Every New Beginning...

..comes from some other beginning's end.

Nine months ago I created 4% Real Estate in an effort to provide top notch real estate services at a reduced commission. In an effort to continue to provide exceptional service at a reduced price, I have left John L Scott Real Estate and joined the United States' first Internet Real Estate Broker, Redfin.com. As a Real Estate Agent at Redfin, I will be bringing Redfin's superior listing and buying services to Pierce County, Kitsap County, and Thurston County.

As I begin this new roll at Redfin, and as I maintain Blue Collar Agents, I am fearful that posts on this blog will be sporadic, if any at all. That being said, thank you for your readership and quality comments, they are truly appreciated. I also invite you to take a look at the Blue Collar Agents Blog, a blog about discount agents that I co-write with Franz Honer from Southern Maine.

May your real estate journies be quality, exciting, and inexpensive!

Cheers,
Trevor Smith
Redfin Real Estate Agent

Seattle Foreclosures: How do we stack up?

A recent report from Property Shark shows that Seattle has the lowest number of foreclosures between New York, Miami, and Los Angeles. Seattle comes in second for lowest rate of foreclosures.

According to the report, the Seattle Area (King County) reported 293 foreclosures during the third quarter. This was well below the 1533 foreclosures which took place in Los Angeles. When the number of foreclosures is compared to the number of households, New York City far and and away boasted the lowest rate of foreclosures, with only .01% of homes going to Trustee Sale.
By studying King County in depth, we find that Auburn and Federal Way, two of the least expensive places to live in King County, experienced the highest number of foreclosures.





Many feel that foreclosure rates will rise in 2007, as tens of thousands of Adjustable Rate Mortgage's fixed terms expire.

Now the stage is set. The nation’s foreclosure total already broke the 1 million glass ceiling in October, and just how high foreclosure levels will go in 2007 is open to
debate depending on how steep one believes the downturn will be.

“When I got into this business, back in 2000, defaults were about 1percent of all first mortgages. Today we’re at 1.5 percent. While it’s not a large number, it’s still a significant move. Do I think the economy is going to crumble? No! Will (the foreclosure rate) go to 2 percent? We’ll have to wait and see,” Saccacio told Doti, an economist and president of Chapman University.

For Esmael Adibi, executive director of the A. Gary Anderson Center for Economic Research at Chapman University, the key concern is all those people who signed up for those “exotic” adjustable-rate mortgages in 2005 and thereafter. In California, for example, 27 percent of all mortgages were so-called “option ARMs,” where the buyer pays 1 percent interest and the underpaid amount gets added to the loan’s principal. (Foreclosure Pulse, 2006, Para. 2-4)

Despite these nationwide scares, Seattle has remained fairly resiliant to busts in the housing market. Will this be able to continue into next year or will next year bring a housing market disaster? I suppose I'll leave it to my friends over at Seattle Bubble to debate that.

New Homes LLC: Poor Product, Poor Service

I recently took one of my home buyers through Rainier Vista, a new community in Covington. As we drove in the community, we began to look for a model home. However, there was none to be found. As we pulled around the corner, we saw a small trailer sitting back in a corner. Hmmm, I thought, I guess that's the sales center.

My Client and I walked into the trailer, and began talking to a very sweet woman, who turned out to be the sales representative for New Homes LLC. Now, I have to admit, after seeing New Homes LLC homes before, I was instantly turned off. New Homes, despite offering fantastic prices, constructs perhaps the lowest quality homes in Western Washington. But, like I said, the price was right, so we continued to listen as the sales rep gave her pitch.

As the representative continued her pitch, I began to notice that she wouldn't even speak to me anymore; she only addressed my client. She showed my clients floor plans (which turned out to be wrong) and photos. She then told my client that she could take a leisurely 1 hour drive to Bonney Lake to view a model home. At that time, I could tell my client was getting the same vibe I was... something is shady about this operation.

I politely excused myself and my client, and we began to leave. As we began to walk out the door, the sales rep asked for my clients contact information. She did this, despite the fact that I introduced myself as a REALTOR, as we entered the trailer. I stepped in, and gave the sales rep my information, and quickly helped my client out of the trailer. Phew, I thought, we made it out of there.

A few weeks went by after that unpleasant experience. Then, yesterday, I received a phone call from the New Homes LLC Sales Manager. He asked if my client had purchased a home yet. I politely said, "No, She has decided to buy closer over to I-5, in the Kent, Sea-Tac, Burien, areas." That didn't phase him. "Well, what if I told you that we are offering a $10,000 discount on our homes?" "Thanks for the information," I replied, "But my client is out of town for a few weeks, and I think she is pretty set on further West." He still didn't get the hint. He kept pressing. Finally, I broke down and told him that I didn't feel that New Homes provided a good product, and that I had had bad experiences in the past. He responded, "Well, New Homes, are no frill homes but they are very quality." And so the story went. He didn't get a clue. Finally, I told him I had to go. "Can I call you tomorrow?" he asked. "No!" I told him emphatically. "Well, lets sit down and meet in person, " he said. "No! No! No!" I said, " I have to go pick up my wife, I have to go!" He finally let me off the phone.

You see, this person was in sales. I know all the sales tricks. I wouldn't bite. My client wasn't interested and I knew it. However, by being a pushy salesman, this sales manager lost me for life as a potential help in selling his product. I now not only passively dislike New Homes LLC, I vehemently dislike and distrust them. Poor Craftsmanship. Poor Salespeople. Just plain a poor company.

Seattle and Snow... Not a Good Mix

Seattleites do a lot of things well. Seattle is the most educated city in the United States. Seattle is also one of the richest cities in the United States. Seattleites can build you a mean computer program. And you can darn well bet that you'll get the best latte you ever had here in Seattle.

Despite being a town of geniuses and entrepreneurs, we Seattleites are complete idiots when it comes to driving in the snow. The last few days we have gotten a rare snow storm here in the Puget Sound, leaving Seattle drivers helpless. Now, I understand that many Seattleites do not have snow tires, and that's OK, given that it almost never snows. I also understand that many folks are driving rear wheel drive cars, and that can be tough. However, there are few common sense things we can do in order to not turn 1-5 and I-405 into an ice-capades show:

1. Slow down. You can not go 70 on ice. It just doesn't work.


2. Don't stop on hills. You can't get started again.


3. Leave the person in front of you allot of room.


4. Be patient, we'll all get there eventually

So, Seattleites, we're smart, heck we're geniuses, lets beat this winter weather together. Besides, I'm tired of getting made fun of by my friends in Spokane and North Idaho, who think city folk can't drive on snow. Lets prove them wrong.

Photo taken from Monday Night Football coverage of the Green Bay - Seattle Game on Seahawks.com

My Interview at Redfin

I recently interviewed for a Real Estate Agent position at Redfin, an Internet based discount brokerage here in Seattle. I met with Allie Howard, Manager of Washington Operations and Rob McGarty, Manager of West Coast Operations. My already high opinion of Redfin has gone up another notch after meeting these two wonderful people.

Allie and Rob were relaxed, positive, and sharp people. They interviewed me by truly getting to know me - allowing me to express my passions and experiences freely. They shared their vision and passion for Redfin and helping real estate consumers as well. As I left our meeting, I knew that despite if I get hired or not, I had found an ally in the real estate industry.

It wasn't just Allie and Rob that impressed me either. Aime Cook, Redfin's Recruiting Director was incredibly responsive in communicating with me and giving me feedback on the interview. Another Redfin employee (please forgive me I forgot her name) even recognized me from my blogging. The whole company truly felt like a community.

I am hopeful of receiving this position. I know they have some more interviews to complete, and it will be at least a week before I hear back.

Redfin has the feeling like "Something big is going to happen." I wonder if this is what Google felt like in 1998, or Microsoft in 1988? I am hoping to be on the ground level of this amazing company.

If you are one of my clients reading this, rest assured, you're needs will not forgotten in any transition I make. If you have any questions or concerns regarding this post please email me at trevors@johnlscott.com.

Remember the Homeless this Thanksgiving

Happy Thanksgiving to the visitors of the Seattle-Tacoma Real Estate Blog.

Over the holiday weekend, please take a moment to pray for the homeless of Western Washington. According to a 2004 statistic from the Committee to End Homelessness in King County, on any given night there are an estimated 8300 people homeless in King County. The committee feels King County's homeless rate is strongly tied to the high cost of living in certain areas of King County.

