Gene Quinney The Real Estate Pundit

The Law Of Unintended Consequences

2009-06-22T08:17:00.000-07:00

At the risk of sounding like a spoiled sport about the governments new plan to help struggling homeowners, I must point out the obvious—-Any time the government steps in to help they generally create opportunity for scam artists. It’s known as “The law of Unintended Consequences“.

For instance; loan modifications. Sound good on the surface right? You’ve heard that banks are helping struggling homeowners by changing the terms of their loans to more affordable interests rates. Who would argue with that? Let’s take a closer look.

Fact: These “loan modifications” are not available to everyone. I know I know, that’s not mentioned in the news but it is fact. They are available to borrowers with ARM’s (adjustable rate mortgages) and other types of subprime mortgages generally prone to default. However, if you have a conventional loan you have little or no options. Since ARM’s and subprime loans account for a very small percentage of the total amount of mortgages in the US, that equates to few, if any opportunities for the majority of homeowners, many of which are currently struggling. Fact: The vast majority of modified loans end up in default and foreclosure.

Over the past couple years, companies calling themselves “loan modification” specialists have formed. They charge upfront fees and take advantage of distressed homeowners. They claim to stop foreclosure, negotiate lower rates and save thousands in mortgage payments. What’s the problem you ask? ---The upfront fees of course and the simple truth that loan modification services are available directly through your lender without third party assistance.

If you or someone you know is considering a loan modification DO NOT use a third party negotiator. Contact your lender directly for information on whether you qualify for modification. Keep in mind however, they are a debt collector. If you do not feel comfortable working directly with your lender, contact the law firm of Oldfield & Helsdon, at http://www.tacomalawfirm.com/ or call Tom Oldfield directly at 253-564-9500 for a consultation about your legal rights. Tell him Gene and Kim sent you. If you discover “loan modification” is not an option, we may be able to help with a “Short Sale”. Contact us for details at 253-539-7653 or send an email to geneandkim@comcast.net.

List To Last! Why Are You Just Working With Buyers?!!!

2009-05-28T12:50:00.000-07:00

Ever since the market started tumbling I've heard agents complain about the expense and problems of working with sellers. Not work with sellers! Are you crazy?

Their reasoning, in a market where home sales are virtually non-existent, one good qualified buyer is worth two sellers. Well I'm here to tell ya--- that type of business approach is doomed for failure. Ever hear that Ole' adage 'list to last"? If you haven't, you are probably headed out the proverbial real estate door and if you have---you're probably sitting on a couple listings that have been collecting dust. What a dilemma.

So---how does one "list to last" in a market where homes are sitting for hundreds of days? Why have a listing that isn't selling?

1) Having listings on the market ensures that your phone will ring. Maybe not as regularly as years past but it will ring and having the opportunity to speak to and possibly procure buyers is what it's all about right?

2) Having listings on the market shows buyers and sellers that you are a motivated go-getter with area expertise.

3) Having listings on the market shows the neighboring property owners that you have been selected to represent that owner. This, in and of itself gives you a huge advantage over other agents who may be considered to list homes in that neighborhood in the future.

Now---The only thing you must do is educate the sellers about proper pricing so the home sells. Easy right? Keep the sellers informed about the current market so they are prepared to remain competitive with value adjustments. Another easy task. Keep the neighborhood informed so they do not think you just listed the home and vanished. Again---simple.

The "list to last" principle is not one that focuses all marketing and sales efforts on the listing aspect of the real estate market. it is merely one of many ever changing assortments of tools we have at our disposal. As we progress through these tough times it's my opinion that agents should use every tool available. Work with buyers. Work with sellers. Work with everyone who needs the services of a professional real estate agent. Only then will you capitalize on every available possibility.

If you do not have listings---you are missing a very fundamental element of the "list to last" priniple.....The"List" part. Without it you can not "Last"...

HOW SWEET IT IS!

2009-04-04T10:21:00.000-07:00

For many years, particularly the years of soaring home values and equity gains where just owning a house made you an instant investor, home buyers had to move quick when they found a home that fit their wants, needs, and desires.

Can you imagine a scenario in today’s slower market, when homes are averaging hundreds of days on the market where the same may be true? Make no bones about it, it exists.
Let’s briefly reflect on how we arrived where we are today. Loans buyers couldn’t afford. Unscrupulous lenders with teaser rates that re-set to higher rates after a couple years. Government programs that forced banks to loan to less than qualified borrowers. These ingredients were a recipe for disaster.

Now we have a situation where the news is reporting a recent increase in home sales. I also seen an interview on TV where the vice president of some large real estate company was boasting about zero down loan programs for first time home buyers. Ever hear that old adage “don’t believe everything you hear”? Believe it, but that’s a topic for another day.

Although great news, that increase is not an indication of a market recovery, it’s merely a symptom of market activity and an indication of what IS selling. Since the second quarter of 2006 the market has been in steady decline. Bank Foreclosures and Short Sale properties have been flooding the market and from what I see with increasing unemployment numbers that scenario is not changing any time soon.

Here’s the rub. When banks foreclose they generally re-list at very affordable AS-IS prices to compensate buyers for the condition of the properties, which many times is very poor. Banks do not make repairs, make no warranties and make no representations so with bank owned homes being sold for up to 50% off of typical market prices there is a huge push by investors to pick up these foreclosed properties. Hence boosting the number of sales.

Short Sales have also contributed to the increased numbers, yet lag far behind bank owned homes. Does that translate to a recovery? In my opinion, no. There remains a glut of foreclosed homes and every Short Sale that does not sell will eventually become a foreclosed property so until we reduce the amount of foreclosures, sell off the vast majority of current inventory and get unemployment under control, we will continue to see the down ward slide. The good news is home prices are very affordable which has buyers and investors singing “how sweet it is”…

Say Goodbye To Brick & Mortar

2009-03-12T16:04:00.000-07:00

Just when you thought the age of the Dinosaurs was long gone another Dinosaur is on the verge of extinction. "Brick & Mortar" Real Estate Companies. Crazy idea you say? Crazy like a Fox.
The Northwest Multiple Listing Service has been experiencing shifts in the past couple years. Agents leaving the NWMLS at a rate of about 14% every year for going on three years, a reduction in membership, and agents moving onto greener pastures.

If not for the innovation and creativity of a select few Brokers, those green pastures might well be outside the fences of the real estate industry. These trends could indicate a possible sign of concern for the industry if not for safe havens created by Brokers ahead of the curve. These safe havens are the wave of the future. "Online Brokerages". Northwest Equity Home Sales provide this virtual office platform. Although not entirely new to the industry their growing popularity can be contributed to the slow down of the market which is driving agents to scrub their plates clean of unnecessary expenses and if you really think about it, isn't that what should be done even without market forces. A lean clean business machine is always better than the alternative.

In days and years past the bloated bank accounts of agents and broker alike afforded a certain level of carelessness and complacency when it came to advertising, listing, and marketing expenses but those days are long gone and I say good riddance. Brought on by market demand “Online” brokerages provide a host of benefits for experienced agents that rival those services offered by the old Dinosaur brick and mortar companies. Today’s agent isn’t shackled to the confines of an office or to the wires and cables of technologically handicapped firms that charge outrageous fees for service that should other wise be free.

The modern day real estate agent is wireless and deserve a wireless platform in order to thrive in today‘s environment. They travel the landscape using GPS navigation, laptops with WI FI and hands free devices with infared technology to access listed homes. They send text messages with the ease and nimbleness of an Olympic champion. They have adapted to the new era of home buyers and sellers who email and peruse the Internet during their morning cup of Joe just as regularly as if it were delivered to their door step in print form by the neighborhood delivery person.

Today’s agent isn’t relying on the big name brokerage companies anymore. They have learned through hard work, intensive labor and long hours the rewards of their labor should be exactly that. THEIRS! They have finally began to realize the buyer and or seller agrees to work with the agent 99% of the time NOT the brokerage company. It’s the agent that gains the trust of the client NOT the company. It’s the agent that builds, establishes, and maintains the relationship with the client, NOT the company.

It’s the agent that meets with the owner and lists a home, meets with buyers and sells a home, closes the transaction, coordinates the Title Company, the inspection , the appraisal, and the signing. For all their hard work what do they get from the company? A huge office bill and the balance of what should have been a nice paycheck.

For those very reasons agents are asking this question. Why pay tens of thousands of dollars to a company when it’s the agent who is doing 99% of the work and what am I really getting for all this money. Good questions right. You bet they are and many agents are asking themselves the same thing.

Market forces work and when the market slows down for one sector it picks up for another, or forces change the market would not have other wise undergone. What will happen when the big brick and mortar mega-brokerage companies start to fade away? Will the agents who stuck with them go down with the ship or will they be adventurous enough to move on to greener pastures?
While many will simply slide into their pre-real estate lives as the Dinosaurs fade away, many who are not afraid to think outside the box or harness that independent entrepreneurial spirit that compelled them into real estate in the first place will make the choices that may just ensure their future otherwise they could go into extinction as the Dinosaurs have and will again…

Home Buyers Starting to Seize Opportunities in Some Western Washington Areas

2009-02-07T10:27:00.000-08:00

Pending sales during January jumped from the same month a year ago in eight of the 19 counties in the Northwest Multiple Listing Service area. Last month's pending sales outgained December's weather-hampered activity by nearly 1,100 transactions, prompting one MLS director to report "We're starting to feel the train building up steam."
The latest report from Northwest MLS shows inventory is shrinking and prices in most areas are below year-ago levels.

NWMLS members tallied 4,353 pending sales of single family homes and condominiums area-wide during January, up from December's total of 3,255, but down about 3.3 percent from a year ago when sellers accepted 4,499 offers. Sales surged more than 26 percent in both Pacific and Pierce counties, according to the new figures from Northwest MLS. Cowlitz, Grays Harbor, Kitsap, and Okanogan counties also experienced double-digit gains in pending sales compared with a year ago. Read More.

HUD Mortgage Reform

2008-12-29T16:08:00.000-08:00

Consumers should save nearly $700 at the closing table, thanks to mortgage reforms issued in November by the U.S. Department of Housing and Urban Development. The long-anticipated changes – the first such revisions in more than three decades – are intended to help consumers shop for the lowest cost mortgage and avoid costly and potentially harmful loan offers. For the first time in its history, HUD will require lenders and mortgage brokers to provide consumers with a standard "Good Faith Estimate" (GFE) that clearly discloses key loan terms and closing costs.

In announcing HUD's final changes to the regulatory requirements of the Real Estate Settlement Procedures Act (RESPA), HUD Secretary Steve Preston said that changes in the housing market and increases in home foreclosures demand action. He expects the new regulations will bring more clarity and certainty into the market. Preston explained the new GFE will be given to borrowers at the time an estimate is provided. It will more clearly answer several key questions consumers have when applying for a mortgage: Is the interest rate fixed or can it change? Is there a pre-payment penalty should the borrower choose to refinance at a later date?
Is there a potentially crippling balloon payment? What are total closing costs?

