Follow the Money…

Have you ever wondered where mortgage money comes from? Years ago, the money came from your local banker. If your credit was good, and the bank had the available funds, you had yourself a home loan, and you diligently made your monthly payment to that same bank.

These days, the majority of all conforming home loans begin the same way as they did years ago, but they now follow a trail that most often leads to three major institutions: Fannie Mae (Federal National Mortgage Association); Freddie Mac (Federal Home Loan Mortgage Corporation); or Ginnie Mae (Government National Mortgage Association), then on to Wall Street.

Please understand that there are many variation of this, and I’m speaking of standard conventional loans. Depending on a many circumstances, some loans follow different pathways.

We begin the process with a mortgage professional as we always have. We answer the questions, jump through the hoops, and sometimes feel our whole life is being reviewed, but all goes well, and we end up with a home loan. Now it’s here that the trail can take some turns.

If you placed your loan with a bank, it frequently appears that your loan is still with that bank, but in most cases the bank is simply “servicing

Getting Ready for a Home Inspection

Having attended many, many home inspections, I would like to offer a few tips regarding getting ready for an inspection (sellers) and what to bring to an inspection (buyers).

There are a few things that a seller should do to get ready for an inspection. One is to change your furnace filter. I like the big bright blue ones for the inspection. When the inspector pulls out a filthy, dirty sometimes crumpled up filter in front of the agent and buyer, there is always a 15 second staring at the filthy thing that transpires. Just take my word for it. It’s not a pleasant 15 seconds. Check your filter before the inspector arrives.

For those not buying or selling property, go check your filter. They cost very little. Keep a new one in there monthly or every other month during heating season and year round if you have forced air and air conditioning.

Also for sellers, the inspector will be spending some time with the buyer at the furnace, hot water tank and electrical panel. Make sure these are not covered with an inch of dust and dirt and are not blocked by boxes and storage items. Most times the inspector has to move things to get to these, which can put him in a bad mood. Trust me, you don’t want a crabby home inspector. At a recent inspection we had to move a whole storage cabinet to find the whole house GFI in the garage. So yes, wash that hot water tank and change that filter and make sure three people can comfortable get to and stand in front of these areas.

Buyers should bring some graph paper for drawing out the floorplan, a measuring tape for measuring the refrigerator opening if you are going to buy a new refrigerator, a clip board and pad for making notes, and of course your check book to pay the inspector. The Home Inspection is one of the few things you pay at time of service in a real estate transaction and is generally not transferred to the closing sheet. Sometimes you can be reimbursed for the inspection, so be sure to tell your agent or escrow closing person to show the cost as a POC on the HUD 1 if you have seller paid costs built into the sale price.

There are very few things you can do to get ready for a home inspection. Putting in a clean furnace filter is #1 for a seller.

Trulia Lands in New York

I just got an email announcing that Trulia launched in New York!

Congratulations Pete and Sami! I know that was pretty high on your list of ToDo items!

Are you wondering what Trulia is?

I wrote a post on their service when they launched in California. In general, they have one of the nicest interfaces around for real estate search. If someone is looking for inspiration on how to build a tight real estate search that is focused on providing a maximum of useful information to buyers, they they need to look no farther than Trulia to see how it can be done.

Trulia Launches New York

So is there anything wrong with Trulia? I only have two qualms about their service. One, they launched in New York before Seattle! 🙂 and two, they don’t have a comprehensive database of homes (The California agents I’ve talked to have all mentioned that Trulia does not include a lot of homes that are available and did include a lot of homes that had already been sold.)

With those two caveats in place, it is my opinion that they have one of the most interesting real estate search tools available!


Contributing to Rain City Guide…

staircase with windowSeveral real estate agents (and one broker) approached me last week with an interest in contributing to Rain City Guide. Just about every one of them said they had noticed that Rain City Guide has a very high rankings on some key Google search terms, like Agent Recommendations (#1), Seattle Real Estate (#6), and real estate (#2 on blog search). (All of them were surprised to hear that we got these high rankings despite being less than a year old and not spending a dime on typical search engine optimization (SEO) techniques!) I’ve been trying to spread the blogging gospel for quite a while that if real estate professionals work together to create their own useful content for their potential clients (i.e. blog together!), all the agents involved would benefit. It is nice to see that some local real estate agents are finally starting to “get” it.

So back to the original question… What does it take to become a contributor on Rain City Guide?

