It never fails. Seems like any time I get a new listing, in the first hour of the first open house somebody inevitably asks me this question. ” Is the seller flexible on price?” Honestly, that’s really an astonishingly stupid question…isn’t it? Is there anybody that you know on Earth who puts their home on the market for sale and expects to take a big price reduction…on the first day! I mean, do these folks imagine me sitting with the sellers and having a conversation like this?

Me: “Well, we’re off and running. I just put the house in the MLS and our first open house is tomorrow.”

Seller: ” Great! Remember Jim, I’m real flexible on price. Make sure those potential buyers and those agents know that, OK?”

Me: “Sure, no problem. How much under the asking price do you think you may want to go?”

Seller: “Oh, I don’t know. Maybe $100,000 or so. I just want to make sure those buyers feel like they’re getting a good deal. That’s my goal.”

Folks, if you believe any of this please call me because I have some really great ocean front property to sell you in Vacaville.

Seriously, I’ve never met a seller in my career who had any flexibility on the first day of the listing. If you like the house and want to make an offer on a listing that’s been on the market one day…get ready to pay at minimum somewhere close to the sellers price. Heck, the truth is most sellers entertain the fantasy on day one that they’ll get multiple offers and their house is going over asking. Even if it’s a complete dump! Now if you’re asking that question on day 72…that’s a different story.

2012 has sure been an amazing year in real estate. Unexpected. Crazy. Competitive. Illogical. These are just a few adjectives that come to mind when I think of this year so far. I have to admit, I have enjoyed being as busy as I’ve been so far this year. By the middle of June I will have surpassed my total for all of 2011. As good as it’s been there’s still one particular area that astonishes me more than any other. It’s the incredibly low inventory we’ve experienced.

It’s inexplicable really. Just when I think there’s an uptick and we’re about to shoot upward into what we tend to think are normal ranges…it doesn’t happen. Last month there was 6 condo/townhouses on the market…a historically shockingly low number. It doubled a few weeks later and I thought maybe we were headed back to “normal” ranges. Say 25 to 30.  Well…that sure didn’t happen. Today we’re hovering at 8 active units. Oddly enough there are also 8 single family homes on the market right now and two of them came up since yesterday.

What the heck is this? I can hardly believe what I’m seeing when I look at the MLS. I ahve clients that want to buy a house in Redwood Shores. There’s a grand total of 4 active single family listings there and all of 3 active condo/townhouses. Do you suppose there’s more than 23 active buyers in all price ranges looking in Foster City and Redwood Shores? Is it any wonder that there’s multiple offers on everything?

I wish I had an answer for this situation. The simple fact is there’s lots of folks looking for homes around here and nowhere near enough inventory to satisfy the demand. If you’ve been sitting on the fence about putting your home on the market…now’s the time. It’s hard to imagine the supply and demand curve being more favorable to you than it is right now. If you’re a buyer…you’ll learn patience.

In every semi hot to hot market I’ve been through there ends up being some pretty strange phenomena demonstrated by sellers. Not alot mind you, bur certainly enough to make one (me) scratch the old head. First of all, there’s sellers out there who actually weren’t planning on selling but heard about how hot the market. They think “what the heck! Let’s sell!” or something like that. What they then do is list their house pretty much in the shape it’s currently in without a whole bunch of preparation, staging or real strategic planning. I guess they figure that if the market is so hot they don’t really need any of that stuff…their place will not only sell but get multiple offers just cuz. What happens next is possibly the strangest of the strange. They, and their agent, decide to price the home a tad bit lower than the price they’re hoping for since that certainly will prompt those dreamed of multiples and those high over bids. And then…nothing happens! No offers. Lots of disappointment. Cue the phenomena…the seller and agent RAISE THEIR PRICE!

