by Jim the Realtor | Oct 29, 2023 | 2023, Flips, Jim's Take on the Market, North County Coastal |
Could there be trouble brewing under the surface?
Are there home sellers scrambling to get out with whatever money they can? Maybe get just enough net proceeds for the family to have a steak dinner at closing? It was like that last time…..but it’s different now.
It’s a lot different now!
Let’s check the home sellers who purchased during the pandemic days. Those who bought their home before 2020 are having no problem selling for substantially more than they paid, so we only need to check the recent purchasers. Is anyone losing their shirt?
This month’s NSDCC sales are up to 117 – here are the ones that were purchased since 2020, and comparing what they paid then to their sales price this month:
Observations:
- Twenty-six of the 117 sales had purchased since 2020 (22%), but 12 of the 26 were corporations in the business of making money. They succeeded!
- The median gross profit was $750,000.
- Fourteen of the 117 sellers (12%) were regular buyers since 2020 who found a reason to sell this month.
- Even if they were in some sort of trouble, they still made out nicely – and for all we know, there were many who sold JUST BECAUSE they could hit the jackpot!
- The only seller who lost money had purchased 1,700sf for $5,500,000. Think twice about doing that!
- There are at least 100 sellers EVERY MONTH who are walking away with $1,000,000+ in their pocket!
Could there be trouble ahead for those who bought this year if prices declined substantially? Maybe, but rates have been rising for 18 months so they shouldn’t be surprised about future market shifts – if any.
For them to purchase a home in spite of market conditions must mean they are in it for the long haul.
P.S. The flip that made $8,000,000: Click here
by Jim the Realtor | Oct 28, 2023 | Local Flavor
As the local real estate market continues to defy the expectations of most observers, it’s natural to wonder, ‘who are these buyers?’ Here is one story:
https://robbreport.com/shelter/celebrity-homes/frances-bean-cobain-house-oceanside-san-diego-1235388535/
They paid $2,250,000 cash on June 1st, which was $55,000 over the list price. Here is the listing:
https://www.compass.com/app/listing/1833-california-street-oceanside-ca-92054/1288534331496481801
by Jim the Realtor | Oct 28, 2023 | Where to Move |
Here are the two Top 10 lists for the best cities in America! You’ll be surprised to see which city took the top spot!
2. San Diego
Several years ago, travelers headed to San Diego might have wondered what they would do in the city, besides hitting the beaches. No longer. With a recent string of hot hotel openings (like the Guild and the Carté) and a legit food scene that offers up some of the best Mexican dishes and seafood platters you’ll ever taste, San Diego has officially stepped out from the shadow of its big sister to the north, earning world-class destination status that goes well beyond the waves. Come for the sunshine, but stay for everything else.
https://www.cntraveler.com/gallery/best-cities-us
by Jim the Realtor | Oct 27, 2023 | Jim's Take on the Market, Realtor, Realtor Post-Frenzy Playbook, Scams, Zillow |
Paying referral fees is a standard practice in the realtor business.
Are you thinking of moving to a new town and need an introduction to a realtor there? Your agent here will track one down for you, and that agent will pay them a referral fee, which used to be 20% to 25% of the gross commission. The challenge? Getting good help!
Great agents don’t need any assistance with procuring new clients, and they might reluctantly pay a 20% or 25% referral fee only if the new client is motivated and in the upper regions, price-wise.
Less-experienced agents are willing to pay out higher referral fees, which doesn’t do the client any favors.
What we do is tough work, and fewer and fewer people want to do it.
It’s so hard to hire, train, and retain good/great agents now that many real estate companies are just resorting to referring clients, and taking a substantial referral fee instead.
Zillow has staff taking the incoming calls, and qualifying the leads before sending them to their Flex agents. Their referral fee is now 40% of the gross commission, AND they want buyers to use Zillow Home Loans too. Their Flex agents who send their buyers to ZHL will be rewarded with more leads, and vice versa:
Less than five percent of the U.S. real estate agent population works with Zillow (with far fewer Flex agents), and Zillow only touches around three percent of U.S. real estate transactions. They are running a small, exclusive ecosystem of agents that are willing to play by their rules, which now includes tight integration with Zillow Home Loans.
You’ve probably seen the TV ads by Homelight? The ones that pitch teaming you up with the best agents in town? Well, at least with the best agents who are willing to pay them a 30% cut of the gross commission.
Now Redfin is giving up on their agent-employee program, and they are testing the idea of hiring agents on commission splits, instead of salary and paying them “up to 75%”. It’s doubtful they will pay many of their agents the full 75% split. It’s just another way for them to get referral fees of 30% to 50%.
None of the referral fees are disclosed to the client, and it’s never discussed of how the size of the fee will impact the quality of the agent service you receive.
