I almost fell over when I saw this! over at Grow A Brain. Anyone else interested in chipping in for a night at Frank's house (Frank Sinatra, that is)...email me!  This is the piano shaped pool.  Cost is $2,150 a NIGHT!  Too steep for me, but it sleeps eight.  Any takers if we split the tab?

Now that I have started a Guess That Album Cover Contest, I need to point out that I am clearly NOT the one selecting these covers.  My partner, Kim Harris, is the original founder of Easy Street Records.  The two remaining stores are owned by his Stepson from his 23 year, now defunct, marriage, Matt.

From his early days at the store on Bel Red Road in Bellevue, he assisted with the origin of Queensryche, originally started by a fellow and his brother from Redmond High School who hung out at the store.  Kim spent many years managing that band and others, mostly heavy metal, and interacting with some now very famous groups of that era in large venue, multi-band, concerts. 

He also taught "The History of Rock and Roll" at The University of Washington (U-Dub) and knows just about everything there is to know, backward (from Muddy Waters and the like) and forward on that topic, as well as many other music topics.

He picks the covers for the contest...just giving credit where credit is due...he is also my Broker, my real estate partner and my "life" partner.  We may get married some day...or not.  Jury's still out on that one :-)  We were both married for a very long time, he twice and me once, so we're not rushing back into marriage at this point.  Many in our industry know that his ex-wife (a local Realtor)  married his brother...by my Italian "standards" a bit sacrilegious :-) LOL.

All of our clients enjoy our "team" concept ,and we are pretty much inseparable from morning till night.  Some clients are surprised at first that I have a "partner", so I thought it would be a good idea to mention him in my blog so people aren't as surprised when they first meet he and I together.

The new Guess that Album is a bit tougher than the first.  I'll add more clues if it goes more than a few days with no guesses.  There is a huge clue in the photo itself BTW. 

NEW ON MARKET!?!?

I am sad to report that the newest home on market as of this very moment, is not new on market at all.  That wasn't the original point of this article, but I will have to include it because in finding the most recent home on market by mls# sequence and then hitting property history...unfortunately it was a RULE BREAKER who cancelled the "old" listing and obtained a new listing number.  This is happening less often, but apparently still a problem.

Generally speaking, mls #2603498x will have been on market longer that 2611476x.  Numbers are issued in sequence.  So as a "rule of thumb", you can rely on this system when looking at property in public sites.  Days on market are "cumulative", so when a property gets a new listing number due to change of agent, the days on market will be "intact" and "accurate".

But, unfortunately, some agents don't know there is a new rule making it a no-no to Cancel a listing and bring it back simultaneously as "new on market".  I doubt this message will make it to every single agent in the mls.  So do your due diligence when determining if a property is REALLY New on Market! or just a regurgitation of an old stale listing.

Do not totally rely on Days on Market, as a slight change in address can alter the accuracy of days on market as well.  Any agent with access to the mls system can double check the accuracy for you.  Make sure they hit the Property History button and print out that property history for you.  There is no other way to determine the accuracy of the data.  Personally, I call a listing that came off market and back on a few months later, stale, and not New on Market.  So be sure to look at the ENTIRE history to see if they tried and failed to sell it last year, and the year before that, etc...

Yesterday someone asked that I update the stats from THIS POST. 

Since we are past the year half mark, I will call OVERSUPPLY, any category with

 more FOR SALE than STI + PENDING + SOLD YTD.

OVER FIVE MILLION - 42 FOR SALE - 0 STI - 3 PENDING - 8 SOLD YTD (OVERSUPPLY)

$4M TO $5M - 23 FOR SALE - 2 STI - 5 PENDING - **8 SOLD YTD (OVERSUPPLY)

$3M TO $4M - 67 FOR SALE - 2 STI - 10 PENDING - 22 SOLD (OVERSUPPLY)

$2M TO $3M - 183 FOR SALE - 17 STI - 22 PENDING - 87 SOLD (OVERSUPPLY)

$1.75M  to $2M - 115 FOR SALE - 11 STI - 34 PENDING - 86 SOLD YTD

$1.5m TO $1.75m - *176 FOR SALE - 15 STI - 37 PENDING - 106 SOLD YTD (OVERSUPPLY)

$1.25M TO $1.5M - 247 FOR SALE - 20 STI - 68 PENDING - 216 SOLD YTD

$1.1M TO $1.25M - 189 FOR SALE - 11 STI - 54 PENDING - 187 SOLD YTD

$1M TO $1.1M - 101 FOR SALE - 9 STI - 33 PENDING - 100 SOLD YTD

Based on my observations of actual homes on market, I think the OVERSUPPLY in the $1.5 million to $1.75 million is being created simply because some people who should be in the category below $1.25M to $1.50M) are overpriced, which is throwing off the stats.  If you add these two categories together there is *No "real" OVERSUPPLY under $2 Million. 

