Are You Financially Prepared for a Disaster? February 28, 2007
It’s hard to believe that just six years ago today, the Nisqually Earthquake rattled our cages. I was just getting ready to quote interest rates for a purchase at my office when I was so shook (literally) that I accidentally quoted rates for a 15 year amortized mortgage instead of the 20 year amortized that my client was interested in…needless to say, I honored my quote. You never know when an emergency might happen, whether that’s an earthquake, a tree crashing through your roof or a illness or death in your family. Life happens to all of us when we least expect it. The anniversary of this event reminds me of being prepared for such emergencies.
A few months ago, I read an article from the Financial Planning Association which, among other things, discussed creating a simple three ring binder that contains your important financial information. I thought this was brilliant. In the event you need to leave your home quickly or if you have your partner in the hospital, you need to be able to access your important information quickly instead of running around your house or riffling through filing cabinets, etc.
The three-ring binder is intended for you to create a central source of answers and personal information that can help provide direction and instill hope following a disaster or other family emergency. Unfortunately, a disaster could result in death and incapacity. Accordingly, the binder is an ideal place to record your memoirs, personal wisdom, parting thoughts, and answers to questions that only you can answer. It’s important to keep this information in your binder current and always handy. It should include
- Instructions for whom to call first, what to do first, and where to find things.
- Personal family information: names, dates of birth, Social Security numbers, and other ID numbers and pertinent information about family members.
- A family medical history that includes doctor contact information, current medications, allergies, and so forth.
- A current telephone and e-mail directory that lists family members, friends and advisors.
- A current inventory of your financial assets, including all account numbers.
- Estate information that includes details about end-of-life wishes and arrangements.
- A list of service contracts and warranties.
- Detailed information about your business (if applicable).
I know…you all ready have the emergency kit with three days of water and food on your to-do list! This is just food for thought.
Sphere: Related ContentLow flow toilets and old houses
A relative of mine just replaced the old high-flow toilets in all 5 units of his building with low flow toilets. The result: a water bill that is $100 a month lower - the replacements should pay for themselves in six months. The toilet of choice: Toto Drake. It’s approximately $200 and it gets rave reviews on the internet.
I live in an old house (1908) with the requisite sloping floors and rusty iron pipes that come along with it. We already have low flow toilets (usually excellent Sloan Flushmates) which were purchased on Consumer Reports rave reviews. See the second rave review above - the only toilet they liked better than the Toto has a flushmate system. HOWEVER! Consumer Reports clearly does not have an old house that has charmingly rust-flecked, low pressure water. See, the Flushmate system works by storing up pressure from the pipes in a sealed tank and uses that pressure to forcefully push water out when you flush. There is no need to rely on gravity to move water through Flushmate toilets, although there are no mentions of them being used in space on the internet. When you put one of these suckers in a house with rusty pipes, little bits of rust get into the workings of the tank and the flushes get progressively worse over time until you’re left with a toilet that pushes the tank water down about a half inch on the flush and then gurgles at you. When this happened, I found myself cussing (a lot) at an inanimate object.
So last Thursday I found myself doing a midnight toilet installation of a Toto Drake. It comes with excellent instructions which should be supplemented by these instructions. And now that it’s done, I very highly recommend it. In fact it’s amazing. For decency’s sake, I will not go into further details.
The moral of the story:
- New house? Get a Flushmate
- Old house? Get a Toto Drake
- Hate money? Keep your high flow toilet
Mortgage Blogging…
Greg just pointed us to the latest installment of the Inman Blogging series (requires a subscription after today)…
He also beat me to the punch on the best quote of the whole series so far by RCG’s own Rhonda Porter:
Sphere: Related ContentYou expose yourself to more resources so you can blog more. It’s a sickness, I think . . .
Craig Does the Daily Show February 27, 2007
I don’t think the man behind Craigslist has a mean bone in his body…
or a desire for any gold plated riches.
Sphere: Related ContentRedfin’s First Year
In a follow up to Dustin’s post, I started to examine Redfin’s numbers in a bit more detail.
