Negotiation is for Monkeys

Every seller wants the best representation possible when selling their home, but good negotiation skills which are a critical component, are fast becoming a lost Frequently Unasked Questionsart.

Speak to any agent and they will no doubt claim to sell your home for the most money in shortest amount of time—but can they all really be the best?

We’re heard sellers tell us that “any monkey” can sell a home in our market right now, and they’re probably closer to the truth than we’d like to admit. But these “monkeys” they refer to are certainly not going to get their sellers the most amount of money.

It’s tough to see the whole picture when you see homes on your block being listed with inexperienced agents, or a veteran agent who still faxes paper contracts back and forth, yet they both sell their listings for thousands of dollars over the listed price. The seller walks away happy with the results, and nobody will ever know how much money might have been left on the table.

Forget about marketing as an important variable in the outcome—for now. Let’s focus on the day offers are due. Many agents are so excited when they get 20 multiple offers they strut around their office wearing it like a badge of honor—but clearly they are merely underpricing homes rather than fighting for top dollar. Once they have dozens of offers to wade through, what they do next weighs heavily on the outcome for the seller.

One of the most disturbing and glaring differences we see is how agents negotiate on the seller’s behalf. The lost art of negotiation on the part of many REALTORS® is leaving money on the table for their sellers and dashing the hopes of frustrated buyers.

A little history…Agents have a fiduciary duty to their clients. In a nutshell, it is the highest of all duties to be had. A fiduciary duty is the highest standard of care in either equity or law. The Fiduciary duty is a legal requirement of loyalty and care that applies to any person or organization that has a fiduciary relationship with another. Think of the historical roll of a fiduciary as a similar role the Secret Service takes upon itself to protect POTUS. OK, so now you know how serious the fiduciary duty is.

Then why do so many agents seemingly treat this highest of duties so callously? Simply put, they probably don’t know any better.

If you are selling your home, a breach in this sacred fiduciary duty could cost you thousands of dollars and the same holds true if you are a buyer.

Here’s where the art of negotiation is being lost and hence the fiduciary duty being broken. It’s the agent’s job to get you top dollar for your home. Skipping steps and poor negotiation skills can come close to treading on intentional negligent conduct (or fraud) on the part of your agent.

When enlisted as a real estate agent to sell another’s real property, the bond of fiduciary is created. Fast forward to when five offers arrive on the day set-aside for the bidders to present offers. We’ve seen it many times—an offer is submitted by each of the agents and late at night we get a call that our offer was rejected, or hopefully accepted.  But when agents don’t bother asking each buyer if they can go up any higher in price, it’s tantamount to leaving a lot of money on the table. Agents are becoming increasingly lazy as they coerce their sellers into taking the highest offer rather than counter other potential buyers to see who will offer the final highest and best offer. Agents defend the lack of counter offers and asking buyers to go up in price by concluding “It’s not a fair practice when a buyer has already offered over the asking price”. Our position, clearly, this has nothing to do with worrying about the other agent’s feelings—it’s about the fiduciary duty to a client.

For example, we had buyer who made an offer on a home in Redwood City and there were seven other offers. Our clients offered $1,350,000. We got a phone call at 9:00 PM telling us our client’s offer was third highest, and that the seller had accepted a high offer—we were told over $1,400,000.

Apparently over the weekend the winning bidder (buyer) backed out of the deal and without as much as a phone call to us they accepted the second highest offer for $1,375,000 as a replacement. They never bothered to check with us because if they had, they would have learned our buyers were also willing to go over $1,400,000 to get the property. This agent cost their seller over $25,000.

But there’s a better way to do things. When we’re on the receiving side of listening to offers, we vet each one as they are presented to ascertain if this is their clients’ highest and best offer, OR if they would like to be involved in a counter offer situation should one develop. We’ll be blunt and tell the agent that their client’s offer is not high enough, and if they want to compete they had better increase their price to their highest and best. This way when we meet with our clients—the sellers—we’ve already developed the best offer to present, and counter offers are rarely necessary.

And it’s not always about the almighty dollar. Sometimes vetting the offers beforehand means asking an agent why they have an appraisal contingency with a 50% down payment. Contingencies shift the burden of the unknown to the seller and we’d of course like to see as few in a contract as possible. Asking the right questions at presentation time may mean the opposing agent can go sharpen their pencil and come back with a cleaner or better offer.

We once had an agent wax on about how we were “…shopping her offer around” to get more money for our sellers. Simply put, we unapologetically agreed.

 

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years’ experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

You can find them on Facebook at https://www.facebook.com/Morganhomes and also find them on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

 

 

 

 

Best of Tour-May 5th 2015-Belmont

Best of Tour-May 5th 2015-Belmont

The Inventory of homes continues to increase as we visited 17 homes for our clients on tour Tuesday.