That is the true purpose of running stats in this manner.  We can see from these stats, that some owners priced at $1.5 or slightly higher need to reduce their prices below $1.5 for the market to be entirely in balance under $2 million.

At the very high end you will always have more sellers than buyers, because over a certain price people will prefer to buy tear downs and build their own homes, before buying someone else's $Five Million Dollar home.  Same as new car vs. used car.

*Note that I have used the same method so that duplications are standardized, though not eradicated.  An agent will sometimes show a property as being in two different areas even though a property technically cannot exist in two places at the same time.  For instance, a property in Juanita might show as both Juanita (area 600) and Kirkland (area 560) since Juanita is "in" Kirkland.  Also, since I compile the stats using $3 mil to $4 mil and then $2 mil to $3 mil, a property at exactly $3mil would show in both categories.  Since we are looking for the up and down trends, these built in duplications should not affect the assumptions made generally from the stats.

I decided to go with YTD on the solds rather than 6 mos so when we are finished at year end, we have true 2006 figures.  In the original post I went a true 6 mos back into December of 2005.  As of today YTD would be a tad over 6 mos.

These are for all of King County compiled via NWMLS by hand.  Not by using the mls stat feature.  I do a preview count of every single sub-segment noted, which involves 32 separate and distinct searches. The mls will only go up to 250, so as the number grows in the sold between $1 mil and $1.25 mil, I need to break out into two categories of less than 250 homes.

**Of special note, the solds in the original post for 4 to 5 mil were obviously out of whack, so I edited the original post to change 22 sold to ? sold.  Since only 8 have sold YTD, that number must have included all statuses for that category or else there were a lot of them at year end of 2005.  Let's track it forward from 8 and disregard the original 22.

As with all stats, there are many ways to compile them.  As long as we stay with apples to apples, we are safe as long as we are tracking the trend and not being anal about the actual houses involved.  To remove the duplications for purity sake, would not be worth the time spent viewing each and every property to remove them.

As most of my readers know, I have been experimenting with negotiating and/or simply giving back a portion of the buyer agent commission since February of this year.

I had a very interesting call from an agent wanting to explore this concept.  It was great tossing this around for an hour or so with another real estate professional.  Most agents don't want to talk about the buyer having any say in the real estate commission.  It's convenient to say that the seller pays the commission.  The agent who called me asked if I felt the buyer paid the whole commission.  I responded that from a real estate professional's standpoint, the best way to think about commissions is to apply the wisdom of Solomon and keep the issues and the commission separated.  When you are the buyer's agent you don't know or care what the listing agent is being paid.  So leave that between the seller and the seller's agent..  Look at your buyer client as if he is the one paying you whatever you will receive at the end, and treat the buyer accordingly.  That is the only way to treat people as you should and never favor the seller when you are representing a buyer.

The seller pays the listing agent and the buyer pays the buyer's agent.  He asked how I determine a fair fee as you don't know how difficult the transaction will be when you first meet the buyer.  I asked him how he sets a fee with the seller up front, not knowing how long it will take to sell the house?  Apply the same logic to a buyer.  The more we negotiate the fee with buyers, the better we get at evaluating a fair price up front, the same as we have always done with sellers.

In the first transactions, and in most transactions of $300,000 or less, I simply credit the buyer at the end with what I feel is representative of "an overpayment" to me.  This surprises them and makes them happy.  At the lowest sale prices, under $200,000, I do not usually give a rebate.  For buyers who approach me wanting to purchase over $500,000, I offer the buyer agent fee negotiation up front after I "interview" them.

A buyer doesn't have to ask for a fee reduction with me.  As I experiment with different price and different methods of fee negotiation, it gets easier and I get better at it.  So far all of the clients have been happy with the result.

I wish more agents would discuss the issue so that we would all get better at treating buyer clients with the same dignity and respect with which we treat seller clients.  Telling buyers your service is "free" is insulting to their intelligence.  It's more like saying "It's none of your business what I am getting paid to represent you".  Clearly no one believes that it is none of their business. 

With Buyer Agent Fees getting higher and higher with even builders offering 4% Commissions or $5,000 bonuses to "selling agent", we as an industry need to agree that the buyer does have some say in the matter.  Or we simply have to offer the excessive amount back to the buyer, without the buyer having to ask for it.  We are not mercenaries bringing lambs to the slaughter who encourage buyers to purchase the house that offers us the most money...we can't be that...and yet, unfortunately, most just don't see it that way...yet.

