Category Archives: Seattle Real Estate Stats

Fishing season is officially open!

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To this title you might ask, “which salmon is available?”  Well, I’m not really talking about fish with scales and fins here.  What we’ve noticed over the past month is that the fishing with low offers is getting pretty common in a lot of price ranges.  These occurred in neighborhoods ranging all over the area too including Greenwood, Phinney Ridge (x2), Bellevue (Bridle Trails), and Mercer Island.

Some of these properties I can understand the desire of investors to lowball and get a bargain.  One of these homes I had listed was already priced to be a good value for the neighborhood so my clients completely ignored some extremely low all cash offers from an investor because they weren’t THAT motivated to sell – meaning, we’d only been on market for about 30 days.  Now, 2 years ago being on market that period of time would have made some people nervous but, realistically, most homes take longer than just a few hours to sell or even just a couple of weeks. So, we ignored the first 2 ridiculous offers and another one came along (still low). We put forward a counter with a very small price change and the buyers took it. WAKE UP CALL!  We’re not in a buyer’s market in the Puget Sound region.  We’re in a balanced market.

What I’ve noticed in talking with all of the agents submitting offers for these various listings I have is that they’ve all bought into their client’s mindset of thinking that “it’s a buyer’s market” and they should be able to really drop prices via their offers. But the agents aren’t helping their clients by doing the work associated with helping “sell” those offers.

Yes, there are some sellers out there that are still hanging on and desperately wishing for the days of the high flying markets we had for 5+ years, but reality is kicking in for most and the scales are becoming more balanced.  This isn’t the rust belt where the economy has sunk and houses have sunk lower.  If you’re a listing agent you had better be able to justify your pricing.  And, if you’re a buyer’s agent you should do the same for your offer.  One lowball offer we received my partner went back and asked the guy to submit his comps that supported the offer.  The agent’s reply was, “well, I don’t have any, it’s just what they wanted to offer.”  Our client almost completely ignored their offer except for some details we pointed out that led us to believe they’d accept a counteroffer with a minor price change – and it worked.

Another listing had an agent providing comps but they just solidified my client’s view that our pricing was right on. We did go ahead and submit a counter with a faster closing date and some small concessions that we expect will be accepted.

I will admit though that with a couple of my buyer clients, who are not in a hurry to buy, we’re doing some of this offer roulette.  We submitted an offer on a MI house for about $100k less than asking price but we also put forward our pricing analysis and comps that supported the price point.  The house had had several large price drops based on other agent feedback as well and it was definitely a cosmetic fixer.  It might have worked out for my clients except that the house got another offer the same day – it was still a very low offer but not as low as ours so the seller started negotiating with them.  But, that’s okay because my clients are willing to wait for the right deal for them.  This house was going to need roughly $200-400k in updates over time so from a cost perspective the price we offered was what they were willing to spend knowing the costs they’d incur later.

Having watched the low offers come in for one of our listings my client provided the impetus for this post by saying in an email, “well, it looks like fishing season is officially open!”  I’m glad that she’s got a good head on her shoulders and a good sense of humor too.  These are the clients you really enjoy working with especially when you can have sensible discourse with regard to your work together, market conditions, strategy, and more.

Happy fishing! 

Is your offer "a secret" to be kept?

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Many buyers are under the erroneous perception that their offer is “a secret” and that in a multiple offer situation, their offer cannot be revealed to other participants.

While many agents may say “I would never…”, reality is that they DO in one form or another in some cases.  The real question is CAN they do it…and not WILL they do it.  Often the seller will counter the most qualified buyer with the higher price of another offer from a less qualified buyer.  Technically they didn’t “reveal” your “offer”, but they used your price as the counter price to a different buyer.  Same difference really, isn’t it?

