Posted by: Timothy Ellis (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.

42 responses to “Weekly Twitter Digest (Link Roundup) for 2011-12-10”

  1. Kary L. Krismer

    I wrote on the bank excise tax issue over a month ago:

    http://www.trulia.com/blog/kary_l_krismer/2011/11/more_bad_bank_listing_practices

    I went a bit further than the piece you linked, suggesting that it might be a Consumer Protection Act violation because the terms are not disclosed to consumers, and also pointing out that it’s yet another self-defeating measure of stupid bank management.

    Most the bank listing are under $250,000. Many if not most of the owner occupant buyers have limited funds for making a down payment, but these banks want to have them come up with an additional 1.78%? All they are doing is limiting the demand for their listings, and thereby reducing the price they recover.

    BTW, this issue isn’t applicable to entities like Fannie and Freddie, because they’re exempt from having to pay the excise tax. Just think how much money the state and counties are losing because of that exemption!

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  2. raymond pepper

    forgot all about these guys Findwell….Please someone tell them they gotta fix this typo: http://www.findwell.com/real-estate-agents

    also Tim being the stat guy u are can you verify this: http://www.findwell.com/real-estate-agents/nick-jarman

    everytime a check their office minimum goes up up up: “Our current minimum fee is $6,500″

    Findwell’s Lisota must be a reject from Red Fin because I cannot imagine anyone paying MORE to utilizing their services..

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  3. David Losh

    RE: raymond pepper @ 2

    Actually they bring a lot more to the table than redfin, what’s the problem with that?

    I was a little surprised your web site uses Zillow as a search tool.

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  4. Kary L. Krismer

    RE: raymond pepper @ 2 – Interesting approach. Provide links to your competitor’s website! ;-)

    I’m not seeing the typo, but as to the second issue you raise I suspect that the “over 200″ in the bio covers what you’re concerned about.

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  5. Kary L. Krismer

    The Smith Tower situation is interesting. Buy building, kick out most of the tenants, then don’t do what you planned (convert to condos) and apparently don’t do anything else either. If not condos, why not apartments? If not apartments, why not at least try to lease as office space again?

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  6. Dweezil

    RE: Kary L. Krismer @ 1

    Nobody is naming the banks doing this. Hmm. Do these ‘devious’ banks pull this stunt consistently in that any listing owned by those banks needs to be viewed extra cautiously?

    I would not consider the seller’s remarks as a binding contract, so at what point does the excise tax make a legally binding appearance?

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  7. raymond pepper

    RE: David Losh @ 3

    David tell me EXACTLY what they bring to the table that you would consider to be “more.”

    We love Zillow at 500 Realty! Its Free and a great resource tool…Did you see who’s search engine we use as # 1 and # 2??….Windermere and JLScott….We love all 3…!!….We believe if a Buyer comes to us and they get lost in the Windermere or JLS website, and we lose them as a customer, then they were never ours to begin with…

    You can only educate the brain-dead to a certain limit…….

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  8. raymond pepper

    RE: Kary L. Krismer @ 4

    check out the spelling of “mutuAl” ……….

    again providing links to competitors is crucial since we claim to be the “Best Deal You Will Find Anywhere”….its all about empowering the consumer!!….

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  9. David Losh

    RE: raymond pepper @ 7

    I’ve always recommended the John L Scott search site. It is the best. I also like Zillow.

    Findwell is a person who actually cares about Real Estate, the Real Estate business, and Real Estate community.

    In my opinion it is worth more, for every one, to promote those business models that are a service to the consumer.

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  10. ChrisM

    RE: David Losh @ 9 – Zillow is crap, at least if you’re searching by lot size. Getting zillow to correct the errors is a complete waste of time.

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  11. Ira Sacharoff

    RE: ChrisM @ 10
    Zillow is fun. But as far as them accurately providing to you the current market value of your home, it’s pretty worthless. Or right maybe 20% of the time? Sometimes it seems they’re way off. It does provide entertainment. And would have been a good stock to short when it became publicly traded.

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  12. Scotsman

    Zillow’s wacked. My home is worth about 60% (generous) of what they claim. It has never even been close. They must do better in the city or in developments.

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  13. Jonness

    By raymond pepper @ 2:

    Findwell’s Lisota must be a reject from Red Fin because I cannot imagine anyone paying MORE to utilizing their services..

    I’ve looked at them all. 500 Realty is by far the best deal going.

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  14. ChrisM

    RE: Ira Sacharoff @ 11 – Oh, I’m not even talking about the zestimate stupidity.

    They’ve got some data conversion problem where it appears sometimes they expect lot size to be in sq ft, other times they expect it to be in acres. Well, they had it a couple of years ago. Maybe they’ve fixed it since then, I stopped using them long ago.

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  15. David Losh

    RE: Jonness @ 13

    I’d like to hear how 500 Realty is a deal.

