Setting the Asking Price for a Home in Redmond

Later today I will be setting the asking price for a home in Redmond near Microsoft, and thought it would be interesting to some to follow how my brain wraps around the task.

The goal is to find the house they will be moving to first, but I always go to the house they will be selling in order to buy, ASAP after meeting them. This way the owner has plenty of time to do everything they need to do, and will be ready to list the property the minute they find the house they want to buy. It also assists by making sure their Net Proceeds Expectation on the home they are selling is not over-stated, BEFORE they make an offer thinking they are getting more than they will. That can be a very dangerous mistake, in my experience.

So laying out their net proceeds from the sale of their home, before they make an offer or even establish a firm purchase price target, is the first step in the home buying process.

First I pull the tax records of the “Subject Property” and note the layout as to main floor footprint, basement square footage and anything over the main floor. In this case there appears to be a bedroom or bonus room on the 2nd/3rd floor. Tax records call it 3rd, I call it 2nd. Then I look to see if the property had been listed for sale in the mls when they bought it. No luck there. The timeframe is available, but the house was apparently not listed in the mls when they bought it. An off-market transaction. That likely means the price they paid was not market-tested, so I’m putting no relevance in its accuracy.
I just thought of David G. since my next step is finding their Significant Other Sold Property, which reminded me of Zillow. Since I already know where I value this one, I’ll go peek at Zillow…be right back.

WOW! That was an eye opening experience. OK then. David G., call me if you want to know what I saw. Glad I took that step. I also saw one of my favorite agents and neighbor, Mike Moghaddas, on a Zillow ad in the sidebar. OK, enough on Ardell’s Field Trip to Zillow.

The Significant Other Sale, which is just a house or two from the subject property, tells me everything I need to know to get a ballpark value before I go to see the house later today. Zillow told me everything else and more. While the Significant Other sold in 2007, it sold in early 2007, so I have to try to calculate change and I can already tell you that I’m pricing this one UP and not DOWN. No, the market is not down as to price for this home. Only question is how much up is it.

No agent can make recommendations as to work to be done to get the home ready for market, until they have a ballpark value in their head that they come up with on their own, without owner input. I already know that if he lists it at X price, he doesn’t need to do anything. If he lists at at Y price, then we have our work cut out for us and some major staging and aesthetic and cosmetic fixing to do. In fact this is one case where I will likely recommend a pre-inspection. Something I rarely if ever do.

I know exactly what the interior looked like on the Significant Other sale. Original, but good, condition. I also have a pretty good feel for being able to get 5% more than the early 2007 comp would indicate. Now I go to see the house and add the missing pieces to the puzzle.

Before all of this technology, and Zillow, we often had to see the house first and then go back and do the homework. Today, technological advances have turned the tables on the way we work. Homework first, see house second. The advantage this technology affords the agent and the owner, is that we can now give the owner the list of things they need to do at first visit.

The owner should only do things if doing those things is going to assist in the sale and get a higher price. And that is not always the case. Sometimes a lower price is warranted due to price breaks. For example, if without the work the home would list at $599,950 and doing the work might put it at $615,000, maybe better to go with the 5 on the front and just clean it up and lightly stage it. If the owner does a lot of work in those cases, it would be a waste of time and money. This is one of those cases, and I can already tell that before going to see the house. Ain’t technology great! Only question is, how much work was already done to the house since the time it was purchased. Zillow didn’t help me with that one, so a trip to the house is the final step rather than the first step.

Had the property been on market last year, cancelled and I was re-listing a property that was already tested, the steps would be different. This is not one of those cases. Never listed for sale since the owners purchased it.

Valuing property is one of the most important things we do for buyers and sellers. It’s fun and rewarding and very meaningful to the lives we touch day in and day out. No computer program will replace us, but clearly they are very helpful to us. Speaking from someone who knows as when I started in real estate the mls was a DOS version with no photos, and the mls was a weekly book with black and white thumbnail exterior photos only. No access to tax records or square footage when I started either. I love technology…and Seattle Area does it best.

This entry was posted in General by ARDELL. Bookmark the permalink.


ARDELL is a Managing Broker with Better Properties METRO King County. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has 33+ years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. email: cell: 206-910-1000

76 thoughts on “Setting the Asking Price for a Home in Redmond

  1. Good luck with your price, Ardell!

    I’m just down the street from MS and I haven’t seen much evidence of real price appreciation around me. People out testing the market with crazy-high prices, yes.

