Ask not what your client can do for you…

Bill Gassett wrote a blog post a couple of days ago titled “Things Buyers Do That Real Estate Agents Hate”. I happen to know and like Bill and would not normally engage in a “correction”, point-counterpoint post with him. However one of my clients posted Bill’s article on his facebook page with this tag “Ardell DellaLoggia? Thoughts?”

Since my thoughts are more than will fit in a facebook comment…I am writing the full answer here. My facebook comment answer was:

I like Bill…and his piece is somewhat right…but for ALL the WRONG reasons. The only thing I “HATE” that a client does, is something that is against their own best interests OR anything that hints of fraud or discrimination. I would never HATE something one of my clients may do because of how that might impact me vs them or the public at large. Writing a point counter point to Bill’s piece…be back with the link when I am done.

Bill Gassett’s post has 13 points and I will use his point captions…but with my answer vs his. To compare to his answers…read his post in conjunction with this one.

Things Real Estate Agents Wish Buyers Wouldn’t Do

1. Buyer Calls Listing Agents On Their Own

Even MORE “wrong” than the buyer doing that is the real estate industry still using the term “Listing Agent” vs Agent for the SELLER. The main reason a buyer should not call the Seller’s Agent is the ONLY job of that agent for the seller is to answer your questions, and listen to what you say, to and for the seller’s benefit and not yours. In multiple offer situations, what the buyer may have revealed about themselves to the Agent for the Seller during that call could cause their offer to not be accepted…even if they would otherwise have had “the winning offer”. It’s like asking your wife’s attorney questions during a divorce. After warning you that they represent the other party…their job becomes to use what you are saying to THEIR client’s advantage, if you continue to talk after they ask you not to do that. Perhaps we need a miranda-type warning:

“I represent the seller and not you. Anything you say can and will be used to further my client’s best interest and not yours.”

2. Buyer Asks the Listing Agent to Show Them the Home

Same answer as 1 except even worse. Now not only do your words help further the seller’s best interest, but your general demeanor and body language as well. Not a good idea for a lightweight to get into the ring with Joe Frazier.

3. Ask Real Estate Agents to Show Them Properties Before They Are Pre-approved

It does not serve a buyer’s best interest for them to succumb to multiple and unwarranted credit checks needed for a pre-approval, because the act itself will lower their credit score. There are many contradictory versions of whether or not and when that is true. But a homebuyer’s loan costs and mortgage interest rate, when they do purchase, is directly tied to that credit score. If they are shopping for an agent while viewing 3 to 5 properties with different agents before they are ready to choose an agent and property, then getting 3 to 5 pre-approvals through those agent’s many and varied preferred lenders could seriously harm the buyer for years to come. EVERY real estate agent learns how to qualify a buyer as part of their required education for licensing. There is no reason an agent can’t qualify a buyer well enough to show them enough properties to decide if they are well suited to working with one another, usually 1 to 3 properties. The potential damage to the buyer has to outweigh the potential damage to the agent in this case. If the buyer tells me they have worked at Microsoft or Google for 5 to 7 years and have a salary of $200,000 and a credit score of 760 and want to look at houses costing $500,000…I don’t need a lender to run a credit check that I believe will lower the buyer’s credit score by about 25 points. Many of my clients fit that scenario and are well qualified and are buying below their means. If I worked in an area where 9 out of 10 buyers who come to me can’t get a mortgage…I would feel differently. An agent needs to consider the harm to the buyer and not just protect themselves from “wasting their time”.

4. Buyer Asks to View Property Outside of their Price Point

This involves more than the buyer and the agent, as the main reason NOT to show properties outside of a buyer’s price point has more to do with licensing ethics and sellers. We as agents have “The Keys to the Kingdom”. Having access to enter people’s homes is a HUGE privilege that comes with a responsibility not to abuse that privilege. Since I have been in the business for almost 25 years, I can’t say that I have never had someone ask me to enter a $2 Million listing for “the fun of it”, as example. My answer is no because my access to people’s homes is to a given purpose and “fun” isn’t one of them. If there is an Open House, well that’s an open invite. But using my access key to enter someone’s home for other than the purpose of buying it…answer has to be no. The main reason I don’t like Bill Gassett’s answer vs mine is many agents do, and often, make appointments to see homes to value a home they are soon going to be listing. If the home is occupied, I don’t think it is right to do that unless I disclose to the seller that I am not there for the purpose of showing their home to a prospective buyer. But MOST agents do think seeing the home to help them list a competing home in the neighborhood IS a legitimate reason. When you think about the seller cleaning for you and leaving their home for you…you have to agree that for them to do that to help you do your job for a different seller, is clearly not OK…in my book.

