Tag Archives: real-estate

New Book – Must Read!

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Editor’s Note: I’m excited to introduce Seattle Eric as a new contributor on RCG. It must be six months ago that I first approached Eric to see if he would be interesting in coming on as a contributor because I really liked the writing style he demonstrated on his blog about life as a Seattle real estate investor. Now that he’s bitten the bullet and switched to a career as a real estate agent, I’m even more excited to have him on board!

For my first post on the RCG, I’d like to promote my new book, which so happens to also be a topic of much interest recently. All proceeds will benefit…well..me.

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(available while supplies last….shipping and handling extra…)

What is more dangerous: censorship or self-censorship?

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At yesterday’s seminar, the issue of liability came up (as it always does) with many agents worried that they could get in legal danger for content that they write on a blog. My summary of what Russ is able to say quite eloquently is that the type of content that is legally appropriate for an email or other correspondence is the same for a blog. In other words, if you’re not allowed to call a neighborhood “family-friendly” to a client in person or in an email, then you can’t do it in a blog. The take home lesson is that blogging is like all other business endeavors in that an agent needs to use common-sense when blogging.

While liability is interesting, I find the concept of censorship to be a much bigger danger for the real estate community. To give an example, yesterday someone requested that I take down a set of comments he had written (over a month ago) on RCG because the powers that be (most likely his broker) did not want him blogging. Considering his comments were part of a long dialog that was already read and commented upon by hundreds of people, the request seemed hopelessly short-sighted on the part of his broker. Nonetheless, I did make the changes he requested. But this got me thinking… There really are two types of censorships that are common in the way that the real estate industry operates online:

  • Censorship: When agents are censored by their brokers/industry
  • Self-censorship: When agents simply refuse to take part in an online community because they are afraid that the “powers that be” might not approve of their comments

Personally, I think self-censorship is the real danger in that agents don’t even take the chance to push the limits of what it means to create an online community. If the censorship is overt, the conversations over and an agent can either live with the consequences of not having an online “voice” or move to a new broker. But when the censorship is self-imposed based on a climate of uncertainty, I think agents will have a much harder time demonstrating the expertise that they can provide to their potential clients. It seems obvious to me that agents need to have a high level of freedom if they are going to differentiate and successfully market themselves online.

Thanks to SoCal Agents for Another Successful Bloginar

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Russ and I just returned from giving a Bloginar in Bel-Air today and it was a blast!

I’d call it a success as the audience seemed engaged and there were lots of side questions and side discussions during the breaks. It is obvious to me that blogging in real estate is still in its infancy, and while it may not be an appropriate tool for all agents, the technologies involved are here to stay. Personally, I have a lot of fun at the seminars as I enjoy engaging others in a conversation about how real estate professionals can use blogging to create a community around real estate.

Note that if you’re looking to see how a blog post can generate a fascinating discussion around a real estate topic, check out Russ’ post from two days ago where he inspires people to discuss real estate commissions with a simple two paragraph post (and a link!).

By the way, if you were one of the attendees at today’s seminar, please consider leaving some feedback on how you think it went. Your feedback is crucial for us to know how to improve the seminar into the future!

Thanks again for everyone who showed up for making it a success!

Top Ten Things A Home Inspector Says

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[photopress:top_10.jpg,thumb,alignright]It’s Time for another Top Ten! Those of us who have been to 100 too many home inspections can practically stand behind a home inspector and mouth what he is going to say next, when it comes to these “Top Ten Things A Home Inspector Almost Always Says”. No we don’t do the two finger rabbit ears behind his head 🙂 I swear we don’t!

NUMBER ONE:

You need a GFI over here by the sink, oh and another one over here in the master bathroom, and one down here by the kitchen sink…and one more out here in the yard, at the outlet next to the hose bib.

NUMBER TWO:

Contact…contact…Earth-to-wood contact over here.Get that firewood AWAY from the HOUSE!

NUMBER THREE:

Now this here tree is planted WAAAAY TOO CLOSE to the HOUSE!

NUMBER FOUR:

You want to treat the roof for moss BEFORE you get moss. You can spray the treatment on with a hose from on the ground. But first you have to get the moss off the roof, because the treatment will only keep moss away. It won’t remove the moss you’ve already got. I tried to get a website link for you, but lots said we should all trash our roofs and get metal ones. Moss can’t grow on a metal roof. Pretty noisy neighborhood if it starts hailing on all the metal roofs.

NUMBER FIVE:

Cracks in the Driveway!