It is difficult, if not impossible, for low-income individuals and families to find affordable housing in King County. In the spring of 2004, average rents for a one-bedroom apartment ranged from $577 in Auburn to $944 in Bellevue and more than $1,100 in downtown Seattle. For a disabled person living on Supplemental Security income (SSI) of $564 per month, the lowest average rent for a one-bedroom apartment is more than his or her monthly income. A worker earning minimum wage ($7.16 per hour) would need to work 80 hours per week to afford a one-bedroom apartment at the Fair Market Rent of $729. Thehousing wage in King County; the hourly wage that a worker would need to earn in a forty-hour workweek in order to afford a one-bedroom apartment; is $14.02 per hour or $29,162 per year.

Remember this was 2004. Housing costs have skyrocketed much higher since then, making the problem even more potent.

Lets put our heads together and think about what we can do to help this Thanksgiving. At the very least there is someone ringing a bell at your local department store... I think that's a good start.

Happy Thanksgiving Bloggers.

The Salvation Army now offers an "online red kettle" as well if you are interested in donating right now.

As Real Estate Slows Rentals Heat Up

Consumers only put up with so much. There comes a time when Joe Seattle the Real Estate Buyer says, "$300,000 for a Studio Condo is too much." "What about an interest only loan, or a Pay Option ARM?" says the Jim Desperate the REALTOR or Jane Needy the Loan Officer, "Then your payment would only be around $1700 a month."

But its too late, this buyer is out of the market. He's going to rent instead. And who can blame him? He can probably go rent that same Condo for $1000 - $1500 a month. So Joe Seattle signs a 6 month lease on a charming Ballard Condo. Bill Tacoma, Jimmy Auburn, Fred Renton, Frazzled Homebuyer, and 10,000 of their friends do the same. And so goes the transition from real estate boom to rental boom.

The Puget Sound Business Journal begins their article Apartments are where the action is - for now by saying, "Rents are up. Vacancies are down. In short its good to be a landlord again." The article goes onto explain that a slowing real estate market means a higher demand for renting; and a higher demand for renting means higher rents.

After mirroring the economies decline for four years, the fall 2004 vacancy rate for the Puget Sound region (King, Pierce, Snohomish, Kitsap, and Thurston Counties) was at 7.4 percent, rents were either flat or falling, and landlords were showering tenants with incentives. Ever since the pendulum has been swinging in favor of landlords. (Broberg, 2006, Para. 7-8)

This increase in renters has turned investor's eyes toward apartment complexes. Micheal Derr, managing director for Trammell Crow Residential Real Estate in Seattle says that people are interested in buying complexes before they are even built (as quoted by Broberg, 2006, Para. 6). This is quite a turn around from 2-4 years ago, when it seemed like every other apartment complex was being converted into a condo.

Despite this rental boom, it is important to remember that everything is cyclical. The interest rates will eventually drop and those inexpensive apartments will eventually be comparable to a mortgage on a condo. Right now though REALTORS are out and Landlords are in. However, like bell bottom pants and 80's style shawls, everything comes back in style again.

The Nominations are in...

The NWMLS nominations for Board of Directors are in... and guess who is in the running for Pierce and Thurston Counties? Drum role please..... The Broker of MLS-4-Owners, Chris Nye.

At first I thought I misread the nominations, so I read them again, "Windermere, Windermere, Coldwell Banker, ReMax, Windermere, MLS-4-Owners... WHAT!?!" I nearly fell out of my chair. I would have never in a million years thought that a Discount Broker, let alone a FSBO Discount Broker, could be on the list of nominees.

So, I believe champagne is in order. The Members of the NWMLS may be taking a huge step forward in becoming an open and competitive MLS. (After hearing stories from MLS systems around the country, I think NWMLS is already doing fairly well in this arena.). So Chris, best of luck, if I could vote, you would have my vote. However, since our Broker run oligarchy offers dues without representation, I will simply offer my sincere support.

By the way, if you would like a campaign manager I would be happy to lend you my skills. We could do all sorts of fun ads...

Ever feel like you're spit on by the entire real estate world? Feel like the whole real estate industry is against you? If so then I'm your Candidate for the NWMLS Board of Directors. I've been taking heat for years from traditional Brokers, and I think its time for a change. I believe in fair consumer practices and reasonable real estate fees. I believe in an open MLS that is fair to various real estate service models. So, if you're tired of the same ol same ol up in Kirkland, then vote for me, Chris Nye, for Board of Directors. I'm Chris Nye and I approve this message.

Or we could have campaign bumper stickers. NWMLS: Nye Will Make Life Simple

Anyhow Chris, congratulations on your nomination, and best of luck in the campaign!

(This Blog is my opinion and not that of Chris Nye or MLS-4-Owners)

Rain City Guide: The Standard in Real Estate Blogging

Here in the Seattle and Tacoma area we are extremely lucky to have a multitude of techies and computer geeks. This techiness has bled into the Real Estate Industry leading many REALTORS (Like Myself), Loan Officers, Real Estate Lawyers, and investors to blog about their experiences.

With this in mind, I thought I would take a moment to pay tribute to the Granddaddy of Seattle Real Estate Blogging, The Rain City Guide. Rain City Guide is an upbeat Blog run by eight of Seattle's finest real estate specialists. I have been impressed by Rain City's diversity of views and truly helpful articles. This being said, I have added Rain City Guide to my permanent link list.

Keep up the great work Rain City!

You Tube your Home

You Tube, the incredibly popular amateur video forum (now owned by Google) is becoming an increasingly popular medium for advertising homes. This video, posted by Scott Price, a local Windermere agent does a great job of capturing the home in a way photos just aren't able to. It may not be long before we are looking at videos rather than photos in the MLS listings!

NWMLS October Report

The Following article is October's Report on NWMLS home sales for Western Washington. Data is collected from the NWMLS and the report is written by the NWMLS.

Home Buyers, Sellers Look Beyond Elections

KIRKLAND , Wash. ( Nov. 7, 2006) – Not everyone spent the month of October campaigning. Nearly 12,000 homeowners around western and central Washington state put their homes on the market last month and 8,567 owners accepted offers on their properties, according to the latest figures from Northwest Multiple Listing Service.

October's activity was similar to September when brokers reported rising inventory, higher prices and fewer pending sales compared to a year ago.

MLS members reported 11,910 new listings of single family homes and condominiums during October, about 500 more than twelve months ago.

With those additions, the inventory at month end stood at 36,282 listings. That total encompasses 19 counties and marks a 48 percent increase in active listings from a year ago. (Starting with October, NWMLS is reporting data for Clark and Pacific counties; previously, transactions in those areas appeared in the "Other/Out of area" segment of the monthly report.)

"When it comes to current market conditions, it's important to keep things in perspective," cautioned Lennox Scott, chairman and CEO of John L. Scott Real Estate.

"Housing sales are down, but this has created a greater balance in the market between buyers and sellers," Scott remarked, adding, "Since we've come off of the frenzy market of the past year, buyers have more selection, there's less competition for homes, and interest rates are still low. Home prices continue to appreciate in most areas and we're on track to have the third most productive year in the history of real estate."

System-wide, the median price for a home that closed last month was $315,000. That is $28,000 more than a year ago, an increase of about 9.8 percent. For a single family home (excluding condominiums) the median selling price was about $332,000; for a condominium, the median price was $243,450.

In King County, which accounts for about four of every 10 sales in the MLS service area, the median price of a single family home (excluding condominiums) rose 12.8 percent, increasing from $390,000 a year ago to $440,000 for sales that closed last month. Condo prices jumped 20.8 percent, climbing from a median selling price of $215,000 twelve months ago to last month's figure of $259,700.

For most counties in the Northwest MLS market area, price gains from a year ago tended to be in the range of 9-to-11 percent.

Every county experienced a double-digit buildup in inventory and all but three counties reported dips in pending sales.

"The evidence looks pretty convincing that the market has corrected itself and we are experiencing a tilt to the buyers' side in the arena of negotiations," observed NWMLS director Dick Beeson. This "gentle incline," as he described it, presents some good opportunities for buyers, particularly in areas like Pierce County where the selection is about 50 percent larger than a year ago.

Overall, traffic has been steady at open houses and "perfect" properties still get multiple offers, according to Beeson, the broker/owner at Windermere Real Estate/Commencement Associates in Tacoma.