5. Buyer Does Not Respect The Agent’s Time By Calling Last Minute

I don’t get this one at all because in a hot market we have to be very “Johnny Jump Up”. Anyone who doesn’t want to jump through hoops to get their client the house they want, just shouldn’t be in this business. Often “the early bird gets the worm” around here. Last Minute is really First Minute in a hot market. I can’t tell you how many times my client got the house they wanted because we were there “Johnny on the Spot” and the first offer in. To hell with respecting the agent’s “time” and schedule. Whatever makes the most sense for the client to achieve their objective is the ONLY respect factor in the room! End of Story.

6. Buyer Looks At Home 5 Times and Does Not Make an Offer

Thank God they stopped themselves from buying a home they didn’t want, I’d say. Really? If it takes 5 times for them to know they don’t want it…then 5 times it is! This is just ridiculous, Bill. Sorry, you know I like you, but Holy Caboley! I have in fact had a client or two say they were going to buy a house because they felt badly FOR ME if they didn’t because of all the time and work I had invested in the endeavor up to that point. I was aghast that they would put me before their family’s best interest. I love those people…but Oh My God! No!

7. Buyer Not Researching Where They Want To Live Before Asking Agent to Show Them Homes

Duh! Isn’t looking at a few homes in various areas part of that “research”? Another “I don’t “GET” what Bill is getting at…or I don’t agree. Hard to say which.

8. Buyer Makes Unjustified Low-ball Offers

That’s a tough one to answer as everyone’s definition of “unjustified” and “low-ball” is different. If the market has already proven by lengthy days on market that the asking price is the wrong asking price, then basically it’s time to ignore that asking price in the offer. There are too many considerations here. If the buyer and I decide the price is $100,000 over-priced, and that happens often, and it came on market at that price 5 minutes ago, and my clients really want the house at the correct price, then the strategy of how we get that house for them at the right price is very important. I get Bill’s point here, but if you accept that person as a client, then…well…if you don’t like the way the client is acting you need to help that client find an agent better suited to their needs. This may be a reason to drop a client or not accept them as a client in the first place. But you don’t get to continue a bad relationship. Once you view your client as “an unreasonable low-baller”…it’s time to part ways. Breach of relationship, I’d say. There’s another agent who might love that client…release them so they can find a more compatible agent to work with.

9. Buyer Wants To Make An Offer Contingent On The Sale Of Their Home

I have to quote Bill’s Opening words on this one ” Sellers are not going to accept an offer with a home sale contingency 99% of the time.” Another Duh! If you knew your client needed to sell before buying, and you took them to see homes they now want to buy with a home sale contingency…whose fault is that? The time to have this conversation is NOT after you brought them to see the house and now it’s time to write an offer and you don’t want them to have to sell their house first. Why did you bring them to a house they now love…and then tell them they can’t buy it? Mean…just mean. ALSO AND IMPORTANT if the forms are available to make a contingent offer…and they ARE…then guess what? It IS sometimes OK to make a contingent offer and sellers DO sometimes take them, for sure! Might have to buy new construction, as example, to do a contingent offer. But if your client needs to do a contingent offer…then you have to figure out how to make that work. If you can’t…then drop them so another agent who does know how to do that can help them achieve their goals.

10. Buyer Asks To Negotiate Items That Were Visible Prior To Inspection

Huh? If the house needs a new roof, and I could tell that before the inspection, the buyer can’t negotiate that as part of the Home Inspection Negotiation…why? That’s just wrong. Of course the buyer can negotiate items “that were visible prior to the inspection”. Why not?

