Author Archives: Robert Gray Smith

Affordable Condos or Cheap Apartments — Who's choice is it?

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I’m not typically one to go on about property owner’s rights vs government(s) ability to control code enforcement and reasonable use of property without infringing on others.  I think active involvement in zoning, environmental protection, etc are way too important for market forces only. But when the politicians start butting in without thinking about the unintended consequences it’s time to speak up.

For the last couple years we’ve all heard a lot of complaints about the shortage of affordable home ownership in and around Seattle. At the same time, it’s been a dismal market for landlords as the rental market has been very low. Given that situation, wouldn’t you do what a lot of apartment owners are doing — go condo. Better return for the owner and it increases the supply of available equity housing in the market.

From an article in the Seattle Times, Condo Wave leaves renters battered, apparently State Senator Ken Jacobson believes those evil property owners shouldn’t be allowed to put their real estate to it’s highest best use. Apparently we must stand up for low-rents, tenant rights over landlords and above all no more development. Let potential homeowners look farther away from the city to live — they can afford it. Ok, I’m exaggerating and ranting – but figure out the obvious. They’re not eliminating housing — just switching it to the ownership market.

If you live in Washington State, please be sure to check out the Seattle Times article and contact Senator Jacobson with your opinion on his proposed legislation. A hearing is scheduled for Thursday in the Senate Consumer Protection and Housing committee, so don’t wait.

Coldwell Banker Bain’s new interactive map search launched today

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Very similar to what John L Scott did (they were both done by the same dev company) but a little more localized as far as neighborhood drill-down. They also added sold property listings driven by address reference rather than map based, but still pretty handy.

As I’m an agent for Coldwell Banker Bain I’ll refrain from singing my praises of the improvements. I’m a little more interested in what everyone else thinks of it. Check it out at http://www.cbba.com/InteractiveMapSearch.aspx

No more Redfins, no more Zillows or Trulia’s — no more innovation!

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Ok, I’m a little off the real estate target here but it is an issue that effects us all. The biggest factor behind the creation of innovative companies like CraigsList, eBay, Amazon.com and even Google is what? The Internet of course. The Internet has been a decisive factor in leveling the playing field between the giant corporations and the startups with great ideas. This provides the environment for real estate related companies like Redfin and Zillow as well as social networking sites such as MySpace.com and YouTube.com.

Apparently many of the telcos (Sprint, Vorizon, AT&T, etc) feel that they should be getting a share of the revenue created by these new ideas. In exchange for creating a faster Internet, their proposal is a toll booths, private express ways and the slow lane for those who don’t want to line the pockets of the telcos. The very same pockets that have already been lined with $200 Billion in tax breaks to create an infrastructure they’ve failed to deliver on already.

So what to the power hitters and luminaries of the industry have to say? Well, on one side we have AT&T CEO Ed Whiteacre who said “that in order to bring America up to speed through fiber-to-the-premises (fttp) wiring, content providers are going to have to pony up to use his “pipes.” I’m far more inclined to believe the likes of Craig Newmark, founder of CraigsList.

‘Imagine if the leaders of 16th century Germany, feeling threatened by the democratizing forces of the printing press, had taken Gutenberg’s invention and limited its use to those they politically agreed with — or if Luther had to pay licensing fees for nailing up his 95 Theses on every church door in Germany,’ writes Craig Newmark in an opinion column in the San Francisco Chronicle.

Sir Tim Berners-Lee, father of the Internet, has characterized this as a US-only problem at present. “In Europe, net neutrality is the rule“ he said. Interestingly enough they are also way ahead of the US in broadband technology and capacity. What else can you say about an issue that has united Microsoft, Google, Yahoo and Moveon.org all on the same side.

Some of the proposed Net Neutrality legislation is seeking to prevent the telcos from charging extra tariffs based upon the type of content delivered. But even with the heavy hitters like Microsoft and Google, this initiative is facing a tough battle. Just last week those companies favoring net-neutrality lost a key vote in Washington DC. The key lobbyists seem to be siding with the telcos and their bread-and-butter lobbying dollars.

On the other hand, is this law really necessary? There are some who advocate letting them put up road blocks — it will spur more market forces to alternative technology like Wi-Max. Others are against the net neutrality laws as they are currently proposed. Andrew Cantor of USA Today’s Cyberspeak column argues that “Network providers need incentive to build faster pipes…But if they(sic) can’t make money by offering a better product, why would they bother building one?”

As much as I’m a free market leaning entrepreneur I lose my trust when it comes to industry big business. We (the American public) already got taken to the cleaners in the great theft called the Telecommunications Act of 1996. I’m not ready to stand by and watch the same thing happen with the Internet. If you want to take a stand for Interent Neutrality, contact your congressman or senator today. The Senate is actually getting ready to vote on a crucial bill, so let them know this week where you stand.

Further reading:

This is not your father’s woodshed

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[photopress:hmphoto3.jpg,thumb,alignright]I’m not talking about the steel side or rubber maid monstrosity of ugliness you pick up at Home Depot. Nope, these are modern architecture with designer finishes. I’ve been thinking about writing this article ever since I saw the well designed sheds by Coast Cabins at the home show a year ago. A recent article in Business Week on the same topic spurred me to get around to it. I’ve often thought of adding more space to my existing home (especially since my son came along – he’s 5 months now) but not really in the budget range yet for the massive remodel I’d like to do. So I thought about putting up one of these sheds as an office and/or guest space. No waiting weeks for contractors, off-track budgets and even better – no permits.