It’s easy! Here are three steps that are guaranteed to get my attention:

  1. Join in the discussion by leaving comments! The number of people writing comments has grown dramatically in the last few months, with many popular and/or controversial posts getting dozens of comments. (If you have been only reading the posts and not the comments, then you’ve been missing out on some of the most interesting real estate conversations on the web!).
  2. Register with Rain City Guide. (As a bonus, this gets you a username so that you can log-in and edit your comments.)
  3. Email me and let me know you’re interested!

Who do I think should be contributing to Rain City Guide?

Curb Appeal EnthusiasmAnyone who is willing to share their unique insights on the Seattle-area real estate market! There is no doubt in my mind that the site will be a better resource as more and more experienced real estate agents/brokers, mortgage brokers, and title representatives join the discussion. I also think the site would benefit from having a few other real estate professionals, like photographers and investors, adding their unique insights. All-in-all, there is plenty of room to grow and improve!

One more idea… Maybe you’re an agent who doesn’t want to jump into the blogosphere where your opinions can and will be closely examined (dare I say, “examined with hostility” 🙂 ) but you still want to benefit from the exposure that posting on Rain City Guide will provide. I have an idea on how you can get involved as well! I’m looking for someone who would be willing to post an article each Friday that lists the most promising Open Houses of the weekend similar to the wonderful Curb Appeal Enthusiasm column that Alex of Behind the Mortgage puts together! I know that some agents already do this type of research, and if you are one of them, this would be a great way to get additional exposure for your hard work and knowledge! If you’re interested in putting something like this together, or have another idea for a regular column, let me know.


I had an email from a reader asking me how many hits Rain City Guide gets per month from Google… Not knowing the answer right away, I dug into my stat program and produced this chart:

Unique Visitors Per Month on Rain City Guide

Some interesting notes:

  • More than half of Rain City Guide traffic comes from Google searches
  • In January of this year, Rain City Guide received more visitors from Google Image search (378) than from either Yahoo search (333) or MSN search (194)! (While I’m missing data from one more day in January, the trend will almost definitely hold!)
  • The uptick in May ’05 was almost definitely due to my release of gHomes (now replaced by this home search).

DOJ-"opt-out" and a war with a "discounter"

A new Broker opens an office and has no listings yet. He goes to area brokers and asks if he can advertise their listings in his “window” to help get him started. Mostly they say yes. They are not trying to force out the competition and they are more than willing to help him.

Now they walk past his office and they see their listings in his window. No problem. Until they see this big sign on top of the houses for sale, which are their listings. “Our Mission: To reinvent the existing residential real estate business — an ANTIQUATED, INEFFICIENT, and COSTLY system of selling homes!!”

That is an actual statement from a website. It used to be pages and pages of “Help us fight the GREEDY brokers! Join our CAUSE!

Well, do you think the local brokers wanted their listings in that “window”? Would you? So the “window” is the internet, same difference isn’t it? That guy was using their listings to show homes on his site because he didn’t have any listings yet, and badmouthing them at the same time. Does that seem right to you?

The brokers didn’t opt out against this company because he was a discounter. They opted out against this guy because he was advertising their listings (VOW site showing other broker’s listings) while at the same time badmouthing them and calling them greedy SOBs! That’s the kind of “mud” that causes the “opt out” provision to be invoked against a “discounter”.

The local brokers said get my #%$## listings off that guy’s site now!

What do you think? Do you think the brokers should be forced to let this guy put their listings on his site, while he badmouths them on the site at the same time? I don’t think so. But I’d like to know what you think.

This is what the DOJ suit is about. The DOJ is trying to remove that right of brokers to say, OK, you can use my listings. But don’t sling mud at me from behind the picture of my listing! If you do that, I’m taking my picture out of your “window”.

Of course we could break his kneecaps, but opting out seems like a better answer 🙂 The brokers “opted out”. The new company didn’t have any homes to show on his site. He cleaned up the site a lot, though the Mission is still as it appears above without the CAPS, and a compromise was reached. Opting out is a negotiation tool to prevent companies from getting started on other broker’s listings while slinging arrows at them. There is another group involved. Same theory. EBAs. But they are “Johnny come lately’s to the suit”, so let’s stop at this example.

Tell me how you feel about all this.

DOJ suing NAR and the "opt out" clause

Galen: “As I understand it, the Justice Department is not challenging this sort of (NWMLS) setup.”