"Knowing 2005 was the zenith year in real estate sales, having an adjustment this year was to some degree expected," Beeson noted. Nonetheless, he expressed some surprise at the growing ratio of vacant homes that are currently on the market. He believes this could be the result of "natural" vacancies from job transfers and buyers who are moving up or downsizing, as well as some selling by investors.

Another NWMLS director, Ken Bacon, the broker at Windermere's Redmond office, expressed little worry about the slippage from last year's record-shattering sales volume. "The 9 or 10 percent decline in pending sales from the boom year of 2005 illustrates the demand for housing in the Seattle area remains strong," he commented.

Appreciation continues because of this demand, according to Bacon, but he emphasized "Pricing is critical as the market now allows buyers time and options prior to making a commitment."

"We are still seeing some multiple offers in price ranges between $300,000 and $800,000 depending on the neighborhood, house, and location," Bacon said. Contingent sales are also being written, he reported, but said in his experience the first buyer is often bumped by a second buyer within a couple of weeks.

Condominiums continue to fuel demand among entry level buyers and downsizing sellers, according to Bacon. The combination of tight inventory, close-in locations and sought-after amenities is sustaining demand and creating some bidding wars.

In King County, there is slightly more than a two month supply of condominiums (2.3 months) to meet demand at the current pace of sales; for single family homes there's a 3.2-month supply. (Nationwide, there was a 7.3 months supply of existing homes for sale nationwide at the end of September, according to the National Association of Realtors ® .)

Bacon described open house activity as "steady but not strong," pointing to inclement weather, weekend sports activities and growing popularity of computer tours as factors that affect open house visits.

Asked about "hot" neighborhoods for his office in downtown Redmond, he said properties that combine views, acreage and good locations typically draw multiple offers. Close-in communities such as Marymoor Heights (if priced under $800,000) and Bridle Trails (if priced under $1 million) and affordable communities such as Education Hill are experiencing high demand among buyers.

Bacon expects some seasonal leveling will continue during the fourth quarter and predicts election results will have no impact on housing activity. He believes the area's strong economy, good prospects for job growth and stable interest rates will continue to fuel the local market.

Equal Opportunity Housing: Private Eye

The goal of The HUD Office of Fair Housing and Equal Opportunity is to eliminate discrimination based on race, color, sex, national origin, religion, disability, and family status. In an effort to enforce these laws, Fair Housing often sends "undercover agents" to pose as buyers. These "buyers" usually tour model homes at new construction sites, asking the site agent questions like, "what type of neighborhood is this?" or "Do you feel like I would fit in here?" Usually site agents are keenly aware of the posing buyers by their obvious questions. One agent was even tipped off by a video camera peeking out of the "buyer's" purse.

A few days ago I was cased by Fair Housing in a more high tech way. The Fair Housing Officer emailed me from my website with the following message:

What neighborhoods would you suggest for a family with 2 kids (9 and 2), who are liberal and Jewish, and have an adopted Guatemalan daughter? My husband is an attorney and I am a social worker. We want a neighborhood with the best schools, LOTS of kids who play outside, parks, walking areas,etc. Please recommend via e-mail. Thanks!

Now, I have no proof that this was a Fair Housing Agent, however I know very few people who are so forward about religion, politics, and family life in an email to a stranger. So, I politely replied with this:

Thanks for visiting my website. I would be happy to help you find a home that meets your needs. According to State and Federal laws I am not allowed to recommend neighborhoods based on the criteria you gave me (religious, familial status, race, etc.) Perhaps you could give me some other criteria to search for a home.

- What area of Western Washington would you like to live in?
- Do you like newer or older homes?
- What style of homes do you prefer?
- What amenities do you need in a home?

Any of these things would be helpful!
I look forward to working with you! Have a great day!

I have not heard back from this "buyer" and I do not suspect I will.

Despite the obviousness and even absurdity of the Fair Housing Agents I am happy to live in a country where every persons rights are protected.

View Fair Housing Adverstisements

Fair Housing Laws

About FHEO

The First House: The Washington State Governor's Mansion

Yesterday, I had the privilege of joining the 93rd class of the Washington State Patrol for a reception at the Governor's Mansion. The mansion, located adjacent to the Capitol Building and the Temple of Justice, is a magnificent Southern Style home with sprawling grounds. As we walked up the driveway, we were greeted by WSP Cadets who guard the mansion 24/7. We were told that Christine Gregoire sometimes orders them pizza as a gesture of appreciation.



As we entered the mansion our eyes were drawn toward the floor to a giant Washington State Seal mosaic embedded in the entryway. The front stairs leading to the second story were blocked. This is the entrance to Christine Gregoire's personal residence and living quarters.


We then quickly toured the library and living rooms. These rooms were adorned with photos of Salmon, Timber, the Seattle Library and other icons of Washington State. Our tour brought us to the most important room: The dining room. Despite, the gorgeous mural, the dining room's true attraction was the food. Mrs. Gregoire had spent hours making the best appetizers and deserts. Where does she find the time?

After visiting with the graduates and taking in the history (and plenty of brownies) we made our way to the door, leaving with a greater connection to government and our great State.

Gig Harbor: The World's Largest Gated Community?

Yesterday I took a trip over the Narrows Bridge to Gig Harbor. The new bridge project seems to be humming along, with much of the bridge deck now in place. WSDOT estimates that the 12 million pound, $849,000,000 bridge will be completed in Summer 2007. At that time the original bridge will be closed for approximately a year to complete repairs and updating.

Despite the clear need for traffic relief at the Narrows Bridge and all along HWY 16, there are still many unanswered questions as to how the new bridge will effect life on the Peninsula. The new $3.00 toll will clearly have an effect on people who make the daily commute to Tacoma and other East Puget Sound areas. Will low income people from the Peninsula be able to afford $90.00 a month simply to get to their jobs?

One Gig Harbor resident believes that Gig Harbor will quickly become the World's Largest Gated Community. By imposing the toll on low income families, he believes many will be forced to move to Tacoma just to afford their cost of living. This would leave mostly upper and middle class families in the harbor. While this is unlikely to happen overnight, it's not inconceivable that in 20 -30 years, Gig Harbor, Purdy, and even the Key Peninsula will be exclusive havens for the well-to-do.

What are your thoughts on the bridge project, tolls, and its effect on the Peninsula communities?

Your Commute is How Long?

After recently taking some clients house hunting in the South King County area, I realized the substantial commutes that people are willing to make in order to live in their ideal home. It is not uncommon for people to commute to Seattle from Maple Valley, Auburn, Federal Way, or even Pierce County. This often results in a one way commute time of 1 hour 30 minutes to 2 hours.

Lee Holmes, a local software developer, realized the importance of commute times during his home buying experience, "When I was first looking for a house, one of my primary constraints was commute times. I started by asking people – 'How long does it take you to commute to work?'" In response, Holmes created a program to calculate your Puget Sound Commute time. This program allows the user to factor bus routes, HOV lanes, and start times into commute time calculations. The program will then tell the user which areas are within acceptable commute times.

With commute times growing longer, and public transportation options limited, this program may be a great option for helping home buyers balance their home preference with long commutes.

NWMLS Holds Annual Meeting, Excludes Agents

The Northwest Multiple Listing Service (NWMLS) will hold its annual meetings this November to discuss issues such as MLS Rules, Arbitration for disciplinary proceedings, and NWMLS Forms. They will also be nominating candidates for the NWMLS Board of Directors.

Unfortunately, there will be a significant population unrepresented at these meetings. According to NWMLS rules only Brokers and Office Managers are allowed at meetings. The NWMLS warmly reminded agents of this by posting a message on Discover, the NWMLS home page:

Meetings are Open to Member Broker and/or Branch Managers only.

This practice is very disappointing and undemocratic. If the NWMLS exists as a service to the real estate agents of Western Washington, ought not the agents participate in forming the rules and regulations that govern them? It is my belief that a significant amount of rules currently enforced by the NWMLS would not be in existence if Agents participated.

By allowing Broker control of the NWMLS, the brokers either consciously or sub-consciously make rules that benefit themselves rather than the agents. This is not to suggest that most brokers don't care about their agents; however the voice of a broker's bottom line may often drown out the voice of an agent's best interest.