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  16. Ray pepper

    RE: David Losh @ 15

    Hmmm. A deal. Well, with every closing in 2012 the client gets a 500 Realty tshirt, a 500 Realty pen, and coming next week a 500 Realty calendar. Or you can choose to take the 500 Realty Mystery Box that I personally fill with a variety of highly desirable items!

    Now that’s a deal!!!!

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  17. David Losh

    RE: Ray pepper @ 16

    Well, for as much as you charge, I think dinner, and drinks first would be appropriate.

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  18. raymond pepper

    RE: David Losh @ 17

    agreed! Thats why I say…………..take the mystery box…but shhhhhh…don’t tell everyone to do it!
    There just may be a dinner and drinks in the box.

    But, sometimes a bird in the hand is better. The form fitting 500 Realty T Shirts make even the most obese or most hideous look both 5-10 pounds lighter and 5-10 years younger!!

    But, between you and me……………………………………..take the box.

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  19. David Losh

    RE: raymond pepper @ 18

    John Wagner Escrow will write up a Real Estate Purchase, and Sale Agreement for about $600, if you use his escrow service.

    Why do people pay all of this excessive money to have a Real Estate brokerage fooling around with a done deal?

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  20. Jonness

    By David Losh @ 15:

    RE: Jonness @ 13

    I’d like to hear how 500 Realty is a deal.

    One of their agents helped to talk me out of buying a house that would have put me underwater by now. For this service, he charged me $0. I’d call that a pretty good deal.

    Seriously, this guy is the only agent I’ve ever worked with that I have felt has my best interests in mind. Every other agent, no matter how fancy their brick and mortar, and no matter how much they charged, has gone for my jugular.

    That’s my experience. Others’ mileage might vary. :)

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  21. raymond pepper

    RE: David Losh @ 19RE: David Losh @ 19

    600??????? What a rip off!!!

    For a done deal?? Our agents write it up for 200!!!

    Who would pay 600 when they already have a mutual Buyer and seller that agree on all terms? I will tell you……….The Braindead!!…Not sure who John Wagner is but I find that a COMPLETE RIP OFF!!

    However, most of our Buyers need to tour homes and take multiple months to find a home they desire. They also need multiple offers written up and there is no Escrow company in this GALAXY that has the capability to do this or even have MLS access.

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  22. Kary L. Krismer

    By Dweezil @ 6:

    RE: Kary L. Krismer @ 1

    Nobody is naming the banks doing this. Hmm. Do these ‘devious’ banks pull this stunt consistently in that any listing owned by those banks needs to be viewed extra cautiously?

    I would not consider the seller’s remarks as a binding contract, so at what point does the excise tax make a legally binding appearance?

    I believe they are all state chartered banks, but I’m not certain of that. I’ve seen the comments in the agent only comments, but that’s the only time I’ve personally come across it.

    You’re right the remarks are not part of the contract. It would be added in as part of the bank’s addendum, which typically comes back in response to an offer. In the link Tim used, they phrase used was “transfer taxes” which I could see someone might not realize included our “excise tax.”

    This is yet another reason why it is more important to have an attorney review the paperwork on an REO property.

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  23. Kary L. Krismer

    By David Losh @ 19:

    RE: raymond pepper @ 18

    John Wagner Escrow will write up a Real Estate Purchase, and Sale Agreement for about $600, if you use his escrow service.

    Why do people pay all of this excessive money to have a Real Estate brokerage fooling around with a done deal?

    Quite some time ago someone from this site called me wanting me to help them put together a deal. I don’t recall all the specifics, but they’d already found the property, I think even come up with an agreed price. That basically left only drawing up a contract and doing an inspection. Some agents will do that for a reduced fee. I refer such people out to an attorney. Attorneys might not be able to deal with the inspection issues as well, so if that’s a concern I would probably agree to do that hourly.

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  24. Kary L. Krismer

    By raymond pepper @ 21:

    RE: David Losh @ 19RE: David Losh @ 19

    600??????? What a rip off!!!

    For a done deal?? Our agents write it up for 200!!!

    That is probably the unauthorized practice of law. Agents are only authorized to fill in forms in limited circumstances. The leading case in Washington is Cultum v. Heritage House Realtors, Inc. There the court did allow agents to fill out forms in limited circumstances. Specifically they said:

    Our decision provides that a real estate broker or salesperson is permitted to complete simple printed standardized real estate forms, which forms must be approved by a lawyer, it being understood that these forms shall not be used for other than simple real estate transactions which arise in the usual course of the broker’s business and that such forms will be used only in connection with real estate transactions actually handled by such broker or salesperson as a broker or salesperson and then without charge for the simple service of completing the forms.

    You are probably violating both the highlighted provisions because it’s not a transaction being handled by your firm and you are charging for the simple service of completing a form. Is it really worth the $200?

