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Solutions for Potential Sellers

The real estate market is red-hot, prices are higher than ever and buyers are begging for inventory!

Many homeowners want to take advantage of this opportunity but are worried where they’ll go next. It’s a tough market to be a buyer, but this shouldn’t discourage you from selling your home for the highest price ever – AND we can help! Here are a few solutions:

1. Longer escrow. Gives you time to secure your next home.

2. Rent back. In the past six months, we have arranged rentbacks of 3-6 months for our sellers!

3. Sell your home contingent upon buying. We can lock your home’s buyer and price, and then go shopping!

4. Move in with relatives for a bit. Nothing like some quality family time!

5. Buy your next home first – using a Compass bridge loan. Go for maximum convenience!

6. Find a short term rental in the area. Spending the summer in a beach house doesn’t sound that bad.

Don’t miss out on the GREATEST REAL ESTATE FRENZY OF ALL TIME!

Call or text Jim at 858-997-3801.

Staging in 2021

Staging and professional photos create the best first impression of a home, which helps to pre-sell the buyer. It makes them want to get there faster to confirm they’ve found the right house for them. How much does staging add to the price? Hard to put a specific number on it, but you should have more offers faster.  What drives the eventual price in this market is how the listing agent handles multiple offers.

WASHINGTON (April 6, 2021) – A new survey from the National Association of Realtors® reveals that home staging continues to be a significant part of the home buying and selling process.

The biennial report, the 2021 Profile of Home Staging, examines the elements of home staging, including the perspectives of both buyers’ and sellers’ agents, the role of television programing and the expectations of buyers.

“Staging a home helps consumers see the full potential of a given space or property,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “It features the home in its best light and helps would-be buyers envision its various possibilities.”

Buyers’ agents overwhelmingly agreed, as 82% said staging a home made it easier for a buyer to visualize the property as a future home.

These agents also said that visuals themselves are helpful, even more so in relation to buying a house during the coronavirus outbreak. Eighty-three percent of buyers’ agents said having photographs for their listings was more important since the beginning of the pandemic. Seventy-four percent of buyers’ agents said the same about videos, and 73% said having virtual tours available for their listings was more important in the wake of COVID-19.

“At the start of the pandemic, in-person open house tours either diminished or were halted altogether, so buyers had to rely on photos and virtual tours in search of their dream home,” said Lautz. “These features become even more important as housing inventory is limited and buyers need to plan their in-person tours strategically.”

Staging also increased the sum buyers were willing to spend for a property, according to the report. Twenty-three percent of buyers’ agents said that home staging raised the dollar value offered between 1% and 5%, compared to similar homes on the market that hadn’t been staged.

Coincidently, the response from sellers’ agents was nearly identical, as 23% reported a 1% to 5% price increase on offers for staged homes.

Eighteen percent of sellers’ agents said home staging increased the dollar value of a residence between 6% and 10%. None of the agents for sellers reported that home staging had a negative impact on the property’s dollar value.

Moreover, 31% said that home staging greatly decreased the amount of time a home spent on the market.

Exactly which parts of a home to stage vary, although living rooms (90%) and kitchens (80%) proved to be the most common, followed closely by master bedrooms (78%) and dining rooms (69%). As many workers were forced to work from home due to the pandemic, 39% staged a home office or office space.

Television programing played a noticeable role in how buyers viewed a potential property, according to Realtors®. Agents surveyed said that typically 10% of buyers believed homes should look the way they appear on TV shows. Sixty-three percent said buyers requested their home look like homes staged on television. Sixty-eight percent of Realtors® reported that buyers were disappointed by how homes appeared compared to those seen on TV shows.

In some cases, agents found that TV shows could influence a buyer’s perspective about a home. Seventy-one percent of respondents said that TV shows that depict the buying process impacted their business by setting unrealistic or increased expectations. Sixty-one percent said that TV programs set higher expectations of how homes should look, while 27% said that TV shows result in more educated home buyers and sellers.

“The magic of television can make a home transformation look like it happened in a quick 60-minute timeframe, which is an unrealistic standard,” said NAR President Charlie Oppler, a Realtor® from Franklin Lakes, N.J., and broker/owner of Prominent Properties Sotheby’s International Realty. “I would advise buyers and sellers alike that before house hunting or before listing, they connect with a trusted Realtor® to get a reasonable sense of what’s out there and an idea of what to expect.”

Eight-one percent of those surveyed said buyers had ideas about where they wanted to live and what they wanted in an ideal home (76%) before they began the buying process.

Forty-five percent of surveyed Realtors® said they have seen no change in the share of buyers who planned to flip a home in the last five years, while 42% said they had.

Also, 59% said they have seen an increase in the buyers who planned to remodel a home in the last five years, while 34% said they have seen no change. Agents surveyed said that typically 25% of buyers who plan to remodel will do so within the first three months of owning their home.

https://www.nar.realtor/newsroom/nar-finds-home-staging-helps-buyers-visualize-homes-sell-faster

Listing Agents & Bidding Wars

Let’s review how some listing agents have been handling their bidding wars in 2021.

  1. Ignored a $60,000 non-refundable deposit and took an offer that was $40,000 lower.
  2. Once they get to the highest offer, they insert their own buyer at the same price.
  3. Let an escalation clause determine the winner, and ignore the others.
  4. Counter for highest-and-best, then pick a winner before everyone responds.
  5. Not respond at all.

There are no rules. No guidelines. No laws.

The best our association can do is to issue a spreadsheet form.

Thus, anything goes.

Here’s how I handle it.

The home on Galena Canyon had originally listed for $1,599,000 and had 25 showings and six offers over the first weekend in March.  We had three buyers (one was contingent) who were willing to pay around $1,750,000, so I asked the two non-contingent buyers to make their second highest-and-best offer to determine the winner – which they did, and $1,770,000 won it. I changed the list price in the MLS to $1,770,000, and marked it pending.