Like I said this doesn’t happen alot, but I’ve seen it happen consistently in this kind of market. A listing actually increases in price after a couple of weeks or more on the market. There’s just one little problem with this phenomena. It never works. If a house doesn’t get any offers at $875,000 why is it likely to get an offer at $925,000? Folks, if you don’t get offers, multiple or other wise at your asking price what makes you think that raising the price is going to motivate a buyer? I saw this yesterday at a listing on the Peninsula (which will remain nameless) and once again I marveled at the ability of humans to be in denial. If a house doesn’t get offers at the original price it probably wasn’t prepared well and as a result buyers don’t see value in it. If they don’t see value in it they typically don’t buy it. As painful as it is the solution is probably going to be lowering the price.

When it comes to real estate, everyone likes to imagine that they’ll get lucky, or their planning will come out perfectly and their timing will turn out perfectly when they take the plunge.  In truth, I think it’s almost impossible to intentionally execute the perfectly timed sale. If you’re a seller, you hope to put your house on the market when there’s very few competitors and lots of buyers…sort of like right now. Of course, your life’s circumstances have to be in line with all that too. Even within that hot market cycle there’s other variables that affect the perfectly timed listing. Listing your home right before tax time in mid April is usually a mistake. Listing just ahead of a long holiday period can also be less than beneficial. Oddly enough, I’ve had listings for which Mother’s Day was a fabulous open house and a terrible one on others. If you listed your home in January of this year you didn’t do nearly as well as if you had listed in February of this year. Pretty darn hard to predict that kind of timing! Right now, today, it’s a perfect time for a 3 bedroom townhouse listing in Foster City. It’s going to be interesting to see what happens at 1000 Stern in Bayfront Court listed for $649,000. No competition.

If your a buyer, timing can be just as important. If you bought last year, your timing was very good. Having said that…there’s a ton of variations in the buyer profile here too. The market is always moving, it’s alot like a river…it ebbs and flows. Sometimes it’s like rapids and other times it’s slow to the point it feels stagnant. There hasn’t been too much of that in 2012 but there have been little stretches where it’s slowed a tad. Those are the times of opportunity for a buyer. I noticed a few houses that listed late last week that are looking at offers on Thursday…it’s going to be very interesting to see if the July 4 holiday will limit offers at those places. In the long run, no matter what you buy in 2012 it’s going to look like good timing in 2022. I think it’s going to look good when looking back from 2013 for that matter. Timing is ultimately a matter of perspective.

Tom Wolfe, in his book “The Right Stuff” talked about how pilots feared making mistakes or doing something stupid that could often ruin careers, or worse, end up in tragedy. The pilots called it screwing the pooch. Don’t screw the pooch, they said. When the few select pilots were chosen for the astronaut program those guys found themselves in an environment where they didn’t think they could do anything that could have negative consequences anymore. The astronauts were so incredibly popular they felt they had discovered the unscrewable pooch. No mistakes were big enough to hurt them.

Sometimes that’s how the current market seems to me. Most of the time real estate agents go to great lengths to manage their listings to insure their clients get the best possible result. It’s sort of routine and almost everybody expects that. This week we saw an example of the opposite. A house came up for sale in Foster City, whose location will remain nameless, and if there was any possible way to screw up its marketing it had it. No lockbox and no showings were allowed outside of a 3 hour open house on Saturday. No, sorry, you can’t see it other than that. The seller doesn’t want to be bothered. One of the bedrooms was locked and inaccessible. The listing agent and the seller hadn’t done any disclosures or inspections. If this house had come on the market last year it would have been on for months. It’s ridiculous, a text book example of “how not to sell a home”. Except it’s 2012…so of course it got multiple offers and sold anyway. Amazing. This market is the unscrewable pooch.

Well, actually it’s not completely unscrewable. I heard a story this week about some sellers who sold their condo to some nice buyers off the market because they didn’t want the hassle of listing it and didn’t want to pay for staging and a buyers agent commission. They sold it WAY under market as a result (and these buyers REALLY did well!). In this market where places like the one above get multiples these sellers gave their place away. This time the sellers did indeed screw the pooch. If you’re thinking of selling this year…let the market take it’s course. It’ll be worth it.

