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Week of March 11th-17th
Property Tips and Tricks
Home Didn't Sell? Consider This.
If you listed your home for sale and it didn't sell, you may be wondering what went wrong. Additionally, if you are considering listing your home for sale in the future, below are a few questions to think about.
Did you allow for the home to be shown, virtually at any time?
- One of the hardest things, especially when living at a house, is keeping it "show ready" as well as accommodating a showing on short notice. Access is important when it comes to real estate transactions, buyers can be fickle, and timing can be everything. The truth is, sometimes buyers make the decision that they are going to buy a house "today" and they may look at a handful of homes for sale, and pull the trigger on one at the end of their home tour. While this isn't the norm, the reality is it does still happen, and as a seller you want to put the odds in your favor. Furthermore, in a market like Carmel or Pebble Beach, many buyers come from out of the area, and may not have the flexibility to work around your schedule. At times, it can feel completely unfair as a seller to drop everything at a moment's notice, but it can make the difference between selling and sitting on the market.
Does your house stand out among other offerings in the market?
- There are certain things that can be done in preparation for a home sale to make it more appealing - from investing in landscaping to increase curb appeal, to removing clutter and staging, or updating finishes and painting rooms. Don't have the budget for that? There's always something special about a property, and there's good in all houses. Thinking critically, knowing the market, buyer preferences and your competition, you or your agent can identify special attributes of a property, and thoughtfully highlight them in the listing copy to draw in potential buyers.
Did you price your home fairly?
- Pricing a home too high can turn away buyers before they even get in the door. I've heard many times - "well, they can just make an offer". While that may sound like a viable strategy, in practice, most buyers won't even bother if they think the delta between what would be their offer price and the asking price is too large. Also, available inventory changes, so if you listed your home when there were only a couple of alternatives on the market in that area/price point, but now there are a dozen, what seemed like a fair price when you initially listed has been influenced by market dynamics - supply and demand - so you may need to pivot on your asking price to be more competitive.
Real Estate News
NAR Commission Lawsuit
This past week, the National Association of Realtors agreed to pay $418 million in damages to resolve real estate commission lawsuits. Why should you care? Well, it's likely to impact how commissions are handled in the future, affecting negotiations, advertising, and payouts.
The too long, didn't read summary of the lawsuit is the NAR, along with Keller Williams and HomeServices of America, faced allegations of price-fixing real estate commissions at a fixed 6%. This led to a class-action lawsuit, representing 500,000 people across the state of Missouri who collectively sold 260,000 homes over a 7-year time period. Just recently, the NAR agreed to settle to the tune of $418 million.
What changes are proposed in the settlement? There is one big one - buyer's agents commissions can no longer be advertised on the Multiple Listing Service (MLS). However, it is important to note that buyer's agents' commissions/compensation remains permissible under the settlement terms; it's just that advertising must occur off the MLS.
Will sellers pay less to sell their homes and will buyers pay more to buy their homes?
Will buyers have to work out a fee directly with their agent for representation?
Will real estate companies and brokerages step back from the MLS and NAR, resulting in more pocket listings?
Could open houses become busier, as buyers seek to engage directly with listing agents to lower their home purchase costs?
Will first time homebuyers be hurt the most?
Will there be full-service buyers agents and flat-fee buyers agents, similar to full-service and flat-fee listing agents?
Will buyers be encouraged to sign more paperwork upfront when engaging an agent for representation?
Will this result in more agents leaving the business, potentially reducing the overall number of real estate agents?
The truth is it is too early to predict precisely what will unfold. Michael Ketchmark, the attorney who won the class-action case, suggests it could take 10-15 years for substantial change. The reality is that real estate commissions have always been negotiable..perhaps the average seller does not know this but it has been the norm for many years and savvy sellers, especially at higher price points, rarely pay a 6% commission. Also, sellers have always been able to list their home for sale, by owner, as well as not offer to pay a buyer's agent commission.
In the past, I've purchased off-market properties. On one occasion, I found the deal myself, negotiated price and terms directly with the seller, yet still chose to involve a buyer's agent and paid them their fee out of my own pocket. Why? The risk of overlooking something during my due diligence period was too significant. Importantly, the property wasn't within the market where I operate as a Realtor. I recognized that each market has specific laws and nuances that I couldn't fully evaluate without the assistance of an experienced professional in that area.
Popular home search portals, such as Zillow and Realtor.com, stand to lose out as most of their revenue comes from selling buyer leads. In Zillow's case, selling buyer leads accounts for 70% of its revenue, or nearly $1 Billion per year. Have you ever come across a home listing on Zillow, inquired about it, hoping to directly communicate with the listing agent who possesses in-depth knowledge about the property, only to discover that you’ve been redirected to an agent who lacks the same level of expertise? Essentially, that’s Zillow’s model in a nutshell.
Shifting our focus back to the NAR, which controls the distribution of homes across 880 regions in the country: The proposed changes are set to take effect in mid-July 2024 and will vary from state to state.
Worked with me in the past? Share your experience.
Jonathan Balog
DRE# 01980970
Broker
M: 831.747.0310
[email protected]
Compass is a real estate broker licensed by the State of California operating under multiple entities. License Numbers 01991628, 1527235, 1527365, 1356742, 1443761, 1997075, 1935359, 1961027, 1842987, 1869607, 1866771, 1527205, 1079009, 1272467. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.
OUR WEEKLY UPDATE