California realtors make a call for higher standards…

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There was an interesting article (requires a subscription) on Inman yesterday about the California Association of Realtors (www.car.org) pushing for higher licensing standards. CAR’s president noted that currently in California someone who cuts hair requires more training than real estate agents to obtain a license for their profession.

I applaud the fact that the industries own are finally calling for improved standards — though I’m not sure they are asking for a high-enough bar, but that’s just my opinion. Currently in Washington, the Department of Licensing requires you to be at least 18-years old, complete 60 clock-hours of training and pass the state exam with a score of 70% or better.

I personally would not want to be represented by that agent who scored 71%…I’ve already met enough of them across the table. It’s not all bad though…Let me also state that I HAVE BEEN impressed with the quality of agents hired by some of the more well known brokerages. They have displayed the professionalism I wish we had across the board in this industry.

So what do you think? Is 70% a reasonable bar for licensing? Should an AA or Bachelors degree be required? Is it the amount of clock hours that matter or the testing to demonstrate prociency in what you’ve learned.

Cancelling the purchase contract of a condo based on the resale certificate

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When you purchase a condo (which can be a townhome) in the re-sale market (as opposed to new construction), there is a very important event that takes place during escrow. Line 19 of our “Condominium Purchase and Sale Agreement” Form 29 provides that the seller will deliver the “resale certificate” to the buyer within (blank) days from mutual acceptance. You have a limited period of time to cancel the contract based on the resale certificate and when that timeframe runs out, you lose that right. The period is normally 5 days.

I want to talk more about the practical aspects of this event, rather than the legalese, so the above is short and not all inclusive and simply an introduction. In the past several weeks I have cancelled two escrows based on the resale certificate, or more accurately the buyers cancelled escrow based on the resale certificate, and so I think this topic is timely and worth noting. I will give a real life example as an anecdotal story to raise some of the issues involved, keeping this post short(er), and will go into more detail on my blog, where I can be as prolific as I want 🙂

I showed a condo at night. We went up the elevator and into the unit and we at that point were more concerned with getting the property into escrow than examining all aspects thoroughly. It was a one of a kind condo. I knew that if the buyer lost the opportunity to make an offer, I could not easily find them another like this one. And so the offer was prepared and accepted rather quickly. We had two timeframes to further examine that choice, one was the home inspection and the other was the resale certificate info and timeframe.

During the home inspection which was in the light of day, we walked all over the complex and found two alarming issues. The inspection itself was fine. The alarming issues were part of the common area and HOA responsibility. Neither of the issues we viewed were addressed in any way in the Seller’s Disclosure “Form 17”. I asked the listing agent to go look at the problems we viewed and respond, he would not do so and said the seller had no knowledge regarding what we could readily see. I believe that was true as they did not go where we went, which was everywhere. When the resale certificate arrived, there was almost no information regarding the issue, the minutes in the resale certificate being from 2002 through 2004 were not any help. There was a minor, yet bold notation, regarding one of the issues with an estimate of a very large cost. I am being vague as this is a real life current situation and you need to know the steps to take more than the actual detail. It was obvious that the total actual cost was not yet known and that the repairs would not be completed until several months out. The buyer cancelled the escrow based on the resale certificate. The seller did offer to pay the amount the HOA expected the total cost to be, but we deemed that to be insufficient. Another buyer may be willing and able to work something out acceptable to both parties, and that is OK. We returned the resale certificate so that the seller could use it to raise this issue to the next buyer in a more timely manner, should they choose to do that.

When you purchase a condo, be sure to walk all over the complex and view everything there is to view. Make notes of anything that is worth noting. The seller’s disclosure is normally about the unit itself, and not all issues of the complex. Likewise, the inspection is normally an inspection of the unit itself and not the roof or siding or other issues deemed to be HOA responsibility. When you receive the resale certificate, read the minutes thoroughly. Look at the Rules and Regulations, CC&R’s and By-Laws and make sure you understand and have no problem with these. Even if the mls says you can have pets and you see pets when you view the condo, that does not mean that pets are allowed. Look specifically at the pet rules and make sure you can comply with the written rules. Look at the amount in reserves and make sure that the amount is sufficient for the needs of the complex. Most importantly know that you have a very limited time to note a lot of things when you get the resale certificate.