2012 has been such a funky year for appraisals. Possibly the most problematic year that I can remember too. The sharp incline in activity, multiple offers and overbids leading to price escalation has made it harder than ever to appraise a home. Once upon a time the loan officer or mortgage broker you worked with had a favorite appraiser they worked with and that went a long way to insure a competent appraisal. Now, those same lenders can’t even speak to the appraiser…who comes via a request to an outside appraisal management company. I’ve worked with appraisers who had never been in the town where they were doing the appraisal. In one case I had to assist the lost appraiser find the house I sold. That doesn’t inspire alot of confidence in me with regard to their knowledge of the local market and the countless variables that affect value there.

Any time I enter escrow I worry to some degree about whether or not the place will appraise, and if it doesn’t what impact will that have on the deal. I have no doubt that this fear is in the mind of every listing agent who’s in a multiple offer scenario. This is one of the major reasons that sellers look for offers with more than 20% down payment…as well as offers that waive the appraisal contingency all together. If you have 30% down you won’t have an issue even if the appraisal comes in low.

I have 2 different appraisal headaches right now. In one case I have a townhouse in Foster City in escrow where the appraisal came in $20,000 under our agreed upon price. My buyers scraped and scratched to come up with that down payment. When they appraisal came in 20k low they have 4 choices…they can 1) back out, 2) make up the difference themselves in cash, 3) the seller can lower the price or 4) both parties can split the difference. In this case the buyers didn’t have the extra money and couldn’t get any more either. The seller reduced the price. As you can imagine, this is painful for the seller but the truth is there’s not much she/he could do. You can’t complain to the bank…it just is what it is. If you take another offer it better be with 30% or more down because that appraisal isn’t going to disappear. Your stuck.

My other headache came after winning a bidding war with 11 offers and a purchase price that went $75,000 over asking. The appraisal came in $45,000 under our price. This wasn’t a huge problem since my buyer put down over 35% but it sure doesn’t feel good when an appraisal comes in a bunch lower. Nobody like to feel that they overpaid for a home. The thing that drove me crazy here was the comment the appraiser made that he was an expert in Foster City and the market here has been dead since the last month or so. Really? He couldn’t justify the price as a result. What market has he been in? Not this one. I’d like to think that value is determined by what a buyer is willing to pay, but that’s not the case.

To make things even stranger, the appraiser who did the first example above has done 3 or 4 others on deals I’ve had this year. 2 of those were on properties that went WAY over asking and no comps at all were available…and he brought both in at the agreed upon price. The example above didn’t seem that far off to me and he brings it in 20k short. Go figure! Appraisals are pretty capricious…

For a long time it’s appeared to me that large expenditures on renovation or remodeling were kind of unnecessary when getting one’s place ready to sell. It came as no surprise to me then when I saw Forbes Magazine run a segment on the 20 best and worst home improvements for the buck and almost all of the “best” in that story were simple, basic things that make nothing but sense.

Of the 10 best suggestions, according to Forbes, here’s my favorites:

1. Clean up the house.

Give your home a top-to-bottom cleaning or, better yet, hire a pro to do a deep clean. Do it even before you hiring a real estate agent. If you don’t have a regular cleaner, hire one to keep the place tidy until your house is sold.

2. Simple repairs.

It is well worth the modest cost to fix broken outlets, tiles, light switches, door latches, folding doors and ceiling fans. Buyers view such flaws as signs of deeper problems–and may lower their bids accordingly.

3. Eliminate clutter.

A 10-foot-by-10-foot locker at Public Storage or one of its competitors is likely to cost you less than your phone and cable bills. Move out unneeded dishes, linens, personal items and furniture. Try to empty closets. Your house will appear bigger and more valuable.

4. Paint your house.

This can actually be a do it yourself thing to save money. If the paint on the front of your house is peeling, scrape it and repaint. Indoors, cover up any blemishes and repaint any rooms in loud colors that may be off-putting to others.

5. Clean up the yard.

No need to break the bank here. Mow the lawn, weed the flowerbeds and pull any dying bushes. Plant flowers in bare spots.

