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

Never Afraid to Tell It Like It Is…

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I’ve been to several people’s homes in the last few weeks. Not to list the property now, but to give them that “to do” list they need to get their home ready for listing in late March or early April. Having that list a couple of months ahead of time is very helpful to my clients, as it gives them plenty of time to do things, and the confidence that they are doing the right things.

Having done a few of these in the last week, I wondered if I would approach the topic differently if this family greeted me at the door 🙂

desktop

Would I have boldly removed all of the knobs from those kitchen cabinets, the ones they just bought and spent hours putting there, thinking they looked great,

…to show them the cabinets actually looked better without them at all.

Would I have swept the 31 garish knobs into the kitchen drawer if Tony was the one who had just spent his time putting them on to the cabinets?

Often the hardest part of our job is delivering the hard truths. Then standing back to see if the owners will be receptive to the changes…or will they “shoot the messenger”? Perhaps growing up where that crew was just a bunch of comare to me, gives me the talent to boldly give people the hard truths, with no sugar coatings, that they need to get top dollar for their homes. I never thought about it that way until this morning. But I can honestly say I’d deliver the same news to Tony, like a caring paisano, that I do to my clients day in and day out.

Real Estate is not for Sissies…it’s a tough job and we often deliver the hard news. In fact, it’s why I got into the business in the first place. When I heard agents saying, “I let the market tell them”…”Oh, I couldn’t say THAT”, “I know it’s overpriced, but I’ll just let them sit on market for awhile until they “get” that”, I was honestly appalled!

Agents are often appalled at the things I do for my clients and say to my clients…I’m appalled that they don’t.

There IS crying in Real Estate. There’s no room in this market for agents who don’t want to tell their seller clients and buyer clients everything they know. I’m never afraid that someone is going to fire me.

It’s always better in my book for the messenger to get shot…than for the messenger to keep the message hidden in his pocket.

Red and Blue States – Foreclosures

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foreclosure

I saw this map over on Active Rain posted by Gabriel Silverstein

I can’t find the original source for more info. Maine is such a Blue State! Doesn’t seem to have ANY foreclosures. California looks pretty darned sad, as does Florida. Does anyone know if the Nevada Red area is primarily in and around Vegas?

If anyone can find the original source of this map with more info, I’d appreciate it. I find it to be incredibly interesting.

We’re not as blue as we are politically 🙂

Rudy is to Trulia…

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rudy

I woke up this morning to this email:

Rudolph Bachraty wrote:

Hi All!

We’re conducting a poll and would appreciate any feedback you may have.

What are the 3 most important things Real Estate Agents should do to improve their online presence?

There are lots of choices with little or no clear ROI.

Agents are blinded by the bling. Time is money. It has to be spent wisely. Not everyone can dedicate endless amounts of time testing new products and services. Even I get overwhelmed at times. Yet agents know that most consumers go online to conduct their search for real estate information and they want to join the conversation too. Agents just want to know where and how to start.

Thanks for your time.

Rudy

For more info, please visit:

http://www.truliablog.com/?p=287

Of course I am going to answer Rudy, formerly of Sellsius for obvious reasons.

The thought crossed my mind that Trulia is just as on the ball as Zillow, given that

DavidGibbons

Rudy is to Trulia…as David G. is to Zillow.

How can you not love Trulia and Zillow as much as you love Rudy and David G.? It reminds us that this is the day of Who You REALLY ARE No gimmicks. No phony crap. No “how do I want to present myself?” I think, for the first time in history, people are responding to who you really are vs. the Sound Bites and canned schpiels and “make a problem; fix a problem”. The smart money’s on choosing based on reality, not smoke and mirrors and dog and pony shows. Credibility is key.

Kudos to both Trulia and Zillow for choosing these two guys to be their voice out in the world.

Setting the Asking Price for a Home in Redmond

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Later today I will be setting the asking price for a home in Redmond near Microsoft, and thought it would be interesting to some to follow how my brain wraps around the task.

The goal is to find the house they will be moving to first, but I always go to the house they will be selling in order to buy, ASAP after meeting them. This way the owner has plenty of time to do everything they need to do, and will be ready to list the property the minute they find the house they want to buy. It also assists by making sure their Net Proceeds Expectation on the home they are selling is not over-stated, BEFORE they make an offer thinking they are getting more than they will. That can be a very dangerous mistake, in my experience.