11. Buyer Expects the Home To Be Perfect After the Inspection

Now I just feel like someone Turned Back Time. Who died and made the agent in charge of what is and isn’t a “reasonable” request? If it hinders their objective to ask and sometimes it does, then we have to figure out how to meet the buyer client’s needs without risking losing the house, if getting that house is the client’s primary objective. The buyer in escrow is protected from the seller viewing their request “unfavorably”. That is why we do the inspection when IN escrow vs at time of offer. In fact your #11 explains why your #10 makes perfect sense to you. You seem to be more worried about the other agent’s seller client than you are about your buyer client? Do you not have Buyer Agency where you work? You do. Take the seller’s agent hat off when representing a buyer please.

12. Work with a Buyer’s Agent for Months and then Buy a House Through a Different Agent at an Open House

I have never had that happen to me in 24 plus years, not with another agent. But one time about 22 years ago I had a buyer client who got cornered by a seller at a ForSaleByOwner Open House. It was kind of funny too. I was doing their Open House on the property they needed to sell in order to purchase. They called me all excited “We Just Bought a House!!!” They were so happy. Had already signed the contract with the seller who had contracts AT the Open House for buyers to sign. It took them a few minutes after telling me their great news to realize what happened. LOL! They were so happy…how could I not be happy for them? They started apologizing once they realized that I basically felt like they just punched me in the gut. But I told them that THEIR goals and happiness was truly my foremost consideration. It happened. I was truly happy for them. I picked myself up…dusted myself off…and proceeded to help them in any way I could. Now as to Bill’s tale of woe…yes…I have seen that happen to many other agents. Most of the time it is the agent’s fault. Sometimes it is the seller agent’s fault at the Open House just like that FSBO Seller in my example. Sometimes it is the Buyer’s Agent who was not realizing that it was a one sided relationship for way too long. In any case this is usually a “look in the mirror” problem and not the buyer’s fault.

13. Buyer Works With More Than One Agent

You really can’t marry the first frog you kiss. Most of my clients are committed at first contact because they are referred to me by friends and family who highly recommend me. But buying a home with an agent is a very personal thing, and without a good personal referral a buyer needs to try a few agents on for size before choosing one. Also…it is sometimes hard not to use more than one agent if you have two completely different geographic options. I don’t have that problem here in the Seattle Area, but I did when I worked in PA and people often made a choice between Yardley PA and Princeton NJ. No one agent could do both. Any agent should know if a buyer needs to use more than one agent to best serve their interests and should actually be recommending that they use more than one agent if that is what is needed. They should be the first to tell the buyer to do that if and when it is needed.

Again…not to pick on Bill Gassett here, and the ONLY reason I have gone through this point by point is because my client happened on Bill’s post and asked me for my thoughts. I saw no way to do that without covering all of the points…and to do that on facebook where my client asked the question…well, too long. So I am posting a link to this post there now.

Buying a House in Seattle 2015? Check out Quill’s free Home Buying Class

2015 Home Buyer Class

Free Home Buyer Seminars offered by Alternative Brokerage in Seattle

Are you thinking of buying a house in Seattle in 2015? Or perhaps it’s time to sell your home? Either way, you’ll learn some great information at Quill Realty’s free House Buying Seminars for 2015.  We ‘re offering a free home buyer class – great for sellers too – on the fourth Wednesday of every month through June, from 7p – 9p here at the Quill office in Georgetown. Whether you’re a first time homebuyer or a seasoned veteran looking to “move up,” you’ll learn something valuable at these free real estate classes. Topics will include the current and anticipated future of the real estate market, common real estate legal issues (including from the seller’s perspective), and real estate search tips for finding “the one” (and other good marketing tips for sellers). All from the unique perspective of a consumer-driven, alternative real estate brokerage.   Continue reading

Real Estate – Why DATA is the New Black

Early Friday evening one of my favorite long term clients asked me this question: “Why is the market so slow these days? I have an alert for ($) houses in (zip code) and I barely get a couple of hits every week west of (the freeway). Almost always tear-downs.” (actual specifics from his email removed)

My first data set pulled was a line up the number of homes sold where I primarily work (North King County – North of I-90), by month, over the last 6 years from 2009 to 2014 YTD. This to answer only the first 8 words of his question “Why is the market so slow these days?” The easy answer would be “because it is past October 15th”. I test my knee jerk response by pulling all of the relevant data to be sure I am not answering like grandma in a rocking chair pulling some now irrelevant data from her long term memory bank. I also do this because I need to discover why this person’s current perspective may vary from the long term norm.

