TBT: Three Revolutionary Products That Are Changing Local Real Estate.
February 25, 2021
Since the creation the White Oaks Blog in 2007, I have written over 1,700 different articles about real estate and life in San Carlos. That's a LOT of content! I will be the first to admit that not every one of these articles were home runs or perfect specimens of journalism, and I've learned a ton from writing this blog for 14 years. But there are a number of popular posts whose content is still very relevant today, and have been literally buried in the archives of the blog. Each week, I'll pull one of these topics, sweep away some of the dust, and repost them under this new TBT series on Thursday.
Below is a post back from 2019 that discusses some of the groundbreaking products that I can offer you through Compass that are literally changing the way we buy and sell homes. Enjoy!
Game-Changers for Sellers and Buyers.
Aside from the impact that the internet has had on the real estate industry, not much new has come out of this notoriously stodgy industry in the past few decades. Some of the same problems that buyers and sellers faced then are still pervasive today because nobody has stepped up to develop innovative solutions to keep up with a rapidly growing and changing market. Compass stormed the Bay Area real estate market in just the past few years with the intent of dominating the local market and positively changing the way homes are bought and sold. Along those lines, Compass has recently introduced three new products that will open doors for sellers and buyers that were simply not available just a few years ago — and they're already having a major impact.
#1. Concierge Listing Service.
Introduced at the beginning of this year, the Concierge Listing Service was designed to assist sellers in preparing their homes for sale. Obviously, homes that are clean and well presented fetch more money than homes that are not. But one of the long-standing problems in selling a home is that owners may not have the funds to adequately prepare a house for sale, especially if there's significant deferred maintenance. The ultimate irony of living in one of the wealthiest communities in the country is that many home owners are literally house-rich and cash-poor — in other words, they have a ton of equity in their home, but not the liquid funds that are necessary to make their home look amazing when it hits that market. That's where Concierge comes in.
Through the Concierge program, home sellers are advanced the funds for a whole slew of tasks that are required to get their home ready for market, including landscaping, painting, inspections, staging, and all kinds of cosmetic improvements (think refinished hardwood floors, new countertops, new appliances, modern light fixtures.) These are all things that many home owners would LOVE to do before they sell, but don't have the money, time, or expertise to make it happen. Compass pays the contractors directly as soon as the work is completed, and then collects the money out of the proceeds of the sale whenever it closes. The best part? There are no fees or interest charged for this service — zero. We're not talking peanuts in the area of funds, either. Owners can qualify to receive up to 3% of the home's expected sales price in advance for these improvements. With the average price of a San Carlos home now sitting at $2,000,000, just think of what you could do with $60,000 (or more) to make your house amazing.
The benefits here are obvious, even for those who have ample cash to prepare their home for sale. There's no need to pull money out of other investments or take out a home equity line of credit to make these improvements. Even if the sellers have the money, it allows sellers to commit those funds to the purchase of their next home, rather than having them tied up in their current home.
I have utilized Concierge for 10 different listings already this year, and the results were absolutely remarkable. We were able to dramatically improve desirability of these homes — often times way beyond what the seller imagined they could do — and the sellers did not have to shell out a single penny up front. Needless to say, it's a wildly popular program that is only now being copied by other brokerages.
#2 Bridge Loans with Zero Upfront Cost.
Another problem that Compass is trying to tackle is helping move-up buyers who have LOTS of equity in their home, but don't have the money for the down payment of their replacement home. Consequently, they have to sell their existing home before they buy the next one, or they have to make an offer contingent on selling their existing home. In this competitive real estate market, neither option is particularly appealing, and as I have often stated on this blog it's one of the biggest reasons why there are not more listings in San Carlos (and elsewhere on the Peninsula). Homeowners want to move, but they don't have the liquid funds to make it happen. They're literally locked into their current home.
A bridge loan by definition is simply short-term loan that is secured against the equity in your current home. Sellers are loaned a significant percentage of this equity to use as a down payment for their replacement home. This allows the seller to buy their replacement home without having to sell their current home first, which is a huge advantage.
Bridge loans themselves are nothing new. After almost disappearing entirely after the Recession, they are starting to make a comeback in this competitive market. The downside to bridge loans is that they command a higher interest rate than conventional mortgages, and during the process of buying your replacement home, you're paying interest on two mortgages (your existing home and the bridge loan), so it can create a significant short-term financial burden. This is where Compass is working to alleviate that burden.
Compass' Bridge Loan Service falls into two parts. First, we connect you with one of our two vetted bridge lenders (Compass is not in the lending biz). Each of them have strong track records in bridge funding, and have dramatically streamlined the application process so that you get answers in days, not weeks or months.
The second part (and the most exciting) is the Zero Upfront Cost program. Once you have secured your bridge funding (either through Compass' partners or any other lender), Compass will advance you the cost of your bridge loan for up to 6 months. Just like the Concierge program, there are no fees and no interest charged for this service. Even though bridge loans are typically interest-only loans, the interest charges over 6 months can stretch into the tens of thousands of dollars. So instead of paying for two mortgages out of pocket, you're only paying for one, and Compass just collects those funds after you close escrow.
#3 “Coming Soon”.
In a real estate market that moves so quickly, time is definitely of the essence. Since homes tend to sell so quickly, it's always a challenge to ensure that a home gets adequate exposure before you consider taking offers without leaving it on the market for too long. The solution? Coming Soon, only from Compass.
Compass has invested millions of dollars into creating a very intelligent and intuitive search tool for not only homes that are currently on the market, but as a repository for all of the listings that Compass agents have that are coming soon. Because Compass is now one of largest brokerages in the Bay Area, there are LOTS of coming soon properties that are featured on this site.
This is beneficial for both buyers and sellers. For buyers, they obviously get an advance notice of properties that are coming up in their target search area so that they can get a jump start on the process. For sellers, they get extra exposure without losing valuable days on the market (DOM) once they launch on the MLS. This affords them the ability to “test price” their home to a select audience before finalizing on the list price. Of course, it's a win-win for both parties if a home can be purchased off-market through this venue.
Why Go Anywhere Else?
No other real estate company has these three remarkable offerings — not the big national brands, and certainly not the small local boutique brokerages. There are restrictions and additional details that pertain to all of these programs, so feel free to contact me for more information. But at the end of the day, if you have the ability to access a significant amount of money to prepare your home for sale, get unparalleled exposure for your listing, and then step into that previously unattainable move-up home…why would you list your home with anyone else?