There will be a whole new wave of lawsuits against listing agents who insist on rushing buyers through the process. They think it’s a good thing to shorten the contingency periods and then make themselves scarce – and they are going to get what they have coming to them.
Stella Guan spent months searching for a home to buy, getting outbid again and again in the white-hot real-estate market of the Los Angeles suburbs. Finally, her offer on a “beautiful” Santa Clarita house was accepted in August, she said. The graphic designer, 30, paid roughly $600,000 for the house. But after sleeping there for only a few nights, she had an unfortunate realization. “I was like ‘uh-oh, I hate this house,’ ” she recalled. “I hate this house so much.”
Looking back on it, she said, “I should have seen all of the warning signs, but the pandemic housing fever got the better of me.”
A house, unlike expensive jewelry or clothing, can’t be returned if the buyer is unhappy with it, so a cardinal rule of home buying is that you shouldn’t rush into a purchase. But in 2020, millions of Americans did just that.
Fleeing small apartments, buying vacation homes or simply looking for a change of scenery amid the crushing boredom of lockdowns, people scrambled to buy houses amid the pandemic, spurring bidding wars and supercharging real-estate markets across the country. Now, many are discovering the pitfalls of these hasty purchases, ranging from buyers’ remorse and financial strain to damage caused by unexpected problems.
This spring especially, “people were so panicked,” said Priscilla Holloway, a Douglas Elliman agent in the Hamptons, a popular spot for New Yorkers seeking refuge from the pandemic. “Buying a home is a huge commitment. You have to be thorough. But people were getting all crazy, and they weren’t as thorough as they usually are.”
Ms. Holloway said she helped a family move this summer after discovering that the Hamptons house they had just bought had an infestation of wasps nests in the backyard. The family didn’t find the wasps until after closing because they had waived the inspection in the midst of a bidding war, said Ms. Holloway, who wasn’t representing them at the time. Deciding the property was unsafe for their young children, they immediately put the Westhampton Beach home on the market. Ms. Holloway and a colleague helped them find another house to buy.
Nature had an unpleasant surprise in store for Richard and Meaghan Weiss when they bought their first home in Northern California after moving from Brooklyn.
When Covid hit, the couple left their Brooklyn apartment to stay with Ms. Weiss’s parents in Sonoma, Calif. Ms. Weiss was pregnant and they had a toddler at the time. “Being cooped up in an apartment, not being able to see people in New York, sounded like a miserable existence,” said Mr. Weiss, 40, who works in commercial real estate.
After a few months they decided to relocate permanently to the Bay Area, where Ms. Weiss grew up, and started looking for a home to buy. They found the market to be “super-duper competitive,” Mr. Weiss said. They were outbid on one house and backed out of a contract on another when they found out it had serious foundation issues.
Finally, they were able to buy a four-bedroom house they loved in the East Bay, paying about $100,000 over the $1.89 million asking price to beat out another bidder. “We were a little bit overeager because we’d been burned twice,” he said. “We probably didn’t do the due diligence we should have and looked at everything as thoroughly as we probably should have.”
They closed on the hillside house in November. When they returned a few weeks later to move in, “we see all these holes in the siding,” Mr. Weiss said. On closer inspection, they found that the wood on one side of the house was “absolutely devastated,” with some 90 holes in it. It turned out that the culprits were acorn woodpeckers living in the large oak trees surrounding the house. “Come to find out, it’s a systemic problem in the neighborhood,” Mr. Weiss said.
The seller hadn’t said anything about the birds, he said, and coming from Brooklyn, he and his wife didn’t know to ask. Since then, they have tried various deterrent devices and consulted with exterminators, but the only permanent solution is to replace the home’s wooden siding with cement at a cost of roughly $150,000.
If it weren’t for the frothy pandemic market, Mr. Weiss believes they would have discovered the problem before closing. “I think we would have been slower and more thoughtful and more methodical,” he said. “Buying a home becomes emotional. Because we were emotional from losing the first two and the competitiveness, we just kind of dropped our level of diligence and plowed through.”
