Author Archives: ARDELL

About ARDELL

ARDELL is a Managing Broker with Better Properties METRO King County. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has 34+ years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. email: ardelld@gmail.com cell: 206-910-1000

I told my daughter not to buy real estate

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I think the public deserves to know what we tell those nearest and dearest to us.  My girls are 20, 22 and 24.  My 24 year old has a 3 year old.  My 22 year old is pregnant.  I don’t recommend that either of them buy real estate right now.

Tina, my 24 year old, will finish school in November or so.  Then she’ll get a job in her chosen field.  Where will that be?  Anyone’s guess really.

Jacquie, my 22 year old is the one who wanted to buy a condo or townhouse with Peter here in Kirkland or somewhere on the Eastside.  Even though she will likely continue work in Seattle, she prefers living on the Eastside.  They can well afford to purchase, but I recommended against it.  Told her to rent for 6 – 12 months first.  Jacquie equals “Jacquie and Peter”.  To the best of my knowledge, Peter has only visited Seattle and has never lived here.  He has at least a year of school left in CA and is coming to spend the summer here with Jacquie, either in a rental or a place that they purchase.  Where is Peter going to work when he is finished school? 

If you don’t know where you are going to work, if you don’t have a good year at your current job so as to know if you are likely to stay working there, if you aren’t confident at the job you have right now and are thinking about leaving that job…don’t buy real estate.  Not unless you are prepared to hold it as a rental if you decide to move on.

Would I have counseled them differently in 2004 or even 2005?  Yes, I think I would have.

What Are Negotiating Rights After Inspection of House?

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The Title of this post are the exact words of a Google Search for those keywords that I found in my blog stats today.  When seeing it I thought it would make a good topic for a post.  Hope you agree.

To some extent the words “Rights” and “Negotiating” are contradictory.  If you have an actual “right” to something, you don’t NEED to negotiate it.  So suffice it to say that you have no “negotiating rights” in the strict sense.  You likely have a “right” to cancel the contract based on the inspection, but not a right to repairs.

If you have included an inspection contingency in your contract, then you have some rights.  You have the right to hire an inspector.  You have the right to gain access to the home for inspection.  Personally I think you should STOP the inspection the minute you find something that causes you to not want the house.  You save money usually (some inspectors; not all) and you really shouldn’t be nosing around someone’s house once you have decided not to buy it.  That’s my personal opinion.

I often hear “Doesn’t the seller have to fix…?”  The seller doesn’t HAVE to anything, nor does the buyer for that matter.  So the buyer has the right to ASK.  To answer the question literally, “what are (the) negotiating rights after Inspection…”  You have the right to ASK would probably be the closest accurate response.

Most and virtually all inspections that fail, fail due to poor communication.

1) Don’t just point out a problem without being specific about the remedy requested

2) Try to give a variety of remedies, so the seller can choose one

Examples:

Inspector says: “Hot Water Tank is 14 years old and should be replaced as life expectancy of this hot water tank is 10-12 years”  Remember, from the seller’s perspective there is nothing wrong with it.  It heats up the water just fine, they never run out of hot water and it’s not leaking or knocking or causing any problem whatsoever.  It’s just old.

Yes my friends, there is assisted suicide and genocide involving old hot water tanks.  It’s age descrimination, and some are put to rest before their time has come.

Let’s use some common sense here.  What is around this tank often suggests the appropriate remedy.

1) Hot water tank is in a condo on the third floor.

My suggested remedy?  “Hot water tank to be replaced by seller prior to closing.”

2) Hot water tank is in the garage and much of the owners valuable belongings are stored there prior to moving.  Very valuable things that used to be in the house but ended up in the garage when decluttering the house for it to go on market.

My suggested remedy? “Hot water tank to be replaced as soon as possible by seller.”  Once you are aware of a potentially dangerous situation, one that could cost thousands of dollars if the tank blew and the water damaged the seller’s things, you should pass that info on to the seller.  How would you feel if you asked for a credit or didn’t ask for a new tank at all, and the tank blew 3 days before closing and the seller’s stuff got ruined?  Might you be liable in some way for not passing that info on to the seller?

3) Hot water tank is in garage and nothing that could be damaged by water is anywhere in the garage and the water couldn’t get into the house if the tank blew.

In this instance you can take a credit for the repair.  You can ask for a 1 year home warranty just in case it goes bad in the first year.  You can ask for any of the remedies above as well.

