Rain City Guide

A lesson in the dangers of distressed property purchases...

Actually, John, if you read the beginning of the post thread you’ll see this article was written BEFORE the law went into effect, which was June 12, 2008, and I also was referencing a deal that was in a different state. It was actually a house in Texas but my client/friend lives here and was asking my advice on whether it looked like a feasible investment for her and her husband. I told her to get away from this deal as fast as possible.

Keep in mind that the Distressed Property Consultant law is fosued specifically toward homes that are in foreclosure and that have equity positions. It also was drafted to stop those cases where buyers of foreclosures were promising homeowners to save them from foreclosure and to allow them to stay in their homes. In a lot of those cases there was equity skimming and it was the intent of the law to stop this practice. In its actual implementation it got mangled by the legislature and ended up harming more people because agents and potential buyers of these homes in distress decided to walk far, far away from purchasing them. The exact thing these homeowners needed. The legislature has been inundated with comments from people on all sides of the fence on this issue and is currently drafting a revision that is expected to be released within the next couple of months and that will be put into effect immediately. We’re all (at the Association of Realtors) looking forward to seeing the new verbiage passed as long as it clarifies more reasonably the duties of the individuals involved.

I am in agreement with you that any RE agent or consumer be in compliance with the local and state laws that affect their area.

Watching trends in the daily market watch of the MLS

Hi SL, I don’t know if you’re being serious or mocking me since posts don’t register sarcasm, but it is fun to see those remarks on RCG! I hope you do actually like what I write here. Let me know if there are topics you’d like to see addressed.

The pain of over pricing and poor photos... and how not to get bit by them, 9+ questions to ask your listing agent.

Hi Leanne, from that perspective *I get it* when you’re saying having empathy trounces other factors. I’d probably have had a tough time watching a young “gung ho” agent do the same thing you saw and would understand this other woman’s concerns in her situation. You are correct in that we act as counselors but I’d say we aren’t in a new position – we’ve always been in this position.

I can think of this from many angles from helping first time (and sometimes not first time) buyers figure out what financing terms really mean and their long term impact on their budget and ability to lead the life they want. To talking to foreclosure clients and the myriad of concerns that they will have. Even going through the motions of working with clients who are divorcing or perhaps a family in grief because of the loss of a loved one and now the family member’s home is being sold. Each of these requires a level head, empathetic and/or sympathetic listener, and a person who knows how to be a problem solver when those difficult items and roadblocks come up – and they will come up.

I like to think of it more from a maturity level rather than an age level – partly as I look at my own career and the amount of responsibility I carried at the age of 28 that many younger people today don’t have, want or know how to handle. We do the younger generations a disservice when we let them think “it’s all about them” which is often what I notice.

So, point taken. And, I think one of the points we can pass on to younger, newer agents is that they can make a better impression on others by learning skills from mentors and putting their energy into developing a working persona that builds rapport and trust with clients.

Fishing season is officially open!

Bennyd, you don’t say what marketplace you live in but I also didn’t say that sellers with “unreasonably high prices” should keep them that way either. And, it seems to me that you have a bias to all agents already given your comments about compensation and volume. Do you really think an agent would like to overprice a house so it can sit forever? Or, that we’ll want to underprice houses just to get them to sell fast enough to make money? Neither of those strategies work for building a long term business and I don’t work that way. Throw insults at someone who deserves them.

Fishing season is officially open!

You don’t have to insist on them in every situation, but if you’ve got major price disparity then it’s not unrealistic for a listing agent to ask for justification. All situations are unique so you have to address them individually. If you have a client that is being unreasonable and who didn’t price right to start, that is a different conversation for a listing agent than if you priced well and then started getting lowball offers.

One of the biggest reasons we’ve seen a decline in volume is that the financing markets made it a lot harder for people to get loans, particularly if they had little or no down payment. Almost all offers I’ve seen lately have had between 15% and higher down payments which was not the case a few years ago, and even last year at this time. August 2007 was the beginning of the financing meltdown. From what I’ve seen, the hardest hit price range in this area for getting loans, and thus sales, is the $600k to about $950k. Just so happens to hit those houses that will likely require JUMBO loans to purchase.

When it's good to know a "wiseguy"

ohmigosh, Leanne, imagine if the agent or the owner hadn’t been available to come help you. YIPES! I’m sure you’d have felt like my dog does when he goes in his crate. Trapped!

The Commission-Based Fee Structure: it's Bad for Buyers

Pardon me for not going through all 200+ comments here but the first 50 got redundant so I’m going to guess this may not have been covered. Why does everyone continue to post that the seller pays the buyer’s agent? They don’t. The listing agent does via a portion of the total fee they collect in their listing agreement and that they advertise within the cooperative brokerage terms of the NWMLS.

I, for one, have other language for our clients if we have an unrepresented buyer that provides for a discounted commission structure because I will not provide dual agency in a transaction. Therefore, if there is no buyer’s agent, my client gets a portion of the commission back. Granted, not all agents run their business this way, but we feel it is fair to our clients. We have a specific fee for our services to them as a single agency provider.

For anyone who wants to start asking about what this structure might be, I’m not planning on sharing it because this is my own private business and between me and my clients – not the public’s domain.

With regard to showing properties as a buyer’s agent that state a commission to the buyer’s agent less than I typically state as my fee, we show all of them. No matter what the commission amount. I’ve also successfully negotiated my fee from a seller in several FSBO situations even while letting them know I only represent the buyer and that they have opportunity to have attorney review or to get their own representation. In fact, I have a deal like that right now where I brought the buyer to a seller, my fee has been negotiated and the seller decided for another 1% to hire an agent to review the contract, etc.

Safety can't be stressed enough for agents and sellers of property....

http://www.remax.net/stories/mainst/20080219/7998.htm
it was brought to my attention that one of my links wasn’t working so I’m reposting it here.

Board votes 6-3 to landmark Ballard Denny’s building

I’m torn about this ruling because with the preservation of that landmark there is the possibility that the rundown properties next to it will continue to exist and blight the neighborhood. With the restriction of not building to the corner it may not be economically viable for a developer to recast that into a good space, but perhaps they’ll come up with something interesting and surprise us all.

A Closing Date without a closing

Connie, I agree with Craig that those are 2 major issues of consideration. You don’t mention where you are located so it’s hard to say exactly but I can comment that in some markets where prices are declining you may have issues with the appraisal – which may impact financing and the actual price your clients get for the house.

The other financing issue is if the buyer’s loan will allow for a loan rate lock for that period of time and/or the consideration of if the loan program they qualify for now is still available at the time of the closing in October. I’ve seen some serious situations arising for a lot of people that involve both of these scenarios both in and outside of WA.

What’s causing the need for the long closing?

Taking on KING/KONG...

tj, you have to keep in mind that we’ve had numbers in real estate that have been well above the norm for some time now (several years) so even if we have decreasing sales and increasing inventory they are really going back to more “normal” levels. If you go back and look at the past several years of articles about the industry you’ll see where because of lower than usual interest rates people were buying that might normally not have qualified (payments were lower and closer to rents or at least reachable) or people were stepping up what they owned because they could get more house for their money.

Taking on KING/KONG...

Yes, they seem to use the Internet quite a bit in their research for a story or for people to use as resources. Considering the estimate of only 4% of real estate agents writing blogs then it certainly makes for some good opportunities for folks like us to get some screen or print time.