6. Replace hardware.

It’s a mistake to replace the kitchen cabinets or closet doors. But you can convince buyers to pay a little more by installing new handles, knobs and drawer pulls where needed.

7. Replace old appliances.

A new stainless steel range will not prompt buyers to pay much more for your home. But a seriously bedraggled stove or refrigerator could scare them off. If you’ve got a junky-looking appliance, swap it out for a budget-minded replacement.

All of this makes total sense to me. Interestingly, Forbes is not gung ho about the idea of large remodeling projects or room additions to maximize value prior to a sale. They think, and I agree, that a wise use of your funds can and will bring you the biggest bang for your buck. I would go slightly further and suggest the use of a good professional stager for preparation of the home as well. Intelligent planning and decorating will really assist you in getting top dollar when the time comes.

Historically, when you buy a home you have a contingency or two that allows you to do inspections, get a loan, get a correct appraisal and also…to simply change your mind. That, of course, has changed a bit in this crazy hot market we’re in and lots of folks are writing offers with no contingencies that assures the seller that no problems will occur en route to close of escrow. If you’re doing that you need to be sure going in that you really want the place. The point though, is that the contracts we use have provisions in them that allows for buyer contingencies and you could, if you have them, simply change your mind and back out.

Every once in a while a seller is the one who wants to back out. I’m aware of a situation recently in Foster City where that happened. The seller, a recipient of multiple offers and overbids, decides a few days into the escrow that he simply doesn’t want to sell. He thinks he has a “cooling off” period that allows that. He’s wrong. The contracts used in California have no cooling off period. No contingencies that allows the seller to back out. On the  contrary, here’s what IS included in the fine print of one of the contracts:

“Should escrow not close due to a default by the seller, or if seller
does not otherwise perform under this contract Seller may be subject to a
claim for specific performance and/or be liable for Buyer’s damages
including but not limited to, consequential damages (eg: temporary
housing arrangements, storage costs etc)and for payment of the
brokerage fee.”

Changing your mind is alot different for a seller than it is for a buyer, huh? I heard a story once about a seller who actually signed all the papers and closed the escrow, receiving her money…and then refused to move! It took a coule of weeks to legally evict her. Her adult kids had to fly in from out of state to encourage her. For some reasaon it never occured to her that selling meant leaving. It’s actually kind of amazing that you could do all that preparation work towards selling, get the house on the market, look at and ratify on an offer and then change your mind. Of course, it’s going to be a process if the seller engages an attorney and fights it all…but he odds are very long that he’ll win. It’s his signature on that contract after all.

I have this little link here on the blog that says “Ask me something, I know stuff”. Sometimes I even do! Technology, on the other hand can sometimes baffle me and when somebody asks a question there I’m supposed to get an e-mail. I just discovered that I haven’t been. Oops! Anyway, a seller in town asked a couple of interesting questions a month ago and I thought I should tackle them via a post or two. Here’s the first question:

“Our agent represents us as the sellers. The buyers wants him to represent the them, the potential buyer. Right now he gets 6% if he sells the house and would split it with the buyers agent if they had one. What is the % of discount should our agent give us? “

Very interesting and good question…and I think there’s several answers that are appropriate for it. First off a question…how good is the offer? If it’s a good one, why argue about the commission? You were going to pay it anyway. Second, if the offer is lower than you were hoping for, how about using the extra commission to bridge the gap…regardless of who gets it. Maybe the buyer needs it for the downpayment…why not let them have it if the purchase price is right for you? Third, I personally hate doing both ends of a transaction. Both sides end up distrusting me. I discovered that I just couldn’t win. I’ve done it and regretted it. I’d much rather give the buyer to an agent in my office to make sure I represent my client alone. Of course, that’s because I’ve been doing this for 22 years and that extra commission isn’t going to be as important as it was all those years ago.

If a home has been on the market for a long time, maybe it’s not such a bad thing to do both ends…maybe you have to! If it’s in a multiple offer environment I think I’d worry about it. It’s almost a guarantee that the playing field won’t be level.