Best of Tour this week goes to the newly listed home on Dekoven in Belmont (we’re not allowed to give the house number since it isn’t our listing—dumb rule, I know).

It’s listed as a four bedroom two bath home (actually it has two and ½ baths). Now it needs some updating but what intrigued us was not just the lot size, (12,960 sqft.), and the size of the home, (2,830 sqft.), but the layout was very unusual—not your typical Belmont ranch home.

Think of an Eichler-esque style home with an atrium in the middle which brings in a lot of light—we imagined a Nana wall opening up this space and incorporating it as a part of the flow of the home—we’ll perhaps not this dramatic.nana wall

Open this May 9th from 1:00-5:00 (Saturday—not Mother’s Day).

As always, you can click here to find more information on this listing or any other homes on our advanced real estate site.

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years’ experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

You can find them on Facebook at https://www.facebook.com/Morganhomes and also find them on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Best of Tour for April 28, 2015

Selecting today’s Best of Tour home made for a difficult decision. Not because there were too many intriguing homes to choose from, or great deals to be had, but rather that there were none which offered any attributes we found remarkable or outstanding.

I don’t profess to be any sort of great hiker, and today proved why. We hiked up and down more stairs today than was portrayed in the famous lithograph Relativity by M. C. Escher in 1953.

Aside from the common denominator of “mundane” in the homes we toured today, was the abundance of cliff side homes. There are two kinds of cliff-side homes—cliff hangers—you know, the sort of homes you wonder if your kids would get out the bungee cords and leap over the edge, and what we refer to as cliff clingers—those homes which are on the up-slope with a yard better suited for a Billy Goat.

Now don’t get us wrong, many of these very homes offer spectacular views and often little yard maintenance. But when you’re out touring 20 of them in a row, one pines for just one sprawling California ranch home.

So if you are looking for an excuse to step back from the relentless open house weekend, we recommend you get away and tune in next week. Perhaps a nice hike would be in order…

Best of Tour for April 14th 2015

The definition of a mansion varies from person to person but we’re weighing in and calling this best of tour home in San Carlos so unique as to rise to the level.

Perched on the prestigious Hyde Park development with sweeping views of the surrounding canyons and San Francisco Bay, this stately home offers a plethora of elegant verandas and vistas to choose from.168 Queens Lane

Swank and extraordinary best describes this home and it comes with an equally extraordinary price tag for San Carlos where the average home sold this year for just over $1,400,000—yet there’s nothing average about this home. Listed by Coldwell Banker at a cool $4,988,000.

Click here for more images and details…

 

 

168 Queens Lane Kitchen

Veranda

 

 

 

 

 

 

 

 

 

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

You can find them on Facebook at https://www.facebook.com/Morganhomes and also find them on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

 

 

 

Best of Tour for April 7th 2015

Today’s Best of Tour was chosen due to its awe factor of being what I would consider my dream home. Imagine living lakeside in a mountain retreat but really just minutes from downtown Redwood City with its nightlife and great restaurants, not to mention the “Weather Best by Government Test” slogan the city boasts.

But get your wallet out as this amazing five bedroom five and one-half 4,250 square foot home will set you back a cool $4,498,000 if there are no multiple offers…

Click here for more pictures…
1005 Lakeview Way kitchen1005 Lakeview Way aerial

 

 

 

 

 

 

 

 

 

 

1005 Lakeview Way Living room

 

 

 

 

 

 

 

 

 

 

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

You can find them on Facebook at https://www.facebook.com/Morganhomes and also find them on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Listed by Coldwell Banker

 

Never Lose Money on a Home Again with Home Price Protection?

Home Equity LockHow does the program work?

Home Price Protection™ provides financial protection to homeowners in the event their local market index value declines at the time they sell their home,regardless of the price the home is sold for.

Is this insurance?

No. It is a financial agreement to pay the homeowner upon resale if their House Price Index drops. The contract is not purchased to insure against the loss of value in a particular real estate parcel; rather the contract pays out based on declines in the relevant market index, regardless of whether the home sells for a gain or a loss. A Home Price Protection™ agreement holder cannot have an insurable interest in the House Price Index. In order to provide consumers the confidence they deserve, we insure our risk with a Washington, D.C. insurance company which provides regulation on our pricing, capital and reserve requirements at levels sufficient to cover operations and expected claims.

Who can sign up for this program?

Anyone who is a homeowner or who is buying a home can purchase a Home Price Protection™ contract from EquityLock Solutions. Anyone who is selling a home can agree to purchase Home Price Protection on behalf of their buyer.

