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.

81 responses to “Guess the Price Round 2: We Have a Winner!”

  1. Kary L. Krismer

    So far you guys are doing considerably better than Zillow.

    Tim, what’s the term for that? The idea that if you have 200 people guess the number of jellybeans in a jar, the individual guesses may be far off, but collectively it will likely be pretty close.

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  2. Kary L. Krismer

    RE: The Tim @ 2 – Yes, thank you. And for the benefit of others, from that link:

    The classic wisdom-of-the-crowds finding involves point estimation of a continuous quantity. At a 1906 country fair in Plymouth, eight hundred people participated in a contest to estimate the weight of a slaughtered and dressed ox. Statistician Francis Galton observed that the mean of all eight hundred guesses, at 1197 pounds, was closer than any of the individual guesses to the true weight of 1198 pounds. [4] This has contributed to the insight in cognitive science that a crowd’s individual judgments can be modeled as a probability distribution of responses with the mean centered near the true mean of the quantity to be estimated

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  3. Kmac

    Collective wisdom & group wisdom are two other names for it.

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  4. Pegasus

    RE: Kary L. Krismer @ 3 – Is that related to mass hysteria?

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  5. Ira Sacharoff

    I’m not certain, but I think if you put on a blindfold and threw darts at a dartboard with home prices on it, you’d probably get closer than Zillow. Or maybe that’s their technique.

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  6. No Name Guy

    While the crowd appears to have nailed the price within a few percent, it appears to be well off on the sale date. Just eyeballing that scatter plot with dates and prices it looks like only about 7 guesses were within a month and a half of the closing date. And all of those guessed early. Only 3 of the 52 appeared to have guessed a later date.

    What was the average and mean of the dates?

    Might be instructive to see an asking price versus history plot for those thinking / needing to sell in this market (or for those looking to buy and beat down a seller). Perhaps put the dots of asking price / date on the above plot of the guesses?

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  7. Jimmy

    That place is worth about 75k-100k max. Seattle is wildly overvalued. But I admit at least people get to enjoy the 35 degree drizzle and gray for 9 months out of the year and the never warm enough to actually enjoy the summer summertime weather. Seattle=Live in debt for an overpriced dump or leave.

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  8. Kary L. Krismer

    RE: No Name Guy @ 7 – Time is a total wild-card. If something doesn’t go quickly, you never know when that one person who wants to buy it will come by. I describe it as being like fishing.

    Also, it would be affected by when price cuts occur. Good luck predicting that, unless the agent has a pattern.

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  9. deejayoh

    By Ira Sacharoff @ 6:

    I’m not certain, but I think if you put on a blindfold and threw darts at a dartboard with home prices on it, you’d probably get closer than Zillow. Or maybe that’s their technique.

    By The Tim:

    This time around the collective intelligence of Seattle Bubble overshot slightly, with the average of all the guesses coming in 5.5% above the final sales price. So far you guys are doing considerably better than Zillow. Nice!

    Well, in this case, the Zillow value the day the contest started was $564K – which was only off by about 1% to the final sale value. I know because I put it into my comment on the original thread. Just sayin’…

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  10. softwarengineer

    RE: Jimmy @ 8

    Come On Now Jimmy

    Be a sport, just because a low class minimum wage earner first bought that house some 60-90 years ago, doesn’t mean the CEO or branch manager type qualification income [top 2%]today wouldn’t mind living in it? Hades, its newly remodeled….that justifies the costs?…sarc

    What gets me is the dinky old fashion galley kitchen, original single bathroom, no decent storage space and small closet they put in museum piece houses can’t be remodeled…just white-washed. Another problem is old fashion wiring can’t run today’s appliances without overload, I’ve seen re-wiring of museum piece homes with the wires on the outside of the walls, to preserve the original design…..looks kind of like a factory wiring job in an old warehouse or a do it yourself basement remodel. Plumbing is another pitfall, like Kary said, its probably been replaced a few times along the way, and cross your fingers the mixes of new, old and remodeled 2 or 3 times holds [God help you if they've mixed copper with CRES]….but hey, its a nostalgic museum piece to own. Did you hear, the Old House Cafe in Tacoma [1920] is changing hands….go down there and take a look at the remodeling to keep the historic features….outside the wall wiring and added lights with the equivalent of visible ceiling extension cords…..what else could ya do, completely gut the dry wall and destroy its museum flavor to re-wire it????

