A Bad Week for NAR- The BAD Show #001
NAR has a tough week with a couple of pending lawsuits, the port of Port Royal sees a HUGE maritime development, and we talk about the crazy market on Hilton Head Island. All this and more on The BAD Show, with Bland and Dan.
Every episode venerated local Bland Kiser and market hawk Dan Prud'homme meet to talk about the headlines affecting the real estate industry and business in the country at large-- or just, whatever. It's The BAD Show, you get what you pay for.
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So this is the first one we're calling it the bad show, Bland the Bland and Dan show. But it's probably still going to be pretty bad.
I think it's going to be good, but it's bad to the bone. So
a couple of topics want to ask you about the port of port Royal over in Beaufort I want to talk about.
NAR had a tough week last week. They, they, they took it on the chin with a couple pending lawsuits. And then we took a deep dive into the, into the market and the impacts that we're seeing with inflation and people moving here from other environments, maybe with vastly different political views than we typically see in South Carolina.
True. All those things are true. We're going to discuss that in more. That'll be bad, bad in a good way. Like Michael Jackson, bad.
There's an article in the newspaper and the island packet yesterday. I hear the island packet online is pretty well read
online. You heard that? I believe it is the most visited online publication online in the state of South Carolina.
There's an article yesterday about not port Royal plantation on Hilton island, but the town of port Royal over five Buford. Did you get a chance to see that? I
did. I'm so excited about that subject. Well, why don't you well, so as some people may or may not know, both of our brides are originally from Buford, so we obviously love it over there.
Yep. And so the, the port of port Royal, which was South Carolina, port authority properties. I dunno on almost a hundred years or something like that.
That's where like doc sides restaurant used to be
just north of Paris island there has now been purchased by the largest marina operator in the USA called safe Harbor marinas.
And so they're redeveloping it into. Mega yacht marina almost 600 tiles townhouses and a waterfront homes. So it's going to be really awesome. And so the article and the packet that you'd mentioned had a nice map that sort of showed exactly what was going on, what they are proposing to happen. So it's very exciting.
You're going to be. I, you know, I'll probably still keep my boat on Hilton head for now, but it'll be a great place, a lunch, you know, a lunch or dinner destination to go from the island by boats, from our island over to their island. For sure. That's a
beautiful piece of property over there. Isn't it? Oh my gosh.
That's unbelievable. No offense to port authority buildings, but you know, they're not the most aesthetically appealing places in the world, but kind of reminds me of the military when I go over there. Yeah. The big old warehouses and stuff. So it's going to be
awesome as a cool article. Good, good read for those of you have access to the packet.
It's a good
read. Yes. Alan packet.com. Well, so yes. There's an article here that says the writing is on the wall court tosses, NAR counterclaim against Rex out. He tossed it out. What does that mean? Nara
had a bad week in the news. You know, they had this this counterclaim thrown out where they basically accused reg.
Which is a discount real estate listing service. They accused them basically of libel of misinformation. And the, the suit was started out really only because Nard didn't to show the court how they were harmed, like what it cost them financially. So that was thrown out. And then the whole pocket listing.
You know two years, three years ago NAR implemented clear cooperation, which tried to get rid of pocket listings and said that a new listing needed to be put into the MLS within 24 hours, 48 hours. And it was backed up to 24 hours. And in that That was tossed out by a lower court, but then the appeals court said no, that shouldn't be tossed out.
That should be going to court. What's your take on pocket listings plants?
Well, my take on pocket listings is that sometimes the seller thinks is a good idea to have a pocket listing. We know that there's is one thing to have something in your pocket where nobody can see it. And there's a whole nother thing to have a property that's on the market so that everybody can see it.
So maybe we should
call them secret listings,
secret listings. Yeah. So, you know, I, I just think that. It's good to have the exposure. If you're trying to sell a property, let as many people at a basic stuff, let as many people as possible know about it. And usually that produces the best result. Yeah.
I mean, my experience is always like get the most people interested in one single thing and that's what drives value.
It's less about exclusivity and more about getting as many people interested as you can to bid up the price. Right. That's right. Yeah. You know what the lawsuit is about in terms of NAR you know, NAR wants to make sure that buyers get the opportunity to buy property and the properties are not held internal to a company or something like that.
Where a buyer that's working with a real tour doesn't have access to all of the inventory and that's their intent. But the courts are not liking that right now. So it was a, it was a tough, tough week and the courts for NAR and, you know, our industry is actively, actively trying to be disruptive and I think we're going to see a lot
more court cases.