The new standardized GFE will offer consumers more certainty about the loan they’re agreeing to, while enabling them to shop more effectively for the lowest cost loan. Last March, HUD proposed reforms to the longstanding regulatory requirements of the Real Estate Settlement Procedures Act (RESPA) by improving disclosure of the loan terms and closing costs consumers pay when they buy or refinance their home.

Last May, HUD extended the rule's comment period to June 12th to allow for more opportunity for comment on the Department's proposed GFE form. HUD received approximately 12,000 comment letters. Upon considering the feedback, the Department made considerable modifications, including shortening the form. Brian Montgomery, HUD's Assistant Secretary of Housing, Federal Housing Commissioner, said, "I am convinced that we successfully balanced the needs of consumers with those in the business of homeownership. None of us can lose sight of the fact that millions of Americans simply don't understand all the fine print of their mortgages and this, in many respects, is at the heart of today's mortgage crisis."

This new, final RESPA rule is effective 60 days after publication. HUD will require the new standardized GFE and HUD-1 Settlement Statement beginning January 1, 2010. "It has been a long road but today we can finally announce a better way to buy homes in America," said Preston. "Consumers need and deserve to know what they're getting themselves into before they sign on the dotted line. After carefully considering the concerns of consumers and the different businesses in the housing sector, we have developed an approach that empowers the average family to shop for the most appropriate loan to meet their needs." NWReporter..

For More Information ClickHere

Who’s On First?

2008-10-07T11:59:00.000-07:00

The Meltdown

With all the turmoil in our financial markets you have to wonder who’s on first and who and or what is at the foundation of or current problems. Typically, economic meltdowns do not happen over night, so that leaves a person to ponder when it all started? Here’s my take...

Back in the late 70’s congress passed a law designed to increase homeownership for those who may not have had the type of credit banks typically looked for in terms of qualified buyers. This new law, The Community Reinvestment Act (CRA), enacted by Congress in 1977 (12 U.S.C. 2901) and implemented by Regulations 12 CFR parts 25, 228, 345, and 563e, was intended to encourage depository institutions (Banks) to help meet the credit needs of the communities in which they operate. Homeownership for all Americans is a lofty goal and this endeavor was indeed noble but what wasn’t noble was the unintended consequences of this type of potentially risky business practices including relax underwriting guidelines that ultimately became the vehicle that drove us down the road to millions of foreclosures.

Rekindled in the early 1990’s, that 1977 lofty goal to increase homeownership by allowing those with less than perfect credit was exacerbated by changes with the two institution Freddie Mac and Fannie Mae who purchase loans on the secondary market. These GSE’s (Government Sponsored Enterprises) were under constant political pressure to help low to moderate income families qualify for home loans. This pressure spawned another practice called “Desk top Underwriting”. Desktop underwriting is a general term used to describe an automated way of underwriting mortgage loan applications which uses artificial intelligence to enable lenders to make credit decisions based on a computer review of the loan application. As a sophisticated computer-based method, desktop underwriting also commonly referred to as automated underwriting, was developed to review the critical factors that affect a loan underwriting decision.

Two of the most commonly used automated underwriting systems are run by Fannie Mae and Freddie Mac. Desktop Underwriter® (DU) is Fannie Mae's automated underwriting software program, while Loan Prospector® (LP) is Freddie Mac's software program. The computer analyzes credit history, calculates debt-to-income and loan-to-value ratios, employment stability, assets and affordability to determine a borrower's profile and whether loans meet eligibility requirements.

Banks all across the country then used DU to qualify borrowers at times requiring very little verification of work history, income, debt or ability and willingness to repay the loan. Let’s face it, computer programs can not use it’s intuition or experience to help determine whether or not a borrower may be a high risk, but when all is said and done, that is exactly what these programs were designed to do. Eliminate the possibility of discrimination.

Now we’re looking at yet another government sponsored proposal. An economic recovery plan that will put at risk 700Billion dollars of tax payers money. Although sold to the public as a loan or asset reinvestment and procurement plan, this new law H.R. 3221: The Housing and Economic Recovery Act of 2008 addresses the housing problem, the credit crunch and hopefully will restore consumer confidence, but the one thing it does not address is the fact that the government expects us, the average taxpayer to trust them to fix a problem they started.

Ronald Reagan said it best. “Government is not the solution to our problems, government is the problem.”

Break The Rules And It WILL Hurt!

2008-06-20T11:02:00.000-07:00

Complaint: Agent took a listing and failed to deliver it to NWMLS for input or input it by 5:00 p.m. the next day, failed to timely present a buyer’s offer to seller, and failed to report status change in a timely manner. Agent listed own telephone number in the owner’s phone field. Penalty: $5,000.

Complaint: Agent altered listing information on many listings before they expired. Penalty: $5,000 fine with $2,000 suspended on the condition that the member not be found guilty of any further Rules violations within 12 months. Agent must take Rules and Regulations class within 1 year.

Complaint: Agent input duplicate listing without submitting it to NWMLS for input and payment of fee, and failed to report notice of sale in a timely manner. Penalty: $3,000 fine with $1,500 suspended on the condition that the member not be found guilty of any further Rules violations within 12 months.

Complaint: Agent solicited another member’s active listing. Penalty: $5,000.

Complaint: Agent solicited another member’s active listing, including preparing a Form 19 to cancel the listing. Penalty: $1,000.

Complaint: Agent failed to disclose a Short Sale, listed inaccurate information, pressured the selling agent to lower the selling office commission, and failed to report status change in a timely manner. Penalty: $500 fine with $250 suspended on the condition that the member not be found guilty of any further Rules violations within 12 months.

Complaint: Agent removed the key from the keybox and left it outside so the home inspector could access another member’s listing. Penalty: Subscriber fined $5,000 with $2,500 suspended on the condition that the subscriber not be found guilty of any further Rules violations within 12 months. Member and agent must take Rules and Regulations Class within 60 days.

Complaint: Agent sent another member’s listing client an email alerting them to errors in the current listing and suggesting the client change listing agents. Penalty: $5,000 fine with $4,000 suspended on the condition that the member not be found guilty of any further Rules violations within 24 months.

Complaint: Agent used his Supra Key to access another member’s listing after his real estate license had expired. Office failed to notify NWMLS that agent’s license had expired. Penalty: $2,500 fine with $2,000 suspended on the condition that the member not be found guilty of any further Rules violations within 24 months.

Distressed Property Law

2008-05-19T08:43:00.000-07:00

Scam Artists Beware!

The "Mortgage Meltdown", "Housing Slump", and "Credit Crunch" have led to many a new program. Risk, as we know it is mitigated by the good intentions of legislators through the introduction of bills to relieve the pain consumers experience from market forces and protect us from----ourselves.

Owning a home was once an endeavor that served to provide shelter from the elements, a place to raise your family and fill photo albums with memories but lately, over the past couple decades many people, with the help of numerous home improvement T.V. shows have lost track of the primary function of home ownership and have turned the traditional buying and selling process into an industry of profit and loss.

Flippers, people buying homes for the sole purpose of reselling them for a profit forced changes in FHA guidelines to help protect buyers buying homes that are "flipped". States and local governments across the country have passed laws to protect or mitigate the potential damage caused by flipping homes. A new law in King County Washington require flippers (under certain circumstances) to be licensed and bonded contractors in an attempt to mitigate the potential damage caused by those who may not be skilled at home improvement and or try to avoid building code compliance.

As of March 2008 the Washington State Legislature passed HB2791 into law. This new law called the "Distressed Property Law" identifies certain homeowners as "Distressed Owners" if they fall into any of these categories.

1) The homeowner is at risk of losing the home due to nonpayment of taxes;
2) The homeowner is at least 30 days late on a mortgage payment;
3) The homeowner is in default of any mortgage term such that the lender could accelerate the balance owing; or
4) The homeowner believes they are likely to default on the mortgage within 4 months and tells this to, among others, a real estate agent.

This new law carries with it a new legal classification of "Distressed Home Consultants" for Brokers and Agents who provide distressed property services to distressed owners and under the new law have fiduciary responsibilities that extend beyond the statutory requirements of current Washington State "Agency Law".

This new law was intended to prevent fraud in situations where a homeowner with equity in their home who happens to be facing foreclosure, enters into an agreement with a buyer/scam artist to purchase their home to avoid foreclosure and rent it back and maybe someday in the future buy the home back form the new owner. Unfortunately however, many times the distressed homeowner is unable to qualify for financing and eventually is evicted from their own home losing all their equity.

The Washington REALTORS® closely monitored the legislation as it was proposed by the Attorney General as the legislation progressed through the House and the Senate. Both the Washington REALTORS® and the AG were satisfied that the Bill, as proposed and intended by the AG, did not include the adverse language now causing the problems. However, after the Bill was passed in one form by the House and in a slightly different form by the Senate, it moved into a process that occurs outside the arena where public comment or influence are allowed. It was at that stage that the adverse language was added and the Bill was immediately voted out of the Legislature without any opportunity for the AG or the Washington REALTORS® to testify about the problems.

Law makers have a tendency to pass laws without consideration to the unintended consequences. They pass them then let the courts sort it out through trial and error. No pun intended. The new law, well intended as it may be and in typical fashion causes problems within the real estate industry in it's practical application.

Some issues arising from this new law are; Language within the current listing agreements is insufficient to address the concerns of the new classification of homeowners and consultants. The standard purchase and sale forms used throughout the industry are insufficient to address the new language and none have been produced thus far. Agents must identify themselves as "Distressed Property Consultants" in cases where the sale or purchase of a home is "distressed" and potentially when listing a home, sellers may not disclose or even be aware they are distressed, especially with long term listings. To comply with this new law, listing agreements must be written in the sellers "First Language".

Other problematic issues are being looked at by Washington Realtors who are working diligently in conjunction with the AG to produce acceptable literature to provide to folks thinking about selling or buying distressed properties. Neither entity have committed to publishing anything yet and local MLS's and it's members are working to facilitate a smooth transition for buyers and sellers affected by this new law.

The new law takes affect June 12th, 2008.

Technology & People

2008-04-16T16:44:00.000-07:00

The Human Element

What a difference a few decades make. When it comes to technology we have come a long way haven’t we? From days of broken down cars on the sides of the road with mechanical problems or flat tires, to more dependable automobiles using run-flat tires and no required tune ups for the first 100,000 miles.

