I thought it was appropriate to bring this back to my major beef with escrow…inflated and unneccesary reconveyance fees. (comments #29, 30 etc.)

Apparently some clever lawyer has decided to run with thisissue as well.

http://seattlepi.nwsource.com/local/363112_escrow15.html?source=mypi

Can you give us some insight into this?

If the price of properties account for different characteristics, then the TOM should be the same for all properties according to the market efficiency hypothesis. The test results only partially support this argument. The variables determined to be significant in the TOM model are insignificant in the price model and vice versa.

An accurately priced property has an initial list price that is +/-3% of the final sale price. The range of +/-3% probably accounts for the fact that real estate has qualitative characteristics that may be difficult to value. Interestingly, there is no impact on TOM from the initial list price/sale price ratio for low or high priced homes. Over pricing and under pricing does not influence the TOM. I suspect the low priced homes are seen as a generic product in a large supply. The list price doesn’t necessarily signal the seller’s reservation price. The high priced homes are limited in supply. They have many more unique characteristics.

For medium priced homes, accurately pricing the property from the start has an impact on TOM. The smaller the percentage difference between the initial list price and the final sale price impacts the TOM and selling within the average number of days on market. Overpricing medium priced homes can result in a buyer perception of stale or shelf worn listings. When finally priced correctly buyers ask “What’s wrong with it to sit on the market?” Such overpricing can result in a final sale price discounted more than 10% from the FMV. That is 7% points from the +/-3% range for property initially priced correctly. With the Time Value of Money, the longer TOM has as an economic oppurtunity cost.

Also, seasonality and brokerage firm choice impact the TOM. TOM is influenced by the season in which the property is listed for sale, the size of the brokerage and the number of listings.

Is it possible the large brokerage firms enjoy a competitive advantage from an economy of scale with general marketing and advertising cost? It seems plausible the large brokerage firms enjoy a cost advantage listing high priced homes and a large number of low priced homes. Strategic spending increases brand awareness.

Source: Yavas and Yang, Real Estate Economics, 1995.

Wikipedia defines it as irrelevant or off-topic. I personally feel I’m always on topic and never try to bait. But, I understand our message will continue to stir debate for at least another 5 years.

As for escrow, we do the same thing here. We look for quality, price, and service. A good escrow agent will work with you in a transaction and they’ll answer questions for you on the fly sometimes before you even get to a contract situation. An example is as such: a client of mine bought a property a few years ago with the idea of short-platting, fixing up one house and building another. He’s already completed the short plat and fix up and sold the fixed up house. Now we’re on to the new construction piece and we had questions about whether, or how, a title transfer could be done (for liability reduction reasons) to move from private personal ownership to an LLC. One of my favorite escrow people was willing to provide some great information and resources to me and my client that helped him get what he needed and to learn the proper process and costs associated with the adjustment in ownership. End result – happy customer who will want to work with this escrow agent (and me) in the future.

Truly service minded professionals don’t think about only themselves when helping clients. They provide thoughtful advice, resources, and commentary so that people (the public) can make good decisions.

I enjoyed our conversation and we both learned something new

Totally agree about WA and rebates and I do it all the time, as do many agents who don’t necessarily advertise as such. Though I’ve only done one with a 75% rebate in recent history.

If the lender won’t permit the full credit, and sometimes they don’t, we then take it off the price of the house.

The issue of the lender being fully informed has nothing to do with WA laws, but I understand there are a few States that do have Rebate issues. I think those will change in short order though.

Best of luck to you and your business.

BTW- everyone, I’d like to retroactively introduce Mr. Ray Pepper, otherwise known as the most enthusiastic Broker to grace the electrons of Seattle Bubble and RCG. Everyone together….Hiiii Raaaaaay!

Just giving you a hard time Ray and you didn’t hijack the post, just added a bit of Pepper to it!

BTW we are 100% within compliance and never “fool” the lenders. All our credits to the Buyer are stated clearly on the P & S addendum. Every transaction is its own entity and all subject to Lender Discretion. Most of the time the credit pays nearly all associated closing costs but in about 20% of the transactions the Buyer gets a check.

FYI

“According to long-standing interpretation, it does not violate Washington State’s laws governing the licensing of real estate brokers and real estate salespersons to rebate all or a portion of a real estate commission to an unlicensed principal(buyer, seller, lessor, lessee) in the transaction in which the commission is generated.”

“Accordingly, a licensee could advertise: “buy or sell through me and I will give you_____.”

“A rebate of all or part of the commission to the buyer by the company representing the buyer, or to the seller by the company representing the seller, would not require written consent of buyer, seller, or the lender.

Washington State Real Estate Regulatory and Enforcement Unit

I’m not having trouble understanding what you do. You got into the discussion by saying you provided full service. Maybe we just don’t understand your definition of full service.

I think it’s a great business model. I don’t blame you for trying to get the word out, and have given you a lot of leeway with regard to advertising here.

It would probably be better if you took those credits off price if that was financed money. Handing people checks outside of closing is generally considered lender fraud if the property was fully or mostly financed. Taking $31,000 of money financed as “commission” that wasn’t commission, could be an issue. Banks don’t have a lot of tolerance these days for fooling them into paying a commission…that wasn’t commission, and not showing everything on the HUD 1. Just as easy to do it “on the sheet” most times. Try it.

I do believe your comments could have been presented in an on-topic manner. I expect it is simply your style to try to advertise anywhere you can.

So now that you have been kind enough to have an exchange with us, maybe you want to apologize to Tim for hijacking his post

Tim did ask “does it matter who you list with.” Your answer, I expect would be “YES! Just get in the mls and we’ll offer a big rebate to the buyer and that will help get your home sold faster than a traditional service.” And you are correct, it is a good option for some people. If you would talk TO us instead of AT us, like a commercial, all would be well.

I just wrote 31,000 in checks last week as credits back to Buyers. I’m sorry you are having trouble understanding what we do. Our customers speak volumes.

If you call looking for your OWN HOME do it your self. Then we are. But, we find everyone enjoys looking for their home.

To be honest Ardell I haven’t looked into what you do or any of the other people do here. If my tone is negative I apologize. But, I have respect for everyone in this profession for it will become far worse before it gets any better. Brace yourself.

You will be happy to know we are arriving in Seattle soon and many more offices in 2009-10. Our Model is just one of many to come. We will constantly change to improve our Model for the consumers.

Today we have added a nice young lady to step out on our website and explain what it is we do. Interactive Actor marketing I believe they call it. But, either way within a few years everyone will know there are options in Real Estate far different and better then the old Brick and Mortar.

You said, “A proper model ( I will not self promote) gives full representation with every listing be it 500.00…”

Now you say,”When you list you do NOT get:

*fliers (we email to seller the listing for the client to print and fill box)
*open houses ( we advise sellers to place a balloon on our sign and sit in their open house on Sundays- and yes post it on Craigs List)
*we do not pay for staging, or newspaper ads…”

I just wish people would be honest and be partially “do it yourself” companies. That would be largely popular and a more honest representation. I hate the word “discount”. Why not just be a Do It Yourself company with a lower cost for the part the buyers and sellers do on their own? Lots of people want that. Why pretend to be more than you are when it is not necessary?