Yes. There's no doubt that it has been disrupted. And that's what to me is really so exciting about what we haven't been able to accomplish is we just keep on, keep on trucking and we just moved through all this change and disruption
and there's an opportunity and every change. I'm just going to embrace it.
You have to embrace it and face it and embrace it.
Hey, let me ask you a question. I saw an article this last week. I think it was an Inman and it was the preface of the article was in multiple offer situations that seldom the highest and best offer that wins. Typically the offer that when. Is it the one that's coming from an agent that has a lot of experience and the people being interviewed one on to say why as a seller's agent that does a high volume, why they're interested in working more with an experienced agent with things like good earnest money Not having to deal with a bunch of contingencies.
Do you have any experience or take on?
Absolutely. Especially just by virtue of the fact that we're getting up there in age a little bit. We've been doing you are not me. Well, that's true. Even see I've earned my gray hair. You know, we've lived and worked in this environment for a long time. And we've made a lot of great relationships with our real estate colleagues from firms all across the island and in Bluffton.
Right? So in this wild couple of years that we've had, and we've, I think we can agree I've never really seen. A market that has just produced multiple offer situations over and over and over and every price point. Right? So it's not just, you know, start our owns it's all the way up to the very top.
So when there are multiple offers and you're the listing agent and you're fielding say, let's just make up a number of 10 offers and you may know. Two of the real estate agents that have brought this collective 10 offers. You look at that pretty hard because you know, their reputation, you know, that they, they do you know, what to expect, you know, what to expect so that, you know, unfortunately, sometimes when it's an agent, that's a little bit newer to the industry, they might have an out of town.
Area code and, you know, they might be from another market. They may have done well in another market. It's just, we don't know them yet. We don't have any experience working with them yet. And so your
advice to that agent would be to get a local phone
number? Yeah, I would start there. I've had to do that myself, but that'd be number one on the list.
I mean, I think that's a pretty good, good start. Let's stick with the 8 43. Conducting business in this, in this area. What kind of, what other kind of bland vice would you give them?
Well, I don't know. I don't know, stay in the business for a long time now. Well, but I'm not, I mean, in all seriousness, Your tenure in the market is something to be considered when you're a seller.
And you're thinking, okay, there are 10 real estate agents that have brought offers on my property. What kind of success? I would look at that as a seller. What kind of successes each of these agents add?
Okay. Let's flip it around. Don't name names, unless you really want to know don't name names. Tell us about your worst experience being a buyer's agent here in the last year or two where you were in a multiple offer situation, representing a buyer where you don't feel like you were served too well.
Well, gosh, that's hard to isolate because there've been a lot of the situation happens too much. It doesn't
happen a lot. Is it a lack of communication that makes it a bad extreme? Like, we've all lost on offers, but it's done, you know, from a listing agent with grace and we've had other experiences where
kind of punks about it.
Yeah. Well, I would say that again, it's hard to isolate just one circumstance, but what we have seen. Oftentimes is, you know, listening agent will say, okay, all offers best and final due at 4:00 PM on Sunday. So let's just pretend I'm out and I'm doing whatever I do. I'm trying to work and it's Thursday. So I see.
And I know my clients are interested in it. They have expressed a desire to make an offer. And so all of a sudden, you know, we were working towards this 4:00 PM deadline on Sunday and then submit the offer and say, oh, well the agent says, well, we, we ended up taking the first offer. It came in on a Friday and it was full price.
And so they published 4:00 PM Sunday. That's a little confusing, I think. Really, probably not the best way to go about it. I, my personal take is they, in this one situation, I'm thinking about the folks, the sellers probably didn't get the best exposure and the best advice because they took the first offer.
And who knows. I mean, it probably would have in this situation gone up maybe 50 or a hundred based on the demand for this today. So I ended up selling it
for a little less. What do you think they could have? I
think so name names? No, no, not in this one, because actually the reason is, is because it's someone that I don't know.
And that's another good point. It's an agent that's very new to this market. I've never heard of them. They have an out of out-of-state area code and off went the property. They undersold it by easily 50, $60,000. It was just so that,
you know, your, your comments around that raise kind of another question.
So is it, is it the fact that the agent doesn't have a lot of experience or is it more a situation that because they don't have a lot of experience. They don't know, what's customary in our market, what's expected in our market. And so therefore they can't guide their client and say, yeah, you know, you could do that, but it's probably not going to be looked favorable.
Upon in our market, this is kind of what the market expects to happen, right? So it's not just a, a blatant disregard because there are new agent it's, it's the experience doesn't allow them. I don't want to put words in your mouth, see experience it doesn't allow them to give a consumer the advice.