Something may recently have happened leading this person to believe that the standard progression is no longer the realistic expectation. I value his thought process as part of how I answer the question…by first pulling the data…lots and lots of data.

The line graph below documents the data pulled for the last 6 years. But as I almost always do when pulling stats, I went back 12 years because data expires! More on that in graphs 4 and 5. Since I almost never regurgitate already documented data from other sources, but rather only trust the data if I calculate it myself, I usually go back as far as my data source will allow, which in this case was 12 years.

First I test my perception that 2014 is not a low inventory year, even though there are tons of articles saying that inventory is low. Many articles talking about the frustration of buyers with “low inventory”. But look…no…my perception is indeed correct. The red line is the “low” or at least the first half of 2009 depicted in the red line. The green line of this year is not only NOT “low”…it is pretty close to the high over the last 6 years.

To be clear, I am using “homes worth buying” as “inventory” and the proof that they ARE homes worth buying…is someone actually bought them.

Volume 2009-2014

After I peruse some of the recent data as an attempt to start at the point where he may be coming from when asking the question, I dive into my own “expert opinion” perspective, which is my 2001 baseline. This information is really already carved in my brain, but since I turned 60 this year I figure it wouldn’t hurt to double check that my memory is still accurate. 🙂

Volume 2001 baseline

I actually did all 12 years before honing in on the actual answer to the question, which comes from comparing 2014 with 2013 and 2013 with both 2001 and 2005.

To determine which were the correct comparison years, I had to first pull ALL of the data that the data source would allow.

While yes…my knee jerk answer of “because it is October” would have been correct, by pulling all of the data I can see from the variance of the actual stats from 2013 against the baseline of 2001 exactly why the question made 100% sense from this person’s perspective at the time he asked it.

This person, along with every average homebuyer, is looking week to week over a period of 6 months to 18 months for a home to buy. They have no “baseline perspective”. Their expectations come from more recent history’s actual activity, and rightly so, with no way to tell if the last 6 months was exceeding or under performing standard market expectations.

The bar graph below explains where the expectation may come from. I have 2005 in there just because it is the one year over the last 12 years when the most number of homes were purchased (ipso facto “available” to be purchased), so highest inventory year. But the key to answering the question is in the 12% of June 2013.

If you look at every piece of data on this page which looks at all 12 months for all 12 years in 6 different comparative charts…12% of a full year’s total inventory being available to buy in one 30 day period is pretty much unheard of! That was June of 2013.

I had another client who started looking in early 2013 and did not buy the house they could-should have purchased in June of 2013. After that they were progressively and continuously disappointed with the number of homes that came on market for months and months afterward. They had no way to know that the volume of homes coming on market since they started looking were many more than the normal market expectation.

In hindsight every subsequent month looked pss-poor in comparison. Pretty much all activity if you started looking in April of 2013, and didn’t purchase by June-July of 2013, is looking relatively dim. BUT in reality inventory is not dim. Inventory, the number of homes you can expect to choose from, is in fact currently performing at or over market expectations adjusted weekly for seasonality. All this can be gleaned from the 12% spike in that bar graph, noting the rational explanation as to why your expectations may be “off” by comparing relatively recent actual data against 12 years of data comparisons.

Basically that makes us both right. I’m right at “because it’s October” and the person asking the question is right to consider the options dim based on more recent relative comparison.

Volume 2001-2013-2005

Posting the data and graphs that helped formulate the above. Worth noting, while I brought forward the Red Line year of 2009 to note inventory low point, the graph below shows that the 12 months of low inventory started in the 2nd half of the gold line of 2008 and proceeded to the lowest point of Jan and Feb of 2009, which some of my readers may remember as “my bottom call” that made front page news at the time.

Volume 2005-2008

Looking above and below at the thick green line of 2014 inventory against the high inventory years of both 2004 and 2005 you can easily see why all of the articles calling 2014 low…and actually they were saying that last year in 2013 as well, are simply not true.

Volume 2001-2004

While my analysis will continue to use 2001 as a baseline, you may want to use the bar graph below to set your expectations. This is the average good homes on market based on the average of 12 years worth of data.

I use 2001, as many of the variances over the last 12 years are influenced by Tax Credit Incentives coming in and out and artificial interest rate jockyings…not to mention all of the massive changes in loan approval criteria over this same period. For that reason 2001 is still the purist baseline by which to compare and contrast other market influences as they come and go from time to time.