No, the seller doesn’t HAVE TO.  But those are reasonable requests in my opinion, though #3 is not a given for sure.

You have the right to ASK.  The seller has the right to say NO.  If people would be honest and only ask for legitimate items and appropriate remedies, no one would feel like someone is trying to club them over the head.  A home inspection is NOT a chance to take advantage of someone.  There are reasonable requests and unreasonable requests.

Ask yourself this?  Would YOU replace a 14 year old tank in that location if you bought the house 8 years ago, just because it is “past its life expectancy”.  If yes, then it is reasonable for YOU to ask.  If no, then maybe not.  Apply that Golden Rule to all items and you will be negotiating fairly.  If you are reasonable, you likely will get everything you should.  Maybe not everthing you WANT, but everything you SHOULD want.

Buying a condo with a pending lawsuit

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This Old CondoI just received a call from an agent from another company regarding a complex with a pending lawsuit.  It is one of many calls I have received regarding the same complex.  The developer of the condo conversion project, now two years old, has been asked/forced to come back and make improvements (to the roof, I believe) and agents are scrambling to find a foothold.

One might think that the builder being made to come back and make improvements is a plus for present and future owners.  Whether the builder is coming back as a result of a lawsuit won, or the settlement of a lawsuit brought, isn’t the fact that the property is going to be improved a positive factor?

Not necessarily, at least not during the suit and during the improvement phase.  Why?  Because lenders do not like to finance condos in the midst of pending litigation.  The listed properties are stacking up.  The pending sales are not closing.  The agents being called by owners to list properties are calling everyone to see if the properties can in fact be sold at all during the lawsuit and improvement phase, before they agree to list them.

Buying condos during a period of pending litigation can be a wise investment for investors seeking to buy at rock bottom prices, holding them as rentals during the improvement phase, and then selling them when the “dust settles”.  But the investor buyer may have to buy them with cash, as lenders may not be wiling to lend. 

Sorry, no, I’m not going to tell you which complex I am speaking about here.  First because it’s irrelevant to the post, as the one I am discussing is just one of many in this situation from time to time.  Second, because I am going to call a few of my investor clients and suggest that they buy the best of these while they are going cheap.  If I tell you where this place is, it would not be in the best interest of my clients. If I blog about this compex by name, other investors who are not my clients may compete with my clients as a result of this post, driving the prices up for my clients.  I blog “transparently”, but never without first determining the positive and negative impact a post may have on my own clients.

I have always said that the best investment is buying into a condo complex that has received moneys from the builder to make improvements.  I have purchased a condo in the past on this basis myself.  BUT you have to be sure that the improvements will be paid for by the builder IN FULL!  The BEST improvements during your HOLD period…are the ones paid for by the builder or developer, and not the home owners, IN FULL, not in part. Even if the seller is going to pay the special assessment, that is not good. If the net result after improvements is a huge special assessment that will be paid out over a 15 year timeframe, increasing the dues substantially, then it is NOT a good investment.

A few recent examples from The Eastside.

One complex had substantial improvements paid for by the builder.  During the lawsuit phase, the units sold at a 16.8% discount.  During the repair phase they sold at a 10.1% discunt.  This is not considering the substantial appreciation during those years, so the discount was more like 25%. There was NO special assessment incurred.  The dues did not increase as a result of the repairs.  The builder was forced to improve the property at no cost to the existing homeowners.

Prior to the suit, the units were selling for $345,000. (Downtown Kirkland).

During the lawsuit phase they sold for $287,000. 

During the repair phase, when they were financeable (suit settled) but cosmetically VERY unappealing, the units sold for $310,00

When the improvements were completed, the units sold for $525,000 partly due to appreciation during the lawsuit and repair phase that took many, many months, and partly due to the increased comsmetic appeal and other resale certificate improved factors.

In 2008, in a weaker market, the units are down from $525,000 to $495,000, but the investors who purchased during the lawsuit phase at $287,000 still have appreciable gains even during a weak market phase.

I wanted to include another example where the property value goes DOWN after improvements instead of up.  That happens when the builder doesn’t pay all of the amount for the improvements, or the lawyer keeps 1/3 of that money, causing a long term special assessment after repairs.  But I have an appointment at 1:00 to present offers on one of my listings.

