Sound Transit needs your input! April 26, 2008
Last fall I was saddened to learn that the greater Puget Sound region voted down the mass transit package that had been put forward for the Pierce, King and Snohomish County areas. While that put a bump in the highway, so to speak, for the transit people it didn’t stop them from moving forward to see what other options could be considered for our area. Transit is a major issue for our continued quality of life in this region and many groups, government, non-profit, and public based are coming together to try and make it more and more of a priority.
It’s an enormous issue when it comes to real estate and it will impact what cities and neighborhoods will thrive over the coming years. Think of it like the railroad towns of the late 1800’s that once the automobile became the major mode of transportation, those towns dwindled to permanent small town status UNLESS they found another way to be relevant. Today, we need a more diverse mix of convenient transit options more similar to places like Washington DC, Portland, New York, Chicago or like our European counterparts in Paris, London, Madrid, or Milan.
The big question here is whether or not the choices that are implemented are ones that the public wants or feels is appropriate. If you want to see what is going on, check out this website at Sound Transit, and start providing your public comments to the conversation.
For my own part, I am proud to be a member of the local REALTOR(R) association and as part of my volunteer time spent with programs they have such as committee meetings, I am also involved in the current opinion panel work that is bringing together our organization with others that are shaping the area - such as city council members, Sound Transit, park departments, non-profit environmental groups, and more. We’re focused on trying to find common ground that we believe will benefit all in the area and transit is a big part of it. I hope you’ll join the discussion too.
Friday’s Rates April 25, 2008
Mortgage bonds have a negative reaction to inflation and we’re seeing high food and oil prices and rates continue to be very volatile…next week, the drama promises to deliver with the FOMC meeting on Tuesday and the Jobs Report on Friday. I know I sound like a broken record…but here goes: THE FED DOES NOT DIRECTLY CONTROL MORTGAGE INTEREST RATES. Sorry for shouting (but feel so much better). 
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000. This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below and are based on a minimum mid-credit score of 720.
30 Year Fixed: 5.875% (APR 6.023%)
30 Year Fixed with 10 Year Interest Only: 6.250% (APR 6.388%)
15 Year Fixed: 5.500% (APR 5.743%)
5/1 ARM - LIBOR 2/2/6 Caps: 5.375% (APR 6.945%)
Conforming-Jumbo Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $650,000 and a $520,000 loan amount.
30 Year Fixed: 6.375% (APR 6.524%)
30 Year Fixed with 10 Year Interest Only: 6.875% (APR 7.018%)
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed priced with 1.5% discount/origination points: 7.625% (APR 7.841%)
30 Year Fixed priced with 1 discount/origination point: 8.000% (8.169%)
FHA. Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.
30 Year Fixed: 6.125% (APR 6.910%).
FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.
30 Year Fixed: 6.375% (APR 7.158%)
VA. Pricing based on credit scores of 620 or better with loan amounts up to $417,000.
30 Year Fixed: 6.375% (APR 6.572%)
Prime Rate (what HELOCs are based on): 5.250%
Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. These programs all have the same closing costs so you can see APR is not a valuable tool.
This is just a small sample available of rates and products. Rates are as of Friday, April 25, 2008 at 1:00 p.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote please contact your local Mortgage Professional. For more frequent rate updates via what I’m currently quoting my clients, follow me on Twitter.
Greatest Real Estate Agent in the World April 24, 2008
Well, Greatest Real Estate Agent in the World competition is about over, and this is the last post I will write about the contest. My original post has been running at #1 and #2 for most of the competition. At several points during the competition I have had two of the top 10 spots between the post noted and this post.
What we were supposed to learn was that some people are really good at getting attention by writing good content (not that I’m proud of either of my posts on this topic and all the screwing around I’ve done with them). And other people are really good at getting the attention of the Search Engines because they are good at getting the attention of the Search Engines.
In the true spirit of the contest, I’m going to name my chosen winner.
Greatest Real Estate Agent in the World I’m giving to Kevin Tomlinson and his blog efforts as to content, and Brad Caroll of Dakno Marketing who provides the technical support for Kevin’s site and his blog.
