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This presentation covers both sides of the concerns about home values plunging because of the effects of the pandemic on the economy.
Suze says don’t buy a house until later this year because there could be foreclosures, and David points out that the CARES Act already gives those in forbearance at least 6-12 months. I’ll point out that the rules changed after the last crisis, and now lenders don’t have to foreclose if they don’t feel like it – which makes foreclosure an option, not a requirement. It’s a huge change that Suze doesn’t see.
Our society is now geared to take advantage of other people’s misfortune, so insiders will pounce.
Our MLS is going to provide a Coming Soon feature, which will fluster the agents who say that the Coming Soons build anticipation (like a movie trailer) and test pricing, but who then use the concept to circumvent the MLS and instead advertise directly to the consumer in hopes of double-ending the commission.
The Coming Soon status launches in San Diego Paragon Tuesday, May 19th. From that day forward, when entering listings for sale in San Diego Paragon, you may choose between Active and Coming Soon.
To prepare for this launch, Paragon will undergo scheduled maintenance from 10:00 PM PT Monday, May 18th to 6:00 AM PT on Tuesday, May 19th – a total of eight hours. Paragon will be unavailable during this time. Below is a brief video to help you understand the details of this status.
How does Coming Soon work?
Coming Soon allows listing agents to take up to 21 days to stage the property, take interior photos, prepare it for showings, and so on, without Days on Market accruing.
How is Coming Soon similar to Active?
– Marketing is allowed in both statuses, so long as Coming Soon listings are clearly marked as Coming Soon.
– Both Coming Soon and Active listings are fully displayed to other professional users of MLS systems.
– The listing agent offers a commission on both Coming Soon and Active listings.
How is Coming Soon unique?
– Coming Soon listings have limited distribution: they will not go out from the MLS to portals like Zillow, Trulia, and Realtor.com, or to IDX broker and agent websites.
– Showings are not permitted in Coming Soon.
– Because of these limitations, Days on Market do not count in Coming Soon.
Hat tip to Rob Dawg for sending in this podcast by a realtor president – an excerpt:
It’s been a strange, and difficult time for us. So, imagine what it’s like if you are trying to buy, or sell a home. Tim Comstock is President of the Ventura County Coastal Association of Realtors, as well as a working Real Estate Agent. He says that if buyers or sellers can wait, they should.
Comstock says about 20% of the homes listed when the crisis started have been taken off the market, but some people still have to move ahead because of factors like a job move or a death in the family.
Comstock says despite the difficulties, some deals are still happening. He admits it isn’t easy.
As for the future, what does the industry expect? Comstock says people will always need housing, but much will depend on whether people keep their jobs, so that they’re in a position to buy in the first place.
Within twenty seconds into this podcast interview, Tim said that buyers and sellers should wait if they don’t have to move, and that he had nine listings currently that he is struggling to sell. This is the guy who is the public face of Ventura County real estate, and the elected leader of the local realtor group.
The listeners are looking to him for guidance, and leadership.
He did them a great disservice.
While we know that being the president of a realtor association is mostly ceremonial, when a crisis develops on your watch, it’s your time to deliver for your people. Agents are counting on you to help them!
This is our Super Bowl, and the ultimate challenge of our career. This is where realtors get to rise up and demonstrate our value as problem solvers – and then provide solutions!
He threw an interception here – time to get back in the game and throw for a touchdown.
He should get back up to the microphone and apologize – maybe he had some bad pizza the night before? Then tell us how realtors can serve their clients, and assist them with moving while we’re in this predicament. It’s what leaders are expected to do.
We may not win every game, but let’s try.
This isn’t what buyers and sellers think. It’s what realtors are thinking that their buyers and sellers are thinking, but we aren’t mind readers so it’s really what realtors think…..who haven’t left their house for a month.
Yes, the markets are showing delays. Sixty percent said their clients are pressing pause for a couple of months. Completely stalled, though? No—they’re simply simmering, responses show. Consumers and the industry are adapting to the changes, awaiting a hopeful return to normalcy.
“Expect second quarter home sales activity to slow down with the broad observance of stay-at-home orders, but sales will pick up when the economy reopens as many potential homebuyers and sellers indicate they’re still in the market or will be in a couple of months,” says NAR Chief Economist Lawrence Yun. “Home prices remain stable as deals continue to happen with the growing use of new technology tools. Remarkably, 10 percent of REALTORS® report the same level or even more business activity now than before the economic lockdown.”
