Jul. 25, 2006 - A dog, a cat, a fish and a ferret?
When an agent lists a condo, the phone starts ringing off the hook with agents asking "Can they have a dog? A cat? A dog AND a cat? Two cats? Two dogs? A dog, a cat, a fish and a ferret?
So this time I decided to include a picture of the dog. Having the photo also helps people viewing property on the internet, without benefit of the mls internal remarks, to see quickly that YES, they can have a dog and YES there's a place for the dog to hang out.
I put a bunch of other photos to show that this two bedroom condo was very difficult to stage. Usually I bring in color. But t his one already had lots of color. So mostly I moved lots of the owner's stuff around (several boxes of his stuff into my basement) and came up with this "look"..
Of course it's hard to decide what to do when there's all this color. Do you tell the owner to paint it all white? Local people will "get this", it's a two bedroom condo up by Chelsea Village in Juanita near the beach for only $199,999 with 1.25 baths. I know many agents say...paint it all white! But this place even has a jetted tub! There's nothing on market this cheap at the moment and I really think condos are always so drab and all the same.
I decided to take a chance and let the owner's colors show! It's the only game in town and has tons of upgrades, even new hardwood floors. So hopefully people will COME and LIKE the color scheme.
Generation X is surprising us and the old "REALTOR BEIGE RULE" is going out...at least I think so.
Client calls me and wants to buy a condo across from Microsoft in the value deficient complex (versus the higher inherent value complex). They almost look like one complex, but are in fact two separate ones.
One bedroom condo (last summer) priced at $119,999. They are looking at the crown molding, I'm crawling under the bed and pulling out the sofa trying to figure out what the seller did with the baseboard heaters that appear to be missing. The client is looking at the crown molding, I'm looking at the kitchen cabinets and seeing originals from the seventies with new knobs and handles that make them "look updated". Buyer starts catching on and saying, hey, why are the indents in the rug from the coffee table not where the coffee table now is? They pick up the little area rug and see a huge red ink stain on the wall to wall carpet. (seller's agent said that was "staging"...I said it was concealment of a defect. Seller's agent said they were waiting for the home inspector to see it...I said home inspectors don't move furniture and area rugs, by and large, to find concealed defects.)
I take the buyer client over to the "better" complex to an almost identical unit priced at $101,000...that's $19,000 less than the one the buyer had picked out from the internet because of the crown molding. The doors are not painted white and the wood trim is not painted white and it has no crown molding, so doesn't "feel" as good to the buyer. But I know that the HOA requires that the old and ugly sliding door they are looking at, be replaced with a brand new pretty white framed one before closing. The HOA also requires that the seller replace that old window in the bedroom with a brand new white framed one before closing. So "what you see is lesser than what you actually get on this one."
They buy this one for $100,000 vs. the other one, which did sell to someone else for $119,000. While we were in escrow, another condo in the same complex and the same building as our $101,000, identical unit with about $1,500 worth of improvements, sold for $122,000! Yes, I'm still damned proud and excited about this one. Not often you can get $20,000 of built in equity before closing...and roll out of bed distance to Microsoft to boot! Sorry for crowing...one of my most favorite transactions. No commission concessions on this one...clearly the buyer received "value" for the $3,000 I made on it :-) And they are now great friends who call me before making a move in any real estate transaction. Great people; happy clients for life.
When a property has been on the market for some time with no offers, the risk to the buyer is less. The entire marketplace has "noticed" that the asking price does not fit this house. The marketplace may not be able to put their finger on exactly why that is, the way I can. But the public can inherently perceive, that the price the seller wants, does not seem to fit the "value".
The greatest risk to my buyer client is when there is a lot of attention on the property on day one. Everyone running around looking at the "staging" of the house that is WOWing everyone in town and putting upward pressure on the pricing. While the buyers are going from room to room "LIKEing" the place, which is great and their part of the job at hand, I am looking way past that. This happens most often at an open house where five to ten sets of potential buyers are liking this house all at once.
Sometimes I am actually standing in the corner, scratching my head, saying don't all of these people see that those cabinets, while freshly painted with new handles and looking very nice, represent about fifty bucks worth of cost and that 1977 kitchen still needs a $20,000 remodel? Don't they see that all of this light, bright and airy is "flip camouflage"? Someone just popped off the doorhandle of the cheapo 1977 doors to the bedrooms, painted them white and stuck the same old handle back on. Wa la! Fifty cents worth of paint and now this condo is $5,000 higher than the one next door with the brown doors and brown baseboards?
Perhaps every buyer would see what I am seeing, if they had the time. But multiple offers on first day can push a buyer into a situation they haven't had time to evaluate thoroughly. So my being able to see these things in a nano-second, is of value. Not because I am "smarter" than my buyer client, or because my "buyer client" is stoopid...just because I do this day in and day out for 16 years and can spot things much more quickly as a result.
