Monthly Archives: August 2005

Some tips on selecting a listing agent

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[photopress:View_of_Patio_1.JPG,thumb,alignright]Today’s topic is inspired by a woman I ran into at an open house. The woman was going through a divorce and wanted to sell her home quickly. A nearby home had recently been sold quickly, so she contacted that real estate agent (who sent her a helpful postcard!) and she quickly listed her home with this agent. So far, so good… right? Wrong!

What’s wrong with this story? Well, first off, the home owner only talked with one agent and didn’t really interview him to find out what type of service he would provide. It turns out that this particular agent does a horrible job marketing everything but the “after sale” postcards where he announces to all the neighbors that he just sold a nearby home! The photos he took of the home were unflattering (and it was a beautiful home!). The brochures he created were very generic and photocopied (to save money!). And this was for a $400K home! No wonder some people are frustrated with the commissions of real estate agents!

Anyway, this wasn’t meant to be a rant on any particular agent, the idea behind this post was to give some concrete ideas on how you should go about selecting an agent. First off, yesterday I ranted about how home buyers should ALWAYS get more than one quote from a mortgage broker. (I’m sure my broker friends hate me for giving out advice like that!). Today, I’m going to turn the tables on myself. Home owners should ALWAYS interview more than one real estate agent before listing their home!

What difference does it make? Well, there are about as many styles of agents as there are agents. And at the end of the day, you really want to find an agent who is going to meet your goals. What might your goals be? One goal might be to maximize the amount of money you can sell your home for. Another goal might be to ensure that the new home owners are decent people. A third goal might be that you want a really fast transaction. Ideally, you’ll find an agent who will help you define your goals and then go out and beat them.

So, now that we’ve all agreed that it is worthwhile to interview more than one agent (everyone’s on board right?), what types of questions should you ask? In a previous post, I listed 10 good questions for sellers to ask a real estate agent along with some background on why the questions were important. The questions are summarized here:

      1. How long have you worked full time in real estate?
      2. Do you have a personal assistant, team, or staff to handle different parts of the sales transaction?
      3. Do you and/or your company each have a website that will provide me with useful information for research, services, and how you work with buyers?
      4. How will you keep in contact with me during the buying process, and how often?
      5. Can you explain one thing that you do that other agents don’t do that ensures I’m getting top dollar for my property?
      6. Will you give me names of past clients who will give references for you?
      7. Do you have a performance guarantee?
      8. How are your fees structured? May I have that in writing?
      9. How would you develop pricing and marketing strategies for our home? Will you commit to the marketing strategy in writing?
      10. What will you do to sell my home?

[photopress:shilshole_boats.jpg,thumb,alignright]Rather than go through each question with a blow by blow with my answers, I thought I would outline my basic strategy that I give to each and every home owner. For my own benefit, I’ve broken the process into three categories. When I’m successful, all three of these steps come together to form a cohesive whole:

  • Preparing Your Home. Advice can range from “you need to bring a U-Haul truck here and remove the clutter” to “I think this room would look much better with new drapes, to “Wow! Your home looks amazing!”
  • Marketing Your Home. This is where I bring in photographers and have my design team put together color brochures, fliers, ads, webpages, and other home-specific marketing techniques. Of course, I also list the home on the MLS and open houses until the home is sold.
  • Selling Your Home. This is where we strategize on pricing the home to meet the sellers goals and maximize the price. This is also where my team performs numerous quality control checks to ensure that all the legal issues are settles.

So, to answer a more fundamental question… Why am I (as a real estate agent) advising you to interview more than one agent? I’m confident enough in my own ability to say that there is not another agent in North Seattle who can offer the market insight and quality of service that I provide. My experience has proven that when I’m given the opportunity to present my ideas for preparing, marketing and selling their home, many home owners choose to work with me!

One good faith estimate isn’t good enough…

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[photopress:Cats.JPG,thumb,alignright]In reading Elizabeth Rhodes response to an interest-only loan question, I realized that it has been a while since I talked about my uncomfort with interest only mortgages… I think way too many people are using them as a last resort to get into a house. When interest rates start rising, a lot of people could find out that they have bitten off more than they can chew.