Blue Collar Agents Blog

The Blue Collar Agents Blog is up and running. There is still alot of work to do, however the basics are done. I hope for this blog to be an open and lively platform about the discount real estate service industry. I expect to post something interesting and relevant within the next week.

Introducing Blue Collar Agents

Blue Collar Agents Discount Real Estate Agents

Though this site has been up for a while, I have now finished most of the work required to make it a functional directory. Therefore, I introduce to you Blue Collar Agents Discount Real Estate Agent Directory . It is my goal to make this a comprehensive nationwide directory for Discount Brokers, Discount Agents, Flat Fee Brokers, and Internet Brokers.

As I continue to work on this project you will see The Blue Collar Agents Blog integrated into the site. This blog will focus on the Discount Real Estate industry nationwide, and will include feature stories about directory listings.

Right now Agents may submit a listing for free, or can pay $19.95 for a Premium Listing. Premium Listings include banners on the home page, photo uploads for your listings, and document uploads for listing fliers, among other things. Premium listings will also be featured on the home page for a period of time. Please do not pay to have a Premium Listing right now (Unless you like giving me money!). I will be offering this service for free in the next month or so during a promo blitz. The promo will last at least a few months. For right now, submit a free listing and upgrade during the promo.

I appreciate your support and input regarding this directory. I am hopeful that this will be a valuable resource for real estate consumers.

Looking for Bloggers

I'm looking for bloggers to participate in this blog. Here is my wishlist for qualified bloggers:

- You should have a pulse.
- You should probably be involved in the real estate industry in some way, shape, or form. (ie mortgage, title, escrow, investments, etc.)
- If you are not involved in the real estate industry, you must have something knowledgable and meaningful to say to real estate consumers about the real estate market, REALTORS, and the real estate process.
- I would love to find someone who is specifically in Seattle or the North End. If not, no worries.
- I would love to find somebody who likes to shake things up.
- I would love to find somebody that disagrees with me.

Thats about it. You can blog as much or as little as you want. If you're interested, either post a comment or email me at trevors@johnlscott.com

Prepayment Penalties

As the mortgage industry loosens its standards to attract sub-prime, self-employed, low income, and other "out of the box" borrowers, they are also imposing safety nets to protect their loan. These safety nets help the lender counteract the risk of taking a non-conforming loan. Some of these tactics include high-interest rates, big down-payments, proof of cash reserves, and pre-payment penalties.

Prepayment penalties are penalties imposed on borrowers who sell or refinance their home too quickly after purchase. Many prepayment penalties are 1-2 years in length. If you sell or refinance your home prior to your time limit, the lender will impose a cash penalty at the time of closing. These penalties are often 6 months interest on your loan, or 5-6% of the total value of your loan.

Lenders are smart. They know that many people who need sub-prime and other nitch loans often need to sell their home quickly due to a relocation or financial burdens. The lenders will gladly collect $5000, $10,000, or $20,000 of your equity simply to allow you to move.

My advice is this: Be careful of loans with prepayment penalties. If you do take a loan with a prepay make absolutely sure that you will be living at your home long enough for the prepay to expire. If not, you may end up selling your home and bringing money to the closing table.

Auction your Home?

There are times when people try incredibly hard to sell their home but simply can't. This often puts people in precarious situations. Some are forced to carry 2 mortgages. Others move out of state and have nobody to watch their vacant home. Some simply get in over their head and need to get out of their mortgage before foreclosure proceedings start. In order to produce a quick sale of their home some people in these situations have turned to auctions.

While this is still a fairly uncommon method of selling your home, auctioning is gaining popularity. After sitting down with Randy Wells, Vice President of the National Auctioneers Association and Tranzon Auctioneer, I found out the full scoop on when it is beneficial to auction a home and the process of auctioning a home.

First, auctioning a home has the allure of "I'm going to get a deal," and as we know deals attract crowds. By creating the image of desperation (ie: I have to get out of this house now), crowds gather. It is not that you actually have to be desperate, auctions by default simply create the image of desperation. This is probably because foreclosed homes are usually auctioned.

Second, auctioning a home is not always beneficial. For a person who has ample time to sell and is not financially burdened, using a REALTOR is probably a better option than using an auctioneer.

Third, auctions work well when there is a buzz. Randy usually requests 1% of the sales price of the home for advertising prior to auction. This pays for huge newspaper ads, radio time, maybe even TV time. The more buzz, the more people at the auction.

Fourth, auctions are fairly effective. According to Tranzon, 85% of homes they auction produce an acceptable transaction that will close in a reasonable time frame. I am not sure the statistics on using a REALTOR, but I don't believe it is that high.

Fifth, you can set an undisclosed reserve. In other words you have a minimum amount that you will take for the house. If the bids don't meet the reserve you don't have to sell.

Sixth, most auctioned homes are sold as is. Tranzon notes that many sellers can avoid the timely and sometimes expensive inspection process by having open walk throughs prior to auction. This allows potential buyers to view the home and even have a professional inspection prior to purchase. This usually speeds up the closing process after the auction.

Seventh, most auctions are held live, right at the home. Randy says he likes to create a competitive atmosphere, thus jacking up the price of the home. He said his favorite auction he ever performed came down to a bidding war between 2 Montana cowboys who hated each other. Their testosterone made the property sell for thousands over the expected price.

In the end auctions are a very viable option for selling your home. However, even Randy believes that working with a REALTOR is vital, and usually the best way to sell a home.

Equal Treatment for Discount Brokers

After a fight between the FTC and NAR, many MLS systems that banned or provided limited services to discount brokerages have opened their doors. Read the full scoop in the New York Times.

A Victory in Wisconsin for Fair Commissions

According to the Millwaukee Journal Sentinel, the Southeast Wisconsin MLS will begin to provide full marketing and listing services for real estate listings that do not offer a "full" commission. Shame on Metro Multiple Listing Service for taking so long, but thank you for realizing that free trade and competition always makes the market better for consumers.

Realtor Web Site Open to All Deals: Sales Denying Full Commissions Weren't Previously Listed

Real Estate Agents Boycott Discount Brokerages

I thought this was an interesting article about Progressive Home Sellers.

I believe REALTORS have to begin to provide full service real estate services for around 4-5% total commission. If not, the market will replace Agents with other home selling and buying options. (ie Auction, FSBO, etc.)

The Impact of Google on Developing Nations

In order to complete my Bachelors Degree, I attend school in the evenings at Northwest University in Kirkland. Recently, I completed a paper on The Impact of Google on Developing Nations. Its not really real estate related, but for anybody interested in Google and Internet Advertising, this might be interesting.

Facing Foreclosure

I was introduced to a great blog today. A 24 year old guy invested in multiple properties during the housing boom. He is now facing foreclosure on 5 of them. He is blogging about his experiences. Take a look: I am Facing Foreclosure

(I have also added this blog to my permenant link list.)

REALTOR vs Real Estate Agent

For many people the terms REALTOR and Real Estate Agent are synonymous. Others, particularly REALTORS, adamantly point out the difference between the two. So, what is the difference between a REALTOR and a Real Estate Agent? Should these differences effect how you choose an agent?

Nine years ago the National Association of REALTORS (NAR) began an advertising campaign trying to persuade consumers of the dramatic difference between a REALTOR and a Real Estate Agent:

Now in its ninth year, the NAR advertising campaign runs February through November on network and cable television and network and satellite radio. This year's commercials help consumers understand the real value of working with REALTORS®. From their voluntary adherence to a Code of Ethics to their incomparable knowledge of real estate processes, REALTORS® are the experts of residential and commercial property transactions.
(NAR, 2006, Para. 6)

The National Association of REALTORS clearly points out that there is a difference between a REALTOR and just a "regular real estate agent." NAR, sites that an adherence to a Code of Ethics and extensive training set REALTORS apart. Yet, on a practical level, I am not so sure this is true.

I am a REALTOR, a member of the National Association of REALTORS and the Tacoma Pierce County Association of REALTORS (TPCAR). I have paid alot of money to be a part of these organizations. (I don't remember the exact amount, but I think it was between $300-$500 per/year). In exchange for my dues, what have I received? Nothing. No ethics training on the REALTOR Code of Ethics, no extra training beyond my state classes, not even a lousy pin with the letter R on it.