My theory this week to explain what’s happening today?
The ultra-low mortgage rates are the problem.
Specifically, the decline in mortgage rates over the last two years have caused more of the existing homeowners to refinance, rather than move. In the graph above, you can see how the supply of homes for sale has declined in a similar trend to mortgage rates. Low rates have spurred more interest from buyers, but the drop in supply hampers their ability to take advantage of it.
If and when rates rise, it won’t change the problem with low supply because the refinanced homeowners have packed it in – they’re not moving no matter what happens to rates. They are locked in forever!
Selling the house and hitting the road sounds like an adventure. For some, it might be the only choice – and I think their numbers are probably increasing.
I haven’t seen this movie yet, but it looks like a good depiction of home on the road:
Del Mar Heights has always been a sexy option – the access to beach/freeway/UCSD is excellent, and two of the best elementary schools in the county are a short walk. Like in other areas, the inventory has dried up, so when this one hit the market, it created a tsunami of interest. Look at the number of views & saves:
Talk about perfect timing! The day after the bidding concluded on the home above, this estate sale hit the market, and about half of the disappointed group ran over here to make an offer:
We can expect both to be in the March double-digit-over-list group at 15% to 20% above.
If three-quarters of those unsuccessful buyers throw their hands up and decide to sit this out for a while, there will still be several competitors frothing at the mouth for the next one – even at $1,500,000+.
No surprise here, given what we see in the market today.
But interesting that 2021 is off to 2x the start we had last year – which was pre-covid! New listings are down 20% to 25% while twice as many people are looking!
Would you sell your house for the zestimate? They say their accuracy is within 1.9% with on-market homes – no kidding! Of course, they concoct the zestimate after the list price is published, just like Redfin does.
There’s been no shortage of news when it comes to Zillow, a company that kicked things off in the early 2000s with a home-search portal that consumers now recognize as the place to go for market inventory. Now, the Zestimate, introduced by the company in 2006, is the latest cog in a machine that has taken on an entirely new model: brokerage, iBuyer, lender, title and escrow service, and, most recently, showing service.
Zillow has just announced that it will be pairing its Zestimate with its iBuying arm, Zillow Offers, as the latest way to use technology to “simplify and streamline real estate transactions from beginning to end.”
The Zestimate is now available as an initial cash offer for eligible homes in the following cities:
Phoenix and Tucson, Ariz.
Charlotte and Raleigh, N.C.
Miami and Jacksonville, Fla.
Orlando and Tampa, Fla.
Portland, Ore.
Denver, Fort Collins and Colorado Springs, Colo.
Nashville, Tenn.
San Diego, Los Angeles, Riverside and Sacramento, Calif.
Dallas, Houston and San Antonio, Texas
Las Vegas, Nev.
Atlanta, Ga.
Minneapolis, Minn.
However, the cash offer for a property’s Zestimate is only available in a limited subset of homes in these markets. Those who own qualifying homes will see the cash offer displayed at the top of their property information on Zillow, the company reports. As Zillow Offers grows, the company expects to continue expanding the number of eligible homes for the Zestimate cash offer.
Additionally, the company states the initial offer is before taxes and fees and is subject to both eligibility and the accuracy of the property’s description.
“For 15 years, homeowners and home shoppers have come to rely on the Zestimate as an essential first step. This exciting advancement demonstrates the confidence we have in the Zestimate and the lengths we are willing to go to make selling your home truly seamless and easy,” said Zillow Chief Operating Officer Jeremy Wacksman in a statement. “This is a proud moment for Zillow’s tech team and speaks to the advancements they’ve made in machine learning and AI technology. Zillow is transforming the way people sell and buy homes. Presenting the Zestimate as a cash offer to qualifying homes up front will save time, reduce friction and provide greater transparency—getting us closer to our vision of helping customers transact with the click of a button.”
A hot-button issue in the past has been the accuracy of Zestimates. Real estate agents have long complained of sellers pushing back on proposed listing prices that don’t meet the expectations set by their Zestimate.
