Monthly Archives: November 2006

Get out and vote

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There are important land use questions on the Washington ballot this year that will have a measurable effect on real estate: Initiative 933 could mean less regulations (or no land use regulations depending on who you talk to) for you and your neighbors (hope you aren’t a NIMBY). Vote Yes! Vote No!

Note: both of those websites are blowing smoke up your you-know-what: while the initiative could cost taxpayers $1300, it would be spread over many years, just like the $1300-per-person new tunnel through Seattle will be spread out over many years. And Washington State has never prevented anyone from walking on their own land.

I’m going to take off my fairness hat here: Initiative 933 is written in such a disastrous way that it doesn’t matter what you believe about land rights, because the only people who are going to benefit from it are lawyers. We need serious land use reform in Washington State, but Initiative 933 is the wrong way to go about it. Good idea, bad solution.

Zestimates & Seasons Change

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[photopress:weather.jpg,thumb,alignright]Well, I’ve been busy putting the finishing touches on Real Property Associates and Preferred Real Estate (registration required and in beta) websites. I’m looking forward to taking some time off from consulting/coding and combining the best aspects of both sites in my next iteration of RCG’s Zearch. (so many cool ideas to implement, so little time). Anyway, if your RSS feeds start to break or things start to appear in Spanish, it’s all my fault. At any rate, if I implement something interesting, I’ll blog about it.

Anyway, it’s been an eventful month while I’ve been too busy to blog. Here’s the month’s highlights for me.

Zillow makes the big time
You know you’ve made it when somebody complains to the government about you or otherwise starts a legal action against you. Greg on the BloodhoundBlog and Joel on the Future of Real Estate Marketing has all the gory details and the play by play action on the NCRC complaint to the FTC regarding Zillow. Frankly, I prefer it when Zestimates are too low. It’s keeps downward pressure on the county assessor’s desire to collect all the property taxes he thinks he’s entitled to. I only want a high Zestimate when I sell the house, when I’m living in it (which the typical case), I want it to be low! Hopefully this will blow over like a winter storm. Besides, nobody complains when the local weather report is 10% off (which has a bigger day to day impact on me than an inaccurate zestimate does). Speaking of which, has anybody else started building their ark yet?

I’ll never trust an integrated NIC again
This past month, marked the 3rd time in the past 2 years that a machine with an integrated NIC (that’s just fancy way of saying the machine’s motherboard that has a built-in network adapter) died or otherwise corrupted Window’s network stack on me. When it happens on a personal machine, it’s very annoying and when it happens on a server with paying customers it’s much worse. Maybe having FIOS at home or running a server is much harder on a NIC, than a cable/DSL is. Whatever the cause, I’m tired of dealing with poorly debugged network cards & drivers. From now on, I’m paying the extra $20-$40 bucks for a stand-alone Intel or 3com network card and I’m only trusting NICs that MS includes drivers for on the Windows CD. (For what’s its worth, it’s seems Linux folks are having similar issues w/ nVidia chip set NICs too, so I know it’s not a case of Windows sucking since every Intel or 3Com NIC I used in the past 6 years hasn’t given me a single minute of grief). Oh well, I just had to vent since that mishap cost me a day of my life, I won’t get back.

Changing of the leaves and the tile servers
John L Scott’s PR folks informed me that their site now has Bird’s Eye images for Portland, OR. The more interesting thing is that MS appears to have updated a lot of their aerial imagery on Virtual Earth recently. If you visit a site that uses the newer Virtual Earth control (such as local.live.com), you notice that Seattle’s images appear to be have been updated with photography from a fall evening (with better resolution) while the Eastside’s images still appear to be photographed during a summer afternoon.

Perhaps future versions of Microsoft’s & Google’s map offerings will have night/day and seasonal maps/aerial photography? Either way, it’s interesting to see the changing of the map tile servers coincide the changing of the leaves. (regardless if it was intentional or accidental). Speaking of the mapping wars, it’s going to get a lot more interesting tomorrow since MS is releasing a new Virtual Earth control tomorrow.