So, I put my mind in rewind, trying to remember the requirements I had to meet to become a REALTOR. Was there a test on the Code of Ethics? Nope. Was there a background check seeing if I was a mass-murderer? Nuh-uh. Was there anyone to see if I was competent enough to fill out a Purchase and Sale Agreement? No Again. Just an online form and a credit card number - that's all it took.

So when the National Association of REALTORS runs multi-million dollar campaigns informing the American public to only use a REALTOR, not just a Real Estate Agent, I sit back and laugh. I laugh because I know my dues are going to pay for those ads, not in helping me become a better agent. (In fairness to TPCAR, I have received flyers in my box for classes sponsored by TPCAR, however most, or all of them, I had to pay for.)

On the other hand, there is just measly Real Estate Agents - non-members of NAR. You don't see many of these any more. Why? Most MLS systems require that you be a part of NAR in order to belong. In other words, in order to use a system you need to function as a Real Estate Agent, you have to be a REALTOR. Given a choice between getting denied MLS access and joining NAR, most agents join NAR. Thankfully, some agents and Brokers have filed suit against this practice and won. The NWMLS (Western Washington's MLS) does not require membership in NAR for membership in the NWMLS.

For those Real Estate Agents left, many have gotten a bad rap from the NAR commercials, but is this deserved? Well, I am sure there are scum-bag real estate agents out there, but I am also sure that there are scum-bag REALTORS out there. There are excellent Real Estate Agents out there too though, and they simply don't need the name REALTOR to be an ethical person.

Marlow Harris throws Red Herring

If you're a real estate consumer, please forgive this real estate minutia, however when somebody who has been on HGTV and interviewed by the New York Times starts ripping on my real estate model I get a little irked - even miffed. I believe it wrongly damages my reputation (I'm not sure what type of reputation a Discount REALTOR has, but its mine nonetheless) So, here is my final public response and synopsis of my dealings with Marlow Harris:

As you will notice from a former blog post, Marlow, found it appropriate to call me a scab because I list homes for 4 percent commission. Read the original dialogue yourself. As you can see 2 other people including a Seattle Realtor commented on the issue, along with myself. During the dialogue I continually asked Marlow if she believed fixing real estate commissions is OK. Here was her response to Objective Observer and myself (4percentrealtor):

Trevor, read my comment again: "If the National Association of Realtors was a labor union, and we were union workers, you'd be a scab."

Anonymous "Objective Observer": The term REALTOR(tm) is a trademarked term that refers to members of the National Association of Realtors. Not all real estate agents are REALTORS. When using the term REALTOR, it should be in all caps or at least the first letter capitalized.

And for the definition of "scab" see Jack London's speech "War of the Classes", first given before the Oakland Socialist Party Local, April 5, 1903.

Have a nice day!

Does anybody feel that this was a direct answer to:

Are you suggesting we fix real estate commissions?

Well, I thought she might have just misunderstood the question, so I asked her again,

Do you believe fixing real estate commissions is OK or not?

Its been over a week and a half now and no response from Marlow. Today, I found that Marlow had commented on another Blog which I frequent. It just happened to be a blog post about my dealings with my good buddies over at the NWMLS. What a coincidence. Yet, here is the doozy. What did Marlow have to say? Drum roll please...

"REALTOR" is a registered trademark of the National Association of Realtors and should be capitalized and, if available, the trademark symbol should be used.

Marlow, can't you think of something better than this to say? Who do you work for anyway? Do you get kickbacks from the NAR trademark department?

MARLOW, HERE IS YOUR LAST CHANCE TO BE A STRAIGHT SHOOTER BEFORE YOU GET LISTED IN THE TREVOR SMITH HALL OF SHAME OF PEOPLE WHO DESERVE ZERO RESPECT:

Do you believe fixing real estate commissions should be legal?

Are you paying too much in Closing Costs?

Unfortunately Washington State does not currently license loan officers. While Mortgage Brokers require a license, their loan officers do not. That will change next year when Washington State's loan officer licensing laws take effect. In the mean time, its important to make sure your lender is ethical, upstanding, and open about their fees, points, and other miscellaneous charges.

Bankrate has done a study regarding Closing Costs. By surveying lenders nationwide they have come up with a national average for what your closing costs should be. Keep in mind these closing costs are based on a $180,000 loan, which is not necessarily a realistic amount in Western Washington anymore. Take a look at this study and see if your lender is overcharging you.

In defense of lenders, the following situations are usually legitimate reasons for having above average closing costs:

• You have poor credit
• You have had a bankruptcy recently
• You work a non W-2 job, or are self-employed
• You have worked at your job less that 2 years
• You have a high debt to income ratio (Average is around 30% - 40%)
• You are doing a zero down, 100% financing loan (This probably means you have a first and a second mortgage, both with their own closing costs)
• You are purchasing an investment property

A Slowing Market

An article from Saturday's Seattle Times says that inventory is up and that appreciation is slowing. Is the Seattle Market slowing or in for a bubble burst?

Local Housing Market Keeps Slowing

Fred

I recently started working with a new client. Fred is probably in his mid to late 70's. He is also one of the neatest people I've ever met. We went and looked at properties on Tuesday and we're going again today. I look forward to our time together. He tells me stories about World War II, his time in the Navy, and how he met his wife in Japan. He's funny too. I haven't heard someone laugh and joke that much in a long time.

This is one of the most rewarding aspects of being a Real Estate Agent. I get to know extraordinary people, hear their stories, and be a part of their lives.

Fred, thanks for your friendship.

Redfin & Waterless Toilets

How Redfin & Waterless Toilets are alike?

I thought this was some reasonable and practical insight on Redfin.

For Sale by Owner

I don't have anything against For Sale by Owner's. If a seller feels confident in the real estate process, is willing to market their home, and is willing to work with REALTORS, I think FSBO can be a viable option for many people. However, I do have a bone to pick with some of you For Sale by Owner's out there. (Its an - I care about you - I want to see you succeed - bone)

First, REALTORS aren't the devil. I know many of you get more phone calls from REALTORS then you do buyers, but not all REALTORS are out to screw you out of your equity. Many REALTORS genuinely care about helping you sell your house. Don't shut us all out right away.

Second, before you decide to list For Sale by Owner make sure you understand the Real Estate process. Many REALTORS become frustrated with FSBOs and even won't work with FSBOs because they are afraid of the legal ramifications of improper paperwork. You don't have to be a genius to figure out purchase and sale agreements and other real estate paperwork (Heck, they gave me my real estate license), you just have to be willing to do some research. Remember, if you list FSBO, don't expect the Buyer's Agent to do your paperwork, you have to take responsibility for your own forms.

Third, be available. If you are advertising your own home, make sure people can reach you for questions. There have been many times where I have contacted owners of FSBO's where no one answers the phone and I don't get a call back. People can't see your home if they can't get a hold of you. If they can't see your home, they can't buy your home.

This advice is not meant to be mean-spirited or anti-fizzbo. I love the fact that some sellers take the initiative to make things happen themselves. However, as a REALTOR, I see these mistakes made often, and I believe it hinders For Sale by Owner's from selling their home.

Nine Mile Falls, Washington

Nine Mile Falls... My home. Well, ten years ago it was my home. Nine Mile Falls is located by a falls, 9 miles north of Spokane. Clever name, huh.

As with many people who return to their place of origin, I noticed all the changes. First, a whole raod was blown up by WSDOT. Goodbye Rutter Parkway. Second, little Nine Mile is getting a fast food restaurant. Hello Zips. Third, Jeb's Supermarket (I believe he uses the term "Super" to liberally) got a brand new lime green deli sign. Hello shameless advertising. Finally, and most suprising of all, the gas station, Matt's Service Station & Cenex, now accepts credit cards at the pump. Hello 21st century.

Despite these changes, there were many things that were just like they were in 1996. The high school kids were wearing their football jerseys in preparation for the Homecoming game. My Dad, who owns the local Hardware Store, was taking care of his tomato plant which he calls Oscar. And the checker at Jeb's "super" market carded both me and my wife for beer, because they had just been fined again by the Washington State Liquor Board.

Oh the joys of coming home.

I hope as a REALTOR I can play a small part in helping others establish a home and create memories like these.

Real Financial Heroes

Real financial heros part 3 of 3

I have to credit to Seattle Bubble for introducing me to this video. Oh so funny... Oh so True...