“Zillow’s move to use their Zestimate as the basis for a cash offer is bold, although I’m more amused than concerned. The accuracy of Zestimates have long been a running joke among the real estate community, but I wouldn’t put it past Zillow to make it work through careful selection and their continued acquisition of more data,” says Josh Harley, chairman and CEO of Fathom Realty.
Kit Fitzgerald, regional designated broker for the Kit Fitzgerald Team at Equity Northwest Real Estate, says that because the Zestimate is algorithm-based, it’s impossible to get the same accuracy that a living person such as a REALTOR® can provide. “It plugs in a bunch of numbers, zip codes, mapping, etc., and spits out a general number,” says Fitzgerald, who adds that without going inside of a home, assessing the overall condition of a home, the layout, amenities, street scene, etc., the accuracy is just not there.
According to Zillow, the Zestimate is available for nearly 100 million homes in the U.S. with a “nationwide median error rate for on-market homes of 1.9%.” To come up with a property Zestimate, Zillow reportedly uses data from public records, multiple listings services, brokers and artificial intelligence that pulls information from photographs.
Is photo-based data enough to support neighborhood comparables to come up with a home valuation, however? Michael Hickman, CEO and president of Seven Gables Real Estate, a member of Leading Real Estate Companies of the World®, doesn’t think so.
“The issue with Zestimates is the interior,” says Hickman. “Any AI can look at comps, but what about the interior improvements that an AI would not pick up? Without AI scanning interior upgrades, the Zestimate will never be accurate.”
As Harley suggests, Zillow’s recent endeavors suggest the company is seeking out more data to build out their capabilities, and according to David Serle, broker/owner of RE/MAX Services, this could be a good thing—at least when it comes to Zestimates.
“I think this is a positive thing. There have been concerns since 2006, when Zestimates first became available, about the accuracy of these valuations,” says Serle. “This will create greater transparency for the consumer and the real estate industry.”
What it comes down to, however, is that Zillow’s iBuyer solution won’t meet the needs of every home seller, according to brokers and agents, regardless of whether or not they are offering an initial cash offer based off the Zestimate.
“There is a certain amount of people who would gravitate to an iBuyer sale and many who will not,” says Serle. “Typically, a cash offer in most iBuyer programs could be as much as 10-15% off the market value, especially in a ‘hot’ seller’s market around the country. I do not believe real estate brokers or agents are competing against iBuyer programs or consumer portals; we are relationship driven and strive to push forth the best consumer experience possible. All of these tools cannot replace what an experienced, knowledgeable and excellent real estate agent does.”
In today’s market, for example, Cathy Strittmater—team leader of Cathy’s Home Team of Keller Williams Solutions—says sellers can expect multiple-offer scenarios, and that should impact decisions about going on the market or accepting an instant cash offer.
“In today’s market of multiple offers on properties, and values rising quickly, it’s in sellers’ best interests to sell their home on the open market rather than sell to a single vendor who is also ascertaining value,” says Strittmater. “I would personally consider that a conflict of interest—no differently than dual agency is also a conflict of interest.”
Fitzgerald is of the same mindset, stating a Zestimate might give sellers a general idea of their pricing ballpark, but it’s not a great overall tool to assess value.
“In an ever-changing real estate market, you’d hate to potentially leave money on the table by not opening up the sale of your home to a much larger number of well-qualified buyers,” says Fitzgerald. “The instant purchase is a good tool for some, but I believe that for the vast majority of homeowners, the open market provides more healthy competition for your home.”
While the iBuyer model won’t appeal to all, Harley does caution that industry practitioners should maintain a competitive stance when it comes to Zillow and these instant-cash business models.
“They’re smart and they are a monster of our own creation,” says Harley. “We allowed it to happen and now agents are shocked that the foil-hat wearing conspiracy theorists were actually right. iBuyer programs have a long, long way to go before they are a real threat. Right now, it’s more smoke than fire, but if we’re not careful and figure out ways to compete effectively and provide a true value exchange for our services, REALTORS® and their clients will be the ones who get burned.”
