Rob Dawg left this comment regarding the seniors who are aging-in-place:
Wait until autonomous vehicles add another ten years.
Self-driving cars have the potential to change everything about real estate:
Seniors be able to stay in their home longer.
Homebuyers could live farther away and get more home for their money.
Kids wouldn’t need parents driving them around.
But one of the big hurdles is whether people will trust computers to drive the cars for them. You may know that Mercedes-Benz has installed automatic braking systems, and I have one on my car – and hate it.
When I drive up slowly at an intersection, the computer is overly-sensitive, and brakes too early – and it’s not gentle. With no warning, the computer slams the brakes on, giving riders a whiplash, and in one case, causing the driver behind to hit me! The system has a manual turn-off button, but it’s hard to find and not permanent so it’s a constant battle. Donna agreed that I’ve altered my driving considerably, but I’m giving up. I’m going to get a normal car instead.
More hurdles that will cause autonomous vehicles to be delayed:
Have you seen homes going pending that weren’t selling a few months ago?
You could make a case that the market is somewhat seasonal, and just the increase in the number of buyers would improve the market. But junk is junk, whether you’ve been looking for days or months.
We already discussed how sellers of newly-listed homes are bursting with optimism now that the selling season is underway. But those sellers who have been lingering for weeks or months have already tested the market, and should be more realistic.
My theory is that some buyers are cutting deals on the older listings.
Multiple offers are back. Three examples from the last 24 hours:
One-story house that had been on the market for 30 days (plus Coming Soon)
Two-story house that just listed for $1M in SEH, plus
A contingent buyer around $2 million getting beat out twice to non-contingent buyers.
It is remarkable that in 2019, realtors still don’t have rules, laws, procedures, or any effective guidance on how to handle a bidding war so the sellers get the best deal while giving every buyer a fair chance to compete.
But we do have a summary form! We could do this on a napkin:
We ended up with three offers on our Gladstone listing, and a bidding war!
Bidding wars don’t just happen; somebody has to spur them on, coordinate them effectively, and keep the focus on winning and losing, and not the price.
The home had its foibles too.
It only has two bedrooms, the third ‘bedroom’ is unpermitted, the kitchen and bathrooms were gussied up but mostly original, and it backs to the full assortment of power lines. The worst part was not having any recent comps that painted a solid picture on value, leaving it up to the buyers to get comfortable – I helped, and thankfully they had good agents too.
We are listed for $499,000, and I nudged two offers north of $530,000!
The buyers cancelled the second escrow on Brava yesterday.
We have had a dozen cash offers, so after the first cancellation I went back to the others and got them to bid it up to $690,000, which is a miracle when the highest offer was $675,000 in the first round.
Other agents since have said, ‘oh, you picked the wrong buyer’. But I’m going to give the high bidder a chance to close every time – I think I have that obligation. If they would have stuck, I would have been a hero.
There is more of a chance that end users will hang in there, but with flippers it tends to be cut-and-dry, and all about the money. There has been some concern about the 2019 market being soft(er), but it’s not stopping them from wanting to buy. They just want to fine-tune the price!
This is a neighborhood with zero lot lines, which you can see in this photo (in yellow). Each home has the exclusive use of one side yard, instead of splitting both sides. You can touch your neighbor’s house, but it does give you more usable space.
I don’t think there will be a noticeable discount needed for the flipper to resell a zero-lot-line house. There are several neighborhoods in Carlsbad, Encinitas, and Carmel Valley that have the zero lot lines, so it’s not that rare.
A quieter Sunday at the open house – about half the people as the crowd on Saturday, which makes you think that the internet advertising is what brings them and they are happy to wait until the first open house:
Hat tip to Eddie89 for alerting us to how the sale turned out:
A bidding war recently broke out over a prime piece of California real estate — and it wasn’t for a tiny San Francisco condo.
In this case, a dozen offers were made for an entire town, the 19th-century mining hub of Cerro Gordo, on 300 acres in the Inyo Mountains outside Lone Pine, Calif. It was listed for for $925,000 in June and closed on Friday the 13th for $1.4 million.
“I would say the date was very coincidental,” says listing agent Jake Rasmuson of Bishop Real Estate. “Strictly by chance but very fitting for the property.”
The seller accepted an offer from a group of Los Angeles investors who plan to preserve the relic of the American West and keep it open to the public.
“We did have higher offers, however the sellers really liked the buyers’ proposal and liked the buyers’ plan,” says Rasmuson.
Cerro Gordo has been in the hands of the same family for decades, and though privately owned, it was open to the public for tours. The owners were hoping to sell to someone who appreciates the property’s history.
The buyers are Brent Underwood, who founded the youth hostel HK Austin and Jon Bier, who runs a public relations firm catering to athletes. The two teamed up with other investors to make the purchase; they include Ryan Holiday, former director of marketing at American Apparel; Tero Isokauppila, CEO/founder of superfood company Four Sigmatic; Brendan Gahan, CEO/founder of Epic Signal; George Rutolo, owner of The Whisky Bars; and Kelley Mooney, an en executive at Hulu.
