Posted by: The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

58 responses to “Guess the Price Round 2 Update: Five Price Drops Later…”

  1. 3rd Generation

    This site becoming more irrelevant to me by the day.

    Why not have a graph of the contents of hot dogs at Costco?

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  2. Updog

    Must admit the property has dropped faster than I thought it would have. I agree, I don’t think the last price cut marks the sellers bottom. Maybe they just wanted to set future expectations? Send a “no more $25k price drops” message? The price to begin with was so high they must have considered this.

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  3. joe dirt

    RE: The Tim @ 2

    Keep up the good work.

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  4. lecadidupe

    Quite revealing how the majority of SB’s crusty, cynical posters, including me, as well as a couple of consistently bearish types, overestimated the price and/or underestimated the time on the mkt for this place. And The Tim’s choice of this place couldn’t have been more apt: this is the quintessential Seattle Craftsman Charmer in a Credentialed Neighborhood, replete with gleaming hardwood floors and the bland interior decor that stagers here seem to fetishize so much.

    Heh: 3rd Generation decries the irrelevance of The Tim’s post, but there he is, leaving a comment before anyone else.

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  5. ChrisM

    Tim, could you add the price-drop data to the graph as well? In other words, the original listing price (and date), and then a listing price drops (and dates) so we see the listing price history compared to the guesses?

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  6. robotslave

    RE: lecadidupe @ 5 – For all the bearishness, I think overestimating the sale does fit with the cynicism of the crowd on this site.

    In addition to the “housing prices are collapsing” sentiment, there’s also a pretty strong “but not nearly fast enough” tone to the grumbling we do here.

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  7. Bingo

    3rd Gen must be the blue dot at $650,000 selling in August ;o)

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  8. David Losh

    RE: 3rd Generation @ 1

    Actually this post is very relevant to today’s Real Estate market.

    It shows a perception that the price is right, and that a flip is still acceptable no matter how bad it might be.

    It goes to the mentality that is still out in the market place. Tim put this up because he bought a flip, that flopped. I know a dozen guys today that are squirming over project properties.

    For me this post is fascinating.

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  9. Scotsman

    I think what this shows is a core belief that Seattle- and “credentialed craftsman homes” are still special in some way. A majority, now proved wrong, were sure that this “gem” would certainly sell by now, and at a price above the current listing.

    We are headed into the abyss in so many ways this ‘ole bear can’t even keep track. This is one more data point that shows things aren’t what too many still assume them to be.

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  10. splainin

    This might be a counterpoint to the “flipping is dead” meme. Something funny about it, but can’t suss it out.

    http://www.redfin.com/WA/Seattle/426-Smith-St-98109/home/135225

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  11. Azucar

    RE: 3rd Generation @ 1

    The post is totally relevant to the contents of the site. Why complain about a contest… that is related to the overall content of the site… where you also might get a free lunch out of the deal?

    And, speaking of lunch, if The Tim does do a Costco Hotdog Contents guessing contest, I get dibs on “Pig snouts and cow rectums”.

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  12. Kary L. Krismer

    RE: splainin @ 11 – Prior comment removed.

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  13. lecadidupe

    RE: Azucar @ 12

    In fact, you could argue that the Guess the Price posts couldn’t be more relevant to this site in that here’s where the rubber meets the road: The Tim gives us an emblematic Seattle house and we get to put all our prognosticatin’ and prophesyin’ to work, and boy, did most of us blow it. I’m a mild bear, but I was surprised that even Scotsman overestimated the price.

    The house is as cute as a ladybug on a Lhasa Apso’s ear, as the Seattle Weekly’s “Surly Gourmand” would say, almost nauseatingly cute. I like how Software Engineer called out the cheesy “beauty bark” the flipper had just laid down, as well as the living room that does double duty as a hallway, and the chintzy galley kitchen.

    -le cadi
    -one or two Perfect Precious Seattle points off, though, because it’s not listed by a certain brokerage whose name escapes me at the moment. “Winney the Meerkat”?

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  14. Jonness

    By 3rd Generation @ 1:

    This site becoming more irrelevant to me by the day.

