Category Archives: General

Moving to "the darkside" of the "ARITLP"

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[photopress:darkside.gif,thumb,alignright]This morning I posted “the easy version” (post below this one) of the Real Estate Agent’s Role in the Lending Process.  I will now take it over to “the darkside” where the correct answer is a zero down, stated income, stacked costs, sub-prime loan with a pre-payment penalty. 

I call it “the darkside” because it goes to least conservative loan product.  But both are examples of CORRECT ways to proceed.

Buyer:  I want to see townhomes priced at $350,000.

Agent:  Have you spoken with a lender?

Buyer: Yes, and here is a pre-approval letter for up to $350,000.

Agent: OK, let’s go see some townhomes.

Buyer finds one he wants to purchase for exactly $350,000.

Agent:  How much are you planning to put down (Needed to write offer, as downpayment amount goes into the Finance Contingency.)

Buyer: Zero Down

Agent: Do you have the GFE from your lender? 

Buyer: Yes.  Here it is.

Agent: OK.  So looks like you will need $10,000 for closing costs and prepaids.  Do you have that?

Buyer: No, I need you to have the seller pay them. 

Agent:  OK, well the property has been on market for 20 days.  Let me call the listing agent and see if he has any other offers.  OK, no other offers.  Let’s try to get the property for $10,000 less by offering full price with the seller paying $10,000 toward closing costs.

Buyer:  What if the seller won’t pay them? 

Agent:  We might have to stack the costs, or part of the costs, on top, which would push the price up.  But based on the comps, it should appraise with no problem.  Let me call your lender and see if we can push this to $355,000 or $360,000, if we need to stack the costs, and how much that will increase your payment.

Buyer:  OK.  Thanks.  Here’s my lender’s number.

We call the lender.

Lender says:  You can push the price up, as long as buyer is OK with the payment at the higher price.  We’re using “stated” income because he’s hourly, and I can’t get his current income to average out for qualifying purposes.  But he has plenty of money to make the payment up to $400,000.  I just can’t get the income to qualify on a full doc.  So it will be sub-prime with a 1 year pre-payment penalty, until he has two years’ history at his current income.  Then he can refi.

Agent:  What rates are you using and what did you use for taxes and insurance when you pre-qualled him? 

Lender: 6.25% on the first and 9% on the second.  I used $250 a month for the taxes and $250 for the condo fee.

Agent:  Sounds good.  The taxes on this one are $270 but the condo fee is only $230, so it’s a wash.  Anything else I need to know to write the offer?  I’m using $10,000 for closing costs from the GFE.  Does that sound right? 

Lender:  Better make that $11,000 to be safe. Zero downs are getting harder to do on a stated income basis with stacked costs.  Not sure I can squeeze the costs back on the 2nd these days the way I used to.

Agent:  Looks like the payment on your first at $350,000 is going to be $1,725 and on the second it’s $564. plus taxes and HOA dues, that’s a payment of $2,790 a month.  If we have to stack the costs to $360,000, that will push the payment up on the first by $50 and the second by $15 making the total $2,855.

Buyer:  That’s OK.  I have no other payments and am working on my credit score to get it up by the time I refi after the pre-payment penalty is over.  I have an old judgment I’m working on to get it off my record from my divorce.  But I can always get plenty of overtime, so I can handle the payment.  I had to rent after the divorce, and I’m just tired of not having my own place and I want to get a lot closer to work with all the overtime I’m doing.  Let’s try to make the offer with the costs included in the asking price.  But I’m OK if the price pushes up with the costs stacked on top.

*******

It is the agent’s role to know that the offer they are writing is “doable”, that the buyer is aware of his payment and prepayment penalties, and is OK with all that.

I don’t have to be his “Mommy”.  I just have to know that he understands FULLY what he is “taking on” and is in full agreement with full knowledge.

Another scenario same as above could be:

Buyer: $2,855 is a lot of money until I pay off my car in a year.  Can I do interest only?  If I did interest only on the first, how much would that save me a month.

Agent:  About $250 a month.

Buyer:  Well, let’s just make the offer and I’ll be OK with the higher payment if I have to go that high.  I’ll talk about other options with the lender if we get into escrow.  If it can’t be interest only, that’s OK.  But thanks for showing me the difference in payment.  Doesn’t seem like enough to make that much of a difference.  I’ll decide later.