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  11. Ira Sacharoff

    By deejayoh @ 11:

    By Ira Sacharoff @ 6:
    I’m not certain, but I think if you put on a blindfold and threw darts at a dartboard with home prices on it, you’d probably get closer than Zillow. Or maybe that’s their technique.

    By The Tim:

    This time around the collective intelligence of Seattle Bubble overshot slightly, with the average of all the guesses coming in 5.5% above the final sales price. So far you guys are doing considerably better than Zillow. Nice!

    Well, in this case, the Zillow value the day the contest started was $564K – which was only off by about 1% to the final sale value. I know because I put it into my comment on the original thread. Just sayin’…

    Even a blind squirrel finds an acorn once in a while.

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  12. Chris

    Does anyone have a guesstimate how much profit the flipper made? Anyone see the inside of one of these flipping operations? I knew someone who worked as a carpenter on a crew for that fellow from the 1990s who had a real estate radio program. The whole thing collapsed and the radio guy went to prison if I remember correctly. I’ve wondered how these projects pencil out ever since. If it didn’t work in Seattle in the 1990s where/when does it work?

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  13. Chris

    RE: The Tim @ 15

    Not to mention cost of capital – either via interest payments or opportunity cost (if they paid cash). Seems like a lot of risk to take on for a very modest return.

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  14. Chris

    Wow, pretty tight margins. If they did more than one of these projects I would think they would have to also have a general contractor’s license and all the fun involved in being a business with taxes, liability insurance etc. I remember the general contractor issue came up in a newspaper article Scotsman posted a few months back.

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  15. Chris

    I found that article Scotsman sent the link for last February about a house flipper on the Eastside. The comments section had the general contractor requirements:
    RCW 18.27.010 (condensed)
    (1) “Contractor” includes any person who undertakes to alter, repair, or improve any building or improvement attached to real estate or to do any part thereof including the installation of carpeting or other floor covering, the erection of scaffolding or other structures or works in connection therewith, the installation or repair of roofing or siding, performing tree removal services, or cabinet or similar installation; or, who, to do similar work upon his or her own property, employs members of more than one trade upon a single job or project or under a single building permit except as otherwise provided in this chapter. “Contractor” also includes a consultant acting as a general contractor. “Contractor” also includes any person covered by this subsection who offers to sell their property without occupying or using the structures for more than one year from the date the structure or improvement was substantially completed.

    http://seattletimes.nwsource.com/html/realestate/2014125179_realyoungrealtor06.html

    Anyone know what it costs for a contractors license? Do they also have to be bonded? Thanks for all the good info. I guess I made the right decision in the 1990s not to flip houses (and to stop sniffing glue)!

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  16. Kary L. Krismer

    RE: Chris @ 19 – They made a change in the law about 4 years ago which required that virtually ever flipper register. Given that timing, I think it’s rather clear that change in one law cause the entire economy to collapse. ;-)

    I’m not sure becoming registered is that expensive. The biggest expense is probably the bond, and you can do a cash bond. I’m not sure how large of a bond is now required. Years ago it was only 6k, but I’m pretty sure it’s increased since then, probably to 10k or 20k.

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  17. Chris

    Exactly right Kary – http://www.lni.wa.gov/TradesLicensing/Contractors/HowReg/default.asp#5
    Not as much as I would have thought. To get a contractor’s license is $113 a year plus they need a $12k bond and $50k liability.

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  18. Kary L. Krismer

    RE: The Tim @ 15 – I think your $100,000 is high, but that would depend a lot on what they spent on the kitchen.

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  19. Kmac

    RE: Chris @ 21

    A 12K bond will run you $300-1000, depending on your credit and $1,000,000 insurance will run you 1500-2000 for starters. A million would be eaten up quickly when lawsuits start to fly.
    12k in lieu of bond is an option but will be tied up for two years beyond termination or with replacement with a bond.

    Also, lead litigation isn’t covered under normal policies, so if rehabbing anything earlier than 1978, pony up more for environmental pollution coverage. Asbestos too.

    A lot of risk in todays market for a measly $30k

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  20. Chris

    I guess I understand house flipping. Around $30k isn’t pocket change – probably not worth the risks but at least some return. What I don’t understand is condo flipping. Wouldn’t that always be a sign of an overheated market? How could you ever recover costs after transaction costs? It’s interesting how casually Bernanke dismisses a national housing bubble and mentions condo flipping here (in 2005) starting after the one minute mark.

    Was there much condo flipping in the Seattle area during the height of the bubble/subprime days? If so when did it stop (if ever)?