Redfin released a report today (it was yesterday, but I am on vacation… I guess you can say Maui Time :)) that opens saying, “Finds .904% Negotiating Advantage, 1.952% Average Commission Refund, 95% Customer Satisfaction; The Most Common Type of Redfin Buyer is a First-Timer”. After reading this, I started to crunch my own figures and trying to figure out if I understand this report correctly.
Here are the items I am confused about:
#1 They found .90% of their customers experienced a negotiating advantage?
They state their customers paid 99.329% while customers of other brokerages paid 100.233% or an average savings over other brokerages of $4,474 per deal. That is a fairly bold statement to make. Knowing the process and the competition for the best price for your seller, I am confused about the fundamentals of this statement.
Was this statement made saying Redfin’s name commands sellers attention and therefore sellers say ‘yes’ to a lower price
OR
was this statement made saying their most common buyers being a “First Timer” are putting in offers on homes without multiple offers.
If the later is true, in order for this statement to have any meaning, you would really need to break down their numbers a bit more. I would be curious to see how many multiple offers they have won, the age of the listings they are receiving this “Negotiating Advantage” and how many offers a buyer submitted before they had an accepted offer.
If this is not true and Redfin is claiming they found the secret sauce… CONGRATS… I WANT IN!
#2 200 customers in Washington state bought homes through Redfin between February 6, 2006 and February 5, 2007
The AVERAGE savings for these customers was $14,134 (it is actually $9,660 + they claim they negotiate a better price for an additional savings of $4,474). That means as a company on AVGERAGE they are receiving 1/3 of the average commission of $14,418 or $4,758.00 per deal.
Multiply this income times 200 clients and on average in 2006, they grossed roughly $951,582. As of May 2006 they had 25 employees. For this math, lets not take in to account other business expenses (lease, hosting, office supplies, etc) and only take in to account payroll. If you assume the average household income in 2000 at 45k, that would assume payroll would be somewhere around $1,125,000. As a business owner, I understand as well as the next person it takes money to make money. I also understand they are growing and additional cities are coming online.
With a very strong financial backing… who all understand business and the future of Real Estate much more than I do… I know their latest round of financiers took this all in to account. It will be interesting to see what the future holds.
Sphere: Related ContentThe condo public offering statement/resale certificate
As always, this post is not legal advice. For a specific legal question, consult an attorney.
Buying a condo can make a lot of sense, particularly if you can purchase a unit close to work (e.g. downtown) and if your “lifestyle” is conducive to apartment-style living (e.g. no kids, no pets). If you’ve decided to take the plunge, make sure you do your homework. The Seattle Times had a good piece on the topic a couple of years ago. That article notes several sources of information that you should review prior to purchasing, including the public offering statement (for new construction) or the resale certificate (for a previously owned unit). In reality, your homework can begin and end with the public offering statement or resale certificate, as by law each of these must contain the information necessary to make an informed decision.
That said, don’t revert to your younger self and “forget” to do your homework. The statement or certificate can be quite intimidating, often including hundreds of pages of information. Nonetheless, you need to sit down and dedicate some time to reviewing it in detail. Reading it in bed, before drifting off to sleep, is NOT sufficient (although you may find a cure for your insomnia). The disclosures contain information about the financial and physical health of the devlopment, as well as the rules that will govern how you can use the unit (such as renting it out). Ignore this information at your peril — you may find years later that you made a very poor decision, all because you did not take the time to review the provided information.
Finally, given that the disclosure contains hundreds of pages, many of them written in dense “legalese,” you may wonder whether an attorney should also review it on your behalf. An attorney can explain the disclosure and answer any questions you may have. Moreover, the attorney may be able to identify issues of concern that you did not appreciate. On the other hand, the attorney does not and can not know everything that is important to you. Therefore, while you may benefit from an attorney’s review, the key is that YOU must take the time to review the disclosure carefully. If, after doing so, you decide that the condo is not for you, both disclosures create a right of rescission (7 days for a public offering statement, 5 days for a resale certificate) so you can cancel your purchase and sale agreement and avoid the mistake entirely.
