Historic Snohomish Homes glow in winter wonder.

Some of the many  Historic Snohomish Homes are oriented on wide tree-lined streets and remind me of growing up in the Capitol Hill neighborhoods very near St. Joe’s school, Stevens Elementary School and Holy Names Academy.   Some of the larger historic homes of Snohomish share similar architecture, classic lines and warmth that is accentuated when under the soft blanket of our local snowy weather.

I brought the camera to work this morning to hopefully capture some scenery (or crazy drivers) while coming to work and on my way home.  These are very amateur photos, but I tried.  Enjoy.

This photo above does not show it well, but there is a large wooden placard hanging under the front porch gable that reads, “Merry Christmas.”  It must be about 8 ft wide.  If you click the photos you might see it better.

Classic.  Gorgeous wrap-around radius deck and historical colors, probably from the Benjamin Moore palette paint line.   A wonderful treat to see a full Christmas Tree in the upper 2nd floor porch/deck.  Tremendous detail on this historic home, much of the 2nd floor shows wonderful wood work, pillars and dentil molding.  (Boy, I wish Snohomish had a lumber store similar to Seattle’s old Blackstock Lumber.   I’d probably be broke buying up all that clear VG Fir moldings)  Much is blocked from the trees, but who’s complaining?  Not me.

These homes are a lot to take care of and maintain, but there is nothing like them.

Snohomish river looking from park in downtown Snohomish towards the east.  Just weeks ago, this river was raging and near flood stage.   In years past, the flooding of this river would rise to levels above the bank, which is several feet high and cover those bolted down picnic benches.

Quick snap shot of recent Snohomish Co. Notice of Trustee Sales (foreclosure)

Spending time at the Snohomish Co.  excise tax and recording office today afforded me the opportunity to pull some records on current Notice of Trustee Sales recorded from Sept. 1, 2008 to today.   There were more than the 36 in my sample before I became restless and bored with basically the same theme that I knew would play out.

All were purchased within the last 4 yrs, most of the sample from 2006, one in 2008.    One was for $3 million in arrears, another for $1.28 million in arrears and even one at $56,000.00   So, foreclosures are affecting all property types and income strata.

Here’s the tally of when the homes were purchased in my quick sample:

2004: 2

2005: 4

2006: 18

2007: 11

2008: 1

Lenders represented (again no surprise):

WaMu, Countrywide (several), Flagstar, First Franklin, AEGIS, Homecomings, GMAC, Indymac, Everhome Mtg, HSBC, EMC, Wells Fargo, First Horizon (now Metlife), Greenpoint and US. Bank.

Side note: Short sales are taking 60-90 days from the sampling we are closing in our office.  It is UNREALISTIC for agents to expect anything sooner.   If it happens sooner then great, but do not expect quick responses.  On Monday, we received approval/clearance on a short sale from a Purchase & Sale agreement signed around from this past JUNE.

It is not terribly efficient to have borrowers lock in interest rates two months prior to receiving short sale approval.  We are seeing this happen.  The downside for the borrowers in this volatile mortgage market speaks for itself.

Spike in LIBOR rates may pressure ARM mortgage holders.

I know everyone (including me) is rather distracted by the events going on in the financial market mayhem over the past two weeks, but many mortgage holders of ARM’s tied to the LIBOR Index should be re-evaluating their long term mortgage strategy.    Because LIBOR has been very low, many were complacent to make serious consideration of refinancing into a fixed rate.  I read many comments about LIBOR Index being very favorable, and to an extent is has been true, until…….

Bloomberg’s report

The overnight Libor rate in US dollars ratcheted up 3.3 percentage points to 6.44 percent, the largest increase in 7 yrs.

This could change the tone of all the ARM mortgage holders, whose mortgage index is tied to the LIBOR, who were hoping for little payment change when their adjustment period arrives.

About 6 million U.S. mortgages, including almost all subprime home loans and 41 percent of prime ARMs, are linked to the London Interbank Offered Rate, or Libor, according to First American CoreLogic in Santa Ana, California.

Further down the article, Seattle’s Bill Fleckenstein remarks:

“If the Libor market seizes up and stays that way, it’s going to complicate everything,” said Bill Fleckenstein, president of Fleckenstein Capital in Seattle. “What you are seeing is the unwinding of the financial system as we know it.”

In Honor of Sept. 11th.

God Bless America and all those who serve including those who have sacrificed their lives.

This flag has flown at my house since 9-11.  For me, walking past the flag into my house has been a daily reminder of how lucky I am to live in America and how much sacrifice was laid before me, by prior family members of earlier generations, to enjoy the freedoms I have that we should never take for granted.

King County Median prices fall over 10% YOY. Quite frankly, maybe today's Seattle Times headline will help the market.

This has been on my mind for a while, so I’ll throw it out there for people to discuss.  Sometimes a non-agent can introduce topics that the real estate community may be uncomfortable in discussing with their clients.  So, here goes…..

The topic:  Is this lousy news for sellers just the spice to get them to realize that the white- hot markets of 2005-2007 are long gone?

