Guide To Seattle Real Estate

We have another blogging project that focuses on negotiations.  Everyone negotiates!  Whether it is a parent with their children or a couple deciding were to go out to dinner, everyone is involved in negotiations on a daily basis.  And yet most Americans have a negative connotation of negotiation.  It is pride really.  If we have enough money we wouldn’t have to negotiate.  Or we think that negotiation is more like pulling to wool over some ones eyes than coming to mutually beneficial agreement.

Well we want to change that.  We believe that anyone can be a good negotiator, it just takes a little practice and planning.  That is where The Negotiation Board comes in.  It is a forum and a Blog.  The Forum is a venue for anyone to share their negotiating stories and ask questions on how to handle certain situations.  The blog is for tactics and strategy discussion.  Our hope is to create a community that is supportive of each others desire to improve their negotiating skills.  A community dedicated to helping each other save money and reach mutual beneficial agreements with others in our daily lives.

We are just getting started but already have some great posts about getting out of a Verizon wireless contract and even one about negotiating with Comcast.  We have a significant amount of tactics and skills information and training already available.

We would love to have a few guest posts from Realtors, who are expert negotiators, sharing a few of their better real estate negotiation stories.  If you are an agent and would be interested in writing a guest post or two, check us out over at The Negotiation Board and let us know.

After my last post here is a comment I received from a Realtor.

I like to think that it’s less about the area that I know but the fact that I know negotiation and contracts very well. On top of it, my clients are usually tech savvy and want someone that communicates in the way that they do.  Having come from a technology background I am able to do just that.  The majority of my business is in King County, but I also work in north Pierce County and south Snohomish.

This is EXACTLY what I have been talking about, the average real estate agent specializes in making the commission not serving their clients.  Every real estate agent had better know the contracts and how to negotiate, that is a given.  But to say that you don’t need to know the area to best serve your clients is false.

I often hear that the value of a home (or any asset for that matter) is whatever a buyer is willing to pay for it.  Real Estate Agents often use this to rationalize not knowing the area they are working in.

“If my buyers are willing to pay X for this property then that is what it is worth.”  NO, that is how the listing agent is supposed to think, Not the agent representing the buyer.  A Salesperson has this definition of value, not an agent.  And agent is someone who represents the interests of their principle, not a salesperson.

Are appraisers supposed to set the value of a home at whatever price an individual will pay for it?  No, just because someone is willing to pay 500k for a 200k home doesn’t mean that appraiser will value the home at 500k.  Ok, sure there are appraisers who are just as unscrupulous as some realtors and lenders, but let’s stick to what they are supposed to do.  The value is what the home will sell for in a specific market not to a specific individual.

How can a real estate agent who hasn’t walked the last 20 similar homes that have sold recently know what the value is?  They can’t!  Sure they can come up with lots of great rational why they can: look at the MLS history, tax assessed value ratio, neighborhood analysis, Zillow, experience, technology, and of course the best “It is worth whatever their buyer is willing to pay.”

Agents like this are a part(just a part) of the reason we are in the financial trouble we are in right now.  They don’t represent their clients, they just sell them what ever they can and for whatever price they will pay.

I refer people to agents who specialize in an area.  Sure they may work with people outside of that area, but that is the exception not the norm.  Buyers and Sellers need agents who know the local market and have walked the homes that have sold.  It is the only way they can really understand the value of a home.

I know and work with local agents who specialize in an area and act like an agent is supposed to, they represent their principle YOU!  If you are looking to buy or sell a home in Western Washington, let me help you find the right agent for you and the area you are looking in.

Ok so just how is this going to work?

Part of the reason I am phasing out of full time Real Estate is that I don’t want to work with unscrupulous people.  No not all agents and lenders are unscrupulous!  But, unfortunately,I think there are more that are than not. 

Just look at what attracts most people into the real estate industry. $$$$$$$$ Making money fast.  People are lured into Real Estate thinking that they are going to make it rich.  Brokers tell prospects about how much their top performers make to get them to sign up.  Then over 90% of agents drop out in the first 2 years.  It isn’t all that easy to make a sustainable income.  Being a great agent takes a lot of work, it definitely isn’t a walk in the park.