    Just down the street from me, the McMansion built in 2005 that sold for $1M has been on the market for almost one year now, with no takers (asking $1.1M). I believe that it’s somewhere in the foreclosure process, as it was on the August King County list of foreclosures and appears to be vacant since last September. This is within one mile of the Red-West MS campus. OK, sample size of one, but the other three near-identical houses built at the same time all sold quickly and one has already been flipped (but that was a year ago).

    Maybe the price appreciation has still been happening on the older, less-expensive homes in this area.

  2. I’m wondering if the new $1M plus home is the one we went to and said NO WAY! LOL. It was new, but that’s about all it had going for it.

    The $550,000 to $850,000 older homes in various stages of original condition to fully remodeled, are the ones I am referring to. Each neighborhood has a max point though (as you well know) and overimproving compared to the neighbors is not a good move. Improving, yes. But OVER improving is dangerous.

    Often the style of the home, something not often changed, is the limiting value factor. We saw one at $1.2M last week that was unbelievable inside as to the remodel. Excellent! But the outside was a very outdated style and pretty darned crappy looking. Watching these overimproved interiorly vs. exterior curb appeal and outpricing the neighbors by hundreds of thousands of dollars bears watching.

    Some houses should be torn down, or not improved to that degree inside.

  3. “overimproving compared to the neighbors is not a good move.”

    I’ve heard this before, but I can’t remember the logic behind it. Care to educate me?

  4. I Say,

    First let’s establish that we’re not talking about new construction. A brand new house in Kirkland East or West of Market can sell for $1.6M next to a tear down.

    We’re talking about a typical Bellevue/Redmond housing development built in 1963 as the example. No two story homes except for little pop up addtional space bonus/attic second floor structures. Mostly ramblers and ramblers with basements and split entry homes. Many obsolete as to style and exterior finishes. “The blend with the trees” crowd built between 1963 and 1979 or so.

    So you have a split entry home in a neighborhood that sells for between $450,000 and $600,000. You buy the higest priced one at $600,000. Best location in the neighborhood and highest price ever paid for in the neighborhood at $600,000.

    You gut the thing, but keep the exterior pretty much the same. It’s still a split entry, in other words. You throw in a $50,000 kitchen, a $30,000 bathroom remodel, another $40,000 in upgrades including new carpet, wood floors, opening the kitchen by popping out walls, etc…

    Now you have added $120,000 to this $600,000 home and want to sell it for $850,000 or price it at $799,950 in a neighborhood where the comps for the appraiser are between $450,000 and $600,000.

    Even if you can get a buyer to pay it, how do you get their lender to finance it if it won’t appraise based on the comps?

  5. How much is sale chances effected if the price is such that 20% down payment will keep the loan under the $417K FNMA Freddie Mac conforming loan limit?

  6. Question to Ardell –

    Are you willing to buy the house yourself from the seller
    for the listed price if it does not sell within 60 days
    at the price you “valued” it ?

  7. Ardell, I actually like to see the house first, then evaluate the comps, even on homes I sold to them years ago. I want a fresh view, not colored by comps, or Zillows often crazy prices, and once I’ve seen what I’m working with, then I hit the computer data and research.

    I do always take the KCAR records with me, so can verify onsite if the square footage figures seem wild or appropriate.

    There’s nothing wrong with approaching these things your own favorite way, what matters is that you know the market and don’t overestimate price.

    And, overbuilding in a tired, staid neighborhood can be the kiss of death to your hard-earned money :-).

  8. Anonymous,

    No. It’s not the house for me at the moment. I only buy houses to live in them. If the seller is in a big hurry to move, I price them differently than when they are not. Also, pricing in January is not the same as pricing in June. We’ve got the whole market in front of us from this point forward.

    If you read the post you would have seen that I’m not pricing it for market today. Just to give the owner a realistic idea of what his net proceeds will be so he isn’t looking at homes in the wrong price range on the purchase side. By the time it goes on market we’ll have more 2008 data to go on.

    Often my 5% up is still lower than the seller was thinking. Any house should be able to sell if it is within 95% of offer range.

  9. Leanne,

    I think underestimating is going to be more dangerous than overestimating this year. In the last few years you could count on multiple offers to push a low price up. I think that’s a dangerous game for sellers in 2008.

    What we did in the last three years needs a bit of tweaking. Though I personally was never a big fan of underpricing a property to watch it bid out. I’ve had multiple offers, but not intentionally.