Just know that the values CAN go down instead of UP after improvements, the key being the shortfall between builder provided repairs or monies, and the cost of the improvements. 

Sunday Night Stats – Just the Facts

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King County Condos

Active Listings: 3,917 UP 37 – median price $324,900 – MPPSF $321 – DOM 55

In Escrow: 930 – DOWN 10 – median price $299,900 – MPPSF $304 – DOM 48

Sold YTD : 1,886 – UP 110 – median list price $289,625 – median sold price $282,642 – median PPSF $288 – DOM 47

Sharing this breakdown info I needed to do for my own business.  Condos in parts of Kirkland, Bellevue and Redmond

Condos Sold YTD:

98033: median sales price $479,500 – DOM 59 – MPPSF $334

98034: median sales price $250,000 – DOM 49 – MPPSF $263

98007: median sales price $269,500 – DOM 37 – MPPSF $286

98052: median sales price $320,500 – DOM 56 – MPPSF $285

Issaquah: median sales price $294,950 – DOM 30 – MPPSF $288

King County Residential

In Escrow: 2,704 DOWN 109 – median asking price $431,850 – DOM 41 – MPPSF $207

SOLD YTD: 5,736 UP 322 – median sold price $440,000 – DOM 51 – MPPSF $221

Both of those median price per square foot numbers are down from last week.

Actively for sale 11,453 UP 222 – MPPSF <$800,000 is $220 – MPPSF >$800,000 is $337

So inventory is up 222 and in escrow and closed combined are up 213, so still not selling faster than they are coming on market.  I’m thinking at some point that balance has to tip in the other direction.  Running pretty close this week.

Stats not compiled or published by NWMLS. (Required disclosure) 

Here comes the sun!!!

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“Little Darling…it’s been a long, cold-lonely winter.  Little Darling, it seems like years since it’s been clear.  Here comes the sun,”

…so “they”: say.  I’m delayng this listing one day from Wednesday to Thursday, hoping for a bit of blue sky and sunshine.  My iPhone tells me it will be sunny from Thursday until past Sunday!  Do I dare believe it!?!?  Oh well, I’ll have some backup gray sky photos just in case.

Planning to run around taking as many sunny photos of other listings on Thursday and Friday too.  Anyone with snow photos ought to do the same.  Thursday is Picture Day..with Friday as a backup.

This morning I was singing Sesame Street’s “Sunny day, everything’s A-OK” but it was driving Kim nuts…so I switched to the Beatles.

*****UPDATE******** yes the sun came out!  Replacing the gray day photo with sunny photos!

That’s pretty much the identical photo that I had, but with a BLUE sky.  YAY!!!

This one that the owner took is awesome.  He climbed on a log in the creek.

 

Sunday Night Stats – King County

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In January of 2007, 455 people were able to sell their homes in 30 days or less at 99.84% of asking price.

In January of 2008 only 261 people were able to sell their homes in 30 days or less and they sold at 98.93% of asking price.

42% fewer people sold their homes within 30 days of listing the home for sale in January 2008 vs. January 2007

In January of 2007, 13.25% of all homes sold had been on market for over 120 days and sold for 97.52% of asking price at time of sale.

In January of 2008, 21.67% of all homes sold had been on market for over 120 days and sold for 95.60% of asking price.

And yet…they sold for a little more.  Volume down by 30%, days on market longer, but median sold prices up from $430,000 to $431,375.  Median asking prices up from $430,014 to $439,000.

That was January…let’s jump to April (I don’t know the answers before I type this BTW.  I figure I can’t introduce my agent bias if I post in real time.)

In April of 2007, 1,184 people were able to sell their homes in 30 days or less for 100.62% of the asking price.

In April of 2008, only 561 people were able to sell their homes in 30 days or less and they sold at 99.25% of asking price.

53% fewer people sold their homes within 30 days of listing the home for sale in April 2008 vs. April 2007

In April of 2007, 13% of all homes sold had been on market for over 120 days and sold for 97.8% of asking price at time of sale.

In April of 2008, 20% of all homes sold had been on market for over 120 days and sold for 95.97% of asking price.

But in April, no more volume down; prices up.