Home and car phones with cords and rotary dials to voice activated hands free mobile devices with streaming video and web application brought directly to you, any time, any day 24/7/365. Computers the size of entire rooms are now held in your hands. Camera and video phones with direct connectivity to host websites you can post pictures or video virtually as it’s being recorded, or minutes later are used as readily as your morning coffee cup. A space shuttle. A space station. The list goes on and on. Gene Roddenberry would be proud, but what does any of this have to do with real estate?

Advancements in technology have enabled techno-savvy agents to utilize the world wide web, mobile devices and satellite imagery in our everyday business lives. From the moment we receive a call on a property we can locate that property on our laptop with wireless card, our PDA with direct MLS feeds, download arial satellite photos of the property and surrounding areas, email links to property data from the road or in the field, read showing activity reports online for listed homes from a secure online location and much more all in a matter of minutes...Bravo!

Never before has the ability to transfer information been so easy. Looking for a no obligation market analysis of your home? Get one free online. Need tax information? Go to the County Assessors website. Even pay your taxes online. Is there anything that can’t be done online? Well, yes— thank goodness we can’t replace the human element completely.

Client Kills Wisconsin Realtor

2008-03-24T12:11:00.000-07:00

Wisconsin Real Estate Agent, 71, Is Killed by Client During Showing, Police Say

A convicted sex offender was charged Thursday with killing a 71-year-old real estate agent whose body was found near a smoldering mattress in a home she had been showing him.

The criminal complaint alleges that James A. Hole choked Ann B. Nelson with her scarf and beat her with a fireplace poker Tuesday after she said something he didn't like, then set the house on fire with the still-conscious grandmother of 16 inside.

Hole, 34, of Brookfield, Ill., was charged with first-degree intentional homicide, arson and burglary. Bond was set at $1 million and a preliminary hearing was scheduled for April 4. He had not been assigned a public defender as of Thursday afternoon....

More Relief From The Fed

2008-03-13T07:20:00.000-07:00

Federal Reserve Actions

The Federal Reserve announced today an expansion of its securities lending program. Under this new Term Securities Lending Facility (TSLF), the Federal Reserve will lend up to $200 billion of Treasury securities to primary dealers secured for a term of 28 days (rather than overnight, as in the existing program) by a pledge of other securities, including federal agency debt, federal agency residential-mortgage-backed securities (MBS), and non-agency AAA/Aaa-rated private-label residential MBS. The TSLF is intended to promote liquidity in the financing markets for Treasury and other collateral and thus to foster the functioning of financial markets more generally. As is the case with the current securities lending program, securities will be made available through an auction process. Auctions will be held on a weekly basis, beginning on March 27, 2008. The Federal Reserve will consult with primary dealers on technical design features of the TSLF.

Politics

2008-01-30T09:04:00.000-08:00

Not In Front Of The Kids?

Well folks I don't talk politics because of the caustic nature of heated political debates, personal opinions and down right nastiness but in this case I think I'll try to beat around the bushes regarding some issues with some questions... Change is definitely a theme in this primary season but what type of change should we expect? Better yet, do we really believe after decades of Washington insider status quo politics change is even possible? Maybe...Maybe Not.

The Economy;Are we really heading toward a recession or are politicians and the media driving this issue for political reasons?

The Housing Slump; Is the country on the brink of a housing crisis or is the media and willing politicians trying to score points with the voters by giving money away?

Energy Independence; Is it a reasonable expectation for Washington to achieve energy independence?

Global Warming; Scientists on both side of the debate have data to support their theory's. Man made problem or cyclical natural event. How can we as voters expect the right choice to be made in the face of conflicting information?

Whether you're a Democrat or a Republican or Independent, the choices are not clear although they have stark contrasting positions on a variety of issues. All candidates seem to have a passion for change and it's our choice as voters to decide what change we desire. When the time is right folks get out there and let your voice be heard. VOTE!

FED SLASHES RATES!

2008-01-22T13:12:00.000-08:00

FEDERAL RESERVE SLASHES RATES BY 3/4

For all the the wary buyers out there (you know who you are) sitting on the side lines waiting for the market to sweeten up--your fruit is ripe for pick'n. Prices have settled down over the course of the last year or so to a reasonable level, inventory is higher than normal which makes for a competitive atmosphere for motivated sellers and the Federal Reserve with the precision of a clever weilding butcher just cut interest rate by 3/4 making it the steepest cut since 1984. Read Full Article Here. In other words....The time to buy a house is NOW!

The Puget Sound region has been somewhat inoculated from the huge market fluctuations experienced in other areas of the country. September 2006 Panic Not My Puget Sound Neighbors. Rejoice. Mainly due to it's highly desirable geographical location and diverse and mostly stable jobs market, not to mention the beautiful ocean and mountain scenery from East to West.

As of December 2007 home prices around the Puget Sound Region have still realized marginal yet welcomed increases in value unlike our neighboring states, making this the right time to buy a home In Pierce, King, Thurston and other counties around the beautiful Puget Sound Region.

False and Misleading Advertising?

2008-01-17T11:36:00.000-08:00

CAUTION! Washington State Homeowners.

If you receive one of these notices be sure to check with the Washington State Department of Financial Institutions to verify they are licensed in this State BEFORE calling the number on the mailing.

It appears on the surface to be a violation of Washington State disclosure requirements so I would caution anyone who received one of these mailings.

If you did have a loan originated with First Magnus Financial Corp it was probably sold to another servicing company. Do not fall for this kind of deceptive advertising. If you have any doubt check the link provided and above all....Don't panic.

2008-01-13T09:13:00.000-08:00

"Nobody Can Do What Countrywide Can"

Sound familiar---It should. The commercial has been running all across the fruited plains now for several months. I suppose they didn't get the memo that someone out there can do what Countrywide can...

"Bank of America would gain greater scale in originating and servicing mortgages in the U.S. Countrywide had $408 billion in mortgage originations in 2007 and has a servicing portfolio of about $1.5 trillion with 9 million loans. The purchase also includes Countrywide's Lender Placed insurance and other businesses."

Bank of America Agrees to Purchase Countrywide Financial Corp.

Bail-Out or Legitimate Program?

2008-01-11T12:02:00.000-08:00

"An estimated 240,000 families can avoid foreclosure by refinancing their mortgages using the new FHASecure plan. FHA will allow families with strong credit histories who had been making timely mortgage payments before their loans reset-but are now in default-to qualify for refinancing."

"FHA Secure"

If you don't trust the media and believe they have a vested interest and or personal agendas to persuade the public and influence certain outcomes, particularly during an election cycle, visit the HUD link I provided to become more informed about the current plan to help struggling homeowners. Jimmy Carter bailed out Chrysler. Are we bailing out homeowners who made bad choices or is this a proper economic program?

2007-12-22T12:05:00.000-08:00

The Power Of Positive Thinking!

As the year winds down so does the market. Thank goodness for that. Well...What I mean is it's nice to get the year 2007 behind us so we can start a-new. Although sale prices are on a slow upward climb, Fact of the matter is the overall sales volumes for 2007 were grim.

With the new year comes a new advertising campaign from the National Association of Realtors and Pierce County's local association...The Tacoma Pierce County Association of Realtors. Their efforts throughout this ad campaign will be to draw attention to the Pierce County market which is doing much better than the national market.

A noble effort indeed and somewhat accurate but having said that the numbers are not up to par. It is better to focus on the positive aspects of the current market but I would be remiss if I didn't provide the statistical data. Below is the Pierce County numbers for the year to date totals. Judge for yourself... Pierce County Year to Date Stats 2007

The New Year has an element of hope which invokes a revived sense of enthusiasm for buyers and sellers alike. Recently the Federal Reserve chose to lower short term interest rates twenty five basis points which should help home buyers feel better about the new 2008 market. See ya in the new year and have a Merry Christmas!

Hero!

2007-11-02T08:42:00.000-07:00

Every now and then something is so inspiring you have to share.

Money or Your Life?

2007-11-01T09:33:00.000-07:00

Does working with shady characters increase your chance of victimhood?

This is a touchy subject due to anti-discrimination laws but where do you draw the line. Notice no question mark. Entering a vacant home with a complete stranger after dark is dangerous. Entering a vacant home in the middle of the day is just as dangerous, isn't it.

According to the Department of Justice, most crimes occur in the middle of the day in broad daylight as did the murder of Linda S. Stein (second from the left) a noted Broker to the stars and once manager of infamous Punk Rock group the Ramones. According to investigators "Ms. Stein had many tumultuous relationships in her life, but investigators have not focused on any particular people, and did not comment on possible motives,..."

Every time someone walks into your office you face the risk of placing yourself in a dangerous situation. My wife never shows a home in my absence. Real estate agents, man or woman should take precautionary measures to reduce the risk of victimhood. If someone calls to see a home you have listed, get as much information as possible about this person. Use the buddy system and take along a friend. Have the prospect meet you at your office first. An excellent office policy to implement is never allow agents to show a home to an unknown prospect unless they are met at the office and a copy of the prospects driver license is made. Be respectfully suspicious. It's far better in my opinion to lose a potential sale by being careful than to lose your life from over eagerness.

UPDATE! Arrest made.

Witch School Is It?

2007-10-31T12:01:00.000-07:00

I thought it poignant on Halloween to note there is a school for Wiccans in a small town in Illinois. I'm not sure if they teach broom stick flight lessons, or witch spells you'll learn but like it or not they have an online school. Click here for more details.

Constitutional Right To Own a Home?

2007-10-29T15:24:00.000-07:00

Whoa! Pretty deep subject huh. "Rights".

All kidding aside, I've heard it said that we have a 'right' to affordable housing. I've also heard plenty of other things. A 'right' to have affordable health care. A 'right' to an Education. A 'right' to affordable prescription drugs.

No matter where you go someone believes they have a "right" or an entitlement. Well I'm sorry to say...You don't!
Nowhere in the Constitution or the Bill Of Rights do we have a right to any of the aforementioned items. We are privileged to live in a country that allows us the opportunity to buy a home. If we work for it . Health care is there, if we work for it. A quality education is there, if we work for it. Prescription drugs are there, if we work for them.

So why didn't the founding fathers write in the constitution the right to all those things. I guess they wanted all Americans to work for them...

Agents Flying Fast & Loose?

2007-10-24T15:35:00.000-07:00

Follow The Rules or Pay Big Time!

The Northwest Multiple Listing Service otherwise known as the NWMLS occasionally needs to enforce their rules through disciplinary action. Good for them! Member Brokers and subscriber agents are expected to follow not only the letter of The Law and the Code of Ethics (for Realtors), they're expected to follow the rules and regulations of the NWMLS. Every now and then agents go willy nilly with the rules. Some get a slap on the hand, and some, very stiff fines.

Agent advertised another member’s listing in a real estate guide without written permission. Penalty: $3,000 fine with $2,000 suspended on the condition that the member not be found guilty of any further Rules violations within 12 months. Agent must take a NWMLS Rules and Regulations course.