“Hey, No Fair!” is something we hear often from the buyers caught in multiple offers.  Reality is that the seller does NOT have to be “fair” to all of the buyers, nor does the agent for the seller.  P.S.  If you are thinking that this post is not relevant as we are “in a buyer’s market”…think again.  At least half of my recent dealings in the last 60 days have been multiple offer situations.  The good houses are getting multiple offers,  “good” often translates into best floorplan, best condition, turnkey, move-in ready, needs little or no work…and not best “value” or a “bargain” in need of repairs or updates.

Here are a couple of ways that your offer is “revealed” in a multiple offer situation.  Often it’s more like a guessing game.  Buyer Agent says “If I bring you an offer of less than asking price, does it have a chance.”  Agent for Seller laughs and says, “Hey, I have FOUR OFFERS!, what do you think?”.  Even if all four offers WERE under the asking price (not likely), the agent may still respond in this manner.  Buyer Agent says, “If I cap at $950,000 will that put us “in the running?”  Agent answers “Yes, but more offers may come in, so no guarantees.”  Well at least you found it it was likely more than the ones in hand…maybe.  No guarantees.

The reason agents don’t reveal the other offers before the seller picks one is because they WANT you to go AS HIGH AS YOU WILL GO, and that is their job as the agent for the seller.  NOT because they CAN’T tell you.

When an agent reveals that there are multiple offers, that is also called a “Notice of FINAL and BEST”.  You bring your Final and Best Offer.  NO the seller does NOT have to counter you and rarely do multiple offer situations give you a “counter” or “second try at it”.  YES, the seller’s agent can pick up the phone while considering the multiple offers, call the Buyer Agent who has the buyer with the best credentials and give them a price at which their offer would be accepted and tell them to re-write, right now, and bring a new offer at a better price to the house.

Can the agent for the seller by-pass an offer merely because the buyer does not have an agent?  Yes.  The seller can take the offer price from an unrepresented buyer and counter a represented buyer with the same offer price.  If the seller and the seller’s agent prefer that the best and most competent agent be on the other side of the table during escrow, that is a considerable factor.  Often the seller and the seller’s agent will choose based on the competence of the Buyer’s Agent.  So everything the Buyer’s Agent has said to the Listing Agent WILL be part of the consideration, and having NO agent will also be a factor in determining which offer to select.

OK, now everyone say “NO FAIR!” in unison.  Quite right.  When the seller and seller’s agent are looking out for the seller’s best interest, they are often NOT fair to all or even any of the buyers who are submitting offers.  Don’t be lulled into the idea that you will get a second chance to make an offer.  Don’t be lulled into the idea that other buyers “CAN’T” be told what your offer is.  Don’t expect a seller to “be fair” to you while he is doing his best not to “leave any money on the table”.

Best offer wins.  Often the best offer is cultivated by “shopping” the offers on the table until the best offer is formed…and not the best offer “as submitted”.  If anyone thinks it is “illegal” for an agent for the seller to reveal your offer to another potential buyer…quote me the law that prevents that from happening. 

Rarely, if ever, do agents reveal another offer by physically showing it to another agent BEFORE the seller makes a decision.  Rarely do they reveal another offer in writing.  Rarely do they reveal it in a voice mail message.  Most often these things happen verbally and “off record”…like a whisper in an ear as most secrets are revealed.  So your agent being available by phone during the time the offers are being presented, could mean the difference between your getting the house and your not getting the house.  Often what we do to earn our commission is be available…at the right time…with little or no notice…just in case we are needed.

So when you decide not to have an agent, know that may hurt you in a multiple offer situation.  And when you are choosing an agent, understand that how your agent conducts themselves with and in front of the agent for the seller…can make or break your deal…and your heart.  So pick an agent that is trustworthy.  One that YOU trust…and one that the other agent will trust to help you close, rather than to “get out” of, the transaction.  If an agent makes it very clear to you “that they can help you get out of this”…they may be sending that signal to the other agent as well.  No seller wants a buyer who is looking for “an out”.

I have had agents bring offers, in mulitple offer situations, tell me “I hope this one works.  I’ve submitted 7 offers for these buyers and they cancelled on home inspection EVERY time!”.  When the Buyer Agent “vents” to the Agent for the Seller…what are they thinking?…but that’s another post.  For now, know that your offer CAN be revealed, used, shopped and utilized to the seller’s best advantage.