"Risk" to the buyer comes in many forms. My perspective is always on the resale value of the property my buyer client likes. While the buyer is looking at all of the things that they like, I am looking for functional obsolescence and other things, both fixable and not fixable, that affect value.
Question asked on RCG: "Does the buyer take on appreciably more risk? Ignoring any issues that would be discovered during an inspection, do buyer’s agents, in practice, actually help buyers from getting screwed (for things sellers should, but don’t, disclose)? "
It is sometimes difficult to answer a question like this, because the question skews the answer to one specific, and not necessarily true and relevant, response. The question assumes that the "value" of a Buyer's Agent has to do with home inspection items and Seller Disclosure items. As promised to the questioner, I will do a string on different topics related to the issue of the question. Here's the first.
REAL LIFE EXAMPLES:
Buyer purchases house at $25,000 less than asking and under appraised value. In this case what I noticed were several things.
1.The home was overpriced. Because it was overpriced, the client had not noticed the property in his online search. Also, because it was overpriced, it was getting stale on market and ripe for an offer lower than fair market value.
2. The home had aesthetic issues, but was a home inspector's dream. Great new roof, top of the line, not a cheap "looks new but cheapest roof available" type roof. It was built in the age range when construction was better than the period before it and after it. Newer is not always better if newer falls in a "weak construction material" period of time. The heater was not only newer, but also top of the line Trane. The fireplace had never, ever been used in the many years since the home was built..."like new".
3. We did do an inspection during escrow, but we did not make the offer "subject to" the inspection. Based on my visual inspection, we used the "no inspection contingency" a point of negotiation to get the lowest price possible. We then did an inspection to prove out our suspected "good inspection" evaluation, and there were no surprises from the home inspection. It's a bit of a risk, and I have a better than average eye for these things, but well worth the risk at a $25,000 savings from ask price and $10,000 under appraised value and no competition or price war, even though it was one of the most sought after neighborhoods. The houses selling were the inferior ones priced $25,000 less...this was the diamond in the rough...the needle in the haystack...the one overlooked by most.
That is not to say that "no inspection contingency" should always or often be used to get best price. You have to evaluate the most expensive items that could come up in the inspection: Site issues like drainage, foundation issues, roof, siding, heater somewhat in that order. The risk is not in buying a house with problems, as you DO still do an inspection, you simply do not make the seller responsible for the result of the inspection. The risk is not the potential defect ,as you will know all defects prior to close. The risk is the Earnest Money deposit, and not necessarily. If what you find during inspection is something that should have been in the Seller Disclosure Statement, you can still back away without losing the Earnest Money Deposit, even without the protection of an inspection contingency.
That's an example of Buyer Agent advices with regard to home inspection and seller disclosure...have to go now. Will do more later.
Jul. 21, 2006 - Stop by and chat on Sunday, July 23
Here's another car photo and reminder about this Sunday's car show in Kirkland from 10 - 4, July 23.
I will be at an Open House in Juanita from 3 till ? with someone covering me from 1-3 so I can have my fill of the car show first. Just drive up Market, just past "The Village" on your left and follow the "Sound Realty" Open House signs. But if you get there before 3...you'll meet Gwenny and not Ardell :-)
I couldn't get this photo over to my Kirkland Blog for some reason. So I'm cross linking it here.
Jul. 21, 2006 - Everyone's Talking about Real Estate Commissions
Further to mine of July 18th let's tie in some great discussions going around in the last three days.
These discussions move around from talking about Real Estate Commissions and "Discounters" to Who Represents Whom in the Real Estate Transaction to DOJ suing NAR...in other words ALL of the HOT TOPICS! Interesting reading, while it lasts, before someone "puts the lid on it".
This one of Robert's may add a substantial amount of "food to the fodder" and is clearly one to watch in terms of comments.
Greg Swan is on a roll!! Couldn't highlight all the great stuff there if I wanted to, so read the whole last ten days of stuff over at Bloodhoundblog. In fact, highly recommend you add that to your RSS feed.
Sellsius is going a little sideways, but mainly because of their New York perspective. So for Pacific Northwest readers, you need to take the NY articles and comments from New Yorkers to our articles with a grain of salt, because our laws and common practices here in the Seattle area are quite different.
To assist you in that regard, note that every agent here in the Seattle area represents the BUYER at first contact and NOT the Seller. The agent whose NAME is on the FOR SALE sign, the Listing Agent, represents the Seller when they first talk with a buyer. Everyone else does not, except if the "agent" you are speaking with is the Broker of the Listing Agent...in which case that person would be a Dual Agent at first contact.