The particular question Elizabeth was answering was in regards to whether or not someone should stick with a mortgage broker that made them feel uncomfortable… She gave an appropriate response (concluding that the client should walk away from this broker) but missed out on giving some truly useful advice that could really minimize this issue. What she could have said: “Get more than one quote!” or “You’re making a mistake by using only one broker anyway.”

In practical terms, “getting more than one quote” means getting at least two good faith estimates. At a minimum, you should get an estimate from at least one on-line banks and one local broker. If I ever create my own set of top 10 rules for a home buyer, getting two good faith estimates would be at the very top. No one has to tell you that you’re making a huge investment when you buy your home. By making loan brokers compete, it is entirely possible to get a much lower rate. Even saving just two-tenths of a percent on your loan can add up to thousands of dollars in the long run.

If you want some more detail, I wrote a bunch more on getting a home loan last March that stills seems relevant.

Catching up…

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I haven’t blogged in a little while, but that is not because there is a lack of interesting things to talk about. All kinds of interesting things have been happening on the real estate front, so I’m going to attempt to catch up all in one huge post.

First off, I joined up with the Real Estate Blog Squad. The idea behind this group is that lots of real estate agents would team together to blog about topics related to the National Assn. of REALTORS® annual convention and exposition that will be going on October 28-31, 2005. In reality, I have no idea what will come out of this group, but I’m happy to take part in the experiment.

Redwood TreeNext I wanted to talk about a local news items from this previous week… Seattle Times: Seattle market: Distorted prices — or room to grow? The Seattle Times ran an article about a story I covered about the riskiest cities to live in… The only reason I mention it is that the article says: “The word went out on CNN. It ran in The Christian Science Monitor. A Seattle real-estate blog reported it, and it earned the cover-story spot on msn.com’s money page.” I’m pretty sure that I’m the only Seattle blogger that covered this story, so I’m going to hazard a guess that the Seattle Times real estate writer is now reading my blog! Welcome Elizabeth Rhodes! I definitely read just about everything you write!

After an absence of 5 days, I enjoyed reading this post from Counter Intelligence that described a situation that I’m sure is familiar to many real estate bloggers: “I’ve got to post a new article today or I’m going to lose readers.” I was surprised to hear that counter Intelligence lost 90% of their daily hits after 50 days of not posting. Contrary to the idea you might get by reading this recent article from National Association of Realtors (NAR), real estate blogging is hard work. Let this serve as a warning to real estate agents who are thinking of diving into blogging. Writing an interesting post on a daily basis is tough stuff. Make sure that you enjoy writing. Make sure that you enjoy keeping up on the news. Real estate blogs like Hot Property have an inherent advantage in that it would be so much easier with multiple bloggers all posting to the same site. Ideally, Rain City Guide will someday get about 5 of 6 different real estate agents who post articles on a regular basis. That way, any one of the agents can take a week off when they get burned out without the site suffering a blackout period.

Funny headline of the week… The Ballard News-Tribune (a local paper with a malfunctioning website) had this title for their August 3, 2005 issue: “We could get monorail first.” The article went on to describe how the Ballard segment of the Monorails Greenline would likely get built before other sections. This begs the question: Do the writers of the Ballard News-Tribune read other newspapers? . Do they know that the monorail is much closer to dead than ever being built at this point. The mayor of Seattle has given the monorail an September 15th deadline to come up with a plan or he is going to kill the entire project. The entire organization is in shambles.

Jeremy Zawodny had an interesting analysis of the insane housing market of Silicon Valley. The fact that home prices continue to rise at astronomically fast rates in Seattle, makes me glad to live in Seattle…

I think I bunched enough stuff together for one post, but I there are so many more stories to talk about… I’m just about ready to publish my first podcast for Rain City Guide. I’ve been working late into the night to create an updated MLS home search on top of google maps (nothing is ready to demonstrate yet!). Curbed nominated the “hotest” real estate agents in NY City (do we need something like that for Seattle? 🙂 )

UPDATE: . I imagine Bill Wendel over at Counter Intelligence will get a kick out of learning that even some at Wired News have been getting burned out on technology lately!