  10. Ardell, what are you talking about? I didn’t say anything about underpricing.

    I simply said that I prefer to see my properties that I am going to price before I do the research. I don’t want the research to color my opinon in any way. See first, research second.

    Nothing wrong with your method, nor mine. We’re both likely to end up at the same listing price, and as you said, depending on what the sellers needs are for timing and condition.

  11. Leanne,

    Not saying you do. But we both know many who have done that in the last few years, and did it well and successfully. Just saying whatever we have done in the past, it may be time to think about things from a whole different perspective.

  12. Rhonda,

    I’ve seen people determine downpayment based on conforming loan limits, but not set their purchase price accordingly.

    Have you?

    From the seller’s standpoint, we don’t expect the buyer to have 20% down, so pricing the home to suit a given potential buyer’s loan program does not seem to matter. We don’t discuss how much downpayment a buyer may or may not have in the over $500,000 price range, nor does a seller expect to lower his expectations based on the buyer’s desire to have a conforming loan.

  13. If a buyer only has so much down and they believe they need 20% down and want a conforming loan, they would assume they qualify for x amount. I’ve witnessed many potential buyers making financing assumptions before reviewing their scenario with a mortgage professional. These days, there’s just a lot of bad info regarding what’s going on in the mortgage industry re: qualifying.

    I’m am trying to figure out exactly what Pauls asking…is it conforming vs jumbo sales? I hope Paul’s reading and will elaborate for us.

  14. “If a buyer only has so much down and they believe they need 20% down and want a conforming loan, they would assume they qualify for x amount. I’ve witnessed many potential buyers making financing assumptions before reviewing their scenario with a mortgage professional.”

    Rhonda, are you suggesting there’s something wrong with running these calculations to set some boundaries and goals? I understand that folks can get fine terms w/o 20% down, but what’s wrong with setting this as a goal before deciding you’re ‘ready’ to purchase?

  15. laxtosnoco, there is nothing wrong with running calculations to set boundaries and goals and I’m all for people waiting to buy when they are ready vs when a RE/mortgage professional is ready.

    But if someone is saving 20% down because they BELIEVE that’s their ONLY option, shouldn’t they know all of their available choices?

    Nothing is wrong with setting goals…one should have as much information as possible before they set them in stone.

  16. In the same manner as an agent is not the best to ask if the market is tanking a mortgage broker is probably not the best to give advice if a big downpayment is a good idea. The broker and lender makes more money if the loan is bigger than smaller, i.e a lower downpayment is good for business. Also if people do not wait by saving there is more traffic which means more money. Even if the broker is a good one like Rhonda the answer is likely going to be colored to some extent. Not to say that a good broker would push a person into a larger loan than they can afford but within the comfort level I think a broker like to see a larger loan rather than a smaller. It’s just being business savvy I guess. Is that a fair assumption Rhonda?

  17. Not really tj. Most professionals, be they agents or lenders, are simply doing what the client needs them to do. Thinking about more or less pay is not part of the equation. I said most “professionals” not most agents and lenders.

    It really just doesn’t come up in our minds. Because people think it does, I started setting flat fees to remove that aspect from the equation. But whether I use a flat fee or not, whether a buyer wants to purchase high or low, the conversation regarding what the buyer should do, has nothing to do with what I will or won’t make. It just isn’t part of the equation.

    That’s like thinking a lawyer is dragging his heels to make more money, when he could have completed the task more quickly. If you feel that way about your lawyer or agent or lender, you shouldn’t be working with them.

  18. Rhonda, adults are free to make their own choices, but I think everyone should try to save a significant down payment in markets like our current one. It’s not that there aren’t alternatives (albeit more costly ones), but if you can’t save money while renting when it is significantly cheaper than owning an equivalent property, how in the heck are you going to make the mortgage payment?

    We wouldn’t have the current credit crisis if customers had decided to defer gratification for a year or two while saving up some $. Some people folded to loan officer/broker pressure to get in before getting ‘priced out’.

    Remember when fully amortized 15/30 year fixed loans were so 20th century?

  19. Correct. Still you owe the seller of the home they are buying a full faith and honest effort to sell. At this point I am simply checking that the net proceeds expectations are on target before they make an offer at all.

    Buyers are not protected against not having enough funds to close. They lose their Earnest Money in that case. So double checking everyone’s math before an offer is made as to cash needed to close and where it is coming from, is part of protecting your client within the contract provisions.