Price reductions have been taking place for sometime.  Months and months.   But, many have been token reductions and the conversations I hear and read on blogs is that,  in some instances, resistance has been fairly strong.

What good does it do when a seller who reduces a price by $3K on a $650,000 listing that has been languishing on the market for months?  If today, after weeks of small incremental reductions, the listing is priced at $550,000, there is no agent on earth representing a buyer that will take it seriously.  Especially after seeing the price reductions go on and on for months.   I don’t know who is torturing who:  the homeowner doing this practice or an agent who can’t pull the plug on the listing?  I’ve heard that not taking a listing is not in the DNA of agents (I’m teasing of course.)

I know of some agents who have broken their backs and have spent a lot of money on listings only for the seller to eventually pull the plug on the listing out of frustration.   And then, (drum roll please) have the $500K+ listing end up renting for under $2000.00/mo.  Any sellers out there understand the rent-to-price ratio relationship over the history of residential real estate?  Now, on the other hand, many of today’s agents have little experience in working through a correction and pricing and marketing a home effectively.  If we are honest, there was not a lot to do in a white-hot market to generate the offer: place the listing on the NWMLS and arrange a time with the seller to accept multiple offers.  I hear some were even nice enough to offer coffee and pastries to the agents sitting in cars outside of a property waiting for their turn to submit their offer.  How times have changed.

I have seen a couple of examples of the substandard work ethic and marketing in my neck of the woods in Snohomish Co:  outrageously poor marketing, only to have another professional agent come to the rescue and have a successful sale.  Good for that agent and good for the seller to recognize when a change is needed.

Will agents bring the Seattle Times clipped article to listing presentations?  When is real estate bad news good for moving sellers in the right direction and getting the market moving?  Perhaps today.  Or, maybe we still have a long way to go in understanding how damaging the excesses of next to zero lending standards will turn out to be and the artificial appreciation it fostered.

PS.  Those who are currently in the market to buy should be in conversations with your loan officers regarding the recent drop in interest rates.   Just today, our office is hearing that there are 30 yr fixed rates at 5.5% at par, some even indicating a small rebate at that rate.  Consult with your loan officer.

Some agents and loan officers need to just say, "No."

There is a lot about the real estate industry that needs improvement.  But, there are some very stand-up hard working salt-of-the-earth real estate agents and loan officers that are working in a challenging market and who are literally bailing out financially challenged homeowners.  They are making things happen and are doing what they can to make transactions close.

I know it is a challenging market, especially in the outer lying areas outside of Seattle/Bellevue proper and cash flow is tough, but I’m growing VERY tired of LO’s giving broker credits and agents giving up commissions earned for “challenged” borrowers who obviously have a history of financial mistakes.

I say this in the similar tone and voice of Al Pacino in his famous scene in Scent of a Woman:

I know people want transactions to close, but sometimes consumers need to face the consequences of their own decisions.   Loan officers and agents sometimes need to say, “you know what?….enough is enough.  I’m not dipping into my livelihood to bail you out.  Dig yourself out of your own hole.

Don’t blame us for your prior agent selling you an overpriced home.  Don’t blame me as a loan officer for your garbage loan sold to you by a prior mortgage broker.”

If the Bubbleheads want to trash me because I’m part of the real estate industry, so be it.   But, this is the stuff that goes on behind the scenes that agents and loan officers GET NO CREDIT FOR AND SHOULD.

Need cash flow? Don't be afraid of unpopular sales and…

mobile home
……..selling uncoventional listings otherwise known in the real estate world as “Mobile Homes.”

You think to yourself…pshttt. Yeah, you laugh. You say, “whatever. That’s not going to make me a listing star or a top producer!”

Guess again. You may find this hard to believe, but one of the top two producing agents (in both sales and commissions paid out of our escrow office, I believe two years running) who uses our office to close mobile homes, comes in to collect commission checks darn near every week. Sometimes more than once a week. Sometimes, three a week. This unassuming agent is in our office so often we nearly gave ’em a desk and phone. (ok, not quite).

It is not unusual for the agent to stop in with two transactions on Wednesday and say, “let’s close these by Friday.” Sounds good to us.

Don’t discount this lucrative market. The sales are closed as fast as the parties can make it to our office to sign their paperwork. Two thousand dollars here, three thousand dollars there…it all adds up to well into the six figures in earned commissions. For crying out loud, wouldn’t you like a transaction that can close just about as fast as popcorn pops in the Microwave!

Purchase Implosion: Pre-approval letters worth the ink?

Nearly everyone has had a personal experience of a deal falling through via the other side of the transaction not performing. It is hard to swallow when you have no control over the other party or their financing efforts. Especially bad, the call to your client who is in boxes and ready to move within hours. It takes guts to make the call and is character building.

The dreaded phone call: “….hate to bring you bad news, but our transaction has fallen through, and ….”