But most of all, any thought of commissions dropping will be fleeting at best. Commissions need to stay high in order to pay the larger referral fees!
by Jim the Realtor | Oct 26, 2023 | Jim's Take on the Market |
Below is a graphic from a USD publication that shows how many people might do something about high cost of housing here. Unfortunately, the majority of people polled probably weren’t the long-time homeowners who find it quite comfortable here and wouldn’t consider moving even if you gave them a couple of million dollars:
Many San Diegans are questioning if they can remain in San Diego County due to the lack affordable housing, inflation, and the related high cost of living. The housing crisis is forcing residents – including those who work in the nonprofit sector – to rethink staying in San Diego. Likewise, the high cost of living is increasing demand for nonprofit services as the need for basic support services grows. Inflation is driving upward pressure on wages while depressing the value of charitable gifts and assets, threatening the financial stability and strength of the nonprofit workforce.
https://digital.sandiego.edu/cgi/viewcontent.cgi?article=1019&context=npi-stateofnp
by Jim the Realtor | Oct 25, 2023 | Local Flavor |
This is our fifth year of participating with Mama’s Kitchen in their annual fund-raiser, Mama’s Pies!
This is their 19th Annual Thanksgiving Bake Sale, where local bakeries and restaurants donate pies for pickup on Wednesday, November 22. Each pie sold will provide 12 meals to a critically ill San Diegan.
They are literally the best pies I’ve ever had!
Last year they sold out early, so make sure to get your order in before they’re gone!
If you’re interested in participating in Mama’s Pies, here’s everything you need to know!
1. Visit our selling page here.
2. Click “Buy or Donate Pies.”
3. Add your desired pies and holiday feasts to the cart.
4. Under “Select a Seller” section, click “Yes” and choose “Team: Klinge Realty Group.”
5. Choose your desired pick up location OR under Private, choose “KLINGE” to have me deliver it to you. If choosing delivery, we’ll reach out to you for your address.
6. Add in any additional donation amount if you choose to do so.
7. Put in your payment method and click submit!
Thank you in advance for supporting this important work – we couldn’t do it without you!
by Jim the Realtor | Oct 25, 2023 | Jim's Take on the Market, North County Coastal
There have already been 101 detached-home sales close this month between La Jolla and Carlsbad!
With five business days left in the month, plus the late-reporters, it means we should match last October’s count of 133, and maybe even approach last month’s 153 sales.
Of this month’s 101 sales, 45 were all-cash.
The 8% mortgages won’t kill the market – especially for the superior homes for sale, which are hot. They may be the only ones selling, unless sellers of the inferior homes will accept an appropriate discount – a gap which is probably 10% to 20%.
by Jim the Realtor | Oct 24, 2023 | 2023, Why You Should List With Jim |
A good example of the places that could be undervalued is Terramar in Carlsbad. It’s a neighborhood of 240 homes near the beach, and the living is so good that there is rarely any turnover. Without a flow of recent sales, who knows what the market will bear – especially when every house has been uniquely customized.
Two months ago we set out on our journey of price discovery.
The sellers have a genuine reason to move, but wanted to really test the market on price. When you have active oceanfront listings of $12,750,000 and $25,000,000 in the neighborhood, the curiosity is real!
Everyone gets attached to their zestimate. In this case, my seller had her eye on the zestimate range, and suggested that we start at the high end, which we did:
But you have to read the room, and adjust accordingly.
All we had to do was follow my List Price Accuracy Gauge:
- If you are getting showings and offers, then the list price is within 5% of being right.
- If you are getting showings but no offers, then the list price is 5% to 10% off.
- If you’re not getting any showings, then the price is more than 10% wrong.
Lowering the price early and often is prudent too. The initial urgency wears off quickly, and once a home has been on the market for months, it invites lowball offers because buyers know it’s just a sitting duck.
We lowered early and often, and in meaningful amounts:
Boom, now we’re in escrow!
by Jim the Realtor | Oct 23, 2023 | Inventory
The NSDCC median list price has been around $3,995,000 all year, and has been stuck there for the last three months.
Homes listed above $4,000,000 tend to be custom homes which are harder to price, and their sellers tend to be more affluent and will want to test the market. Let’s don’t assume anything from them about the overall market conditions – if those houses don’t sell, it probably won’t change the sellers’ lifestyle much.
Let’s form our opinions about the health of the current market conditions from the Under-$4,000,000 category:
Given all the commotion, the Under-$4,000,000 market looks fantastic!
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by Jim the Realtor | Oct 22, 2023 | Realtor, Why You Should List With Jim |
This topic came up in my 45 hours of continuing education, and Donna agreed that rarely do listing agents comment on their seller’s disclosures – do they even read them? A focal point as we transition into single agency:
To complete the disclosure process, the seller’s agent filters property information provided by the seller before it is provided to the prospective buyer.
Accordingly, all property information received from the seller is reviewed by the seller’s agent for inaccuracies or untruthful statements known or suspected to exist by the seller’s agent. Corrections or contrary statements by the seller’s agent necessary to set the information straight are entered on the disclosure forms before the information is used to market the property and induce prospective buyers to purchase, collectively referred to as fair and honest dealings.
The extent to which disclosures about the physical condition of the property are to be made is best demonstrated by what the seller’s agent is not obligated to provide. Everything else adversely affecting value and known to the seller’s agent – material facts – are to be brought to the attention of prospective buyers as a matter of law.
As a minimum effort to be made before handing a prospective buyer information received from the seller, the seller’s agent is to:
- review the information received from the seller;
- include comments about the agent’s actual knowledge and observations made during their visual inspection of the property which expose the inaccuracies or omissions in the seller’s statements; and
- identify the source of the information as the seller.