NUMBER SIX:

Pine needles on the roof, in the valley flashings and in the gutters.

NUMBER SEVEN:

Chimney flashing. if I had a nickel for everyone of these…

NUMBER EIGHT:

Hanging gutters, loose gutters, missing gutters, gutter downspout too close to foundation, divert water further away from the house.

NUMBER NINE:

CAULK! Take out the old caulk…put in the new caulk. Caulk inside where the tub meets the tile. Caulk outside of the tub where the tub meets the floor. Caulk around the kitchen sink. Apparently we all need many tubes of caulk in various colors, including no color at all!

And NUMBER TEN IS!

UH OH…NO TAG ON THE HEATER! OLD TAG ON THE HEATER! NO TAG DATED 2006 ON THE HEATER!

2ND INSPECTION NEEDED TO HAVE AN HVAC QUALIFIED INSPECTOR SERVICE AND INSPECT THE HEATER.

You Have to Wonder….

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And some ask why the government is so fixated on organized real estate. It is because of this mindset and the audacity to shout it out to the world…

I tactfully tell my sellers if I reduce my commission to 4 percent or 5 percent, the buyer’s agents will show my listings last only after showing the full-commission listings. Whether it’s ethical or not, that’s what happens.

Full article on Inman (subscription required after a day)

-Russ

Legal Description, Revisited

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Way back in January, I authored a post on the legal description of property. People say that blogging generates business, and they’re right. I recently picked up a new case because an agent read that post and referred his client to me. This new case illustrates the complexity of the legal description issue (which I address below), as well as the dangers associated with relying on an agent — or the internet — for legal advice (a topic I will address in another post later this week).

My original post discussed the general principle that a legal description must be included in a contract for the sale of real property in order for that contract to be valid. The point of the post was to encourage buyers and sellers to include the legal description in the contract from its inception so that there was an unequivocally binding contract upon mutual acceptance. Thus, I did not discuss the exceptions to the general rule. In fact, there are several, one of which is frequently applicable given the format of the widely used NWMLS forms.

A contract for the purchase and sale of land need not contain a legal description if it references another document that contains such a description. Bingham v. Sherfey, 38 Wn.2d 886, 889 (1951). This rule is well established. See, e.g., Sunreal, Inc. v. Pong’s Corp., Inc., 2003 WL 21500730 (Div. 1 2003) (quoting Bingham). In the Bingham case, the contract at issue did not contain an adequate legal description. However, it did contain the tax parcel number for the lot at issue. The Court held that the tax assessor in the particular county presumably performed the assessor’s statutory duty and included a legal description for the property in the tax records. Bingham, 38 Wn.2d at 889. Thus, the Court found that reference to the applicable public record (i.e. the property tax records maintained by the county) “furnishes the legal description of the real property involved with sufficient definiteness and certainty” such that the contract was valid. Id.

The NWMLS form contract contains a space to insert the tax parcel number for the property at issue. Thus, even if the contract does not contain a legal description, it very well might contain a tax parcel number. If it does, then the contract probably falls within the exception created by Bingham, and the contract is binding despite the absence of a legal description.

Admittedly, one could make a counterargument. In Key Design, Inc. v. Moser, 138 Wn.2d 875 (1999), the Supreme Court reaffirmed the legal description rule first announced in Martin v. Siegel, 35 Wn.2d 223 (1949). Key Design, Inc., 138 Wn.2d at 881-84. Quoting Martin, the Court held that “every contract or agreement involving a sale or conveyance of platted real property must contain . . . the description of such property for the correct lot number(s), block number, city, county, and state.” Id. at 881. Thus, in light of this language, one could argue that a tax parcel number is insufficient. However, Martin was decided two years prior to Bingham. Moreover, the Court in Bingham specifically noted that its holding was consistent with Martin. Bingham, 38 Wn.2d at 889. Thus, a court is unlikely to apply a bright line rule to the legal description requirement. Rather, a court will probably enforce a contract that contains the property’s tax parcel number.

Every purchase and sale agreement should include a legal description so that there is no issue. However, if you are going to dispute the validity of a contract on this basis, you need to be aware of the exeptions to the general rule. As I will discuss further in my next post, you should always consult an attorney — directly, not by reference to a blog — before reaching a conclusion about the validity of a contract.

Please note that this post is not legal advice. You should consult an attorney for specific legal counsel.

Embracing Seattle’s New Urbanism

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As a longtime resident, I’m used to watching the Puget Sound area go through continual growth spurts as development and demographics change. I get lost in my hometown of Port Orchard spurting for the last 45 years as steady as the whales in Sinclair Inlet.

