Getting Local

Local

I had the good fortune in the last few weeks to have a couple of very popular listings here in Foster City, 1121 Catamaran and 18 Dory Ln, and one thing became very clear to me while chatting with folks at each of the open houses…there’s a whole lot of buyers out there either not working with local real estate agents, or not working with agents at all. Dory had about 90 people at it’s open house, Catamaran at least 200. I’m sure of that on Catamaran because I printed 90 flyers and I had 4 left at the end of the day…people mostly come in groups and, almost always, one person takes a flyer.

In the case of Dory, I handed out 14 disclosure packets to interested parties prior to looking at offers…and I received 7 of them. On Catamaran I handed out 11 disclosure packets and received 3 offers. Of those 25 packets only 9 of them were given to local agents and 5 of the 10 offers came from local agents. Interestingly…of the 10 offers 6 of them were truly outstanding (price and terms) and 5 out of 6 were from local agents. Both winning bids came from local agents.

Why, you ask? It seems so obvious to me. These local agents know the Foster City market inside and out. They know what constitutes a good offer in a multiple offer environment and they know what will be important to a seller. One of the big reasons they know that is because they have sold listings here too. They also routinely see good offers from bad ones and thus they know what they’re doing.

Just so were clear, when I say a local agent I mean an agent who actually does a fair amount of business in Foster City. There’s real good agents in San Francisco, San Jose, Fremont…etc that would be lost in the Mid Peninsula and have no clue about Foster City. Honestly, I have no clue about San Francisco as a residential market. I’ve been a realtor for 20 years, sold hundreds of homes, but I’ve never sold a property in San Francisco. I would not provide a client the kind of service they deserve working with them in San Francisco.

Especially if you’re out there trying to do this thing on your own, consider working with a local agent…it will be more than worth it to you. That also applies to sellers.

Comments

  1. “They know what constitutes a good offer in a multiple offer environment and they know what will be important to a seller. ”

    How do they know what is important to the seller? Experience or the agents call you and ask?

  2. David Saks says:

    Foster City might be that lil’ ol’ diamond in the rough. Maybe the next gold rush.

  3. Jim Minkey says:

    Good question Michael…it’s sort of like asking for the secret recipe for KFC chicken though. Occasionally an agent will call to ask about specific needs, but in a nutshell in multiple offer territory a good offer endevours to, as much as possible, eliminate seller fears. Much as it would be fun to get very specific it occurs to me that I’d just as soon not educate any non local agents via this blog…I’ll end up having to compete against them at some point and I want the advantage!

  4. Local agents don’t have the midus touch. Local agents convinced buyers that prices in Foster City in 2007 were fair. Said buyers then watched as they lost 100K overnight after the housing crash. Ouch.

  5. Jim Minkey says:

    Cora…are you arguing that out of area agents had a better handle on prices in 2007? I don’t recall any Daly City or San Francisco agents in the role of “voice of reason” when it came to Foster City values. Just sayin…

    What it comes down to is this…in Jan/Feb 2010 there’s 14 disclosure packets out on the home you want. There’s going to be multiple offers. Based upon experience I can suggest how you can buy this home. Do you want to take a shot or wait?

    That’s the reality. Agents aren’t pushing prices up, the critical mass of demand is doing that. You could write 10 very reasonable offers, maybe all of them at the asking price or lower, but after you lose all 10 times you kind of get sick of it and begin to get more aggressive. That’s what it was like.

    I also can’t resist mentioning that I, myself, undoubtedly lost $100,000 or more in the value of my house since 2007…but since I didn’t have to sell did I really actually lose anything? I don’t think so. Just like in the stock market, if you had to sell in early 2009 you lost money…if you had to sell.

  6. We are so happy to have bought the home we did, and it was good that our agent (not Jim) knew the seller’s agent (not Jim), and man, I do not wish to be one of those MULTIPLE offers.
    The thing is, Cora, agents are there to help buyers/sellers. They do not predict the future. Buying real estate is either for 1.home, or 2. investment, and if it is for a home, than lost value and what not is less important, although painful, but you gotta live somewhere. If it is for investment, then there are inherent risks involved.
    If we could buy another house, (my husband says NO WAY), I would hire Jim in a heart beat.

