Thanks to the new fan-favorite Instagram page “Zillow Gone Wild,” we now have this hand-picked collection of seriously odd real estate findings that’ll make you look twice, thrice, and think of something nice to say about it. Because many times, money can get you a mansion, but it won’t buy you taste.
This is nothing. What would be entertaining is if they required the listing agent’s commission to be exposed too.
The Department of Justice today filed a civil lawsuit against the National Association of REALTORS® (NAR) alleging that NAR established and enforced illegal restraints on the ways that REALTORS® compete.
The Antitrust Division simultaneously filed a proposed settlement that requires NAR to repeal and modify its rules to:
Provide greater transparency to home buyers about the commissions of brokers representing home buyers (buyer brokers),
Cease misrepresenting that buyer broker services are free,
Eliminate rules that prohibit filtering multiple listing services (MLS) listings based on the level of buyer broker commissions, and
Change its rules and policy which limit access to lockboxes to only NAR-affiliated real estate brokers.
If approved, the settlement will enhance competition in the real estate market, resulting in more choice and better service for consumers.
“Buying a home is one of life’s biggest and most important financial decisions,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Home buyers and sellers should be aware of all the broker fees they are paying. Today’s settlement prevents traditional brokers from impeding competition — including by internet-based methods of home buying and selling — by providing greater transparency to consumers about broker fees. This will increase price competition among brokers and lead to better quality of services for American home buyers and sellers.”
According to the complaint, NAR’s anticompetitive rules, policies, and practices include: (i) prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn; (ii) allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free; (iii) enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered; and (iv) limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS. These NAR rules, policies, practices have been widely adopted by NAR-affiliated MLSs resulting in decreased competition among real estate brokers.
NAR is a trade association of more than 1.4 million-member REALTORS® who are engaged in residential real estate brokerages across the United States. NAR has over 1,400 local associations (called “Member Boards”) organized as MLSs through which REALTORS® share information about homes for sale in their communities. Among other activities, NAR establishes and enforces rules, policies, and practices that are adopted by the Member Boards and their affiliated MLSs.
San Diego didn’t make the NAR list of vacation-home areas (counties where 20% of the housing stock is for seasonal use), but our market should be enjoying some additional second-home purchases:
Vacation home sales are outperforming total existing-home sales. Sales of homes intended for vacation use rose to 109,100 in the past three months of July-September, a 44% gain from the level of 75,600 sales during the same period last year, according to NAR estimates based on information gathered from the monthly REATORS® Confidence Index Survey and NAR’s existing-home sales estimates. In comparison, total existing-home sales during July-September rose 13% year-over-year (1.72 million in July-Sept 2020 vs. 1.52 million in July-Sept 2019).
The pandemic and low mortgage rates have increased the desirability and affordability of owning a vacation home. Buyers may be desiring a vacation home as a weekend getaway as urban-based leisure activities are still constrained by social distancing. The ability to work from home also means buyers who can work from home can spend more time at and enjoy their vacation home. Historically low mortgage rates have also made a home purchase more affordable, while rising prices in past years have yielded larger home equity gains that can be tapped (through say a home equity loan) to use for a down payment.
He wants to hook you up with the top agents in your area – AND only charge you a 2% commission.
They keep the 2% circle at the bottom of the advertisement for the entire 30 seconds to engrain in your head that they have some magic network of top agents who will work for the discount rate.
Don’t believe it.
The agreement they have with agents is that you will be presented with a 2% option, which is the typical For-Sale-By-Owner plan – if you find your own buyer, then the agent will handle your paperwork for 2%. At that point, you’ll probably wonder about the more traditional plans where your listing agent handles the whole process. The next thing you know, you’ll be signing the listing agreement at 6%.
Why will these listing agents insist on the more-expensive plan?
It’s because they have to pay a finder’s fee to the advertiser.
Whenever a corporate third-party is referring you to an agent, there is a fee paid by the agent – and it’s hefty. Whether it is a TV-advertiser, an internet pitch, or relocation company provided by your employer, they all take a big cut out of your agent’s commission – usually 25% to 30%.
The great listing agents – the ones you hope will sell your house for the most money – will pass along this finder’s fee to you. It means you’ll be presented with 6% or 7% options, and/or a commission that drastically discounts the buyer-agent’s side of the commission.
The agent-referral industry relies on the bait-and-switch.