“We want to maintain the historic nature of the property while introducing amenities that will allow more people to enjoy this piece of American history,” Underwood says. “We have spent a lot of time with the current owners and caretaker to learn the history of the place. I’ve read all the books I can find on the town. I can’t express our excitement to be able to continue the care of this beautiful location.”
He adds that they also hope to eventually add overnight accommodations and events such as writing retreats, concerts, photo shoots, theater and more.
Silver was first discovered in the hills of Cerro Gordo in 1865, and in the following years prospectors flocked to its rich veins of silver. It became known as the “silver thread” to Los Angeles and silver was loaded onto mule trains and taken to the city. The town population swelled to some 5,000 at its height and quickly dwindled when silver prices dropped in 1877.
“We want to create a place that pays tribute to this historic part of American history,” Underwood says.
Choosing the right realtor to sell your home is critical.
It’s not life-or-death critical. We’re just talking about the extra 5% to 10% that is available when effective marketing creates maximum urgency – and the agent’s skills and salesmanship creates competition between buyers to achieve a top dollar sale.
Here’s what I do:
I conduct a thorough pre-listing inspection to determine the best improvements to make prior to hitting the market. Repairing the visual dings, doing ‘clutter patrol’, and implementing any staging where needed to maximize the appeal to buyers. I focus on bang-for-the buck; spending as little as possible with max results.
I recommend an attractive price – one that is retail-based for the location and condition, and makes the buyers feel like it’s worth checking out.
I have professional photos done and include my own video tour to help sell the buyers on the value of the home, instead of playing elevator music. I won’t include a Matterport 3D tour, which is the worst thing any agent could do for you. The buyers can view every nook and cranny in the house, so they keep looking until they find something they don’t like – and then give up. The goal of marketing is to get the consumer interested enough to jump in the car and check it out in person.
Inquiries – I handle all inquiries myself, and I answer my own phone. My focus is to gauge the interest of the buyer or agent, and help to sell them on the house. Redfin and most big agent teams have showing requests handled by a separate and unrelated third-party called Showing Suite, and they miss out on a critical opportunity to pick up intel about the interested parties that I use later in the negotiations and bidding war.
I conduct the open house extravaganza myself. We effectively advertise and have 25-100 people attend every open house. The crowds help to create the Fear of Loss; where interested parties realize they better step up quickly and pay more than they thought so they don’t lose it. Nobody does open house like I do.
Once offers are pouring in, I qualify both the buyers and agents myself. Other agents can get swept away by sappy love letters, or by all-cash buyers and not give due diligence to every offer, or ignore the buyer’s agent and their critical role in getting to the finish line.
Virtually all agents will ask for highest-and-best offers, and then help the seller to pick their favorite. It feels exciting, and all can say they played the game. But I create an auction-like competition where buyers participate in the final outcome, rather than passively hope their blind bid is enough. It takes aggressive salesmanship to accomplish this, and it’s where I pay for myself with a specific strategy to achieve a top-dollar sale (I am registered as an auctioneer with the State of California).
Donna has been our troubleshooter-in-chief for the last twenty years, and is our secret weapon. She bird-dogs every sale to the finish line and beyond, and as a result, we rarely have an escrow fall out. Our clients feel informed and well-served, with every detail covered in advance.
My last thirty listings have averaged an SP:LP ratio of 99% (selling within 1% of list price), with an average of 20 days on market – and half of them sold in ten days or less. Commissions are described HERE, and you’re only paying a little more than Redfin to get the maximum service available.
I am happy to give you a free consultation in person, or by phone or email!
It’s been an old wives tale that listing agents can’t disclose to a buyer’s agent the price and terms of competing offers. I found this at the N.A.R. website:
Real estate brokers may, unless prohibited by law or regulation, “shop” offers. Therefore, REALTORS® assisting purchasers in formulating purchase offers should advise those purchasers it is possible that the existence, terms, and conditions of any offer they make may be disclosed to other purchasers by sellers or by sellers’ representatives except where such disclosure is prohibited by law or regulation.
Competing buyers are more likely to respond favorably if you give them a number to shoot at. Sharing the price and terms of other offers is a way to create a slow-motion auction effect, which benefits both sides. Buyers gain some transparency, and sellers get top dollar.
What today’s home buyers are up against……from realtor.com:
Driven by frustrated buyers who rolled over from last year and record-breaking lows in housing inventory, the 2018 spring buying season is expected to be one of the most competitive in years—but buyers are still optimistic about getting into their dream home, according to a survey conducted for realtor.com®.
“We’re only a few weeks into March and already seeing the market heat up,” said Danielle Hale, chief economist for realtor.com®, in a statement. “Holdover buyers hoping for greener pastures this spring are likely to find sparse options that require them to pay top dollar or make other concessions.”
And those holdover buyers are driving a large portion of the demand, according to an online survey of more than 1,000 active buyers conducted in early March by Toluna Research.
The home search has dragged on for more than seven months for 40% of respondents, the survey showed, while 34% have been searching for 4-6 months. About a quarter have been in the market for three months or less.