WHY IS THE MARKET SO SLOW THESE DAYS?

Getting back to the first 8 words of the original question…because based on normal seasonal activity you can expect that there will be HALF the number of homes coming on market that are worth buying by December than in May. “coming on market” activity is the month prior to the sold month. So highest SOLD volume in June will = highest number of instant alerts of new listings coming to your phone in May.

Expect the numbers to increase from December through May and then begin a decrease through year end before beginning the next climb.

Volume 12 year average

WHY IS DATA THE NEW BLACK?

Because it saves you time and reduces your stress to DRILL down the data from the general comparisons above and fine tune your actual parameters before you waste any time looking for something that doesn’t exist in the place where you are looking. That brings us to the 2nd and 3rd part of this person’s question ” I have an alert for ($) houses in (zip code) and I barely get a couple of hits every week west of (the freeway). Almost always tear-downs.” (actual specifics from his email removed)”

Only 25 houses were sold using a full $150,000 spread with your $ amount as the cap in the whole 6 months of “high season”. So expecting 2 a MONTH in low season let alone 2 a week…is an invalid expectation. Expect ONE really good one a month from here to February of 2015.

“Almost always tear-downs” means you are looking for a nice home at the price of the land alone. Again an invalid expectation. Changing your price to what that home will sell for there is not an option. Changing your choice of what to a tear down is also not a reasonable option.

The only answer to your dilemma is to change the where and not the price or the what.

(Required Disclosure: Stats in this post are not compiled, verified or published by The Northwest Multiple Listing Service.)

VERY “Walkable”…but is it SAFE to walk there?

walkscoreI am very happy to report yesterday’s news that WalkScore has added a crime overlay, something I have been asking for since WalkScore first came about.

Local residents often roll their eyes when they see an awesome walk score attached to an area where it is simply not very safe to walk after dark AT ALL. Not a big problem for local residents, but what about the many people relocating to The Seattle Area who are relying on various internet tools to guide them in their search for a home in their new City?

I have not tried the new tool out extensively, but from what I have seen the crime grade does NOT reduce the walk SCORE, so a previous score of 87 will still be a score of 87. BUT if you take the time to study the color coded crime map after viewing the score, you will be better able to judge an area now than ever before. Previous to this change I have always recommended that people use Homefacts.com to pull the crime data and photos of local registered sex offenders. Not sure if the changes to walk score will replace that need or not, but I am very happy to see that they are finally acknowledging that some very “walkable” neighborhoods as to their scoring…are in reality sometimes not very safe to walk in at all.

Try it out, as I will, and let me know what you think.

Costco Signs Major Lease With Vulcan – Issaquah

costco vulcanJust received a press release that Costco is leasing 176,656 sf of space from Vulcan (Paul Allen) Real Estate at Sammamish Park Place in Issaquah. Sammamish Park Place is a 3 building complex totalling 586,823 sf with the other two buildings being occupied by Microsoft.

This complex was built in or around 2000, so I am wondering who left that Costco is replacing. I don’t see any stories on this move yet, but will post a link if and when someone else picks it up with more info.

Should you hire a lawyer when buying or selling a home? Depends – do you want to reduce your risk?

[Updated 3/2016]

Buying or selling a home is a legal transaction. Real estate brokers are able to engage in the limited practice of law needed to put together contracts for real property. But brokers certainly aren’t lawyers. And buying or selling a house is usually one of the biggest financial transactions in someone’s life.

So “forward thinking” consumers – both buyers and sellers – might consider using a lawyer instead of a broker. This allows them to save money while getting superior legal services. Other consumers will go the traditional route, but end up wondering whether they should also hire a lawyer to assist them in the transaction. If that describes you…

You should hire a lawyer in a real estate transaction when the legal risk outweighs the cost of a lawyer.

What is “legal risk”? For a seller, it means possible liability for someone else’s financial losses. So there are two parts to “legal risk.” First, what is the possibility of being held liable? And second, what is the probable amount of that liability? A 98% chance of owing $100 is a very different legal risk than a 2% chance of facing a cool $1m liability.

What sorts of issues might create liability? On the seller side, there are two general obligations: disclosure obligations, and title obligations. An attorney will help you to understand these obligations, what you need to do to comply with them, and the possible amount of liability if you fail to do so and are held accountable. In other words, by hiring a lawyer, you’ll be able to identify – and then reduce – legal risks.