Last Friday morning, the buyer had an unforeseen glitch, and we fell out of escrow.  We go back on the open market for Easter weekend, hoping for the best – knowing that the urgency is much higher when the listing is new and fresh.

I had added this to the confidential remarks:

Since we hit the market, these have happened: 16175 Deer Ridge 3,451sf closed for $1,775,000 on March 1st. 15288 Cayenne Creek 3,877sf closed for $1,800,000 on March 30th. 16342 Cayenne Creek 3,446sf pending, listed for $1,825,000. 9716 Wren Bluff 3,780sf pending, listed for $1,835,000. Plus Mark listed one for $2,795,000 around the corner. Built-in equity!

This time, we had six showings and three offers over list, which I thought was pretty good.

I had told the agents to make their highest-and-best offer, and while they were all competitive, I thought there might be more gas in the tank. So I politely asked all three to H&B again, and one emerged from the others by packing another $40,000 onto their first offer.

We are in escrow at $1,840,000, after starting at $1,599,000 a month ago.

Isn’t that the result you’d like to see for yourself, or someone you know?

It is not a given how listing agents handle a bidding war. Most agents just grab their favorite, and turn off their phone.  You deserve better.

If you, or someone you know, is thinking of selling, I’d sure appreciate a call!

Back On Market During Frenzy

Our 4S Ranch escrow fell apart yesterday on a quirk in the loan underwriting process.  The buyer had a glitch in his visa record with the government, where it showed as pending, not approved. Boom – bank wouldn’t give him a mortgage.

It is usually hard to re-ignite the original urgency, but this is 2021!

Our original list price was $1,599,000 on March 1st.

I raised the list price to $1,770,000 to help give guidance to everyone in the marketplace (it was our agreed-upon sales price). Since we got started, these four listings have happened:

  • 16175 Deer Ridge 3,451sf closed for $1,775,000 on March 1st.
  • 15288 Cayenne Creek 3,877sf closed for $1,800,000 on March 30th.
  • 16342 Cayenne Creek 3,446sf listed for $1,825,000, now pending.
  • 9716 Wren Bluff 3,780sf listed for $1,835,000, now pending.

We are 3,780sf and we’re sticking with our $1,770,000 list price. On Easter weekend!

https://www.zillow.com/homedetails/10541-Galena-Canyon-Rd-San-Diego-CA-92127/96742404_zpid/

Spencer the iBuyer

Spence has gotten involved with Offerpad, joining the other disrupters who lead with lies and insults about traditional realtors.

He said, “The real competition for Offerpad isn’t Zillow or Opendoor, it’s the fact that 99.5% of the time people sell their home the old analog way.”

But at the same time, these consumers are also relying more and more on services like Uber, Instacart and Amazon.  “They’ve become conditioned to wanting an ease of use,” Rascoff said. “They’ve been conditioned to pressing a button on their phone and having some magic happen.”

His magic costs 7.5%.

They don’t mention their percentage, but even analog people have a calculator handy.  To offset, they pack their Traditional Offer with concessions and costs that add up to 9%, which makes theirs look like a deal.

But the worst part for any seller who makes their home-selling decision based on the cost is that they assume that everyone will sell the home for the same price. Offerpad will try to convince you that their ‘team of real estate experts’ will pay the full retail value for your home, and then hit you with the testimonials:

Will consumers go for it?

Will people ignore the math, not speak to a traditional realtor, and not know the real value of their home – and instead just press the button to have some magic happen?

P.S. They aren’t the only ones using that photo, though not sure who went first:

When Will the Frenzy End?

Let’s call it the Big Confluence:

  1. Covid concerns keep diminishing over the next few months.
  2. More sellers feel safe to put their home on the market.
  3. More sellers find a way to hurry up and get their home on the market.
  4. Buyer skepticism rises.
  5. Agents get too cocky.
  6. Prices reach their limit.

All the above will cause inventory to increase, and buyers to relax. Then what?

This is my craziest theory of all-time:

Zestimate Accuracy

Let’s go around the horn with the automated valuation models.

Zillow says that their zestimate is within 1.9% of being right on price with the on-market homes, which sounds really good until you realize what that means.

Their zestimates of the OFF-MARKET homes are way off – especially in this market:

Once we listed for $1,599,000, they kept their zestimate at the $1,336,035, but after we received six offers that were all over list price and accepted one at $1,770,000 – and raised the price accordingly – then Zillow bumped their zestimate by $352,658:

You sure you want to sell your house to them for the off-market zestimate?

Redfin said they didn’t have enough information to generate a value when they saw my initial $1,599,000, but then they came around once the list price was raised to $1,770,000:

The other automated valuation models aren’t any better, but at least they don’t cheat:

GET GOOD HELP!

 

Zillow Buying Houses For Zestimate Value

There are a few Zillow issues to unpack here, so let’s start with them saying they are willing to buy your house for the amount of the zestimate – which is fine, if you don’t care about cashing in on the actual value.

In their press release, the boss claims that the zestimate’s nationwide median error rate for on-market homes of 1.9% which sounds simple enough – for years they have been adjusting their zestimate to the list price once a home goes on the market.

But once my new listing went on the market, they didn’t adjust the zestimate upward.

Would you sell your house for $1,336,035, when Jim the Realtor says it worth $1,599,000?

Factor in that Zillow charges more than I do, and it would mean that hiring me to sell your house would net you about $300,000 more – and that’s if we sell for the list price (it might go higher).

The big difference?

I don’t spend $100 million per year in advertising – they will reach people that I don’t reach.

Tell people to use me instead!

Link to my listing on Zillow

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