Buyer:  What about insurance?

Agent:  The Master Policy is included in the HOA dues, but you should have a policy for your contents and some other supplements to the Master Policy.  But that will not be included in your monthly payment to the mortgage company.

Buyer:  OK.  I have apartment insurance now, so no big deal.  Let’s just write it up and see if the seller will pay any of the closing costs without our having to stack them.

Agent:  $11,000 is a lot to get a seller to suck up in this price range, but we should be able to get $5,000 to $8,000.

Buyer:  That’s OK.  I’ll be happy with that.

Sometimes the lender gives a pre-approval for the purchase price, without going over the payment amount and prepayment penalty.  Even if the lender did, the payment could change based on the actual taxes and homeowner dues of the actual property selected.  Best for the agent to verify when the offer is written, that the buyer is OK with the monthly payment and terms of the loan, before he signs the offer.

Buyer remorse often equals that the buyer wasn’t FULLY aware of all of these factors at the time he made the offer.  Better to confirm all details of what the buyer is getting himself into, before the buyer is in escrow and his Earnest Money is in jeopardy.

The Real Estate Agent's Role in the Lending Process

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[photopress:images_1_2_3_4_5_6_7.jpg,thumb,alignright]The Real Estate Agent’s Role in the Lending Process runs the gamut from “not needed” to “key ingredient”.  To follow this Article, I recommend you first read Jillayne’s article and the comments therein.I pulled this sentence” “A fiduciary would simply recommend and justify the most appropriate products and would still offer alternatives if requested to do so,

Miss Independent

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[photopress:Kelly_Clarkson.jpg,thumb,alignright]As you know, I’ve been pondering my own blog situation lately. After careful consideration, I decided to start my own blog and I decided to host it myself. Also, I decided against using WordPress and I picked SubText instead. I probably wouldn’t recommend this route for most Rain City Guide readers, but then again, I’m Miss independent. Miss self-sufficient. And ooh, I fell in love.

At any rate, I’ve created my first blog posting, I’ve added links to my sidebar, and I’m tweaking my theme (although folks in the ASP.net / Subtext land, call them skins), but it’s probably only 70% there. Still, I’m looking forward to what I’ll do. I suspect my blog will be geeky, so if you’re into that kind of thing, by all means visit. And if you’re not, add my blog’s RSS feed to your reader and stay in touch. In case your curious, why I picked SubText, here’s my tale of the tape.

SubText

  • Managing multiple blogs seems easier than WordPress
  • FCK Editor that SubText uses is better than the HTML editor WordPress ships with
  • I liked image uploading handling better than WordPress
  • Can use the AylarSolutions plug-in for source code syntax coloring (very important if you are a blogging Software Engineer)
  • Doesn’t require PHP or MySQL, so SubText will use my server’s resources more efficiently than WordPress would (very important if you host paying customer’s IDX / MLS search web sites).
  • Open source / BSD License (better than GPL, not quite as good as WTFPL)
  • Source code is in a language I love & platform I know (C# / ASP.net / Windows Server)
  • Cool code names like “Poseidon

Workshop Post-Beginning the Homebuyer Process

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In the “workshop post” I wrote this morning, I indicated that I have almost always started the homebuying process with my clients by looking at was has SOLD vs. what is currently for sale.  Sold, Pending and STI properties will better reflect the best that the market has to offer in your price range, as someone liked them, and bought them.  So better to set your sights and parameters based on these properties, before you look at the properties for sale.  I had a request to do the Green Lake/Wallingford area in a similar “workshop post”, so here goes.

A buyer client tells me that they want to live “in Green Lake“.  I ask why because wanting “the lifestyle of being able to live where they can walk around the Lake” is a LOT different than wanting to “live in Green Lake”.  Seattle Agents and publications define Green Lake much more narrowly than consumers who just want to be within walking distance to the Lake.

So I go to the mls, which I now have open in a separate window, and I DO NOT search for “Green Lake” by Community.  Instead, I do a radius search, and I put the center point of the circle smack in the middle of the Lake.  I draw the circle at 1.45 miles from the center of the lake. First, because no one is walking IN the Lake, so part of that distance is the Lake itself.  Secondly, because walking around the lake is 2.7 miles or so.  If you are going to walk around the Lake once or twice, I figure you can walk a mile to get TO it, and should consider your options within that distance.  Third because I used to live exactly 1.45 miles from the center of the Lake, and it was a comfortable walk over to the Lake, even in high heels.  So I know, from personal experience, that this is a reasonable parameter and opens up the options, especially if a client’s price range is teetering on maybe not being able to afford to live “near” the Lake.