On the buyer side, “legal risk” means the possible hassle and costs associated with some condition of the property. In other words, a buyer engages in due diligence specifically to identify the legal risk of completing the purchase and owing the house, usually under the title contingency and the inspection contingency. If there are land use concerns or landlord/tenant issues, an attorney will really help. And regarding title, only an attorney is qualified to analyze a title report. For example, if a neighbor has a driveway easement across the property, you’ll want to know that. Based on what you find, you might have the ability to renegotiate the contract to account for the defect. An attorney can help there too.

And of course you need to know the cost of an attorney. As a general rule, expect to spend $1-2k on an attorney if you need to rope one in for some legal analysis and counsel.

At the end of the day, it simply makes sense to hire both a lawyer and a broker if you are a prudent consumer. Why? Because…

Every transaction has risk. A lawyer reduces it.

Those two statements are simply not debatable.  And as a long-time practicing attorney, I have lots of examples of the risks associated with buying or selling a home, and how a lawyer will reduce those risks. Here is one such example.

Continue reading

It’s Hard Out There for Buyers, Lesson 2: Make Sure You’re Dealing with the “Agent-in-Charge” (It May Not Be Who You Think)

Here’s another quick tale from the trenches as I continue to work with clients at my new real estate firm, this time from the rough-and-tumble market of South King County.  Yup, it’s tough everywhere…

My client identified a home in Kent for purchase.  It had been on the market for 200 days, with a couple of failed contracts in the meantime (one due to “buyer remorse” and one to failed financing) and nary a price drop. The listing showed an Agent and a Co-agent (both from the same office). I promptly reached out to the Agent, who told me they had no offers and none expected.  Within a day or two we submitted our offer at $10k off list.  Having heard nothing in response, I followed up with a  call two days later.  Her voicemail told me she was the managing broker for the office.  Good, I’m dealing with the boss…

The Agent called back and explained that the sellers were having health issues and thus the delay in responding.  I asked about other offers and was assured there were none.  I noted that our offer amount was predicated on us being the only offer, and if another offer appeared to please let us know.  In that event, obviously we would take a different tack in the negotiations.  I also said that we had no problem at all being patient with the sellers given their health issues, assuming they were indeed acting in good faith and negotiating only with us.  The Agent assured me that was the case. Yeah.  She said that the Co-agent was trying to meet with the sellers and they would get back to us in a day or two.  She said the sellers were likely to counter at $4k off list.  Riiiiiight.

The next day, I got a call from the Co-agent.  With “the bad news.” Sellers had received a full-priced offer, so they accepted it. Another “WTF?!?” moment.  Although signed, it had yet to be returned to the buyers, leaving me a tiny bit of room to maneuver.  So I tried to salvage the situation, and the Co-agent at least pretended to be sympathetic.  I called the client and got authority to draft a new offer at $1k OVER list – thus beating the offer in hand – but the sellers had made their decision and had no interest in giving me or my clients the time of day.

When the smoke cleared, and the rage had subsided, I though about the lesson to be learned.  Always go with full list in this market if it’s within shouting distance of fair?  That seems extreme and not consistent with my professional obligations to my client. Recognize that assurances of “good faith” are rendered meaningless the moment a new offer comes in?  Yeah, but that’s a little obvious, this is after all real estate.  🙂  Then it hit me: Know who is really “the agent.”  You know, the person with the seller’s ear who is actually driving the ship. It may be the “Agent” or it may be the “Co-agent,” assume nothing based on title (even if the “Agent” is also the managing broker!).  Listen for clues.  When the Agent says, “Oh, the Co-agent will be meeting with the sellers tomorrow,” immediately hang up and call the Co-agent.  Don’t waste your breath talking to anyone else.  It is a waste of time that will not be helpful going forward.

Another lesson learned. And confirmation that the Quill model strikes the right balance between protecting the client (by keeping an attorney on board and behind the scenes) and getting a deal done (by allowing the Quill agent to take the lead when negotiating a contract).

“Offers to Be Considered on a Future Date”: Is This Really Fair to Buyers?