  • These still fall under local ordinances or CC&Rs for outbuildings, so you need to check your neighborhood rules.
  • In King County you can do up to 200 square feet without a permit
  • I live in the City of Bellevue where it is up to 120 square feet without a permit

[photopress:shed_10_12_image01.gif,thumb,alignleft]If you want to go a little more contemporary, there’s a great system designed by architect Michael Graves for Target (yes, that Target — with the bull’s-eye). Or if you like modern ala The Dwell home, check out modern-shed.com,

To some people this might seem a bit trashy, but as the Business Week article said “just think of it as a backyard room“. Me — I’m thinking of heading to the woodshed. 🙂

Interesting, not-so-nice Craig’s List practical joke

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Anytime you see a house listed FSBO at over $200K below market you gotta wonder what’s going on. This particular one on Craig’s list was just down the street from my home so I decided to take a look.

$307000 – 4 bedroom fhouse or sale by owner

4 bed 2 bath completely remodeled inside in desireable redmond location for sale by owner.this lovely split level home is located within walking distance of lake sammamish ,parks,and schools in a secluded neighborhood!

Serious buyers only!

I will be holding an open house friday through sunday 7am-8pm if im not there my wife will be so feel free to stop by and have some cookies and a mocha 🙂

please do not email i rarely check it

These poor owners had people knocking on thier door all weekend thanks to someone’s idea of a practical joke. Open posting options like Craig’s List, Google and others are free and get great exposure, they are also prone to abuse. As the man said “If it sounds too good to be true…”

Brokers and Agents – a perplexing business model

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For those who aren’t agents let me explain how many of the larger brokerages (eg., in this area – Windermere, John L. Scott, Coldwell Banker Bain, etc) operate. As an agent you are an independent sub-contractor usually paying a monthly desk fee to associate with a particular company, plus variations of splitting your commissions with the broker. For that you get office space, administrative support, access to training etc.

What you do NOT get is client leads from the company. (except for Relo clients if you last long enough). For that you do your own marketing and/or sink to using the sourcing companies like house values, home gain and others of those ilk whose business model Ardell summed up so well long ago.

So here’s the part that I just don’t get. As an agent, there is no way I can come up with the marketing dollars to compete against House Values online. But my brokerage (Coldwell Banker Bain) spends millions in advertising, development of their website and overall branding. Yet for all of that they have no pro-active lead capture system or method of distributing leads to field agents. Certainly any of the larger brokers could compete better for the internet business and yet they don’t. Plus, if there are agents willing to pay for lead sources why not capture that revenue back into their own company.

It seems to me that the logical thing to do would be develop a virtual brokerage office.

  • Create a staff of salaried agents for an inside sales team
  • Implement a product like LivePerson to monitor web traffice and engage potentinal clients online
  • Capture those leads and turn them to field agents in the local office for a percentage of the commission (you have to pay for that inside sales team somehow)
  • Quit making your agents rely on 3rd parties for additional lead source generation

I’m going to propose this idea to my company but thought I’d run this by everyone for some feedback.

Multi-family investments – recommended reading

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Generally I have an issue with most real estate books as they are usually advise on how to make a million dollars in 90-days or some similar hype. So it’s refreshing to come across the few books that are sound, practical advise on investing in real estate. The latest that I’ve read that fits into this practical advise category is The Complete Guide to Buying and Selling Apartment Buildings by Steve Berges.

Let’s face it, with high vacancy rates and low rents, multi-family hasn’t been a great place to invest the last few years in the Seattle area. But with the increasing prices of entry level homes, number of condo conversions removing units from existing inventory and the increased interest rates the rental market is seeing renewed demand. So where do you invest and how do you analyze the deal?

That’s why I like this book. Steve Berges doesn’t promise to make you a millionaire overnight. Instead he lays out tax planning, case studies and financial analysis examples that help you develop some investment strategies. I was a finance major in college, plus several years at Microsoft brainwashed me with the metrics mantra — if you can’t measure it, it doesn’t matter. So I really appreciated the financial analysis part of this book. Sample spreadsheets on how to calculate different ROI scenarios and determine the best investment among several properties.

This isn’t an exciting, feel-good rich dad, poor dad type of read. It’s practical advise on how to get into the game, analyze your investment and calculate your exit strategy. For anyone contemplating multi-family investments, I highly recommend this book.

One last note — don’t spend useless hours trying to recreate his spreadsheets from the book. I wasted several hours on that before realizing the obvious — all his analysis tools are available on Steve’s website www.thevalueplay.com

NWMLS to take 3 more baby steps into the digital age

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Ok, Robbie and I have both made our gripes known before about how closed the NWMLS technology is — even for agents. Well they are finally taking some steps in the right direction. I don’t have all the details yet so really not sure if they’ve gone far enough.  But I thought the readers of RCG should see it here first. I’ll follow up with details as each is launched.

The three major changes coming up are:

  1. New Vendor Access Agreements for MLS Data. This new agreement allows a Broker to have as many IDX downloads as the Broker wants —as long as the providing Vendors sell their products only to that Broker’s agents. For agents this is great as we should see a greater range of MLS data solutions. The downside is I’ve heard that it these vendor agreements will be excluding public access solutions of the data. In other words, you might be able to develop a really bitching CRM system for agents that accesses MLS data directly, but we (agents) are still limited to our company’s primary IDX feed for our website data.
  2. NWMLS Sold Data to Become Public  – Not sure they are going to give us all of the data fields on this, but a lot of the fields that become public record (e.g. close date, purchase price, etc) will be available on Broker-controlled websites. My guess is you will see some of the brokers coming up with online CMA systems for the general public. (Heading Zillow off at the pass?)
  3. FINALLY!!!  Digital Signatures. – NWMLS approved and endorsed DocuSign as the sole electronic signature system for NWMLS documents.

– Robert