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  21. Kary L. Krismer

    By Kmac @ 23:

    12k in lieu of bond is an option but will be tied up for two years beyond termination or with replacement with a bond.

    I assume those accounts still earn some small amount of interest, so really the cost is merely not having access to what hopefully is a small amount of your money for a period of time.

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  22. Chris

    RE: Kmac @ 23
    Looks like a lot of liability risks for a $30k. I think on some of those issues they can sue decades later. I understand Merlin Olsen sued companies he worked for in his teens.

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  23. NewHomeOwnerInFremont

    RE: Chris @ 26 – I am not a flipper but 30K (~5.8% return on what they put into the flip in less than a year) is not bad—not terrific either. As long as the flipper doesn’t lose his shirt, he or she can live another day to flip another property.

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  24. David Losh

    The real question is why some one would pay $558K for that.

    The property didn’t sell for $480K, it was lowered to a selling price of $370K. So, in theory some one could have made an offer of $390K, any time, but didn’t.

    Instead some one paid $188K for a remodel that they financed for 30 years. Is it worth the money? .

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  25. David Losh

    RE: The Tim @ 15

    Rehab rule is between $60K to $80K, but you are probably close.

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  26. Jonness

    By The Tim @ 15:

    By Chris @ 14:
    Does anyone have a guesstimate how much profit the flipper made?

    Here’s a breakdown of costs. The biggest guess in here is the “Rehab” cost, which I am totally shooting blind on.

    Purchase Price: ($370,000)
    Closing Costs: ($9,250)
    1 Year Taxes: ($4,612)
    Rehab: ($100,000)
    Sale: $558,000
    Agent Fees: ($33,480)
    Excise Tax: ($9,932)
    Profit: $30,726

    The RE agents made a lot more money but did a lot less work. Forget flipping. The money is in the paperwork.

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  27. David Losh

    RE: Jonness @ 30

    agent fees are divided by four. two agents, two brokerages.

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  28. Scotsman

    RE: David Losh @ 31

    Don’t forget almost zero risk.

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  29. Kmac

    By Kary L. Krismer @ 25:

    By Kmac @ 23:
    12k in lieu of bond is an option but will be tied up for two years beyond termination or with replacement with a bond.

    I assume those accounts still earn some small amount of interest, so really the cost is merely not having access to what hopefully is a small amount of your money for a period of time.

    Right, but more often than not it’s about the cashflow.

    Just to clarify my earlier comment, $30k profit in a “normal” market is one thing. Trying to make 30k by leveraging up 500k in this market is something entirely different.

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  30. Hugh Dominic

    By Jonness @ 30:

    The RE agents made a lot more money but did a lot less work. Forget flipping. The money is in the paperwork.

    You got that right. The local government made $10k for doing nothing. The brokers made $12k after taxes for doing nothing. Whoever handles closing made $9k for almost no work. The agents and brokers made $12k after taxes for not much work.

    The flipper made $25k after taxes for a ton of work and risk.

    Who do you want to be?

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  31. Pegasus

    RE: The Tim @ 15 – Interesting breakdown. If you could get rid of all the fees and taxes you could make a buck. I doubt they put a $100,000 into the place. Prolly used undocumented workers and junk stripped from foreclosures to redo the place. The transaction, even if they really did put a $100,000 into the place, shows how tuff it is to make a buck with all the hanger-ons attached to a transaction that are not at risk in the transaction. Unless you are stupid you would never take on the risk and front the transaction with your own money for investment purposes. All you are doing is making other people and governments wealthy for doing little if nothing at all to justify their fees. Sickening!

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  32. Chris

    Seeing the amount the agents and state made on this one transaction got me thinking about all the fence sitters. Wouldn’t real estate agents and state governments be a lot better off if there had been a sever but quick reset of real estate prices a couple years ago without all the tax rebates, 3% down FHA loans, GSA bail outs etc? It seems better to have two $300k transactions than one $450k transaction. I suppose some homeowners would be trapped underwater but I bet people are still going to get married and buy their first homes, have kids etc and want to buy a home if the market wasn’t so out of balance. Isn’t everyone hostage to artificial value pumping for the benefit of the TBTF banks? CBS news just had a story about how NAR revised their sales figures down for the last few years.