In spite of economic ups and downs, the NW is never stagnant and the next 10 years will hardly be an exception. And now there is another new trend as the babyboomers are seeking new lifestyles, all the while the NW economy is projected to add 50,000 new jobs by the year 2024. This new lifestyle and economy is fueling a new change as Seattle, the Queen of the NW cities embraces it’s new urbanism.

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Seattle will continue to change it’s skyline as a projected 10,000 new condominium units will be built over the next 5 years, ranging in price from the $200,000’s to more than 5 million. Here is the skyline as it will be affected by projects currently in the pipeline.

[photopress:Skyline_1.jpg,thumb,alignright]Always living in the eye of this growth hurricane, I try to stay open to predictions especially when these 10,000 units are already on the drawing boards. (Remember when East Lake Sammamish was only summer cottages, and the only thing you did in Issaquah was stop for a burger before hitting the slopes?)

But still I pause skeptically when I see plans for the immediate future in development like those planned for downtown Seattle. With only 55,000 people currently living in downtown Seattle, will changing demographics fill all of these new units? And where will the people come from?

Dean Jones, President and CEO of Real Logics speaking at a panel discussion regarding Seattle’s New Urbanism in June, believes there is a pent up demand for these new units and that about 2200 units per year can be absorbed, likely more than can be built possibly causing more demand than supply.

This pent up demand, Jones believes, is coming from 4 main sources: up to 1/2 from empty nesters; in city professionals; in city homeowners; and a minor segment of investors. According to architect Blaine Weber, a major driver of this demand for in city living is that people are seeking a new lifestyle. Living in the city can be a more carefree, healthy lifestyle as people step out of their building and walk a few blocks to work. ‘With addition of new pedestrian walkways and multi-modal transit opportunities, Seattle can become a 24-7 hub.’ Personally, I think that rising gas prices also make people rethink their life style alternatives and move closer to work centers and mass transit.

It’s interesting to wonder, then, what will happen to the housing being left behind by the empty nesters. In fact, some suggest that a sufficient inventory of single family detached housing already exists to supply demand for the next 20 years. Christopher Lineberger of the Brookings institute believes that all net new inventory will be attached single family homes in intensely urban settings again reflecting the desire of up to 50% of the public to live in a carefree environment with ‘walkable urbanity.

New urbanism is showing up outside of Seattle, too as planned developments are changing the waterfronts of Bremerton, Tacoma and communities like Dupont, Issaqauh Highlands, Snoqualmie Ridge and Redmond Ridge have been winners with buyers in the last 5-10 years. On the Tacoma waterfront there is a new 800 unit planned community that will be car-less with mixed use waterfront, according to the ‘Queen of Condos’ in Tacoma, Gema Powers. This appeals to my love for walking to Starbucks and the grocery store.

I’ve always thought I’d try out downtown living, especially since it’s where LTD Properties and Real Estate is located. I worry though about the lack of lawn and trees that’s you’d forgo in a high rise, and where would my husband restore his old Mustang that takes up half our garage? On the other hand, no more pulling weeks and repainting the house. I guess there’s pros and cons to all life styles, but at least we have enough alternatives that we can choose our own. It all sounds so appealing that maybe I’ll try out everything for 2 years at a time, but of course, when there are two and one doesn’t like change, I’ll have to live vicariously from friends as they embrace this new urbanism!

Negotiating the Commission vs. “Discounting”

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[photopress:album2.jpg,thumb,alignright]My very first entry here on RCG discussed the manner in which a buyer and their buyer’s agent negotiate the buyer agent commission. Being a “Discount Broker” and Negotiating are not one in the same. A “Discount Broker” usually has a set fee or menu of services with set prices. Many traditional brokers have a set range within which their agents cannot deviate. “Negotiating the commission” is a simple phrase for no carved in stone set amount. It means sitting down with a client and determining a fair and reasonable price for this client given this particular client’s needs and expectations. The end result being an unknown factor until the end of the interview. The end result could be higher than the client’s desire, lower than the client’s expectation and in many cases no change at all from the agent’s expectation. Negotiation is about an intelligent discussion with a mutually agreed upon end result.

Last night before I went to sleep I popped over to Greg’s excellent blog and his article that referenced my feelings on the topic of buyers and buyer’s agents. I was a little surprised to see a “nastygram” comment there aimed at me personally and my feelings on this topic. It amazes me that agents who sit down with sellers every day to negotiate the commission, become absolutely outraged at the suggestion that buyer’s should do the same with their agent.