I will admit that is what attracted me to the business.  I thought that a flexible schedule and a decent income would allow my wife to stay home when we had kids and I could spend more time at home with them.  I want to be really involved with my family.  We had Callista a few months ago.  She is a beautiful gift from God.  Even her cry’s and screams are cute.  Real Estate Riches are made working long hours, nights and weekends.  Not for the family man wanting to spend more time at home.

I have been double dipping for awhile now working for a marketing company in Auburn, more of a 9 to 5 gig.  Working B2B is great, much less likely to be stuck working with those unscrupulous fellows. 

I want to keep what I like from the Real Estate Industry.  I am going to reduce my night and weekend work and just refer clients to other great agents.  One thing I have learned in the business is what smoke smells like.  No matter where they try to blow it.  This way I can send clients to agents who actually specialize in what they are looking for.

I’ve represented buyers, sellers, houses, townhouses, condos, Snohomish/King/Pierce counties, wherever there was a commission check I was.  Sure I did my absolute best for every client that I had.  But specialization has its benefits.  There was no way I could’ve really known the inventory in Tacoma and Bellevue, only an agent that specialized there could.  Someone who actually went on tour every week and saw every home that came on the market.  Most agents are just like I was, they specialize in making the commission check.  That is what brokers teach their agents to do. Make them money!

So instead of spending my time knocking on doors and sending out massive amounts of postcards, I am going to get to know great agents.  This way I don’t have to work with the unscrupulous ones, I can just say no.  Then I can review these agents here on this blog.  I can talk about what they do great and only write about agents that I feel actually have their clients best interests in mind.  No Smoke Allowed!

When I am approached by a person who is looking to find an agent I can then send them to the agent who will best serve them, not just someone chasing the commission check.  Sure I wont make as much as a full time agent, but this is only a part time gig.  I can focus my time on my family and working at my marketing gig.  I can take what I love about real estate and help others at the same time, the best of both worlds.

Wish me luck as I figure out how all this is going to work.

I have been a Seattle Real Estate Agent for a few years now.  While it was good and now when it is not so good.  I have worked as a Discount Agent, a Full Service Agent, with Expired listings, FSBO listings, met clients Door to Door, met them telemarketing, and of course worked with Family and Friends.  The industry is huge and everyone has their own niche or book of business that they work from.  Lately, the reasons I love working in the Real Estate industry have been overshadowed by the reasons I don’t.  This I have to change.

How do I capture what I like about the Industry and discard the rest?  Here is my pro/con list.

Pro-Real Estate Industry

• Helping people through education
• Houses and what type of family each will best serve
• Being a knowledge resource for clients
• Blogging
• Working with great Agents and Lenders
• Helping First-Time buyers get into a home.

 Con-Real Estate Industry

• Not getting paid for all of your time
• Not getting paid due to someone else’s failure
• Working with SLIMY Agents and Lenders
• The inherent Cut-Throat nature of the business
• The zero-sum game nature of the process
• Again working with SLIMY Agents and Lenders

I have learned so much and built relationship with some great people in the past few years in Real Estate.  While I am in transition away from being a Full-Time Agent and to spending more time in my marketing career, I am looking for a way to still be of service and involved in the industry.  I have some ideas that I am going to be exploring over the next few weeks.

In a training class I once met an agent who had been in the industry for 15+ years and never had closed a transaction.  Lame you might think, but she made a decent living and worked with several clients a month.  Instead of finding a buyer for a seller or a house for a buyer she found great agents for her clients.  She found agents that weren’t slimeballs agents, ones that actually specialized in what that client wanted.  Not just an agent who said that they could do whatever the client asked.  (I have been guilty of that one myself, Tacoma is not in my area)

I am going to have to work on my business model and see how to do this, but I know that there is a way I can provide valuable services to clients and still maintain the passion I have for real estate while ditching what I dislike about the industry.

I talk a lot about West Seattle Real Estate, mainly because it’s where I live.    I would be happy to provide them to you.

Taking a look at these two charts we get a glimpse of our market here in West Seattle (98116, 98126, 98136).

Real Estate is a Supply and Demand game.  With an average of 10+ months of “Supply” on the market.  Pricing and Condition is key to selling your home.  Location is definitely also a factor look at 98126. Why are the number of sold listings rising there and dropping in 98116 and 98136.  Speculation leads us to the High Point Development.  With all those brand new homes and the builders ability to lower the prices more than your average cash strapped home owner, thats where the action is.  For the rest of us homeowners, Buyers are waiting out the Real Estate frenzy of the news media.  Closings tend to lag the real decision process by about 30-45 days.  These numbers really reflect the buyers of December rather than the buyers of January and February.