The second question that came up from a reader (same reader actually) asked the following:

“We are selling our house. What is the advantage and disadvantage of having the buyers agent submitting the offer in person as compared to just the written offer?”

My answer to that is simply, how much time do you have? I’d say most agents I know would prefer to present their client’s offer in person. When I present a client’s offer I really prefer to do that because it allows me an opportunity to build a bridge from the buyer to the seller. I can explain who these folks are and hopefully persuade them to accept our offer. From the standpoint of the seller that means you’ll have to spend the time listening to me. You’ll also most likely need to go to your agent’s office to do so. If you’re about to look at multiple offers count on spending quite a bit of time in your agents offer because all those agents are probably about as long-winded as I am. You could be there for hours…honestly.

It’s not uncommon now for the listing agent to ask for offers without a presentation. They’re simply e-mailed or faxed over. That allows you to relax at home while the agent does the due diligence regarding review of the offers. Honestly, it’s sort of a waste of your time when you’ve seen 3 offers that are over asking and the 4th agent presents an offer under asking and with suspect terms as well. Why sit through that? I guess I’d have to say that if I’m representing a seller I’d rather review the offers myself and then go to my clients home to show them the offers in a more comfortable and speedier time. If I’m representing a buyer I’ll fight to present it in person. Funny, huh? Being present for offers is really the polite, correct thing to do for everybody. You just need to be prepared to take the time for it.

Well, just how bad is it? What I’m talking about is just how bad is this current spectacular lack of inventory on prices and thus on the overall market in general? Let’s look at a couple of cases in point. First, there’s a house for sale in Redwood Shores on Skiff that came up 20 days ago, has no lockbox or sign and when I called to ask the seller if I could show the house last weekend I was told, “No” by the seller who informed me that it was only available to show on Monday between noon and 3. “Why is that?” I asked. Because his agent couldn’t be there last weekend. See, there’s this crazy little thing called a lockbox that allows the homes to be shown without some realtor opening the door for you. Many of you may be surprised to learn this but the vast majority of us are housebroken. If the listing agent’s not there we won’t allow wild toga parties to occur in the sellers home. Now, ordinarily a marketing mistake like this would insure a lengthy stay on the market and a significant reduction in price. Skiff looked at offers today…they had 5 of them.

If you don’t like that story, how about the vacant house on Ventura in San Mateo. It came on last Friday but wouldn’t allow showings until the Tuesday broker tour. After that the agent notes say:

Special evening showing Thursday 1/24 5:30-7:00. ***No Lockbox*** Please try to make one of the scheduled showings

What happens if the buyers can’t make it tonight during that window? The listing also says that an offer date will be determined. Did I mention the house was vacant? Why on earth would it be a problem to allow a lockbox on a vacant house? Is the marketing goal to get as few prospective buyers into the house as possible? You see…that would be the case any other time! This place actually has several disclosure packets out…it’ll get offers when they want them. No matter what you do you can’t screw thing up so far in 2013.

Now lets look at what happens when a house allows access. There’s a fixer upper listed on Clipper in San Mateo that got offers a couple of days ago. It’s vacant too and allowed showings with a lockbox. In all fairness, it was listed for the incredible price of $375,000, but here’s what the listing agent put in her notes after it went pending:

Thank you to all 87 agents who submitted offers. Seller has accepted one and another is in backup

What!! 87 offers! It must have taken 5 or 6 hours just to review them…without agents presenting them! Why is this bad news? Well, if you’re a seller it sure isn’t. You could list with your wife’s cousin Iggy who has a license in Dubuque, Iowa and not California and he could put it in the Dubuque MLS and you could probably still get multiple offers at this point. If you’re a buy on the other hand you’re going to experience a whole bunch of competition. Sorry.