That somebody that maybe is a little bit more seasoned.
Well, that's why, you know, you hit it right on the head there. I mean, it's a, it's seasoned agents, at least in my experience, whether they're representing a buyer or a seller are the ones that know how to, I guess, kind of cut to the chase. They know what to look for proper amounts of earnest money.
And this market, we've seen a lot of properties that sell without inspection. Without financing contingencies, right? Yep. And all those things. So when in a situation, when you have 10 offers to choose from probably to some degree they're similar, but you know, what, what are the strengths? What are the pros and cons.
We put on our listing agent hat, our firm has a policy. In most cases, we won't take a property off the market for less than 5% earnest money. Right. So that's important, you know, that that earnest money is that show of good faith your insurance policy. That's right. And then of course people are still getting financing.
Right. But what, what a lot of buyers are having to do is cross out that financing contingency and treat it as a cash offer, where that's also a signal to the seller. If they're willing to walk away from 5% earnest money and waiving that contingency and the inspection conditions contingency. Now you still get the house inspected, right?
Yeah. But you know, you're, you're making the assumption that a. Any potential problem in the house is not insurmountable. And you're willing as the new buyer to, you know, maybe spend 10 grand, if you have to replace the roof or whatever the case may be. Yeah.
What are you seeing right now? Market's is falling down,
staying the same, I would say on the island.
It's I would say it's about staying about the same, maybe not as many instead of having 10 offers on a particular property. Maybe we're seeing five. And so sure. I think there's a little bit of obviously concerned about what's happening. To our friends and Ukraine, which is terrible, as we all know.
And then of course we all read the headlines about inflation and, you know, people are starting to toss around the R word a little bit. So our market. As you know, quite a bit different though. What I don't see changing in our market is the COVID factor from the standpoint of, we all know why people love to come to Hilton head island to enjoy.
You know, everything that is available to them as far as amenities are concerned, but with, with COVID still lingering out there. I still believe that now more than ever, you know, people are not wanting to live in the metropolitan areas, especially the colder ones up north and. They still are, are looking at our properties here on Hilton.
Head island is values compared to where they come from. And in the worst case scenario, whether it's conscious or subconscious, I know a lot of them were thinking, boy, you know, as another variant pops up and we have to lock down in New York or Chicago or name of a city If we lived on the island or we had a place on the island, they didn't close the golf courses.
They didn't close the, the bike pass down to the beach. So they can always have that. We have a lot of outdoor dining options, that kind of stuff, biking. So I don't see, I haven't seen it slow down yet. And as long as we have all of these buyers sitting on the sidelines that are still out there waiting to find that perfect property, it just hasn't been there yet.
I don't see, that's a long answer.
I mean, I think it's a correct answer. I mean, I think again, markets rise and fall on inventory. There's not a significant enough change is going to happen in inventory. And that's really because the people that have bought didn't buy to make money, the people that bought bought, because they wanted to be here on Hilton head island and what is going to change.
Like what's going to happen in New York city that says everybody from Hilton head said, I'm selling my house on Hilton med and I'm moving to New York again. I just don't see anything on the horizon.
There was an old bumper sticker that I used to see when I was a kid over in Buford, actually. And it's a.
Something to the effect of, I've never heard of anybody retiring and moving up north,
you guys did that to make fun
of us northerners. Well, I didn't do that. It was not
me. It's usually right next to the one that said we don't care how you used to do it back home. That's right. That was the one that was right
next to it.
Well, and it's interesting. We're talking about that subject is I was having a conversation with somebody yesterday, and there's no doubt that we've had this influx of people purchasing in our area from markets that we've never seen before, California, Texas. A lot of, you know, Colorado, Western states, Chicago, I think there is some concern amongst folks that have lived here a long time that The politics are going to change.
There you go. Along with the influx of people,
right? Yeah. I was trying to think of a nice way to say
I don't have a nice filter.
But yeah, I think that's a concern. But. That's always been the makeup of Hilton head island. Right. Essentially. And, and in Bluffton too, I mean, people move here from all over the country and world, because all the reasons we know, like the melting pot of the melting pot, we are, we are.
Yeah. Sometimes people will worry. If they're moving from somewhere else, they might, how am I going to make friends I'm going to, how will I get to find that sense of community? And I know that can be daunting for people when they move places. But In most situations, I think people come to the island, they find whether it's their church or their country club, or, you know, their Viking.