Agent took the key to the house from the keybox, gave it to the electrician, and allowed the electrician to remain on the property unattended. Penalty: $5,000 fine.

Agent modified the listing price on several occasions by $1.00 or $2.00 to make it appear on the hotsheet. The property was listed at the same price after the changes as it was before. Penalty: $3,000 fine.

Agent lent his key to his unlicensed assistant who showed the property without an appointment while the agent remained outside. Agent failed to leave a business card after the showing. Penalty: $5,000 fine.

Agent failed to remove the keybox in a timely manner, failed to update the status of the property, and failed to upload a primary photo in a timely manner. Penalty: $1,500 fine.

Agent’s key was used by her friend, an unlicensed individual, to show listings. Penalty: $5,000 fine.

Market Forces

2007-10-21T18:45:00.000-07:00

Understanding Your Market

All across the fruited plains real estate agents log on to their computers punch in a their secret agent number and watch as the world wide web streams market data from a secure server in cyberspace to their warm well lit offices. Let’s take a look at the different types of data and how it affects buyers, sellers and real estate professionals.

Newly matched listings and listings ‘back on market’ offer the prospect of a sale for agents an brokers working with ready willing and able buyers. For a buyer, newly matched listings serve as an opportunity to pounce on a fresh listing. For a seller, a newly matched listing (to their property) in their MLS area serves as more competition.

For agents, newly expired listings offer the prospect of a new client. Agents may consider contacting that property owner to consider a re-list. Although a lucrative endeavor, it’s extremely competitive. At times sellers of expired listings are not happy with their previous agent for a variety of reasons, some valid, and some based on unreasonable expectations, a lack of understanding, or a unwillingness to trust their hired professional. Expired listings generally reflect prices other sellers could not obtain.

The previous days cancelled listings also come streaming through the agents high speed connection. Buyers could view this category as a missed opportunity and sellers are left with less competition. Cancelled listings are fewer today than in the past. This category of listing status has undergone changes due to NWMLS policy. Many agents had previously abused this listing status to attract buyers to a old property listing by simply canceling and re-listing. Today, a significant change in the property and or price change of 5% or more must take place in order to cancel and re-list. Good job NWMLS!

Last night there were 465 price reductions across the NWMLS which puts pressure on existing home seller to remain competitive. An increase in value may not be possible for those with little or no wiggle room. For those who have flexibility and wish to stay competitive being aware of your competition is prudent and strategically wise. For buyers, better value.

Pending and sold properties also add to the data real estate professionals see on a daily basis. Pending properties are those sellers who have found willing buyers and are undergoing the closing process. Sold properties are ones that have completed the closing process and are in fact closed and recorded. Sold properties are the only true indication of value. Think of it this way. The active market (available properties) indicate the price sellers want for their homes. The sold market indicates what sellers are actually getting for them.

Brokers, agents, and sellers across the fruited plains must recognize these factors and understand how they impact the market. Sometimes it’s positive. Sometimes it’s not. Understanding market forces help sellers remain competitive and for buyers, the price reductions and increased available housing translates to more choices and better value.

Home Evaluations

2007-08-04T15:50:00.000-07:00

The value of a home is typically determined by recent home sales of similar homes in the same area. That’s not to say that a similar home can’t sell for more or less. Each seller and buyer enter the real estate market faced with different challenges. A pending foreclosure, divorce, expiration of a lease, multiple offers on the same home, or relocation are some occasions that could influence the sale price of a home.

The definition of fair market vale is “The highest price estimated in terms of money which the property will bring when exposed for sale in the open market by a willing seller allowing time to find a willing buyer, neither buyer or seller acting under compulsion, both having full knowledge of all the uses to which the property is adapted and for which the property is capable of being used”. So long as there are no extenuating circumstances involved in the recent area sales these comparable sales can be used in the comparison. This type of valuation is known as the Comparable Market Analysis.

Homes of similar size and age should be used in this approach since a home with more square footage could have a substantially higher price based on square footage. Example: Two homes sell for $150,000 one home is 2000 square feet, the other home is 2089 square feet. Theoretically, with all other features the same the larger home could sell for $6675.00 more for the additional 89 square feet. Another method of valuating homes is the Replacement Cost Approach. This approach to property valuation is seldom used since most areas of all major cities provide an adequate supply of comparable homes.

When an area has no similar homes sales or the home in question is Historical or Monumental in nature then this approach can be used. This approach to valuation can take a very long time to complete since estimates to rebuild the home back to it’s original state could require custom or even hand made materials and craftsmanship. Remember, any market analysis or appraisal regardless of the comparable homes used or the person performing the valuation is an Opinion of Value. How the market data is extrapolated and adjusted could have a profound influence on the list or sale price.

"Chipping Away At CBS's Credibility"

2007-05-18T06:48:00.000-07:00

"Chipping Away At CBS's Credibility"

should have been the title to this so called news piece.

For those having used services of a real estate agent prior to watching the CBS News Magazine segment on May 13 called "Chipping Away At Realtors' Six Percent", a report purporting the Internet based real estate brokerage 'Redfin' and their crusade to change the real estate industry by providing a 'no service' business model has been met with opposition by the National Association of Realtors, must have made you feel cheated, robbed or taken advantage of or maybe.... a victim.

The truth is...you were deceived. You were cheated. You were misled - With false information. You were a "victim". A victim of false reporting. Lied to by a once responsible news organization. Cheated from knowing the truth. Robbed by a team of thieves who stole your trust and took advantage of their positions of influence.

Similar to past CBS reporting indiscretions, it left me yearning for the days when you could trust the major news networks to provide accurate information, balanced perspective and honest reporting. Not today. This latest example of intellectual dishonesty by the so called news team at CBS contains blatant disregard for truths reminiscent of their debacle that lead to the resignation of several senior news executives including the once honorable Dan Rather and the firing of Mary Mapes over airing a story based on false National Guard documents prior to the 2004 election known as "Rathergate".

So here we go again. With the political campaigns heating up, CBS news fires up their rhetoric and propaganda machine to impugn an entire industry that has been a major component in the stability of our Nations Economy. By setting the stage with an "Empty Chair" they have once again proven to the world they are not worthy of respect as a "news" network.

The NAR (National Association of Realtors) and it's staff spent nearly a year working with CBS. Legal council for NAR met with CBS producers in Chicago, and a conference for Realtors was attended by the producers of CBS and they still got it wrong.

Let's focus on obvious reporting errors.

1) Calling six percent commission "sacrosanct". Fact. There is no set commission. To do so would be a violation of Anti-Trust Laws. 'Price fixing' provisions covered under the Sherman Act to be precise. Commissions are negotiable. According to "Real Trends" a company that tracks real state trends coast to coast the average commission is 5.1 percent.

2) NAR is the industry's" Governing Body". Fact. NAR is a trade organization. Here in Washington State it is not required to join the National Association of Realtors in order to become licensed real estate agents or brokers and help buyers and sellers buy and sell.

3) NAR issued a rule in 2003 threatening to block access to MLS services by Internet discounters. Fact. No Virtual Office rule blocked or threatened to block access. An important note is, MLS rules apply to it's members and subscribers, NAR cannot dictate to any MLS how to regulate or manage their independent listing databases.

4) The MLS is a database that lists virtually every home in the country. Fact. There are over 900 individual MLS services nation wide. There is no national database or national MLS. MLS data is privately owned and regulated through a series of rules and laws governing the sale of real estate. They are not just isting databases. Listings are individual contractual agreements to cooperate and compensate between brokers.

5) Eight states have minimum service laws that require Realtors to provide a level of service many Internet discounters cannot provide. Fact. Minimum service laws ensure the general public receive a minimum level of service from real estate licensees. Not from Realtors. Remember, real estate agents (licensees) are not required to join NAR to sell real estate. The term "Realtor" is a trademark not synonymous with "real estate agent". Internet discounters chose their business model that provides less that the laws require.

6) The Brokerage industry has a powerful lobby. Eleven states flatly prohibit rebates. Fact. Laws preventing rebates are designed to protect the consumer against kickbacks during a real estate transaction not to limit brokers from attracting customers.

Other important facts left out of the report is that the Redfin website itself provides evidence of misleading half truths and deceptions.

For example; From the Redfin website.

"Even in the seller’s case, commissions have been found to create conflicts of interest: according to award-winning University of Chicago economist Steven Levitt, the commission motivates the seller’s agent to take any offer, even if low, for fear that the agent may lose the commission if he doesn’t complete the sale.

Fact. Agents do not "Take offers". Only sellers and buyers can agree to an offer or counter offer.

The buyer’s agent and the seller’s agent each earn a percentage of the overall home price. When listing a property, the seller sets this percentage, known as the commission, earned by each. Traditionally, the seller sets a commission of 6%, with 3% going to the seller’s agent and 3% going to the buyer’s agent.

Fact. There is no set commission, it's negotiable. As mentioned earlier the national average is 5.1 percent.

This one sided reporting from a discredited news organization also stated that eRealty went belly up from unfair business practices "choking off air supply" and "threatening" rule changes from NAR in 1999. What they forgot to clarify was that the company did not go belly up. It was purchased by Prudential Real Estate Affiliates for a loss of 33 million to investors. Must have slipped their minds. A small kudos for at least posting the correction on the CBS website. Think they'll get around to making the corrections about NAR and industry practices. I won't hold my breath but remain cautiously optimistic.

I guess it's trendy now in today's society to place blame on others when your business model fails. Solution; Find a willing participant in the news media. Fabricate a feel good story alleging victimhood. Set the stage for a one sided barrage of half truths and lies. Then sit back and let the consumer fall prey to yet another example of irresponsible news reporting.

Maybe the Internet discounters should try selling services consumers want instead of whining when their business models fail. Just an idea...

Ready Set Go!

2007-05-06T13:19:00.000-07:00

Your Waiting is Over

What do you create when you cross years of brisk sales and rising prices with higher than normal valuations?

Report after report indicate the real estate industry has experienced record Growth both in the numbers of new construction starts and residential re-sale homes, not to mention the increasing numbers of new communities specifically designed for the 55 and better home buyer. Cities around the country have flourished with double digit increases in market values helping to maintain economic growth amid the lackluster new jobs market, alarming some economists warning of a bursting housing bubble due to an over exuberant real estate market.

Housing starts and resale home sales including condominiums are not the only numbers increasing at alarming rates. Price reductions, expired listings, cancelled listings, and the number of New Real Estate Agents entering the industry have a dramatic negative affect on the market as well, artificially inflating prices literally forcing some buyers to sit on the side lines awaiting affordable housing.