The Greatest Lease Agreement ever Written

As a follow up to my previous post about the 1985 Singlewide, my brother has decided to rent the "woodland cabins" across the creek. Take a look at this agreement. I haven't laughed this hard in a long time.


Renter’s Agreement
The Owner hereby rents the rotted plywood shacks located “across the creek” at 711 East Coulter Creek Road for the period commencing on Oct. 1, 2006, and monthly thereafter until an awkward situation makes the arrangement inconvenient or unlivable for one or both parties, at which time this Agreement is terminated. Resident hereby agrees to the following terms:
Maintenance: To live without electricity and piped water. Resident will not string electrical cords over the creek from tree branch to tree branch and use them as zip-lines for buckets of water and/or personal waste. Resident will deposit only small amounts of garbage to the weekly collection of such, since garbage is bad for the planet, and will not display it in the front or backyard nor hide it in the Chemical Coop or outhouse. Resident understands that, yes, the outhouse is that pile of wood near the sinkhole known as Brooks’ Last Stand. Extra Visitors: To use said dwelling as living quarters only for 1 adult and not turn Owner’s property into rainbow gathering or patchouli pow-wow with extended visitations from friends and/or lovers in groups of three or more. While Resident is allowed to smell wild mint, read books in the treehouse overlooking the creek, sit in one spot for long periods of time observing woodland critters, and think, Resident understands that too many people engaged in such activities may lead to neighborly suspicion of Owner. Appliances: In the event the Resident uncovers an appliance in a nearby ravine, say, a stationary bike or front-loading dishwasher, Resident agrees to dispose of it and other found antiquities in the Belfair Dump, paying a small fee to the nice woman at the booth. Personal Property: The Owner shall not be liable for any loss of personal property, including loss of dogs in nearby ravine and/or burglary of food by bears, for smoke damage to lungs and/or personal photo albums from sticks of incense or wood burning stoves, for any accidental wounds to persons in or about the rented property resulting from water, rain, windstorm, or act of God. Pets: The Resident specifically understands and agrees: No dog poo on Owner’s side of the creek. Rent: To compensate for the above living conditions, Resident agrees to pay no rent for the first month and instead receive the sum of $1 from Owner. Failure to receive these funds may result in no compensation from the Owner, who is cheap and forgetful.
Personal Relations: Furthermore, Resident agrees to respect the Owner and not leave angry notes tacked to his door or throw rocks at him when he walks around half-naked on sunny, weekend mornings; to not enter his trailer unless invited for Holiday gatherings, real or imagined; to not attend the crazy high school parties down the street, however joyful they may sound. Resident agrees to check the mail but to leave the Owner’s mail alone because walking to the box is his motivation to leave the house at least once a day, however sad that may be. Resident will not grow, smoke, or cook marijuana or other illegal substances alone or with Matt Funk or the Funk family, the neighbors. Resident will not smoke cigarettes on the property unless willing to offer one to the Owner. In the rare case such an offering may occur, Resident will not knock on the Owner’s trailer window while Owner is deep in thought but will croon a Negro Spiritual from a distance at such a volume as to gradually make Owner aware of Resident’s presence.

Default by Resident: I, the Resident, understand that the fourth wall is falling away from Rotted Plywood Shack #2, that my foot could fall through the floor, that the roof could cave in, that I may never be able to get rid of all the Maxim magazines. I understand that by living in the woods, I must trek through the woods, and that to trek through the woods, I must forage through wet plants and spiderwebs leaving cold spots of dew on my jeans and sticky strands of fiber in my hair. The swamp behind my cabins may become a stream; the stream in front of my cabins may become a river; I may become depressed. On my death bed, I may recall this time in my life as a low point. Nevertheless, I will respect the stately trees on the property as bleachers for choirs of birds, firm in their commitment to this place, aspiring towards the sky.
Acceptance and Rejection of Property: Resident accepts the condition of the property, waiving inspection of same by Owner and agrees to ignore all defects since there isn’t much but defects to ignore and/or notice, and notify Owner of any improvements made to the property. Resident accepts complete independence on one side of the creek and likes it that way, and acknowledges that the Owner, due to a long-cultivated aversion to manual labor, is unavailable to help with the hauling of materials across said creek. Legal Contract: Resident agrees that the security deposit shall be an unspoken trust and tenuous bond between the Owner and the Resident, and not just a one-time, non-refundable, financial gift. Resident understands that the Owner is, in reality, not the Owner of the Property but Steward of the Land, and that Resident is also Steward of the Land, agreeing to cherish and maintain it. Resident understands that the rotted plywood shacks are not considered “livable” by most American definitions of the word and that, despite such categorization, Resident wishes to make this an ethically and perhaps legally binding contract. Resident agrees to seek competent spiritual advice before signing this contract, if such advice is needed.
Accepted this _____ day of __________________20________At ________________________________________________ Resident ___________________________________________ Owner __________________________________________

The Joys of a 1985 Singlewide

I recently helped my brother purchase a 1985 Fleetwood Singlewide trailer in Victor, WA. Don't know where Victor is at? I didn't either. Its a small town near Belfair, WA. Oh, you don't know where Belfair is at either? Oh. Well its a small town located near the Hood Canal in Mason County.

Anyhow, through the entire singlewide experience, I have come to some revelations. First, a lot of people value land more than a house. In this case, the singlewide is in need of repair (OK, alot of repair), but the land is gorgeous. The 6.3 acres encompasses 2 creeks complete with spawning salmon, large cedar and fir trees, and even a treehouse. How can you put a price to that? Secondly, you can be happy and not rich. The singlewide was not the most expensive home on the block, but I have never seen anyone happier with a home purchase then my brother. Thirdly, if you're going to have neighbors, you might as well be neighbors with Matt Funk. Matt runs a saw mill in his back yard and is the President of the Coulter Creek Water Association. He also has a dog named Johnny Rotten. I mean who can beat that?

In conclusion, a singlewide in Belfair is just as good as a mansion in Bellevue... if the priorities in your life are right.

A New Direction for Seattle - Tacoma Real Estate

You'll notice in the above blog description, that this blog has changed its focus. Here's why:

• My previous description was too stuffy and made me sound like a guy who wears a suit and drinks scotch.
• I know alot about real estate, real estate agents, and real estate law but I am not an expert. I wanted people to know they are getting professional advice but not expert advice.
• I like to have fun. When I was just focusing on the market and real estate advice, I felt like I had to act like I was in a Federal Reserve Meeting.
• I love telling stories. I want you to hear all the funny (ha ha) and funny (hmmm?) stories I deal with.
• I like pissing people off. OK, not really, but I love a healthy debate, especially about the following issues: Real Estate Commissions, Real Estate Agent vs REALTOR, & Online Real Estate Marketing & Brokerages.
• I didn't follow my description anyway. Since I wasn't meeting up to my blog's description, I decided to lower the standard!

Craig Newmark - Just a Nice Guy

I was thrilled today to see Craig from Craigslist post two comments on my blog. I thought for sure it was a poser - but it wasn't - it was Craig Newmark himself. After emailing back and forth 3 or 4 times, I am happy to say Craig Newmark is just a nice guy who cares about doing right by the people who use his site. He is pleasant and easy to talk to. Man, who would of thought - someone can be kind, humble, and a genius.

~ Best wishes Craig. Cheers to Craigslist.

P.S. This article from CNN also sheds some light on where Craig's heart is at.

Interplead

in·ter·plead (ntr-pld)
To submit one's claim to the process of interpleader. (The Free Dictionary)

Don't let this happen to your earnest money! Here's what happened to some recent clients of mine:

• I represented the seller
• The day of closing the buyer's financing fell through
• Neither person agrees on fault and both refuse to release the earnest money
• The Earnest Money sits for 30 days, then goes to an interpleader

Here's the thing that is just crazy. The earnest money is only $500. It costs $100+ just to submit the case to the interpleader. Then you have court costs. My Broker tells me that by the time this thing is done the winner will receive a whopping... $100-$200. How sad, people being stubborn to their own demise.

Seattle Bubble

My thanks to Seattle Bubble for noticing the issue between myself and Marlow Harris, and more importantly the underlying issue of real estate commissions in America. Although I am a new follower of their blog, so far I have appreciated their posts. For those interested, I have posted a permanant link to their blog on the right.