Median sold price in April of 2007 was $474,950 ($50 less than median asking price)

Median sold price in April of 2008 was $451,250 and median asking price at time of sale was $459,925

 Volume Down 32% 2008 YTD vs. 2007 YTD

By Request: Stats for “Curious” in Redmond 98052 pretty strong relative to King County as a whole.  Also for Curious – Woodinville 98072; not a pretty picture.  For Aiboh here’s 98074 Sammamish – not bad.  A lot better than Woodinville.  I have to put the special request stats on my blog for space purposes.  But keep the requests coming and if I can’t do them on Sunday night, I’ll squeeze them in during the week somewhere. 

Regular weekly stats:

King County Residential

Actively For Sale: 11,231 – UP 268

In Escrow: 2,813 – UP 63 – MPPSF $210 (dropped $2.00 again – and that’s asking price

Closed YTD 5,414 – UP 305 – MPPSF $220 YTD (April MPPSF $224)

Not sure why closed sales keep running high while the properties in escrow are running low as to median price per square foot.  You would expect the closings to be affected eventually as these close, but so far not.

MAYBE a lot of the ones staying in escrow are short sales, and they are not closing at all.  That would be the only explanation I can come up with for “in escrow” MPPSF running lower and lower and closings not being lower. 

King County Condos

Actively For Sale: 3,890 – UP 106 MPPSF $320 Down $3.00

In Escrow: 940 -UP 40 – MPPSF $303.50, Down $1.50 but close to where they were the week before last.

Closed YTD: 1,776 – UP 101 – MPPSF $288 – asking prices still running high relative to closed prices.  Especially considering April closed sales are running at $270 MPPSF compared to April 2007 at $300 MPPSF.

Volume down 52% April YOY in condos and prices are starting to see more signs of weakening.   But again, given the sold properties in both residential and condo were on market for a long time, we could be seeing some old inventory selling off at drastically reduced prices.  Some old stale inventory is runing scared from “new on market” and dropping prices accordingly.  

Stats not compiled or published by NWMLS. (Required disclosure)

Sunday Night Stats on Monday Morning

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Did you ever work so hard in a week, that you just needed to lay down for 20 minutes after dinner and didn’t wake up until the next morning!?  Sure you did.  It happens to all of us.  Well, that’s what happened to me last night after my Open House in Bryant and after inputting a new listing in Redmond.  Just took a nap and never woke up until 6:00 a.m this morning.

In this business the days sometimes just keep running together one after the other and you forget when you last had a day off, or a haircut, or your nails done.  You just keep working day after day until the job is done, and the time frame just keeps switching from this “right now” to the next “right now”.

There is no “have a nice weekend” in real estate.  There is no “what’s your schedule like” in real estate.  On any given day the phone rings and sets a chain of events into motion that has no end until the work is done.  And when your clients have small children, you really roll up your sleeves and pitch in until the house is ready for market.  I have 4 sets of clients with children, all getting their houses ready for market, and 2 of the 4 moving to new houses nearby.  The work is back-breaking, but very satisfying when the job is done and the home is photo ready and Open House ready and Broker’s Open ready, and then you do the photos and the Open Houses and the Broker’s Opens, and it just keeps going until the house is sold.

Everyone wants a list of what an agent does.  Truth is we do whatever it takes to achieve the objective.  Everyone working all at the same time, owners of the homes and agents alike, all working toward the common goal of getting everything just so and on market.

Whether it’s a home built in 1910 in Bryant:

Seattle Home in Bryant

Bryant Home

Or a newer townhome in Redmond:

Rivertrail in Redmond TownhomeRivertrail Townhome

Perfection is the expectation of buyers.  So you just keep working till you get it as perfect as you can.  And the poor Moms who live there with their small children, have the undaunting task of trying to keep it that way day after day.  Getting the kids ready for school and leaving the house in perfect order for showings, is no easy feat.

So this Mother’s Day I ask that you all give honor to the Mom’s with homes on market…and the Mom’s like me who turn into everyone’s Mom when helping them get the job done.

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And now for Sunday Night Stats on Monday Morning.  I won’t be doing the April month end stats until next week, as there will be many month end closings posted during this week.  So let’s just do the normal weekly stuff. 

I expect if I’m this busy getting properties on market, two on and at least three to go over the next few weeks, that every agent is busy prepping homes to get them on market.  So inventory should be rising even more in the next 30 days.

King County Residential:

For Sale:  9,372 at a million or less – DOM 53 – MPPSF $225.58 and 1,591 over $1M – DOM 68 – MPPSF $371 Total Residential King County homes on market this morning 10,963.  That is 135 more than last week, after netting out those that went into escrow from those that came on market this week.