Real Estate 101 – Improving on "the basics"

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[photopress:h.jpg,thumb,alignright]For the last few weeks I’ve set aside Friday mornings to get together with a small group of agents to talk about their Real Estate Business. Not everyone will succeed by the same means, and there are as many different ways to approach this business, as there are people in it. This is the time of year to take a step back and re-evaluate what you have been doing, and take the necessary steps to fix what is broken. This applies not only to each and every individual real estate agent, but companies as well. The times have changed…time to change with them without “throwing away the baby with the bathwater”. I’m going to go back and attempt to improve on the basics. For those who never learned “the basics”, you may find this helpful. For those who know the basics, let’s try to move a step forward together.

Basics: Year one = 12 “things”. I am going to change some traditional principles here, with regard to “things” to expand them from 3 to 4, and to eliminate the word “listing” from our vocabulary. I would like to elevate “having a listing” to “having a seller client” if and when possible, to remind us that we represent people who sell property. We are going to evenly weight representing a seller client and representing a buyer client, breaking from tradition here. An idea whose “time has come”, don’t ya think?

Most offices in the past had a big chalk or white board with three columns titled “Listing”, Listing Sold” and “Buyer Controlled Sale” or similar language. Given the changes in our industry since 1989, every company should change that system, to the one I recommend here. Every office should create a “Virtual Board” on an agent only, password-access website. The “board” should have four columns marked, Property for Sale, Property Needed, Property Sold and Property Found.

Column 1) A seller hires you to represent him in the sale of his property. You put “123 Peachykeen St.” on the board in the “Property For Sale” column. That is a “thing”.

Column 2) You meet a buyer at 123 Peachykeen St, but they don’t like it. You decide to help them find a property to buy, and they agree to hire you. You put “Mr. and Mrs. notPeachykeenSt” on the board in the “Property Needed” column. That is a “thing”.

Column 3) Joe Agent from another company faxes you an offer on 123 Peachykeen St and your seller client accepts that offer”. You put “123 Peachkeen St” on the board in the “Property Sold” column. That is a “thing”.

Column 4) Mr. and Mrs. “not PeachkeenSt” submit an offer on a property and that offer is accepted by the seller. You put “Mr. and Mrs. notPeachykeenSt – 123 SomewhereElse St” on the board under “Property Found”. That is “a thing”.

It is very important for agents to track “things” and not just sales. Columns 3 and 4 are sales. Columns 1 and 2 are the actions that create the sales. In a balanced or buyer’s market, every item in column 1 should produce 1 sale in column 3 and 2 sales in column 4. Given most of the Country is coming out of a hot seller’s market, it is a good time to review the basics, and go back to when property was on market long enough to produce 3 sales from every property for sale.

A new agent should have 12 “things” by year end. A second year agent should double their sales from the first year, and reduce the number of “things” in Column 1 and Column 2, that did not result in a sale. When an agent reaches 36 “sides”, by doubling their sales each year, they reach a crossroads, but that’s another article.

For now, the goal of every agent is to get to 24 to 36 sides per year. A side is representing the buyer OR the seller in a real estate transaction. The goal is to have 12 properties to sell each year, and sell them. From those 12 properties, you should be able to assist 24 buyers in finding a home to purchase. 36 “sides” equals 12 Properties Sold and 24 Properties Found. The number of sides between 12 and 36 is somewhat affected by the price range you are selling. If your average sale price is $200,000, then you will need more sides than someone whose average sale price is $600,000.

Now everyone get out your “boards” from last year. Examine Columns 1 and 2 very closely and be very honest in answering where you may have failed in assisting your buyer and seller clients in achieving their objective last year. Not what “they” did, but what “you” did not do for them.

Look at Colums 3 and 4 and examine what you did right in those scenarios. Contrary to popular belief this is NOT a “numbers game”. Every property you do not sell equals a failure for you seller client. Every person whom you did not find a property for, is a failure for your buyer client.

It’s is now time to do your 2007 Business Plan. Some of you will need to hone up on your skills, to get more of Column 1 down to Column 3, by converting more of your Properties for Sale to Properties Sold. Some of you will need to hone up on getting more of Column 2 down to Column 4, by honing up on your skills of finding the right properties for the right people. Others may need to make better choices with regard to columns 1 and 2, or reduce the costs of attaining them.

