Guide To Seattle Real Estate

A few days ago a first-time buyer posed this question. “When is the best time to buy?” She wanted to know when the housing prices were going to be steady and not in risk of falling. The Seattle Real Estate market has held out so far but no one has a crystal ball. Whenever YOU are ready, is the correct answer. Now there are a few caveats to this answer, of course.

No one can be sure what the market is going to do next. We always hear about the people that “gamed” the real estate market. They were smart and bought at just the right time and made a fortune, Right? What we hear are the anecdotal stories that our friends and connections tell us. Notice that the only stories that people tell are of tragedy or great success. No one talks about everything in-between. Just like the news we only remember the extremes.

It is better to be apart of that in-between realm rather than risk trying to “game” the market and lose. As long as you choose the home you buy wisely, and one that you can afford, you will be just fine. Especially for first-time buyers, buying a home can be a complex and scary process. Buy when you are ready, not when someone tells you that “The market is hot” or “Better move now before you miss out.”

Even a broken clock is right twice a day. The real estate agents that are always saying than “Right now is the best time to Buy or Sell” are just that, a broken clock. They have a 50% chance of being right over the long run. The “Bubble heads” that are always talking about the impending doom of the real estate market, have been talking about the bubble for years. Way before our current expansion. If everyone would have listened when the Bubbles first started talking about the bubble they would have missed out on the great gains in the market.

If you buy or sell when you are ready and make good decisions based on which home you buy or how you present your home when selling, you have a much better chance of being “right.” If you are your own clock, you can be right all day long:)

I love sales!  No not the Sleazy Used Car type. Sales, helping clients find what they are looking for. That is what a real estate salesman does. What are your needs and how can my experience and training help you? I read and attend tons of Sales Training, some good some not.

I just came across this great post from Gavin Ingham.  He is a Sales Trainer whose blog I just found about a week ago. While his article is about Selling in a Recession, he gives a great example of what many real estate agents are doing in this slower market.

One of my friends went down to our local real estate agent this week to put his house on the market. He was told that maybe he should wait as he might not get the price he wants right now. They told him the market was quiet and that might not be able to sell the house at all. Better to wait for the market to pick up. I walked past their offices later on that day. They were all sitting, chatting and drinking coffee. They were probably moaning about what a bad year it’s going to be. If I’s have been in that office, I’d have taken my mates house on and I’d have been on the phone drumming up some viewings. 50 calls, 100, calls, 500 calls… Whatever it takes. I’d have found someone.

That is the truth if I ever heard it.  What is your real estate agent willing to do for you?  While yes we all like to build our business on referrals, do we sell homes through referrals? NO! Homes are sold through effective marketing and great follow-up on leads and responses to that marketing. Calling back everyone who calls on the sign or the 20+ web markets the home is advertised on.  With a little effort we can collect the leads that are interested in a home.

Yes we can network with other agents, but that is just part of the game. We have to make the calls, follow-up, beat the pavement, find the buyers.  It’s our Job!  If someone wants to Sell their home, Sell it.  Now I am not saying that as agents we can sell any listing. The home must be priced right and in the right condition.  If a home meets these conditions it will sell in ANY market, with great follow-up and diligence of the agent.

Even an under-priced steal of a deal won’t sell if the agent spends all their time talking with other agents in the break room at the office.  I have never sold a home to another agent and doubt I ever will.  That’s why I try to spend my time away from the office. Whether I am holding Mid-Week Opens or Previewing or in my home office Smiling and Dialing, I am working for my clients.

What are you willing to do for your clients?  If your not an agent, What do you expect your agent to do for you?

Well we are two weeks into the new year. What has been going on in our market in the last 13 days?

In West Seattle (MLS area 140)

Single Family Residential Homes
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

So what does this all mean to you?  The real market movement is in the Pending Listings.  Judging the current market situation is all about the pending listings.  The buyers  are in the 450k realm and are buying homes that are priced and shown well.  When the DOM of the Pending homes and the Active listings are compared we notice a 23 day difference.  Why? What makes these homes standout over the rest? Price and Condition. The homes that are selling in this market present well and are priced right!

The Sold Statistics are also interesting with a median price of $370k.  These homes went under contract in December and Title was just transferred.  Why is the Sold Median so low compared to the Active Median?  Speculation leads us to believe that First-time buyers are more likely to buy a home regardless of season.  Established Families with school aged children moving up to their second home are more likely to buy during the late Spring and Summer months.

How many two week periods like this do we have on the market? 459/20=23 or 10 months.  That is if these two weeks are indicative of the rest, they are not.  The market will pick up as we move away from the holidays.