More than one-third, or 35%, of those surveyed indicated they anticipate “a lot of competition” this spring.
Perhaps because of that, buyers are thinking strategically about turbocharging their home search and getting an edge on the competition.
When asked how they are trying to get ahead, 42% of respondents revealed they are checking listing websites every day, while 40% plan to put more than 20% cash down. The survey also revealed that 33% are setting price alerts, 31% plan to put down a larger earnest money deposit, and 26% are willing to offer above asking price. Only 6% indicated they are not planning to use any special tactics to cope with competition.
“The majority of buyers are aware of the tough competition they’re up against this spring. Having been in the market awhile, they’ve likely lost a few homes to better offers, which has given them more time to save and up their bidding strategies,” said Hale.
If enough people see this…..maybe more will leave? I can help you with that!
From cnbc.com:
Californians may still love the beautiful weather and beaches, but more and more they are fed up with the high housing costs and taxes and deciding to flee to lower-cost states such as Nevada, Arizona and Texas.
“There’s nowhere in the United States that you can find better weather than here,” said Dave Senser, who lives on a fixed income near San Luis Obispo, California, and now plans to move to Las Vegas. “Rents here are crazy, if you can find a place, and they’re going to tax us to death. That’s what it feels like. At least in Nevada they don’t have a state income tax. And every little bit helps.”
Senser, 65, who previously lived in the east San Francisco Bay region, said housing costs and gas prices are “significantly lower in Las Vegas. The government in the state of California isn’t helping people like myself. That’s why people are running out of this state now.”
Based on the U.S. Census Bureau’s American Community Survey data, “lower income Californians are the ones who are leaving, not higher income,” said Christopher Thornberg, founding partner of research and consulting firm Beacon Economics in Los Angeles.
He said housing is the chief reason people are leaving California, pointing out there are frequently bidding wars for what limited inventory of homes is available.
A USC Dornsife/Los Angeles Times Poll of Californians last fall found that the high cost of living, including housing, was the most important issue facing the state. It also found more than half of Californians wanted to repeal the state’s new gas tax, which raised fees by 40 percent.
“The rate at which California has been losing people to other states has accelerated in the past couple of years, in part because of rising housing costs,” said Jed Kolko, chief economist with employment website Indeed.com.
This is the fourth installment of my essay on the future of real estate sales. I’ll send this along to Brad Inman, who is gathering thoughts for a leadership conference at the end of March, so they have my perspective from the street.
In summary:
The unconscious desperation among agents is ripping apart the formal agreement between brokers to share listings. The environment is going the way of commercial brokers, where exposing listings to other agents is a last resort.
We see it happening – there is the occasional article – but without vigorous intervention by realtors themselves, the MLS will slowly disintegrate and be picked apart by outsiders.
Sadly, the sharing of listings is what is best for sellers, buyers, AND realtors, but the greed and desperation among agents gets in the way.
What Can Be Done? What Are The Choices?
Individual agents can adopt a full-transparency program, starting with publicly describing the specific services they offer, and their commission rates. If consumers took the time to educate themselves about the differences between agents, at least they would make better decisions than they do now. It’s unlikely that this will happen, because agents are lazy and won’t bother, unless forced to do so.
We can hope that N.A.R., C.A.R., big brokerages and other industry titans will address this specific problem, and implement changes to save the MLS and broker cooperation out of a commitment of doing what’s best for consumers. Probably the least likely of these five to actually happen.
We can have big leadership conferences where outsiders will speculate how the disrupters will pick us apart, piece by piece.
We can wait for the government to intervene.
We can do nothing, and watch the broker cooperation via the MLS – which is the best thing for everyone involved – die a slow but certain death.
We can hope that somebody will find an answer. But it would have to include ways to eliminate agent shenanigans, invigorate consumers, and be a forward-thinking solution that benefits all.
The inquiry might start with creating a national MLS, or electing a real estate czar, or encouraging agents to keep their word and quit cheating their own customers out of what’s best.
But what if a thing was the answer?
The solution is LIVE AUCTIONS.
We can easily incorporate them into our regular business as the process to select the winning bidder. All other selection processes used today are subject to the listing agent tilting the table – with a live auction, all participants will be watching, and able to determine the actual winning bidder.
Could there be shill bidders who run up the price? Yes, but let’s insist that every buyer is represented by a realtor – that way, at least the agent’s reputation is on the line.
Live auctions would keep listing agents and buyer-agents employed, though the fee structure may be in flux. But our commissions are already under attack, so let’s take a chance that consumers will agree to pay a reasonable fee for these live auctions, and the other additional benefits provided by realtors.
A live auction doesn’t have to be a showy, champagne-filled soiree with a fast-talking auctioneer. They can be as simple as gathering the buyers around the living room, in a rather informal setting.
I am offering the live-auction strategy to my sellers as the fairest and most effective way to select a buyer, and let the full transparency be the best way to reach top-dollar.
Here’s an example – catch the winning agent’s comments at the 9-minute mark:
