Tag Archives: buyers

When it's good to know a "wiseguy"

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If you’ve ever watched a show like the Sopranos you know that there is a term out there called wiseguy that has a potentially dangerous undertone.  Well, yesterday, for one of my new listings I was thrilled to know a wiseguy, or rather a Wise Locksmith, Chris Weissman.

While driving from Renton to Bellevue’s Bridle Trails neighborhood, to show this listing, I get a phone call from another agent who has shown up to view it with a client.  He’s having trouble with the door and wants to know if I am aware of any problems or special way of handling the lock to make it turn.  “No, I haven’t had any problem with the lock before and neither have the other agents that have viewed the house already”, I tell him.

Come to find out, after calling one of the sellers, there is a way from the inside of the house to turn a little switch that would lock the home from the interior and it would make it so the master lock wouldn’t work.  Not good.  *Note to sellers – always let your agent know about quirky things like this so we can stop it from happening in the first place.*  Not only was I losing this viewing but the pending showing I was about to do would possibly be lost too.  On top of it, I lost one other possible buyer showing when yet another agent came by while we were working on getting the problem fixed.  My inner MacGyver kicked in.  I wasn’t about to do some fancy trick with a paper clip but I could quickly sort out a possible way to solve the problem.

And here is where my wiseguy comes in.  Chris is actually a former client of mine.  He and his girlfriend, Maridee, sold a condo and purchased a home through me about 18 months ago. I learned at that time that he was a locksmith and I’ve referred him to several clients since that time, with very good results I will say.  So, Chris gets a call from my partner, Michael, to see if he can help and he’s on top of it immediately coming over from the Seattle area during rush hour and actually making it within about a 20-30 minute time frame. I was thrilled.  One of the great things about working with various people and different types of contractors day in and day out is that when you need something fast – most of these wonderful folks will drop everything to come help you.

His first instinct was to try various methods and tricks he’s learned throughout the years to find special ways of opening locks. Unfortunately that didn’t work.  The second attempt through the garage didn’t work but mostly because it is on an electric opener, so then he had to tear off the existing door handle and replace it with a new lock.  I’ll say that it’s a little disturbing to see how easily some of this stuff can be taken off a property – although Chris did say that since he does this all the time he makes it look easy.  He just hates having to destroy stuff.  He didn’t damage the door though and that’s all good.

It ended up that the buyers that wanted to see the house at my scheduled showing ended up coming back (I rang their cell) and we had a successful viewing.  One of the other agents is planning to come back too but I likely won’t know if that 3rd agent comes back.  Either way, the house is accessible again and all is well that ends well.  Since the clients aren’t looking at offers till next Wednesday we should be set but I’ve got Chris on speed dial now, just in case….

A Thanksgiving Real Estate Story

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I’m greatful that I get to work in this wonderful world of real estate sales.  Every family that is buying or selling a home has a story to tell me.  Every investor renting, buying or selling a building or entrepreneur buying or selling a business brings the agent into their lives during the transaction and often long lasting friendships are forged. What I love is that every deal is different, every buyer and seller brings new and interesting lives with them.  I’ve learned about nearly every religion in the world (I ask a lot of questions).  I’ve learned why people come to the Greater Seattle area.  I’ve learned all about the books and operations of the businesses I represent and their hopes and dreams and I get to share these dreams.

But I want to share the story of Stacy Bannerman who is The Founder/Director of a Foundation called The Sanctuary For Veterans & Families, with whom one of my agents, Brian Borgen and I are currently working. 

This summer I co-listed with Brian a fabulous waterfront home/retreat/spa/B&B in Vaughn, about  ½ hour west of Gig Harbor with 900 feet of salt waterfront, 11,000 sq ft home and 5 acres.  Working with interested buyers has been fascinating and fun, seeing the property through the eyes of different buyers, such as a retreat for Hollywood stars and a Bed and Breakfast business supported by Social Entrepeurs from Europe.

However, Stacy Bannerman called us from an online ad this fall and thinks the property will be perfect for their needs as the Sanctuary they have been looking for.  Working with Stacy has humbled me and made me realize how thankful I am for our Veterans who have been in harm’s way.

Stacy shared with us her vision for this Sanctuary and explained to me why she was willing to spend countless hours volunteering her time so that veterans could have a place of retreat from the world while they get the special services they need to get back on their feet.

ChavezShe states that “at least 1.6 million American military personnel have served in Iraq and Afghanistan, and Iraq war veterans are exhibiting higher rates of post-combat mental health problems than veterans of any other war in this nation’s history.  

Due to repeat, extended tours, an unprecedented wound-to-kill ratio of 16 to 1, and the high incidence of civilian casualties in a war without front lines, the most conservative estimates now are that at least 30 percent of troops will suffer some post-combat mental health problems. While post-combat mental health issues affect an individual veteran, the aftermath of war impacts the whole family and reverberates across communities.”

Stacey is going through the hoops to get this property under contract, she already has set up work schedules for the operation and arranged to have Bastyr University  handle the rehab portion of the week to help with mental and physical recovery.  The foundation will also be setting up a children’s dayschool so that the veterans can find a safe place to bring their families and get special counseling for a week at a time.

So, today an architect is drawing up the changes to be made to submit to an appraiser and then we get under contract and she’s out raising money.  All this and she has a full time job herself.

I will be so proud to be part of this and sure hope it comes together.  It all feels right and I’m excited and once again, so grateful to be in this business.

  

Update on 'Fix and Flip'

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Last Thursday night at the monthly REIA meeting, Than Merrill from A&E’s Flip this House presented an informative glance into his working business model. Than does more than 120 flips a year at an average of $27,000 each.  Although he just started 3 years ago, Than is making millions using a system that he partially nabbed from other fix and flip coaches and partially created himself.  Than acknowledged up front that he would have something to sell, otherwise he says there would be no point in his flying out here from Conneticut to talk to a real estate investment club.  And sell he did.  What my husband and I heard prompted us to attend an all day (9 to later than 6!) on Sunday.  The cost was relatively inexpensive and anything for more education, right?

In case you’re wondering who attends a real estate investing club, I noticed a lot of people with jobs looking for a way to become self employed, and I also found many who had already made that transition using real estate investment as monthly income.  Others are there to build a retirement using real estate investing as a vehicle. Some using sefl-directed vehicles and others doing 1031’s to defer taxes. 

Finding the right investment opportunity is key to good real estate investing. The investments we have been buying are properties that can be subdivided or converted to condos or in some other way create equity through development.  I hate fix and flips because there have been such a small margin in them because we didn’t knowi how to find below market inventory consistently.  We only do the fix and flips if we can increase the value of an adjacent lot or new construction home we sell by increasing the value of the original home. 

However, working with distressed sellers to find below market inventory is a business that is very specialized and can by itself be a full time occupation.  And there are a lot of investment buyers looking to buy discounted properties.  Finding these discounted properties has always eluded me. We have tried the foreclosure route and bought on the court house steps, but too many investors were chasing these properties and they still got bid up, squeezing that profit margin.  Then there are title issues and the fact that you can’t really inspect the properties among other things, like needing cash!

Than has been successful finding these sellers and I wanted to know how. He has multiple sources and mutliple campaigns aimed at finding anyone willing to sell at a discount. His program is a highly developed marketing and operation.  We were impressed, So, we decided to invest in the systems thinking that if he can make them work, so can we (I know, pretty egotistical). The cost of the program is pretty reasonable, the bigger cost being the time to attend a one week boot camp and implement the multiple marketing systems. But we’re looking forward to it and hope soon to have a source of ‘cents on the dollar’ real estate to offer our buyers.  Keep tuned.

BTW, still nothing definitive on the Contractor’s issue, i.e., an owner needing a contractor’s license to perform work on real estate prior to a sale if within one year. We’re all waiting for clarification. 

Green Lake = Cheap Date

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[photopress:date.jpg,thumb,alignright]A young couple on a “cheap date” wandered into my Open House yesterday. I can certainly empathize with guys who need to find a way to entertain women on a date, without spending a lot of money. But when the cheap date escalates to cheap ways to look like a bigger man by trying to cut someone else down to size, I have to draw the line.

Any woman who has ever been on a “first date”, knows when a guy is sending back the wine just to look important. I liked the time the waiter said, “You are quite right sir, that is a bad wine. Maybe if you tried one that costs more than $5.99 a bottle, you would find one more to your liking.” Some guys aren’t satisfied with the cheap date scenario, unless they can find a way to go on a cheap date, and look like a big important guy, all at the same time. So what does sending back the wine, and an Open House “date”, have to do with one another?

It starts out innocently enough. The guy follows one of the suggestions for a cheap date noted in the links above, and ends up “walking around Green Lake”. It’s a great first date scenario. It’s free. You can test out if the girl has the stamina to make it around the 2.8 miles a few times, without huffing and puffing or whining that her feet hurt. But after three times around the lake, it gets a little boring. He’s out of ideas on what to talk about. He’s decided he likes this girl, and wants to impress her, but how do you impress a girl when you have no money to stop for dinner at Duke’s?