    Why not have a graph of the contents of hot dogs at Costco?

    Tim: You are doing a fantastic job with the site. I didn’t partake in the second version of guess the price mostly because I had a lot going on when you originally posted this. Most likely, my guess would have been too low this time around anyways, because I’ve experienced an increase in bearish sentiment these last months (whether right or wrong).

    I’m having a good time watching this property drop. The guesses make a really interesting chart, and it’s nice to have an update every once-in-a-while to show how the current list price relates to the distribution of guesses.

    In short, this guess the price game is a great idea, but it’s bound to tick off the bulls as well as those who already bought while expecting we’d reached a bottom. :)

    Fun stuff ahead this winter.

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  15. ricklind

    By 3rd Generation @ 1:

    This site becoming more irrelevant to me by the day.

    Why not have a graph of the contents of hot dogs at Costco?

    This is Tim’s site. We come here, or not, if we choose.

    Why not start your own site.
    Call it “Bite Me” dogs.

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  16. ricklind

    By robotslave @ 7:

    RE: lecadidupe @ 5 – For all the bearishness, I think overestimating the sale does fit with the cynicism of the crowd on this site.

    In addition to the “housing prices are collapsing” sentiment, there’s also a pretty strong “but not nearly fast enough” tone to the grumbling we do here.

    True thing. I think most of us just want a bottom, almost any bottom, to set in to use as a building reference point. I don’t speak for any one else here, but think that most of us don’t want permanent free fall. Or baptism by concrete, either.

    Rick

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  17. Ira Sacharoff

    RE: Scotsman @ 10
    The “Credentialed Craftsman” magic doesn’t work everywhere. It doesn’t work on busy streets. It might work generally in Montlake, but those rare old homes in places like Kirkland are shunned, where in Ravenna or Sunset Hill buyers continue to go ape”chocolate”.

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  18. Splainin

    RE: Kary L. Krismer @ 13RE: Kary L. Krismer @ 13 – Que?

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  19. Kary L. Krismer

    RE: Splainin @ 19 – Let’s just say something doesn’t look right, so I decided to withdraw my comment.

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  20. David Losh

    RE: splainin @ 11

    She takes the houses she does down to the studs. The interior is meticulously restored, to period, using wood products. I think this is her tenth project.

    This project was an excellent purchase, and value for whoever bought it.

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  21. Kary L. Krismer

    By David Losh @ 21:

    She takes the houses she does down to the studs. The interior is meticulously restored, to period, using wood products.

    Do they use lath (sp?) and plaster? In the movie Company Men they were doing a remodel and using that method. I can see trying to be true to the period, but sheetrock is superior in every way–I think.

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  22. Peter Witting

    RE: Bingo @ 8 – Nah, it’s just Bluedot’s house…

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  23. Peter Witting

    I think that realty is named after a pub in London, the “Windy Mare”.

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  24. splainin

    @ Kary – Got it, thanks. Missed the prior comment. As for lath and plaster, I’ve lived in houses with both and prefer l+p for sound and “knock test” quality, but wouldn’t pay for it in new construction.

    @ David – Thanks for the info, didn’t know. The pictures (still available on zillow) don’t suggest that the finishes are particularly period and the architecture certainly isn’t. But I do suppose there remains a market for quality construction, so it’s nice to see someone able to capitalize on that as opposed to spit and duct tape flips.

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  25. David Losh

    RE: splainin @ 25

    How are the finishes not period?

    This is an excellent recreation of the original period.

    When you see the before pictures you can see that the property was certainly maintained, but of a lower quality.

    As far as lathe, and plaster? WTF? There is only one company in Seattle that does that and the cost is prohibitive.

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  26. David Losh

    RE: splainin @ 11

    Actually I watched the property at 426 Smith Street take shape. I saw the finished project at the first Broker’s Open, and it was very impressive. The agent is also the contractor and has a line of subs. There was another women there that day who has done 25 of these projects.

    I want to make clear that what some people do, myself included, are different than flips. Property renovation is an art. You don’t always make money. When I started, and with this woman’s first few projects, you have a learning curve.