Here’s an interesting seller lesson. This story appeared yesterday on Yahoo and is about a homeowner in Pennsylvania that discovered through the neighbors (after she moved in) that a murder-suicide had taken place there. This fact wasn’t disclosed to her upon her purchase in 2007. The murder-suicide happened in 2006 and before the current sellers had owned the place. In looking at our disclosures the question about a death in the house specifically asks whether that event has happened within the last 5 years. Interestingly, the defendants here won both in a trail and an appeals court. The issue now is in front of the Supreme Court in Pennsylvania. It sure seems to me that a murder-suicide that took place only a year prior to this lady buying the house should have been disclosed.

This topic has come up around here on more than one occasion in the past. There was a house on Lurline in Foster City a few years ago that had this history. Of course it was fully disclosed…and the house took ages to sell and sold at a significant discount. The problem can come when the property is a foreclosure. I saw an REO listing in Belmont a few years ago that looked great, but had no disclosures. In analyzing the history of the house it had been listed previously as a short sale and I contacted that agent to ask what history the house had and was told of a murder-suicide there. That fact wasn’t disclosed at all by the bank. Theoretically, they didn’t know about it.  In some cases it pays to do a quick Google search of a properties address prior to making the offer because information like this will show up via various media outlets. That’ll only take a minute to do that. I also think it’s obviously important for sellers to fully disclose the material facts about the home they’re selling. An event like this that happened just a few short years ago would clearly effect a persons desire to buy the house…and the neighbors are going to tell the buyers when they move in.

I had lunch with a friend of mine today who showed me a couple of letters he’s received at his house recently. It was interesting because I haven’t seen this type of letter at my house…but I suspect it won’t be long until I do. One was a short but sweet letter that appeared to be handwritten. It said simply:

Hi My name is _______ and my partner_________ and I would like to BUY your house at ___________

Please call me at ___ ___ ____

Simple, it sort of seemed believable to me. The interesting thing to me is the fact that it’s purporting to be from a buyer….not from an agent. We’ve apparently reached the stage where buyers are direct mailing homeowners asking to buy their place. The market is SO insane that now folks are independently going door to door looking for inventory!

The second letter my friend got was from an agent of sorts, but it wasn’t trolling on a listing. It said I want to buy your house and I’ll make it happen without an agent and save you a bundle. What I really think is that this individual is hip to how hot the market is right now and wants to find a seller with whom is uninformed about this heat. You could easily tell many people that their house is worth a November 2012 price and undercut its real value by about 25%. Seriously. The market has been SO hot that 3 month old comps are as irrelevant as 1995 comps. I really think this letter really was trying to pull a fast one on an unsuspecting seller.

But what do I know. Still, these are letters I’ve never seen before and it sure is interesting that my friend has received 3 of them in the last month.

Well, we’ve reached an interesting observation point. Sellers in Foster City and elsewhere can actually overreach. After hearing about how crazy the market has been some sellers are putting their houses on the market at prices that aren’t realistic even now. It’s fascinating to me. Here’s a couple of examples, in San Mateo there’s a 2 bedroom, 1180 sq ft house on Huron that’s listed for $599,000. That struck me as a bit high when it came out…and the market seems to agree. No offers even though there was an offer date last week. Meanwhile, I had a listing just around the corner for $579,000 and we got 9 offers last night.

There were two different places in Foster City that also fell right into that equation in the last few weeks who’s names and addresses I’m not mentioning. Their prices were too high and the market sensed that. Quite often sellers now are hearing the good news about home values and think their pie in the sky ideas about how much they can get will become reality simply by showing up on the MLS. If a house is well priced and prepared it’s going to get attention…and offers. If it’s overpriced then you can still be stuck. I’m actually sort of glad this form of sanity is happening. It get’s REALLY scary when folks buy overpriced, problematic house just because their for sale.

Seems like a lot of us have gotten used to the pace and flow of this heated up market and sort of know it’s rhythms a bit…sort of. Every once in awhile there’s a phenomenon called the preemptive offer that sort of throws a wrench into that awareness. When a house hits the market it’s not unusual to have  somebody suggest that they want to write an offer and present it right away. Most of the time the listing agent will have created a game plan for reviewing offers and that will typically take it’s course within a 10 day period following the listings arrival. When I say most of the time I mean about 98% of the time. Occasionally the seller and agent will agree to look at an offer right away and not wait. This is called a preemptive offer.