Chew on this scenario:

A transaction is stopped in its tracks just hours before it is slated to close. Seller has already signed closing paperwork and escrow is waiting for lender documents to have borrower sign and then proceed to close the transaction as scheduled. Escrow is then notified that the deal is apparently dead. Why? Escrow is informed by the agents that buyer’s financing fell through. Buyer’s financing addendum gives the borrower x amount of days to obtain financing, which was written to expire the day of closing. As is tradition, the selling agent provided a pre-approval letter (not pre-qualification) at the time of the offer.

In a sentence in paragraph #2 of the Financing Addendum Contingency (NWMLS Form 22A) it states:

“A letter from the lender generated or dated at or prior to mutual acceptance shall not constitute a letter of loan commitment which complies with this paragraph.”

1) Should the listing agent and seller fight for the earnest money?
2) What do you find would be some of the transaction management pitfalls that could have been avoided?
3) Is the buyer fully in compliance or did they fall short of a duty to act in a timely manner. Time is of the essence.

Does it matter who you list with, who you close with or who your loan officer is?


Being in the escrow business is really fascinating. You see lots of things. You hear lots of things. You get to observe what is efficient and what slows down transactions.

Escrow can be confusing too. We really serve two masters: those that are our clients (the principals such as the seller or buyer or borrower) and those that are our customers: agents and loan officers who suggest and refer work to us or any other service provider. It’s also something to experience such a large transaction “quality control” chasm between different agents working for different brokerages even within a major brokerage franchise network.

But this post really is about how agents and consumers decide what you decide.

1) For example, an interesting thing occured. In the mail, I received a post card from Greg Perry of John L Scott marketing a home not far from my place. It’s not strange that I receive things in the mail from Realtors, but that the owner of the home is a broker from another company—why did they hire another agent to list the house? I know this owner because our kids play together and we’ve closed transactions for him. It is a fascinating move.

2) We have had several transactions with repeat clients who have used a different service provider (agent or loan officer) the second or third time around. Why are they doing this?

3) In escrow we work in high collaboration with just about every title company. Obviously, we do not have primary contact with the sales staff (title reps) but rather the attorneys, title officers and back office staff that are largely the engine under the title insurance hood.

One of the things that I have always wondered and one question that my wife actually raised while we discussed business matters is the following: how do agents choose one title company over another since the perception of agents in the market is that title insurance companies (heck, even escrow firms) all do the same thing and the end result of issuing a title policy or a closed transaction is the same result? In other words, agents have a tendency to say they receive good service, but what is that service they receive? Agents have very little if no contact with the title company other than the with the title rep. How are the title companies differentiating themselves especially when many are using just another name plate but are in fact a subsidiary of a large national title company.

Consumers have no idea how to differentiate Pacific Northwest Title (First American) from First American Title. Or, comparing Land America Title from Commonwealth or Rainier Title (Land America companies). It is kind of like comparing the Nissan Quest with the Mercury Villager. Both are virtually the same vehicle. Consumers rely upon their agent to differentiate for them. How do the agents differentiate between service providers for their customer?

4) Along those same lines, competition is cut-throat between service providers such as escrow and title, especially in a market where sales volumes are significantly lower than over the past four years. Agents are very fierce in fighting for their respetive loan officer or title or escrow company if involved in a sale. Tradition has it’s place, but what is the compelling proposition of one service provider or closing agent over another?

5) What is more important to an agent when suggesting a loan officer: closing the transaction, lowest rates and fees for their customer or client, or a combination? For example, one of the loan officers we work with does average volume but gives phenominal service to the client, loan docs are usually ready days in advance and nothing has ever not closed due to a problem created by this LO. On the other hand, we work with LO’s that due boat loads of loans and there are the occasional problems with service to their clients or other issues.

The Northwest: blessed with water,mountains, settings and views. How do you value views?

How do you value views? I don’t know.

Growing up on Capitol Hill is a far cry from acreage, cows, chickens, Llamas and horses. To say my current environment is different from where I grew up is an understatement. The house I grew up in had what I thought was an excellent view looking East over the Arboretum, Madison Park, Lake Washington and the Cascades. I can recall many warm Summers climbing out of my parents bedroom window and inching up the roof on my rear to get a perfect view. Only on the roof ridge could I see Mt. Rainier and Mt. Baker, but they were there. Husky Stadium—the hollowed place my Kansas State University Football ulumnus father (played with the late Harold Robinson, the first African American player in the Big 8 at the time, circa 1952) hated with a passion I can’t describe—was also in view. I don’t know how a guy could hate the Huskies so much and get his Engineering/Architecture degree there, but I just didn’t ask questions. I crawled up on the roof really to see one thing only: The Blue Angels.

When my spouse and I started looking for a larger place for our clan, we couldn’t qualify for squat (code for beer budget with a Champagne taste). I wanted a view, she wanted acreage. Where in Ballard were we going to find that? Where in Edmonds would we find anything like that without a million dollars in my back pocket. Monopoly money didn’t count. Snohomish County is where we found the view and acreage.

Ardell has had some really nice view photos lately on this blog and ActiveRain Blog. Rhonda Porter has posted some great photos of views and water on her blog as well. It reminded me about a post I wanted to make about how to value view property. Since I’m not in the valuation business, I thought I’d ask those who are. How do you value view property?

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