Why do I choose them as the winners of Greatest Real Estate Agent in the World? Because I can’t tell which is most responsible for the success of Kevin’s blog.
Is it Kevin’s writing style and good content? Is it Brad’s ability to gain the favor of the SEO God’s through other means? Is it Kevin’s great website that creates what it takes to pull the blog up with it?
Or maybe it’s just because Kevin IS a great agent and so everything he does, he does just as well as he does his real estate activities, including hiring the best people and directing them to their best efforts on his behalf and on behalf of his clients.
And that’s the real success story and the real lesson about SEO placement. It takes a great team. Simply being a great agent is often not enough. Simply being a great blogger is often not enough. Hiring someone to toy around with the Search Engines to bring a mediocre or bad site to the top of the heap, is not going to help you if what readers find at the top of the search is not worth reading, or the agent isn’t worth hiring.
Kevin is the winner because he has it all. No one should have to fight over whether it was Kevin’s talent or Brad’s talent that makes the package work.
It shouldn’t be EITHER content OR SEO knowledge. It should be the best marriage of both worlds.
The Commission-Based Fee Structure: it’s Bad for Buyers April 22, 2008
This post is not legal advice. For legal advice, consult an attorney in person, not a blog.
[Sorry, no links or cites here, but I think the following historical perspective is undisputed:] Originally, real estate agents (and brokers, referred to collectively in this post as “agents”) represented only the seller. The “listing” agent signed the contract with the seller that entitled the agent to a commission. This agent then informed other agents about the house now available for purchase by posting on the Multiple Listing Service. Another agent, the “selling” agent, would see the listing and show it to a potential buyer. Even though the selling agent then assisted the buyer in purchasing the property, she actually — and legally — worked for and owed a duty to the seller only. Because the “selling” agent assisted with the sale of the property, the “listing” agent would then split the commission paid upon the sale. The system made sense, as only the seller paid the commission to the listing agent, the listing agent then offered to share the commission as means of finding a buyer, and both agents eventually assisted with the sale. Indeed, some agents today still look at commissions in this light. As James Melanowski, an agent, said in a recent comment (#20):
There is one commission. I get paid x% to sell your property and with that x% I will do everything in my power to do my job. That may include paying a buyer’s agent, it may not. I may want to pay that agent y%, y-1/2%, or y+1/2% to bring that buyer to the table. The point is, x% is what you pay ME and it is to do with as I please.
Unfortunately, in this system, buyers usually mistakenly believed that “their” agent represented them in the transaction, when in fact they had no representation at all and “their” agent worked for the seller. With the evolution of consumer protections, many states revised this system. In 1996, Washington passed RCW Chapter 18.86, which by law altered this arrangement. Since then, in Washington a “buyer’s” agent owes a duty only to the buyer, regardless of the source of compensation, while a “seller’s” agent represents only the seller. Notwithstanding this new legal arrangement, the term “selling” agent is still used today by the MLS to describe a buyer’s agent(much to the chagrin of enlightened agents — right, Ardell?).
But if the buyer’s agent now represents the buyer, why is the buyer’s agent paid by the seller? This alone is enough to create a conflict of interest that could potentially impact the quality of the buyer’s representation (see RPC 1.08(f)). Furthermore, if the buyer selects her agent and works closely with the agent to find and buy a house, and the agent owes a duty only to the buyer, shouldn’t the buyer have the ability to decide how much to pay the agent? Under the current system, based on an outdated and no-longer-applicable model of representation, it is the seller — not the buyer — who ultimately determines the buyer’s agent’s compensation.
In addition, agents can and do represent both buyers and sellers. Thus, they have a vested interest in a system that promises a significant commission for both sides of the transaction. With flat fee listing and FSBO, the listing agent commission has come under increasing price pressure, and indeed it is not uncommon for listing agents to reduce their commission from the previously “standard” 3% (often times as long as the seller will also use the same agent for the following purchase, thus allowing the agent a subsequent and “full” 3% commission). The “selling” agent commission, however, is immune from such price pressure given the current business model. Indeed, as Kary Krismer, another agent, said in a comment (#31) to a recent post in reference to a buyer’s agent’s commission of 2.5%, rather than the standard 3%:
Well, it’s not that it’s a waste, but it’s not a wise decision at all. We’ll show buyers 2.5% properties, and have actually had a number of transactions in them. But there are some agents that won’t, or that subconsciously might down-talk the property.