Obviously you are not going to pay as much for a house 1 mile from the Lake, as you will for one across the street from the Lake.  But some people are very surprised by how much house they can get, if they just go a little further away, and so should consider all property within a mile of the Lake, all the way around the Lake.  Someday I’ll have to tell the story of when I showed a house that was used as a brothel.  It was a riot and an experience I will never forget. Talk about “never let them see you sweat”. But I’ll skip that area in this workshop post.  Suffice it to say, that while it IS close to the Lake, you may not want to be the first house in from Aurora on certain streets. 🙂

The median price range for this area is $447,000, but includes some houses priced as high as $1.7 million.  So let’s say that this client is single and can afford up to $450,000.  The first thing I see is that 265 properties have sold in the last six months for $450,000 or less, and that does not include the STI and Pending sales.  So the first question is answered.  YES, you can afford to live within walking distance to Green Lake.  Let’s see what he can get for something that is at least 900 sf and built since 1990.  I expect to find condos and townhomes, but since he is single, he may want something newer, rather than an older house that needs a lot of work, so let’s look there first.

WOW!  68 newer townhomes and 12 condos have sold and he really likes the idea of owning a newer townhome, which in Seattle are not condos.  Since there are so many, and he likes the two story townhomes vs. the one floor condos, we can up the square footage to at least 1,200 square feet.  He really likes this style

Which is only 6 blocks from the Lake up at the top end by Duke’s.  I call that “the Top”.  It was over 1,400 square feet, had 3 bedrooms and 2.25 baths, a garage, and was well within his price range as it sold for $390,000

Now he is VERY upset that he never saw that one as he had been looking on the Internet for a home before he met me, and this one just closed.  He wants to know how and why he missed this one.  I look in the mls and note that it wasn’t “mapped”.  Not mappable for some reason OR maybe the agent didn’t want to show it on a map, as the map feature makes it look a lot closer to a busy road than it actually is.  So if the buyer was looking at property via a site that required “mapping” to be intact…this one would may have been overlooked if he was only using that “cool” feature..  Most sites offer various means of searching for property, the same way that I can use several “search types” when using the mls.  Don’t use ONLY one, if you are seriously looking for property and not just browsing around the Internet.  Use several sites and a few different search methods.  Not just “the fun” one.

He asks what a .25 bath is.  I explained that there was no .25 bath in this townhome.  “2.25 baths” equals 1 full bath (with tub), one 3/4 bath with a shower (and no tub) and one “powder room” with toilet and sink on the main living area.

He asks if he can rent out the other two bedrooms.  I point out the layout and what he will “lose” if he rents out the two rooms to people he doesn’t know REALLY well.  First, he will pretty much lose his “yard”, because the sliding glass doors to the yard are from the lower floor bedroom.  Kind of awkward to go through someone’s bedroom to get to your yard, and possibly even more awkward to sit in your yard, staring into someone else’s bedroom.  I also point out that in this townhome, the 3/4 bath is down with the lower level bedroom.  So if he is OK with only using his yard with the lower tenant’s permission, yes he can have a friend live there and contribute some money each month for groceries and utilities. (Not legally “rentable” as a separate living unit.)

Main drawback is the top floor had no “master bedroom” as there is one bathroom in the middle of the hallway between the two bedrooms.  So if he “rented” the other bedroom upstairs, he would have to share his bathroom with that other person.

He wants to know how I know where the bathrooms are and where the yard access is, etc without having ever been in the property?  One because almost all Seattle townhomes are built with two bedrooms on the top (3rd) level and one down at the garage level.  Second, because the position of the bedrooms and bathrooms is noted in the mls, but not on the public sites.

There was a much bigger townhome on the Wallingford side, but the front door was “below grade” and it sold for $35,000 more

After looking at and discussing all of the options, he decided he’d rather have something like this free standing newer single family home for $450,000 with attached garage and 1,600 square feet in Greenwood.

He was surprised that both of these were built in 1990.  He said they seemed newer.  I explained that was because they upgraded the colors in the house and updated the appliances to stainles steel when they remodeled the kitchen.

