by Jim the Realtor | Nov 17, 2023 | ADU |
AB 1033 is the latest state law designed to develop a market for ADUs, and thus lessen California’s grinding housing crisis. However, past legislative attempts have not met with much success.
In 2021, the legislature passed SB 9, which allowed homeowners to split their single-family parcel into two lots and build up to two units on each lot. It went into effect in January 2022.
Earlier this year, UC Berkeley’s Terner Center, a housing policy research group, released a study following the progress of ADU development after the passage of SB 9. It looked at 13 cities where developing ADUs seemed to make the most financial sense for property owners and “found that SB 9 activity is limited or non-existent in these 13 cities.”
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB1033
This is a nightmare for title insurance. If you want to get a clear and marketable title, the property would need to be officially subdivided, or turn into condos – which the new law did address:
(10) In addition to the requirement that a local agency allow the separate sale or conveyance of an accessory dwelling unit pursuant to Section 65852.26, a local agency may also adopt a local ordinance to allow the separate conveyance of the primary dwelling unit and accessory dwelling unit or units as condominiums. Any such ordinance shall include all of the following requirements:
(A) The condominiums shall be created pursuant to the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4 of the Civil Code).
(B) The condominiums shall be created in conformance with all applicable objective requirements of the Subdivision Map Act (Division 2 (commencing with Section 66410)) and all objective requirements of a local subdivision ordinance.
(C) Before recordation of the condominium plan, a safety inspection of the accessory dwelling unit shall be conducted as evidenced either through a certificate of occupancy from the local agency or a housing quality standards report from a building inspector certified by the United States Department of Housing and Urban Development.
(D) (i) Neither a subdivision map nor a condominium plan shall be recorded with the county recorder in the county where the real property is located without each lienholder’s consent.
Lenders aren’t going to give their consent, so in order to sell off an ADU, all you have to do is have a property with no mortgages, and file a condo map with the state and work it through the process for a few years!
by Jim the Realtor | Nov 16, 2023 | Local Flavor, Military
We are wrapping up the Compass convention downtown – photos I took today:
USS San Diego logged 300,000+ nautical miles around the Pacific Ocean and earned 18 battle stars during WWII
Salute to Bob Hope
by Jim the Realtor | Nov 16, 2023 | Frenzy Monitor
With multiple wars, raging rates, and lawsuits flying everywhere, it sure feels like chaos and doom are prevailing. But underneath it all, our local market looks a lot like it did last year at this time.
Keep your head down, and keep pedaling!
by Jim the Realtor | Nov 16, 2023 | Realtor, Realtor Post-Frenzy Playbook, Realtor Training, Realtors Talking Shop |
I am willing to take the stand if it will help the realtor commission lawsuits, but the defense might have second thoughts. The complaint is that realtors have conspired to force sellers to pay a standard, non-negotiable commission rate to the buyer’s agent. My testimony could go like this:
Plaintiff Attorney: You look like you’ve been around a while. Have you ever sold a house to a buyer that cost less than $100,000?
JtR: Yes
PA: Was the commission rate offered by the seller and publicized in the MLS in the 2.5% to 3% range?
JtR: Yes
PA: Have you ever sold a house to a buyer that cost more than $2,000,000?
JtR: Yes
PA: Was the commission rate offered in the MLS in the same 2.5% to 3% range?
JtR: Yes
PA: Have you ever sold a house to a buyer on the first day you met them?
JtR: Yes
PA: Has it ever taken one to two years to sell a house to a buyer?
JtR: Yes
PA: Were the commissions in both cases in the same 2.5% to 3% range?
JtR: Yes
PA: As a buyer-agent, have you ever negotiated your commission rate with the seller or listing agent?
JtR: No
PA: No? Why not?
JtR: It is strictly forbidden by the rules.
PA: The rules? What rules?
JtR: The NAR Code of Ethics forbids any negotiation of the buyer-agent’s commission paid by the seller.
PA: Is that the strict Code of Ethics that all NAR Realtors abide by, and what makes them different then all other licensees? The Code of Ethics that NAR has advertised on TV ad nauseum for decades?
JtR: Yes
PA: Judge, I rest my case.
by Jim the Realtor | Nov 15, 2023 | Market Buzz, North County Coastal, Sales and Price Check
A columnist reflected on history to help measure whether it’s a seller’s market, or a buyer’s market. I like it!
House-hunting’s transformation includes several market trends including people moving less often, consumers accessing detailed market info, near-instant cash buyers and tighter lending standards. Maybe the buyer/seller-market math should morph, too.