Sphere: Related ContentSeattle Area Appreciation February 26, 2007
I could have just said yes. But I remember the day. It was June 15, 2005. I could feel it. I could taste it. I could smell it. The ground was swelling. You could put your ear on the ground and hear it coming! LOL I happened to be in a complex called Sixty-01, which has its own idiosyncrases that I won’t go into since you are out of State, Brian. But here’s some stats to prove my blood boiling was on target. Hindsight is easy. Feeling it coming is an artform. I’m using Sixty-01 because I was there that day and also because it has a lot of “same product”/apples to apples for straight appreciation comparisons. They are all practically identical 2 bedroom - 1.5 bath townhomes in the stats below. Leave it to Marlow…
…to come up with the most provocative (and interesting!) commentary on Redfin’s press release from today…
Some more opinions from around the web:
- Greg gives a thorough round-up (as usual) with more than a dash of opinion thrown in
- Straight from Redfin
- The Freakonomics take on the date
Inman has Gone Blog Wild
and it is a good thing!
Looks like they just published the first of a 4-part series on real estate blogging (only by subscription after today!). Lots of good stuff from some of today’s heavy hitters!
It was great to see Todd of Lenderama get some exposure for his (very cool) REMBEX search tool.
Also want to say thanks to Greg… I think he’s running one of the best real estate sites on the web, so it means a lot to me when he gives credit to RCG for some of his inspiration.
While I’m talking about Inman, I thought I’d mention that, like many other real estate bloggers, I’ve been invited to participate in their Blogger’s Connect at the very end of July. I’m definitely looking forward to it as I had a lot of fun last year in San Francisco… From the overview:
Sphere: Related ContentThe content, speakers and workshops are being designed in the blogosphere. We have invited 20 leading real estate bloggers to use their blogs to reach out to their readers to invent the program.
Imagine the first “user-generated program” including panels, topics and sessions. Could be silly, could be interesting — certain to be fun.Bloggers Connect will begin on Tuesday, July 31 with a party and then all-day sessions on August 1. Fun and crazy events are being built into the program including the Dive Bar Tour, the Haight Asbury experience and the blogging romp.
Use Your Sent-Items Folder as Inspiration February 25, 2007
It was so much fun to stop off in Seattle last week to give the seminar in downtown. Meeting up with Rhonda and Jillyane (and potentially a new contributor I’ll introduce soon!) was awesome!
One of the tidbits I share with the real estate professionals in the audience that seems to resonate well (at least based on the feedback I’m getting) is when I explain to them that even the non-bloggers in the audience are already writing blog posts, but they are not getting credit for it. Here’s my logic in a nutshell…
Assumption #1: Writing a blog post is just like sending a webmail (via Hotmail, Yahoo Mail, Gmail, etc), except that it is one step easier. With a webmail you need to (1) click on “write” or “compose” message, (2) fill in the email address of recipient, (3) fill in the title of email, (4) write your message, and (5) click “send”. Blogging is one step simpler because you do not need for step 2, i.e. fill in the email address of the recipient since a blog post is essentially an “email to the world.” Otherwise, all the steps are essentially the same with the final step being “publish” instead of “send”.
Assumption #2: The sent-items folder for most real estate professionals is already filled with good stuff that they are already experts on… For most real estate agents, the sent-items folder of their email program is likely to find information on neighborhoods, mortgage and closing process, local events, etc..
Because most agents are already sharing lots of their knowledge via email and because a blog post is nothing more than an email to the world, hopefully, you’ll start to see how I can say that most agents are already blogging… The idea that they are not getting credit for their knowledge stems from the fact that if a professional has a lot of stored up information in their “sent items” folder, then the search engines and other bloggers can’t give them credit for this knowledge. The last bit is critical to the seminar, but not necessarily to this blog post… 
Interestingly, both Steve Rubel (Turn Gmail Into Your Personal Nerve Center) and Greg Swann (Feed guarding: Protecting your weblog content from theft — or worse fates . . .) wrote articles today that either demonstrate the blurring of email and blogging (i.e. blogging via email) or take it for granted (i.e. RSS syndication).
By the way, I’ve been taking my own advice about unleashing the “knowledge” from my sent-items folder over on the seminar blog by publishing answers to many of the questions that I’ve been getting from seminar participants. I’ve been inundated with email questions lately which is great for providing me blog content, but not so good in terms of providing me time to answer everyone quickly!
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