Sunday Night Stats

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Not a huge movement, but fewer condos for sale, meaning they are selling a bit faster than they are coming on market, for a change.  Fewer in escrow than last week, but that’s normal for the last week in the month as more escrows close out in that week.  Won’t be doing true month end stats until next week, as there will be end of month closings posting during this week.

King County Condos

Active Listings: 3,911 DOWN 42 – median price $324,999 – MPPSF $320 – DOM 59

In Escrow: 944 – DOWN 28 – median price $299,925 – MPPSF $300 – DOM 51

Sold YTD : 2141 – UP 127- median list price $289,950 – median sold price $285,000 – median PPSF $290 – DOM 47

I did a quick check on May closings.  While all are not posted, May sales prices were up both as to median price and MPPSF at $290,000 and $293.  Likely won’t take the YTD numbers up much, but one would expect “high season” sales to be a bit more as to price than 1st quarter sales…and they are.  I’m putting one on at $273 per square foot in Issaquah this week, hoping for shorter days on market than the King County median of 47.

King County Residential

Single family homes are not selling at a higher rate than they are coming on market as the condos are.  I would expect to see that change in June and July.  The number in escrow is down, but again that is because more move from in escrow to closed in the last week of a month, than in other weeks.

In Escrow: 2,879 – DOWN 54 – median asking price $448,950 – DOM 45 – MPPSF $212

SOLD YTD: 6,547 –  UP 380 – median sold price $440,000 – DOM 50 – MPPSF $221

May sale prices are up at $447,000, but no change for MPPSF

I do the Actives last for Residential, as I can’t run stats when volume is over 10,000 units

Actively for sale 11,612- UP 33 – MPPSF <$800,000 is $220 – MPPSF >$800,000 is $339

If distressed properties start selling more and more outside of the mls and less and less via the mls, we will have to check these numbers against the tax record data.  In fact it will be a good idea at the end of June to compare the first two quarters mls figures with County Stats.

I’m still seeing multiple offers on the best properties.  People expecting the best properties in the best areas to sell at bargain prices are disappointed.  It’s not that kind of buyer’s market.  It’s not really a buyer’s market at all…it’s just not a seller’s market. Distressed properties ARE a bargain, but not the best homes in the best areas.  The date for that to change is usually around October 15th.

Stats not compiled or published by NWMLS. (Required disclosure)

 

8 New Seattle Neighborhood Blogs Added to Neighborhood Round-Up

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Since my last Neighborhood Round-Up, we have 8 new Neighborhood blogs added to the Rain City Guide Blogroll.  When I go through the existing blogroll reading the neighborhood blogs, I am always looking at their blogrolls to find new ones to add to RCG.  Two weeks ago I emailed Dustin the most recent ones I found, and he added them…did ya notice? 

So I want to introduce our 8 new Neighborhood blogs, please welcome….

Over at My Ballard , the struggle to FREE Ballard from 101 years of oppression is being marked with a free prize at Archie McPhee…just say the Secret Word!   

Moving to Southeast Seattle, The Rainier Valley Post announces all (it’s quite a list!) the fresh goodness now at the Columbia City Farmers Market.  

Central District News reports that a CD P-Patch will soon be growing from a vacant lot. 

 A Tree Grows in Capitol Hill…8 Block Walk is worried about a favorite Pocket Park tree. 

How to bike to work from an island…photo essay from Surrounded By Water: A Mercer Island Blog 

At The South Lake you can make your mark on a poll…”Do you pay to ride the S.L.U.T.?” 

cap to the hill reveals a secret place…joe’s bar…to spend some time.  

inBelltown …well, “it’s currently down while we undergo maintenance.  We’ll be back online soon!”…is missing it’s RCG debut! 

New Seattle Neighborhood Blogs….  Welcome to the Rain City Guide Blogroll!