In Escrow: 2,750 – DOM 45 – MPPSF $212, that’s 81 less than last week due to month end closings with MPPSF dropping from $214 to $212.  That reflects a drop in asking prices, not sold prices.  Expectation is the sold prices of those 2,750 will be less than the $212 MPPSF asking prices.  Though some did sell for over asking price with multiple offers, the median will likely be more like $210 or so.

Closed YTD: 5,109.  That’s 463 more than last week with DOM of 51 days and MPPSF of $220 for the year to date which is up a buck for closed sales.

Given the median days on market for In Escrow is going down, the price issue of down to $212 MPPSF for those in escrow, is likely due to increased competition and homes coming on market being more realistically priced to sell.  At least for the ones that are actually selling and going into escrow.

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King County Condos:

For Sale:  3,784 – that’s 10 more on a net basis than last week.  DOM 57 – MPPSF $323 (about the same)

In Escrow: 900 – that’s 46 less than last week due to month end closings – DOM up from 43 to 48 – MPPSF up from $303 to $305.  Remember those are asking prices, not sold prices.

Sold YTD: 1,675 up 158 over last week – DOM 48 – MPPSF $288 – that is DOWN from $290 last week and EQUAL to the MPPSF of 2007 all months combined.  Given most of last year was strong, condos just now reaching MPPSF of all of last year is a pretty strong statistic for condos.  You would think all of this year would be equal to the last 5 months of 2007.  But they are still running high relative to 2007 compared to the single family home market, but starting to dip on a YOY basis, which is to be expected. 

Amazing how strong the condo market is.  I suspect new construction and condo conversions are giving resale condos a run for their money and strong competition.  That is keeping the MPPSF up, though for resale…not necessarily so.

That’s it for Stats this week.  When I do month end stats for end of April YOY next week, we’ll break down some of the areas like “within 2 miles of Microsoft” and certain Zip Codes from weak ones to strong ones.  So if you are hoping to see a break down of a given area, it’s time to get your requests in for next week.      

One of our agents listed a property at $350,000 in Tacoma three weeks ago and has had NOT ONE showing since it was listed.  My listing in Bryant listed at $529,950 had 6 showings in the first two days + more than 20 people at the first Open House yesterday.  So there is a lot of difference in activity from one area to the next.

Getting the property ready for market, and good photos, have become critically important.  No more stick the sign up “as-is” and wait for offer…    

"It's Microsoft's World, Kid…

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I just live in it.”

That was the line in CSI: NY last night, where Microsoft’s Photosynth was used to reconstruct the events prior to and during a crime at a high school prom. They loaded up all of the photos taken on every student’s cell phone ( a big box of them).  Then they used Photosynth to timeline the victim and suspects whereabouts in the moments before the Guidance Counselor was slain.  One of my clients worked on this program, so I was “tuned in” last night. 

Rather than my trying to explain what Microsoft Live Labs Photosynth is, for those who didn’t see the show last night, here’s a video that Robert Scoble put up when Photosynth was the hit of the O’Reilly Web 2.0 Summit in the Fall of 2006.  Here’s another great and even better video called Nasa meets Photosynth. 

Another description from Wikipedia: “from Microsoft Live Labs and the University of Washington that analyzes digital photographs to build a three-dimensional point cloud of a photographed object.[1] Pattern recognition components compare portions of images to create points, which are then compared to convert the image into a model.”

The program last night and the Nasa meets Photosynth video give some great examples of how this technology can be used.  In the comments someone noted that he might be able to “watch his child grow up” by using this technolgy, and someone else referenced a marriage of Flickr and Photosynth for multiple purposes. 

As a side note, I am one of those people who didn’t like Bill Gates too much, until I saw him “honored” in the eyes of a friend from India.  Watching my friend speak from the standpoint of “anything is possible”,  I realized what a huge role model Mr. Gates is for so many young people with dreams. When I see young people striving to become great in their own right, every single day, spurned by the idea that “everyone can be great…just like Bill Gates”, I bless Mr. Gates for his ripple effect.

Someone bought me an Apple computer…I refused to use it for six months and then gave it back.  On the other hand, they are going to have to pry my iPhone from my cold dead hands…until Microsoft comes out with a replacement product 🙂