I would like to dispell the myth that I am a “Buyer’s Broker” who exclusively works with buyers only. Not because there is anything wrong with that business model, but because it simply isn’t true. The only reason I highlight buyers with regard to commission negotiations is because agents negotiating with seller clients is a given. There is absolutely, never a listing appointment with a seller, that does not include the topic of commission. Consequently there is no reason for me to evoke change or explain the parameters within which the seller consumer can negotiate with their agent.

One of the main reasons to highlight the difference between “discounting” and “negotiating” is the fact that Buyer Agent Bonuses are on the rise. Every night I receive emails and “Zip Your Flyers” from agents around the Puget Sound offering “$5,000 EXTRA Buyer Agent Bonus!” and “4% SOC!”

The mere concept that a Buyer Agent will be enticed to lead a buyer to one house over another, because of the amount of money that Buyer Agent will make when it sells, shoud be offensive to every single agent in this country.

The Buyer Agent represents the Buyer. The Buyer Agent is not “Selling a House to Make Money”. The Buyer Agent, in representing the Buyer’s Best Interests, should never be offering advices based on the fee structure of each property. That doesn’t mean that a low fee doesn’t infiltrate and influence the thought process. We are human. It would have to be a perfect match for my client and a great house for me to truly buckle down and recommend a house that is paying five bucks or nothing. But there have been times when I recommended a house and walked away with absolutely nothing, just as there are times when I have represented a seller and found that my walking away with nothing was the only way to achieve the objective. It happens once in a while the same as a lawyer does a pro bono case once in a while. I don’t make a business model out of it, but I don’t rule out the possibility of that end outcome either.

As for the jab at the end of the “nastygram” comment “NOTE: Ardell is NOT a REALTOR”, it is absolutely true that I “stepped out of the pew” after having been a member for 14 years or so. I have given NAR over ten years of those 14 years I was a member, to raise the status of the buyer to CLIENT level. I am disappointed that Buyer Agency has not progressed further than it has, and clearly I have given them sufficient time to meet my expectations.

Does anyone really think it matters if I go over and slap my $500 or so over at the Board of Realtors on Monday to “become a REALTOR”? Does taking five minutes out of my day and $500 out of my pocket really make any difference in who I am or how I do business with my clients? I think it is more honest and ethical to be true to myself, and stay out as long as I agree with the DOJ’s position. I think it is more honest and ethical for me to stand outside the fray until our basic thinking is more in line, than to be a member who dissents from within. I’m the one who has to look at myself in the mirror in that regard, and make a personal choice. At present, this is the one I can live with.

As long as the buyer is not expected to discuss commissions when they meet with an agent, the same as a seller – no more, no less, I will remain where I am. Discussing commissions with a seller does not automatically translate into discount nor does discussing commissions with a buyer automatically translate into discount. It is a matter of equal treatment and respect, pure and simple. How can that possibly be wrong?

ON A LIGHTER NOTE – THERE WILL AGAIN BE A PRIZE, ON BOTH SITES, FOR NAMING THE BAND AND ALBUM TITLE OF THE PICTURE IN THIS POST. Same era, late sixties, fabulous Rock and Roll band from the West Coast that might have done better on a different label. Not a One Hit Wonder, with many albums in our collection, and one of Kim’s favorite bands of all time. There are other clues to the band’s name in the photo itself, but this one should not be an easy ,”googleable” answer. Good luck!

Negotiating Fees with the Buyer Client

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I was quite encouraged by a phone call I received yesterday from an agent wanting to discuss how to approach fee negotiations with a buyer. Not how to object to the subject. Not how to respond if a buyer raises the topic. But how to introduce the concept of negotiating the fee to a buyer, without the buyer being the one to first broach the subject.

Clearly, the Buyer Agent truly treating the buyer as a client, is the key to the future of our industry. As long as agents continue to think that the seller is paying their commission, when they are representing a buyer, they will continue to treat the buyer as a second class citizen in the real estate transaction. I am very hopeful that people will start to see that there are two sides to this $coin$ and that the buyer clearly pays their fair share, if not more, for their representation.

Given the huge increases lately in Buyer Agent offerings from sellers, it is obvious that 98% of the industry still does not “get it”, nor do they want to “get it”.

Looking for guesses on that album cover. Prize to be determined by location of the winner who guesses the band and the One Hit Wonder on that album.