  20. okay, so I didn’t read all posts. Bottom line to sell—find all comparable properties, and list below….the lowest.
    nuf said.

    There is WAY too much inventory for buyers to choose from, especially if they are in a hurry.

    Although, this usually means, they want a higher selling price.

  21. Isnt’ that the advice of someone who doesn’t own and wants prices to come down though? Is that a credible source of advice? There’s a lot of talk about agent’s being biased, but I find people who want prices to be lower to be way more biased than agent advices.

  22. laxtosnoco-don’t forget that double zero down VA and low down FHA loans are so 20th Century, too.

    It’s all about making informed decisions by knowing and understanding your options.

    The current credit crisis is not from people putting less than 20% down.

  23. Professionals paid by the hour who drag their feet will soon be out of business. I don’t think a mortgage broker that suggests a smaller downpayment as long as the client is getting a comfortable mortgage is going to get a bad rep. It’s more about finding a good rate and a good lender with good terms. It’s more like telling the car sales man that you have a $40k budget. Do you think he recommends a $20k car or a $40k car? Would you blame him for doing it? Probably not, what I’m saying is that it’s the wrong person to ask since he is hardly objective.

  24. I’ve been toying with the idea of selling a home tour service at an hourly rate. The ad has an agent with duct tape on his/her mouth. No advices. Do you think many would like that service? They can trade up for advices if needed, but the advice agent is not the same agent as the duct tape agent…obviously.

  25. I did one last year where the LOC increased the longer the property was on the market. The client proposed it and I agreed. But he was primarily interested in a fast sale, so you’d think it would be the other way around (commission decrease the longer it was on the market).

    Anyway. we do open houses on listings, and so having it sell earlier does save us some work. This one did sell quickly (at the first or second open house), and for the lowest LOC per the agreement. The client was happy and I was happy. I’d do that again in the right situation.

  26. Rhonda, FHA loans are fine for many folks and I don’t begrudge people for not being able to save 20% down in high cost markets. That MMI sure isn’t free though.

    I respectfully disagree that low/zero down payment loans are disconnected from the credit crisis. Why?
    – Huge leverage = increased risk. At the height of the madness, with seller paid closing costs, buyers were paying $500 out of pocket for a $500k mortgage. LBO’s would kill for that type of leverage.
    – Lack of borrower skin in the game makes it easier to stop making payments and walk away.
    – No cushion to sell. If someone needs to sell for whatever reason, having made a down payment provided a cushion to cover transaction costs and/or minor price depreciation. Since the music appears to have stopped playing on the appreciation game, many sellers will not (are not) able to sell. If the borrowers had truly ‘chosen’ not to make a down payment, then they could make a deferred one, but in most cases the borrower hasn’t got any savings to draw from.

  27. “The ad has an agent with duct tape on his/her mouth. No advices. Do you think many would like that service?”

    Some people might offer to pay extra.

  28. Hi Ardell,

    Good luck with your listing. Let me know when it is coming on the market.

    I find the buyers who buy near Microsoft are looking for homes that are “turn key”. Usually they are buyers who are buying their first home and they don’t know a lot about home repair, nor do they have the time or inclination to make repairs. The buyers are usually strong financially and lead busy personal and professional lives. The homes I have sold near Microsoft usually move more quickly and sell for the most amount of money when they are in move in condition.

    redmondjp-million homes around Microsoft do not sell as well as million dollar homes in Kirkland and West Bellevue. That being said, the more realistic price ranges in the Redmond/Microsoft area have not lost a lot of ground in pricing.

    I agree with Ardell. This is one of the hottest areas and probably will continue to be so this year.

  29. “The current credit crisis is not from people putting less than 20% down.”

    I have to completely disagree with this statement.

    1. 0 down loans were the main tool used by speculators in the bubbliest markets.

    2. If someone has put 20 percent down on a house, he has more incentive to stay in the house and not walk away.

    3. Putting 20 percent down shows that you have made enough sound financial decisions in the past that you have been a responsible saver. If the money was a gift, well then someone you know is a responsible saver that can hopefully help bail you out!

    4. Putting 20 percent down on the majority of loans that are going bad right now would have totally changed the game. Once the bond insurers go kaPUT or are re-rated, I wouldn’t be surprised if all loans are requiring 20 percent down.