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.

Listing Square Footage — How hard can it be?

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Back in middle school, one of my favorite math classes was geometry.  Calculating the volume of cylinders, figuring out the angles of oblique triangles…now that was living!  Best of all, it seemed like math that maybe I might really use someday.

Fortunately in this business there’s lot of opportunity to practice.  Whether we’re helping a client to analyze a land development, or figuring out the volume of topsoil needed to resod a yard, or simply figuring the square footage of a house, we get to use some of that old fashioned geometry in the process.

It turns out that the square footage thing, though, just isn’t that simple.  It’s been talked about before (like here, and here), but today we were listing a new townhome, and as I evaluated the active comparables, I found that what should be a “standard,

Sunday Night Stats – King County.

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A special Shout Out to my Late Night Fans. I was over on my blog testing out some theories in specific areas. Comparing YTD 08 with same period 07 in King County, Kirkland and Bellevue. To my surprise, given it’s almost 1:00 a.m., I was seeing people reading them as I was posting them.

I almost didn’t post my Sunday Night Stats, given tomorrow is a holiday and I post them Sunday nights so that people have something to play with at work on Monday morning. But once you start a regular “show”, I guess you can’t miss a night. So I was pleased to see someone is watching and waiting and reading. Quite a few someones in fact. It gave me the energy to press forward, so thanks!

Before I continue with the normal weekly stats, I think I’ll go back over to my blog and do Redmond. The more time I spend in Redmond, the better I like it. I just sold a Rivertrail townhome, and have another coming on market next week. Have spent quite a bit of time in Abbey Road and English Hill recently as well. Redmond has a lot to offer and may be becoming the stronger choice than Bellevue or Kirkland. I’m going to be tracking that. As I suspected, Redmond’s doing pretty darned good relative to Kirkland and Bellevue at 30% down as to volume vs. 60% down as to volume. And the asking prices of property on market is also more in line with reality.

The market is not going up this year people! Stop adding 10% to last year’s comps to get your asking price. Unless you like sitting on market for 3 times the number of days, only to have to reduce your price and sell for less as “stale on market”. Condition and price are key! Inventory is up and volume is down and you have a lot of competion with many months of inventory in supply.

OK, let’s get to tonights weekly roundup:

King County Condos

Active Listings: 3,953 UP 36 – median price $324,950 – MPPSF $320 – DOM 58

In Escrow: 972 – UP 42 – median price $299,950 – MPPSF $302 – DOM 50

Sold YTD : 2014 – UP 128- median list price $289,950 – median sold price $285,000 – median PPSF $290 – DOM 47

(The numbers on solds on my blog tonight are different because I closed it as of 5/15/07 and 08 to do an accurate % regarding change in volume, giving enough time for all closings to be posted. Here I do the 7 day change from last Sunday.)

King County Residential

In Escrow: 2,933 – UP 229 – median asking price $449,000 – DOM 43 – MPPSF $212

(median asking price way up there on “in escrow” this week -MPPSF up too by $5)

SOLD YTD: 6,077- UP 341 – median sold price $439,990 – DOM 50 – MPPSF $221

Sold prices the same PSF. Houses are selling for about $10,000 under list price.

Actively for sale 11,579 – UP 126 – MPPSF <$800,000 is $220 – MPPSF >$800,000 is $338

No change to speak of in price per square foot. Inventory increasing by less than half as much as last week. Maybe it’s the holiday. Speaking of which…have a good one!

Stats not compiled or published by NWMLS. (Required disclosure)

 

STOP TAKING MONEY FOR REFERRALS!!!

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I could start and end this post at, ” Just STOP taking money for referrals…unless you are providing an equivolent equivalent value.” But this practice is such a hold over from the olden days, that many will say WA??? As in what the heck are you guys smokin’ in WA?

The added “equivolent equivalent value” has to be TO THE CONSUMER by the way, and not to YOU!

‘frinstance: Had a 3 plus hour meeting with some people yesterday.