So laying out their net proceeds from the sale of their home, before they make an offer or even establish a firm purchase price target, is the first step in the home buying process.

First I pull the tax records of the “Subject Property” and note the layout as to main floor footprint, basement square footage and anything over the main floor. In this case there appears to be a bedroom or bonus room on the 2nd/3rd floor. Tax records call it 3rd, I call it 2nd. Then I look to see if the property had been listed for sale in the mls when they bought it. No luck there. The timeframe is available, but the house was apparently not listed in the mls when they bought it. An off-market transaction. That likely means the price they paid was not market-tested, so I’m putting no relevance in its accuracy.
I just thought of David G. since my next step is finding their Significant Other Sold Property, which reminded me of Zillow. Since I already know where I value this one, I’ll go peek at Zillow…be right back.

WOW! That was an eye opening experience. OK then. David G., call me if you want to know what I saw. Glad I took that step. I also saw one of my favorite agents and neighbor, Mike Moghaddas, on a Zillow ad in the sidebar. OK, enough on Ardell’s Field Trip to Zillow.

The Significant Other Sale, which is just a house or two from the subject property, tells me everything I need to know to get a ballpark value before I go to see the house later today. Zillow told me everything else and more. While the Significant Other sold in 2007, it sold in early 2007, so I have to try to calculate change and I can already tell you that I’m pricing this one UP and not DOWN. No, the market is not down as to price for this home. Only question is how much up is it.

No agent can make recommendations as to work to be done to get the home ready for market, until they have a ballpark value in their head that they come up with on their own, without owner input. I already know that if he lists it at X price, he doesn’t need to do anything. If he lists at at Y price, then we have our work cut out for us and some major staging and aesthetic and cosmetic fixing to do. In fact this is one case where I will likely recommend a pre-inspection. Something I rarely if ever do.

I know exactly what the interior looked like on the Significant Other sale. Original, but good, condition. I also have a pretty good feel for being able to get 5% more than the early 2007 comp would indicate. Now I go to see the house and add the missing pieces to the puzzle.

Before all of this technology, and Zillow, we often had to see the house first and then go back and do the homework. Today, technological advances have turned the tables on the way we work. Homework first, see house second. The advantage this technology affords the agent and the owner, is that we can now give the owner the list of things they need to do at first visit.

The owner should only do things if doing those things is going to assist in the sale and get a higher price. And that is not always the case. Sometimes a lower price is warranted due to price breaks. For example, if without the work the home would list at $599,950 and doing the work might put it at $615,000, maybe better to go with the 5 on the front and just clean it up and lightly stage it. If the owner does a lot of work in those cases, it would be a waste of time and money. This is one of those cases, and I can already tell that before going to see the house. Ain’t technology great! Only question is, how much work was already done to the house since the time it was purchased. Zillow didn’t help me with that one, so a trip to the house is the final step rather than the first step.

Had the property been on market last year, cancelled and I was re-listing a property that was already tested, the steps would be different. This is not one of those cases. Never listed for sale since the owners purchased it.

Valuing property is one of the most important things we do for buyers and sellers. It’s fun and rewarding and very meaningful to the lives we touch day in and day out. No computer program will replace us, but clearly they are very helpful to us. Speaking from someone who knows as when I started in real estate the mls was a DOS version with no photos, and the mls was a weekly book with black and white thumbnail exterior photos only. No access to tax records or square footage when I started either. I love technology…and Seattle Area does it best.

Hold On To Your Hats! Sunday Night Stats

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Whoa Baby!  To say these numbers are interesting is an understatement.  I better put that MLS required disclaimer that this data was hand calculated by ARDELL using the MLS system, but not posted or compiled by NWMLS.

We’ll start with the January data Year Over Year (YOY).  Remember a few more sales will trickle in since we are so early in February, and some agents don’t post immediately after the sale.

But as of tonight, the Jan. month end closings (drumroll please):

**UPDATE FOR LATE POSTINGS OF JANUARY CLOSINGS as of 2/7/08 and again on 2/10/08):

King County SFH sales for Jan. 2008 came in at 861 895 902 vs. 1,357 in 2007.  A 36% drop.34%

King County Condo sales are down about 43% 39% from 511 in 2007 to 293306311.

Remember that for every city that is performing better than those percentages, like Bellevue and Redmond whose SFH sales are only down about 15%, there are other cities and areas whose performance was worse than the overall King County numbers.