Let’s focus on price reductions, expired listings, cancelled, re-listed properties and valuating property. As I write, the NWMLS (Northwest Multiple Listing Service) had 493 price reductions in the last 24hrs up sharply from the same 24hr time period last year. Expired listings the night of 5/1/07 totaled 55 properties in King, Pierce and Thurston Counties up from a mere 17 expired properties on 5/1/06. Cancelled listings in the three counties totaled 42 properties the night of 5/1/07 down from 50 on 5/1/06, but dramatically up from 4 cancelled properties on 4/1/04.

The three most common methods used to valuate real property are. The Income Approach, typically used in multi family dwelling of four or more units or investment properties producing income. The Replacement Cost Approach, normally used to valuate historical or monumental properties where the re-construction would require handcrafted materials and workmanship. The Comparative Market Analysis or C.M.A. Real estate agents will use this market data to help a seller determine what the market value of a property would likely be using other similar ‘SOLD’ properties from the same area, adjustments notwithstanding. These CMA’s are an indication of an affective price range.

In the first quarter of 1998 there was an estimated 11,000 real estate agents in the Northwest Multiple Listing Service. In the first quarter of 2007 we have nearly 30,000. What this translates into is a tremendous competitiveness between agents fighting for listings and good qualified buyers, many times dismissing market data.

The evidence is clear. The days of pricing a home based on the active market (what folks want for their home) as opposed to the sold market (what folks are actually getting for their homes) are over. At least for a while. The industry will experience some changes as new agents filter back to their pre real estate existence. The face of real estate will forever be changed with inevitable and welcomed State Legislation mandating Broker only licenses as found in states like California and Oregon, which will raise the level of legal accountability and responsibility for every agent. A long anticipated achievement indeed, and we'll be providing the same quality services as these changes take place.

One of my goals as an active member in our local association Professional Standards Grievance Committee is to promote a higher level of professionalism and expertise within the industry itself by raising awareness. I believe there are better days ahead for our local real estate market and I feel fortunate to be on the cutting edge helping to advance those positive changes for the good of the industry and the general public.

The answer to the question... what do you create when you cross years of brisk sales and rising prices with higher than normal valuations? You provide an opportunity for those sitting on the side lines to enter the realm of homeownership amid falling prices. You realize a purging of the industry from within. You invite governmental regulation, but what you create is a “BUYERS MARKET”.

Nothing Beats Good Old Fashion Honesty

2007-03-23T10:34:00.000-07:00

Snake Oil Salesmen

"If I can't sell your home I'll buy it"

"Your home sold in under 60 days or I'll give you $1000 CASH"

"You're approved regardless of credit"

"Your home sold in 45 days guaranteed"

Since the beginning of time snake oil salesmen have preyed on the naive claiming their concoction of colored water and cooking oils possess the power to cure. The power to clean, or the power of hope. After all , isn't everyone searching for that magic elixir. The fountain of youth. Or that pot of gold at the end of the rainbow. The question we should all be asking ourselves is not why these scoundrels seek out the weak or uninformed with their empty promises of hope. Rather, the question should be...Why do we as a society allow these unscrupulous characters to roam the streets in search of their next victim? But are they victims at all? Maybe, if one person is helped by the power of hope, then we can make the case that the magical concoction works. Maybe if a formerly impenetrable stain is removed by the bottled liquid the consumer is not a victim.

With the passing of time comes changes in the manner by which societies view any particular behavior. Whether it be public, private , or professional. In a democratically elected society, the general public makes distinctions between activities and actions and whether they are to be considered acceptable. Lawmakers derive their motivation based on public support for any issue involving the safety and well being of their constituents, and as a result, many un-acceptable behaviors of yesterday are acceptable today. The opposite holds true as well.

The snake oils salesman's horse drawn wagon of deception has evolved into the flashy foreign sports car that carries him or her into crowded neighborhoods of frolicking kids and unsuspecting parents. The elixir of hope once contained in a bottle and paraded around middle America is now presented in the form of empty promise and guarantees that do not exist or were never intended to be fulfilled.

Although some programs are legitimate, many could be considered Fraud. Fact is, these offers are nothing more than a deceptive means of getting you to call the snake oil salesman and buy a bottle of stain remover. Or at least give the salesman the opportunity to show how wonderful the bottle of colored water really is.

Remember the ole adage " if it sounds to good to be true, it probably is". That ole adage rings true today as much, if not more than any time in the past. The only difference being, the snake oil salesman of today are camouflaged behind expensive fancy suits and flashy foreign sports cars.

If you are considering one of these gimmicks, think long and hard. Get the guarantee in writing and understand the fine print and hold the promisor legally accountable to perform. Nobody will buy your home unless there is something to gain for them. Nobody will give you money if your home doesn't sell unless there is a catch. Banks will not give you a loan if you cannot perform.

Beware! That bottle of elixir may work fine on shallow surface stains, but when dealing with the complexities of the real estate market there's no match for good old fashion elbow grease and honesty.

Homeless Grants

2007-03-03T12:48:00.000-08:00

BUSH ADMINISTRATION ANNOUNCES NEARLY $1.4 BILLION TO SUPPORT A RECORD NUMBER OF LOCAL HOMELESS PROGRAMS NATIONWIDE.

WASHINGTON - More than 5,300 local homeless programs throughout the nation will receive nearly $1.4 billion in funding announced today by U.S. Housing and Urban Development Secretary Alphonso Jackson. HUD grants will support a record number of local programs, providing critically needed emergency shelter, transitional housing and permanent support more than 150,000 individuals and families. For a detailed local summary of the projects awarded funding, visit HUD's website. Or click Here.

The Good The Bad And The Ugly

2007-02-03T13:50:00.000-08:00

Home Inspectors

You probably thought I was referring to Clint Eastwood staring down a couple of hombres in the scorching desert sun preparing for a gun fight. Not at all. I was referring to Home Inspectors. Some good. Some bad. And well, let's not get into personal appearance here.

Any agent that has been a part of many home inspections know that inspectors come in different shapes and sizes. Meaning, basically, some are better than others. The same goes for any industry though, we must take the good with the bad. Right?

Unfortunately, when it comes to home inspections, there's too much at stake for all parties involved especially the buyers and sellers to leave an ispection up to a inspector of questionable experience. There is nothing worse than having to explain to a seller why they were told a light fixture needs replacment, when the only problem was that the inspector could not find the right switch.

Or why a seller is expected to pay for an engineering report showing the Manufactured Home they have lived in for nearly a decade, and bought using V.A. Financing was not installed with proper tie downs, when the only problem was the inspector was too large to fit through the crawl space access area and had no idea they were installed properly 10 years ago.

Or believe it or not, when a seller is faced with a recommendation from a home inspector to cut a hole in the homes hard wood floors to create an access area to the crawl space measuring 18"x30" because the one in the foundation is not up to today's codes and is only 12"x30". Believe it! It happens all the time. Why? Because there are no regulatory standards to enforce Home Inspector Qualifications. In other words, anyone can become a home inspector. That's right! Anyone.

Since the vast majority of real state professionals are burdened with concerns of liability, many shy away form recommending any particular inspector, and with that I cry foul. How, in the course of any transaction can an agent assure their client that the professionals involved with the many facets of a real estate transaction are qualified, experienced, and professional, if they leave the responsibility of selecting a home inspector to their clients by letting their fingers do the walking? I say you can't.

It is the responsibility of all agents to assure their clients that the home buying process is handled by competent and responsible professionals. From the agent themselves to the Mortgage Lender, the Title Company, the Closing Company and everyone in between. Although there are rare cases when a buyer or seller has selected real estate related professionals prior to the selection of a real estate agent, it is imperative to coordinate all parties during the transaction, and to advise buyers and sellers while undergoing the closing process and it helps all parties when we know the ones involved are experienced.

By arming your clients with the knowledge that inspectors are experienced professionals, buyers and sellers can avoid unnecessary showdowns and battles that leave everyone burnt from the scorching threat of inexperience.

You Pay For It. They Don't!

2007-01-22T12:18:00.000-08:00

Online Theft Of Private Information. An Unintended Consequence.

Appraisals are expensive. Ranging from $450 for a single family residence to up to thousands of dollars for large commercial projects. Appraisals are also confidential. Let me put it this way. If you pay for an appraisal of your property, why should anyone else be privy to that information without your authorization? The following article stems from what could be considered online information theft.

Read Full Article Here

Another Great Day In The Pacific Northwest!

2007-01-14T08:53:00.000-08:00

Well today is the day. The day the Seahawks get to prove to everyone they deserve to be at Chicago playing the Bears. Think they'll win? I do. We'll see.

Let see....The Hawks have been iffy all year with the injuries and all. Alexander's foot which put him on the sidelines for several games didn't stop Mack Strong from stepping up to help fill the void of the injured 2005 MVP. Matt Hasselbecks knee injury seemed downright depressing until Seneca Wallace made us all proud with gutsy performances both in the pocket and while scrambling for a couple hard fought victories while filling in for Matt. Wide receivers out. Defensive linemen out. Going to the street (basically) to find a Mortgage Rep to strengthen the defense. C'mon have they been playing as a team or what?

Hasselbecks back and looking more comfortable in the pocket but needs to keep cool and avoid turnovers. Alexander needs to be fed early to establish the running game and the offensive line needs to protect Matt in order to give the receivers time to get open in the secondary. Sound easy? It's not. The Chicago Bears will be swarming like Bees after honey. That little pigskin ball of honey.

Although we have freezing tempuratures outside, I'll be rooting for them from the comfort of my couch and this twelfth man will be cheering for the Hawks in about 42 minutes with millions of other fans. Goooooo Hawks!!!

So Many Agents, So Little Time.

2007-01-08T12:45:00.000-08:00

How do you choose an agent to represent you?

That all starts well before you make appointments with the prospective realtors. First...Make a list, and ask them all the same questions. Those questions should include. Are you a Realtor in good standing? How long have you been a Realtor? How many times have you changed offices? There could be a profound negative affect if you hire an agent who has a propensity to change offices, particularly in the middle of a advertising campaign or in the midst of a mutually accepted transaction. How many homes have you sold in the last 2 years representing sellers? Let me explain here. Remember you’re a potential seller, not a prospective buyer so it’s important to know how many sellers the prospective realtors have represented not how many prospective buyers they’ve represented.

Keep this in mind, there are two sides to every transaction and the MLS maintains accessible records of the listing agents not the selling agents so it’s easy for an agent to claim that they sell many homes and not be able verify that through MLS stats. On the other hand if an agent or broker does in fact list homes regularly they should be able to produce a record of previous sales for you to review.