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  25. David Losh

    RE: Jonness @ 20RE: raymond pepper @ 21

    OK, now I’m really confused. So you are saying that an agent that works at the Brokerage Ray manages made representations about a property. You are also stating that you feel this service was worth $0. I get that.

    What I don’t get is if an agent is opening doors, and making representations about a property, and you are following the advise of that agent, and it takes months, and multiple offers, why wouldn’t you pay for that.

    And the going rate for a virtual assistant transaction is between $300, and $350.

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  26. Kary L. Krismer

    RE: David Losh @ 25 – I think he’s saying it was a valuable service, but since no transaction ever closed he didn’t have to pay anything for that service.

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  27. raymond pepper

    RE: David Losh @ 25

    David..Your always so confused..Read here: http://www.500realty.net/faq.php

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  28. raymond pepper

    RE: Kary L. Krismer @ 26

    Correct Kary!

    I live my life by rarely paying ANYTHING upfront until ALL SERVICES ARE RENDERED…

    This is why I can’t tell people to utilize WA LAW because the 500 due up front and the remaining 3500 due in 6 months is INSANE..Plus I hate hourly fee limits for tours. We have 4-5 clients who have been looking for 2+ years!! But, our Agents must like the clients or the time with them..

    However, if our Agents feel their services are not being used in a productive manner we FIRE the client and send them to Red Fin or Sky Line. If they are a seller we highly recommend MLS4Owners as well.

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  29. raymond pepper

    RE: Kary L. Krismer @ 24

    absolutely Kary! 200 is more then enough for our Agents to engage a motivated Buyer and Seller that agree on all terms.

    We have a form that limits our Agent duties in this case but most of the time we send it over to one of our Attorney’s because as you know Attorneys have to eat too!

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  30. David Losh

    RE: raymond pepper @ 27

    I understand your business model, but just don’t understand why some one would think it’s a good deal.

    You charge a LOT of money.

    If your agents are in fact making representation, if your agents are giving advice, how are your service any different than a mortar and brick.

    I’ll go a step further, you make all kinds of claims about you being the cheapest, that every one else is charging so much more, how is that very public set of claims a benefit to your clients?

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  31. David Losh

    RE: raymond pepper @ 29

    The case says you can’t charge for the service.

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  32. Kary L. Krismer

    By David Losh @ 30:

    If your agents are in fact making representation, if your agents are giving advice, how are your service any different than a mortar and brick.

    Are you advocating that lower price has to mean less service? Should Ray limit his clients to one picture or charge them for lock boxes? Ray could do that if he wanted (I’m pretty sure he doesn’t), but there are certain things he cannot do.

    Two of the many duties state law imposes on agents are: (1) To exercise reasonable skill and care and (2) To disclose all existing material facts known by the licensee and not apparent or readily ascertainable to a party. To some extent they have to make representations and give advice, and the quality of that advice will vary from agent to agent. It doesn’t necessarily correlate all that well to how much the agent is paid.

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  33. Kary L. Krismer

    RE: raymond pepper @ 29 – I meant is $200 enough to break the law? $200 is probably more than enough to fill out forms, but I’m virtually certain you can’t provide that service for a fee based on the case I cited.

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  34. David Losh

    RE: Kary L. Krismer @ 32

    If an agent is making claims, and using reasonable skill, there is a cost associated with that. There is also a cost in disclosing material facts, you would need to know the facts. You also need the where with all to know that if you do disclose facts you may well need to walk away from a property.

    Now let’s bury this part of my comment about REOs here. An REO can put anything into the comments. That’s the appropriate place. It’s all a matter of negotiation. Banks are going to make the most standard form of disclosure that they can. You can find that a buyer is expected to put on the new roof in an REO, or apply for a rehab loan. That is where you would find the terms of the transaction as the listing agent knows them.

    If an agent is ill equipped to deal with an REO transaction they need to refer, or walk away.

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  35. Jonness

    By David Losh @ 25:

    What I don’t get is if an agent is opening doors, and making representations about a property, and you are following the advise of that agent, and it takes months, and multiple offers, why wouldn’t you pay for that.

    There is not a whole lot to it. Ray’s agent gave me some good advice. I decided not to buy. Since he works on commission, he didn’t get paid. Obviously, I’ll eventually buy a house, so it will work out for both of us.

    A lot of agents would not have been honest with me in that situation. Thus, I’ve really come to appreciate this guy.

    I’m not sure how anybody else has fared with Ray’s business. I can only speak from my own experience. In order to work with an agent, you have to be pre-approved within the previous 3 months and keep it up to date if you don’t buy right away. Then it is just like working with any other agent. The difference is, once you buy, Ray’s agency refunds you 75% of the commission.