The client was happy with his options.  He didn’t think he could get something newer in his price range, within walking distance to Green Lake and shops.  He didn’t rule out attached townhomes, but we figured out he preferred a free standing townhome, at the higher price.

This Just In: Zero Interest Loans, at a Cost of Zero, with a Monthly Payment of Zero (APR 0%)*

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This is part three of a four-part series of blog articles about the subprime mortgage problems facing the real estate industry. In part one I sketched the rise and fall of subprime loan products and their relation to predatory lending practices within a capitalist system. In part two, I examined the structural relationship between a professional and his or her client. In today’s blog article, I will compare the subprime problems with a classic business ethics case study.

The space shuttle Challenger accident has frequently been used as a case study in the study of engineering safety, the ethics of whistleblowing, communications, and group decision-making.  With Challenger, an O-ring eroded on earlier shuttle launches. Morton Thiokol (MT) managers believed that because it had not previously eroded by more than 30%, that this was not a hazard. During a pre-[photopress:morning_1_2_3.gif,thumb,alignleft]launch conference call with NASA, the MT engineer most experienced with the O-rings, Roger Boisjoly, pleaded with management repeatedly to cancel or reschedule the launch. He raised concerns that the unusually cold temperatures would stiffen the O-rings, preventing a complete seal. MT senior managers overruled him and allowed the launch to proceed. Challenger’s O-rings eroded completely as predicted by Boisjoly resulting in the disintegration of Challenger and the loss of all seven astronauts. Boisjoly concluded that the caucus called by managers who decided to launch, was an unethical decision-making forum which came about because of intense customer intimidation. “Roger Boisjoly and the Challenger Disaster: The Ethical Dimensions

Beginning the Home Buying Process-Workshop Post

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I’m trying out a “Workshop Post” style, where we DO what I do, together in realtime.

I have My MLS up as I write this article and we “work” through the scenario together, online.  The client will be hypothetical, but fairly consistent with an average actual scenario.

Young couple want a home for $500,000 in 98033 that is at least 2,500 sf, no more than 5 years old, with a lake view, if possible.  These parameters feel “off” to me, so before we talk about looking at homes, I go with the client, to the computer and test the parameters.  “Let’s put these in the mls and see if any have sold in the last 6 months using these parameters.”

Entering 98033, max price of $500,000, minimum year built 2002, with a Lake View.  Zero Found.  Before we take out the Lake View, let’s try shifting to 98034.  Nope, still Zero Found.  Before we take out the Lake View criteria, let’s try built since 1990 and 2,000 sf or better.  Still nothing.  OK, let’s take out the age of house restriction and see if that buys a Lake View.  Nope, still none.  Husband says, “Can I get a Lake View if I up the price to $600,000?”  We find a couple in both 98033 and 98034.

Wife starts getting teary eyed, doesn’t like the style of those houses and is not willing to trade down to houses like that just to get a view.  Husband and wife talk and agree that getting a veiw isn’t worth trading down in age and size and style.

Start over.  Back to original parameters of not more than $500,000 in 98033, 2,500 sf, built since 2002, but with no Lake View.  Nope, still none.  We shift to 98034 and we find one, but wife doesn’t like the style of home.

Buyers are getting discouraged.  I take over at this point and help them out.

 

I say are you looking for something like this?  It has 4 bedrooms, 2.5 baths.  It was built in 1995, has 2,350 sf on a 10,000 plus sf lot and sold for $540,000.

Now we have two big smiles.  YES!!  They say, but we really wanted Kirkland.  I ask why.  They say because they wanted Lake Washington School District.  I say this IS Lake Washington School District, but it’s in Zip Code 98011 in the Finn Hill section of Bothell, possibly in the section Kirkland is talking about annexing.  Have to check on that.  They say they don’t care, as long as it is Lake Washington School District.  I say, but if it is in the “likely to be annexed” portion, the value may improve if the address becomes “City of Kirkland”, which would make it an even better investment. 

Now I give them “the bad news” that it likely has LP siding.  They ask how I know that?  We talk a bit about why it likely has this type of siding, and what that means, and not to limit to just this type and location I move on to other likely good scenarios and show them these houses:

all of which are in Kirkland, and come up with 10 to 12 other good options just outside of their original parameters.  In Kirkland, but a little older, newer, but  little smaller, older but remodeled, etc…

Now we are all happy and on the same page before we begin to look for property.