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  33. Kmac

    By Pegasus @ 35:

    RE: The Tim @ 15 – Interesting breakdown. If you could get rid of all the fees and taxes you could make a buck. I doubt they put a $100,000 into the place. Prolly used undocumented workers and junk stripped from foreclosures to redo the place. The transaction, even if they really did put a $100,000 into the place, shows how tuff it is to make a buck with all the hanger-ons attached to a transaction that are not at risk in the transaction. Unless you are stupid you would never take on the risk and front the transaction with your own money for investment purposes. All you are doing is making other people and governments wealthy for doing little if nothing at all to justify their fees. Sickening!

    That has been my experience. For all the risk I took on with new construction, I barely made more than the bank or the total re commissions, individually.
    If you could get rid of one or the other, it would make things much more equitable.

    Despite what people think, builders of new construction, unless they are really dealing in volume, aren’t making as much $$ as you think they are. National average was less than 8% gross profit when times were good.

    I guess flippers of existing properties are a different beast.

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  34. David Losh

    RE: Pegasus @ 35RE: Scotsman @ 32

    The reason I got a Real Estate license in 1984 was because we had a painting company that had the contract on two condo projects, and an option on a third.

    The developer is a dick who was bankrupting his LLCs for fun, and profit. I always got paid, except for $2000 for repainting the doors purple to make the units sell better. We didn’t take the option on the third project which where I would have collected my full payment.

    The stinkin’ Real Estate agent would come in every friggin’ day, pull into the garage in his BMW, pull out a card table, and folding chairs, then dog about not being able to make a sale.

    I figured out he made about what I made for doing nothing.

    The developer was making money, the Real Estate agent was making money, and every one else was getting shafted. One of my buddies lost $150K by moving plumbing fixtures onto the job sites so he could get the bank draw. Banruptcy came first.

    Sorry, I needed to rant there just for a minute, I’m better now.

    The fact is that being a Real Estate agent, to be good at it, is a lot of work. It’s like anything else. It’s a business.

    It’s all kind of the same. You take a risk at any business. The agent didn’t have to get paid. He could have lost the deal, lost the listing. You never know.

    There are good agents who make a good living, and bad agents who get by.

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  35. Macro Investor

    Let’s invite the suckers (er, I mean buyers) out for drinks to find out what they were thinking. Or Tim could just interview them. It seems like such a tiny little place, 1800 finished sq feet on a postage stamp lot, for $558k. Seems outrageous.

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  36. David Losh

    RE: Macro Investor @ 39

    Yes, please, and the agent who “wrote it up.”

    Market says the property is worth $370K, but less than a year later it sells for $190K more. That must be some spectacular remodel!

    $190K??!!! Come on.

    Did any one tour the property? Can we get an update?

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  37. ARDELL

    RE: David Losh @ 40

    What would you say the lot is worth on that, David? You know Capitol Hill better than I do.

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  38. Kary L. Krismer

    By Scotsman @ 32:

    RE: David Losh @ 31

    Don’t forget almost zero risk.

    Hardly, unless you’re factoring in the existence of malpractice insurance.

    Interesting some here are saying that the flipper has liability for life and others are saying that the agent has zero risk. If you look at some of the case law the liability of agents is sort of crazy. It’s been mentioned that this property has possible slippage issues. That’s a liability issue for agents, which I could see, depending on the circumstances, but some case law goes too far, IMHO. See, Jackowski v. Borchelt, 209 P.3d 514. Leaky roofs and septic tanks can also be liability issues for agents.

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  39. Kary L. Krismer

    By Macro Investor @ 39:

    Let’s invite the suckers (er, I mean buyers) out for drinks to find out what they were thinking. Or Tim could just interview them. It seems like such a tiny little place, 1800 finished sq feet on a postage stamp lot, for $558k. Seems outrageous.

    The listings show it at over 3,000 square feet, so presumably the basement was finished at some point.

    If you go from Lynn to Mercer, one block either direction from the main street, this was the third lowest price sale in the last six months, was the lowest price per square foot, was below the mean and the median, but other than that, yes the price is totally “outrageous”. ;-)

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  40. David Losh

    RE: ARDELL @ 41

    Exactly the point, and a really point. The drop from $480K to $370K should indicate some one thought the lot was worth about $370K. That’s what it sold for in an open market. By my thinking it would make the potential for a new construction to have a sales price of $1.1 Million. That’s possible, but a little high.

    I’d put the lot closer to $300K

    The question is if this was a tear down, or worth the rehab.

    Also I realize that I am supposed to say congratulation to the buyer, as you have pointed out, but I really am stymied by Real Estate prices after all that has gone on this year. I’m going to start touring more to get a better feel for it.