How much does it cost?

The national average is currently 2.05%. For a home worth $200,000, the one-time cost would be about $4,100. We offer multiple payment options from a onetime payment up to 60 month financing options.

With RE/MAX we offer special pricing and the cost for RE/MAX clients ONLY is 1.75% of the purchase price and can be financed over a two year period at zero percent interest.

When can I file a claim?

Upon the sale of the home after a 2-year waiting period from the time of enrollment and if the house price index in your area has gone down since enrollment. Protection is available for a maximum of 15 years.

Why is there a waiting period?

There are several reasons why we chose to impose a waiting period. The program is intended to encourage homeowners that are committed to remaining in their home for the long term, rather than as a speculative financial tool. Second, home price movements can be somewhat predictable over the short term, but over longer periods, the predictability is reduced. The waiting period prevents a situation where homeowners will increase their protection at times when the market is weak, impacting the sustainability of the program.

What if the homeowner loses more money upon reselling the home than they get from the Home Price Protection™ payment? What if they make money upon reselling the home, but the index has gone down?

EquityLock Solutions will make a payment only when there has been a decline in the market index and only for the percent change in the index, multiplied by the protected value. Because the index represents the average performance of home prices, some people will experience losses greater than the decline in the index while some people will experience losses less than the decline in the index. It is possible that a homeowner could sell their house at a profit but still receive a Home Price Protection™ payment if the index has declined in their neighborhood.

How is payment made in the event of a claim?

Upon reselling your house, we look at the change in your market index. If there was a drop in the market, we pay for any difference, up to the contract maximum of 20%.

If you’d like more information on this exceptional program please contact us at info@morganhomes.com or call (650) 508-1441.

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

You can find them on Facebook and also on Twitter.

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Best of Tour 2.10.2015

BEST OF TOUR

Not to be confused with the Board of REALTORS “Best of Tour” award whereby agents try and coax or pressure their colleagues into signing a petition proclaiming their home the “Best of Tour”, our’s is based upon our personal impression after seeing all of the homes on tour and reporting back to you.

Today’s Best of Tour there were three stand outs:

Belmont:

Belmont’s inventory is still low but this one perked us up. A home on Belmont’s west side under $1,000,000? Ready to move in, this home is great for a first-time buyer tired of renting.

2014 Monroe Avenue , Belmont 94002   Status:  Active  Monroe

County:                San Mateo

Area:     362 – Belmont Country Club Etc. List Price:             $899,000

Beds:     2

Baths (F/P):        1

Apprx.Sqft:         1,150 SqFt (Tax)

Apprx Lot:           4,000 SqFt (Tax)

 

San Mateo:

904 Murphy Drive, San Mateo 94402       Status:  Active      Murphy Drive

County:                San Mateo                          Price:     $2,488,000           List:        02/06/2015

Class:     Res. Single Family

Beds:     5

Baths (F/P):        4 (3/1)

Apprx. Sqft:        3,910 SqFt

Apprx Lot:           11,970 SqFt

This home underscores why looks can be deceiving. From the outside it looks like just another track home but once inside it is anything but ordinary. From the open floor plan and expansive rooms to the wonderful rear yard. Truly a great find!

If that one is above your comfort zone there’s a home on the water in San Mateo which has been recently upgraded. Best part—you can water ski right from your back yard.

1765 Lake Street , San Mateo 94403         Status:  Active            Lake

County:                San Mateo          Orig Price:           $1,288,000           Original:               02/05/2015

Area:     413 – Parkside    List Price:             $1,288,000 MLS #:            ML81449598

Beds:     4

Baths (F/P):        3

Apprx.Sqft:         1,960 SqFt (Tax)

Apprx Lot:           8,280 SqFt (Tax)

 

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

You can find them on Facebook at https://www.facebook.com/Morganhomes and also find them on Twitter @ https://twitter.com/morganhomes

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Belmont’s Housing Market is Dead?

Drastic Drop in Inventory
Drastic Drop in Inventory

What Happened to Belmont’s Housing Market?

Talk about a slow start…Belmont has started this year with a big yawn when it comes to the housing market. New listings year to date are down 67% over this time last year—and 2014 was a slow year for listings.

San Carlos on the other hand is enjoying a 27% increase in listings to date at a median price 30% higher than last year.

One hopes we can begin to catch up! Stay tuned…

 

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Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

 

For all you need to know about Belmont, subscribe to this blog right here. You can also follow us on Facebook at https://www.facebook.com/Morganhomes and on Twitter @ https://twitter.com/morganhomes

 

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

Belmont Enjoys Steady Home Price Increases–2014 a Year in Review

Belmont Enjoys Steady Home Price Increases

Since the housing recovery began in earnest in 2012, Belmont has enjoyed a steady increase in home values. Since 2010 Belmont’s home values have increased 44%, while year-over-year prices continued to increase 17% in 2014.