I just received the email below from Pacific Northwest Title Company.  I thought it was interesting.  Hope you do too.

Here's a look at the last month's listings by county:

King County reported 6,489 single-family homes for sale. That's an increase of 951 from June 2005 and 462 from May.

Snohomish County had 3,483 detached homes on the market last month, up from 2,747 a year earlier and 3,255 in May.

In Pierce County, 5,098 single-family homes were available last month, up 1,634 from last June and 381 from May.

Mercer Island's median single-family home price is $998,250 — making it the county's second-most-expensive area.

In Pierce County, 5,098 single-family homes were available last month, up 1,634 from last June and 381 from May.

Snohomish County had 3,483 detached homes on the market last month, up from 2,747 a year earlier and 3,255 in May.

King County reported 6,489 single-family homes for sale. That's an increase of 951 from June 2005 and 462 from May.

Others in the top five are West Bellevue (median of $1.187 million), Queen Anne/Magnolia ($699,950), South Bellevue ($635,500) and Redmond/Carnation ($599,950).

One of the main reasons I find this most interesting is we know sales are down, but the above dispells the myth that sales are down because inventory is down, meaning you can't sell more if more are not for sale.  The above stats say that there are in fact MORE for sale, not less.  I will have to hand count the second quarter and compare that to the first quarter of this year and the second quarter of last year, to fully answer this question.

Stay tuned...I'll try to report those stats by the end of the week.

I have noticed recently that many of the homes that stay on market for longer than the average days on market are homes where the bedrooms are positioned "awkwardly" in the home. 

A four bedroom home with two bedrooms above the main living level and two bedrooms under the main living level, or one bedroom on the second level, one on the main level and two in the lower level. This is more common in homes with views than in homes without views.  The master bedroom is often placed where there is an excellent view at the top level of the home with the best view, and is sometimes all master suite on the top level.  This puts all remaining bedrooms on a different floor than the master suite.

For people with grown children or for divorced people who have a new partner in life that is not the parent of the children, who are older and visit rather than live in the home full time, this can be a perfect configuration of space.  But for someone with a two year old and a baby on the way, having a small child in a bedroom two floors below the master suite, just wouldn't work.

Homes with only the master suite on top in the view corridor, can end up being a great bargain as well as a great home for the right person.  Often sellers price these homes based on a price per square foot comparing the home to neighbors who have 3 or 4  bedrooms up.  Consequently the home stays on market for a longer period of time, as it is overpriced for its style and is not discounted property for the "awkwardness" of the bedroom placement. 

Waiting for "the right person" to come along is all well and good, but don't expect the house to sell for the same price as your neighbors, given the diminished buyer pool.

I managed to post an entry to Rain City Guide on quarter baths.   I have two offers to present today on my Mt. Baker tudor, a listing coming on in Kirkland that we are putting the finishing touches on, an inspection negotiation in West Seattle and a new client for a new home with acreage on the Eastside and a townhome to sell in Ballard.  Busy all across the Lake! 

Hopefully I'll have some time over the weekend to add to all of my blogs.  It's good to be BACK!!!  And it's a gorgeous day in Kirkland!! 

Using Escalation Clauses to "beat" the highest offer, is a relatively new concept.  Before Escalation Clauses, when we received more than one offer on a property, the buyers were often put on "Notice of Final and Best".  They each put their best offer in a sealed envelope, the envelopes were opened all at the same time.  If the seller was lucky, one stood out from the crowd by a substantial margin, and that person got the house.

Let's say the owner receives ten offers.  How does the seller choose from those ten offers?  Sometimes receiving too many offers is overwhelming, and the seller doesn't like having the fate of ten families, all wanting his house, in his hands. 

As a listing agent representing the seller, I would recommend evaluating the buyer qualifications, as the first consideration.  Let's say three of the ten are cash offers.  The other seven may be set aside without consideration for now, and the three cash offers may be given a notice of final and best.  If one of the cash offers is also the highest offer, possibly that one would be accepted on the spot and one or two others would be offered 1st and 2nd backup position.  You can counter the three cash offers, but if you tick off all three, you lose your three best buyers, so not necessarily a good move.  Better to counter one at a time quickly, before the other offers expire, so you only lose one at a time.

The cash offer is given first consideration because when a property bids up over the asking price, it may be bidding up over the amount at which it can appraise.   If the seller accepts the highest offer, without regard to the loan amount, he loses the other 9 when he accepts one. That one can fall apart when the property doesn't appraise, which can leave him with nothing.  Going from ten offers to no sale at all, is painful.  So you pull the ones with the most cash forward.  All cash, then those with more than 20% down and if you have 3 to 5 offers, you reject the zero down to 20% down offers on the spot and counter the higher cash available bidders.