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

My Friend, Bob

Posted on by
6

[photopress:bob.jpg,thumb,alignright]Many, many years ago, my friend Bob was spilling his guts to me in a long conversation about him and “The Firm”. He was at the crossroads of life that many businesses face. Bob joined Obermayer, Rebmann, Maxwell & Hippel, a major lawfirm in the City of Philadelphia, in 1970, just two years before I was hired at Girard Bank, another Philadelphia mainstay.

I don’t know why I remember this conversation as vividly as if it were yesterday. Bob said, Ardell, we’re at that place. We have a great team of attorneys who all know each other and mesh well. We have a huge base of repeat clients that feel like old friends and who trust and respect us, and whom we enjoy serving. Now we have to decide whether to GET BIG or stay small.

Every time I am on the other side of a transaction with a “Top Agent”, I think of Bob and that conversation we had some 25 years ago. When I see an agent’s name on the bottom of a Purchase and Sale Agreement, when an offer comes in, but never meet that agent. All communications come through a licensed real estate assistant who just faxes papers back and forth and never meets either the buyer or the seller. The agent, who has the authority and responsibility to assist the clients in some major decisions, delegates everything to an assistant who makes “weekly calls to the client” in some pretense of “keeping in touch” on some designated every other day schedule. “Hi, just calling to let you know we are alive and well even though you never see us.”

Today, Bob is the Managing Partner of the Philadelphia office, and Obermayer, Rebmann, Maxwell and Hippel has offices in Philadelphia, Harrisburg, Pittsburgh, Cherry Hill and Wilmington…three states. Bob’s still Bob, Robert I. Whitelaw, the managing partner. When I last saw him he had fallen off his bike and was nursing a sore arm. We’re both a little older and wiser, and I often wonder if he had a chance to go back to that day, when we were laying back shooting the breeze, if he would make the same choice to go big, or would opt to stay small.

Every agent faces that crossroads sometime in their career. Do they hire two assistants and a marketing manager and five “Showing Agents” and a Transaction Coordinator? Do they go to that point where when one of their clients comes in the door, and “the agent” passes them in the hall without noticing, because they’ve hardly ever interacted with them after the first day when they met and were passed off to the “showing agent” and then the “transaction coordinator”. Do they go to that point where they don’t remember more than half of the homes they have sold or any of the people who hired them to sell it?

Bob, or course, opted for big. But I knew when we were talking that he really didn’t want to do that, and felt he had to for the sake of “The Firm”. Aside from hiring a “free lance” assistant during heavy times, and occasionally pulling in a “showing agent” when circumstances put me in a position of having too much to do on a given day, I’ve pretty much put a cap on how many people I will “take on” all at once.

I know I can do a bang up job if I handle 24-36 clients in a year’s time. I will remember their faces, and their spouses and their children and their home that I helped them to acquire. When Travis called me “back” when I was in L.A. to sell the place I had sold to him, I remembered every single aspect of the time we had spent together over two years before. Travis didn’t hesitate to wait for me to return to Seattle from L.A. He didn’t call any other agents, just me. We spent hours together getting the place ready and reconnected. We hugged, we strategized, we painted and primped. We reviewed offers and talked and kicked back and had a glass of wine.

And so today I think of Bob, and his reluctant choice to get big and not stay small. I’m very, very happy today that I chose to know all of my clients, and be with them through every tiny aspect of the process. But “What About, Bob?” and his choice…I’ll have to give him a call…I still miss him after all these years.

I FEEL LIKE A DOG!!

Posted on by
12

[photopress:collie.gif,thumb,alignright]I feel like a dog this week. Four times this week I went into people’s homes to tell them what they needed to do to get top dollar for their home. The last two times I turned people’s homes upside down and sold them quickly for top dollar, I had no problem at all. I told them to give me the key to their home. Told them to go to work. And when they came home they were amazed at the difference and were happy, happy, happy!

But this week…I had four experiences that just make me feel like a dog!

Generally, when I stage an occupied home before putting it on the market, there is little to no cost at all. So I have no “bad news” that hurts them financially. I often do most of the work myself as part of the commission, so there’s no added expense and people are happy. So why was this week so different?

Mainly it was because of the people. The last two times the owners really wanted to move. This week, everyone who was selling “needed” to sell and “needed” to move, for reasons beyond their control. When someone really wants to move, they have no trouble when I move their stuff around. This week, as I pulled things off of the wall that people bought from “home interiors” back in 1983, and stacked all the chatchkis in a big pile, I could feel the pain of the memories coming down with the chatckis.

Tonight it was Roosters. Roosters, roosters everywhere I turned. Two days ago it was 3D Cherubs peeking at me from every wall, most of them with gold filigree hanging from their chinny, chin chins. The toughest one of all was a dear friend of mine, a guy, and I swear he had tears in his eyes when I told him the “schocking blue” walls had to go!! He had just painted it that color to get it ready for market.

This is why most times I just have to go in and take it all down myself. I have an “eye” for getting the home just right and I’m not attached to the chatchkis like they are. It hurts them when they come down, but they don’t put them back up after I take them down and it hurts them more if they take them down themselves. It hurts them much less if they just leave and let me do it, and they come home to the “new look”.

“Detaching” from the home is a very big part of of the home selling process. The closer they are to detaching from the home, by the time they get an offer, the more likely they will get a higher price and handle the negotiating with less emotional charge.

I would never put someone through this if it didn’t make them more money. And sometimes I think I feel worse than they do when I’m done. And I know I’m not doing them any favors if I allow them to “leave money on the table” by “being nice”, and letting the house go “live” into the mls, before it is ready to be shown.

Representing “people” rarely means telling them what they want to hear, or stroking their egos. Most often it means having the guts to tell them what they need to hear, and rolling up my sleeves and just doing, what they can’t bring themselves to do.

I know in my heart that I’m doing the right thing, and helping them get the most money they can for their home. But I still feel like a dog.

The “Ideal” Business Plan

Posted on by
28

[photopress:meeting.jpg,thumb,alignright] In answer to Russ’ comment on my post of this morning, How to Choose a Client, let’s break down how an agent can do a super-duper job at representing their clients’ well, choose their clients wisely, and also make a good living AND price their services fairly….all at the same time!

John Q. Agent wants to make a six figure income of $100,000 a year after gross expenses. He decides to work with no more than 2-5 active clients at one time, so that he can do “Whatever it takes” to help his clients fulfill their objectives. By focusing on 2-5 good-hearted, honest and serious clients, he is able to sell 2 houses a month and loses only 1 in every 15 clients he accepts to “take on”. By focusing on only 2-5 clients at once, he does such a super job, that he doesn’t have to pay for leads or spend the bulk of his time looking for leads, because his very happy, good-hearted clients send him business. By recognizing that he represents people for a living, and doesn’t sell houses for a living, he leaves a long trail of happy closed transactions in his wake. All of this “good will” brings him a steady stream of new clients, so he can spend all of his time representing his clients and very little of his time dredging the bottom of the barrel for “new leads”. His “good-hearted” and happy past clients, know other “good-hearted” people because, “birds of a feather flock together”.

Average home price is $400,000 in the Seattle/Eastside Market. That’s a little under the actual median price, but let’s assume that the best clients don’t necessarily have the most money 🙂 Let’s assume that John Q. Agent charges slightly less than 3% for clients buying and selling at $400,000 or less and 2% for clients buying at $750,000 or more and 1% for clients buying at $1.5 million dollars or so and also has varied programs in between, depending on the timeframe and actions needed to fulfill the client’s objectives.

So John Q. averages $13,500 per client, but gives $4,500 of that back, even after the reduced rate, on average, because he only needs to make $9,000 apiece X 24 sales (two a month) to make $216,000 of which he pays his broker a cap of $20,000 annually leaving him $196,000 before “expenses”. Keeping Russ’ figure at 20% for “expenses”, John Q. Agent exceeds his goal of $100,000 by making $156,8000 after expenses working with only 2-5 good-hearted, honest clients per month and selling 2 homes a month and “being the glue” that holds them together so ALL of them close, and it is NOT a numbers game…in fact, it’s not a game at all.

John Q spends 20 hours a week on his “in escrow” transactions and 20 hours a week on helping his “next to come out” listings get their homes ready and 10 hours a week doing all that other stuff that agents do. He spends so much time focusing on these few clients that none of them “leave him in the dust” or “screw him”. Though a few do decide not to buy or sell…and he wishes them well.

And they all lived happily ever after…

How to Choose a Client

Posted on by
24

[photopress:diversity.jpg,thumb,alignright] I have only one criteria when choosing a client. That criteria is very difficult to describe, because the best term to describe my favorite clients, I only know in the Greek language. I dated a Greek guy for six years, from the time I was 16 until I was 22. Whenever he introduced me to his Greek friends and relatives, they would lightly and quickly thump their fist on their chest and say

“kalu ka thYA” (emphasis on the YA). Generally, they were saying, “She has a good heart.”

When I meet a potential new client, I am actually interviewing them to determine whether or not I want to work with/for them. This can be a great business or it can be a miserable business. The difference between the two is the clients one chooses. Agents who view all people as “leads”, who think anyone wanting to buy or sell a property is a “potential client”, do both themselves and the client a great disservice.

My talents are best suited to people who need my “help”. To sellers who need to sell their home at the highest price they can get, and who are willing to roll up their sleeves WITH me, and get the house to its highest potential, spending little or no money to do that. To buyers who recognize that there are many potential pitfalls in the home buying process, and who want someone to tell them when they are about to make a mistake.

[photopress:winner.jpg,thumb,alignright] I have very little time for someone who wants to end up with all of the chips on their side of the table when the “deal is done”.

I have very little time for a seller who thinks his house is ready, because he shouldn’t have to do a thing to get top dollar and he can wait for “just the right sucker” to come along and fork over more than the home is worth, so HEcan WIN and THEY can LOSE.

I have NO/ZERO time for a buyer who wants to find some little old lady who can be tricked into selling her home for a great deal less than it is worth. (Yes, I have met people like that.)

All of of my clients are people raised with good values and who have a strong moral code, in other words…people who possess “kalu ka thYA”…”a good heart”. Once in a blue moon, I agree to represent a total bastard…but only because I feel sorry for his wife 🙂

So when a buyer or seller complains, “I guess they didn’t NEED my business because they never called me back after we met”, maybe the agent didn’t “follow up” because the agent chose you, not.

What makes a house a “tear down”

Posted on by
40

[photopress:tear_down.jpg,thumb,alignright] Here in Kirkland, a lot of people complain that the builders are tearing down homes and putting up “McMansions” in their place.

I can walk up and down the streets of Kirkland and “label” each and every house I pass. “Remodel project”, “tear down”, “fixer”, “builder’s dream come true”, will sell “as is”, etc… The number one reason a house becomes a tear down is due to years and years of deferred maintenance. Often these homes are owned by people who inherited them or who purchased them many, many years ago when they were dirt cheap. The increase in taxes over the years suck up any money the owners might have had to make improvements. They have just enough money to get by and the moss overtakes the roof, the wood rot overtakes the fascia boards and siding, the trees get bigger and bigger and crack the foundation, birds make nests in the rotted fascia boards. It’s like a used car that finds its way to the scrap heap, once the cost to repair exceeds the book value.

“Book Value” of a house equals the value of the lot. The value of the lot is based on it’s “highest and best use” and based on its “potential”. If the lot would have a view IF it were a two story house, than the highest and best use of that lot is to put a two story house on it. If that gives the lot a value of $650,000, then that is the value of the dirt. People have a tendency to value a property by what is on the lot and say, “Oh I wouldn’t pay more than $350,0000″ for that house!”. If the lot is worth $650,000, then the house can’t sell for $350,000, no matter how awful it is.

Take the house in the photo above. Would you spend $650,000 to LIVE IN IT? If you would pay $125,000 to live in it, and a builder will pay $650,000 to tear it down…well then I guess everyone has to agree that it is a “tear down”. But they don’t all agree that it is a tear down. People never all agree on anything, do they?

They don’t agree because they like having a little tiny house next to them that doesn’t block their view. They don’t agree because they don’t want the noise of the builders putting up a new home next door from morning until night, day after day, so they can never take a nap in the afternoon again until the new home is finished.

They might all agree that it should be torn down, but they want it to become a new park or playground…as long as no one every comes to play in it and make noise 🙂 They never ALL agree that it should be torn down and become a “McMansion”, especially if they live in the cute little bungalow next door.

Back to Basics

Posted on by
6

[photopress:BubbleBurst.jpg,thumb,alignright]Yes, you can prevent the bubble from bursting. Yes, you can prevent home prices from tumbling. The market takes a hit when sellers refuse to see the handwriting on the wall, and are too arrogant and complacent to compensate for market weaknesses.

The Seattle area is almost entirely unigue in its ability to sustain home values. But gone are the days when you can ignore the homes’ weaknesses. Gone are the days when you can put anything on market, in any crappy condition, and have people pouncing on it, regardless of look and smell and overall condition.

You can still get a better price than the comps. But you have to pay very close attention to showing your “product” in its best possible light. You can’t waste your Grand Opening by saying, I’ll lower the price IF it doesn’t sell. You can’t say “I’ll make it look better IF someone doesn’t buy it”. “You never get a second chance to make a first impression, was never truer than it is right now.”

Do not let anyone in your house until it is absolutely READY! Do not hit that button that sends you LIVE into the MLS, while you are still getting the house ready for market. Don’t push your price over the comps, unless you know you are at least as good or better than those comps.

The market tumbles when people are lazy and greedy. When they want to price it higher than any property that has ever sold before, and want to do nothing to make it look its best.

This is one of those “Forewarned is Forearmed” messages, because I am seeing things sitting on market because sellers are digging in their heels and saying I want more money and I want to do nothing to get that more money. Nothing will send the market tumbling faster that a lot of signs out there on stale listing.

If you have had your property on market for more than 45 days and it is not sold…wake up and smell the coffee and make some changes, before the volume of properties not selling sends the market into a tumble. Be reasonable, and make changes as needed. If the market tells you “We’re not buying it” in 30 to 45 days…do something about it. Don’t say “I’m not in a hurry to sell”. You don’t have to be “in a hurry” to notice that no one is making an offer, because your house is not in tip top shape, and so won’t sell at this price.

Don’t just lower the price until it sells. Take it off market, get it looking its best, and then bring it back. When you don’t make your house look its best, you drive down prices, and that hurts your neighbors. Be a good neighbor and sell your house at top dollar by doing anything and everything you can to make it show in its best light.

Doing Whatever It Takes

Posted on by
56

[photopress:woman.jpg,thumb,alignright]I have to admit that it felt a little odd, even to me, for us to be personally painting the kitchen of my newest listing. We, the owner and I, were getting his place ready to go on market. He had his hands full with his own projects that needed to be done before we entered the listing in the mls. The color scheme of the condo was already transcendental. I wanted the kitchen to be a light color, because darker colors minimize space, and the kitchen in an 827 square foot condo is not something you want to minimize.

In my own house, I like to “repeat” a color by adding different amounts of a “smashing” color in one space , to white paint for tone on tone effects. And given this kitchen had a “pass through” to the dining room/living room “flexible” space, I wanted the kitchen to be “a glow” of the color in the eating area. Given there is not much wall space in the kitchen, I decided it would be easier and faster if I just did it myself, rather than try to explain how to mix the color to the right degree of “glow”.

I was thinking of “anonymous Joe” when I was making the bed yesterday before the first showings. It was “kind of” made already 🙂 I went around changing lightbulbs from 60 watt to 100 watt in the entry and hall, scrubbing the grout in the tile floor of the entry and kitchen, taking the “mauve” colored towel the owner had used that morning off the towel bar and ditching it in his hamper, because the mauve towel he had used was clashing badly with the citrus colored wall behind it. Turned his hand towel, the one I had picked out as “the right color” (but he wasn’t supposed to USE!) around so the tag wasn’t showing. Several other truly “anal” things, standing in the doorway of every single space from every single angle, and tweaking until I was “satisfied”.

This morning I was thinking of Russ’ before the fact contract, with a long list of “services and metrics” that all agents will provide to all. Some list of generic things that people think provide value, when really every single person needs “Whatever it takes”, and whatever it takes changes from individual to individual, be they buyer clients or seller clients. In 16 years I’ve never had to paint someone’s kitchen before, and frankly hope I never have to again. But at this time, for this client, that’s what needed to be done. The poor owner was wasted! It was hot, he had been working on “his stuff” until he was ready to slash his wrists, and I just rolled up my sleeves and chipped in from morning until night until we were done. Sometimes doing it with them, helps keep them going and sometimes my crawling around in every space helps me find things that need to be fixed, that the owner truly just never noticed. The more I do, the more I can head the home inspector off at the pass, so the seller knows his true net proceeds better, after repairs, before I hit the button sending him “live” into the MLS.

I never sat in his house with a little marketing flip chart. I never provided some big list of “services and metrics”. I didn’t even have a written contract saying I would be paid, while putting in twenty to thirty hours helping him get the place ready. When he said half jokingly after all the work was done, “maybe I should stay here”, I took his hand and looked him in the eye and said, “Seriously, if that is what you want to do, if you decide not to sell it after all, that’s OK. Don’t feel like you have to sell it now, just because we worked so hard getting it ready. You do whatever makes you happy.

I remember training a few new agents and making a little bag for each of them to put in their trunk with windex and paper towel and toilet cleaner and brushes (for the vacant house toilet rings). I remember a new agent who “got in it for the money” refusing to touch the bag and saying “I don’t want that in the trunk of my car!”. I remember him refusing to go measure the unfinished basement size, because he saw a cobweb and he had his “good suit” on. No, he’s not in the business anymore…actually he never did sell a house and yes, I did fire him and he went to a local big firm before he quit altogether.

Real estate is a business like none other, and their truly IS a reason why “we make the big bucks”. There’s a lot of reasons why we make the “big bucks”. But most importantly it’s because we do “Whatever It Takes” to sell the house “For the HIGHEST Price, In the Least Amount of Time and with the Least Inconvenience to the Seller”. This owner should have an offer within 3-5 days of “going live”, at the highest price achieveable, and be able to go back to watching his TV (which I have moved 🙂 from his living room to his bedroom). To do this job right, we can’t have that House Values goal of having 20 to 30 more “leads” this month!

We can’t, as an industry, keep doing less and less for more and more. And frankly, Joe and other consumers cannot keep hounding me about exactly what I am going to do, before I meet them and see “their product”. Because clearly there are different prices because of the different amounts of effort needed to sell their home at the highest price, in the least amount of time and with the least inconvenience to them (short showing period).

Those who want to trade in one “price fits all” for a lower “price fits all”, well…I thought you wanted a “fair price” for the job at hand and an end to the price being “fixed” at “6%”. If all you want to do is trade in one price fits all for a lower price fits all, with the guy who needs more service STILL getting paid by the guy who needs less service….I truly hope that’s not the case.

Let’s let each client pay for their individual service, some higher and some lower and always a fair price for the service required to achieve the goal. I truly hope THAT change is the one coming down the pike. Let’s end “price fixing” period. Not just trade in one fixed price for a different fixed price.

Because if it’s just about a tug of war on which fixed price to use…then I’ll have to move over to the other side of that rope. Please tell me it ain’t so.

Once in a Blue Moon

Posted on by
20

[photopress:blue_moon.jpg,thumb,alignright]Once on a Blue Moon, I need to insist that a buyer, if I am going to work with them, sign a buyer agency agreement.

1) When assisting them in their home search requires that I go inside every property to ascertain if the property has what they need.

Example: must have first floor bedroom that is NOT the master bedroom, but is large enough for two people to be comfortable and have it’s own bath and be on the same floor as the washer and dryer. This is a common request for multigeneraltional families whose parents live with them and do their wash 🙂 I can’t tell all of this from mls data and have to preview lots of homes quickly and all new on market homes to make sure the first floor bedroom is not tiny and to make sure it is in reasonable proximity to the washer and dryer.

2) When I am asked to find property that is not for sale.

Example: Must live on the SE corner of the Newmark Blding on any floor higher than the 12th floor. When someone wants something that is so very specific that it requires that I contact all owners of those properties. Waiting for this to come on market is not in the best interest of the buyer, unless they are willing to wait five years to buy something (which sometimes is the case, and that’s OK). If they won’t buy anything else until they realize they can’t have what they really want, and they need a place within 6 months, then I have to contact every owner of that “commodity” and ascertain if it is a dead end and no one is thinking of moving this year. P.S. I rarely negotiate a lower commission for this type of home search. I need a written Buyer Agency contract to establish for the seller’s benefit, that I do NOT work for them, but the buyer, and so need a written contract saying that.

There are a few other examples, but I think you get the picture.

A very wise Broker once told me that once you have the meeting of the minds with a client that the relationship is exclusive…you don’t need a written contract. So as soon as someone is WILLING to sign one, you simply shake hands and acknowledge the meeting of the minds and don’t insult the client by requiring a contract.

Until there is a meeting of the minds, the contract is inappropriate, since a contract is putting on paper that meeting of the minds.

So either way, I do not need a written contract by and large, with some exceptions.

My$.02…YMMV

Here’s a question only the Governor can answer

Posted on by
8

[photopress:gregoirepicture2.jpg,thumb,alignright] Why does the law say “a licensee who works with a BUYER represents that BUYER unless…”

Aren’t SELLER constituents deemed worthy of “equal protections under the law”? Why doesn’t the law say “consumer” generically, so that unrepresented sellers have the same protections, and not just a consumer when a BUYER? Why doesn’t it cover a little old lady owner when a licensee knocks on the door trying to buy the place, for less than fair market value? Why isn’t she represented at first contact?

Here’s a little FSBO trivia. Did you know that agents who bring For Sale By Owners a contract on an mls form, when representing a buyer, are breaching mls rules? Did you know that there is no place in that contract for an agent NOT to represent a seller in some capacity? Only two options: Agent represents the seller or agent represents both the buyer and the seller (dual agent). There is NO place in the contract for the seller to be NOT reperesented as in No For Sale By Owners allowed. A completely different contract must be drafted by an attorney if an agent wants to write an offer on a For Sale By Owner.

Lots of things need to be changed that are leftover loose ends from the days when every agent represented sellers. I’m hoping all of these new business models are going to force all of the trains that are off the track to finally get so derailed that someone has to fix them. Train 1. State Laws of Agency Train 2. MLS Rules Train 3. NAR and Code of Ethics They all need to fit tomorrow’s reality for the new business models to function properly. Tomorrow’s reality is happening as we speak, as these new business models come up and as For Sale By Owner companies spring up. Someone needs to “get on the stick” pretty fast to catch up, because “the times they are achangin'”.

The Law of Real Estate Agency needs to clearly define all of these new business models, so that the consumers, including the For Sale By Owners, are aware of when they are NOT represented, and when they are being offered “limited reperesentation” and what that means to them. That is part of the DOJ “stuff”, at least with regard to Exclusive Buyer Agency. Hopefully with regard to For Sale By Owner companies as well, though I haven’t read anything yet to suggest that is the case.

Where’s that “Food for Fodder” tag? Lots to chew on today.