You almost can’t go more than 15 minutes without a break from the Presidential race to hear about the housing melt down.  Business Week just published another article adding to the confusion.  All to often the statistics don’t match the story.  Headlines read “The market could drop another 20%” then Statistics are given about the percentage of homes bought in the last year that owe more than 80% of the homes value.  The article goes on to say that these people would lose their equity if home prices dropped by 20%.  DUH!

Here in Seattle of the homes bought last year 57% owe more than 80% of the value of the home.  But what does that really mean?  Homes bought last year?  They don’t tell us what the rest of the population owes.  They even have pie charts dividing the country up into broad regions like the WEST and the SOUTH and then tout the polls about what home owners think has happened to their equity.  Ok, lets just take a look at the west.  Compare SoCal with up to a 20% drop in value and Seattle with an almost 4% increase, then lump both of them together into the same statistic.  What do you get? Nothing!  Apples and oranges, literally. 

Real Estate is local!  I am not a Realtor that is going to go on about how “Now is the time to buy!”  Now might be the wrong time for you to buy or sell for that matter.  It might be the right time, depending on your specific situation and location.  Frenzy is what the news media sells.  I am also not saying never to listen to the media, but take it all in with a grain of salt.  What sells, Scary Stories!  The News makes their money selling ads, their fee is based on their readership/viewership.  I am an agent, I am paid at the end of a successful transaction.  Listen to your personal needs.  Educate yourself and choose for yourself. 

Here we see the Median Price of Listed Homes in West Seattle(98116,09136,98126).

All too often this statistic is used to “gauge” appreciation, it doesn’t tell us appreciation.  It really tells us what West Seattle Sellers think their home is worth.  A “Median” is the point where half of the sample is higher and half is lower.  It is a form of averaging.  It tells us that in July ‘07 half of the sellers in 98116 thought their home was worth over $700,000.  Today half think their home is worth more than $625,000.

In any market it is more important to know what the Buyers think than the Sellers.  Buyers set the “market price” of a home.  Sure, Sellers can wait until, if ever, a buyer offers their price.  But if know one does, is it really the market price.  No, it is just the asking price.

If you are interested in knowing what this means for you or for statistics for somewhere else in Seattle, give me a call (206)579-5605.

Sorry, It’s Tuesday and these numbers are from Sunday. I have been swamped the past two weeks. Swamped in a good way though;)

Here we go the last week in action:

Single Family Residential Homes in West Seattle (area 140)
486 Active Listings with a Median Price of $445,000
76 Average Days on Market(DOM)
63 Homes under 300k for First-Time Buyers
27 Pending Listings with an average DOM of 83 and Median Price of $370,000
10 Sold Listings with an average DOM of 44 and a Median Price of $360,000

Wow! Look at the DOM of the Sold Listings. This indicates that the good properties(what is selling) are moving fast, while everything else is just sitting.

Comparing this to our Last report. Keep in mind that our last report consisted of two weeks of data.

Single Family Residential Homes- First Two Weeks of the Year
459 Active Listings with a Median Price of $450,000
76 Average Days on Market(DOM)
55 Homes under 300k for First-Time Buyers
20 Pending Listings with an average DOM of 53 and Median Price of $454,475
25 Sold Listing with an average DOM of 77 and Median Price of $370,000

I will get this all into a graph this weekend so we can track our current market situation.

Who says you can’t buy a home in West Seattle for under 300K anymore? While I will admit it is tougher for first time buyers to buy a home in Seattle, it isn’t impossible. Here are some Listings under 300k.

West Seattle Real Estate Listings under 250k
West Seattle Real Estate Listings 250k - 300k

Here are a few real estate articles that I have enjoyed this week:

How living beyond your means is good from America’s Most Opinionated Mortgage Broker.

A good reason to get a Condo Owners Insurance policy by the Boston Real Estate Blog.

Check out where we stand in Seattle Area in this image and article from Behind the Mortgage. One reason to be glad we live in a blue state:)

How to save yourself a little aggravation during your transaction from S-Crow at Seattle Bubble.

Who sets the price? From Real Central VA.

Stay tuned for more.