From 1990 through 2006, just before the bubble burst, California was a “buyer’s market” in 49 percent of all months and a “seller’s market” 17 percent of the time — using the traditional 6-month/3-month template and Realtor data.
Looking at the past 12 post-crash years — assuming you’d want to match that pattern — a buyer’s market would be 3.25 months-plus of supply and a seller’s market would be 2.25 months or less.
This evolving gap in homebuying supply is another reminder of today’s steep house-hunting challenges.
Link to the Full Article with data
Currently there are 359 active detached-home listings between La Jolla and Carlsbad, and last month there were 140 sales. The 359/140 = 2.56, which, by the new definition, is pretty close to a seller’s market!
by Jim the Realtor | Nov 15, 2023 | Compass, Why You Should Hire Jim as your Buyer's Agent, Why You Should List With Jim
Yesterday, 2,400 Compass agents came to the Rady Shell to hear CEO Robert Reffkin discuss the accomplishments of his clients, the agents. Here are this year’s facts to plug into our presentations:
Compass #1 in sales volume nationwide last two years.
Compass agents sell 2.5x the average agent.
Retention – 98% of Compass agents stayed last year, and 300 who left have come back.
$1.5 billion invested into the agent/client platform.
500+ people in the engineering department improving tech daily.
$1.0 billion in Compass Concierge money spent to maximize the sales price for sellers.
$1 trillion in sales volume in less than ten years.
High tech and high touch!
The support that Compass agents receive from the brokerage enables us to be more effective with helping our clients, and run our businesses with high efficiency!
Robert is one heck of a leader. This year, he has visited 40 metro areas to meet with agents in most of the 200+ Compass offices. Then on the weekends, he takes his wife and three little kids to open houses around the NYC area in support of Compass agents – including on Mother’s Day!
But in the end, it is up to the individual agents to perfect their own presentations. The best thing any leader can do to support highly competitive people is to create a contest!
There will be local, regional, and national prizes for the agents who deliver the most buyer-broker agreements and sales in 2024 – with the top ten agents being flown to NYC for dinner at Robert’s home!
by Jim the Realtor | Nov 14, 2023 | Padres |
An incredible loss today of Padres owner Peter Seidler. He was only 63 years old, and left a wife and three kids. In September, he announced that he had undergone a surgery and wouldn’t be attending any more Padres games, and it must have gotten worse.
We are downtown for the Compass convention so we went by to pay our respects. There were 30-40 others there doing the same, and it was quite somber.
One guy said that he was afraid that the dreams of a Padres championship might have died with Peter, and the recent talk of scaling back the team supports it. What a tragedy.
by Jim the Realtor | Nov 14, 2023 | Realtor, Realtor Post-Frenzy Playbook, Realtor Training, Realtors Talking Shop, Why You Should List With Jim
It’s been over two weeks since the verdict was announced on the commission lawsuit, and the response from the realtor community has been tepid, to say the least.
Agents are waiting to see a strong example of how to convince buyers to sign a buyer-broker agreement. It’s easy for management to just say, “Have your buyers pay you directly”. But will you furnish us with anything besides the cheesy 179-point list?
The annual Compass convention starts today in San Diego, and we’ll see what management has to say.
Meanwhile, CoStar senses an opportunity, and have ramped up their advertising of homes.com to agents. They say their search portal had 100 million unique visitors last month, passing realtor.dud and pulling into the #2 slot behind Zillow.
Their pitch? They send buyers to the listing agent directly.
When Zillow visitors inquire about getting more information or seeing a home, they get sent to the call center where Zillow employees scrub the leads, and send them out to agents who have agreed to pay 30% to 40% of their total commission to Zillow.
Homes.com will send those leads directly to the listing agent, no charge.
How long will it be before agents migrate their advertising budgets to homes.com? The buyer-broker agreement should be a complete failure by next summer, and instead the march towards single agency will be well underway by then.
The conversion to single agency will look like an obvious solution to the casual observers like judges, juries, and the DOJ because it will give the illusion that fees are coming down. But it will just add to the trouncing of buyers that has been going on for years.
Just when quality buyer representation will really be needed, the trend will be in the other direction.
by Jim the Realtor | Nov 14, 2023 | Boomer Liquidations, Boomers |
During the Yahoo Finance Invest Conference, Meredith Whitney, who accurately predicted the 2008 financial crisis and became known as “the Oracle of Wall Street,” said that housing prices will fall in 2024 due to a “silver tsunami” of baby boomers who are expected to downsize in the coming years.
More than 30 million units of housing are expected to be brought onto the market as 51% of people over 50, who own more than 70% of U.S. homes, downsize to smaller homes.