Agents may argue that they are “entitled” — or, more accurately, earn — a full 3% given the time and efforts they invest in a sale, but that alone cannot justify this failure to show properties with a slightly lesser commission. After all, even 2.5% is a reasonable — to say the least — paycheck given the average house price (2.5% of $400k is $10,000). Thus, whether consciously or subconsciously, a signifcant number of agents fail to best serve their clients’ interests (by showing them ALL suitable properties and giving honest and accurate advice about each) simply because they won’t make as much money. While that is not absolutely wrong, at a minimum the buyer should be aware of this “limited” representation. How many buyer’s agents — who discriminate against commissions of less than the “full” 3% — have that conversation with their clients?
Finally, because the commission is a transaction cost, it stands to reason that a decrease in that cost will benefit either buyers or sellers or both (either prices remain the same with less costs and more money to the seller, or prices are reduced to reflect the reduction in costs, or both). With the current system, there is virtually no incentive to reduce this cost — or, for that matter even an ability to do so, unless the buyer is willing to forego an agent and either use another professional (say, ahem, an attorney) or self-represent.
So, the current commission-based fee structure, based on an outdated and now inapplicable model, leads to increased transaction costs (than what would be available in a truly competitive market) and a decreased quality of buyer’s representation. I’d say that’s bad for buyers.
Spring Projects: sprucing up that old cracked walkway or patio? April 21, 2008
Note: there other things more interesting to me than escrow/real estate issues, so hope this topic does not tread on other contributors expertise.
It is Spring (believe it or not) and the Everett Home Show just wrapped up over the weekend. This is the time of year where home improvement projects start to come to the forefront. One of the larger projects last Spring was to remove our 30+ year old drab, cracked walkway and driveway apron in front of the garage. We obtained bids to install either a stone/paver walkway (Hardscape) or new poured concrete. For our budget, time constraints, and do-it-yourself experience, we ended up going with a stamped concrete walkway.
I rented a jackhammer and broke up the entire walkway and driveway apron. It was tough work. We liked the stamped concrete patterns that we observed visiting new home developments, home shows and doing research online. After sifting through all the information, we took quite a while to make a decision on the color and blend we envisioned. It is nerve-racking because if we were unhappy with the patterns and color after the concrete pour, we were going to have to live with it.
A significant amount of prep work had to take place because there is a lot of water run-off from the road adjacent to our home and the topography slopes towards the house. You can also see remnants of the perimeter drainage system I installed and connected to an existing drain system.
Project cost: about $6,000.00 including my expense in removing the old walkway & driveway apron myself. Drain system and retaining walls (Stacked Wall supplied by Pacific Stone Company in Everett) were a separate expense, but we did do it ourselves.
Hope this project provides inspiration and ideas for people thinking about their outside projects!
This year’s Spring (I hope) project entails a new asphalt driveway from the street to the apron & walkway. I’ve also been informed that I need to remodel the guest bathroom. One project at a time.
Sunday Night Stats - King County April 20, 2008
I think I said enough earlier this week, so tonight it’s just this week’s stats.
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King County Residential Sales
Active/For Sale - 10,629- UP 203 - MPPSF Under $1.6M - $227 (Over $1.6M MPPSF $500)
In Escrow - 2,640 - DOWN 68 - DOM 44 - MPPSF $213.50
Closed YTD - 4,330- UP 326 - DOM 52 - MPPSF $222
King Conty Condo Sales
Active/For Sale - 3,706 - UP 22 - DOM 56 - MPPSF $324
In Escrow - 871 - down - DOM 40 - MPPSF $306
Closed YTD - 1,397 - UP 92 - DOM 50 - MPPSF $295
“Statistics not compiled or published by NWMLS.”
Predictions: helpful or counterproductive?
The dialogue between commenters has been interesting to read on Ardell’s most recent post about predictions.
Is this a helpful or counterproductive prediction?