Agents often ask my why I don’t just tell them all of this in the first place, as I obviously don’t need to “go through the motions” to know what I already knew at the end.  I do it because it doesn’t take very long and I can’t really tell someone to knock out the view consideration or switch their other parameters.  I need to go through the motions because some will change to condo with a view or townhome, and some will stick with single family. 

By using what HAS SOLD in the last six months, instead of what is for sale today, we can see the likelihood of whether or not the option WILL exist into the future. Very Important.

Not everyone moves in the same direction, once the original parameters need to take a shift this way or that a bit.  So playing through the process is the only way I know how to have the client move the parameters, and not the agent alone.  Once they determined Lake View was the one parameter that was going to be moved, and once they knew the reason they imposed those parameters, such as School District, I was able to speed through to a “better place” and ease their pain.

This experimental post is what I think people mean when they say they want “more transparency” about how real estate really functions.  If you like it, I’ll do some more using other areas such as Green Lake, Redmond, etc…  I can’t do places outside of my service area, so don’t ask me to do Columbus, Ohio :), but I can take specific requests for a post like this one.

President's in Drag

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[photopress:ar117168258317431.jpg,thumb,alignright][photopress:ar11716823978015.jpg,thumb,alignleft][photopress:ar117168237088538.jpg,thumb,alignright][photopress:ar117168269642171.jpg,thumb,alignright][photopress:ar117168271450231.jpg,thumb,alignright]

I found this on Ines’ Blog.  These were just too funny not to share.  More here

Is Another Offer REALLY Coming?

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[photopress:We_20Hate_20Truth.jpg,thumb,alignright]As soon as it becomes apparent that my Buyer Client is interested in making an offer on a property, the first thing I do (usually within seconds) is call the Listing Agent.

While I always do this, what I say to that agent is not always the same.

Many people think the conversation should go like this: Buyer’s Agent asks direct questions like, “Hi, I am getting ready to write an offer on your listing at 123 This Street, do you have any other offers?”  That is really, in my opinion, the worst way to handle the situation.  It kind of falls into the category of “Ask me no questions; I’ll tell you no lies.”  I wish I had a nickel for every new agent who thought the Listing Agent SAID there was another offer, when that is NOT what the listing agent said at all. 

In fact, the biggest mistake newer agents make, is thinking that the Listing Agent is being helpful HA!  Give me a break!  AS IF!

Sometimes I’m a Listing Agent, myself.  I’m not saying Listing Agents lie anymore than Buyer’s Agents lie.  But clearly the truth is “worked”.  I admire a good Listing Agent who “works his truth”.  You have to have a trained ear.  Somewhat like a musician who can hear when his guitar needs tuning, or a voice coach who can pick up a flat note.  Actually most agents are terrible liars, and I’ve called a few bluffs in my time with great success.  But rather than go in that direction in the first place, better to shift the focus entirely from the getgo.

There’s always a better way, and generally that better way leads to getting the Listing Agent to spill his guts, without your revealing a thing about your client’s intentions.  Of course it depends on how experienced and sharp the listing agent is, and whether you are catching them at the right moment.  By calling immediately, within seconds of knowing my buyer client MAY be making an offer, I can get info without telling any lies.

I pick up the phone and say, “Hi Joe, I’m IN your listing at 123 This Street…”  Most agents call BEFORE they show the property and ask, “Is your listing still available?”  How annoying is that?!  It’s like saying, “Hi, I want to make sure I’m not working too hard for nothing, can you help me with that?”  By calling from INSIDE the property, and saying that in the first 3-7 words, the agent knows you aren’t one of those “wasting-his-time-checking-availability” agents. 

If agents knew how their words and actions affect their clients, they would all be taking “How to Say IT” lessons”…oh forgot…no class on that one.  But plenty of classes on Feng Shui…how FUN! 🙁

Ok, so you’ve got the listing agent on the phone, and the goal is to keep him on the phone as long as you can, talking about crap.  “Joe, is there a Form 17 Online?”  or “Joe, I was just wondering, since the house is vacant, if the owners need more than the average time to respond to offers?”  or “Joe, I’m here in your listing at 123 This Street with my Buyer Clients and they asked if the new roof, noted in the listing, is a 25 year shingle or a 30 year shingle.  Can you check that for them, and get back to me on that?”  (the ending of that last question is very important.  Don’t expect the Lisiting Agent to know that off the top of his head.  You don’t want him to feel stupid or you set the wrong tone.  Counter-productive.)

