Author Archives: Tim

Buying or selling a home: how are you making hiring decisions?

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As we are finding out (some for the first time), housing and the mortgages that finance it is a key economic engine.

Question: Is it important that the agent and/or loan officer you are working with have a keen understanding of fundamental market knowledge and economics? Should they show competency in basic fundamental economics and how it impacts housing?

How would you rate the importance:

1) Very important (it could make the difference in working with the agent/loan officer or not).

2) moderately important (would allow for good discussion, but it would not necessarily dissuade a working relationship).

3) somewhat important.

4) of little importance.

Head Scratcher: $100K loan orig. fee, poof! Maybe it's our hot weather.

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Life in the escrow business:

A borrower notices a $100,000 loan origination fee on a very large transaction, puts on the brakes and says, “not so fast.” The borrower stops the transaction after the loan officer and borrower can’t work it out.

I know Lynlee mentioned a nutty conversation in an earlier post, but this takes the cake for me, YTD. For a LOT of people, in this market, the fees charged on this singular transaction would have made for a “great year.” (or two)

Have a great weekend everyone. Enjoy the weather!

Strategies for selling your home when your neighbor is preventing it.

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This has been on my mind for a long time. I have never felt so bad for a homeowner than one in my neighborhood. In my opinion, they are being held hostage by an home that you have to drive by in order to see the subject home for sale. They share a common driveway. The subject home (a great property and excellent home) for sale is just beyond the eyesore with multiple cars parked in its driveway and yard, never mind the fact that the physical condition is very poor. If I was a buyer, I would not want to drive by this place to get to my new home.

I don’t have the answers, but maybe some creative agents can suggest some ideas. One idea I had was that the subject home for sale could possibly create a driveway that connects to the adjacent main street. This would be expensive, but the alternative is no sale.

Spring Projects: sprucing up that old cracked walkway or patio?

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Note: there other things more interesting to me than escrow/real estate issues, so hope this topic does not tread on other contributors expertise.

It is Spring (believe it or not) and the Everett Home Show just wrapped up over the weekend. This is the time of year where home improvement projects start to come to the forefront. One of the larger projects last Spring was to remove our 30+ year old drab, cracked walkway and driveway apron in front of the garage. We obtained bids to install either a stone/paver walkway (Hardscape) or new poured concrete. For our budget, time constraints, and do-it-yourself experience, we ended up going with a stamped concrete walkway.

I rented a jackhammer and broke up the entire walkway and driveway apron. It was tough work. We liked the stamped concrete patterns that we observed visiting new home developments, home shows and doing research online. After sifting through all the information, we took quite a while to make a decision on the color and blend we envisioned. It is nerve-racking because if we were unhappy with the patterns and color after the concrete pour, we were going to have to live with it.

A significant amount of prep work had to take place because there is a lot of water run-off from the road adjacent to our home and the topography slopes towards the house. You can also see remnants of the perimeter drainage system I installed and connected to an existing drain system.

Project cost: about $6,000.00 including my expense in removing the old walkway & driveway apron myself. Drain system and retaining walls (Stacked Wall supplied by Pacific Stone Company in Everett) were a separate expense, but we did do it ourselves.

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Hope this project provides inspiration and ideas for people thinking about their outside projects!

This year’s Spring (I hope) project entails a new asphalt driveway from the street to the apron & walkway. I’ve also been informed that I need to remodel the guest bathroom. One project at a time.

Predictions: helpful or counterproductive?

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The dialogue between commenters has been interesting to read on Ardell’s most recent post about predictions.

Is this a helpful or counterproductive prediction?

“So, don’t be swayed by media reports of a ‘disastrous housing economy.’ Take the long-term view and be confident that your home will continue to appreciate in value. And know that if you buy a home today, in seven years it will be worth a lot more.”

– Geoff Wood, CEO Windermere Real Estate
(Quote taken from the Spring Quarter 2008 of ‘Inhabit,’ The best of the Pacific Northwest magazine) Published by the Seattle Times.

I don’t necessarily disagree with Geoff’s sentiment and I understand his overall point within the larger context of the quote**—I just took the last paragraph quote from his ad titled “Gaining Perspective on the Real Estate Market”. Seven years is a long time. But this is one heck of a prediction, no bones about it.

**his use of a “Casino” and “gambling” analogy was terribly ironic, intended or not.

I have no idea if this was solely a local ad or if they ran it or a similar one in other markets Windermere has offices as well.

Agents are resources in so many aspects for their clients. Consumers turn to them for valuable feedback, for information, data, suggestions AND ADVICE, which includes feedback on where the real estate market is trending. In so many ways, they are advocates whom consumers want to trust, but for a variety of reasons find it difficult. Building and gaining trust does not begin with “I don’t know where the market is heading, beats me.”