    This project at 426 Smith is exceptional in every way. No detail was left to chance. It’s 100% complete.

    When you look at the numbers of $480K to $1,129,000, it looks like a lot of money. Then consider it was down to studs for about a year, it was completely built out, it was completely finished, new wiring, plumbing, and services, and the margins shrink.

    It’s still good money if you make $120K, to $240K for a years worth of work that turns out a project that you can point to with pride for the next fifty years, or more, God willing.

    The point I was making about the wood finishes on the interior is that you can use MDF and have it formed, or you can restore, with wood, to have a project last.

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  27. Kary L. Krismer

    By David Losh @ 26:

    As far as lathe, and plaster? WTF? There is only one company in Seattle that does that and the cost is prohibitive.

    The cost of a lot of the older methods is cost prohibitive. Even if cedar side shingles weren’t expensive for materials, the labor cost is prohibitive. It’s a lot faster to nail up a 4×8 foot sheet of something to the outside of a building than to install side shingles.

    My concern about lathe and plaster is that it wouldn’t hold up as well, and would be more of a fire hazard. That’s why I was asking if anyone would do that as part of a to the studs remodel, as was the case in the movie Company Men. I’d be a bit surprised if it met fire code.

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  28. splainin

    RE: David Losh @ 27 – Thanks David, that aids my understanding.

    I agree that the finishes are high quality, and I’m sure the wood vs. MDF makes a big difference in both appearance and “knock quality.” Regarding period, the granite gas FPs, carpeting, and kitchen don’t seem faithful to period. And the outside architecture, particularly the decking and lack of details on the new 2d floor, suggest new construction in Kirkland rather than restoration in QA. But the windows, bathrooms, and built-ins are clearly nice (and cher), and I’m sure it is a great place to live. Perhaps I should just update my conception of “restoration.”

    FYI, the $1.129M number is not yet public, AFAIK. MLS says sold for $1.295M, and KC hasn’t reported yet. Your number makes it more realistic (but still well above my guess based on the micromarket).

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  29. Kary L. Krismer

    By splainin @ 29:

    FYI, the $1.129M number is not yet public, AFAIK. MLS says sold for $1.295M, and KC hasn’t reported yet..

    And that is what is odd.

    That doesn’t necessarily mean it’s the seller’s or agent’s fault. King County does sometimes make mistakes, and the people creating the documents to be recorded sometimes make mistakes. I’ve seen the latter just this last week.

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  30. David Losh

    RE: splainin @ 29

    The status is sold, and closed, so it is public knowledge.

    The back deck, and the kitchen are a separate vista that also extends into the dining, and living room that are open.

    It is an improvement on the original design that as I said was of lower quality than what it turned out to be.

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  31. Splainin

    RE: David Losh @ 31 – Where can I find the $1.129M figure?

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  32. Kary L. Krismer

    By David Losh @ 31:

    The status is sold, and closed, so it is public knowledge.

    There’s no deed showing in the KC Recorder’s website, or at least not one that I could find. As I mentioned previously, that could be due to many things.

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  33. David Losh

    RE: Splainin @ 32

    Call the company, ask a Real Estate agent. There is no mystery here. It’s public knowledge.

    I happen to have tracked the house.

    You just hit on one of those weird little things people get all worked up about. I don’t know the price of chicken that was paid to make my chicken burrito, yet I buy it anyway.

    This is like I say, it’s like in the movie Glenn Gary Glenn Ross where everybody is hanging around for those prized lead sheets. Real Estate is a business. You are either in the business or not.

    Like contracting, do you, as a consumer, follow the price of materials? how about what is paid to the contractors, and workers?

    I’m going to do a post about why people think the price of construction has any bearing on the value of a property. Just because some builder drove out to the Issaquah Highlands day, after day, are we supposed to pay full construction cost for being in the middle of nowhere? How about the “Estates” in Fall City? Will they be worth anything when they need repair?

    A project has a worth, a value. In this case the value is owning the best property in the micromarket(?)

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  34. David Losh

    RE: Kary L. Krismer @ 33

    Call the company, ask a Real Estate agent. There is no mystery here. It’s public knowledge.

    Real Estate is a business. You are either in the business or not.