People ask why I always calculate Kirkland, Bellevue and Redmond statistics.  I expect these areas to outperform King County as a whole.  Bellevue and Redmond did.  Kirkland did not.  Living close to Microsoft is still the criteria that gives homeowners the edge in certain parts of Bellevue and Redmond, though not all of those two cities. 

For instance if Factoria performed the same as King County overall, then close to Microsoft is virtually unscathed.  I didn’t break that down, but I expect that is the case given Bellevue and Redmond’s overall performance of down 15% or so.  Next week when we see if there are any more month end closings posted, I’ll break that down to see where really close to Microsoft is coming in.

I’m also tracking which homes are selling and which aren’t.  By visiting the properties in person and picking the ones that should sell, we can tell if there is any impact at all.  If the properties that should sell do sell, then that area ( close to Microsoft) is not affected. 

Now for the weekly stats.  I’ll keep this running with closings on a YTD basis throughout the year and compare the YOY at the end of each month. 

Inventory being “down” means that the sales are happening faster than new listings are coming on market this week.  So a slight, very slight, reduction in inventory for the first time this year.  Sales are keeping pace with, and exceeding, new listings on market by a small margin.

King County – Residential

For sale – 8,638 – DOWN 22

In Escrow – 2,154 – UP 90

Closed year to date – 888 – UP 280

 

King County – Condo Market

For sale – 2,983 – down 26

In escrow – 795- down 28

Closed year to date – 293 – UP 89

Seems a bit odd that In Escrow is down also, but I expect that is because of month end closings.  We’ll see how that shakes out next week and in the weeks to come.

I can’t help but think of the commenter whose monicker is “bored”.  Don’t know how anyone can be bored with this housing market. 

“Statistics not compiled or published by NWMLS.

Sunday Night Stats – King County

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King County – Residential

For sale – 8,680 – UP 172

In Escrow – 2,064 – UP 158

Closed month to date – 608 – UP 169

 

King County – Condo Market

For sale – 3,009 – UP 80

In escrow – 823 – UP 25 – 2.6% of those are contingent contracts

Closed month to date –  204 – UP 60

Next week I’ll have to post both end of month and Sunday night stats plus YOY closings for the month of January.

Single family home market keeping pretty good pace with those closing and going into escrow vs. coming on market.  Condos not so good.  Hard to believe that with over 3,000 on market, only 18 went into escrow two weeks ago and 25 this past week.  If the condos don’t move, the single family market will see the consequences of that come Spring and Summer.

“Statistics not compiled or published by NWMLS.

Sunday Night Stats

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So far it looks like sellers have a 50% chance of selling vs. last year.  I’ll keep tabs on that as we go.  You were twice as likely to sell your house last year as this year, if you put it on market.  For those of you who think it’s a new year and if it didn’t sell last year it’s time to raise the price…I’d rethink that.  Hopefully low interest rates will improve the stats moving forward.  But I wouldn’t count on the improvement being more than a 66.6% chance of selling.  We’re not talking about selling at the price you want.  We’re talking about selling at all.  Not a good time to be stubborn or overly optimistic.  You have until 4/1/08 to get real with your pricing, or possibly be back on market in 2009.  Stop pricing off what other people are asking.  Stick close to the comps this year.  No more than 5% over the comps is a good rule of thumb.  And don’t skimp on condition.  Condition will be the MOST important factor in 2008, second to not pricing more than 5% over the comps.

King County – Residential

For sale – 8,508 – UP 132

In Escrow – 1,906 – UP 97 – 6.5% of those are contingent contracts

Closed month to date – 439 – UP 203

 

King County – Condo Market

For sale – 2,929 – UP 59

In escrow – 798 – UP 18 – 2.6% of those are contingent contracts

Closed month to date –  144 – UP 75

UP means over last Sunday’s data.  Sales of single family homes kept pretty good pace against homes coming on market this week.  But still running at about half the pace of this time last year.  Let’s assume 1/3 of the buyer pool is gone and that this year’s sales will be 2/3rds of last year in total number of properties sold.  That’s my prediction based on what we’re seeing so far.

“Statistics not compiled or published by NWMLS.

Are any homes worth buying?

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While it seems to be a fad to track inventory, reality is that most times in January, and this year is no exception, there are plenty of buyers. They simply do not want the homes that are currently listed for sale for a myriad of reasons, nor should they.