More than once, both he and she have small talked about how much they like Green Lake, to fill the dead spaces in conversation. So he gets this brilliant idea to pretend he can afford to buy a house nearby. What better way to “pretend” to spend a lot of money, without having to spend a dime? He passes that OPEN SUNDAY sandwich board on the third time around and says, “Do you mind checking out this house with me? I’ve been thinking about buying a house here. Oh, she’s impressed! Mr. couldn’t buy her a snack at World Wraps, is all of a sudden thinking about buying a house, within walking distance to Green Lake. She doesn’t believe a word of it, but she’s bored by this time too, and says sure, let’s go to ALL of the Open Houses.

The big sign out front says, “Open 1-4” and it is only 12:15. They see the door open, as I’m busily doing some last minute sprucing up. Opening the windows and doors to air out the vacant house, making sure there are no dead spiders on the carpet, etc… He pops his head in and says, “I know we are early, but do you mind if we take a peek around?” I can pretty much tell this is a cheap date scenario, and have no trouble playing along, until the guy starts his I’m smarter than you routine, to impress the girl.

I go through the house to turn all of the lights on, and check out the areas I haven’t been to yet. I’m listening to their conversation, and can tell they are not really people looking to buy a house, and in fact hardly know each other. But like I said, that’s fine with me, I have lots to do before one o’clock. They have no “real” questions about square footage of lot or house. No questions about how old the roof or hot water tank are. None of the obvious, we are checking out this house to maybe buy it questions. Everything’s going fine and I’m even playing along with him by answering a few of his questions. I tell him he’s right about a few things, to help him impress the girl. Until he starts hitting me with off the wall questions, one after the other in a non ending stream, to make sure he can impress his girlfriend without being “found out”.

Where does this wire go? I tried to head him off at the pass and show him the brand new electrical box showing that all of the wiring had been up dated, yada yada yada. But he was on a roll of obscure nonsensical questions. “Is this a hot water pipe or a cold water pipe?” Where does this vent go? Why does this pipe turn left instead of right? What year did they install this door? It looks newer. Since the house was built in 1905, and everything was changed at some time or another, I’m quickly figuring out this this could go on all day.

In between his onslaught of off the wall questions, he is turning to the girl and saying, “Now this pipe is a really good pipe, see you can tell by this blah, blah. She’s impressed. She’s so impressed her eyes are glazing over, and she wants to get out of that basement so badly, she’s almost ready to cough up the thirty bucks to go to Duke’s. When the questions just would not stop and I had to get back to the business at hand, I tried to gracefully break away, but no, he had to play the “send back the wine” game with me.

I almost feel badly about spinning him around three times, and making him look like the fool that he was, by the end of “the show”. But some guys just don’t know when to quit while they’re ahead 🙂

Beginning the Home Buying Process – Part 2

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[photopress:MacCommercial.jpg,full,alignright] The next step in the Home Buying Process is determining how much home you can afford and how much you actually want to spend. When buying your very first property, it is important to note that while a lender may tell you that you can afford a property priced at $350,000, lenders do not actually qualify you based on sale price. It has become common practice for the ease of agents and buyers to quote a sale price. But the actual process qualifies you for a monthly payment that includes Principal + Interest + Taxes + Insurance/HOA Dues.

This is VERY important because a Townhome with very high monthly dues can be more expensive, even though it has a lower price, than a Single Family attached townhome.

There are four townhomes on my desk. Let’s look at these as a real life, current example. Let’s calculate the monthly payment based on 20% down and an interest rate of 6.25%. 20% down is clearly not the norm for a first time homebuyer, but the way to finance the amount of loan on the 20% top portion, varies greatly from one individual to the next. So we are eliminating that factor to make the point that taxes and homeowner dues, can impact the price at which you can purchase, even though your “lender letter” says you qualify at $350,000.

1. Price $315,000 – Taxes $1,559 a year – Dues $310 a month (Condo Townhome)

2. Price $359,000 – Taxes $2,986 a year – Dues $282 a month (Condo Townhome)

3. Price $365,000 – Taxes $2,064 a year – Dues $239 a month (Condo Townhome)

4. Price $375,000 – Taxes $2,460 a year – Dues $75 a month (SFR Townhome)

1. Payment $1,550 + $130 taxes + $310 dues = Total Payment of $1,990

2. Payment of $,1765 + $250 taxes + 280 dues = Total Payment of $2,295

3. Payment of $1,800 + $170 taxes + $240 dues = Total Payment of $2,210

4. Payment of $1,850 + $205 taxes + $75 dues = Total Payment of $2,130

The homes in price order do not follow suit with regard to monthly payment order. The second lowest price has the highest monthly payment.

If the lender qualified you at a purchase price of $350,000 with 20% down at 6.25% using $200 as estimated dues and $200 as estimated taxes, that would translate into qualifying you at a payment of $2,125. Using the real life examples above, you would actually qualify better for the townhome priced at $375,000 than the one priced at $359,000, even though the lender said your max affordability was $350,000.

When you and your agent walk off with a lender letter at $350,000 and buy a townhome or condo at $350,000, but the lender used $200 a month for taxes and the real taxes are $300 a month, and the lender used $200 for monthly dues, but the real dues are $325…the sale can fail on financing issues. Many owners and agents get very angry when the financing fails, but it really falls upon the agent to know the estimate of taxes and dues used by the lender, so they can adjust on a case by case basis before submitting an offer.

Moral of the story is, when a lender hands you a letter saying “you qualify at a purchase price of $350,000”, make sure you know the interest rate, downpayment, taxes and ins./hoa dues the lender used to come up with that number. Then you can adjust, if you are liking a townhome with dues of $425 a month!

We all know that one complex in Bellevue that has high dues and more “Sale Fail Releases” than any other complex in the Seattle area. Now you know why that is happening.

Buyer Agency Agreements

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[photopress:dog.jpg,full,alignright] Is there a difference between dogs and cats? When you take out a leash, a dog usually gets all happy because he knows he is going to go outside. When a cat sees a leash he usually has the opposite reaction (some exceptions, of course) and says, no way I am going to be LED anywhere!

So what do dogs and cats and leashes have to do with consumers signing contracts?

For many years, agents have insisted that the seller sign a contract for their services, and by and large sellers have been happy to do so. I have never had a seller say, “Can’t you just do what you do, without my needing to sign a contract?”.

A seller is more like a dog than a cat, and a contract is somewhat like a leash. Most dogs are more than happy to be on a leash, as long as the guy at the other end of the leash, keeps pace with WHAT THE DOG wants to do.

The reason it is not possible to represent a seller client without a contract, is because of the “3rd party” promise to pay. The seller via that contract and the seller’s broker, agree to pay the agents who show the property. Say I list a house at $500,000 and the “seller” offers 3% “in the mls” to the Buyer’s Agent. That’s $15,000. While it may appear on the outside that the seller is offering that money to the Buyer Agent in the MLS, he isn’t. The buyer agent is an unknown person and the buyer is an unknown person, at the time the property is entered into the mls. The seller is not putting anything in the mls, the seller’s agent is putting it in the mls and promising to pay the buyer’s agent. The agent would actually have to cough up that $15,000 from his own personal funds, if he didn’t have a contract signed by the seller at the time he put the “offering” in the mls. That’s a little too much to ask of anyone on a handshake, so a contract is required from the seller.

Back to sellers are dogs and buyers are cats. The seller has a known address to the “product”/the house. It is easy to get a list of “services and metres” specific to that house. Does it need some staging? Is it photo ready? Can we get 15 photos quickly after it is staged and edit and upload them…on and on. Specific defined things after viewing the product/house, based on that house’s strengths and weakneses. Pretty simple stuff to calculate from day one, for the most part.

Buyers on the other hand are cats. They do not know “the address” of the property at the outset. They sometimes do not know for certain whether they will be buying a brand new townhome (not as much work for the agent) or a single family home built in 1910 (lots more work for the agent). They sometimes don’t know if they are going to buy in Renton or in Juanita or in Greenwood. Sometimes they need to see some property before making some of these decisions.

So a buyer needs to roam freely a bit, without a leash, more like a cat, to gather the information needed to come to an informed decision regarding type of property, general location of property and ballpark price of property. A buyer may need to see property with an agent in Renton, a different agent in Juanita and a third agent in Greenwood, before having enough information to hire the right agent for their needs. Anyone who has been in this business for awhile, knows that they are sometimes a stepping stone, in a buyer’s journey to an informed choice.

The absolute worst thing that can happen in this country, IMNSHO, is for buyers to be required to sign a contract, just to SEE a house. First of all it is demeaning, and lacks the respect and understanding of the industry, and its differences. It’s trying to put a leash on a cat, and pretending the cat is a dog.