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  35. Splainin

    RE: David Losh @ 34 – I think I agree with most of your points regarding the value of the property not being tightly connected to the cost to build. And more power to those who invest time and treasure (and risk) to improve individual houses, as opposed to tract builders. I guess I’m just surprised at the sale price of that particular house, given the style of renovation and what’s available (and what’s recently sold) nearby. The reduced price you gave makes a bit more sense.

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  36. David Losh

    RE: Splainin @ 36

    It never reduced, it sold for asking price in like a week, as it should have.

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  37. Splainin

    RE: David Losh @ 37 – Well, now I’m confused again. The asking price and MLS sold price are both $1.295M, not $1.129M.

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  38. Kary L. Krismer

    By David Losh @ 35:

    RE: Kary L. Krismer @ 33

    Call the company, ask a Real Estate agent. There is no mystery here. It�s public knowledge.

    Real Estate is a business. You are either in the business or not.

    Before I called I would have to care enough to call. I don’t.

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  39. David Losh

    RE: Splainin @ 38

    Funny.

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  40. Macro Investor

    By David Losh @ 34:

    RE: Splainin @ 32

    I’m going to do a post about why people think the price of construction has any bearing on the value of a property…

    A project has a worth, a value. In this case the value is owning the best property in the micromarket(?)

    Either I’m missing something, or you’re not making any sense. First you say construction cost has no bearing on value. Then you say this okay house on a tiny lot is worth $480 per square foot because it’s nicer than the ones next door?

    I think something’s strange here. Maybe there was an inside deal to keep the foreclosure wolves away. I don’t see a “real” buyer paying that much, without it being on the water front and having a large lot.

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  41. lecadidupe

    I look at the listing pics of the Queen Anne house, and the pics of the Montlake house under discussion, and I frankly don’t see much of a qualitative difference between the two. I see two shells-of-old-houses with schlocky Olde-World-Charm-as-Imagined-by-Disney interiors (ersatz “bronze-finish” sconces flanking the fireplace? Really? For over a million bucks, I’d expect the flipper to go the trouble of finding some period replacements on eBay for a couple of hundred bucks).

    And looking at the yards, well, at least the Queen Anne place doesn’t have beauty back slopping against the side of it, from what I can see, but otherwise: fresh sod, cinder blocks, and fake stone. In other words, flipper cheese.

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  42. David Losh

    RE: lecadidupe @ 42

    You’ve hit on my pet peave. People looking at internet pictures can’t determine what is good, or what is wrong. They are pictures.

    Once you, well, when I stand in the place I can feel the difference between this, and other less thoughtful projects.

    In terms of the fixtures that was another thing I struggled with years ago. I used to have a ton of stuff in my basement that was period. If I saw soemthing that was a great value I’d keep it. Then one day I saw Restoration Hardware, and was very impressed.

    I still kept to my period piece theories until I had a project that didn’t sell. It was priced right. We took it off the market and put in the cheesey stuff that was suggested, and it sold first week end same list price, from the Open House. Off market less than two weeks, cost to me was about $500 in materials.

    Cheesey sells.

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  43. David Losh

    RE: Macro Investor @ 41

    This is a new theory for me. I want to call it the best house in the neighborhood theory.

    If you look at the work being done to homes on North Queen Anne it looks to me that all the houses will catch up to this one eventually. I already see it on Capitol Hill around Saint Joe’s.

    I started thinking this way as soon as about two months ago when some friends bought the best house in Greenwood north of 85th. I thought it was kind of a dumb purchase.

    I spent some time talking with other rehabbers in the neighborhood who pointed out that all the little cracker boxes will be torn town, and rebuilt. Are you sure? Where else, in city, will you get cheap dirt?

    I thought it was a good point. Some neighborhoods have room to grow.

    Issaquah Highlands? Lots of dirt, lots of room, lots of houses with few, or no job centers.

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  44. Macro Investor

    RE: lecadidupe @ 42

    Leca — see the Ira comment # 18. The montlake house is on a busy street. That explains why nobody wants it.

