For Encinitas homeowners who are considering a granny flat – or buyers who want to purchase a suitable property – this is a 7-minute primer from one of the architects who helped guide the city to their current policy (which is the most flexible in North County).
He quotes the costs to build a granny flat to be between $75,000 to $300,000, depending on size, which still sounds like too much for most people. But he thinks that in the long run the benefits are so great that homeowners who have the right-sized property will build one.
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.
The Securities and Exchange Commission today announced it has filed charges and obtained a consented-to asset freeze against San Diego-based ANI Development LLC, its principal, Gina Champion-Cain, and a relief defendant, for operating a multi-year $300 million scheme that defrauded approximately 50 retail investors.
According to the SEC’s complaint, beginning in 2012, defendants fraudulently raised hundreds of millions of dollars from investors by claiming to offer investors an opportunity to make short-term, high-interest loans to parties seeking to acquire California alcohol licenses. In truth, the SEC alleges, the investment opportunity was a sham. Contrary to defendants’ representations, the SEC asserts, defendants did not use investor funds to make loans to alcohol license applicants. Instead, Cain directed significant amounts of investor funds to a relief defendant that she controlled.
“The SEC took emergency action to stop what we allege is an egregious fraud,” said Los Angeles Regional Director Michele Wein Layne. “Importantly, the agreement we reached with the defendants to freeze their assets during the litigation will give investors the best chance to maximize their recovery going forward.”
The SEC’s complaint, filed in federal district court in San Diego on August 28, 2019, charges defendants with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933. Without admitting any violations of federal law, defendants have agreed to preliminary injunctions against violations of these provisions of the federal securities laws, asset freezes, and the appointment of a receiver over ANI and the relief defendant to marshal and preserve assets. The stipulated order is subject to court approval. The complaint seeks disgorgement of allegedly ill-gotten gains and prejudgment interest, monetary penalties, and permanent injunctions.
It’s inevitable that the amount of the commission paid by the seller to the buyer-agent will be made public.
Because the existing rules forbid the MLS companies from disclosing the commission amount to the public, it sounds like the consumer is being wronged. The lawsuits filed against major brokerages are building their case on the lack of transparency about that commission, and when they settle, it’s likely that this will be among the big wins for them – they got the buyer-agent commission disclosed to the public.
Let’s jump ahead.
Once revealed, the public will come to two conclusions about the buyer-agent’s commissions:
The vast majority of sellers offer a 2.5% commission/bounty/reward to buyer-agents to sell their house.
The path forward is becoming more clear. Zillow is rapidly expanding their ibuying enterprise, and because they are so well-known, they have a shot at a major disruption.
In the video below, Mike describes how homeowners who used to rely on their zestimate for a home valuation are now getting a written quote from ibuyers – for free. In Phoenix, the center of the ibuying universe, 40% of homeowners get a quote from an ibuyer before selling their home.
In effect, ibuying is the new zestimate, and more tangible because if you like the number, you could sell your house instantly.
Sure, Zillow is losing money, but their first-year volume is remarkable:
Since launching Zillow Offers in April 2018, more than 170,000 homeowners have requested an offer through the program. In the second quarter alone, there were 70,000 requests.
Zillow reported that it made $1,578 on each home it sold in the second quarter before interest expenses are calculated. After interest expenses, the company, on average, lost $2,916 per home. Barton believes that, eventually, the company will earn 400-500 basis points of return before interest expenses on homes it sells.
It’s an improvement, however, over the company’s first-quarter numbers, where it lost, on average, $3,268 per home it sold, after interest expenses.
“Over time, our unit economics should benefit more from other adjacent services, like mortgage origination, title and escrow,” Barton said in a letter to shareholders. “We expect to be able to leverage these services to support Zillow Offers and improve the consumer’s overall transaction experience, while also generating cost savings for Zillow and our customers.”
They are the only real estate company that has been willing to spend $100 million per year in advertising, and it’s what made them who they are today. It won’t matter if they charge 7% to 13% for their service, all that matters is that they advertise it – which may not be that costly.
Because many or most homeowners have saved their home on Zillow (giving up their email address), they will get regular solicitations to sell their house to Zillow.
Look how easy it is – one click and you get a cash offer…….just like 500+ others near you:
If you have 18 minutes to spare, Mike’s presentation below is a full examination:
Mike mentions that he thinks the companies who position themselves at the start of the consumer journey will win. Stay tuned for a Compass announcement shortly!
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).
Thanks to the readers who sent in the news about Amazon and Realogy teaming up to provide a basket of goodies to customers who get their agent through their TurnKey system:
Real-estate brokerage giant Realogy Holdings Corp. launched a new partnership with Amazon.com Inc. on Tuesday, a fresh attempt at jump-starting the property firm’s flagging business and tumbling share price.
Under the new program, known as TurnKey, home buyers searching for an agent on Amazon.com will be directed to a Realogy agent in their market. These buyers get up to $5,000 of smart home devices and free home services from Amazon, from unpacking and cleaning to furniture assembly and smart home setup.
Realogy is hoping the power of the Amazon brand can energize its own amid a prolonged slide in its stock price. The company declined to comment on the agreement’s specific financial terms but said it is footing the bill for the home services from commissions earned from deals that the venture with Amazon is anticipated to generate.
There are many places that offer to provide a realtor for you:
Who pays for the service?
The agents do, and it can be a hefty referral fee – usually 25% to 40% of the commission.
However, you don’t get directed to the best agent in the area, oh no. You get directed to the best agent in the area who is willing to pay their fee.
We call this, “Buying The Business” and it’s what agents do who can’t earn the business otherwise. Either agents can demonstrate their skill-level and abilities to consumers to earn their business, or for the agents who can’t, gimmicks or discounted commissions are used to ‘buy’ their business instead.
It’s just one more thing about the real-estate-selling business that isn’t disclosed to the public.
This gimmick is a way for Realogy to provide leads and keep more of their agent’s commission:
Will the public ever catch on to how the game is played?
The agents who are willing to pay for the leads either don’t have the skills, or can’t demonstrate them.
Going through Zillow isn’t much better. The big realtor teams get the best leads there, and pass them off to their new agents and then take a large chunk of their commission.
Bottom Line: Agents all look the same, and the industry does nothing to help you differentiate. You must do your own investigation to find out if your agent has the skills and ability to provide the help you need.
Let’s say that the Amazon customers who prefer to just click a button for their every need in life plunges ahead without much care about the realtor they get – they just want their goodies.
What do they get?
The dedicated Amazon customer already owns a few of the goodies – most of the equipment listed above is into their 2nd or 3rd generation by now. Only the Ring Doorbell Pro and the Camelot Deadbolt are attached to the house. So if a buyer already owns the other gear, they can take it with them – and receiving duplicates of the Echo Spots, Shows, etc. isn’t much of a prize.
For the casual Amazon customers, do they even want/need the high-tech gear?
Because they aren’t handing you a check for $5,000 – instead, you get some household goodies that can all be bought separately for $100 to $400 each.
Or will click-a-button real estate be enough of a thrill/reward?
"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 "