All too often people take this big stack of “stuff” and do not even look at it. I do review it with and for my clients. There is no way I could put “Everything you need to know about the Resale Certificate” into a blog post. Hopefully this is enough to start a conversation via comments that is increasingly helpful and to red flag the issue. Again, I will try to add to my existing posts on this topic on my blog as well.

DOJ, Copyright and Real Estate Listings

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I just noticed an interesting article published in the Inman News by RCG contributor, Russ Cofano, that provides an interesting perspective on the extent to which a listing broker can copyright a listing (requires a subscription after today).

In a recent news publication, attorney J.T. Westermeier, partner in the firm of DLA Piper Rudnick Gray Cary US LLP, said that copyright owners of property listings content are not subject to compulsory licensing and that brokers can refuse to allow their listings to be displayed publicly by third parties even if the third parties are competing brokers. In Westermeier’s view, NAR’s online listings display policy being challenged by the DOJ is consistent with the broker’s exclusive copyright rights.

Like many of the arguments that have supported the use of copyright laws to protect listing data, I believe that this argument is misguided. First, Westermeier correctly addressed only copyright rights associated with the photographs and the expressive comments to the listing. As we all should know by now, there can be no copyright to the property facts contained in a single listing. In the perfect world, I might agree that a broker could limit the use of copyrighted photographs and listing comments if indeed the broker owned all of those rights. That is when reality sets in and we realize that the multiple listing service/broker/agent interrelationship is anything but perfect.

Russ goes on to say under the current listing arrangement, most agents are independent contractors who have not given up the ownership of their text and photos associated with a listing. While some agents may have agreements with their brokers that gives up their copyright, this practice is not universal (and I assume that the practice is not even common).

If, within a single MLS, there was uniformity that led to the broker owning the copyright in the copyrightable elements of each listing, Mr. Westermeier’s argument might be a good one. The reality is that within most MLSs, and even within many brokerages, there is no such uniformity. Because of this lack of uniformity, the argument of broker copyright to support an MLS listing display policy that applies equally to the entire MLS membership just won’t work.

Psst – Want a free copy of Windows?

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Granted, this post is not real estate related. However, since Rain City Guide is at the intersection of Real Estate Ave & Technology Blvd, I figured the goings on at Microsoft Way might interest some Rain City Readers.

Windows VistaFor good or ill, Microsoft is still the 800 lb gorilla of the technology industry. Because of this, the success of the company has sizable impact on the price & availability of housing in the region. Therefore, it’s fair to say, that I’m hoping that Windows Vista won’t suck, and its success will lead to another growth spurt at the company which will increase the value of every-body’s home in the greater Redmond/Seattle area. (That way both the geeks & realtors will be happy)

Anyway, the purpose of this post if to inform the geeky among us that Microsoft is having a Windows Vista Install Fair this weekend. Here’s what you need to do in order to get a free copy Windows Vista.

  • Have a computer that your willing to sacrifice that meets the following criteria..
    • Your important data has been backed up! (This is pre-release software after all)
    • Operating System is Windows XP SP2 (Home or Professional) English x86.
    • Intel/AMD Processor running at 1 GHz or higher.
    • Minimum of 512MB of RAM.
    • Video adapter is AGP4x/8x or PCIe with a minimum of 64MB of RAM.
    • Hard Disk has a minimum of 10GB of free space to allow for upgrade.
    • Has a DVD-ROM Drive.
  • Send mail to Windows Vista Install Fair Registration (wvifr@microsoft.com) and inform them that you wish to participate in either the Saturday (March 18th 2006) 1:00 PM to 4:00 PM session or the Sunday (March 19th 2006) 1:00 PM to 4:00 PM session.
  • Bring yourself and your computer over to Building 27 on the Microsoft Campus at the scheduled time.
  • Enjoy your free copy of Windows Vista Ultimate Edition (February 2006 CTP Version) 

Well, I’m looking forward to playing around with all the cool new features and using an OS built for the 21st century. Here’s to hoping my laptop enjoys the experience!

Cool Real Estate Search for Investors

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I noticed that Robbie has been playing around with the back-end of the home search tool he has developed for Rain City Guide, and it reminded me that I’ve been wanting to highlight one of the cool feature. The search tool allows you to sort your listings based on the price per square foot…

And why should you care? Well, here is a search of the “cheapest homes in Seattle” in terms of cost per square foot. (note I had to put in values for the low end of a home and the low end of square footage in order to eliminate all the “zero” values.) If you’re the type of buyer who is looking for a good deal this would be a great place to start. I’m not aware of any home search site in Seattle that allows you to filter things in this way so easily!

