Who Needs to Register as a Contractor?

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There have been some questions and discussion here on Rain City Guide about the changes made on July 23, 2007 regarding who needs to register as a contractor.  This change was made as to who has to register as a contractor and:

“Requires property developers, consultants, and some property owners to register as contractors: Owners that build and develop multiple structures, e.g., “spec” houses, construction consultants and property developers who make improvements to property for sale must register as a general contractor.”

Russ Cofano posted about the changes in “Are YOU a Contractor? “on October 3rd, and Eileen Tefft posted another in “Home Owner Quicksand ” on October 10th, both sparked comments and questions.

The Department of Labor and Industries has posted a “Frequently Asked Questions about changes to the Contractor Registration Law”  (pdf, page 2) which answer a few of the questions that came up on the earlier posts. 

The most basic question that I had was do homeowners have to register as a contractor to get their home market ready? 

#1:  “I have owned my home for three years and am fixing it up to sell.  Do I have to register to be a contractor?  No, if you have owned your home for more than 12 months, you are exempt from the contractor registration requirement”

I have also found out that there may be some exemptions to the 1 year rule regarding improvement work a homeowner has done to their home.  The exemptions would be due to circumstances that cause a homeowner to have to sell in less than a year, such as a divorce, sudden job transfer or loss or other circumstances that fall outside of a homeowners control.  The Department of Labor and Industries will evaluate, and do some background research to determine the validity of the circumstances to determine if the homeowner would be exempt from having to be registered as a contractor.

Another question I had was if you recently purchased a house as a rental property and it needs work before leasing to tenants, do you have to be registered as a contractor?   

#3:  “I am purchasing a residential properly that I am going to remodel or make improvements and then rent it out.  Do I need to be a registered contractor?  No. 

When I called L & I (800-647-0982) to find out more, I spoke with Dennis Yonker, who told me that they are scheduling Public Hearings to get feedback from the public.  While the dates are not scheduled as of now, I have been told that they will be scheduled sometime in the last week of February and/or early March of 2008.  I will do a follow up post with dates for the public hearings when available. 

Dennis (or someone else from the dept.) would also be available to “large groups” to explain and answer questions regarding the changes.  Please remember that they would need at least a 2 week notice to schedule it in.  Dennis has allowed me to post his phone number, and can be reached directly at 360-902-6303.

Because the law is still so new, there is much uncertainty regarding how the law applies to homeowners.  For specific questions, Dennis can help with answers by calling the number above, or contact your attorney to determine the answers to your particular circumstances.

UPDATE: I got an email from Dennis with the dates for the Public Hearings and the message to contact him to check for any changes:

Public hearing dates for testimony on sub House Bill 1843 and changes the 18.27 RCW Contractor Registration Law are set for:
Feb 26-08 10:00 am start in the L and I Tukwila service office. ( 12806 Gateway Dr. 98168)
Feb 28-08 9:00 am start in the L and I Tumwater service office. ( 7273 Linderson Way S.W. 98501)
Mar 6-08 10:00 am start in the L and I Moses Lake service office. ( 3001 W. Broadway Av. 98837)
These dates may change, so contact me, one to two weeks prior to the first testimony/hearings  for updates

 

Seattle Real Estate

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I left December out, since most of the month end closings aren’t posted yet, and month end could be a large percentage of a month’s sales.  But we want to start off 2008 with some kind of benchmark and expectation for the year in front of us.

I could have called this “and then came September…”, but the single family market actually had a double whammy.

Condo sales in 2007 actually started out UP 3.8% over 2006 until we hit September closings.  (that’s units sold, not pricing)

Single Family Homes were conversely DOWN by 9.4% under 2006 when we hit September closings. (again, # of units sold and not pricing)

So first we had people priced out of the Single Family Market moreso than the condo market, and then the Mortgage Crisis hit both markets in August which reflects in the September and subsequent month closings. 

I posted most of the data for King County for 2005, 2006 and 2007 over at my blog, for those who want to pull the data and draw their own conclusions. 

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I’ll come back to this topic, and include inventory issues, after December closings for 2007 are posted.