“So, don’t be swayed by media reports of a ‘disastrous housing economy.’ Take the long-term view and be confident that your home will continue to appreciate in value. And know that if you buy a home today, in seven years it will be worth a lot more.”
- Geoff Wood, CEO Windermere Real Estate
(Quote taken from the Spring Quarter 2008 of ‘Inhabit,’ The best of the Pacific Northwest magazine) Published by the Seattle Times.
I don’t necessarily disagree with Geoff’s sentiment and I understand his overall point within the larger context of the quote**—I just took the last paragraph quote from his ad titled “Gaining Perspective on the Real Estate Market”. Seven years is a long time. But this is one heck of a prediction, no bones about it.
**his use of a “Casino” and “gambling” analogy was terribly ironic, intended or not.
I have no idea if this was solely a local ad or if they ran it or a similar one in other markets Windermere has offices as well.
Agents are resources in so many aspects for their clients. Consumers turn to them for valuable feedback, for information, data, suggestions AND ADVICE, which includes feedback on where the real estate market is trending. In so many ways, they are advocates whom consumers want to trust, but for a variety of reasons find it difficult. Building and gaining trust does not begin with “I don’t know where the market is heading, beats me.”
You have to give Geoff Wood credit. At least you know where he stands.
Rivertrail Townhomes in Redmond
This is a special request for anyone having any floorplans for the townhomes in Rivertrail in Redmond. I’m doing a thorough analysis of the entire community. Different phases. Different models.
Seems most agents think “The Springfield Model” is the most “desirable” floorplan. But it seems to me that various models suit different households and location within the community is first and foremost the priority.
Price per square foot for one car garage townhomes vs. two car garage townhomes is becoming a wider spread.
I have both a buyer client and a soon to be listed seller client in Rivertrail. I’d appreciate anyone who is willing to share floorplans shooting me an email. I’d be happy to drop by and make a copy and return your originals.
Your help appreciated!
RCG Intermission to bring you …… April 18, 2008
…..2″ of snow and rising in Snohomish County. Ummm, isn’t it April 18th, 2008, not mid February? Stevens Pass ski area closed a wee bit too early! If you can make it to our place, the hot chocolate is brewing, the fireplace is on and the kids are heading out to play and we have NO last minute escrow signings tonight! Yeah!
Chrome and Teak are thinking….”you have got to be kidding us!”
Friday’s Rates
Long term fixed conforming rates are slightly improved since this morning…however rates across the board are up compared to last Friday’s rate post. The markets continue to be very volatile and those who play the “floating game” with their rate, may get washed up.
Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000. This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below and are based on a minimum mid-credit score of 720.
30 Year Fixed: 5.875% (APR 6.023%)
30 Year Fixed with 10 Year Interest Only: 6.250% (APR 6.388%)
15 Year Fixed: 5.375% (APR 5.616%)
5/1 ARM - LIBOR 2/2/6 Caps: 5.250% (APR 6.895%)
Conforming-Jumbo Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $650,000 and a $520,000 loan amount.
30 Year Fixed: 6.375% (APR 6.524%)
JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).
30 Year Fixed: 7.375% (APR 7.536%)
FHA. Pricing based on credit score of 620 or better and loan amounts up to $362,790 for FHA in King, Snohomish and Pierce Counties.
30 Year Fixed: 6.125% (APR 6.910%).
FHA-Jumbo. Pricing based on loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.
30 Year Fixed: 6.375% (APR 7.158%)
VA. Pricing based on credit scores of 620 or better with loan amounts up to $417,000.
30 Year Fixed: 6.375% (APR 6.572%)
VA-Jumbo (loan amounts of $417,001 - $950,000).
30 Year Fixed: 6.375% (APR 6.700%)
Prime Rate (what HELOCs are based on): 5.250%
Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR. These programs all have the same closing costs so you can see APR is not a valuable tool.
This is just a small sample available of rates and products. Rates are as of Friday, April 18, 2008 at 1:15 p.m. and may change at any time. Available programs may change at anytime as well. This is not a guarantee nor is it a commitment of interest rate. For your personal rate quote please contact your local Mortgage Professional.
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