strategy,” he says. “If a listing shows up on a hot sheet all the time, that could be a sign of data manipulation rather than true changes to the terms of the listing itself.”
Such a pricing strategy also could damage your reputation with other agents who find it offensive and could ultimately hurt your ability to find a buyer. “I’ve seen properties reduced by $1,” says Dan Halperin, GRI, an agent with Gagliardo Realty Associates in River Forest, Ill. “It’s just a waste of everybody’s time. It irritates clients, and it doesn’t leave a good impression on the public.” Halperin adds that many of his buyers feel an urgency to be among the first to visit a new listing, so he keeps a watchful eye on turnover in the MLS. “I want to be able to tell my clients whether it’s been listed six times or had several price drops in the past,” he says. “I want them to know when it’s not the hot property they think it is.”
So what’s a smarter approach? Instead of resorting to MLS gaming tactics, focus on using professional listing photos from the start and adding virtual home tours and floor plans to listings in order to refresh them, Galicia recommends. Gansho encourages agents to revamp listing descriptions as a way to capture interest from people who may have previously overlooked your listing. These changes won’t appear on an MLS hot sheet, but sharper marketing may get buyers to pay closer attention.
It didn’t start out that way, though. We trudged into 2010 trying to survive a dreary, depressed real estate market. But thanks to Ben Bernanke, who engineered the greatest soft landing in history, the rules were changed and the market responded – quickly turning into a wicked sellers’ market.
Reader LM commented on what Ben Bernanke said towards the end of a live press conference:
“We have told the banks to handle their REOs…..long pause....in an economy-supportive way”.
Oops. What he was GOING to say – ‘we have told the banks not to flood the market with REOs’.
How we sell real estate has changed too. The physical hand-writing (and explaining) of contracts has morphed into a slick bunch of clicks on an electronic form that the buyers will never read while committing themselves to being hundreds of thousands (if not millions) of dollars in debt. The realtor teams have emerged to usher clients to the finish line, which means most buyers are rushed through a home inspection, then beg for a few bucks from the seller instead of repairs, and pick up their keys usually within 30 days – all so you can leave 5-star reviews!
It looks so easy that just about anyone can make it in real estate sales now – and it’s become the career of last resort for many. The best example is the blogger Casey Serin, who became famous for losing five properties to foreclosure that he had he bought on ninja loans. He got divorced, changed his name, went offline, and then resurfaced as a realtor. He now has his own brokerage in the Sacramento area, and he made about $60,000 this year – which is a decent living for a guy like him:
Heck, if he can do it, anyone can!
Biggest surprises of the decade? The no-doc mortgages haven’t returned (yet), Google & Amazon haven’t entered the fray (yet), and the district attorney hasn’t prosecuted more than a handful of realtors for doing shady deals (I could name hundreds). I did have two encounters with the FBI where I laid out the evidence, but they weren’t interested, so I guess it’s ok.
Our move to Compass in 2018 was a result of it becoming obvious that outsiders would disrupt our industry without a fight, and being on the right team was going to be critical to success. In-house sales are the future of the residential resale market, and who you know will make all the difference (just like in commercial real estate sales).
Over the last ten years, I’ve had 7,711 blog posts, Donna and I helped 300+ families buy and/or sell a property, we got two kids though college, and we appeared in a documentary film – wow, what a decade!
I appreciate you being here – let’s make the next one, the best one!
The new C.A.R. forms for 2020 are available, and the most interesting is the MLS-exclusion form in light of the NAR Clear Cooperation policy that begins on May 1st.
Last year I asked the C.A.R. lead attorney about their stand on Coming-Soon and off-market listings, and Gov said it is up to the brokerages. Their new form reflects it too – they have left it optional for agents sellers to choose to comply:
The form does a better job disclosing the listing-agent shenanigans, and makes them a choice for the seller. But will the listing agent discuss the choices? Or just write it up and send for sigs? The sellers just want their money – they assume their agent will be implementing the best ideas to achieve top dollar.
On May 1st, the Clear Cooperation policy will be in effect, which was intended to discourage off-market sales. But in paragraph 9A you will see that office exclusives are permitted, which will legitimize selling properties in-house. The realtor shops with the most listings will prosper if they pitch them hard to their fellow agents – and most already have an internal marketing system to facilitate.
There is an argument that off-MLS sales are good for the seller because the buyers are pressured to pay all the money before the property goes on the open market.
But off-MLS sales add some uncertainties:
Did the buyers steal it, or did they over-pay?
Were there other buyers that would have paid more?
Are the off-MLS sales legitimate comps for the next guy (seller or buyer)?
Are we still committed to sharing our listings with other agents?
The MLS will still exist, and be the market of last resort because the best properties with the best prices will be sold in-house, or to the aggressive, professional salespeople.
Richard just procured a new sale for his investor client by calling agents who had sold similar properties recently. One told him that he did have a Coming-Soon that was a 6-cap, and gave him the address. Richard hustled his buyer over to the property and promptly submitted an offer, which got accepted yesterday!
Why are Coming-Soon/off-market sales attractive to listing agents? Because they can save time and money on marketing, and hurry up to the next deal. But that selfishness will change the landscape for buyers and buyer-agents, and both will need to be well-connected to succeed.
Whether you move there or just buy rental properties, these are NAR’s hotspots:
In offering its list, NAR tracked ongoing data including domestic migration, housing affordability for new residents, consistent job growth relative to the national average, population age structure, attractiveness for retirees and home price appreciation.
The 10 markets that made the cut were, in alphabetical order: Charleston, S.C.; Charlotte, N.C.; Colorado Springs, Colo.; Columbus, Ohio; Dallas-Fort Worth; Fort Collins, Colo.; Las Vegas; Ogden, Utah; Raleigh-Durham-Chapel Hill, N.C.; and Tampa-St. Petersburg, Fla.
“Some markets are clearly positioned for exceptional longer term performance due to their relative housing affordability combined with solid local economic expansion,” said NAR’s Chief Economist Lawrence Yun. “Drawing new residents from other states will also further stimulate housing demand in these markets, but this will create upward price pressures as well, especially if demand is not met by increasing supply.”
“Potential buyers in these 10 markets will find conditions especially favorable to purchase a home going into the next decade,” added NAR President Vince Malta, broker at Malta & Co. Inc. in San Francisco. “The dream of owning a home appears even more attainable for those who move to or are currently living in these markets.”
"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 "