You have to give Geoff Wood credit. At least you know where he stands.

RCG Intermission to bring you ……

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…..2″ of snow and rising in Snohomish County. Ummm, isn’t it April 18th, 2008, not mid February? Stevens Pass ski area closed a wee bit too early! If you can make it to our place, the hot chocolate is brewing, the fireplace is on and the kids are heading out to play and we have NO last minute escrow signings tonight! Yeah!

april snow2

Chrome and Teak are thinking….”you have got to be kidding us!”

Salvaging a dead transaction: when a client refuses to sign.

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Never underestimate the power of a cup of coffee

A few months ago I met with a client at their home in the Woodinville area. After introducing ourselves to each other we sat down at the kitchen table and started going over paperwork and loan documents. The gentleman slowly started to go over the loan documents in a methodical manner which is not unusual. Prior to each signing appoinment one of the very first things I mention to our client is that I’m not in a rush and they can take all the time they need. I indicate that there are a few important documents they need to pay particular attention to while the other bulk of the loan package is a series of disclosures, much of which is boilerplate and typical of most lender loan packages.

Probably 15 minutes into the signing it was evident that the demeanor of the client was changing. Not only was the scrutiny of the documents going slowly but question after question started to flow, one after the other. The client decided to stop the appointment and make a phone call to his loan officer. After a brief discussion, the client hung up the phone and informed me that the transaction would be on hold.

Naturally, your mind starts to spin a bit and I sensed that the gentleman wanted to digest the information more carefully, perhaps without the pressure of anyone being present. I informed the client that it was not a problem and I would be in touch to schedule another time to mutually get together and sign the documents.

coffee cup

We’ve been in each other’s company for about an hour by this time and I told him to “not worry about the transaction, at least I met another new friend!” At this point the gentleman offered me a cup of coffee. Hmm. That sounded really good and was my invitation to build trust. We sat down at the table over the coffee. I’ve never had a better brewed latte—this guy really knew what he was doing. Silky smooth and wonderful. We started to discuss absolutely everything: his house, our families, kids, the real estate market, interest rates, etc….

The gentleman was from Turkey and it was another lesson in assisting clients from other cultures and the way in which you build trust. The rest is history. Three and a half hours later I had a happy client, happy customers (loan officer/agent), and signed documents in my hand ready for a funding package to be completed and overnighted to the lender.

Need cash flow? Don't be afraid of unpopular sales and…

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mobile home
……..selling uncoventional listings otherwise known in the real estate world as “Mobile Homes.”

You think to yourself…pshttt. Yeah, you laugh. You say, “whatever. That’s not going to make me a listing star or a top producer!”

Guess again. You may find this hard to believe, but one of the top two producing agents (in both sales and commissions paid out of our escrow office, I believe two years running) who uses our office to close mobile homes, comes in to collect commission checks darn near every week. Sometimes more than once a week. Sometimes, three a week. This unassuming agent is in our office so often we nearly gave ’em a desk and phone. (ok, not quite).

It is not unusual for the agent to stop in with two transactions on Wednesday and say, “let’s close these by Friday.” Sounds good to us.

Don’t discount this lucrative market. The sales are closed as fast as the parties can make it to our office to sign their paperwork. Two thousand dollars here, three thousand dollars there…it all adds up to well into the six figures in earned commissions. For crying out loud, wouldn’t you like a transaction that can close just about as fast as popcorn pops in the Microwave!

Purchase Implosion: Pre-approval letters worth the ink?

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Nearly everyone has had a personal experience of a deal falling through via the other side of the transaction not performing. It is hard to swallow when you have no control over the other party or their financing efforts. Especially bad, the call to your client who is in boxes and ready to move within hours. It takes guts to make the call and is character building.

The dreaded phone call: “….hate to bring you bad news, but our transaction has fallen through, and ….”

Chew on this scenario:

A transaction is stopped in its tracks just hours before it is slated to close. Seller has already signed closing paperwork and escrow is waiting for lender documents to have borrower sign and then proceed to close the transaction as scheduled. Escrow is then notified that the deal is apparently dead. Why? Escrow is informed by the agents that buyer’s financing fell through. Buyer’s financing addendum gives the borrower x amount of days to obtain financing, which was written to expire the day of closing. As is tradition, the selling agent provided a pre-approval letter (not pre-qualification) at the time of the offer.

In a sentence in paragraph #2 of the Financing Addendum Contingency (NWMLS Form 22A) it states:

“A letter from the lender generated or dated at or prior to mutual acceptance shall not constitute a letter of loan commitment which complies with this paragraph.”

1) Should the listing agent and seller fight for the earnest money?
2) What do you find would be some of the transaction management pitfalls that could have been avoided?
3) Is the buyer fully in compliance or did they fall short of a duty to act in a timely manner. Time is of the essence.