Somehow the buyers didn’t notice these bumps in the putting green until late in the process, and they didn’t look like a problem to me. But hey, if it’ll make you happy, we’ll fix it for you!
Our assistant Brittnie is a licensed realtor, and for months she has been working with a couple in search of the right entry-level home. Buyers at the low-end of every market have had no negotiating power for the last ten years, but some of the softness in our soft landing can be attributed to pilot error – the listing agents are still (too) cocky.
They made an offer that was 8% below the list price on a home that had been on the market for 3 months with no price adjustment. It was easy to figure out why it wasn’t selling – it hadn’t been remodeled (the type of homes that might have gotten lucky before, but now are struggling to sell).
The sellers counter back at 2% under list, and the agent tells Brittnie on the phone, “Don’t even think about countering the price”.
But that’s not all.
He also included the usual terms left over from the high-flying days:
1. Sold as-is, no repairs.
2. No termite.
3. No home warranty.
The buyers walked.
Previously, all buyers who were frustrated enough by bidding-war losses and rapidly-rising prices would succumb to the demands of the listing agent just to get it over with.
And it’s not just the terms, it is the attitude of the listing agents that is a turn-off too. Buyers aren’t going to put up with it when they see houses languishing on the market these days.
Another favorite is for listing agents to crank down the contingency period from 17 to 10 days. I had one do that to me yesterday on a house that we already confirmed had no permits on record at the city (it’s an older house).
I asked him if he was going to cancel the deal if we didn’t release contingencies after 10 days. His answer? “Hmm, well, I don’t know.”
Is it worth it to put the screws to the buyer in the middle of November on a house with no permits just so you have the option to go back on the market around Thanksgiving?
If the market sluggishness continues, some of it will be self-inflicted.
Get Good Help!
Drone footage inside and out of our Solana Beach listing:
The truth about our success is slowly being revealed:
Remember before the last crash when buyers and sellers were far more cavalier about their real estate decisions? Why was that? Because if they needed to move again, there were always a reasonably-priced house down the street or around the corner for sale.
But things sure have changed.
Selling/buying/moving is no longer just something you do casually. Because of the difficulty, you are probably only going to move if, and when, you decide to make a permanent lifestyle change.
Look at the differences just since this blog has been around:
NSDCC January through September:
|Year||#Detached-Home Listings||Percentage Over $2M||Percentage Under $800,000|
There Are Fewer Homes For Sale – In particular, there are fewer high-quality homes for sale that would make it worth it for existing homeowners to move up or down. In spite of having loads of equity, trying to find a home better than your current home is a major obstacle.
Home Prices Are Higher Than Ever – If you can find a house that suits your needs, the price will be higher than ever. You have to pay more, qualify for more, and be willing to eat higher recurring costs like property taxes too.
Cost of Moving is High – Gone are the days when you could throw everything you own into a U-haul and move in a day. Commissions, closing costs, packers & movers, home upgrades, and new furniture will cost you $50,000 to $100,000 or more in any house you buy around the NSDCC.
Competition is Stiff – As a result of the three items above, buyers are very picky and holding out for the highest quality. Staying on the edge of your seat 24 hours a day can take its toil!
It’s a Market For The Affluent – With only 5% of the NSDCC houses priced under $800,000, it means home buying is only for those who have real horsepower – and regular folks are priced out, unfortunately.
The stakes are high, and making any mistakes now will be very costly. The worst part is that home prices are moderating (except in Solana Beach), and without an increase in their equity position, those who need to sell shortly after purchasing could incur a substantial hit.
We are in the No-Mistake zone. Get good help!
P.S. The Solana Beach house on Rios that set the all-time non-oceanfront price record in March at $8,250,000 was relisted for $9,750,000…..and it went pending today!
The Battle of Segovia is over.
Two of the same models were for sale across the street from each other in La Costa.
I had listed the green house on May 30th for $859,000, but because the seller claimed to be intensely private, he didn’t want it on the MLS, no signs, and no open houses.
I was curious to see if it is possible to sell an older house for a premium price just off internet ads – but we didn’t have one showing, so we agreed to part ways after five weeks.
Before we did, I suggested that we lower the price to $829,000.
The seller said, “I can sell it myself for that – I don’t need you”.
At the end of July, I listed the house across the street at 3022 Segovia Way for $888,000. It was featured here a few times – it was the original-looking house with the 13,000sf lot that backed to the school/park:
Twelve days later an agent from the auction company puts the green house on the MLS, priced on the range $839,000-$859,000.
When I was dealing with that seller, he was unwavering about price, so no surprise to see them adopt a similar pricing strategy – especially with me across the street at $888,000.
But it caused a standoff.
Buyers liked my big yard but were cautious about backing to a school yard and the amount of work needed to bring the home into this century. The competitor across the street was cheaper and move-in ready….if you liked his DIY improvements.
The inevitable price war began:
August 12th: She listed on the range $839,000-$859,000.
August 19th: We lowered to $859,000.
August 23rd: She changed to $830,000 (no range).
August 27th: We lowered to $839,000.
We were doing open houses at the same time and were friendly competitors who compared notes. The action was good, and I thought we were probably close to selling both.
But her listing was running out at the end of August.
So when she re-listed with the seller, they decided to adopt the auction format instead. She re-inputted the home as a new listing, priced at $699,000!
Their format provides some uncertainty because the seller has an undisclosed minimum price and they can sell the house before the auction. Up until now, everyone knew that the seller had been expecting $800,000+, so buyers figured that they weren’t going to be able to buy it for the $699,000 or close – and they’d have to wait a month until the auction before finding for sure.
We didn’t change our price or strategy, and two weeks later – after buyers had a chance to re-calibrate – we had three offers and sold for $835,000.
The house across the street sold for $750,000.
For best results, list your home with Jim the Realtor!
I went through the NSDCC open-house list and these are my favorites based on price, location, DOM, and agent. They start in La Jolla (four on the oceanfront!) and go north up the coast as you scroll down.
Let me know if you’d like me to create a personal collection for your search!
Just to have 30+ brokers come to your new listing must mean something – the price has to be close. But the listing agent has to be able to sell it, which is the missing ingredient for all of the disrupters.
Old-time agents gather their evidence and then go all out to convince buyers and agents the property is worth it. Look around – we are selling the whole lifestyle:
How did you like Donna being on duty for the first hour? Wasn’t it great to meet wifey?
506 Pacific Ave., Solana Beach
Open House 12-3pm Today!
Solana Beach suffers the same fate as many well-established high-end areas.
There aren’t many comps to begin with, and it’s ripe for off-market sales.
Three of the last four on the street were off-market sales – were they low?
I’m hanging my hat on the cheapest one, 424 Pacific. The story poles are already up, so the $2,555,000 was really just land value – and that corner is much busier than at the subject property.
But let’s also consider that Solana Beach has been remarkably under-valued for years, and we are just now starting to see what buyers are willing to pay. It wasn’t long ago that the non-oceanfront homes struggled to get more than $4,000,000.
Three recent sales over $6,000,000, with one of them back on the market for nearly $10 million!
My $2,995,000 looks like a deal!
Come on by and check it out today, 12-3pm!Link to Zillow listing