The Listing Agent will usually answer your question and ask “Are you writing an offer?”  By having called within seconds of your Buyer Client being “maybe” interested, and not waiting until you are actually talking with your buyer client about writing an offer, you can honestly say: “I MIGHT be writing an offer, not sure yet.  They are definitely interested, but we’re still going through the house.”  At this point the Listing Agent usually starts spilling his guts.

How the Listing Agent does that takes many, many forms.  The goal is to get them talking.  Usually you do not ever have to ask if there is another offer.  If there really IS another offer, the agent would likely have said it already.  Those that spill their guts for 20 minutes, and THEN try to throw in at the end of the conversation, some vague reference to “maybe another offer coming”, are actually funny.  They kind of sound like the two year old, looking up at Mommy with their hand in the cookie jar, trying to convince Mommy that they really weren’t going to EAT the cookie 🙂

I absolutely will tell a Buyer’s Agent the TRUTH when I am the Listing Agent.  But most times I can “work” that truth in a way that leads the Buyer’s Agent to believe there might be another offer.  I can’t tell you exactly how that’s done, or I won’t be able to ever do it again 🙂  But I do not lie, ever, and most times the Buyer’s Agent erroneously tells their buyer client that I said there was another offer, when I did NOT say that at all.

Again, if I had a nickel for every time I heard a new agent say, “The Listing Agent SAID there was another offer” when the listing agent NEVER said that…  What the new agent is doing is thinking more about getting paid, than about their client’s best interests.  They are listening to the Listing Agent for signs of what they should do next, like maybe write an offer for MORE than they otherwise would have.  And that is exactly what the Listing Agent wanted them to hear.

While I was away…..

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I have not posted in quite some time as I have been consumed with a move to a new firm.  As of three weeks ago, I am now Of Counsel to the law firm of Bullivant Houser Bailey.   

In that period, a very significant case was decided that will greatly impact buyer/seller/broker relationships.  On March 1, 2007, the Washington Supreme Court essentially decided that buyers will no longer have a claim for negligent misrepresentation in post-closing property condition disputes.  For the first time in Washington state, the Supreme Court applied the Economic Loss Rule in the context of a real estate transaction.  The Economic Loss Rule generally provides that where two parties enter into a contract (e.g. a Purchase and Sale Agreement) and economic losses occur (as opposed to physical harm or personal injury), recovery is confined to the contract. 

By way of background, if a buyer of real estate closes and then determines that the property was not in the same condition as disclosed or that the seller withheld material facts, the buyer historically had two ways to state a claim against the seller.  The first was via the contract if there were any express warranties that could be enforced.  However, most residential transactions have few, if any, warranties that benefit the buyer.  So practically, the buyer was forced to go outside the contract and rely on a claim of negligent misrepresentation or fraud (also known as intentional misrepresentation).   These claims are called torts.  Since fraud is very difficult to prove, the claim that many lawyers have relied on for their buyer clients is the negligent misrepresentation claim.   Those days are over! 

In determining whether the Economic Loss Rule applies, the key inquiry is the nature of the loss and the manner in which it occurs.  In other words, does the loss deal with economic injury (e.g. loss of bargain) or personal injury or injury to other property.  If the loss is economic, and no exception applies, then the complaining party will be limited to whatever contract remedies exist.

In the recent case of Alejandre v. Bull, the Buyer claimed that the seller should pay for damages associated with a failed septic system.  The facts are lengthy but like most post-closing property condition disputes, this one clearly involved economic loss and not personal injury.  In a nutshell, since the buyer had no warranties regarding the septic system, they were out of luck unless they could prove that the seller intentionally misrepresented the condition of the septic system (i.e. committed fraud).  In the court’s mind, a negligent misrepresentation was not enough to override the “bargain” struck between the parties under the contract which did not include any warranty for the septic system. 