Ask what they will do to market your home. According to the standard listing agreement, the only action required to sell your home is to list it. That’s right! If a realtor does not clearly explain exactly what they will do to advertise your home you should be concerned because they’re probably just planning on listing it. Although the MLS is responsible for the majority of sales through cooperating brokers working with buyers, what about that 20 or 25 percent of buyers not working with a Realtor yet, you know, the ones driving around neighborhoods, browsing magazines, shopping online. An aggressive marketing plan that targets all buyers is a must so keep that in mind.

Now during those interviews you may have heard this: I’ll sell your home in 30 days or I’ll buy it! I’ll sell your home in how ever many day or I’ll give you 1000 dollars! Or something else along those lines. There is no way anyone can tell you how long it will take to sell your home. Let me repeat that. There is no way anyone can tell you how long it will take to sell your home. What we can do is to use market data in your specific area to determine on average how long similar homes have taken to sell and those promises and guarantees are nothing more than a gimmick to get their foot in your door.

Another important aspect is value. What your home is worth. A wide range of factors will ultimately determine your actual sale price, but many times a seller will mistakenly choose a realtor based on which realtor thinks the house is more valuable totally disregarding all other factors, in other words who the seller thinks will net them more money. That approach can increase market time especially if the realtors is trying to buy the listing, knowing that a price reduction is only a few weeks away. You, the seller determine the list price. You should be provided a list of similar comparable properties to help you determine that price.

Here’s what to look for. Similar means within about 100sqft of your homes square footage, excluding the garage. Be of similar style, in other words ramblers compared to ramblers, 2 stories to 2 stories, split levels to split levels and so on. Located in the same MLS area. Now if your property borders an MLS dividing line you can use that adjacent area. Also if there is insufficient data you can spread that search out into adjacent MLS areas. Similar also applies to lot size, age, condition and construction. If you own a home in a neighborhood or own a condo or townhome where there are several pervious homes sales in the last six months, the range of market value will be much easier to determine. On the other hand, if you own a custom home on acreage in an area with little market data, an experienced Realtor will be able to make adjustment to help you determine a range of market value but ultimately you determine the list price.

Who determines market value? The seller? The buyer? The Realtor? The market? The answer is, the BUYERS! If the buyers see the value you’ve placed on the property it will sell. If they don’t, they’ll buy something else. Another important issue is buyer financing. Unless you find a cash buyer, there will be an appraisal by the bank to verify the value both seller and buyer have agreed to. Another reason to price properly.

We can’t forget the one factor that contributes to a sellers bottom line and that of course is...Commissions. Always remember, commissions are negotiable! The industry as a whole cannot set a certain rate. That would be a violation of Anti Trust Laws. But since they’re negotiable, individuals can choose not to accept a listing if the commission is below what they are willing to accept. And like life itself you usually get what you pay for. Quality usually costs more. Whether it’s wine, food, cars, medical care, or legal representation, if your looking for quality be prepared to pay a little more.

Worth It's Weight In Gold

2006-12-08T09:17:00.000-08:00

Our Service Isn't Expensive. It's Priceless.

You own real property, a single family home, a duplex, an investment property, or a piece of vacant land and you’re thinking of selling it. Here are questions you probably have. How much is your property worth? How much do agents charge? Do I have to pay taxes? Am I required to make repairs for a buyer? Who pays for inspections? Who pays for closing costs? Who pays for the appraisal? How do I pay off my existing loan? If you’re behind in payments a question might be, can I stop a foreclosure and keep my equity? If you have no equity, you may ask, how can I even afford to sell? There are many more questions that you may have but we’ll focus on one of the very first steps in the process...Choosing to use a Realtor.

Now I know there’s a lot of people out there that like to try selling on their own and I can appreciate that. If you choose to be an un-represented seller, educate yourself about your states laws on statutory disclosures, familiarize yourself with all the legal forms and documents you’ll be required to sign, contact your local title company and request a preliminary title report so you can review all the financial and non-financial encumbrances, any easements, and any liens that will ultimately affect your bottom line. Furthermore, to help avoid any future problems, educate yourself on the civil rights acts of 1866, and 1964. The Federal Fair Housing Act. Your States laws against discrimination and the American with Disabilities act, as well as knowing who qualifies as a protected class of people. Fulfill these minimum requirements and you’re ready to sell your own home safely.

How do you choose a Realtor? That really depends on what you’re looking for in a Realtor. And keep in mind that not all agents and brokers are Realtors. Realtors are members of the National Association of Realtors and are bound by a strict Code Of Ethics. You might have notice that I use the words Broker and Agents separately. That’s because there are stark difference between the two. The requirements to become a licensed real estate agent or salesperson in the state of Washington are : 1) Be at least 18 years old. 2) Successfully complete 60 clock hours of real estate fundamentals and 3) Pass the salesperson exam. On the other hand the requirements to become a Broker and Associate Broker are the same and they are: 1) Be at least 18 years old. 2) Have at least a high school diploma or equivalent. 3) Have at least 2 years experience in the last five years as a full time sales person. 4) Successfully complete 120 hours of continuing education courses within the previous five years including a 30 hour course in broker management, a 30 hour course in business management and a 30 hour course in real estate law. 5) Pass the Brokers exam.

All agents and brokers will have access to the NWMLS if they are members or subscribers. What that means is, any agent regardless of experience or knowledge can list your home and make it available to all the other cooperating members of the NWMLS. But you're most likely looking for someone that does more than just list homes. You’re probably looking for experience, knowledge, a record of success, and the one item I thinks is most important...Someone you feel comfortable with and can trust.

Unless you already have a good relationship with an agent, finding someone you can trust will be a leap of faith. You should choose at least 3 people to interview. A process whereby you ask many questions. Look for the person that will work for you. Not necessarily the one who sells the most homes, but the one who will properly represent you in the sale of YOUR home.

Fair Housing Opportunity For All

2006-12-01T19:13:00.000-08:00

Homes are color blind.

HUD Charges RE/MAX With Fair Housing Violation Thursday, November 30, 2006

WASHINGTON, D.C. - The U.S. Department of Housing and Urban Development announced that it has charged RE/MAX Realty 100, RE/MAX real estate broker Phyllis Hasenstab, and homeowner Edith Halvorsen with violating the Fair Housing Act by allegedly refusing to permit an African-American woman to view a home that was for sale.

The charge alleges that the actions of the respondents made Halverson’s four-bedroom single family home in the Bluemound area unavailable to Tami Doss, who is a principal in the Milwaukee Public School System. Doss was interested in the home because she is required to live within the Milwaukee city limits in order to maintain her position.

HUD’s investigation found that, in July 2005, Doss contacted Margaret Silkey, a real estate broker with first Weber Group Realtors, to help her locate a home in the City of Milwaukee. Silkey told Doss about Halvorsen’s home because it fit all her requirements and was in her price range. Silkey informed Halvorsen that she had a potential buyer. Halvorsen asked if the buyer was African American, and Silkey informed her that it was against the "discrimination laws" to provide that type of information. Halvorsen then allegedly said that when "blacks" moved into her sister’s neighborhood, property values fell. She stated that she "could not do that to her neighbors." Both Doss and Silkey filed complaints with HUD. Silkey alleged that she suffered financial damages because of the lost opportunity to make the sale, as well as damage to her professional reputation.

Halvorsen eventually hired RE/MAX real estate broker Phyllis Hasenstab. Although Silkey wanted to show Doss the house, Hasenstab excluded Silkey from showing the property to any potential buyers. HUD’s investigation showed that Hasenstab allegedly took this action because Silkey had called the Multiple Listing Service (MLS) and talked to them about Halvorsen’s discriminatory comments. The house was eventually sold to a white person, and Doss is still renting.

Under the Fair Housing Act’s provision on choice of forum, RE/MAX has elected to have the case heard in federal district court. FHEO and its partners in the Fair Housing Assistance Program investigate approximately 9,000 housing discrimination complaints annually.

Weeding Out The Bad Apples

2006-11-27T10:30:00.000-08:00

As long time clients of the Gene and Kim Quinney home selling team can attest to, the term “value” is not only symbolic of the real property we help buy and sell, it’s primarily a symbol of character as well. With all the false promises, shady guarantees, and high pressure sale techniques learned at some get rich quick seminar taught by a slick talking well dressed self proclaimed motivational speaker attempting to motivate dollars from listeners wallets, it’s no wonder some in the public have a negative view of sales people. including Realtors.

As in every industry there’s a few bad apples in the bunch. But they don’t spoil the entire group do they? I say No! You must distinguish between the good apples and the bad ones. Eat the good ones and throw out the bad or at least set them aside and let them rot away on their own
Let’s talk about the Real Estate industry. A revolving door industry, where new agents come in and go out daily. Now I don’t believe for one minute that people come into the industry with intentions of purposely misleading the public. I believe that within our highly regulated and scrutinized industry folks just get carried way in the moment...Try to out sell or out produce the next top agent. Now I could be wrong, but I hope not. The end result of this competition are guarantees and promises that can’t possibly be fulfilled within the parameters of an individuals reasonable expectations.

I was online looking at some of the mortgage companies and other guarantees that were claiming to possess the ability to get anyone approved regardless of credit, job history, bankruptcy and so forth. The fact is, unfortunately, not everyone can afford to buy a home. There comes a point when one needs to evaluate their actions, take inventory and simply ask themselves if what they’re doing right. Is it moral. Is it ethical. And more importantly, who benefits in the end. Meaning at the end of the day are YOU the agent or lender, or is the client ultimately achieving their goal, and is that goal realistic and sustainable? Bottom line is that it’s not always in the best interests of buyers to buy and sellers to sell and it’s imperative for professionals within the real estate industry to assure the general public that our moral compass is pointing in the right direction at all times.

So whether you’re thinking of selling a home or browsing the market place thinking of buying your first home, be careful to choose a Realtor and Lender who has your best interest in mind. One who’s not afraid of telling you the truth. One who councils and consults instead of sells.

Remaining Flexible

2006-11-08T21:53:00.000-08:00

Keep An Open Mind

It wasn’t that long ago when a seller could wake to freshly roasted coffee, pick up the phone, call any agent, list their home, get multiple offers, and close a sale. What a difference a few months make. Although the greater Puget Sound area real estate market remains strong in comparison to other areas of the country, we are experiencing some notable changes. During the time frame of January 1st through June 1st 2006 the NWMLS (Northwest Multiple Listing Service) experienced 1852 expired listings in King and Pierce Counties. During the time frame of June 1st through today November 8th, the NWMLS experienced 3422 expired listings in the same Counties. Other signs of a slowing market are more price reductions, longer listing periods, and multiple single property listings. Competition is greater for sellers and a realistic approach to the current market is a must while we transition through this market adjustment. A complete market analysis with an emphasis on the SOLD comparable properties and appropriate adjustments for specific features must be made in order to position your property for a successful sale.