EAL vs. ESL

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[photopress:it.jpg,thumb,alignright] This comes under the category of “You learn something new every day.” Over the years I have found that I generally have a much higher percentage of clients who moved here from other countries, or whose parents moved here from other countries, than some of my peers. I was at a client’s house over the weekend (helping to strip wallpaper, which I am very good at doing) and everyone at the house was speaking both English and Romanian, except me of course 🙂

One of the guests taught me a new term, that was more politically correct, and I was at once converted! I asked if ESL, English Second Language, was an appropriate term or offensive in any way. My sister had taught me ESL, since she has a fairly high percentage of students that are ESL the same as I have a fairly high percentage in my field. Prior to that I was using “The English is not my first language crowd”, so ESL was definitely an upgrade.

A lovely young lady advised that her husband preferred EAL, and that it was more politically correct. Of course! How American of me to suggest that English was someone’s SECOND language, when in fact, it could be their FIFTH language. My friends from Bulgaria speak at least six languages. So EAL, English ADDITIONAL Language, is clearly more appropriate for most people from other countries.

I am a 2nd generation American, which may be the reason why I have a high percentage of clients that are Indian, Filipino, Romanian, Italian, Korean, Chinese, and others over the years. Not because I speak their language, which I do not, but because I understand that different cultures have different ideas with regard to home ownership.

I remember back to 1990, my very first year in the business. I had a client who was a young man from Russia. It was apparent to me, though he did not come right out and say it, that he didn’t have an accurate perception of what was included in the sale, and what was not included. Now many of my clients have some questions in that regard, but for this client the entire idea of owning a property was somewhat “foreign” to him.

I literally walked around and touched practically every item. He was in fact quite pleased to learn that the kitchen cabinets would be staying as well as the stove. He was a little confused about why the wall to wall carpeting was going to stay, but the area rug would not be there after the owner moved out. And when it came down to the mirror in the living room leaving because it was hanging like a picture, but the “mirror” in the bathroom WAS staying because it was a recessed, built-in, medicine cabinet, he just shook his head and took my word for it 🙂

This brings up a point that a recent commenter raised. He said he sometimes has to read my writings twice to “get” what I am talking about. In almost every real estate transaction a client has to trust that the agent is correct, rather than totally understand everything involved in the transaction. For persons who speak English as an additional language, who have not been involved in home ownership issues for most of their lives, being able to trust the judgment of the agent is even more important than almost anything else. Trust becomes the all important factor in the relationship.

Even if they do not understand all of the details and the “whys”, if they trust the person at the helm, life becomes a whole lot easier for them. Being able to focus primarily on which home they want, as opposed to each and every detail of the process, can be quite a relief for anyone, but especially for EAL clients.

Top 10 List of Real Estate Lists

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That’s right, I’m going meta-meta. Or better yet, I’m going mega meta (unlike Greg who went mini meta! 🙂 ).

  1. Hanan’s irregular list of new real estate blogs. Beautiful idea, perfectly executed. It is interesting to note that almost none of blogs from his first installment are still around writing interesting content…
  2. 10 Best Women Bloggers. Because it matters.
  3. 3 Easy Steps to Stop Zillow from Publishing the Zestimate of your Home… Because it doesn’t matter (and it still generates a ton of hits).
  4. Curbed’s Broker Boys and Babes Contest. No one else could have done this right.
  5. Curb Appeal Enthusiasm. Simple. Relevant. Useful. Interesting.
  6. 21 reasons to bank on the Phoenix real estate market… Should serve as a great warning to agents writing about the bubble… Be prepared to take the issue on like Greg or don’t even go there… (and I simply can’t ignore his list of blogs that feed a hungry mind.)
  7. The consistently growing list of neighborhood videos from TurnHere… I’m addicted.
  8. The PMI Group’s list of cities with the riskiest housing market. (This is a personal favorite since they traditionally rank Seattle as one of the least risky places to invest in real estate.
  9. Another ego item for the list… I check out the technorati site multiple times a day to find out if anyone is linking to RCG. But technorati provides so much more like keyword searches of blog posts and keyword searches of blogs. I similar argument could be made for del.icio.us since it is so darn useful for finding good content!
  10. Ardell’s list of posts for buyers and for sellers make up an incredible, wild, colorful, useful list of content.

And the worst real estate lists?

  1. I have only one: PubSub. This great concept is in desperate need of some algorithm love. For starters, if they are not going to count blogrolls each day, then they have to be consistent. For example, the Seattle PI Real Estate blog shows up #1 day in and day out because PubSub thinks that all the PI blogs are giving a fresh link to PI Real Estate blog every time they post a new blog entry. In reality, it is simply a function of their blog being on the blogroll of all the PI blogs. In addition, many features (like their URL detail page) have been broken for most of their existence. Lazy-coding issues like this make their tool nearly useless.