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  41. Kmac

    By Kary L. Krismer @ 42:

    Interesting some here are saying that the flipper has liability for life and others are saying that the agent has zero risk.

    Flippers may have liability for lead contamination for life. It is being said by several construction attorneys that specialize in lead related issues that future lead contamination lawsuits will rival the asbestos litigation of past.

    It appears that many of these attorneys do not think that a contractor performing lead work improperly will be able to pass the buck to anyone, even if liability is expressly waived.

    I refuse to buy pollution insurance so I have made the decision that I will no longer get involved in a project that includes pre 1978 paint removal nor will I ever own a pre 1978 house again.
    Government regulations, whether good or bad, at work.
    Homeowners will be constantly watching and many will be gaming for a payday based on the contractor not doing something correctly.

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  42. No Name Guy

    Thanks for the plot Tim @ 9.

    I’m sure they would have sold faster had they priced a lot closer to the final sales price earlier. It took ‘em 2 1/2 months to get down to their final listing price prior to the sale. How many people who looked those first two and a half months moved on to other properties? (Of course, no one will know).

    Kary / Ardell: Both of you have to have experience on the whole pricing versus time to sale. Care to comment on pricing strategies for those who want to sell? Start out lower, or start out higher with several pre planned reductions in list price? Other pricing models? What seems to work better? Yes – it’ll be subjective.

    In the end, one has to wonder at the buyers paying, what was it, 180k, for what the folks here variously estimate at a 60 to 100k remodel, plus the cost of financing for 30 years.

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  43. Pegasus

    RE: Kary L. Krismer @ 42 – Yeah how many of the thousands of real estate agents actually get successfully sued each year for leaky roofs, etc.? Two or three? I think the odds are actually higher that they would get wiped out by a tsunami.

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  44. Kary L. Krismer

    By No Name Guy @ 46:

    Kary / Ardell: Both of you have to have experience on the whole pricing versus time to sale. Care to comment on pricing strategies for those who want to sell? Start out lower, or start out higher with several pre planned reductions in list price?

    I think most people would agree that it’s better to start lower than to eventually end up lower, especially in a declining market. The listing will get the most attention when first listed, and not quite as much on a price change. But again, in a declining market you could start at $500,000 when it should be $450,000, and then lower it to $450,000 when it should be $420,000.

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  45. Kary L. Krismer

    By Pegasus @ 47:

    RE: Kary L. Krismer @ 42 – Yeah how many of the thousands of real estate agents actually get successfully sued each year for leaky roofs, etc.? Two or three? I think the odds are actually higher that they would get wiped out by a tsunami.

    Yet another thing you don’t know anything about! The clue for others is the word “successfully” in the post. Once you’re involved in a lawsuit, you’ve typically already lost, unless perhaps the judge throws the book at the plaintiff.

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  46. Pegasus

    RE: Kary L. Krismer @ 49 – Just answer the question instead of bloviating Kary. How many?

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  47. Kary L. Krismer

    RE: Pegasus @ 50 – Why do you think I would possibly know how many agents are sued or successfully sued for anything? Where do you think I would get that kind of data?

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  48. Pegasus

    RE: Kary L. Krismer @ 51 – Well you are the one portraying why agents have all this risk of being sued to justify their fat commission. It appears, once again, you were just blowing smoke out of your yazoo.

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  49. Kary L. Krismer

    By Pegasus @ 52:

    RE: Kary L. Krismer @ 51 – Well you are the one portraying why agents have all this risk of being sued to justify their fat commission. It appears, once again, you were just blowing smoke out of your yazoo.

    Learn to read. I was commenting on the risk not being zero and provided a citation to a case where not only was the agent sued, but it ended up at the state Supreme Court.

    Like I said, this is yet another thing you don’t know anything about. Quit proving it over and over and over.

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  50. Ira Sacharoff

    RE: No Name Guy @ 46
    I always recommend pricing on the lower end. If it doesn’t sell at a higher price and lingers on the market, potential buyers ignore the listing. Having a property stay on the market isn’t a good game for anybody. Some real estate agents have a delusional sense of their own worth and are convinced they can attain a higher price for the house based on their skills, but it isn’t usually the case. If the house is a type of house that people want, and in a neighborhood that people want to live in, pricing it on the lower end will draw a lot of interest, like a Ravenna Craftsman. Low priced split entry homes in Kent can still stay on the market a long time.

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  51. Pegasus

    RE: Kary L. Krismer @ 53 – Once again you were caught trying to make a mountain out of a molehill. Must be your legal training. Reality evades you.

