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

Why I do not support the use of Buyer Agency Agreements

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[photopress:buyer.jpg,thumb,alignright] For many years I have been at loggerheads with most of my peers around the country, regarding the use or lack thereof, of Buyer Agency Agreements.

After eight years of “ad nauseum”, insider agent forum discussions on this topic, I continue to feel that buyers are most often, better off without them. Most often I am the only agent, in a forum of 28,000 agents, who does not support the use of buyer agency agreements. So maybe I am the “loggerhead” who refuses to “get it”.

The only time I will use them, and I have used them, is when there is a clear and present reason for the buyer to have one, that is of benefit to the buyer. Everything I do is on a case by case basis…everything…and must pass my smell test for being right for this client at this time, given the objectives of this client. Often I wish I didn’t impose that ethical standard on myself 🙂

I was one of the first agents to use a buyer agency contract in the area I worked in at the time. The buyer had a previous bankruptcy. Under the rules in play in that area at that time, I would need to disclose the previous bankruptcy to the listing agent, even though it had no potential negative impact on the seller, as it did not affect this buyer’s ability to secure a loan. The only way I could get around this, was to explain this to the buyer and have them sign a buyer agency agreement. They agreed, we signed it, and the buyer got both the loan and the house. Some disagree with me on this and feel the seller has a right to know everything about the buyer, regardless of whether or not it will impact the seller. I do not agree.

Today, in this area, I do not need a contract with the buyer to represent the buyer, but at that time and in that place I did, so I used one in that particular case. I used one because the buyer could not attain their objective, buying that house, unless I did use one. It passed my smell test of being better for the buyer client for me to use a written buyer agency agreement.

Some of my peers argue/ask, “Why do you always use a contract with a SELLER client?” as if the issues are one in the same…a “contract is a contract” is their mantra. I always use a contract with a seller, because it is in the best interest of the seller to have all of the members of the mls show the seller’s property. In order for the seller to gain access to the mls, the sellers must sign a written agreement to pay, through me, the agent who shows the property and brings an acceptable and accepted offer. In other words…it passes my smell test for being best for my client for my client to sign it.

Sales that “fall apart” on Home Inspection

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[photopress:brokenmask.jpg,thumb,alignright]Tim’s Comment: “What many do not realize is the extent and frequency in which commissions are reduced via credits to the parties at closing. It is very common.’While Tim raised this subject as if these credits were commission negotiations, and sometimes they are, more often these credits are how agents help the buyer and seller accomplish their true objective. The true objective of a seller is to sell his house. The true objective of the buyer is to close on their new home.

Often during the home inspection negotiations, people get all upset. The buyer is really ticked that “the seller won’t fix…:and the seller is really ticked that “the buyer is being so petty as to want him to fix…” For many, many years, agents have used a portion of the commission to keep everything together and throw money at the problem that the buyer wants fixed and the seller won’t fix. With commissions being reduced, and so many agents paying referral fees and bottom feeder site fees and lead generation fees, there is less and less money available to keep these sales together, so more and more are falling apart.

It will be very interesting to see if the new business models that cut the commission down to the bare bones, have a higher rate of sales falling apart at inspection time, with not enough commission in play to fix what the buyer wants fixed and the seller won’t fix. The first time I saw an mls listing that required the buyer agent to submit the offer directly to the seller, one of the $500 mls only listings, the poor sellers were on their third round with two sales falling out of STI. They had even lost the house they were going to buy because of the failed efforts, and were on their third try at getting a buyer that would “stick” to the end. So my guess is the less money on the table to hold everything together, the more sales will fall apart.

When I negotiate with a buyer or seller, I make sure based on the type of property and price range, that I am not leaving the client so short, that the objective cannot ever be attained.

Seattle Street of Dreams – 2006

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Robbie, Stephanie, Harrison and I went to the Street of Dreams together yesterday. What I enjoyed most, was their company. What Harrison (age 3 1/2) enjoyed most, was the school bus ride from and to the car. His first ride on a school bus.

The house I liked best, though not everything about it, was of course the highest priced one at $5,500,000, but I’d want it moved somewhere else with a view. Because I am a “view person”, not everyone is, I came home and liked my own house better than any of them.

Trends, products, styles, features…a run down. I guess I’m “jaded” by having seen lots and lots and lots of houses all over the country, because I didn’t see anything I liked, at least not that I liked in that setting. House number 6, which is purportedly “sold” was the best of the batch, all things considered. Best lot, house that seemed appropriate to the lot and setting, house that seemed appropriate for the area. But I’d like to “live in it” for a week or two like a timeshare. I’d want to move it to the bottom of a ski resort and timeshare it out for two weeks at a time unless I could afford it as one of many homes as a “getaway” house. But then I’m a City Girl who can’t be rustically oriented for more than two weeks at a time. I get hives.

Lots of too much dark, caves, caverns, pitch black theater rooms, stone inside the house, even a clay tile roof inside the house. Lots of too much “old” as in new made to look “old”. Coming from Philadelphia, I know what old looks like, and that’s not it. Two of the homes had a very dark “wood” floor that was supposed to look like the floors of an historic home. Not. Wide plank…yes, dark, yes, waves in each and every plank…not. Someone said it looked like it was made out of plastic.

Every house had a “butler pantry”, I think, and I was evaluating them all. One was totally off as if the designer didn’t know what a butler pantry really was all about. A butler pantry, copied from historic homes which were likely homes patterned from England, is that small galley between the dining room and kitchen with counters and cabinets on either side. It originally did not have a sink, as any water used by the butler would have been the “soda water” type in a bottle to freshen and make new drinks for the guests. For a “butler pantry” to be “true”, the butler should be able to stand in it and see the whole dining room table from it. He watches and quietly comes out as needed to fill a wine glass, freshen a drink or refill the string bean bowl as it gets low. The vantage point should be such that the guests do not really see him most of the time. So the one butler pantry that had only one side and standing there gave the butler a view of the backyard? I don’t think so.

Stephanie noticed this and it was a riot. In one house there is a fish tank inside the shower. Cool, but…the other side of the fish tank built into the wall was not in the master bedroom, it was in the hallway! I went into the shower and did a little dance as Stephanie stayed in the hallway to see if she could see me moving about. All of the people in the house were laughing and talking about how the kids in the “West Wing” could sneak down the hall and watch Mommy and Daddy in the two headed shower through the fish tank.

Moral of the story is NEVER go to The Steet of Dreams with a Real Estate Agent. They look at what’s wrong…not what’s right, at least this one does. Mostly the homes were not “true to themselves” mixing modern smack against historic replica features. That new sink that looks like a laundry tub (modern) next to an island with an Early American spindle table leg built into the corner. The pantry with relatively cheapo looking shelves, with a crystal chandelier hanging in the middle of the pantry. Better to hire a carpenter to build the shelves in, if you are planning to hang a crystal chandelier up between the Frosted Flakes and the Pop Tarts.

So Robbie and family got a taste of what looking at homes with Ardell is like. They look at what’s right, I look for what’s wrong. Robbie kept wanting me to give an opinion of value and projected days on market…but that’s something I do after I get home from showing property, as it is a “data” driven function, not a WAG 🙂

Wrong Godfather

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[photopress:Godfather.jpg,thumb,alignright]Sellsius has the right point, but the wrong Godfather.

The Godfather of the people outside of “The Family” is the local State Real Estate Commission, appointed in most cases by the Governor of each state, and the protections for the people are in the licensing laws of each state.

The Godfather of the Realtors, the people inside “The Family”, is NAR and WAR and SKCAR and their counterparts around the country.

So in Mafiaoso-speak, Marlon Brando (in the Sellsius article) is the head of “the bosses” and Al Pacino is the Godfather of “the neighborhood”. (To be really accurate, I’d have to switch over to Sopranos…so I took a little license there, for the benefit of the non-purists, on the analogy.)

Point being, DOJ against NAR may help the Banks, more than the people, and local Departments of Licensing, and Real Estate Commissions, etc…make changes to affect the public at large. There are ripples to each that affect both…

but don’t go to the wrong Godfather on the day of his daughter’s wedding, or you may get the wrong wish granted, or no wish granted at all! For those not tuned in to “mafioso-speak”, it’s called “Barking up the Wrong Tree” 🙂

The “HOME” Stretch

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[photopress:home_stretch.jpg,thumb,alignright]The final days preceding the actual closing date are often the most confusing part of the home buying process. 9 out of 10 buyers and sellers think that something actually happens that involves them, on the closing date shown in their Purchase and Sale Agreement. I am often asked by clients “Should I take off work the day of closing?”

I can see no reason why the buyer should take off the day of closing, as most times you would have nothing to do to effect the closing, and you don’t normally get the keys to your new house until pretty close to the end, or after the end, of business that day.

There are generally two days that the buyer needs to take time from work during the real estate transaction. The first is in Phase 1, the home inspection. Yes, you can do it on Saturday and sometimes in the evening, but there are only 52 Saturdays in a year and getting the best inspector is worth taking time off work. Sometimes the one who isn’t already booked for this coming Saturday, may be the one with no appointments at all. So I would say you should plan to take time off to attend the inspection the first week after you have an accepted offer.

Now for “the HOME stretch”. You need to take time off from work (in most cases) to sign your loan documents and closing papers. This usually happens no later than the day BEFORE closing. It usually takes an hour. Sometimes up to two hours if you have a lot of questions. The frustratring part is you can’t plan ahead very well. Escrow companies will not schedule the appointment until they have the loan documents in hand. Very often that happens only a couple of days before closing. While I can’t get escrow to agree with me because they won’t even talk about an appointment until they “see the docs”, I usually tell clients to be prepared the day before closing, or the day before that, to take a couple of hours off from work.

Once all of the papers are signed, the buyer pretty much just waits until they get their keys. After you sign your documents they are sent (usually by courier or fax) to the lender for review. Lender review can take 24-48 hours at which point the lender “releases the transaction to record”. This release must happen in the morning or early afternoon. Once the transaction is “released for recording” the agent gets a call and then later in the day when it actually records, everyone involved gets a call with “recording numbers”. Once the recording numbers are received, you can get the keys to your new home. That last call often happens between 4 p.m. and 5 p.m. So taking the day off from work to wait for that call and your keys is usually not a good idea.

When the documents are very late, it could be either because the escrow timeframe was short or because the loan was “difficult”. Zero down loans with stacked costs or loan amounts that are stretching the buyer slightly past the place where the lender is comfortable, usually have more “conditions to funding” and tend to be the ones where docs are arriving very late in the game. If you have a credit score of over 750 and 20% or more down, the docs may come in very early, and all you have to do at the end is wait for the keys.

More often than not, the buyer looks like the poor gal in the photo above…and very glad to be at the finish line!

Top Ten Things A Home Inspector Says

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[photopress:top_10.jpg,thumb,alignright]It’s Time for another Top Ten! Those of us who have been to 100 too many home inspections can practically stand behind a home inspector and mouth what he is going to say next, when it comes to these “Top Ten Things A Home Inspector Almost Always Says”. No we don’t do the two finger rabbit ears behind his head 🙂 I swear we don’t!

NUMBER ONE:

You need a GFI over here by the sink, oh and another one over here in the master bathroom, and one down here by the kitchen sink…and one more out here in the yard, at the outlet next to the hose bib.

NUMBER TWO:

Contact…contact…Earth-to-wood contact over here.Get that firewood AWAY from the HOUSE!

NUMBER THREE:

Now this here tree is planted WAAAAY TOO CLOSE to the HOUSE!

NUMBER FOUR:

You want to treat the roof for moss BEFORE you get moss. You can spray the treatment on with a hose from on the ground. But first you have to get the moss off the roof, because the treatment will only keep moss away. It won’t remove the moss you’ve already got. I tried to get a website link for you, but lots said we should all trash our roofs and get metal ones. Moss can’t grow on a metal roof. Pretty noisy neighborhood if it starts hailing on all the metal roofs.

NUMBER FIVE:

Cracks in the Driveway!

NUMBER SIX:

Pine needles on the roof, in the valley flashings and in the gutters.

NUMBER SEVEN:

Chimney flashing. if I had a nickel for everyone of these…

NUMBER EIGHT:

Hanging gutters, loose gutters, missing gutters, gutter downspout too close to foundation, divert water further away from the house.

NUMBER NINE:

CAULK! Take out the old caulk…put in the new caulk. Caulk inside where the tub meets the tile. Caulk outside of the tub where the tub meets the floor. Caulk around the kitchen sink. Apparently we all need many tubes of caulk in various colors, including no color at all!

And NUMBER TEN IS!

UH OH…NO TAG ON THE HEATER! OLD TAG ON THE HEATER! NO TAG DATED 2006 ON THE HEATER!

2ND INSPECTION NEEDED TO HAVE AN HVAC QUALIFIED INSPECTOR SERVICE AND INSPECT THE HEATER.

KIRKLAND – Classic Car Show!

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[photopress:57_vet.jpg,thumb,alignright]Nothing makes me weak in the knees like a Classic Car Show! I used to be able to tell a Corvette, through the end of the mid-years, just by looking at it. This 1957, year of the “fuelies” model is one of my favorites to look at, but a ride in a 1967 Corvette is unforgettable!

This Sunday, July 23, 10 a.m to 4 p.m., don’t miss the Classic Car Show in Downtown Kirkland. To get in the mood, click on this link to Legends Car Club, the event’s sponsor.

This is a job for…SUPERGEEK!

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[photopress:geek_logo.jpg,thumb,alignright]I would very much appreciate it, and I think agents would buy the software, if someone would write a program to fill this need.

I am setting up a home tour of nine homes for tomorrow. They are spread out from South Bothell to Upper Mill Creek. There will be so much going on in evaluating these homes that I often “mapquest” and print out the directions from one property to the next.

How about one of you setting up a “HomeTour.com” that we can subscribe to for a monthly fee, where we can type in all of the addresses at once and it will spit out the driving directions one to another. Would also come in handy for large offices that do weekly tours of new listings and for agents who are previewing a lot of Broker’s Opens all in a short two hour period. Would save a ton of time.

If someone knows of a program or online service that does this already, I would love to hear about it.

Just throwing it out there as I know many of you are looking for new products in the technology arena that agents would find useful. You may even be able to get HomeTour.com from whoever owns it but doesn’t seem to be using it.

Negotiating the Commission vs. “Discounting”

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[photopress:album2.jpg,thumb,alignright]My very first entry here on RCG discussed the manner in which a buyer and their buyer’s agent negotiate the buyer agent commission. Being a “Discount Broker” and Negotiating are not one in the same. A “Discount Broker” usually has a set fee or menu of services with set prices. Many traditional brokers have a set range within which their agents cannot deviate. “Negotiating the commission” is a simple phrase for no carved in stone set amount. It means sitting down with a client and determining a fair and reasonable price for this client given this particular client’s needs and expectations. The end result being an unknown factor until the end of the interview. The end result could be higher than the client’s desire, lower than the client’s expectation and in many cases no change at all from the agent’s expectation. Negotiation is about an intelligent discussion with a mutually agreed upon end result.

Last night before I went to sleep I popped over to Greg’s excellent blog and his article that referenced my feelings on the topic of buyers and buyer’s agents. I was a little surprised to see a “nastygram” comment there aimed at me personally and my feelings on this topic. It amazes me that agents who sit down with sellers every day to negotiate the commission, become absolutely outraged at the suggestion that buyer’s should do the same with their agent.

I would like to dispell the myth that I am a “Buyer’s Broker” who exclusively works with buyers only. Not because there is anything wrong with that business model, but because it simply isn’t true. The only reason I highlight buyers with regard to commission negotiations is because agents negotiating with seller clients is a given. There is absolutely, never a listing appointment with a seller, that does not include the topic of commission. Consequently there is no reason for me to evoke change or explain the parameters within which the seller consumer can negotiate with their agent.

One of the main reasons to highlight the difference between “discounting” and “negotiating” is the fact that Buyer Agent Bonuses are on the rise. Every night I receive emails and “Zip Your Flyers” from agents around the Puget Sound offering “$5,000 EXTRA Buyer Agent Bonus!” and “4% SOC!”

The mere concept that a Buyer Agent will be enticed to lead a buyer to one house over another, because of the amount of money that Buyer Agent will make when it sells, shoud be offensive to every single agent in this country.

The Buyer Agent represents the Buyer. The Buyer Agent is not “Selling a House to Make Money”. The Buyer Agent, in representing the Buyer’s Best Interests, should never be offering advices based on the fee structure of each property. That doesn’t mean that a low fee doesn’t infiltrate and influence the thought process. We are human. It would have to be a perfect match for my client and a great house for me to truly buckle down and recommend a house that is paying five bucks or nothing. But there have been times when I recommended a house and walked away with absolutely nothing, just as there are times when I have represented a seller and found that my walking away with nothing was the only way to achieve the objective. It happens once in a while the same as a lawyer does a pro bono case once in a while. I don’t make a business model out of it, but I don’t rule out the possibility of that end outcome either.

As for the jab at the end of the “nastygram” comment “NOTE: Ardell is NOT a REALTOR”, it is absolutely true that I “stepped out of the pew” after having been a member for 14 years or so. I have given NAR over ten years of those 14 years I was a member, to raise the status of the buyer to CLIENT level. I am disappointed that Buyer Agency has not progressed further than it has, and clearly I have given them sufficient time to meet my expectations.

Does anyone really think it matters if I go over and slap my $500 or so over at the Board of Realtors on Monday to “become a REALTOR”? Does taking five minutes out of my day and $500 out of my pocket really make any difference in who I am or how I do business with my clients? I think it is more honest and ethical to be true to myself, and stay out as long as I agree with the DOJ’s position. I think it is more honest and ethical for me to stand outside the fray until our basic thinking is more in line, than to be a member who dissents from within. I’m the one who has to look at myself in the mirror in that regard, and make a personal choice. At present, this is the one I can live with.

As long as the buyer is not expected to discuss commissions when they meet with an agent, the same as a seller – no more, no less, I will remain where I am. Discussing commissions with a seller does not automatically translate into discount nor does discussing commissions with a buyer automatically translate into discount. It is a matter of equal treatment and respect, pure and simple. How can that possibly be wrong?

ON A LIGHTER NOTE – THERE WILL AGAIN BE A PRIZE, ON BOTH SITES, FOR NAMING THE BAND AND ALBUM TITLE OF THE PICTURE IN THIS POST. Same era, late sixties, fabulous Rock and Roll band from the West Coast that might have done better on a different label. Not a One Hit Wonder, with many albums in our collection, and one of Kim’s favorite bands of all time. There are other clues to the band’s name in the photo itself, but this one should not be an easy ,”googleable” answer. Good luck!