The market will determine how well you did with your price. Typically you’ll have the majority of showings in the first fourteen days of listing. If you have no showings you’re priced too high. Reduce your price in affective yet acceptable increments. If you have several showings and no offers, you’re in the “ball park”. There are many approaches to price reductions. You may want to determine your bottom line and keep the property as aggressively priced as possible until you find the right buyer.

Hire an experienced representative who uses creative forms of advertising to expose your home. One who is open, honest and tells you the truth about property condition, and position.
In today’s market a seller needs to remain flexible when pricing. Create a balance between value and exposure and you’ll have little difficulty in this changing market.

Wake Up America

2006-11-06T08:56:00.000-08:00

You Have A Responsibility.

Voting. What could be more important?

In Washington State over 70% of registered voters use the mail. WOW! Fast food restraunts with drive up windows. Drive through coffee shops. Banking from your car. Online grocery shopping. The list goes on and on.

In a country where we strive to make routine daily activities more convenient, we still can’t get the majority of Americans to the voting booths. Thirty to forty percent of American vote. We can do much better than that. Even Iraq had a higher voter turnout in their first democratic election.

Whether you support the Democrats or Republicans. Have views from the left or the right. Want tighter border security or open borders. Regardless of your desire to win the war on global terrorism or to become isolationists. Get to the voting booth and make your voice heard but first, educate yourself about the political positions of the candidates. Look at their voting records, do your homework, vote the issues.

Everything from the price of bread to the purchase and ownership of your home are affected by local and national politics.

Uncharted Territory

2006-11-05T09:55:00.000-08:00

The "Cutting Edge"

From time to time I escape to my shop, fire up the ole table saw and try to turn out a piece of handcrafted furniture. If you’ve ever seen my work you would be much happier with furniture from any retailer around the Puget Sound area. Nonetheless, I give it a go because it offers a way to relax and work on my carpentry skills enjoying that wonderful odor of freshly cut lumber while trying not to lose any fingers in the process from the saw blades cutting edge.

Another passion of mine is fishing. Since youth, when my father would wake me in the wee hours of the morning to spend the day pursuing Large Mouth Bass or Lake Trout, I’ve spent as much time as our busy schedules would allow trying to make that perfect cast. The Salmon species, Chinook, and Coho (sometimes referred to as Kings, and Silvers) have been the target of choice lately not only for the thrill of the catch but for their obvious table fare. Like woodworking however, fishing requires sharp tools as well. After a struggle with a large King or spunky Silver, a razor sharp filet knife is needed to prepare that catch for the next family barbeque. As anyone who filets freshly caught fish can attest to, they’re a little slippery, and slippery fish and razor sharp knives don’t go well together. One slip can inflict serious injury from the knifes cutting edge.

Upon entering the real estate industry nearly a decade ago, Kim and I have labored hard to establish and maintain a business model with stand alone characteristics without compromising ethical and professional standards. “No Gimmicks, Just Results!” was registered with the state of Washington in an attempt to distance our service from the misleading advertising, tricks and gimmicks that plague our industries. “Talking House” radio transmitters were installed in homes to advertise features in a new and exciting way. Our website www.nogimmicksrealestate.com was established to provide a gimmick free online source of information for buyers and sellers, while advertising all listed properties available in the Northwest Multiple Listing Service for a one stop real estate experience.

In the last quarter of 2006 we have again traveled into uncharted real estate territory with our series of informational videos available to buyers and sellers on our innovative website NoGimmicksReaEstate.com. The videos provide gimmick free information on all topics ranging from magazine ads, listing insight and techniques, writing acceptable offers to purchase a property to brokerage responsibility and agency duties. Our intent is to focus on what the consumer wants. Free information. Not high pressure sales, half truths, false promises and unrealistic guarantees. This innovative information portal is hosted through the popular website “YouTube” and will grow as a result of demand. Our initial plan is to shoot ten videos specifically aimed towards buyers needs, and ten videos specifically for sellers needs.

As we progress into 2007 Kim and I will continue to develop new techniques and strategies to help consumers find the information they seek while providing resources that keep our services on the “Cutting Edge”.

Predatory Lending

2006-10-16T19:33:00.000-07:00

Looking For A Home Loan?

With all the lenders and banks making promises to give you the lowest interest rate, no fees or points. I thought it might help to better prepare folks looking for a home loan. The Washington State Department of Financial Institutions will point out key practices to watch out for. Don't become a victim of predatory lending.

Fear The Market?

2006-09-22T14:41:00.000-07:00

"The housing sector had been a robust propellant for economic growth...

... for much of the last few years. Between the fourth quarter of 2001 and the last quarter of 2005, real residential fixed investment (RFI) grew at an 8.4 percent annualized rate, compared with the 3.0 percent rate for real GDP."

The last ten to fifteen years have turned the typical home buyer into a would be invester/business person without the proper tools to run their business, by wanting their cake and eating it too. In short, the homebuyer of the past would search for a place to relax, cook, and seek shelter from the cold. A place to provide children with rooms to play and a yard to throw frisbees or play catch. But today's homebuyer is seeking "Resale Value" in their home. Shopping for the best school district, not only for their own kids , but for the children of the next owners once they decide it's time to sell and move up to a bigger home using their gained equity as a down payment. Not a bad plan, right? Buying a home to suit your family needs should be your first and foremost concern. Does the home provide room for a growing family? Do you plan on more family members? Kids ya know, and if so, you'll need more space. Is the garage large enough for your vehicles? Do you have an R.V. that needs covered parking? Will you be able to live in the home without major renovations? These of course are just some considerations to make when looking for a home and not one of them pertained to "Resale Value". Shop for the home that fits your family needs and budget and if your lucky, home equity will be the icing on the cake...

Personal Comment.

2006-09-18T09:14:00.000-07:00

Positive or Negative

We all have a choice. Wake up in the morning and make it a good day by searching for positive up beat moments. Or awakening to everything negative. Face it, it's much easier to be mad or angry, or to place blame on someone or something else for our personal obstacles, hurdles and challenges in life. The difficult road is accepting the bad, dealing with it and then moving on with life un-encumbered.

Many in the media and the cyberspace junkies out there attempt to create an atmosphere of doom and gloom based on reports of a real estate down turn in isolated areas of the country as if every single household in America and every market is suffering. Simply not true.

Every morning there is good news. Every morning there is bad news. Bad news gets more press because it sells news papers and makes for better headlines. But our choices are clear. Do we gravitate to the negative aspects of daily challenges and languish in pessimisms and complaints, or do we recognize these challenges, accept them and move on with positive resolve? Anyone who knows Kim and I, knows the road we'll be on... Make it a good day, even if it's not.

Puget Sound. The Place To be.

2006-09-14T21:09:00.000-07:00

August Home Sales Stronger Than July as Prices Still Climb in Western Washington.

KIRKLAND, Wash. (Sept. 12, 2006) –Inventory gains, interest rates and in-migration contributed to a solid month of housing activity for members of the Northwest Multiple Listing Service. Despite reports of declining prices and sales in many parts of the country, NWMLS brokers in western and central Washington notched more sales in August than during July. The volume of pending sales dipped from the same month a year ago (down 13.2 percent), but surpassed July by 857 transactions for a gain of 9.4 percent.

Prices on sales that closed last month jumped 14.3 percent from a year ago, with most of the 17 counties in the NWMLS market area experiencing double-digit increases.
Inventory shows significant improvement – up 43 percent area-wide compared to last year -- but brokers caution there are still shortages in many close-in neighborhoods and in some price categories.

Northwest MLS figures show the volume of active listings stood at 33,316 at the end of August, up from the year-ago inventory of 23,260 properties. The selection includes 29,404 single family homes and 3,912 condominiums.

MLS members added 14,077 new listings to inventory during August, slightly more than the year-ago total of 13,358 residential properties. Only two counties, Snohomish and Skagit, reported slight declines in the number of new listings added to inventory last month compared to 12 months ago. Based on current indicators, there is about a 3.3 months supply of available inventory in the MLS system. In King County, the number drops to about 2.3 months and in Snohomish County it's about 2.5 months.

The condominium inventory in both those counties remains tight, with only 1.6 months of supply in King County and 1.2 months in Snohomish County. Brokers expect that to ease once thousands of condominiums in various stages of development are completed.
In the four-county Puget Sound region, which accounts for nearly two-thirds of current inventory, the supply is tightest in King County and most plentiful in Kitsap County:

A Changing Market?

2006-09-12T09:42:00.000-07:00

Panic Not My Puget Sound Neighbors, Rejoice.

The resilience of the Pacific Northwest housing market is a much desired commodity among the panic stricken in other large metropolitan areas whose so called "housing bubble" has began to deflate, much to the joy of alarmists whose historic prophecies of doom and gloom echo in cyber space seeking shelter on computer screens of anti-growth and wealth be darned nay-sayers...But here's the simple truth. Some areas are realizing a decline, but NOT the down fall of civilization as we know it like some of the media have portrayed it. Mortgage interest rates for instance are and will remain historically low. Housing prices at their current level could take quite a hit and still remain a good investment historical speaking.

It's all relevant. A high price to you, may not be a high price to your neighbor. The cyber space grumblings are probably from folks who, for whatever reason, be it economic or emotional detachment (not wanting to pay what the market dictates because they THINK the prices are too high) have been priced out of the housing market so they hope for a market decline to bring prices down to what THEY "think" is a fair price or one that they can afford. Unfortunately we all might suffer if the doom and gloomers have it their way.

My advice to everyone is to remain calm. We around the Puget Sound region have no reason to be influenced by the declining markets in California or Arizona, or the East Coast or Mid West. Our local economy is strong. Unemployment is low and spirits should be high just like the prices. Just kidding...About that last part. Here's a good read from the Seattle Times September 03, 2006.

"Princeton economist Paul Krugman, writing in The New York Times, said: "The long-feared housing bust has arrived." Nationally speaking, anyway. If history is any indication, King County may escape it, according to a Seattle Times analysis of single-family-home prices. It shows that appreciation rates have risen and fallen, sometimes precipitously. But not once since 1985 through recession years, interest-rate spikes, wars and employment downturns has the countywide median price of a single-family home fallen, although it's come close."

A federal study, which goes back further, reveals nine months of Seattle-area price declines in the early 1980s that were followed by quick recoveries.
"Seattle has never been a market that's prone to price drops," said economist Matthew Gardner of Gardner Johnson, a Seattle-based land-use-economics firm. "The way it works is, prices climb, plateau, stay there and then climb again. You might see an area where there was a short-term drop but not an across-the-board drop."