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  52. Kary L. Krismer

    By Ira Sacharoff @ 54:

    Some real estate agents have a delusional sense of their own worth and are convinced they can attain a higher price for the house based on their skills, but it isn’t usually the case. .

    I was going to add to my post that it’s better if the seller listens to the agent, because they are really the ones that control the price. Sellers, IMHO, are more likely to be delusional than agents. Agents, of course, can just be wrong.

    I’m sure you’ve heard a lot of them say things too, but one of my favorites was trying to convince someone that they really shouldn’t price higher based on the fact that other houses nearby were active listings at higher prices (and not selling).

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  53. Kary L. Krismer

    By Pegasus @ 55:

    RE: Kary L. Krismer @ 53 – Once again you were caught trying to make a mountain out of a molehill. Must be your legal training. Reality evades you.

    You don’t know what you’re talking about. Cite some facts that this is in fact a mole hill issue or go crawl back under your rock. Oh, wait, you don’t have any facts. You’re just making things up while claiming I’m somehow wrong! Quit wasting everyone’s time.

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  54. Pegasus

    RE: Kary L. Krismer @ 57 – I asked you to back up your claim and you admitted you were clueless about the facts. Now suddenly I am the one who is making things up? Shame on you Kary. You should be embarrassed but that ego doesn’t allow for that does it?

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  55. David Losh

    RE: Ira Sacharoff @ 54

    Some agents are magicians. We have worked with a lot of Real Estate agents. Some have a very good eye for property, and pricing that hits, nearly, every time.

    The strategy is to make the property look as good as it can, and price it accordingly. You can pick a price, and be wrong. If that is the case you need to reduce.

    Most agents don’t let the seller pick the price unless it is an exceptional property. Some properties are going to sit no matter what the price is.

    I think the biggest problem in Real Estate today is that agents don’t make offers. Agents, and buyers play this stupid game of price watching, pouncing, and getting buyer’s remorse.

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  56. Ira Sacharoff

    RE: David Losh @ 59
    I completely agree with you. Some agents are magicians, and know the markets they work in extremely well. I represented a buyer a couple of years ago on a big Craftsman fixer in Ravenna. it was staged beautifully, and the listing agent just knew his stuff. It was priced about 60,000 dollars less than what it should have sold for, and attracted multiple offers. it ended up selling for more than 100,000 higher than the listing price. A magician agent will be able to exploit that. I urged my buyer client to exercise restraint and not get caught up in this multiple offer hysteria. This was a couple of years after the market peaked, and we submitted an offer that was what the comps showed to be current market value. It ended up selling for 65,000 higher than that. If you’re in the right place, at the right time, and have those skills, you can pull it off.

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  57. Kary L. Krismer

    By Pegasus @ 58:

    RE: Kary L. Krismer @ 57 -Trollspeak, trollspeak,Trollspeak, trollspeak,Trollspeak, trollspeak.

    Learn to read! I said I wouldn’t have access to that type of data (how many claims are filed against agents for the things mentioned). I never said I was “clueless” about anything. You’re the one who tried to throw a number out there (2-3) that you couldn’t support.

    You really are a pathetic little troll.

    BTW, how f’n _____ do you have to be to make false claims about facts when the correct facts are in the very thread you’re making the claim about?

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  58. Jonness

    By David Losh @ 31:

    RE: Jonness @ 30

    agent fees are divided by four. two agents, two brokerages.

    You already said it better than I ever could…

    “The stinkin’ Real Estate agent would come in every friggin’ day, pull into the garage in his BMW, pull out a card table, and folding chairs, then “female dog” about not being able to make a sale.

    I figured out he made about what I made for doing nothing.”

    Forget flipping. The money is in the paper work. This could change if and when houses stop falling in price. But for now, flipping is dangerous unless you are a guy like yourself who really understands what he’s doing. :)

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  59. Sweet Pea

    By No Name Guy @ 46:

    In the end, one has to wonder at the buyers paying, what was it, 180k, for what the folks here variously estimate at a 60 to 100k remodel, plus the cost of financing for 30 years.

    Well, if there are 2 things we’ve learned (or should have learned?) in the last few years (well, probably since the start of human history), they are:

    1) A lot of people aren’t very bright, and

    2) Them’s that’s smarter and willing to exploit the others can make out like bandits.

    Marketing, baby! Kind of a bummer if you’re smarter but not terribly into exploiting others :-)

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  60. Scotsman

    RE: Sweet Pea @ 63

    “Kind of a bummer if you’re smarter but not terribly into exploiting others :-) ”

    Yup. For double the insult, it’s pretty hard to do it right when others are playing by their own rules. Is there still any reward for following traditional values?