  7. Jim – yes I completely agree that out-of-town agents fare worse than local agents in terms of their handle on what ‘fair’ prices should be.

    And yes, agents aren’t the ones responsible for the crazy bay area Real Estate price fluctuations, true, but at the same time agents are highly incentivized to get the buyer into the house, or get the house sold for the seller ASAP.

    Local agents with decades of experience under their belt should have seen that something very strange was going on before the housing crash. When the ratio of rents to mortgages gets so out of wack, when prices increase unsustainably within a few years, shouldn’t that have brought up a red flag in the minds of experienced real estate professionals? Maybe it did, but how many of these professionals discouraged their clients from getting into the market back then?

    While the 100K loss is not realized directly, it is still felt in the opportunity cost in investing the money elsewhere, and in ‘land lock’ where owners are unable to move until housing prices go up.

  8. Jim Minkey says:

    You’re great Cora! Thanks for engaging! This all sort of reminds me of old fashioned family arguments from my childhood…FUN!

    1) “agents are highly incentivized to get the buyer into the house” What your saying here, I think, is that agents are self centered and only interested in the fast buck and thus push their clients into crazy prices to satisfy their greed. Of course there are skanky agents like that out there, but that’s not really my experience. I actually find the vast majority of agents I know to be highly ethical. I really like them! I’m successful because my clients value me and the service I provide enough that they refer me to their friends and family. The fast buck doesn’t interest me at all, what interests me is the relationship that’s built that will insure multiple sales via referral and repeat business and that only comes if the client feels right about what I’ve done. That couldn’t happen if I shamelessly manipulated the price up so that I got paid more in one sale. Most good agents share these values too Cora.

    2)”Local agents with decades of experience under their belt should have seen that something very strange was going on before the housing crash.” I clearly remember sitting in an office in January of 2000 and waiting to present my clients offer on a house in Belmont and one of other agents (there were 14 of us waiting to present on this same house) said they had lost a house to someone the day before who had actually offered $100,000 over the asking price for that home. I was completely astonished, I couldn’t believe it. I remember asking myself with a great deal of hesitation whether that was going to be the new normal. A few months after that people were offering a million dollars OVER ASKING for houses in Palo Alto. What should we have done Cora? Take the entire decade off? I saw it coming in 1999…and it didn’t stop until September 15 2008 when Lehman collapsed and the rest of the dominos began tumbling. It was such a strong economy it never seemed like it was going to stop. The truth is that everybody shares in the denial…all of us. I really thought our area was impervious to problems,and you know what? We really are pretty amazing here! Only 11% decline since 2008? That’s freaking astonishing compared to almost everywhere else.

    3) “While the 100K loss is not realized directly, it is still felt in the opportunity cost in investing the money elsewhere”. Like where? If I would have pulled $100,000 out of my equity in 2007 and put it in the stock market I would have lost the 100k and still be paying for having borrowed it today. I lost 100k on paper…it hasn’t cost me anything.

    4) “in ‘land lock’ where owners are unable to move until housing prices go up.” I agree 2007 wasn’t the best year to have been a buyer. Why is it though that having to wait 5 years to sell is such a bad thing. Part of the thinking that caused the “bubble” if you will was the notion of fast turns on real estate investments. For 100 years people bought and stayed awhile. Is 5 years such a terrible thing to be “land locked”? I have a client who paid $810,000 for a 3 bedroom house in San Carlos in 2007. Right now I think it’s worth…about $810,000. That’s up from this time last year. I think he’s doing good…don’t you?

    Again…you’re GREAT Cora! You got me going! Honestly, I think that you see this from outside of the circle. I don’t think you own around here. You couldn’t have experienced the last 10 years and not understand this. EVERYONE got caught up in this. I know it feels satisfying to create a villian out of realtors (or politicians, or lenders or Wall Street…or whoever) but at the end of the day we all simply got caught up together.

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