Gardner predicts Seattle-area home prices will soften but not sink.
That's seconded by economist Dick Conway, co-author of the Puget Sound Economic Forecaster. He estimates that local appreciation will slow to 2 to 3 percent a year, roughly what it was in the mid-1990s and much different from the double-digit appreciation we've seen in recent years.
But realistically, is there any reason Seattle's prices shouldn't take a dive if that's happening in other cities? San Diego home prices are already shaky, and the area may not have seen the worst. A market-risk index compiled by PMI Mortgage Insurance calculates that San Diego faces nearly a 60 percent chance that home prices will fall in the next two years — the highest for any U.S. city. Boston, Sacramento, Los Angeles, San Francisco and San Jose all have a 50 percent or greater chance of price dips, PMI says.

Then there's Seattle: about 11 percent.
"When we see declines in prices, it's nearly always driven by a local economic shock first," said Mark Milner, PMI Mortgage's chief risk officer. "So what this index is basically answering is how vulnerable Seattle is to a local economic shock: not nearly as vulnerable as Southern California."
Seattle-area job growth is among the strongest in the country, Milner said, and the local unemployment rate is below its long-term average. Equally important, he said, is that Seattle's housing prices, while high, are still more affordable to local residents than prices in other coastal cities.

The median price of a San Diego-area home is $613,000, according to the National Association of Realtors. That's more than $200,000 above King County's median home price.
When affordability gets seriously out of range, prices generally stall or fall until wages catch up. That's happened repeatedly in San Diego, a city that's long experienced more price volatility than Seattle has. Beginning in late 1999, San Diego's house prices climbed at least 10 percent a quarter — for 25 consecutive three-month quarters, according to the Office of Federal Housing Enterprise Oversight (OFHEO). Five of those quarterly increases each exceeded 20 percent. Then prices stalled.

San Diego also has a strong history of price depreciation: 24 quarters since 1977. The worst occurred from 1991 to 1995, when a depressed economy caused home prices to dip for 17 consecutive quarters. That's more than four years. But the story in the Seattle-Bellevue-Everett area has been markedly different. The most recent run-up was seven consecutive quarters of 10 percent appreciation beginning in late 2004, years after San Diego's increase started. And none hit 20 percent.Downturns in '81, '82 As for downturns, the Seattle area has experienced exactly three quarters when prices actually fell: one in 1981 and two the following year. Those were recession years when mortgage-interest rates hit 16 percent and buyers stayed away.

The worst of the downturn was fall 1982. Home prices in the third quarter of that year slid 7.6 percent, according to OFHEO. But it didn't last. The following autumn they climbed 11.1 percent.
King County's most volatile time occurred between 1989 and 1993. First came the boom years of 1989 and 1990. "Those were exceptional years for population and job growth," Conway said.
Housing demand, propelled by a strong economy and buyer speculation, pushed prices up 45 percent in two years — a spike that hasn't been duplicated since. This is based on the Times analysis of home sales per square foot, a measure that allows for accurate cost comparisons regardless of house size. While sellers rejoiced, buyers took it in the pocketbook: The median-priced King County house, which cost $97,500 in 1988, fetched $145,000 two years later.
"Speculation can take several forms," Conway said. "First-time buyers will often jump into a market if they're afraid they'll be priced out in the future. That happened in the '80s."
Real-estate experts said at the time that the stratospheric appreciation of 1989 and 1990 was unsustainable, and they were right.

In 1991 it was as if someone let the air out. The local economy stalled (while the rest of the country experienced a recession), and housing demand died.
Appreciation amounted to a more modest 4.8 percent over the next two years, which meant that the house that was worth $147,000 in 1991 was worth just $7,000 more in 1993.
While countywide prices didn't fall in actual dollar terms in 1991 and 1992, Conway said they rose less than the rate of inflation during those years. Moreover, in half of King County's neighborhoods, prices indeed fell in absolute terms. The most dramatic dips occurred in areas that had experienced the biggest price run-ups. Exclusive Madison Park along Lake Washington was one of them. The median price of a 1,500-square-foot house there was $240,450 in 1990 — and $31,000 less the next year. Still, in most neighborhoods where prices fell, the drop was modest. In West Seattle, for example, the median price of a 1,500-square-foot house was $181,530 in 1990 and $180,120 in 1991 — a 1 percent drop that was soon reversed.
"Some sellers had their house on the market for two or three years, and the market did catch up to them," Redmond appraiser Alan Pope said, so they didn't lose money.
The ones who did lose, he said, were forced to sell quickly because of a job loss or transfer, a divorce or death of a spouse. There were many other neighborhoods — North Beacon Hill, North Greenwood and Vashon among them — where prices continued to rise during the early 1990s downturn.

Could prices fall?
In the past two decades, King County has experienced five years when appreciation has been 9 percent or higher, as it is now. Far more common is annual appreciation of 5 percent or less, and there have been 12 years of that, the Times analysis shows. We're entering a period where appreciation will return to that lower range, Conway says, but he forecasts that prices in general will not fall. What would it take for them to fall? If owners who can't refinance their adjustable-rate mortgages flood the market with for-sale homes, that could do it, some experts say. But a shortage of available homes is what fueled the current price run-up, so it's more likely that such an increase — if it happened — would only moderate prices.

Economist Conway doesn't include the adjustable-rate-loan scenario among the possibilities that could cause a local dip. "It would take some combination of a recession, a jump in inflation and a jump in mortgage rates to cause a big drop," he said. If that happened, he's confident the Federal Reserve would take measures to stimulate the economy, allowing Seattle to again escape a sustained decline in home prices.

Media Frenzy Over Housing Market Decline. A psychological condition?

2006-09-08T15:19:00.000-07:00

Check out these headlines compared to the content...

MSN Money…Boom to bust, almost overnight
“In Texas cities, the Carolinas, Utah, New Mexico, Oregon and Washington, real-estate markets are strong”…”In Houston, prices have risen 3% over last year “…”Real estate in the Pacific Northwest is still being pumped up”…“The Northwest's real-estate boom is likely to continue,”…

CNNMoney.com… Sharp home price pullback
“New evidence of a housing market slowdown emerged Tuesday - growth in the price of a single family home was just 1.17 percent in the second quarter, a decline of more than one percentage point from the prior quarter when prices grew 2.20 percent.”... “Conversely, states where prices appreciated more modestly over the past few years experienced more modest pullbacks this quarter. In Arizona, the average home sold for 2.94 percent more than during the first quarter. That was after five years of rapid growth during which prices nearly doubled. Florida prices, which spiked nearly 113 percent over the past five years, rose just 2.51 percent...

The Nation 2005… Pop Goes the Real Estate Bubble
“Let's not be too alarmist. Today is truly different from the past. There are no reliable historical precedents to fall back on, and one quarter does not make a trend”… “The prevailing belief has been that the housing market would stay strong as long as mortgage interest rates remain low for reasons nobody, not even the most owl-eyed economists, understands very well, the rates have stayed fairly low.”…

OK enough cut and paste. There are thousands of examples not only in business news but in every aspect of news. My point here is that the media always looks for the worst, regardless of anything positive. The headlines are scary and ominous. The sky is falling down right...NOT! Listen Chicken Little, the sky’s not falling down. Maybe a little rain or snow but not falling down.

A self fulfilled prophecy is more likely the longer they predict one, but we’re still not experiencing the highly anticipated market meltdown and restructuring of the entire solar system they've been longing for. Maybe these alarmists are lost in their own “Bubble” of self importance they can no longer distinguish between their lust for ratings through flamboyant headlines and personal agendas from the contents of their own articles...

Zillow. Accuracy takes a back seat.

2006-09-02T09:28:00.000-07:00

If you could harness the "Hype" or bottle the "Buzz" around the launch of Zillow.com and sell it, an instant rich man it could make.

Much like selling snake skin oil in the 1800's to unsuspecting consumers convinced the product could cure cancer, blindness or remove tobacco stains from a tightly woven woolen overcoat.

When it comes to real estate valuation, it's not "good enough" to be in the ball park. It's imperative to hit home runs.

Although well intended, Zillow takes physically viewable and recognizable numbers, figures along with technologically advance mapping features with Ariel photos, recorded tax information and displays it IN YOUR FACE. You get the impression they must know what they're doing, right! All the "publicity" at launch time was as if they were making the first attempt to step foot on the Moon. How can they possibly be wrong?

Without a full interior and exterior analysis of your home with the comparable properties, a foul ball is the most likely outcome of your 'at bat'. An error of just half a percent for a $450,000 house can cost you $2250. With all due respect to a well intended project, I've seen errors up to 10 and 15 percent on Zillow. I don't know about you but I wouldn't leave that kind of money on any table. Comparable properties should only include like kind homes...Meaning, split level to split level, rambler to rambler and two story to two story, I think you get the picture, yet even with very similar homes adjustments must be made.

Ah ha. Adjustments...Here's where the rubber meets the road. Adjustments for style, square footage, year, lot size, lot location, features and anenities ect, cannot be done by a computer generated program. It takes a skilled market expert to evaluate, adjust and calculate your specific properties features so you get top dollar, but by that time a prospective buyer may have falsely determined your property value with data that's just "in the ball park" ultimately resulting in a low offer or no offer at all. By the same token, a buyer could think they are hitting a home run by making the deal of the century when it's only a "foul ball"...

Protecting the people or too much government involvement?

2006-08-31T08:38:00.000-07:00

Big brother's knocking at your door and they're not looking to buy.

The Department of Housing and Urban Development is taking a major step toward preventing an abusive lending practice known as flipping that has left thousands of unsuspecting home buyers on the hook for properties worth far less than what they owe on them.
Effective June 2, the Federal Housing Administration will no longer insure mortgages on properties that have been sold more than once in 90 days. And if a repeat sale occurs between 91 and 180 days, lenders will be required to obtain an additional and independent appraisal.
The new rules are designed to stop "flipping," a maneuver in which speculators buy a rundown property, often at foreclosure, make a few cosmetic repairs, and sell them, sometimes within days, at artificially inflated prices.

Sometimes the houses are sold to fictitious buyers and then resold again and again at ever higher prices until they carry mortgages that far greater than their actual worth.
Then, when the monthly payments stop, if they have been made at all, lenders take over the properties and file claims with the FHA, which guarantees to make lenders whole if borrowers fail to meet their obligations....

There are some exceptions to the new anti-flipping rules. FHA-insured mortgages will still be available on houses taken back by HUD and then resold as well as on properties purchased by an employer or relocation company.

Otherwise, resales occurring 90 days or less following acquisition will not be eligible for an FHA-insured loan. Repeat sales executed within three months "imply pre-arranged transactions that often prove to be among the most egregious examples of predatory lending practices," HUD said. For resales between 91 and 180 days, HUD will require lenders to provide additional documentation of value if the new purchase price exceeds the old price by more than 50 percent.

In addition to these time restrictions, HUD said buyers will be eligible for FHA-insured mortgages only when they purchase their houses from the owner of record...