How else are the markets faring? The survey shows 33 percent (a third of REALTORS®) have not experienced closing delays. For those who have reported delays, these road bumps often happen during the financing, appraisal and home inspection portions of the transaction process.
The key to adapting? Technology. To cultivate new client relationships, surveyed respondents say they will leverage live videos (33 percent), social media (59 percent), e-closing tech (42 percent), e-signatures (77 percent), virtual tours (34 percent), messaging apps (38 percent) and WebEx/Zoom (30 percent).Link to Survey
Many realtors will end up out of the business – look how many are unplugged:
Buyer interest declined by 90%? I think they meant that 90% of buyers don’t want to risk their life to see a home in person – they are still interested in the market as seen from the couch.
NAR’s latest Economic Pulse Flash Survey – conducted April 5-6, 2020 – asked members questions about how the coronavirus outbreak has impacted the residential and commercial real estate markets. Several highlights of the member survey include:
- Due to the outbreak, 90% of members said buyer interest declined and 80% of members cited a decline in the number of homes on the market.
- Home prices look to hold steady after rising robustly before the pandemic. Almost three in four members – 72% – said sellers have not reduced prices to attract buyers. Conversely, more than six in 10 members – 63% – said buyers are expecting a decline in home prices as buyers sense less competition in the current environment.
- Technology plays a vital role as the real estate industry adapts to the new reality of managing deals virtually with social distancing directives in place. Members said the most common technology tools used to interact with clients are e-signatures, social media, messaging apps and virtual tours.
- Residential tenants are facing rent payment issues, but many delayed payment requests are being accommodated. Nearly half of property managers – 46% – reported being able to accommodate tenants who cannot pay rent and more than a quarter of individual landlords – 27% – said the same. The recently enacted Coronavirus Aid, Relief, and Economic Security Act includes provisions on eviction prevention and small business loans and grants that are critical to keeping the rental market steady.
View NAR’s Economic Pulse Flash Survey full report here:
The seven-day moving average was +32% on March 8th, and now the average is -68.7%! This is during the peak showing season too!
But at least the current trend looks like it is flattening out? Hopefully the change of realtors being declared essential workers will mean more activity, but it might be too late already.
This will probably be the death knell for buyer-agents, especially if the ‘rona tightens the supply further, which would cause fewer listings to make it onto the MLS.
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.
Kayla sent this in:
The MLS Statement 8.0 Clear Cooperation Policy is ‘a lightweight, middle-of-the-road policy that will just make the problem worse’ because it doesn’t go far enough. It’s so full of holes that it will only exacerbate the problem, and by the time they figure it out, it will be too late to fix it. It might be too late already.
The new policy just helps to define the ways that agents can avoid putting their listings on MLS:
- Office Exclusives Are Allowed. Agents will shop around their new listings for days or weeks among their fellow agents in the office. Only once that avenue is totally exhausted will listings find their way to the MLS.
- Submitted to MLS Within One Business Day. From now on, all listings will be signed on Fridays (or postdated).
- Sellers Can Market Publicly. The listing agent isn’t supposed to publicly advertise the home, but……..
- Showings Aren’t Required. Just because a listing is in the MLS doesn’t mean agents can show it. This is the oldest trick in the book. When an outside agents calls to arrange a showing, he/she is told that the property can be seen any time….as long as it’s between 5:00-5:05pm next Thursday.
- No Penalties Mentioned. There has never been a MLS police, so any enforcement will be sketchy at best. But realtors love to rat out their fellow agents so complaints will be flying – but what will be the penalty? Most likely it will be the usual, which is a letter in the offender’s file for six months. Will it be that much?
- Stop Using the MLS. If it gets too complicated to navigate the rules, agents will just stop using the MLS. This is why being on the right team is so critical now – if all the hot deals are sold in-house, then working at a small brokerage or being an independent broker will be detrimental. Those agents will only see the leftovers as the MLS becomes an afterthought.
Local compliance was first scheduled for March 1, 2020, but they pushed it back to May 1, 2020 so agents have six months to contemplate. Will we be sitting around discussing how important it is that we share our listings with each other via the MLS?
What’s missing is that no one in the industry is demanding that we share our listings with one another because that is what’s right for consumers and agents alike. Instead, our leaders come up with a lukewarm policy full of holes and no teeth. The spotlight will cause more people to find ways around the 8.0, and proudly conduct off-MLS sales because now they are the even-sexier option.