Here's to a shimmering '08

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For some sad reason, right as a year is close to screeching to a halt, I can’t help but utter the phrase “good riddens.” It rolls off my tongue almost perfunctorily. Each year has its highs and lows, and this year was no exception. 2007 kicked off in morbid fashion when my mother was almost killed in a head-on collision (thanks to an ignorant driver) in the leafy Chicago suburbs. Luckily, she survived relatively unscathed, at least physically. On the plus side, I moved to Seattle and made headway on some new goals, established new routines and dived into graduate school and volunteer projects. But besides mourning our own unpleasant experiences, it’s easy to be sullen over the year our own nation has endured: We continue to heartbreakingly lose too many American soldiers as tension swells in the Middle East; the housing market continues to look grim; scandal riddled the sports worlds; and the most recent blows – floods battered Seattle and the senseless slayings in Carnation. At times, it’s difficult to not want to disencumber yourself from the fetters of all that plagues our world, and just pretend it’s not happening.

However, there’s a sort of dis-ease that comes with a new year as well and as I’ve grown older have tried to ask myself, how am I going to make this year a step up from the previous? Even slight tweaks in one facet of one’s life can undoubtly make the new year more resplendent. But that’s always easier said than done. If your 2008 starts murky, here’s a web site that might quell your moroseness and prompt you to unleash chuckle or two.

Let’s hope 2008 is great! Cheers!

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Sweet Home Chicago!

Going home to Chicago for the holidays was more than enjoyable. It had been a year since I had seen one of my brothers and sister-in-law and months since I had seen my parents and other siblings. Presents, food, laughter and fun brimmed my empty-nester parents’ home. What was most surprising was how maneuvering the airports during the holidays was quite a cakewalk. Though my redeye flight leaving Seattle was delayed two hours (mechanical aircraft problems really ease my mind, j/k), which meant we took off from the Emerald City at the ungodly time of 2 a.m., leaving me zombie-like for the first few days of my trip while my friends and I braved the malls for holiday gifts and indulged in a Chinese massage.

One thing that was apparent was that returning to the Midwest had me reverting to the fast-paced way of talking, going-about-things that I have somewhat left behind since I’ve lived in Seattle. It’s interesting to hear if others observe differences in a person that hasn’t been back in months. My mom (jokingly, I hope) repeatedly called me detached, which made me ornery and react with a slight cringe. Though I attributed any disconnectedness to the redder than red redeye flight and time change. Five days in Chicagoland was plenty, especially with the bitter cold that is inevitable there, but I treasured mingling and going to church with my numerous friends and family there. One of my hobbies is writing novellas, so I was also tempted to start a yearly book club with the family since books became a hot topic at the dinner table at certain points, or whip out the Scrabble board, but my geeky self resisted!

As a sort of news junkie, I couldn’t help but inquire into how the Chicago burbs have handled the intense media scrutiny that has swirled around Bolingbrook, IL (neighboring town of my hometown) and embattled ex-cop Drew Peterson, who is under the glare in regards to his missing wife. Some of my friends mentioned the onslaught of Fox News trucks around and others just cited an eeriness to the areas amid the hubbub.

And go figure, we didn’t have a white Christmas in Chicago, but I heard Seattle sure did. And how about the last two gorgeous sunny days we’ve had here in Seattle – just an anomaly? Perhaps yes.

Happy New Year to you all!

Are Short Sales Affecting our Home Prices?

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This downturn in real estate is so much different than the one we ‘older than dirt’ agents experienced in 1980’s. Then, with inflation over 12% and interest rates over 20%, we knew why we were in so much trouble and saw only long term effects since it was a problem with our national economy. We were using rubies, horses, businesses, anything we could use for exchange for a down payment and doing ‘mushroom closings’ where the sale wasn’t recorded to avoid paragraph 17 of the note to kick in. (before you judge, let me mention that this was with attorney guidance!)

This time, it’s been very very confusing since our national economy is healthier, inflation appears under control and here in the Puget Sound area, there is low unemployment and signing bonuses are again being offered for qualified high tech employees.

So, the big question here in the northwest (I’m only referring to the NW, specifically King, Pierce and Snohomish County and of course, there’s Wenatchee), is, is this a short term or a long term correction.

And, is the effect of the short sale inventory going to be a drag on our home prices. There are phenomonal discounts right now in short sale properties. However, are they really affecting the price of normally marketed properties? Do buyers see these short sale properties as good homes for them to purchase, or are we only attracting fix and flippers and other investors to these properties.

The nwmls statistics show that in King County, there are 71 short sales, trustee, or foreclosures in the entire county. Of these, 27 are active, with an average price of $397,000 and average days on the market of 134.

21 are under contract either sti or pending and only 1 is sold in the last 6 months. So, with 27 active, and 22 sold or under contract in all of King County, compared to 8355 active, 1731 sti or pending and 10126 sold in the last 6 months, is there really a measurable effect? or is this just a temporary hiccup?