  30. Once the bond insurers go kaPUT or are re-rated, I wouldn’t be surprised if all loans are requiring 20 percent down.

    Or at least require PMI.

    Or possibly some other 3rd party who would take on the extra risk of the extra 20% for a slightly higher interest rate.

    Or possibly the underwriters will be willing to take on that extra risk themselves if it means more money.

    Or possibly the underwriters will be so desparate to invest the cheap money borrowed from the central banks that they will just lend money to anyone for any reason.

  31. We wouldn’t have the current credit crisis if customers had decided to defer gratification for a year or two while saving up some $.

    You can’t really blame consumers. There will always be people who are more responsible with their money and people who are less responsible with their money. If you open up lending programs to people who are less responsible then you shouldn’t be surprised when they take advantage even when they shouldn’t.

    We wouldn’t have the current credit crisis if there had not been so many responsibility firewalls between the people with the money and the people connecting to borrowers.

  32. Matthew wrote: “2. If someone has put 20 percent down on a house, he has more incentive to stay in the house and not walk away.”

    People don’t walk away if they can continue to pay. And if they can’t continue to pay, it really doesn’t matter that much how much money they are going to lose walking away.

    People want to keep their homes if they can–the ones that walk can’t.

    The only difference I see is that people paying 20% down would typically have the option of selling. But you’d be surprised the number of people that don’t want that option.

  33. LOL! Lax!!! I think you are right!

    Tried to get a photo of an agent with duct tape on their mouth in here, but Dustin’s screwing with the back door and I couldn’t get it in.

  34. Matthew,

    I think the answer is somewhere in between zero down and 20% down, as it has been for years.

    I agree with Alan that removing PMI was a huge mistake.

    People have to have enough skin in the game. But often 5% or 10% plus footing the bill for the closing costs is sufficient skin.

  35. I have always enjoyed working with first time buyers. And I’ve been selling homes since 1983, and would say that 90% of my first time buyers have not had 20% down payments. This is as true today as it was in the 1980’s. I have not seen any increase in the number of my first-time buyer clients with low downpayments — nearly all of my first-time buyers don’t have 20%! And, let me assure you that none of my clients have moved into this foreclosure mess, but how I work with my clients is off topic for this post.

    The current foreclosure mess is NOT due to low downpayments. It is due to low lender criteria — ie: either non-truthful stated income loans, or just plain flaky underwriting guidelines. I also believe that the foreclosure mess is directly tied to excessive credit card interest rates — there’s a correlation there, and it needs to be discussed.

    For all of you who are talking to sellers who are close to foreclosure, ask them about their credit card debt, and the interest rates on those cards, it is frighteningly massive. You will be shocked to find out that they are paying (or should I say, not paying) 22 – 32% interest rates!

    But, back to a positive note: We’ve got to allow our first time buyers to achieve homeownership. FHA, VA, or conventional financing are economically good programs for the individual, as well as our country. If we value homeownership as a stable “way of life”, as well as an economic source of jobs (construction, appliances, furniture, lenders, escrow, title, attorneys, movers, etc etc etc), then we need to get off this semi-bashing of “low down payments are the problem” stuff.

    Do you know that way back in the olden days someone once told me that for every real estate transaction, 90 people had a monetary involvment from that transaction. It’s the ripple effect for the economy of jobs maintained or created due to homeownership.

  36. Leanne,

    Give my a call at 206-910-1000. You should be hyperlinked. You have lot’s of good stuff to say and we should be able to click through to you somewhere.

    Call me for the “how to”.

  37. “You will be shocked to find out that they are paying (or should I say, not paying) 22 – 32% interest rates!”

    This is not too shocking if you factor in the the cost of acquiring/holding these customers.

    Here’s the breakdown for a typical non-prime portfolio

    Servicing: 3%
    Capital Reserves 10%
    Liabilities: 4%
    Haircut .5%
    Total: 17.5%

    So based on the range you gave, banks are making 4.5% -14.5% for an UNSECURED asset that has a charge-off rate of around 10% and a delinquency rate of roughly 8%. There’s a reason why Card companies charge this much.

  38. Leanne-

    “But if the keep charging what the consumer can’t possibly bear, they will end up in worse shape wouldn’t you think?”

    I think consumers need to take responsibility for their own actions when it comes to Credit Cards. This is different than letting them restructure their mortgage. They shouldn’t expect Banks to bail them out for their own bad spending habits. Anyway, banks already try to help consumers through payment plans, so I think it doesn’t make sense to lower rates for them here. Banks wouldn’t be compensated for the risk.