Get emotional about the deal, not the house

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dragon over waterBarry Ritholtz offered up 10 common mistakes made by real estate investors based on an article by Bankrate’s Pat Curry. The mistakes pat identifies stem from the idea that “real estate has become the tech stocks of the 2000s, the darling investment that everyone seems to think will be their ticket to easy wealth.”

Barry sums up Pat’s 10 common mistakes made by real estate investors:

1. Falling in love with the property.
2. Not performing your due diligence.
3. Forgetting the rule of home improvements.
4. Thinking you’ll get those low mortgage rates you see on TV.
5. Not pre-screening tenants.
6. Breaking your own rules.
7. Investing long-distance.
8. Paying too much for the property.
9. Not studying the competition.
10. Being underinsured.

There’s a lot more background in Pat’s article, making it well worth reading.

Median house price jumps 14% in King County

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cat in windowThe Seattle Times ran an article that tried to dive into why home prices have continued to increase.

In King County last month, the number of sales fell 6 percent as a quarter fewer properties were listed for sale compared with July 2004, the Northwest Multiple Listing Service said yesterday in its July home-sale report. Strong competition for the best among them — again — sent median prices through the roof, up 14 percent in King and Snohomish counties.

I find it especially interesting that a quarter fewer properties were listed this July over one year ago. Even with the substantial increase in properties people are simple not interested in moving. I think this phenomena really gets to the heart of why home prices have increased so substantially… and makes me more confident that were not experiencing a bubble. With a smaller supply of homes in livable urban communities, I’m convinced that the increase is simply a result of an increased demand.

Some sellers are making the move now to take advantage of low mortgage interest rates. But in general, there’s little research into what propels owners to sell.

“We have a lot of good data on why people buy homes, but in terms of why people sell, we don’t ask the question,” said Walter Molony, spokesman for the National Association of Realtors. “We assume it’s a lifestyle choice. Whether it’s the right time, that’s a very individual evaluation.”

In her classes, Pelascini has noted that sellers usually have a concrete reason to sell, but not necessarily one that prompts them to act immediately. That’s particularly true for empty-nesters.

A conversation between Seattle and NY

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sculptures two headsThe stranger had a fun article this week by Mike Daisey where he compares Seattle to New York… It’s not always flattering for Seattle (or NY), but it is definitely a lot of fun to read… There are a bunch of great lines in the article, but this paragraph is the highlight:

If I could bring New York and Seattle to the table and make them learn from each other, I’d wish that New York could pick up some of Seattle’s table manners, and Seattle’s earnest desire for things to turn out well, which is replaced in New York with snark. And in Seattle I’d point to the subway and say, “Learn from this. Consensus isn’t everything—show some spine, suck it up, and learn how to take a punch.” Then we’d have dinner together. New York would be loud and rude all night, and Seattle would say nothing, but go home and blog about New York’s behavior mercilessly and anonymously.

How Risky is the Seattle market?

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Sasha getting ready to jumpA national mortgage company, PMI Group, recently came out with a real interesting study that lists the riskiest housing markets in the US. Interestingly the Seattle market ranked #45 out of 50 largest housing markets and it is the only west coast city that ranks in the bottom 10 riskiest areas. Here’s what they had to say about Seattle:

Seattle, WA has also seen its risk decline considerable. It is now the only West Coast MSA among the ranking’s bottom 10. Employment in the metropolitan division is still down by 80,000, or more than 5%, from its peak in the late 2000, but the labor market is gaining momentum with a growing service sector and information industry. The area’s homes have gained 11% in the market value in the last four quarters, while its Market Risk Index value dropped from 84 to 64.

Digging into the report, it says the risk index uses “information on past house price growth and variables measuring employment and unemployment, as well as local income measures and interest rates.” It’s always good to get some positive numbers on our local market!

Considering how much home prices have gone up recently in the Seattle market, I was surprised at the results of this study… None the less, it is pleasing to read that the area’s economics are so deathly as to dwarf the risk of the higher home prices (at least compared to other cities in the US!).

(via Dean Foust at Hot Property)

UPDATE:
CNN picked the story up today and mentions that Seattle home owners can breathe easy knowing that the Seattle market ranked the safest (least riskiest!) in the West.