    However, since Ray’s agency works on a discount, I try to do as much legwork on my own as possible. I don’t want to take advantage of an extremely good situation.

    I’ve never worked with Ray personally, so I can’t say whether his is a good or bad agent. However, I’m really impressed with his business model, and I’ve had a very good experience with one of his agents.

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  36. David Losh

    RE: Jonness @ 35

    Ray makes a LOT of money.

    Good agents tell many people not to buy some of the properties they just “love” because they will be haunted with that sale. Most agents want a good clean transaction that they can refer back to years from now. That’s the business.

    What surprises me is that you think the business model is a “good deal” based on the rebate. The rebate term is correct, it’s not a discount it is actual cash in hand.

    That actual cash in hand is what multi service providers want. When ever you do a deal with a rebater we all know who to solicit for immediate business. That’s how Glenn gets investment dollars. Third party vendors know who will have cash in hand.

    The second part is you have said you are doing leg work, because you realize you are getting this good deal. There is a point where you become unprofitable. In your case you are advertising for Ray so be it. In other cases the “buyer” is referred out.

    Client referral is a sub business model to Real Estate.

    Now Ray will come to say it ain’t so, but it’s in his web site. An agent can sell a client list, or make a 20% referral. Agents become “associates” of redfin for that purpose.

    So the “buyer” thinks they are doing something, and the Brokerage is counting dollars.

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  37. Kary L. Krismer

    By Jonness @ 35:

    Obviously, I’ll eventually buy a house, so it will work out for both of us.

    And I suspect that’s how they’re viewing it too.

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  38. ray pepper

    RE: David Losh @ 36 -

    David if your lucky enough to ever get assigned a 500 agent you will see what I hear every month. Unfortunately, we pass nearly all clients to Red Fin or mls 4 owners because our agents will not take more then 2 clients at a time or they fail to provide us a pre-approval up to our expectations.

    We have the freedom to be very picky because we are all very busy with our own investments, auctions, travelling, and family obligations. We continue to have zero debt and zero overhead and I doubt there are very many brokerages anywhere that would continue to operate as we do. The education of the consumer has taken off much quicker due to this housing collapse and saved us so much time and energy at various home shows and we find no need to even advertise anymore.

    When you offer the best there is in any business people find you and there is never a need to “sell clients ” or push a sale. The dilemma is always time. There is never enough of it!

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  39. David Losh

    RE: ray pepper @ 38

    You are a funny guy, but also the most expensive Brokerage business model I have ever seen.

    You are right you have zero over head.

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  40. ray pepper

    RE: David Losh @ 39 -

    We are striving to give 100% back to buyer but we are still a few years off from that. It is a goal of ours but we need a bit of help from the economy but for now 75% of the commission to buyers and 200.00 MLS listings is the best we can offer!

    If you can find a better deal please advise so we can continue to advertise our motto ” The Best Deal You Will Find Anywhere! ” and my favorite. “Your Only True Friend in Real Estate “

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  41. David Losh

    RE: ray pepper @ 40

    I think it’s important that you stress you are a lead generator.

    redfin provides technology, Craig at WaLaw is an attorney who is trying to figure stuff out.

    I like the Findwell guy, and trust he will be a good Broker. He has demonstrate a willingness improve the Real Estate community.

    These are Brokerages that provide more than price. If price is a concern, and if that is the only concern of the buyer, they should pay an attorney, and avoid agency all together.

    In terms of listing MLS for Owners does provide a marketing platform. I would never recommend them, but they do provide a service.

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  42. Kary L. Krismer

    By Kary L. Krismer @ 24:

    By raymond pepper @ 21:
    RE: David Losh @ 19RE: David Losh @ 19

    600??????? What a rip off!!!

    For a done deal?? Our agents write it up for 200!!!

    That is probably the unauthorized practice of law. Agents are only authorized to fill in forms in limited circumstances. The leading case in Washington is Cultum v. Heritage House Realtors, Inc. There the court did allow agents to fill out forms in limited circumstances. Specifically they said:

    Our decision provides that a real estate broker or salesperson is permitted to complete simple printed standardized real estate forms, which forms must be approved by a lawyer, it being understood that these forms shall not be used for other than simple real estate transactions which arise in the usual course of the broker’s business and that such forms will be used only in connection with real estate transactions actually handled by such broker or salesperson as a broker or salesperson and then without charge for the simple service of completing the forms.

    You are probably violating both the highlighted provisions because it’s not a transaction being handled by your firm and you are charging for the simple service of completing a form. Is it really worth the $200?

    Ray (and David),

    I went back and re-read the Cultum decision, and it was not a majority opinion. They couldn’t get 5 Justices to agree. The four other Justices didn’t think the payment issue was that big of a deal.

    Still, there are liability issues associated with drafting purchase and sale agreements. So I would still ask: Is $200 worth it?

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