Focus on the clients and not just the numbers. Why couldn’t you sell 123 PeachykeenSt? What did YOU do wrong, not what did the seller do wrong. Why couldn’t you find a property for Mr. and Mrs. notPeachkeenSt? What did YOU do wrong, not what did they do TO you. If you think your clients failed…you will not be able to implement an effective business plan for 2007. Once you accept the responsibility for all of your business and non-business in the prior year, you will improve on your business and business plans in every year out into the future.

If you DID achieve the goal of 36 sides, but don’t feel you made enough money, then your problem is in either in the cost area and not the client area, OR you need to elevate your price range.

Questions? Feel free to ask away.

Strip clubs on the ballot

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Land use initiatives aplenty this year in Seattle.

Strip clubs aren’t directly on the ballot, but this year Seattlites are voting on a proposed 4-foot rule (between dancers and patrons) and forced bright lighting (to keep the cockroaches off the floor during business?) to regulate all 4 of our fair city’s strip clubs. There are so few clubs because there has been a “temporary” moratorium on new clubs for nearly two decades now which is still being fought over in the courts (right?). It seems that Seattle is becoming the most socially conservative liberal city in America.

As this great Seattle Times article points out, Portland is at the other end of the spectrum, with over 13 times as many strip clubs per person as Seattle, yet it’s still a great place to live (although I can’t vouch for Voodoo Doughnut – they don’t hold a candle to TopPot Doughnuts).

How does this tie into real estate? For starters, strip clubs are primarily opposed by their residential neighbors. Also, strip clubs (or a de facto ban on strip clubs) reflect on and affect the character of Seattle (for better and for worse). And this is really a property-rights issue: can you do what you want with your land or should the effect of your use on your neighbors be considered? Whatever you believe, I hope you get out to vote or send in your ballot this year.

Zillow your life – it's quite interesting

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I grew up at 4950 Lancaster Avenue My parents purchased it for $7,000 in 1957 or so. They made nothing on it and it is now the hole that you see between the buildings. But they raised seven children there. I lived there from age 3 to age 20 or so when my Dad died. I say it owes them nothing for housing nine people there for 17 years. The entire neighborhood that still exists, only values out at $15,000 max. That’s only a 50% return over a fifty year timeframe. Yes, there are “wrong” places to buy property! Always has been and always will be…ALL property does not go UP! (or down) in equal proportions.

In 1973 when my Dad died, my Mom moved to 6626 Haddington Street I remember her picking up the phone and leaving messages on the answering machines of every real estate office in town. She said I have $8,000. If you have a house to sell for $8,000, call me. According to Zillow, that house has now increased by 470%. My Mom was always a little smarter than my Dad…but my Dad was a cool dude 🙂 I don’t remember exactly what my Mom sold it for in 1980, but I do remember that she got at least double what she paid, had a non-taxable gain AND carried a portion of the price as a mortgage to the purchaser, with a double digit interest rate. That house owes her nothing either.

I moved out by the time she sold that house in 1980. In fact my Mom followed me to Northeast Philly. I rented. She bought a house for $18,000 on Fairdale now valued by Zillow at about $55,000. She sold it for $46,000 or so. It is now worth three times what she paid for it, but she took most of the equity out when she left. I bought this house in Kipling Place in 82 for $45,000 and sold in in 84 or $65,000. Zillow values it at $74,000 now, so looks like I pulled most of the equity out of that one. Me and my Mom seem to be doing pretty good pulling equity out and getting in and out at the right times.

Gotta go and I want to see if these Zillow links last. I’ll pick up in 1985 in another post.

Is Seattle Bubble Proof?

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Best I can tell so far, the answer to that question is a resounding YES, Seattle IS bubble proof, at least in the $300,000 and under market.

I am totally bugeyed, having spent the last 10 hours slicing, dicing and dissecting every single stat in the $300,000 and under market, in $100,000 increments, for 2005 and 2006 year to date on a month by month basis.

While we are seeing a teensy weensy weakness in October vs. August and September prices, the run up from January of 2005 to present has been insane. 72% of families have been squeezed out of the first time buyer market during that time in the $300,000 or under range. So even if we see prices dropping back, we will not soon see the day when the increase will be declared a bubble that is about to burst. In fact a modest correction is well warranted, but I do not see single family homes dropping in price back to where they were in January of 2005 for many, many…if ever…years. So yes, in the single family home market, anything decent in the lowest of price ranges should still be grabbed up. By March of 2007 the opportunity to get any bargains in the entry level single family home markets, will likely be gone for good.