Craig from Craigslist visits my Blog

Ok, I am not sure if this was really Craig Newmark, but Craig from Craigslist posted a comment on my blog post The Beauty of Craigslist. WOW, I am giddy like a school girl. If that really was you Craig: Thank you. You are my idol.

Don't Let em Move in Early

As the real estate market cools, it appears that buyers are asking more and more of sellers. Anxious sellers, hoping to make a deal, often oblige. One thing I have noticed Buyers requesting more often is occupancy prior to closing. While this practice is common and can be beneficial for both parties, I highly recommend not to lease your home prior to closing. Here's why:

• The NWMLS forms for Leasing and Occupancy Prior to Closing are not written as well as many long term leases. I believe they are too general and do not protect the buyer or seller well.
• A deal's not done until the Escrow lady sings. In other words, deals fall apart all the time, sometimes even on the day of closing.
• If the deal falls through you may have a hard time getting the buyers out, especially if the buyers feel that it wasn't their fault.
• Washington is one of the worst states in the US to be a landlord. Tenants can squat for weeks or even months during the eviction process.
• After the deal falls through, you may be left without real estate agency. Many agency agreements dissolve after the closing date has passed. This may leave you to deal directly with the buyers or force you to hire a lawyer.
• Unless rent was collected upfront, then you may be left with zip. These days, its almost a given that buyers get their earnest money back.

There are many leases prior to closing that go well, but there are some that end up going dreadfully wrong. My advice - play it safe, leave it vacant.

Marlow Harris Calls me a Scab

Marlow Harris, author of the Blog 360 Digest decided it was appropriate to call me a "scab" because I list homes for four percent commission. Read the blog posts yourself, but it appears to me that Marlow is also suggesting fixing real estate commissions is OK. Maybe I am a naive Discount Realtor, but somebody told me once that fixing real estate commissions is a Federal Crime. Perhaps I misunderstood Marlow on this, so I requested clarification. At the time of this post, I am waiting for Marlow's response.

My my oh my, the blogosphere sure can be nasty. Marlow, if you're reading this, I would love to meet with you to discuss this important real estate issue more - perhaps even over a cup of tea - or Jack Daniels (whichever you prefer). Shoot me an email anytime: trevors@johnlscott.com

Your friendly Discount Realtor - Trevor Smith

I applied at Redfin

Alright traditional Realtors, get some clean underwear ready... Today - me, Trevor Donald Smith, John L Scott Realtor applied at.... REDFIN!

I did it. Thats right, I did it. I attached my resume, along with my 3 favorite websites, and my paragraph about how to improve Redfin to an email, typed careers@redfin.com in the address bar, and hit the send button.

OK, so who knows if I'll get the job, but I thought, "If these guys are this innovative and are pissing off this many traditional Realtors, I have got to give it a shot."

So here is my commission to you, oh faithful readers of my blog (1 person on a good day :) ). Send an email to careers@redfin.com endorsing my employment for Redfin. Tell them how charming I am. Tell them how I smell nice (after I take a shower). Tell them whatever you want, but tell them I deserve to be a Redfin Real Estate Agent.

I will keep all you reader (notice I didn't say readers) posted on Redfin's response to my Resume.

Have a redfinnian day!

Oh, How I Love the Sign Twirlers

I was driving by Silver Creek down here in good ol Puyallup (I pronounce it Pooly Woop), and I saw something I haven't seen in a while: Sign Twirlers. I love these guys. They get paid to stand on a corner with a big arrow pointing to the new housing development they represent (In this case it was Premier Homes).

Anyhow, this brought back memories of living in California at the very very beginning of the housing boom. There were sign twirlers everywhere. Some of them were expert sign twirlers, flipping their sign at least three to four times before they caught it with the arrow still pointing in the right direction.

When I was in SoCal I got a chance to interview a sign twirler. He said it was pretty boring, but it wasn't too bad when he listened to his headphones. He said the only rules he had was that he had to keep the sign moving and that he couldn't sit down except on breaks.

I must say, if I consider a career change, sign twirling will definitely be on the top of my list. I mean who can turn down music, time to think, and a big ol' arrow?

Shameless Links and Discombobulated Thoughts

Lets admit it, many people with business websites need links to increase their Google rankings. Many of use blogs as an easy way to get those links. So here I go - feel free to post on this thread (and this thread only) any link (real estate related or not) that you please. Write any comment you please, about anything you please (unless its cussing - or pornographic - or just plain ignorant - then I will be very mad and send you a big nasty email)

much love - your 4 percent realtor

Why is everyone up in arms about Redfin?

OK, so I don't have all the info about Redfin, but man are they causing a stir. Every Seattle Real Estate Blog seems to have something to say about it - including Redfin, which has their own blog. Here's what I know:

• They've pissed off the traditional real estate agents (I think I like them already)
• They place a lot of their marketing eggs in the internet basket (i.e. they are an online business)
• Their President & CEO, Glenn Kelman, has testified in front of the Congressional subcommittee on Housing and Community Opportunity
• They currently only do business in Seattle and San Francisco

Since my knowledge is minimal, I thought I would post the various blog posts and articles that comment on Redfin:

360 Digest - Marlow Harris

Redfin's Response to Marlow Harris

TechCrunch on Redfin

Seattle Times Article on Redfin

Real Estate 2.x "Redfin will flop like a fish out of water"

Rain City Guide

New York Times: The Last Stand of the 6 Percenters

I've Joined Redfin - Why an employee chose Redfin

Redfin Launches Industry's First Online Home-Selling Service

Redfin Blog Post about testifying in front of Congress

The Beauty of Craigslist

Who would of thought that an unattractive website that has categories like "Casual Encounters" and "Men seeking Men" would have such an incredible impact on the real estate market. Craigslist, a city by city directory founded by San Francisco's Craig Newmark is changing how people shop for homes.

Basically the concept is this: Why pay $30-$300 to have your home advertised in the Seattle Times or Tacoma News Tribune, when you can post it on Craigslist for free and get a much better response. There are no restrictions on who can post either. For Sale by Owners are posted right along side John L Scott and Windermere listings... who would have thought!

And its effective, oh boy is it effective. I have closed 13 deals since March, 2006 - 3 of those have been from people that either found me or my listings on Craigslist! Bye Bye Tacoma News Tribune... Move over Real Estate Magazines... Ta Ta Seattle Times... Craig is in town, and he's my friend.

BTW: One concern I do have about Craigslist is this: Craigslist is free in Seattle - Tacoma, however apparently it is pay to play in San Francisco and other areas, I have a feeling Seattle will be paying up soon too.

Excise Tax

Howdy to all you perspective sellers out there in Washington State. Just a friendly reminder that when you figure out how much you are going to net on the sale of your home, don't forget to factor in the excise tax. Where I am at (Pierce County & King County), Excise tax usually runs around 1.78% - 1.87%. That can be a substantial amount of money (Over $5500 on a $300,000 house). It's incredibly frustrating to get to the closing table and think you have more cash coming to you than you do.

Check out what the Washington State Department of Revenue has to say about excise tax.

Trulia

I have recently noticed a rapidly expanding company called Trulia. I have to say I am impressed. When you go to the site you'll notice listings from multiple Broker and Agent websites. Trulia compiles the listings from these various websites, formats them, maps them, and poof you have a mini-MLS. Well, I am sure its missing quite a few listings still compared to the MLS, but it definitely has a good chunk of them.

I have placed my listings on Trulia, and I am liking the results. This will definitely be a company to watch in the next few years.

Rain City Guide Discussion

Here is an interesting discussion that arose about commissions, Broker's opens, and all sorts of other real estate related things - Rain City Guide

Buyers Bonus

Ever seen a sign hanging on a new home exclaiming "$5000 Buyer's Bonus." These come in different shapes and forms, but they are definitely the most popular with new constructions sites. So whats the deal with these? Well, I would like to say to you, "Its $5000 free cash to decorate your house or put towards closings costs." However, that would only really be a half truth.

The full story is this: The majority of the time, in order to receive the "Buyer's Bonus" you must use the builder's "preferred" lender. No preferred lender - No Buyer's Bonus. Does that raise a red flag with anyone else? Where is that $5000 coming from? Who is getting kickbacks on this deal? How is your loan being adjusted in order to cover this "buyer's bonus?"

This whole thing is a little scary to me, and appears that some lenders, builders, and agents are getting called out by the feds on this. Anyhow, something to keep in mind when you think about purchasing a new home - your buyer's bonus may be something more that new curtains or closing costs.