If this guy said that he had the top agents in your area that charge 6%, would he get any calls? No.
The home-selling business is known for being the Wild, Wild West.
There are a few rules and ethics filed away in a drawer somewhere but there is no enforcement unless you do something really bad, like this guy – who only lost his real estate license a couple of months AFTER he was convicted and sentenced to three years in jail.
So when the Clear Cooperation Policy went into effect in May that stipulated an agent could input a listing into the MLS as ‘Coming Soon’, as long as they didn’t show it to anyone until it was marked as an active listing, many of us scoffed.
But apparently for our local association, this is the hill to die on:
During the short-sale era, agents defrauded banks out of millions of dollars, and all the association did was to produce a video of realtors talking about how to do short sales properly.
Bidding wars are regularly abused by listing agents who tilt the table in favor of themselves or a favored realtor, and the association doesn’t offer any solutions.
And the Clear Cooperation Policy still allows off-market listings to be sold within the same brokerage – and never offered to outside agents or the public.
There are plenty of more egregious violations of the consumers faith and trust, so why is the association selecting this rule to be the one to enforce, and issue heavy fines? They are dependent upon other agents ratting out the violators, so it’s not like there will be a MLS police, but will they start enforcing any other rules – and issuing heavy fines – while they are at it? The agents who get convicted of other violations only get a letter in their file for six months.
If agents want to show their Coming Soons, they can always join the San Diego Association of Realtors instead, where the fines are limited to $500. Or if the purpose of your Coming Soon is to test the market, just enter your new listing as Active instead and answer your phone for a couple of days and you will have ample evidence of how the market feels about it.
Here’s another tepid response to an issue that bugs consumers and agents alike:
The local recruiting effort by Compass has been very effective, and it’s really starting to show up in the numbers. With 1,200+ productive agents in San Diego County now (I was #160 in July 2018), we are taking away market share and becoming the dominant brokerage – especially in the coastal markets.
How will it all play out?
There could be a tectonic shift in the business if this lawsuit prevails. The result will be that the commission rate paid by the seller to the buyer-agents will be revealed publicly (can’t find them now), and it could end up that buyers will have to pay their buyer-agent’s fee, instead of the seller:
The California Association of Realtors kicks off the 2021 forecast season! To show how far removed they are from reality, check their foreclosure forecast. Homeowners are flush with equity, and if they get in trouble, they will sell before they getting foreclosed because realtors will be soliciting them the minute their notice of default is recorded. Plus the banking laws were changed/ignored last time and lenders have figured it out – don’t foreclose on anyone unless there is ample equity so the bank doesn’t lose money.
Yet the association thinks that foreclosures will make up 5% to 30% of the market, and be discounted up to 40%??
My prediction? Foreclosures will make up less than 1% of the market next year, and no discounts.
The number of homes on the market — down 50% in 2020 — are expected to stay low in the coming year, creating more upward pressure on prices. Southern California likely will see a similar pattern to the statewide trend, Appleton-Young said.
This year’s median house price — or price at the midpoint of all sales — is projected to rise 8.1% from 2019, due in part to strong sales of higher-priced homes, pulling up the overall averages.
While home values rose in all price segments this year, the biggest price growth was in the top 20% of the market, Appleton-Young said. That’s because professionals and other high-income earners weren’t hit as hard by the pandemic as were renters and people working in the restaurant, hotel and hospitality sectors.
Foreclosures also are projected to rise next year, although not nearly to the degree they did during the Great Recession.
For example, CAR economists projected bank-owned homes will make up between 5% of next year’s listings in a best-case scenario to 30% in a worst-case scenario. By comparison, 60% of homes selling at the start of 2009 were bank-owned, with price discounts in the 60% range. A worst-case scenario for next year foresees discounts of 40% for foreclosed homes.
Ultimately, the housing market is ending 2020 in much better shape than anyone expected, Appleton-Young said. For example, house sales shifted from a 41% drop in May to a 15% gain in August, CAR figures show.
“The recovery coming back has been absolutely stunning,” Appleton-Young said. “There’s just a lot of uncertainty, so we tend to be conservative looking at next year.”
The time-honored tradition of buyers hoping to sway sellers with a personal introductory letter came to an abrupt halt this month with the new FHDA form (see snip above).