Last Thursday a group of us went to Broker’s Open Houses. We did not see any homes on the tour that we would recommend to our clients. We did pick the ones we thought would sell first, even though we would not likely suggest that our clients buy them.

Here’s how it played out:

House #1 – We all walked in, it took about 3 minutes to determine that it was not priced right and was not good at any price for any of our clients. There was a busy street close enough to be visible from the home. The house was very “cookie cutter” and not “commanding” the asking price by style alone, before considering the busy road negative. Tacking on the busy road issue, we went upstairs. The master suite was on the busy road side. Had the master suite been on the quiet side and the odd bedroom on the busy road side, the value would have been different.

A few agents talked about the quality of the windows, the gorgeous granite counter tops, when I started clapping my hands and saying: Out of Here…NEXT! It’s $200,000 over on the asking price and there are better houses to be had at this price. Not necessarily for sale today, but clearly within any buyers future timeframe.

It’s a NO! Let’s GO! (the open house agent was not present nor were any agents from other offices, so we could speak freely like this at the first one, since we were early and the Open House hadn’t started yet.)

House #2 – Great house; how much is it? Too much. But a great house if it were priced $75,000 less. NEXT! Agent asked about the old windows. I said irrelevant. Lots of updates needed, so price it at good condition in need of updating. No need to calculate each why and how much, let’s go, it will be a long time before this seller gets real, and you can’t make an offer until the first number is a 6 and not a 7, you will still be $35,000 over value even with the best of negotiation skills. Start price has to be lower, wait for the price reduction.

House #3 – We got out of the cars and everyone proceeded to the front door of the house. I stayed standing in the middle of the street. I told everyone to come back and stand with me and tell me what they observed. Big dog barking incessantly. I said if the dog is in the yard of “the subject house”, no biggeee as he’s moving. No, it was a vacant house. So Big Dog Barking is next door. Everyone made a note of it in case they had a buyer client at a time when the dog was sleeping or not home. We then proceeded into the house.

I stayed at the front window. What is THAT?! Elementary School and Middle school next to it. Every Mom and Dad dropping off kids would be line up out front every day. Car doors slamming. Shouts of “You forgot your lunch!” Envision what isn’t visible. NEXT!

House #4 – Gorgeous remodel. Great price. Open House agent present. Directly behind the Open House agent I could see out the window. The next door neighbor’s house, or part of the accessory of it, was smack up against the fence of this house. The Open House agent should not have planted himself at the home’s worst negative. I couldn’t even concentrate on what he was saying because of the view behind him. I said that’s tough; he said yeah. NEXT!

WHTF house (investor bought “Wrong House to Flip”). Now we can just say WHTF on any similar houses. Saves on time. Walk in say Great Remodel BUT “WHTF”. Still, all in all, I dubbed it my pick for “Best House of Day” as it was priced well and looked good and the cheapest good home in all of Bellevue at the moment.

I picked it as the house that would sell first without a price reduction needed. These “picks” go into an envelope, and we check back on them later to see how well we evaluated the properties. The agent who picks the most right gets a prize, they get to become a really good agent and stay that way.

There were two other houses, similar to house #2. Good houses, but priced out of range. One only needed a $10,000 reduction to get in range, so that was my second pick and some other agents’ first pick.

Even if you have been in the business for over 17 years, like me, you never stop doing Broker’s Opens to stay on top of the market and keep sharpening “the tool”.

Buyers can do this with Sunday Open Houses. It’s great fun and a valuable exercise.

When Spell Checkers Aren't Good Enough

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I would appreciate any advices you may have regarding people who have come here from other countries, and for whom English is an additional language.

Often the advices of Brokers to agents from other Countries is that they should only work with people who are from their Country.  Clearly that is much too difficult to do, and sustain a reasonable lifestyle as a real estate agent, and growingly moreso.

If you receive an email from an agent with stilted language or broken English, and odd spellings created by the spellchecker (like shell instead of shall), do you overlook these things?  Or do you expect an agent to be fluent in the English Language?

Accent alone can be quite charming, but in a field where misrepresentation is quite hazardous and good communication is key, can a Broker afford the risks that come with misunderstandings created by language difficulties?  And yet it seems to be discrimination to not hire people with language issues.

Are there programs that are a big step up from spell checking, that assist people with these difficulties?  Any advices appreciated.