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  61. Pegasus

    RE: Kary L. Krismer @ 61 – I asked if the number of agents sued successfully amounted to 2-3 agents a year. You have admitted that you have no clue how many agents get sued per year or how many agents in the state there are thus rendering your trying to make a claim about risk for agents worthless. You have no numbers to back up any of your defense that there is risk for agents to justify those fat commissions other than one case you cited. Whoopee! There is also a risk that an acorn might fall and strike them on the noggin. The sky is falling! The sky is falling. You need to get back on your clowncycle and warn the world you pompous arse.

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  62. No Name Guy

    RE: Scotsman @ 64

    RE: Sweet Pea @ 63

    Now, if I could only bring myself to open up a check cashing / pay day loan place, and right next door a furniture rental outfit…….but alas, I have just a wee bit too much morals to be exploiting the financially stupid. :-)

    Ira’s @ 60 is a good anecdote. The sellers agent created a frenzy.

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  63. David Losh

    RE: Ira Sacharoff @ 60

    Some agents work a craft. There’s nothing tricky about it.

    I went on tour yesterday for the first time in about a year. It’s easy to see professionals at work. Two that stand out were listed by agents who were both honest, straight forward, priced well, and had the houses in order. You could see everything. The houses made sense. The agents were knowledgeable, and able to answer questions.

    Another house was a good value, good location, but was being presented as a screaming good deal, which it might be. There was a lot there, it was just not very cohesive. The agent didn’t know much about the property, or wasn’t saying.

    One agent said what I have been finding. You used to do a Comparative Market Analysis and have the property come within 20% either way of where it will sell. Now we have these wild swings of sales that are $100K one way or the other. The market place isn’t making a lot of sense.

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  64. Kary L. Krismer

    By Pegasus @ 65:

    RE: Kary L. Krismer @ 61 – I asked if the number of agents sued successfully amounted to 2-3 agents a year. You have admitted that you have no clue how many agents get sued per year or how many agents in the state there are thus rendering your trying to make a claim about risk for agents worthless. You have no numbers to back up any of your defense that there is risk for agents to justify those fat commissions other than one case you cited. Whoopee! There is also a risk that an acorn might fall and strike them on the noggin. The sky is falling! The sky is falling. You need to get back on your clowncycle and warn the world you pompous arse.

    I was stating that there was a risk to agents, not zero risk as claimed by someone. I cited a case showing that an agent had been sued for a specific type of claim. Other types of claims obviously exist, or do you think agents are never sued?

    You’re simply asking for data that no one has and then claiming my position is bogus based on the fact data doesn’t exist. Courts don’t maintain that data. Insurance companies don’t maintain that data. It doesn’t exist. That doesn’t mean that the lawsuits don’t exist.

    BTW, I probably wouldn’t even have known about that Hood Canal case but for the earlier “Bull” decision on the “economic loss rule.” But for the uncertainty in the law that the Bull case created, such a suit would be relatively routine, and would not likely have gone up to the Supreme Court. That doesn’t mean it wouldn’t have happened.

    But I’ll play by your faulty logic. How many brain cells are in your head. If you can’t give me an exact answer, I’ll assume the number of brain cells in your head is zero.

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  65. Pegasus

    RE: Kary L. Krismer @ 68 – Hehehe. And now you are trying to pretend that you were simply pointing out a risk for agents to be sued. Duh. And what a huge risk it is in order to justify those fat commissions. Why did you not point out the risk of getting in a car accident while going to show a house? I bet that occurs much more often then a lawsuit for agents. So you clogged the board once again with banter that is meaningless with little facts and no figures and I called you on it. You admitted you have no facts about how many suits occur annually. No one believes that you were not trying to turn that molehill into a mountain to make those commissions look justified. Why else would anyone even post that drivel?

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  66. Ira Sacharoff

    By David Losh @ 67:

    RE: Ira Sacharoff @ 60

    Some agents work a craft. There’s nothing tricky about it.

    I went on tour yesterday for the first time in about a year. It’s easy to see professionals at work. Two that stand out were listed by agents who were both honest, straight forward, priced well, and had the houses in order. You could see everything. The houses made sense. The agents were knowledgeable, and able to answer questions.

    Another house was a good value, good location, but was being presented as a screaming good deal, which it might be. There was a lot there, it was just not very cohesive. The agent didn’t know much about the property, or wasn’t saying.