  39. Hi QD, there’s a lot of talk about ‘responsibility for their own actions’ when talking about those in trouble.

    However, it seems likely to me that it’s cheaper for the banks and lenders to renegotiate rates and mortgage payment structures in most cases than to go thru the entire foreclosure process. Sure, rewarding bad behavior isn’t great, but if the cost is greater to foreclose, then perhaps less costly alternatives are in order.

    I have no idea on the numbers, other than I hear over and over again that foreclosures are a huge loss center, so mitigation on both credit cards and mortgages seems like a necessary thing given the high rate of bad loans coming in.

  40. Ardell

    Is an offer with contingent to sell another house at disadvantage when buying a house? My husband and I have been thinking about upgrading to a bigger house, but we would have to sell our current house to cover part of the cost. If we find a house we like, what (or how much) do we have to sacrifice in order to have our offer be competitive?

    Also since my husband and I are not completely sure if we can even find another house that would suit our needs and affortable, should we talk to a realtor right now or should we watch the MLS until we at least see something that we are interested.

    Thanks for all the great posts, they give me hope that we may actually be able to upgrade!

  41. Carrie,

    First have an agent look at the house you will be selling and give you an estimate of proceeds after costs. It often depends on how salable your house is going to be, and you have to be ready to put it on market the minute you find a house you want to buy. So get a list of what you should be doing in your house while you are looking for a house to buy.

    I had a list of a few light fixture changes and some kitchen cabinet knob changes, paint front door, etc…for the people noted above. They can work on these things while they are not yet ready to purchase. That puts you in the right position for a contingent offer.

    Contingent offers are more common now, but you can also be bumped by a buyer with no contingencies. We have one going on in our office right now where the first buyer was bumped before they sold their home.

    A good place to look for a home is in the cancelled and expired listings. Some people took their houses off market back in the Fall and plan to bring them back in the Spring. Those are ideal targets if you like the house as they are not in a hurry and are not on market, so the chance of being bumped becomes somewhat non-existent.

    But it really depends on how salable your current property is. So get that evaluation first.

  42. Leanne-

    We’re talking about to different things here. There is/was a lot of confusion with mortgages, but people understand credit cards pretty well. Allowing people to restructure their card interest rate will only promote more bad spending and just delay the inevitable.

  43. Actually, I think both could be restructured, with provisions. If someone is delinquent on their mortgage, and the mortgage company is willing to offer a restructure, and the credit cards are too, then that is good for both sides. In my view, the credit cards would be restructured, and closed, and the consumer could not obtain new credit cards for some period of time, maybe 3 years?
    Just an idea.

  44. Leanne-

    With certain card holders banks are already doing that, but to do it in the same vein as mortgages would be irresponsible and could just induce more bad behavior. Also, just like mortgages, cards rely on investors for funding. Restructing rates would drive investors away drying up more liquidity for the banks.

  45. Pingback: Denver Real Estate Blog » Determining Your Asking Price in Denver Colorado

  46. Thanks for the responses.

    I’m not selling or buying any property. I’m just curious.

    I need to clarify my question. What I’m trying to say is there any benefit to setting the price on property, if its applicable, such that its withing a number such as 20% or 10% down payment on a conforming loan. If the seller sets the property price such as it takes an 11% down payment to make the loan conforming wouldn’t it be better to set the price such that a 9% down payment would get more offers?

    After reading responses here it appears setting the price up or down 2% really won’t make that much difference. The buyer and their agent will make an offer based on their specific situation.

  47. Paul,

    I think you are correct in that last line. That ball is in the buyer’s court, not the seller’s court at time of setting an asking price.

    FYI, one of my buyer’s used Pentagon Federal Credit Union to resolve that issue. There was no difference between conforming and jumbo rates.

    Personally, I have never had that conversation with a seller when pricing. Only with buyers and they do not set their price range using that rationale, in my experience.

  48. Did anybody hear that Chambers Bay in Tacoma will be hosting the 2015 Golf US Open in 2015?

    How will home values perform there?

  49. Ardell-

    Good question. Chambers Bay has been open for about a year now. How has home prices performed in that time? How have homes performed near the course relative to other areas of Tacoma?

  50. Q-Diddy,

    In response to your question, I called the Branch Manager of my Tacoma Office, Ryan Allie, and asked his opinion on this. He has much to say on the topic and has agreed to write a blog post on it. We both have meetings to get to, but as soon as he has time to write it over on his blog, I will link to it here.