This one was better than the last one, but it had a funky easement granted to the neighbor that killed one sale and probably hampered this one. The list price was $950,000, and it just closed for $910,000 for 1,236sf built in 1959 on a 10,800sf lot:
The NYT has another article lamenting the drop in the number of homes for sale, and offered some reasons, like covid reluctance, sellers skittish about finding their next home, forbearance relief, the lack of building new homes, and people keeping their old home as an investment property when they buy a new one.
But who cares about inventory when we’re having MORE SALES THAN EVER.
It’s true that the number of new listings this year is about 23% behind where it was last year at this time.
The other day I compared just to 2020, but here’s a look at the last ten years:
NSDCC Closed Sales Jan 1 – Feb 15
Year
# of Sales
Median Sales Price
2011
158
$810,500
2012
153
$749,000
2013
197
$845,000
2014
261
$1,007,500
2015
252
$1,200,000
2016
253
$1,125,000
2017
260
$1,200,000
2018
231
$1,300,000
2019
242
$1,288,000
2020
254
$1,394,775
2021
299
$1,695,000
% Change, YoY
+18%
+22%
We haven’t had this big of a jump in number of sales AND median sales price to start the year since the Frenzy of 2013 bled into early 2014 when we had a 32% increase in sales and +19% in median sales price. Back in 2004, we had a 26% increase in the median sales price (from $635,000 to $799,000), but the number of sales dropped from 253 to 209.
This is the new reality – more people chasing fewer homes for sale.
Buyers who might think we’re going to get a pullback because rates have gone up are going to get a good lesson on who’s in charge here. Sellers don’t care about rate hikes, lack of inventory, or your lease expiring. They just want their money, and if they don’t get it today, they will wait until they do.
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We sold a home with Jim and Donna and from beginning to end they were consummate professionals. Their initial walk through the property resulted in a list of items to be repaired or updated. They supplied a list of vendors and job quotes to do the repairs and updates. We originally wanted to sell ‘as is’ and just get it over with. They gave us a selling price for ‘as is’ and options for doing a few updates/repairs to doing it all with the selling price for each option. We agreed to do all they suggested and we sold for the exact price they predicted. For every dollar spent we got back more than $2 back in the selling price. And they got that price in a rising interest rate environment! Donna and Jim are extremely detailed and guide you through ever aspect of the sale. There were no surprises thanks to their guidance. We couldn’t be more pleased with their representation.
Thank you Donna and Jim,
Jerry and Mary
Heather Quejada
March 27, 2025
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We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years.
Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. They immediately went to work to update our house built in 2004 to current-day standards and trends — in 2 short months they transformed it into a literal modern-day masterpiece. We trusted their judgement implicitly and followed 100% of their recommended changes. When our house finally came on the market, there was a blizzard of serious interest, we had multiple offers by the third day and it sold in just 5 days after a frenzied bidding war for 20% above our asking price! The investment we made in upgrades recommended by Jim and Donna yielded a 4-fold return, in the process setting a new high water mark for a house sold in our community.
In our view, there are no better real estate professionals in all of San Diego than Jim and Donna Klinge. Buying or selling, you must run and beg Jim and Donna Klinge to represent you! Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.
Lou F
March 27, 2025
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WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough!
Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale.
Communication was prompt and we were well-informed throughout the entire process.
For anyone looking for a dedicated and knowledgeable real estate team, look no further!
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William Sams
March 25, 2025
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Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.
Emily Hernandez
December 29, 2024
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Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
Jesus Adrian Sahagun
November 11, 2024
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This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SABIHA PASHA
July 23, 2024
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Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
Anu Koberg
July 13, 2024
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We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.
Bjorn Isachsen
July 10, 2024
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The Good
The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market.
The Great
Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them.
The Outstanding
We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time.
The Truly Exceptional
Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs.
The Recommendation
For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's bubbleinfo.com blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...
Chris Shea
June 21, 2024
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We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready.
Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free.
Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.