The reason NWMLS is not affected by the DOJ suit is because the DOJ is suing NAR. Most mls systems are owned by NAR and State Boards of Realtors. Ours is one of the few in the country that is not owned by the Board of Realtors. Our mls system is owned by the member brokers. So if the DOJ wins the suit against NAR, it would only affect mls systems owned by NAR and State Boards of Realtors.

Galen “I’ve heard that other MLS systems are a little different, where members can withold listings from selected brokers’ websites, which does little to keep nasty, mud tracking agents out …”

The “opt out” clause is a NAR policy. It could be the policy of broker owned mls systems in the country too. But the suit is against NAR, so even if broker owned mls systems had that rule the same as NAR, the suit would not appy unless the DOJ sued each mls separately. So when you hear that the suit does not involve NWMLS, that doesn’t necesarily mean they don’t have an “opt out” clause (I don’t know one way or the other). It means the suit does not involve them even if they do have the same clause, because they are not named in the suit and do not come under the NAR umbrella of the suit.

The two groups who are joining forces with the DOJ as potential targets of the “opt out” provision are the “discounters” and the EBAs. The reason these two groups fear being targeted has to do with the mud they track through, but not the kind of mud you are thinkiing of. It’s more like “mud-slinging” as opposed to dirty mud from rain soaked Seattle.

I will give an example in another post that should “shed some light” on this whole DOJ thing. I happen to have witnessed it first hand, and while I will not name names, I will explain how and why some brokers “opted out” on the “discount” broker.

I think it was a reasonable move and it worked. The discounter was not put out of business, nor was it the intention of the other brokers to put them out of business. It was to force them to clean up their act and stop mud slinging and it worked.

Read my next post and see if you feel differently about the “opt out” provision after seeing how it is used in real life examples.

Walkable neighborhood: Capitol Hill

I’m going to vote for 15th Avenue, home of the Victrola, Seattle’s best bagels (at the creatively named Bagel Deli), mediocre or dive bars, and Seattle’s crummiest QFC as one of Seattle’s most walkable neighborhoods. Trader Joe’s and 2 organic food stores are within 8 blocks, Safeway is right across from Swedish Medical Center and, most importantly for a walkable neighborhood, one can walk right out into the street without fear because there are so many pedestrians that they almost mingle with the slow moving bikes, cars, and buses – an accidental implementation of an unconventional “traffic calming” idea that I love. Dustin can definitely tell you more about this if you’re curious.

As the Seattle Times once pointed out, Seattle could definitely do a better job embracing car alternatives I propose street living rooms. And maybe more mass transit.

I also like the art at the Victrola right now:
Art at the Victrola in January 2006.

Throw your walkable neighborhood review in the comments and we’ll see what we can do to get a list of the best and the worst neighborhoods for walking.


Agents "Hoarding" mls info

Robbie: ” I can’t help but wonder if the MLS placed the same kinds of restrictions on printed property listings 30 years ago that they are trying to place on digital property listing today.”

Yes, they did. MLS books had a huge WARNING on them “For mls members only”.

Robbie: ” Surely those all free real estate magazines at the grocery store are harming agents & brokers, by giving away valuable information for free?”

Only the listing broker can advertise a property in a magazine and/or give permission to someone else to advertise it. Ad copy for magazines is written separately from remarks and agent comments posted in the mls. The rules regarding the remarks section have changed due to the internet and being able to show these remarks ONLY on the internet. Agent remarks are still forbidden territory for public consumption, as they often include security alarm codes to enter buildings and homes.

Some sellers will not allow a sign on their property, nor will they allow the property to be shown on the internet, as they have valuables which can be seen in the photos. They are in the mls for agent use only. The seller may have opted not to post the interior photos of their home on the internet for thieves to see. So if you draw the info from the mls, the AGENT ONLY source of info, vs. an advertising source like Harmon Homes, you could be breaching the directives of the seller with regard to their home’s exposure to the public.

The mls download agreement for members only is restrictive, and does not permit the “free” flow of all mls data, which includes the alarm codes and other private information regarding owner’s homes. Often it tells agents when the owner will be at work, when he will be on vacation and when he will be sleeping (night shift workers). Agents need this info to know when they can and cannot show the property for appointment purposes. This is info robbers could use to know when the owner will not be home. It is not available for public consumption and is “agent only” info.

So when a bottom feeding, non LIBB member joins the mls for the sole purpose of getting into the mls data system for public display, they need to understand what the mls IS, and what it is not.