Dustin Luther and ARDELL's butt make "the news"

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[photopress:dustin_1_2.jpg,thumb,alignright]The BIG news today is that Inman named Dustin Luther, Owner and Founder of Rain City Guide among many other things, one of the Top TEN People to Watch in 2008

  1. Errol Samuelson, president, Realtor.com
  2. Sheila Bair, chairwoman, Federal Deposit Insurance Corp
  3. Lockhart Steele, founder and publisher Curbed.com
  4. Sam Zell, Chicago billionaire
  5. Kerry Killinger, CEO, Washington Mutual Inc.
  6. Andrew Cuomo, New York attorney general
  7. Dustin Luther, founder, 4realz.net
  8. Lawrence Yun, chief economist, National Association of Realtors
  9. Ben Bernanke, chairman, Federal Reserve
  10. Kurt Pfotenhauer, CEO, American Land Title Association

Those with an Inman subscription can catch it here for those who can’t see that link, the blurb on Dustin is reposted here.

Of lesser import, my butt appears to be the opening shot of Joe and Rudy’s great video posted yesterday, over at Sellsius of  San Francisco Inman Connect/end of Blog Tour USA.

Congratulations Dustin!!!  I agree that you are clearly one to be watching in 2008.  We certainly will be watching you.  I find myself becoming addicted to 4Realz.net very quickly, though I think that site is just a speck of what we will be seeing and hearing from you in 2008.

Happy New Year!

 

Washington State Loan Originator Licensing Update

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[photopress:LOLicensing_1_2_3_4_5.jpg,thumb,alignright]As of November 14th we had roughly 15,000 loan originators who had received an interim license during the year 2007. These licenses expire on Dec 31, 2007 and license renewal is conditioned upon them passing their competency exam and completing two continuing education courses, one of which must be an ethics course. At the November 14th Mortgage Broker Commission meeting, we were told that out of 15,000 LOs, there were only about 5,000 who had taken their competency exam.

The new loan originator exam was introduced in June andthe exam candidates were given a 600-question study guide along with the answers to the test questions. The LO exam is 100 questions long and candidates must pass with a 70%. One to two percent of the students that attended my exam prep course had actually read the entire 600 question study guide. Less than half of one percent of the exam candidates that came through my classroom had read the state law to which they’re subject to, the Mortgage Broker Practices Act. The pass rate for the LO exam currently sits at 89%. This means the exam is too easy. For those that did not pass the first time, the second try pass rate for them was 71%.

As of December 19th, WA State Department of Financial Institutions (DFI) reported that only 1,900 loan originators had renewed their license. At this point, we can try to project attrition numbers before the actual figures are released from the state which will likely be at the next Mortgage Broker Commission meeting, date TBD.

If there were 10,000 LOs who had not tested between mid November and now, and if we know that 1833 LOs are not physically located in WA state and could likely find a Promissor testing center near their city, then we’re left with 8,167 LOs that needed to take their exam before Dec 31st. I suppose if every testing center across the state was filled with exam candidates between Nov 14th and today, they all could have made it. I think not.

LOs were reporting up until mid December that many of the testing sites were not completely booked when they took their exam. I had been predicting LO attrition to be about 2,000 since the meltdown began. Now I believe we could see further LO attrition, up to 4,000. This will consist of LOs who haven’t closed a loan in many months and who have found other employment, LOs who were only originating subprime, LOs who have chosen to work for a retail bank or consumer loan lender not subject to licensing, LOs who were not able to pass the background, fingerprinting, and felony checks, and LOs who have just simply de-prioritized the licensing renewal requirements.

LOs who do not pass their exam, complete their two required courses, and renew their license online must stop originating (scroll down to numbers 18-22) at midnight on Dec 31, 2007 and transfer all files in process to their broker or another licensed loan originator. LOs will have 45 days to pass the exam and complete the required CE classes while originating NO loans. After Feb 14, 2008, if a LO has not passed the exam and completed his or her required CE, the interim license will expire and the LO will need to start the application process all over again from the beginning and must wait until their new license arrives from DFI before being able to do the job of, and earning fees from loan origination. There are no exceptions; not even one loan. New LOs entering the industry on Jan 1, 2008 may not originate until they pass their exam and receive their license from DFI.

I receive an interesting phone call from a student late Sunday afternoon. She was once again canceling her attendance at the Dec 31st ethics class, and for the third time, was asking me to move her into another class. I made sure she realized that if she didn’t finish up by midnight on Dec 31st that she would have to stop originating. Here’s what she said; “Oh, yeah, I know. I haven’t taken my test yet either. Can you put me into a Jan class please, and sorry to have to reschedule on you again.