  51. My thoughts on on Zillow are all over the place. I checked a address on there. December 07 it said the went down 38k. In January 08 the same home increased 133k. I know it was a month later but i thought that was a big jump. You should do alot of research before listing any home.

  52. Can anyone give me more details/progress of the following?

    West Lake Hills:
    15-lot SFH PUD

    Burnett Short Plat/East Lake Hills:
    1.72 acres sub into 5 lots

    Meydenbauer Townhomes:
    22 multi-family units

    Danke Schon!

  53. <p>Michael,</p>
    <p>Agents should check Zillow for two reasons:</p>
    <p>1) To determine whether or not to input the listing on Zillow. If Zillow says it is worth much less than the asking price, then I believe an agent needs written consent of the owner to show the property next to that value. Those who automatically and always post their listings on Zillow, may be doing their client a disservice. In fact any agent who always does anythng without thinking the strategy through to it’s likely conclusion, does a disservice to their seller client.</p>
    <p>2) To see if the owner has posted a Make Me Move price on Zillow or has listed the home for sale on Zillow. It gives the agent huge insight into the thinking of that potential seller prior to the listing appointment.</p>
    <p>No agent should use Zillow to value property, and yet no agent should complete their home evaluation and marketing stratgey without checking Zillow either.

  54. I find people either don’t know what Zillow is at all, or realize that it’s not very accurate. I’ve never met anyone who knew what it was and thought it was accurate (although some have asked me what they think of its accuracy).

  55. Great to see comments based on real experiences. Zillow has its faults but is a good general source. Gotta think these folks are working on being more credible and competitive–we will see.

  56. Q-diddy,

    Here is the response I posted after my conversation with Ardell:

    As it goes right now there are not any new home developments on the course, and home prices around the course have followed suit with the rest of Tacoma and the south sound. There has been some appreciation, but the days on market keep extending, and inventory has gone up. Chambers Bay is a links style course which makes it difficult to have any homes right on the course.

    A lot of the Real Estate in University Place already had spectacular views, so the course was more of a added bonus. It used to be a rock quarry, so there is only one road along the course. If you look at it from a map, it goes Grandview Rd./Course/Bluff. I don’t see it having enough room to really put many home around it. Also, I haven’t heard of any intention the county has to sell the existing property for development. But, you never know. I do believe having the US Open will help Real Estate prices. Plus if the real estate cycle follow typical trends it should be in an upswing while the US Open is in town which should help.

  57. Ryan,

    Short term swings are interesting to follow. I remember back in 2005 when a lot of out of town people were buying up Kirkland condos like crazy. That pushed Juanita condos up as out of town people treated all of Kirkland the same.

    I’m watching it closely now to see if their gains recede moreso than Kirkland Downtown.

    Same I think would be the case if people buy more duing the time and preceding the time of the U.S. Open. Will those values then hold long term…time will tell.

  58. February 2008

    Actually, yes, it is quite normal in this housing market for prospective buyers to offer $75K-$100K less than asking price of the home. Many buyers are now using the tax assessed value as a baseline bargaining tool.

    THE MARKET DETERMINES THE PRICE. So if a property has been on the market for a very long time, the property simply is priced too high. The longer a property sits on the market, the more likely buyers will submit low offers … the longer, the lower in this market.

    Some realtors and sellers wish to believe that the market has hit bottom. No, the the housing market is going to get much worse before it gets any better all across the country, and buyers are offering substantially less than listing price and fewer are budging with counter offers. Those sellers who are refinancing in an attempt to wait until the market picks us are in for quite a surprise, as the bottom of the market will not hit for years down the road.

    Sad but true, an incredible number of homes are now selling for less than tax value and less than mortgage value.

  59. Ardell, Reviewerz is just making predictions, and not even stating the basis for the predictions. Hardly worthy of a response.

    As to Snohomish County assessments, last year I was an expert witness on the value of a property near Lake Stevens. I was “hired” (pro bono) by the debtor and the appraiser was hired by the secured creditor. As I recall, we both agreed that the property was worth less than the assessed value (it was going up further, and maybe the appraiser came in lower than the increased assessment, but higher than the original amoutn, I don’t remember). The court found the value to be less than either assessed value. And this wasn’t because of declining values. The period we were valuing it as of was early 2007.

Leave a Reply