There will be many buyers who encounter a post-closing loss and start looking for a (deep) pocket.  While the liability of the seller to the buyer is limited by the Economic Loss Rule, no such luck for brokers and agents who have statutory duties (many of which are non-waivable) under RCW 18.86. Those duties include the duty to use reasonable care and skill, to disclose material facts and to advise their client to seek expert advice on matters relating to the transaction that are beyond the agent’s expertise. 

Buyers would be well-served to negotiate warranties that apply to aspects of the property that are important to them.  At the same time, brokers and agents need to understand that while they legally don’t have any greater duties to the buyer, the practical effect of this case will cause unhappy buyers to look to the broker’s E/O policy with greater frequency.  Now more than ever, brokers and agents will make sure that the buyer conducts comprehensive due diligence concerning the condition of the property and that appropriate experts are hired to advise them.  

All properties have warts.  The key is to expose them before closing so that the buyer can determine if they can live with them.

-Russ

Seattle, WA vs. Vancouver, BC – Sister Cities?

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[photopress:Seattle.jpg,full,alignright]Stephen Jagger of Ubertor gave me a “heads up” this morning about an article written in Vancouver Magazine. 

Sometimes you learn more about your own City by reading the reviews and travel guides of its visitors vs. its residents.

Some of the facts in the article that I found interesting:

Hot Neighborhoods: Seattle’s Pioneer Square – Vancouver’s Gastown are both “troubled historic neighborhoods by the port”.

[photopress:bim.jpg,thumb,alignleft]Hole in the wall burrito Joints: Seattle’s Bimbos Bitchin’ Burrito Kitchen – Vancouver’s Budgies Burritos (location and phone number in Vancouver Mag’s Article)

Mayor’s “GREEN” Record – Seattle’s Nickels nationally recognized for taking Seattle “green” and adopting the Kyoto protocol while Vancouver’s Sam Sullivan “wants his new ecodensity intitiative to be nationally recognized”. 

Seattle invented the term: “Skid Road” – Vancouver invented the word “Skid Row”  (Actually I had heard San Francisco invented the term “Skid Row” – My partner says Seattle invented “Skid Row” – Google says My partner is correct, but I’d let Vancouver have that one.)

Date downtown burned to the ground: Seattle 6/6/1889 – Vancouver 6/13/1886

I’m wondering how many large cities burned to the ground?  I don’t think Philadelphia ever did, because The Betsy Ross House is still standing (note to Bubble People – Betsy Ross was “a renter” in case you are compiling a list of “famous renters throughout history 🙂 ) and so is Independence Hall as well as The World’s First Penitentiary attributed to Benjamin Franlin’s idea.  For anyone interested in REALLY OLD buildings, this virtual tour of Historic Philadelphia is very cool.

Voter turnout last civic election:  Seattle – 30%    Vancouver – 32.4%

Median age:  Seattle – 30     Vancouver – 38 (average age here in Kirkland is 30-something too.  Where do the older people live?)

Seattle is the “fittest” City in the U.S. – Vancouver is the “fittest City in Canada (based on the percentage of the population considered to be overweight) I’m sure there is some City in CA that is going to dispute that one.

Trevor Boddy, Vancouver Magazine’s author of the article titled “The New Seattle”  (from which the above photo was derived “Old and New: Seattle’s iconic Space Needle and Alexander Calder’s Eagle, one of the installations at the new Olympic Sculpture Park.Image credit: Rosemary Poole”) has this to say:

“Vancouver and Seattle are Siamese twins. Yet we are fused not at the head, but at the back – looking in different directions. ”  This is just one of several posts in Vancouver Magazine’s “Seattle Series”.  I highly recommend a read of the entire series. 

THE SEATTLE SERIES:

36 Hours in Seattle: Where to eat, drink, shop and sightsee.

Bed Check: Reviews of three very different Seattle hotels.

Culture Crawl: Our ranking of Seattle’s independent coffeehouses, and listings of the best local books and music acts.

The New Seattle: What Vancouver can learn from its Pacific sister.

A Tale of Two Cities: Which city’s wealthier? Safer? Healthier? Seattle and Vancouver by the numbers.

I’m not certain all of the facts about Seattle and Vancouver are true – but it is a fun read.  A Big Thank You to Stephen of Ubertor for the email and “head’s up”. 

My favorite Vancouver Magazine article is Playing the Real Estate Game and I hope to write a “sister article” based on that one, comparing the Seattle Real Estate Market to Vancouver’s by week end.