They, they find people to hang out with. They gravitate to the same type of people that they would have where they came from. And so,
Hey and senior brought up politics. Yeah. I wanna, I wanna ask you something. Sure. Do you buy gas? I do. Okay. Has the price gone up in the last
couple of years? It has, especially, I would say in the last three or four months, how much.
Probably not quite double, but probably not quite normal, but something like that. Right? Yeah, because it suck paying twice as much gas.
It's not, it's not something that I enjoy seeing that now. Yeah.
Has real estate prices gone up in the last couple of years here? And they kind of close to doubled,
I would say pretty darn close to it.
Does that suck?
No, it does not. Why, why does housing prices going up about, you know, significant amount and at the same period of time, like, what's the difference between gas going. Almost doubling and right. Like we both use them. We both use houses. We both use gasoline. What's the difference? Is there a difference?
Well, I know economists, but I would say that the main difference when I look at this situation and put on the spot too.
Come up with an answer, you know, I would say that real real estate is a tangible asset that you can enjoy. I didn't let no other words. I enjoy my home a lot more than my tank of gasoline. And I don't want to be cavalier about it. I realized that high gas prices are painful for a lot of people. And it's especially folks that have to, you know, drive a good bit to commute, to work.
And what have you. But I would say that. It's not as painful for me to think about maybe buying a piece of real estate that at least, you know, I can enjoy and use it and also have some tax benefits from writing off interest and so forth. I think that isn't
it kinda like inflation is inflation, right?
If gas is going to go up and the cost of milk is going to go up and the cost of two by fours are going to go up, then the cost of real estate is probably going to go up too. Right? The difference is, is many of those other things are, can just consumable. Right. So, so you consume that tank of gas and it's gone.
It's not an asset. It's not something that you're retaining that increase in value or that, that increase in cost, right? Like goodbye real estate. Now it costs you more than it costs you a couple of years ago. The difference is, is you're retaining that asset and you're taking advantage of the value going up.
And I just make that point because we hear people say all the time. Is that real estate is the best hedge against inflation. I mean, real estate is basically riding inflation. It's, it's parking a certain amount of your money into an asset. That's retaining that inflationary value. That's carrying that price up higher and higher, and it's an easy way to demonstrate, like, you know, inflation is not a good thing, but if your money is parked in the right places, You can help mitigate the cost of that if you have additional
Well, and then obviously we see this all the time because we look at our multiple listing service and we follow market trends and we follow other real estate portals predictions of what's going to happen in the future. And. If I'm not mistaken it was our MLS. Maybe it was an another portal that starts with the Z.
I can't remember, but I was just saying that their prediction for the next year is that our market here locally is going to go up. Who's either 18, 19, 20%. So. Does that go back and answer the question about, is there demand for people to still sell and are there buyers out there on equivocally? Yes. Yes.
And boy, if you're a seller. You really might. If, if you want to do ever cash out on your assets now would be one of those times as a windows and history.
I remember talking to somebody before the great recession when prices were going. And saying, you know, why would you sell now? You know, prices are probably going to go up a bunch more in what he said to me is he said, Dan, the reason that I want to sell now is do I think if I held onto the property for another year, I could sell it for more.
He said, yes, but my concern is that time I'm paying $20 for a loaf of milk for a loaf of milk. I'm paying $20 for a loaf of bread, right? Like that inflation happens across the board. And in how much you, how much you're really making. And, and I think we're seeing that, right? Like we're seeing like the value of our assets have gone up, but the expense, our cost of living has gone up significantly as
So, well, just the other day. We were on our, we took your aircraft and we were flying back from Miami. And as I looked out the window, when we passed the port of Miami, the port of Brunswick in Jacksonville, and then Savannah, what did we see out there?
Those tons of ships sitting out there. Huh?
Just sitting out there waiting and waiting and waiting to get all those goods.
Talk about the supply chain disruption in that time. We, you know, it's, it's there. It's real. Yeah. So until we figure out how to untangle all that that's a whole nother discussion as it relates to you just really
want to talk
about politics. Don't you plan? Well, no, I don't. I, I think that Especially when we start talking about the construction component of our industry unbelievably expensive when you can't get a refrigerator for six months.
Couch you'd have to wait for four months for it to get delivered to your home or pick, pick a subject, pick an item. They're all kind of, a lot of them are delayed, which is not nice and
not nice. I want to start by thanking you and apologizing for. Listening and watching the bad show today.
I liked it. So if you are enjoying our bad show please do not hesitate to hit the thumbs up on YouTube. Maybe hit the like button on Facebook, the love button on Instagram view choice, but engage with us, ask us some questions and we'll answer them. So the best of our ability,