Why are Realtors scared?

I recently was happy to find my business website posted on a blog run by some of the Seattle PI Real Estate Bloggers. "I'm really moving up in the world," I thought. Unfortunately, they weren't giving me positive attention. They were threatened. You see, I am a full service Realtor who lists homes for 4% commission. The Realtors out there who list homes for 6% commission "cause that's the way its always been done," seem to not like folks like me. I don't know why - I'm nice, I work hard, I don't smell bad (I don't think). Nonetheless, they seemed appalled by my business model, and even more appalled that my John L Scott broker would allow such nonsense to continue. Must I remind Realtors (who are supposedly well educated in Real Estate and Real Estate Law) that FIXING COMMISSIONS IS ILLEGAL.

Like it or not good ol boys.... real estate commissions are falling. You may actually have to work for a living. I know, you may have to only golf 3 days a week, and cut your Martini hours back, but I think our clients deserve it. We should not be getting rich off our clients backs.

I can't wait till the day I can go to the HQ of the National Association of Realtors and they have a display labeled "In Memorial of the 6% commission - A tribute to the history of overpaid Realtors."

Investing in Real Estate

During the real estate boom everyone was flipping houses. Aunt Edna, the Priest, and the high school quarterback would form an investment team, purchase a home, make some minor repairs, and sell it for a profit. The flipping boom was fueled by cable TV shows like "Flip that House." And for the most part these amateur investors did well too. However, as the boom ends, is this realistic anymore? Is flipping even a good strategy at all anymore?

Well, here's my opinion on real estate investing. Take or leave it, but I think it makes sense.

1.) Never count on appreciation when investing. If you are going to put a number to appreciation I think 3% annual appreciation is a good, safe average.
2.) Plan on holding your real estate investment long term. Even if you don't hold it long term, be prepared to.
3.) You have to make the deal going in. It has to be a bargain property at the time of purchase.
4.) Flipping is not a good investment strategy. Usually you are counting on appreciation and a strong real estate market to carry you - that's not smart. Plus. you've got your real estate fees, title fees, escrow fees, capital gains, excise tax, and other fees that eat into your profits.
5.) Single family homes are not a good bet. Why? A single family home is either 100% vacant or 100% full. Multifamily homes spread your risk over multiple units. You can usually purchase up to a fourplex with a residential loan.
6.) Commercial buildings are where most successful real estate investors usually go. This is not to say you have to start out with commercial buildings, but they're a good goal.
7.) Think about your tax burden. How can you use your investments as a tax advantage, not disadvantage.
8.) Are you a real estate investor or is it a hobby? If its a hobby, be sure you have the time, energy, knowledge, and finances to support what you're doing.
9.) Put your heads together. Investing is always done better in teams then solo. It spreads the risk, and you'll gain knowledge from your partners. On the other hand, be careful about investing with friends and family. Deals can go bad, and people can get hurt. Be prepared.
10.) Have fun. Real Estate investing should be a bit of an adventure, so have some fun doing it!


Best of luck to you real estate investors... much success in your future ventures!

It looks like Seattle and Tacoma are still winners

Washington State appears to be bucking nationwide real estate trends by reporting double digit appreciation for 2006. It appears the market may remain strong even into 2007. Check out this CNN Money Report. This report is not alone. The NWMLS (The MLS system serving the Seattle- Tacoma area) is reporting that sales in August were higher than those in July. What is going on here? I guess only time will tell.

Why is it so busy?

Despite today's Seattle Times Article about the softening of the Real Estate market, this has been the busiest week in my real estate career. Perhaps the fall weather has gotten the sun hungry Washington residents "back to business." Maybe its that kids are back in school and parents finally have 2 minutes to call on a listed property. I'm not sure. However, I do know that I have shown over 50 listings to buyers in the last 2 weeks, listed 4 homes, and closed 2 deals... I am beat. I can't complain though, business is business, and I would rather be busy then slow.

Real Estate Bullies

This is a follow up to my previous blogs. If you are a real estate consumer, please forgive the minutiae of Real Estate Politics. Anyhow, please find a great article from Morgan of Real Estate Webmasters regarding the use of the term MLS on websites. I also encourage you to look at the REW forum in which this topic was discussed at length. On the forum, I am 4PercentRealtor.

Much Love to all, and may equity, fairness, and the little guy prevail!

Morgan's Blog: NWMLS threatens fines on its own Realtor
REW Forum: NWMLS threatens fines on Directory Listings

The Multiple Listing Nazis

NOTE: THIS POST IS DIRECTED TOWARD MY FELLOW REALTORS:

If you notice I did not use the word "service" in my heading. That is because a particular Multiple Listing "Company" in the Washington area.... dare I call it the "Northwest" area of Washington has now told all agents to remove their logo, and the abbreviation generally accepted as representing Multiple Listing "Companies," from their websites.

It is the author's opinion that this Multiple Listing Company has overstepped its bounds. First, since when does one particular MLS own the rights to the term MLS? Has anyone seen any proof that this term is copyrighted? Secondly the legal bullies at this particular service have demanded, yea threatened, fines, legal action, blah blah blah, if I do not remove their precious terms from my website. Moreover they demanded that to me that I remove the term from another website in which I have no control (www.realestatewebmasters.com). WHAT NERVE!!!

It is the authors opinion that this service is tightening its control out of fear. As websites begin to offer national MLS databases, and Craigslist and Google Base give the consumer more control over Real Estate Listings, the MLS responds by tightening the rules. MARK MY WORDS THIS TIGHTENING OF THE RULES OUT OF FEAR WILL ULTIMATELY MAKE THE TRADITIONAL MLS OBSOLETE!

I don't ususally rant and rave on this blog... but as you can tell... this one miffs me pretty good!

View my website cleansed from the term MLS... Tacoma Real Estate

The Nice Guy Does Win

Something I've noticed as I have gained experience in Real Estate is that the nice guy does win. The Buyers, Sellers, & Realtors who are willing to compromise and be team players usually end up with a successful real estate transaction that is a win, win, win situation (to quote "The Office").

On the other side are the people who insist on playing hardball, thinking that its in their best interest. While this sometimes works if you are dealing with a spineless person, it usually just ticks everyone in the transaction off. I've seen perfectly good real estate deals fall apart over anal retentive personalities, picky pickertons, and just plain nasty people.

Here's the thing, be nice, be pleasant, & compromise. You'll probably end up with a successful real estate transaction.

If you want to hear a funny story about a real estate transaction that fell apart shoot me an email.... I probably shouldn't post it publicly! trevors@johnlscott.com

USA TODAY REVIEWS SEATTLE REAL ESTATE

This article is over a month old, but still has some valuable info. Seattle seems to be a fairly safe market in comparison to California, Vegas, etc.

http://www.usatoday.com/money/economy/housing/2006-06-05-close-seattle_x.htm?csp=34

Is Seattle's Market safe from the Real Estate Bubble?

Is the Seattle-Tacoma Market safe from the ominous real estate bubble? Find out if Seattle - Tacoma Real Estate is in the "dead zone" "danger zone" or safe zone in this CNN Article from May 2006.

http://money.cnn.com/2006/05/03/news/economy/realestateguide_fortune/index.htm

Is the market stabilizing?

Although this is by no means a scientific evaluation, I believe that the Western Washington Real Estate Market is stablilizing. I have noticed this myself, and many other agents in my office are noticing it as well. We are seeing more price drops, longer sale times, & buyer's negotiating more. These are all signs of a slowing market. It is my bet that resale homes will slow first while new constructions remains strong for the next 6 months to a year. What do you think?

The Seattle - Tacoma Real Estate Market

While the nationwide real estate market seams to be "stabalizing" or "dropping," The Seattle area real estate market still seems to be as hot as ever. Take a look at this great article in the Seattle Times

http://seattletimes.nwsource.com/homevalues/

The myth of the 6% Commission

Here is a great posting from the Real Estate Bloggers regarding commissions. (Of course I posted a comment of my own on there!)
The Real Estate Bloggers

Save Money on Commission

Check out this great article from CNN about negotiating commissions with a Realtor. Realtors, you may hate me for posting this, but hey, do we really need to be pocketing $18,000+ when we sell an average home? I truly believe that as Realtors, we need to be putting our clients interests before our own.
Negotiating Commissions