Create your own search here: Seattle Home Search.

Corporate Personalities on Display at the MIT Forum…

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Brief overview of the event…

Moderator:

Panelists:

Jim did an excellent job leading the discussion. I didn’t take notes, but in general the questions were all pretty predictable and the answers were spot on… With an exception of a “woman-related” comment by Nikesh, no one made any major gaffs, and there were no real surprises… But that is not to say the event wasn’t informative…

My initial reaction is that the four panelists did a wonderful job and all represented their companies well. I’d even be willing to go further to say that they personified their respective companies. As in:

Nikesh had a hard time sounding real and often ended up sounding like he was recording an infomercial, which is (for better of worse) my picture of HouseValues.

David made some great points, but came off at times like he hadn’t completely thought through his business model. I wish Jim had pushed him to answer the question: What if a listing agent refuses to show one of your buyers a property? Or better yet, what happens when that listing agent who DOES show a Redfin buyer a property and then sues Redfin claiming they were the procuring cause of the sale. Talking about this issue, I wish someone had pushed either Gordon or Jim to answer if they would knowingly show one of their listings to a buyer who openly said they were going to use Redfin. Agents out there: Would you?

Spencer played the role of beta tech guy. He obviously understands the real estate industry and no one really forced him on any issues so he kept from saying too much of interest (like: What comes next?).

Gordon played the role of elder experienced broker really well. He obviously knows the industry inside-and-out, and considering his interest in technology (he is also a Director at Zillow), he came off as someone willing to explore new business models.

If you were there, what was your take on the MIT Forum? Did you learn anything new?

UPDATE 1:
Niki from HouseValues has a collection of interesting reflections on the forum…

UPDATE 2:
Spencer added his thoughts on the MIT forum (and a few other conferences he’s been to recently) on the Zillow Blog.

Local Treasure: Welkom to Ballard!

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As some of you may have noticed, I’ve been taking a break from writing to take care of my beautiful baby boy. During this time off the Ballard community has been so wonderful to me and my family, I thought it would be fun to highlight one of the aspects that makes Ballard a wonderful place to raise a family. Interestingly, this will likely give a different (although hopefully complementary) view of life in Ballard than the video that Dustin linked to the other day.

Ballard is known for having one of the largest Norwegian populations outside of Norway. But the Nordic influences are not limited to Norway as there is a huge Scandinavian influence all around. Along with the Nordic Heritage Museum, there are many local specialty stores that sell things like pickled herring, specialty breads and other traditional Nordic foods.

In addition, the Leif Ericson Lodge plays a wonderful role in uniting the local population through a ton of community events. Lief Ericson Lodge was first organized on May 13 1903 and currently has 2,000 members. Just this past Saturday it had a large bazaar with lots of music, dancing, singing and wonderful food.

We became involved in the community through a wonderful dance class (called Barneleikarringen) that Dustin attends with our daughter every Tuesday night. The class is taught by a wonderful elderly couple who dedicate their time and effort in order to share their cultural dances and stories with the kids. Despite the fact that neither Dustin or I have Nordic heritage (that we know of anyway), everyone at the lodge has been wonderful to our family. (By the way, anyone with children is invited to attend this great dance class… It starts at 6:30pm every Tuesday and the suggested donation is $5/month, which probably doesn’t even cover the cost of the treats that pass out after each class.)

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There are a bunch of benefits to taking part in this dance class that the kids simply love. For starters, they get to walk in the Norwegian Constitution Day Parade as well as dance at a slew of community functions.

(By the way, they also have dancing lessons geared toward adults, but I don’t know much about that… yet!)

The strong Nordic roots are just one more reason that Ballard is a wonderful place to live.

Lots More than Just the Sexiest Real Estate Agents

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It’s been a while since I had a real “ramble” post, but considering the occasion, hopefully people will forgive me for trying to cover a lot of ground in one post.