The vast majority of preemptive offers are pretty much accomplished by writing a very attractive, over asking, non contingent offer. An offer that the seller most likely would receive if they waited. Of course there’s no way to be sure of that if you’re the seller but some sellers are anxious to sell their house. Maybe the idea of having groups of folks always showing up all week seems intimidating to them and they would just as soon have it all over with.

For what it’s worth, right now I think a seller probably makes a mistake taking an offer like this. I’ve been consistently surprised by what shows up on offer day and it’s pretty hard to determine on day one what will happen. I also think that if the buyer is so fired up about a house that he wants to  write a fat preemptive offer the odds of that buyer not being interested in a week or 10 days are slim. They’ll be there then too.

I have to say that it’s a pretty weird feeling showing a house on day one of it’s listing and seeing it sold that night in the MLS…just as I’m going to call to ask for disclosures. I saw 2 of these happen last weekend. I guess if you’re a buyer it never hurts to ask, but if you’re a seller I’m really thinking you’ll be better off, and at minimum at least as well off, by waiting.

It’s never a dull moment in this market and I really am seeing things I’ve never seen before. The market forces at work are really quite remarkable and sure do shape the way things are. Take the house at 223 Puffin for example. It’s a very nice 2945 sq ft 4 bedroom, 4 bath house that was listed for $1,168,000. It looked at offers, got 5 of them and then decided to opt for a different response. Here’s what’s printed in the agent notes on the MLS:

5 offers received on offer date. In light of resulting sales price of 221 Puffin Court, Sellers have elected to re-price the property accordingly.

It’s now priced at $1,308,000. The house at 221 Puffin is a 2460 sq ft 4 and 3 that was listed for $1,198,000. They looked at offers on April 26. It closes on May 21 so we’re not sure what it sold for. I have no doubt the folks at 223 Puffin do know…what do you think? I’m also thinking they didn’t get $1,308,000 when they looked at those 5 offers they got. This practice is fascinating because it sure could never happen in any other market. The market speaks and you say “no thanks…I want more”. I hope they get it! Everybody likes a rebel after all!

So I spoke to a nice couple last week who have a house to sell in San Mateo and it was the house that the gentleman here grew up in. It’s in trust, but has a probate connection because of a brother who was on title and also passed. These folks explained to me that they’ve been inundated by real estate agents who have swooped down upon them…wanting the listing of course. I’m not sure why this surprises me, it’s just that I NEVER have sought out clients this way. Sort of feels like ambulance chasing to me but I realize that I do not hold the corner of the market on knowledge of how to find business. It’s just the stories they were telling me!

Agents just walked right into the house without knocking. Some brought contractors back to get bids for repairs…without asking. More than one told them they could happily sell the place for them…right now, to one of their clients for $750,000. It’s in an area that I just sold a listing last month for $1,460,000. “Folks why don’t you just forget about the hassle of fixing this place up and just let my buyers take it off your hands?” Great…at a SERIOUS discount! Just to watch it get flipped in about 2 months.

I guess the point is that sellers should beware. There’s nothing like letting a property be exposed to the market so that the market can determine it’s value. There’s also nothing like preparing a home for sale to maximize it’s return. Patience and planning really are virtues.

If there’s anything that will eventually hurt this market it may just be the unbridled greed that some sellers are showing lately.  Understandably, there are sellers out there that have heard all about the multiple offer, enormous overbid insanity that’s permeated the market this year and want that experience for themselves. I get that. What I’ve been hearing though takes things way over the top…in my opinion.

There are folks out there who put their homes on the market and feel entitled to a huge overbid. No matter how crumby their house is or how grossly overpriced it was to begin with. I heard an example of this the other day in San Carlos where a house came on the market on a small 400 sq ft lot, needing lots of work and only 1300 sq ft. It was listed for just under $1,200,000. Unfortunately for the sellers, they didn’t get the offers they were expecting. In fact they didn’t get an offer. When one eventually did come in it was $40,000 under asking (about what it was really worth!). The sellers wanted to counter at $1,300,000. After all…they were entitled to an overbid like that, right? I mean, how dare the market not anoint their house like it did with others.