As I work my way back into the market following the launch of my real estate firm, I am learning just how difficult it is from a buyer’s perspective.  Specifically, I am trying to get a client into a $400-500k home in West Seattle.  It turns out there are only a few thousand other people looking for the exact same thing, and a few dozen homes that fit the description.  OK, I’m making these numbers up, but you get the drift.  It’s tough out there.

Until this week, I had a high degree of respect for sellers and their agents who noted in the listing that the seller would consider all offers on a particular date in the future.  This allows all interested buyers to really put their best foot forward, particularly by pre-inspecting so that the offer is not contingent on the inspection.  Particularly in older neighborhoods like West Seattle, where homes routinely approach or exceed the century mark in age, sellers appreciate knowing that there will be no renegotiation based on the condition of the home.

So on Wednesday afternoon, I met my client at the “target” home where we were awaiting the arrival of our inspector for a pre-inspection.  The seller was to consider offers on Friday morning.  Buyers and an agent were inside, I assumed simply touring the home.  Suddenly, the owner emerged from the house and announced she had just sold the house to the folks who were inside with her.  As the kids say, WTF???

It turns out that the seller had every right to accept this offer, notwithstanding the “offers to be considered” date as stated in the listing.  NWMLS rules specifically allow a selling agent to present an offer directly to the seller long before the stated “deadline.”  So it turns out my anger and frustration at the seller, the listing agent, and the selling agent who pulled the coup were all misplaced.  (I wouldn’t even rule out an apology, now that I know the rules.)

But it begs the question: Is that fair to buyers?  What if my client had completed the pre-inspection?  He would have been out-of-pocket money specifically in reliance on the seller’s and listing agent’s representation in the listing.  And even without that expense, it seems unfair that a stated “deadline” can be wholly circumscribed by one buyer at the expense of all others.  If it were up to me, the rules would be changed. But all I can do is continue working towards providing buyers with an improved home buying process.

The Death of Mortgage Blogs

iStock_000017972256XSmallThere is a buzz going on among fellow mortgage bloggers about how days may be numbered for mortgage blogs. This is as a largely the result of guidance issued by federal regulators late last year specifically on social media. When I first read this guidance, my initial response was “so what? This is pretty much what lenders are supposed to be doing anyhow”… stuff like properly quoting rates, not being misleading to consumers, etc.  It’s also my opinion that this seems to be written in favor of mortgage banks and not mortgage companies. The big banks seem to not want loan originators who have or express their own opinions.

After more thought and discussion with other mortgage bloggers, I can see the real issue is the compliance factor. Many mortgage companies are already stretched with the cost of compliance with just the day to day operations of originating mortgage loans. It’s my understanding that some lenders have made the decision to just not allow their loan officers to have any independent sights or social media sights (like Facebook or Twitter) as this is the easiest route…no extra compliance cost (additional personal hours) and less risk.

Blogs typically have information released freely and quickly. There are times that I have done “live post” when I’m covering an event, such as the Fed testifying before Congress or to illustrate how something like that may impact mortgage rates. I’m not sure it’s feasible for a compliance officer to be able to regulate and approve everything that a loan officer says or does with social media – imagine a person having to approve any comment or update you put on Facebook or Twitter… it’s simply not realistic and it’s no longer “you” being social or in the moment – it’s you-approved by your employer.

The thought of me no longer being able to blog or to no longer have my  blog, The Mortgage Porter, which I began back in 2006 is absolutely depressing. I really enjoy writing and sharing information with my readers about mortgages, including the process of financing a home and various mortgage programs. At times, it’s even been therapeutic by allowing me to vent or “rant”.  Blogging and social media has brought me so many wonderful opportunities and experiences that I would not have had as a non-blogging mortgage originator.

When I began my blog, it was because of a lack of information, or actually because the wrong information was being shared by the media about loan officer licensing. I never dreamed anyone would read it or that people would actually decide they want me to be their loan officer because of the information I freely shared with them – information that they could not find anywhere else!  I use my blog to share information with potential clients – like “what is a letter of explanation” and sometimes, I’ll write a post just to address an answer to a clients question… if they’re asking it, odds are somebody else is searching for that answer too.

I fully agree that content on mortgage blogs must be compliant – however doing away with mortgage blogs is a travesty.

Less information and less transparency is never good for the consumer.

Good thing I have a back up career! 

Stay tuned.