For my neck of the woods, which would be from Green Lake up through Shoreline and beyond, around Lake Washington and into Kirkland and the Eastside, if it’s a single family home priced under $400,000…buy with care…but don’t wait for any of them to ever dip under $300,000 again. I don’t see that happening.

Condo markets in the same price range…entirely different story. I’d stay far away from the one bedroom condo market. the run up there has been as insane as it has been in the single family home market, BUT the one bedrooms are fast converging on the price of a much large two bedroom. So don’t assume you have to buy a one bedroom condo if you are starting out.

So many have overlooked the two bedroom opportunities, that the price growth of the one bedrooms has far exceeded the price growth of the two bedrooms. As fewer people can afford single family homes, more and more are buying condos in the under $300,000 price range. Hold out for the two bedroom units whenever possible, and let the one bedroom condos back off in price a bit. Some one bedroom units are tryng to sell at 79% more than they did 16 months ago! Pass them by. Hold out for a two bedroom, unless the one bedroom is reasonably priced for what and where it is.

I’m too worn out to go further than $300,000 today, but what I’ve written is worth studying. I have every single number broken down by $100,000 increments and split between condo markets and single family markets. I didn’t post them all, but I will keep my sheets of pencil notes for awhile, just in case anyone has any questions.

Have a nice weekend!

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[photopress:tgif_cover.jpg,thumb,alignright]T.G.I.T.F.D.O.T.M.!  Thank God It’s The First Day Of The Month! 

I’ve learned over the years to just say “you too!” when someone says “Have a nice weekend!”  I haven’t had “weekends” since I left the banking industry in 1989.  Today, the first day of the month, is the closest day I have to a “Friday”.

October closings went fairly well.  In fact one of my clients gave me a hand held GPS device as a closing gift yesterday. It’s a Dell Pocket PC with a Global Sat thingie sticking out of the top.  He loaded the King County maps via a Mapopolis program.  We tried it out last night after we received the call from escrow saying the property recorded, and went to the house for the “key exchange”.  Most exciting to me is that it has a setting for “avoid freeways” 🙂

On the first day of the month, I move yesterday’s closings to the “closed drawer”, I pull forward the closings for this month, and I re-organize, and say Thank God It’s the First Day of the Month!

So what did I decide to do with my day off?  Go to Broker’s Opens and try out my new handy-dandy GPS device!  When I wrote this post back in July, I had it all wrong.  I was just too darned busy at that time of year to think it through.  In the old days I had to map out where I was going from beginning to end before I started.  I had to get from here to the first house and then map out the route from house to house before stepping a foot out the door.  So I asked for a program that did that for me.  Correct answer is…I asked the wrong question! 

That is why it is SO important for agents to shake out their heads every November.  Dump everything out that you THOUGHT was the way to proceed in the coming year, and hold it up to the light.  Go back to the first transaction of the year and examine each one thoroughly.  Which clients were the happiest and why?  Where were the snags, and what can you implement into your procedures for the new year to prevent those snags?  Which did YOU enjoy most and why?  Which did YOU feel most uncomfortable with and why? 

This year took me all over the place, due to blogging.  From Queen Anne to Snohomish, from Judkins to Duvall, from Factoria to Juanita and Bellevue to Ballard.  Unlike the old days when we chose our “farm” and worked our back yard, technology takes you to places you wouldn’t have dreamed of going to.  So this year I’m ready with my new handy dandy GPS device!  But today, on my day off, I’m going out to Broker’s Opens in my own “territory”.  I want go out to see what didn’t sell.  I want to examine those properties that didn’t make the cut.  I want to see any vacant houses, that are not sold, that have been on market for way too long. 

Most of the year I have to focus only on those properties that my clients SHOULD buy.  On my day off, this 1st day of the month of November, before I get too busy again, I’m going out to pay attention to that part of the market that missed the boat, that didn’t sell, and discover why they did not.

Not everyone’s idea of how to spend their “day off”, but to make it a little more fun, I invited a tall dark and handsome young guy to go with me 🙂  Have great day!