Belmont Median Home Price

Part of the rapid increase in home values is due to historically low interest rates coming off a reduction in home values during the Great Recession. Another influence continues to be the influx of new jobs which jump started the need for housing in 2012. But the scarce housing inventory may have been the largest contributing factor by creating bidding wars and over exuberant offer prices.

To put the meager housing inventory into perspective, there were four times the number of homes for sale at the end of 2010 and 2011 than there are now, while new listings in 2014 were a quarter of what they were in 2010.

The time a home sat on the market dropped 70%, from 52 days down to just 16, while the percent a seller received increased 10% as sale prices averaged 109% of the asking price last year.

It’s safe to say that Belmont’s robust housing market has become self-evident. But how does Belmont stack up to other nearby cities such as San Carlos?

San Carlos bested Belmont in the median price category coming in at $1,425,000—11 % higher than Belmont for the year. The rate of appreciation over the past four years as also been higher as San Carlos home values increased 52% since 2010 as compared to Belmont’s 44%.

When compared to San Mateo County as a whole, a different picture develops as both Belmont and San Carlos are at the front of the pack. San Mateo County reported a 15% increase in the median home price year-over-year—with a median home value still 21% lower than that of Belmont’s. Here’s the supply and demand answer as to why home values are skyrocketing—the available homes for sale in all of San Mateo County dropped 73% over 2010 and the number of new listings dropped 21%.

We start 2015 with the lowest inventory of homes for sale since we started tracking home statistics in 1998. This will invariably create more multiple offer scenarios forcing buyers to outbid one another for their ideal home. This in turn will continue to put upward pressure on home values. And if interest rates remain stable (currently at a 1.5 year low), we expect another year of double digit appreciation, though we also expect the rate to slow as it did last year, down 2% from 2013.

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years of experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

If you are considering selling your home we’re somebody you should know. Be sure and include us in your interview process—we’ll show you our proprietary EXCITE listing program which has netted our sellers more than any other top Belmont agents.

 

 

 

Winter Home Prices Increase

Winter home prices increase and buck the trends of a winter slowdowns.

We’re getting close to our most anticipated analysis—the year end summary for Belmont. But before those numbers are in the history books, we are closing out the year with November’s home sales report.

The Belmont home market continues to show strong growth after a lackluster fall market. Typically we see a strong push for home sales after Labor Day and a winter hibernation period once we get past Thanksgiving. This year seems to be at odds with historical trends as seen in the median home price which has risen steadily since August.

This November in Belmont the median home price was at $1,342,000 which was only eclipsed once in July of this year. Last November the median home price was $1,089,000. That translates into a 23% increase in the median home price year-over-year.

Did larger homes sell this year artificially skewing the median home price higher? The answer is yes. The size homes which sold this November were 18% larger. If we account for this in the median home price analysis we arrive at a more reasonable appreciation level of 5% year–over-year—which of course is just an approximation.

As prices get higher, demand wanes and the rate of appreciation levels off—as is demonstrated in the above numbers.

SALES & NEW LISTINGS

The number of homes sales dropped 44% year-over year since last November. Upward pressure on home values is being fed by the lack of inventory as new listings dropped 20% as well.

PERCENT RECEIVED

The amount which Seller’s received of their asking price was essentially unchanged at 107 % of asking.

OVER-UNDER

While 72% of all home sales sold for over the asking price—unchanged since last November, this year no seller’s had to adjust their asking prices lower. Last November 20% of sellers lowered their asking price for on average $200,000—indicating a slightly more robust November this year.

On a macro-level, the San Francisco Metropolitan Statistical analysis (the SFMSA) prepared by Standard & Poor’s, and referred to as the Case-Shiller study, reported a decline from August to September of .2%. The Case-Shiller uses a repeat sales pair methodology—virtually watching the same home sell over time. Not that .2% is a monumental shift in trends, since as can be seen in the chart below, seasonal factors cause even a large area like our MSA to fluctuate to a much greater degree.

This graph compares the MSA for our area year-over-year for the past three recovery years. Note that a fair amount of each year’s appreciation (increase in the index) occurs in the first two quarters of each year.

MSA Year over Year

 

 

 

 

 

 

 

 

 

 

Disclaimer:

Drew & Christine Morgan are REALTORS/NOTARY PUBLIC in Belmont, CA. with more than 20 years experience in helping sellers and buyers in their community. They may be reached at (650) 508.1441 or emailed at info@morganhomes.com.

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.