Happy Birthday to Rain City Guide!!!
It’s been one year since I wrote my first post (Hello World, of course) on Rain City Guide. I probably would have taken down the first post since it was just a test except we got a comment right off the bat and I’ve never been very good at deleting comments…

I have no (clear) idea where RCG will go over the next year, but considering the real estate industry is clearly in a pivotal position and I’m extremely excited to have front row seats.

New Broker For Anna
LTD Real EstateWe’re excited to announce that, as of today, Anna has officially switched her broker to LTD Real Estate. This major change for Anna began when I struck up a conversation with a broker at LTD, Jon Ribary, after noticing that we were both developing tools to map Seattle listings this past summer (who wasn’t???). Just like my gHomes tool, his search tool hasn’t kept up with some of the amazing tools that have been released recently (including ours!). However, our similar interests led to many conversations and ultimately a much stronger bond between Rain City Guide and LTD. Anna and I look forward to working closer with Jon and his staff in the days, weeks, months and years to come. If you’re wondering, don’t expect much to change here at Rain City Guide based on Anna’s move to LTD (besides the logo on our sidepanel!). Anna’s move is really related to the fact that she was searching out a broker who understands that the real power of marketing on the internet is when you use the tools to communicate with potential clients as oppose to talking at them. About the only thing you can expect to change is that Jon and I have some ideas for side-projects that will allow RCG to continue innovating so that we can achieve our mission of being the best resource for real estate information in Seattle.

Ride Home from the MIT Forum
The MIT forum is tonight and it is sold out in a major way. I definitely plan to attend, but I have a minor issue in that we’re a one-car family and Anna has something else that she must attend. Getting between my work in Downtown Seattle and Downtown Bellevue tomorrow afternoon without a car will be easy. The part of the trip that I’m not sure I can handle is the trip to my home in Crown Hill this evening. Is there someone attending who wouldn’t mind giving me a lift home after the forum is over? Found a ride home! Feel free to email me directly.

Sexiest Real Estate Agents
I was checking my log files earlier today when I noticed that someone came to Rain City Guide based on the Google Search: [sexiest+real+estate+agents]. I was deeply saddened to find out that we are ranked a dismal #2 on this all-important search. So, if you are a blogger interested in helping us celebrate our birthday in a zany way, consider linking to this post with the phrase “sexiest real estate agents”. I’ll bet it won’t even take a full week for us to be rated #1! Okay, it is obviously getting late, so I’m going to go to bed and try to sleep off the celebratory Champaign that Anna and I cracked open tonight!

Interview with Jonathan Miller of Matrix

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[photopress:jonathanm.jpg,thumb,alignright]Jonathan Miller is definitely one of the hottest real estate bloggers around. With a constant flow of interesting insights, Matrix has quickly gained a national following. For me, he personifies the image of a blogger who is able to demonstrate their expertise through blogging.

What inspired you to start blogging?

Actually, it was podcasting. I got excited about podcasting last year and toyed with the idea of starting my own weekly podcast. Early podcasts like Slacker Astronomy, Evil Genius Chronicles and Rock and Roll Geek Show (before commercial media entered the arena) showed me that given enough passion toward your craft, the average person can develop a following without a whole lot of funding. That’s democracy in action. I still listen to various podcasts everyday and very little radio. With a wife and 4 kids and a business, the whole idea of time slicing is very appealing to me. However, when I sat down to actually do it, I realized this would not be a practical venue to deliver information to my clients and the public on a regular basis. I wanted a more spontaneous medium and I love to write. All the while I had been reading a few blogs up until that point, but I hadn’t considered doing my own blog. At the point I realized that running a blog was the way to go. In fact, I run two. Matrix which covers the national real estate economy and Soapbox which covers the real estate appraisal industry. On Soapbox, I have two appraisers who contribute some posts every week (not unlike RCG).

Are there any special topics or issues that you enjoy covering?

Lately its been real estate jargon – the communication of real estate information. For such a big investment, communication is not really standardized and its pretty low-brow. Basic terminology, broker speak, media characterizations of the market, etc. Its all fair game. Prior to that, I was all jacked up about the stats that we rely on from NAR, OFHEO and the Commerce Dept.

What have you done to personalize your blog?

Well, for one thing, I insert my own personal experiences as they relate to the post to let the reader know the level of my familiarity with the topic. I took the photo on the masthead of the post and I try to use my own photos as much as possible. Myself and my firm collect photos of New York and put some of them in our photo gallery on our company web site. One other thing that I enjoy and helps personalize Matrix is the title of each post. To be contrarian, I make them long and show contrast with a little sarcasm. Its the highlight of each post for me and the last step.