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  45. Macro Investor

    By David Losh @ 44:

    RE: Macro Investor @ 41

    This is a new theory for me. I want to call it the best house in the neighborhood theory.

    You might want to keep working on finding new theories — I thought that was a very old one. I think the other agents will tell you that’s so.

    It sounds like you have an infatuation with this builder. I also admire good work. But I’m sorry — no way does a good remodel justify $480/foot. You can find article after article about how most remodels don’t pay off. I still say it’s more likely they bought the house themselves at their construction cost just to keep the bank off their backs.

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  46. David Losh

    RE: Macro Investor @ 46

    You’re right I do have a fascination with the remodeler. She is the listing agent.

    The Real Estate theory is that you never buy the best house in the neighborhood. That has been my theory in the past.

    My business model has changed this past three years. I think people will improve the properties they live in because they don’t have the ability to sell. I also think that spot lot construction is once again viable, if it is of high quality.

    All the articles about home improvement are based on sales, rather than ownership. In my opinion there has been a huge shift in what people will, and will not pay for.

    Give me a few minutes, now you have me curious about the viability of $480 a square foot. You are right that does seem pretty high.

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  47. David Losh

    RE: Macro Investor @ 46

    The price per square foot is $417. Actives are at about $277, and solds at about $300 per square foot. That would put the sold price at $930000.

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  48. ;

    - you could add an extra point on the chart plotting the average estimated date and average estimated price
    – then take the difference between the actual and estimate to calculate the error in the estimate

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  49. lecadidupe

    RE: Macro Investor @ 45

    Flippercheese ™ is obviously not a deal-killer, or the place on QA wouldn’t have sold (you’d think folks splashing out a million-plus for a house in Seattle would be a bit more discerning…). That’s why I didn’t say it was the reason the Montlake place wasn’t selling. As for Ira’s comment, the guy has an almost molecular-level knowledge of Seattle neighborhoods, so you better believe I read it when he first posted it.

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  50. Absinthe

    RE: 3rd Generation @ 1 – In contrast, I think it’s a really fun feature, and additionally underlines how hard it is for even well informed market watchers to time or predict specifics in the market.

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  51. David Losh

    RE: lecadidupe @ 50

    This thread kind of fits in to the Craig post Tim referred to about the price of down town condos.

    The Queen Anne flip is what is called a condo alternative. It’s completely redone with, I presume, years of worry free enjoyment. I would start saving for a paint job, but other than that this is a stand alone new construction with charm at only $417 a sq ft.

    This also ties into the neighborhood smack down.

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  52. splainin

    To update this, I’ve since learned that the Queen Anne house was not sold, but that the remodeler instead took it off the market and is moving into it. David – does this mean that I am in the real estate business and you are not? ;-)

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  53. David Losh

    RE: Splainin @ 38RE: splainin @ 53

    You are right. It’s the investor who bought it, and also has another Project house in the same area she has up for lease.

    You are also correct about the price.

    To me this is very disappointing, and really a bad thing for the market place.

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  54. lecadidupe

    Looks like the Montlake place is under contract; the most recent price was $569,900. Hope the buyers do a thorough structural inspection.

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  55. Ira Sacharoff

    By lecadidupe @ 55:

    Looks like the Montlake place is under contract; the most recent price was $569,900. Hope the buyers do a thorough structural inspection.

    It’s listed on the NWMLS as “Contingent”, which may indicate that completion of this transaction is dependent on the sale of the buyer’s home.

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  56. Kary L. Krismer

    By Ira Sacharoff @ 56:

    By lecadidupe @ 55:
    Looks like the Montlake place is under contract; the most recent price was $569,900. Hope the buyers do a thorough structural inspection.

    It’s listed on the NWMLS as “Contingent”, which may indicate that completion of this transaction is dependent on the sale of the buyer’s home.

    Ira, your your own sake you should leave this site and never return. You’re starting to talk like a lawyer, and the damage might be irreversible!

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  57. Ira Sacharoff

    RE: Kary L. Krismer @ 57
    So you think it’s because I hang out with lawyers too much online, and it’s contagious?
    There’s got to be some kind of antidote. Maybe I can buy some attorney repellant on ebay.

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