Not only has it been customary to submit a letter of introduction with your offer, but if you don’t, the listing agent usually asks about the buyers. I had one last week say, “Tell me their story” which probably wasn’t meant to gather information to use against them, but who knows?
Paragraph 8A mentions ‘actual or unconscious bias’. Agents who are stuck in their ways may not realize how this information is being digested.
It’s not just for agents either. Paragraph 7 specifically includes sellers and landlords too.
Nobody reads these forms so the practice will probably continue for a while, which means that those who DON’T include a love letter could be hurting their chances if other agents keep doing it.
The pandemic is still raging, the President of the United States is in the hospital, the election is right around the corner, and so are the holidays. The frenzy has to slow down at some point, doesn’t it?
So I schedule for 11am, and show up to find today’s list of showings taped to the front door:
The listing agent happens to be there, so we discuss the current market conditions. She is a long-time independent broker like myself (who now also works @ Compass) and we agree that the environment is ripe to convert to single agency naturally, and buyer-agents being eliminated.
It’s not because it’s what best for everyone involved, because clearly it’s not good for buyers and sellers – except maybe for those sellers who live in the house being barraged by showings the first few days on the market. It doesn’t sound like much of a price to pay, but for homebodies, or those with little kids & pets, it can be a major inconvenience.
Zillow is the only entity who spends eight or nine figures per year on advertising, so they will control our destiny – and with them setting up brokerage units manned by employee-agents in all 50 states, you can get a feel for what’s ahead.
In the meantime, consider these developments.
Today’s listing agents are making it harder to show and sell their listings, they are lowering the buyer-agent commissions (and taking the difference), and some realtors are advertising guaranteed cash offers as the better way to sell your house.
As is the case throughout America, the truth doesn’t matter nearly as much as how loud you can scream.
The greed displayed by these listing agents feeds upon itself, because other agents witness these practices happening without any reprimands, and they start to believe it’s acceptable…..and then they do the same thing. The game is evolving into how to beat the buyer-agents out of their commission.
In the short-term, realtors can justify this revolution by pointing to the commercial brokers who have practiced their real estate like this all along. Heck, less competition will slow down the rapid price increases we are experiencing, and help to trim the over-population of realtors everywhere too….so you can say there are good things about it.
But it all plays into the hands of Zillow, and eventually they will be who processes your order.
Jim the Realtor is legit - I interviewed three brokers; he said list price should be $100,000 higher than the other two brokers; listed it with him and had all cash (no financing) offer in two days, five day contingency period, closing in two weeks - and it closed at his recommended list price. I could not recommend anyone more than I recommend Jim the Realtor.
When we moved to San Diego in 2005 we rented a big house on Mt. Soledad (La Jolla) with 180 degree ocean views for the same payment as a mortgage on a dump in Chula Vista. Clearly something was wrong. Yet, the media was full of the usual happy-talk nonsense, so I was glad to find Jim's blog. I've followed his honest assessments and data since.
We decided to sell and move to AZ at Thanksgiving. Dec. 1st we met with Jim to sell our home. We closed today (29 days later). Jim orchestrated a feeding frenzy -- we had 25 showings in 2-1/2 days, multiple offers, and sold for well over asking price. I'd say he earned his commission! We have owned and sold homes in 5 different States always using experienced, productive, full-time realtors. Jim outshines them all.
You don't decide to sell and close 29 days later over Christmas (with COVID lockdown) without some miracles. Donna was amazing at performing lots of those miracles and ensuring that everything was done right and on time. They are a terrific team with a very responsive and professional network.
Where do we begin..2020 has been a year for everyone. When COVID hit and shut down both my husband and my businesses, we were left with a mortgage and very little income coming in. We were stressed, scared and felt stuck. We made the hard decision to sell our home and move out of state. We contacted the Klinges' and spent a good hour going over what we hoped we could accomplish. Jim and Donna came over with comps in hand and suggestions on improvements to get our house ready for the market. It was overwhelming to think about, but Donna was there and one step ahead in every scenario. Basically we just approved what they suggested and Donna handled literally everything. We placed our house on the market and within the first day we had multiple offers well above asking price! We couldn't believe it. We were overjoyed! Jim countered the offers to weed through them, and everyone came back with way more. It was amazing, and we are ?? sure it was because of the staging and repairs the Klinges suggested we do.