If you don't get that last paragraph,you can comment or email me, IF you are not currently represented by a real estate agent in a real estate transaction. If you have an agent, I cannot "second guess" the agent...because contrary to recent aspersions to the contrary...I do in fact have "ethics" even though I am not a Member of the "Realtor" trade organization :-)
Which raises a point. I just spoke with a writer for The Wall Street Journal who called me this morning, and she did not know that Realtor was not a generic term for someone who sells real estate. Amazing. Maybe it is time to go the way of kleenex vs. Kleenex in that regard. When The Wall Street Journal doesn't make the distinction...hmmmmmm
Besides regular business, I've been staging my listing up in Juanita to get it ready for an Open House on Sunday. It's in Cedar Mill and has been a bit of a challenge to stage. I'll try to get some photos in here soon so you can see why. Many hours on this one, so I've found the time to support my colleagues over at Rain City Guide during Finalist Week, and hope to get some beefier entries onto my blog/blogs soon.
I add here a link to an excellent discussion on commissions generally, that is gaining steam with an excellent string of comments to Russ Cofano's original entry. Between the Sellsius article and several posts on RCG, the town's abuzz on some very interesting observations regarding changes that every consumer should be watching.
I would love to add, and read myself, the Inman article to which Russ refers, but unfortunately it has slipped behind the subscription veil. If anyone has a copy of that Inman Article, I'd love to read it. Hmmm, I guess I just have to subscribe to Inman...I'll go do that right now!! High time I did. FYI, Inman articles can be read "day of" by all, but only by subscribers thereafter.
Associated Press - Published July 14, 2006...Cendant Corp.'s board voted Thursday to approve the spin offs of its real estate and hospitality units...to split the company in four. The spin offs of the two units, now to be called Realogy Corp. and Wyndham Worldwide Corp...Realogy and Wyndham have filed applications to list on the New York Stock Exchange under the symbols H and WYN. Full Article here.
Jul. 16, 2006 - Does a Seller Need to Disclose Ghosts in House?
This wonderful, real life story from Bonnie points out why sometimes, it is not a good idea for buyers and sellers to meet face to face.
I contend that public information is discloseable. If you have entered your home for publication as being haunted by ghosts, then you need to disclose that "ghosts come with" when selling your home. Likewise, if you have told all of the neighbors that there are ghosts in the house, I'd say anything told to all of the neighbors should be told to the potential buyer.
So, like with most secrets, if you want to maintain it as a secret, then don't tell "a living soul"
Jul. 16, 2006 - How is a Real Estate Transaction Like a Pregnant Woman?
The real estate transaction, like a pregnancy, breaks down into Trimesters. Also, as in a pregnancy, the first trimester is the most disruptive to the buyer's daily schedule, the second trimester becomes more relaxed and the last trimester involves a final, and sometimes (but not always) intense event, the net result of the intense event being life changing!
Just as the body goes through many changes in the first trimester of a pregnancy, that can leave a woman feeling absolutely nauseous most of the time, the first trimester of a real estate transaction can leave a buyer's head spinning. In succession, and sometimes simultaneously, many things transpire at the beginning and need to be completed about 1/3 of the way through the time frame.
The offer is made, negotiated and accepted.
The buyer applies for their mortgage, supplying all documents needed to process the loan.
The home inspector is selected, appointment made and results negotiated.
The appraiser goes out to check that the sale price represents a good value for the lender.
All parties receive, complete and return escrow instruction paperwork for the closing agent.
In a 30 day escrow, almost everything the buyer needs to do is completed in the first ten days, sometimes all at once. It can leave a buyer with their head spinning, dizzy and sometimes nauseous in that first ten days, the same as a pregnant woman in her first trimester.
Also like in a pregnancy, the second trimester should be the easiest. It's as if everything has settled in and a full 1/3 of the total time is a respite between the first trimester and the last trimester.
The third trimester starts off with a bit of worry that leaves you feeling tired and ready for all this to be OVER! Is everything done? Did I do everything I need to do so that the final event is successful? Am I packed? Am I ready for all this?
Just as a woman heads off to the hospital for the final event, at the end of the third trimester, a buyer heads off to the closing agent's office to complete the final paperwork that results in their owning a new home. Some people are in and out with no major pain, while others seem to agonize and sweat and take forever to get all of those documents signed properly.
The end result of both is a joyous event. A new baby! A new home! Three trimesters, the first the most world shaking and the second the easiest and the third the most eventful!
The good news is, unlike a pregnancy, where each trimester lasts 3 months, most trimesters of a real estate transaction last only 10 days. 3 x 10 = 30 day escrow.
ARDELL
DellaLoggia
On Seattle Real Estate including Kirkland, Bellevue, Redmond, Green Lake and most areas around Lake Washington North of Downtown Seattle.
Phone: 206-910-1000 - Mailto:Ardell@RainCityGuide.com
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