Do you have any favorite posts?

Definitely. My favorite post was done as a result of the release of my 3rd quarter market report which was covered in the front page of the NY Times. That story was largely credited with signifying the change in the market from frenzy to stable (so I am told). I was so inundated with calls for several days from government agencies, Wall Street investment banks, lenders, appraisers, real estate brokerage owners that I wrote this post so I didn’t have to say the same things over and over. The surge in traffic was an amazing. Manhattan After The Hoopla Over A 12.7% Drop: What Really Happened In 3Q 05? A number of brokerage firms printed the post out and distributed it to their brokers to help them answer questions about the market and Big media linked to it. Very gratifying.

What are some of your favorite blogs (real estate or otherwise)?

There are simply too many real estate blogs to name all of them here. I check in with about 100 blogs every morning using bloglines.com. Of course, RCG has become a daily read. Curbed gets special mention because they have been very supportive from the very beginning and opened my eyes as to how creative you can be in the delivery of real estate information. I write a weekly post for them called Three Cents Worth which has been a lot of fun. For New York stuff, I like the Gothamist for general NY activities, The Real Deal for NY Real Estate News and Property Grunt for his insight. For bubble sites, I like Housing Panic, Housing Bubble and Northern NJ Housing Bubble. For Big Media, I enjoy The Walk-Through (NYT) and Businessweek’s Hot Properties. For financial/business/markets I like Big Picture (amazing volume of content), The Stalwart (very sharp insight), Daniel Gross’ moneyblog (always great content), underthecounter (for perspectives on the financial markets), Calculated Risk (the best charts on the internet). For humor I like: Dave Barry (The king of short but hysterical posts) and the Dilbert Blog (amazing volume of content and insight). For marketing I like Seth Godin’s blog and Guy Kawasaki’s – full of common sense insights.

What tools/websites do you find most helpful in putting together your blog?

Nothing in particular. My developer took care of setting the sites up in WordPress and I requested certain tweaks to the features.

How does blogging fit into the overall marketing of your business?

It fits very well as far as indirect marketing goes. It extends the reach of my expertise which then benefits both my residential and commercial valuation forms. But honestly, that is a fringe benefit. I just like the idea of being able to share my ideas on a topic I never grow tired of.

What plans do you have to improve your blog over this next year?

On the technology side, I plan to upgrade to the new version of WordPress which will add more admin controls. On the user side, probably more user interaction, but I am not sure yet. I suspect most changes will come on impulse rather than some type of strategic plan – that’s the fun of it. Its really all about the content though – fresh insight rather than regurgitating what’s already out there..

What is the one tool or feature that you wish your site had?

I’ll know it when I see it. I think I am set for now.

What do you think real estate blogging will look like 3 years from now?

I imagine there will be a crash and burn of a large number of sites as their owners lose interest or market conditions change. They will be replaced by a slew of new sites. I can see how many webmasters make it their life’s work for a short period of time and then lose interest. For example, whether or not there is a housing bubble that bursts, I can’t see bubble blogs leading the way 3-4 years from now. It will be old news. New real estate topics or causes will take their place. Thats the beauty of blogging. There is virtually no startup costs other than time, so the response to various issues can be immediate.

Your Credit Score has Changed

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Just as I was getting use to the old algorithm, now a new algorithm!

The nation’s three consumer credit reporting companies – Equifax, TransUnion and Experian – announced a new credit scoring system designed to simplify and improve the credit process for both borrowers and credit grantors.

By combining cutting-edge, patent-pending analytic techniques with a highly intuitive scale for scoring, VantageScore will provide consumers and businesses with a highly predictive, consistent score that is easy to understand and apply. VantageScore uses score ranges from 501 to 990.

There is more information on VantageScore here: VantageScore.

There has been much talk about providing borrowers and business with a more consistent method of evaluating credit. For even the most experienced people in the lending industry, credit scoring is a confusing subject. A few weeks ago I gave a presentation with Mark Armstrong, American Reporting Company to a group of real estate agents, and my impression was that they seemed starved for accurate information on the subject of credit. In the next few days, I will post parts of that presentation here.

UrbanDigs has more.