Due to unforeseen dishonesty from the buyers lender, we hit a big hurdle when trying to close. We had already moved out of state and were shocked when three days before closing the lender dropped a bombshell on the buyers and us. However, Jim and Donna handled it like veterans, not afraid to play hard ball and represent their clients. After a few phone calls with us, and several between Donna and the lender, they had a plan B-Z to make sure we were taken care of. In the end we closed with even more money than we ever thought possible and with very little work from us. The Klinges handled this entire "2020" worthy event with the utmost professionalism and did everything in their power to not only make this as smooth as possible for us, but we also walked away with more money from the sale of the house than we ever hoped for. After working with Jim and Donna, you don't ever use anyone else. They are hands down the best team to represent you in any scenario.
Working with Klinge Realty Group was a great experience! They are very responsive, professional and knowledgable about the real estate market! I would definitely recommend Klinge Realty Group.
Jim and Donna Klinge made the sale of our condo extraordinarily easy. They know the market and gave us sound advice backed by details and very considerable experience, reflected both in the initial pricing and subsequent negotiations. They work together as a team and are always available to talk. We had a few challenges with our property and they were able to coordinate the resolution to everything, including items that I would not think would ordinarily be their responsibility to handle. They made the whole process effortless on our part. They are folks with high integrity and we cannot recommend them highly enough.
Review for Member: Donna Klinge
I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in about 15 years. On the buy side, Jim is the PERFECT combo of: completely digitally savvy (he will pull data all day long until you feel comfortable with your chosen house, area, school district, anticipated appreciation rate...anything!), he's super well respected and known in the area by other agents, an amazingly cool but strategic negotiator, is totally devoid of desperation for a sale/commission, and more.
Then once you get into contract phase, Donna literally handles every last and final detail in a concierge-like manner -- totally shielding you from the daily back and forth, noodling and annoyances of the buyer's requests. She solves it ALL; it's miraculous what that woman accomplishes over and above what is even expected in a buy/sell transaction.
On the sell side, Jim and Donna do the same, but even moreso. Donna in particular truly takes everything off your plate: she'll manage getting the house painted, the carpets replaced, she'll go on site (as she Jim both did for me when selling our rental properties) to work with the renters and make sure the house is ready to show -- freeing me to have to take time off of work to do so. They work with A+ integrity, too, so you know you are serving all parties fairly and lawfully throughout.
A home purchase/sale is the most considered you'll ever make. HIRE A SAVVY AGENT, not a friend!, and get what you need out of the transaction. Jim and Donna are our agents for life.
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. Jim's vast experience means he has worked with several realtors and knows the market all over north county. Donna is AMAZING in processing everything in the transaction. She scheduled trades people to work on the house in preparation for the sale as well as the repairs needed before closing. She communicated clearly every step of the way about what would be happening. She took the weight off my shoulders for the whole process. I will always use Jim and Donna for my future real estate needs and I whole heartedly recommend them to anyone buying or selling a home.
Jim and the team at Klinge Reality are without a doubt the best in the business! Not only was Jim helpful and extremely knowledgeable, he was patient and determined to help me find my first home. Jim and his team have been in the business for many years, and it shows. Jim is a wealth of knowledge and was my biggest proponent despite the temperature of the competitive market. I ended up getting the perfect property in my dream neighborhood all thanks to Jim. From the day my offer was accepted, Donna was a real lifesaver. She was extremely helpful, responsive, and knowledgeable when it came to every minute detail, and held my hand through the process. As a first time home buyer I had no idea what the process would entail, but Donna curtailed every concern I came across and made the escrow process feel seamless. Jim and Donna provided me the best home buying experience, and I am very grateful for all they did for me. It was truly a pleasure to work with Jim and Donna and I am already looking forward to the next time we work together!
Review for Member: Richard Morgan
Richard is an amazing realtor! He has high integrity and genuinely cares about his clients and their needs. Richard paid close attention to what I was seeking in a home and was very patient in our search to find it. I would highly recommend Richard and will use him for future transactions. Truly a different kind of realtor experience!
Could not be happier with my experience with Jim and his team. He helped me sell a very unique and challenging property. Throughout the entire process he was always available, honest, transparent, trustworthy, and always put my interests as a seller first. A (rare) true professional! During close of escrow Jim went above and beyond to complete the deal. It would not have been possible without his experience, fantastic team, and pure dedication. Highly recommended!
Thanks Jim and Donna Klinge!