I’ve heard this a few time this year. I’ve actually heard it in scenarios where there actually was multiple offers and the price went more than $200,000 over asking. The sellers were disappointed…because they expected $300,000 over asking!

If you’re thinking of selling…here’s some simple rules:

1) You are NOT entitled to overbids

2) If you’re lucky and you prepare correctly you MIGHT get them.

3) Your overbids may NOT be $500,000 over asking…be prepared.

4) The market is telling you what the house is worth…no matter what you get.

5) If you get a nice clean offer you probably did great.

6) If you sell your house for 20% more than the last comparable sale for your floor plan but the buyers don’t offer you free rent…that’s OK. You did great. Really.

Simple rules.

A client of mine asked me the other day about whether it was better to list this fall or wait until after the first of the year when the inventory situation could be better. Their goal is to move up from their condo into a single family house and they’re rightfully concerned about being able to accomplish that with an escrow and a rent back without being made homeless. Buying being as tough as it is and all.

It’s a great question really, because there is certainly a feeling that buyers have that lots of new inventory will save the day. That shining horizon of the first quarter of 2015 seems like it’s filled with possibilities too. It’s also true that November and December tend to be slower and folks tend to not list their homes then. The problem is, so many more buyers enter the market after the first of the year. Seems like every year January and February are very hot months for selling. Indeed, there’s new inventory, but there’s tons of new buyers as well. In December of 2013 a nice house on Verdun in San Mateo sold with 3 offers and went over asking. In January another nice house on Verdun in San Mateo sold with 34 offers and went WAY over asking.

It’s all a crap shoot, but I really think that selling now is better than waiting on the potential mirage of vast new inventory on the horizon. We’ve been waiting for that for years now…and it’s proven to be pretty illusory.

So I have this adorable listing at Edgewater Isle and my client is a very gifted DIY guy who’s done wonderful work in their place. It’s really gorgeous. Of course he can’t resist the temptation to carry the DIY thing into the home’s listing as well. In an effort to be helpful with the sale he went ahead and listed the place on Zillow as a For Sale By Owner listing. There’s two listings on Zillow actually, the MLS listing and the FSBO listing. They’re sort of competing with each other on that site.

What’s amusing is that the seller put my cell number in his FSBO listing for contact. Would you suspect that I might get some calls from interested buyers? Not a chance actually. What I have got are calls from real estate agents who, apparently , just got their licenses…and want a listing. First thing Monday morning it started. “Hello Sir, this is Ignatz with Coldwell Banker and I’d like to speak with you about selling your home.” At first I didn’t understand…then after the 4th call before noon I figured it out. What’s amazing is that NONE of them were from even close to around here. I actually got a call from an agent in Palmdale!! In southern California for crying out loud! They all want the listing!

My favorite was from a guy in San Jose. I missed his call and it went to voice mail. His message said “Sir, this is Paris Hilton (I made that name up..duh) with Intero and I have an extraordinary opportunity for you today. Please call me back at your earliest convenience.” Since I have several listings right now…I call him back. He says: “Sir, what I wanted to speak to you about is the incredible marketing opportunities available to you via the Intero system that will guarantee you receiving TOP dollar for your home in the blistering 2015 marketplace.” Now imagine that spiel in a deep baritone, Don Pardo kind of voice…and also obviously being read from a script. I was driving on 101 when I got that pitch. I was laughing so hard I almost had to pull over. I said; “Um, I hate to tell you this…but I’m an agent with Sothebys and the place your speaking about is listed on the MLS, by me, and it’s really NOT a FSBO. Sorry.” I thought the poor kid was going to cry.

I imagine rookie agents scouring the internet looking for For Sale By Owners to pounce on. Turn over every stone I guess.

In real estate it’s never a dull moment.