If you are interested in a Custom Statistical Analysis of your neighborhood send an email to jonathanmartin@windermere.com or drop me a line at 206-579-5605.  I would be happy to take a look at what your local conditions are.

Well besides the author, you might.  How do you choose who to work with when you decide to buy or sell your next home?  If you already have a relationship with a great real estate agent, stick with ‘em, if not then you are shopping.

The best advice that was ever given to me about choosing service professionals was, “Use a realtor that has something to lose.” Whether it is a reputation or a good relationship, use a person that will have incentive to work hard for you.

“But isn’t the commission enough?”  Simply put, NO! Is money the biggest motivator in your life? Yes, it is important, but not supreme.  Family, relationship, conscience, morality, and piece of mind rank higher for most. 

A good real estate agent is transparent and in business for the long run.By transparent, you know about all of the compensation they are receiving, who pays who.  You know there true philosophy not just what their marketing tells you.  You know more than the show they put on in your living room before they ask you to sign the contract. 

A blog is a great way to see into the soul of an agent.  Is every post a shameless self promotion or are they filled with truly helpful information and heartfelt opinions?

A blog is like a time capsule, it saves everything.  You can look at past conversations and opinions.  What did the agent say about their last client, how hard did they work for them?  What are they doing to get the next? 

I just finished a Competitive Market Analysis for a client.  They live next to a large construction project.  By large I mean a 6 story retail/condo complex.  The noise starts promptly at 7am and doesn’t end until 5pm.  How does this affect the price we set on their home?

Well it isn’t good.  Most often people are “now” centered. If it is noisy now it will be noisy later. They have a hard time seeing into the future and what it will be like when the noise is gone. 

But how do we judge by how much the price needs to change to entice a buyer to sign?  This is a difficult question, we could look and see how other construction sites have impacted home sales.  But most sites are different and it really depends on the buyer rather than the environment.  This is a challenge but not impossible. 

One method would be to peg the price at a level under the comparable competition, this would normally put the home in the first position to sell.  How much to peg the price lower is determined on the motivation of the seller.  The “discount” in price from the construction would have to be enough to feel like more of an advantage than the disadvantage of living next to the site.

Most important would be how the home is marketed.  We are going to have mockups of how the site will look when it is finished.  This way we can attempt to move the vision of the buyer to the future, when the project is completed.  If we can make a good enough case that the value of the home will increase once the project is completed, then the “discount” can be smaller.  How that case is made is all about presentation. 

This is going to be fun and challenging, what it is all about!

Are you planning on Selling your Seattle Home this spring?  If you are then there are a few things that you should begin, before you put your home on the market.  Preparing a home for sale during the winter in Seattle can be a test of will as you are forced to brave the elements.  Focus on the touch-ups that are inside and leave the outside ones for later in the spring.

The biggest bang for the buck can be: Painting the Interior.  A fresh coat of light neutral colored paint will provide your home with an inviting and refreshing appeal when your prospective buyers walk through the door this spring.  Make sure that you are careful around the baseboards, nothing screams corner cutting than paint splatter on the baseboards.  If you have the know how(it’s not too hard) remove the baseboards and replace them after you are finished painting.

Who is going to spend a half a million on a Seattle home without Granite.  While to some this seems like a trend, it isn’t. With the cost of granite nowadays, this adds more value than spent. I have seen many couples walk into a home and choose their house to be based on the kitchen, disregarding the rest of the home.

Hold off on replacing the carpet or refinishing hardwoods until a month or so before your home hits the market.  This way you avoid staining it during the rainy season before you are able to show off your homes better qualities this spring.  Often it is best to avoid refinishing hardwoods all together, the cost to benefit doesn’t always pay off.

Of course the Exterior of your home is going to need sprucing. While an established landscape can be attractive.  Most Satellites aren’t gardeners and see a complex yard as too much work rather than something to be enjoyed.  Often just a little bark and sod will help a home have a short time on the market.

There are tons of little details that will all add up to a great show at market when the time comes.  Make sure that you have great representation and advice before you begin the process.  I have always loved it when sellers came to me months before they were ready to sell.  Much more than those that said, “tomorrows the day.”  How do they say it, “an ounce of preparation is worth a pound of cure.” Maybe not exactly, but pretty close.

After reading this great article by a Broker in Florida, inspiration hit.  I agree with Bryant, that ABM’s or Discounters have a place in real estate.  Commissions are always negotiable, everything is, and you don’t always get what you pay for.  Having had the unfortunate experience of paying for more than I got, just because an agency  charges full commission doesn’t mean they offer better service.

But lets look at what they advertise as there best quality. I work under the Windermere brand, our company focuses on service and a “Nordstroms” like care of our clients. We are the Cadillac of real estate companies in the Seattle Area, and that is what we advertise: Care, Service, Relationship, Quality, Expertise, and Great People. We are putting our best foot forward.