Them: How can we get referrals from you?

Me: Be on top of your game and the best source of your service for my client. And that changes from time to time and client to client.

Them: Maybe you could get an insurance license?

Me: Why?

Them: So we can legally pay you for referrals.

Me: (after going to bathroom to puke up my lunch) You repay me by giving the clients I referred to you PRIMO attention to their needs. Do the first one or two for free to give me a chance to evaluate your services and talent level.

Them: Scratching their heads, but willing to learn the new way of life I have introduced.

I don’t expect all agents to “get” this. Agents paying referral fees is as old, if not older, than the mls itself. But at least scratch your head and be willing to learn “the new way of life” and society’s elevated stance on this matter.

You refer to someone:

1) Because your client needs that service. They more and more DO NOT and can choose their own.

2) Research and give them a few GOOD and valued options that you have taken the time to investigate. DO NOT STOP AT THE FIRST AGENT WILLING TO PAY YOU A REFERRAL FEE…Yes, sad but true, the way it “was”.

3) Do not simply send them to any office in your Company’s list of other offices. If the BEST agent for them is at RE/MAX and you work at Coldwell Banker, as example, then refer them to the RE/MAX Agent. OR, give them the agent with your Company plus two others and let them choose.

Agents ask me all the time why I am or am not willing to pay or not pay or receive referral fees. Most times I don’t and sometimes I do.

1) I am willing to pay them to Galen, I think, because Estately.com is a valued service that the client has already utilized. Jury’s still a little out on that one.

2) I take a “referral fee” when the client is here and buying there, as I am the one who meets with the client at this end to do the paperwork. So I am “sharing the commission” with the referred to agent on the Coast or wherever, as the client is here in my office going over the offer. Technically a “referral fee”, but actually a fee for “added equivolent equivalent value”.

We are mostly talking about legal, agent to agent referrals here. But quid pro quo, I’ll scratch your back if you scratch mine good old boy networks are so old fashioned and yesterday’s news. As I said, I don’t expect you to “get” this to the degree that I do. I don’t expect you to go puke up your lunch, like I do when the offer comes around.

But at least start to scratch your head and say WA?? Cause Seattle has it ALL OVER most of the country when it comes to using new technologies to change the world. Your client uses the internet. They can find their own referral. “The times they are a changin'” and you don’t want to “endorse your epitaph” with underhanded, yet legal, practices. AT BEST at least say to your client “can I get you a referral who will pay me 25% of the commission you are paying them?” At MINIMUM please apply full disclosure to the practice.

Thank you.

For those who never heard this song, it’s worth a listen and I still remember every word from when it came out back when I was an impressionable youth and goes with the “endorse your epitaph” line in the post.

It’s always been one of my Favorite Songs. Mr. Business Man by Ray Stevens. Maybe Dustin will turn it into a YouTube insert for me. For now, here’s the link:

So many favorite lines in there. “Do you qualify to be alive, or is the limit of your senses so as only to survive?!?” Love that song.

I told my daughter not to buy real estate

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I think the public deserves to know what we tell those nearest and dearest to us.  My girls are 20, 22 and 24.  My 24 year old has a 3 year old.  My 22 year old is pregnant.  I don’t recommend that either of them buy real estate right now.

Tina, my 24 year old, will finish school in November or so.  Then she’ll get a job in her chosen field.  Where will that be?  Anyone’s guess really.

Jacquie, my 22 year old is the one who wanted to buy a condo or townhouse with Peter here in Kirkland or somewhere on the Eastside.  Even though she will likely continue work in Seattle, she prefers living on the Eastside.  They can well afford to purchase, but I recommended against it.  Told her to rent for 6 – 12 months first.  Jacquie equals “Jacquie and Peter”.  To the best of my knowledge, Peter has only visited Seattle and has never lived here.  He has at least a year of school left in CA and is coming to spend the summer here with Jacquie, either in a rental or a place that they purchase.  Where is Peter going to work when he is finished school? 