It’s been a challenging time for hopeful homebuyers amid soaring prices and mortgage rates, but a little bit of good news might be around the corner.
Highlighting estimates from AARP, Whitney said that over 51% of individuals aged 50 and above, who own more than 70% of U.S. homes, are projected to move into smaller residences. This downsizing trend could result in over 30 million units of housing being brought onto the market.
https://www.entrepreneur.com/business-news/silver-tsunami-predicted-to-overhaul-housing-market-in-2024/465209
Every year another expert rages on about the silver tsunami, mostly based on antiquated beliefs that seniors will all downsize – but it’s different now, especially around San Diego.
If seniors are downsizing, they need to leave town to make it worth moving. Here’s how the local populations have changed in a recent 2-year period – it’s hardly been an exodus, and it also suggests that there are new incoming residents who are filling the gap:
by Jim the Realtor | Nov 13, 2023 | 2024, Realtor, Realtor Post-Frenzy Playbook, Realtor Training, Realtors Talking Shop, Why You Should List With Jim |
There are three ways to get exposure to realtors.
- Word-of-mouth from friends and family.
- Personal experience or investigation.
- Realtor-paid advertising.
First, let’s identify how realtors get their business.
Either they earn the business (#1&2 above), or they buy the business (#3 above).
They earn it by creating relationships with friends and family that turn into sales. Those results create word-of-mouth endorsements that will hopefully be the foundation of the realtor’s business.
Or agents can buy the business through advertising.
There are several realtors in our area who spend $25,000 to $50,000 per month on advertising, which means they need to charge the higher commission rates – and that probably won’t change.
Billboards, bus benches, trailers in movie theaters, grocery store carts, etc. all lathered with realtor advertising that supplement their online ads, social media, and mailers to the neighborhood. These realtors hope to subconsciously create a positive image in the homeowners’ minds, which causes them to reach out to the ‘local expert’ when the time comes.
Which realtor will help you the most, and be deserving of their pay?
The best part of the realtor lawsuits is that they might cause consumers to investigate the choices more thoroughly. It is a daunting task because of the number of realtors out there, and the lack of hiring knowledge available. It’s why 80% of consumers hire the first agent they meet – they haven’t moved in a while, and in the microwave society they just want to grab an agent and go. Plus, the realtor industry provides virtually no guidance on the selection process, so you’re on your own.
My General Tips:
Those who spend the big money are vunerable to investigations – they hope that you grab and go instead. Once a team gets to 10 people or more, you have to wonder who is doing the heavy lifting. There are many top producers now in North County who have retired – but you wouldn’t know it because they leave everything in place, and just let the assistants run the machine. See if you can get the team leader on the phone, and check their reviews on Google and Zillow to see which agent is being acknowledged for the work. It’s not a bad thing to work with the assistants, but you’d like to know that up front.
The bigger the team, the less personal attention you will get. Their expertise will hopefully make up for it, but you should know that if your sale doesn’t work out, it’s not going to change their lifestyle.
Realtor websites look the same – brags about their sales, a button to search for your ‘dream’ home, and another for a computerized value of your home. With both buttons, you give up your contact information so they can pester you. Do they provide any helpful content on their website or social media? Their published content is a direct reflection of their expertise, and awareness of current market conditions.
Are they too busy for you? Simple way to find out. Call their phone number, and see what happens.
Every agent has their sales history on Zillow (whether they like it or not, because Zillow auto-loads them). If you are looking to conduct a full analysis, you’ll have fun with this data. One sale per month is a good sign, and check their mix of buyers and sellers, mix of price points, the SP:LP ratio on their sold listings, their listing presentations (quantity/quality of photos) and days on market. It’s takes work, but time well spent.
Do you want to hire the local expert? Rarely do they go into detail on what that means for you, and besides, every agent calls themselves the local expert.
Do you want to hire a long-time veteran? Only if they are still on their game (minimum one sale per month, etc.). More than half of all realtors are 60+ years old, and you don’t want to be their last sale.
Are they available? Deals are being done 24/7, so how the agent handles that is important.
Can they put a few sentences together to describe the current market conditions? It means you have to talk to them live, but it’s a terrific way to judge a realtor’s competency.
My big hope is that the realtor lawsuits give consumers the idea that they should shop around more, and they search for the best combination of quality realtor and commission rate. My guess is that the commission rates won’t change much, and they sure won’t be advertised. It should mean more scrutiny on what a realtor does for you – which is a great thing, and how the decision should be made!
Get Good Help!