What do the Discounters advertise: One says that, “They put you in charge of selling your home.”  Why are you hiring them then?  Aren’t they getting paid to sell you home, even if it is less, it is their job right? Or this, Half the commission to you for using us to buy your home. So what do they do for you, besides pay you half? They don’t say anywhere on their web site, just that they cost less.

Ok so not all of these companies are bad, but take a look at what they are bragging about.  Most companies brag about their best quality, and if all they can brag about is price then maybe you don’t want to shop at K-mart for a home.

In my relatively short amount of time in real estate, I have lost transactions, seen transactions lost due to a lack of diligence on the part of an agent. If all your agent cares about and is good at is price then maybe you should look at their track record.  If your agent doesn’t have anything to lose, then what is motivating them to give you great service?

After reading a great post by Charles over at Portland Real Estate Blog,  a little could be added to our discussion about real estate negotiations. Is it always a Zero Sum Game?

One of the first principles learned when studying negotiation tactics, is to make sure to leave your opponent feeling like they got a good deal.  This can be tough especially when using terms like opponent and zero sum. Homeowners hire agents to play this game tough and get the best possible price for their home. This is zero sum, what one side wins the other loses.

But while our goal as agents is to get the best possible deal for our clients, we must remember that there are people on the other side of the transaction.  Now we’re not talking about being easy on the other side. But, I have come very close to losing transactions because the agent on the other side of the deal was demanding the world, rudely. My clients felt insulted by the underlying tone that was coming across during the negotiations process. Their first reaction was to just walk away.

We had a difficult conversation about what their true goals were and how, once they owned the home they would never have to “deal” with the other agent or seller again.  Their response was to continue with the process, but fight tooth an nail for everything they could, even at risk of throwing the deal. Game On! We got what they wanted, but came close to losing the deal.

Risk vs Reward, this is a personal level that we all have to choose. I have found that by personally presenting offers or adding personalized letters; this paints a human face on the offer.  It can reduce the “cut-throat” edge on the other side. Always give the impression that the other side “got the best” of the deal.  This way they feel satisfied and are less likely to come back for more.

While I was in college, being a real estate agent was the last career on my mind. I knew that I was headed into business, preferably one that I could own myself. I have always had the entrepreneurial spirit. I wanted to be of service to others. In fact I have a well defined life purpose: To be of maximum service to God and the people around me.

I love fitness! Being an avid rock climber and mountaineer, physical exercise is  a large part of my life. So, when I was in school I thought that I should become a Physical Therapist. I could own my own practice, be of service to others, and teach others how to use exercise to heal from injury. Sounds perfect doesn’t it?

Nope, not for me.  I loved the Biology, Chemistry, Anatomy, in addition to my regular Business degree classes. But part of the path was to volunteer or work for other PTs.  I acquired about 800 hours of paid/volunteer time.  They have this requirement for a reason.  If you are going to get your Doctor in PT then you had better be sure you want to do it.

The PTs in private practice that I worked with were total slaves to their business.  Neither had happy or existent home lives. No, I wanted a career where I could help, provide, AND be present for my family.

My wife was working as the office manager  for a small boutique real estate company and gave me a little push towards the industry. I did a little research and found that Real Estate had pretty much all the qualities that I was looking for in a career. Being of service to others, the ability to provide, and with effective time management skills the potential to be present for my family.

Once I got into real estate I learned that the reasons I choose the industry weren’t the same reasons everyone else did. While many agents have a good sense of right and wrong and work from ethical principles; some don’t. I soon found that the way I look at my business is quite different than the way others look at theirs.

While Sales is the name of the game, I work with people, not houses. There is a big difference. Client centered is how some describe it.  Over at Inman they just posted this great article on how, by serving your clients well even if not earning a commission every time, can lead to a successful business. This is the model that I aspire to create. 

It is a learning process. Not a get rich quick path, but a very rewarding one.  Stay tuned for more as we travel this road together.

With this blog still in it’s early development, I have many resolutions to take it to the next level:

• 4 Posts a week
• Increase RSS subscribers from 18 to 50
• Post monthly Market Statistics for Seattle’s main neighborhoods
• Hold one first-time buying seminar each month starting in February
• Grow my network of co-operating authors and find at least one guest author each week.

For personal resolutions, my wife and I are expecting our first child in August.  I will be learning how to work more efficiently to keep the same output of work while decreasing the amount of time that I spend doing it.  I am going to need all the time I can to prepare for our coming child.

I hope you have your resolutions for the new year, and wish you luck in achieving them. I know that the more people that know my resolutions, the more people that keep me accountable to them, the more likely I am to reach them.  What are yours?