If you don’t know where you are going to work, if you don’t have a good year at your current job so as to know if you are likely to stay working there, if you aren’t confident at the job you have right now and are thinking about leaving that job…don’t buy real estate.  Not unless you are prepared to hold it as a rental if you decide to move on.

Would I have counseled them differently in 2004 or even 2005?  Yes, I think I would have.

What Are Negotiating Rights After Inspection of House?

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The Title of this post are the exact words of a Google Search for those keywords that I found in my blog stats today.  When seeing it I thought it would make a good topic for a post.  Hope you agree.

To some extent the words “Rights” and “Negotiating” are contradictory.  If you have an actual “right” to something, you don’t NEED to negotiate it.  So suffice it to say that you have no “negotiating rights” in the strict sense.  You likely have a “right” to cancel the contract based on the inspection, but not a right to repairs.

If you have included an inspection contingency in your contract, then you have some rights.  You have the right to hire an inspector.  You have the right to gain access to the home for inspection.  Personally I think you should STOP the inspection the minute you find something that causes you to not want the house.  You save money usually (some inspectors; not all) and you really shouldn’t be nosing around someone’s house once you have decided not to buy it.  That’s my personal opinion.

I often hear “Doesn’t the seller have to fix…?”  The seller doesn’t HAVE to anything, nor does the buyer for that matter.  So the buyer has the right to ASK.  To answer the question literally, “what are (the) negotiating rights after Inspection…”  You have the right to ASK would probably be the closest accurate response.

Most and virtually all inspections that fail, fail due to poor communication.

1) Don’t just point out a problem without being specific about the remedy requested

2) Try to give a variety of remedies, so the seller can choose one

Examples:

Inspector says: “Hot Water Tank is 14 years old and should be replaced as life expectancy of this hot water tank is 10-12 years”  Remember, from the seller’s perspective there is nothing wrong with it.  It heats up the water just fine, they never run out of hot water and it’s not leaking or knocking or causing any problem whatsoever.  It’s just old.

Yes my friends, there is assisted suicide and genocide involving old hot water tanks.  It’s age descrimination, and some are put to rest before their time has come.

Let’s use some common sense here.  What is around this tank often suggests the appropriate remedy.

1) Hot water tank is in a condo on the third floor.

My suggested remedy?  “Hot water tank to be replaced by seller prior to closing.”

2) Hot water tank is in the garage and much of the owners valuable belongings are stored there prior to moving.  Very valuable things that used to be in the house but ended up in the garage when decluttering the house for it to go on market.

My suggested remedy? “Hot water tank to be replaced as soon as possible by seller.”  Once you are aware of a potentially dangerous situation, one that could cost thousands of dollars if the tank blew and the water damaged the seller’s things, you should pass that info on to the seller.  How would you feel if you asked for a credit or didn’t ask for a new tank at all, and the tank blew 3 days before closing and the seller’s stuff got ruined?  Might you be liable in some way for not passing that info on to the seller?

3) Hot water tank is in garage and nothing that could be damaged by water is anywhere in the garage and the water couldn’t get into the house if the tank blew.

In this instance you can take a credit for the repair.  You can ask for a 1 year home warranty just in case it goes bad in the first year.  You can ask for any of the remedies above as well.

No, the seller doesn’t HAVE TO.  But those are reasonable requests in my opinion, though #3 is not a given for sure.

You have the right to ASK.  The seller has the right to say NO.  If people would be honest and only ask for legitimate items and appropriate remedies, no one would feel like someone is trying to club them over the head.  A home inspection is NOT a chance to take advantage of someone.  There are reasonable requests and unreasonable requests.

Ask yourself this?  Would YOU replace a 14 year old tank in that location if you bought the house 8 years ago, just because it is “past its life expectancy”.  If yes, then it is reasonable for YOU to ask.  If no, then maybe not.  Apply that Golden Rule to all items and you will be negotiating fairly.  If you are reasonable, you likely will get everything you should.  Maybe not everthing you WANT, but everything you SHOULD want.