    One agent said what I have been finding. You used to do a Comparative Market Analysis and have the property come within 20% either way of where it will sell. Now we have these wild swings of sales that are $100K one way or the other. The market place isn’t making a lot of sense.

    The marketplace isn’t making a lot of sense. Thanks for validating that. I thought it was just me, that I wasn’t understanding something, but you’ve been in the business a very long time.

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  67. Ira Sacharoff

    RE: Pegasus @ 69
    In fact, I was with clients in my car on the way to show a house last spring, quietly sitting at a red light when someone went through a red light and drove into me. Nobody got hurt except for my car. Both the guy who hit me and I had the same insurance company(Encompass).It was in unincorporated King County and they had no available police for several hours.We exchanged information and went our separate ways. Later, the guy who hit me denied that he’d gone through the red light, despite my client’s witnessing it. Encompass decided not to pay either claim, so I dropped them. What’s the point of having insurance if you can’t use it?

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  68. Kary L. Krismer

    By Pegasus @ 69:

    RE: Kary L. Krismer @ 68 – Hehehe. And now you are trying to pretend that you were simply pointing out a risk for agents to be sued.

    You really need to learn how to read. That was obviously my point from my first post here.

    By Kary L. Krismer @ 42:

    By Scotsman @ 32:
    RE: David Losh @ 31

    Don’t forget almost zero risk.

    Hardly, unless you’re factoring in the existence of malpractice insurance.

    Interesting some here are saying that the flipper has liability for life and others are saying that the agent has zero risk. If you look at some of the case law the liability of agents is sort of crazy. It’s been mentioned that this property has possible slippage issues. That’s a liability issue for agents, which I could see, depending on the circumstances, but some case law goes too far, IMHO. See, Jackowski v. Borchelt, 209 P.3d 514. Leaky roofs and septic tanks can also be liability issues for agents.

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  69. Kary L. Krismer

    RE: Ira Sacharoff @ 71 – What type of insurance was on your car? If both drivers had full coverage I don’t think the insurance company would have any basis to deny coverage, and sometimes the deductible isn’t even an issue where the same company has both cars. But if both were liability only, I would think someone would need to sue the other to get coverage. If it were an uncontrolled intersection, or one with a stop sign, that would be different.

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  70. Ira Sacharoff

    RE: Kary L. Krismer @ 73
    I had liability and PIP coverage only. How much insurance does one need on a 2000 Chevy Lumina? The other guy had an old ford Ranger pickup. Was it you?

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  71. Pegasus

    RE: Kary L. Krismer @ 72 – Oh my gawd! Your point was that somewhere somehow a real estate agent got sued so that is a risk that you had to point out for whatever reason while you have no proof that this is a common risk for real estate agents. I think that acorn that struck your noggin has got your remaining brain cell ricocheting around in your skull since you don’t realize how stupid you look defending your childish board bullying. I guess no one can claim there is little or no risk for real estate agents be it slight or imagined as long as Kary is here to manufacture risks. What an enormous ego.

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  72. Pegasus

    RE: Ira Sacharoff @ 71 – See. I knew it was a risk for you agents. What’s the point of paying for insurance if they don’t cover you when needed? It’s a big boost to their profits. Its isn’t just auto insurance. Its all insurance arenas. Did you bother to file a complaint with the State of Washington Insurance Commission? Unfortunately having a witness that was an occupant in the accident is rarely accepted testimony. At least according to the insurance company when it fits their purposes.

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  73. Kary L. Krismer

    RE: The Tim @ 77 – I agree. But when someone makes false claims about what I said I’m going to respond.

    It’s unfortunate that even quoting the material doesn’t work. Apparently nothing will work, so maybe I should just quit feeding the troll.

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  74. Kary L. Krismer

    By Pegasus @ 76:

    RE: Ira Sacharoff @ 71 – See. I knew it was a risk for you agents. What’s the point of paying for insurance if they don’t cover you when needed? It’s a big boost to their profits. Its isn’t just auto insurance. Its all insurance arenas. Did you bother to file a complaint with the State of Washington Insurance Commission?

    It’s liability insurance. They don’t cover you until someone is held liable! Some policies are even written that they don’t pay until you pay, but that’s not typical with auto insurance. Here’s the language from my Pemco policy:

    We’ll pay the damages for bodily injury and property damage to
    others if you or a family member are legally responsible because of
    an accident involving a motor vehicle we insure.

    Thus, until Ira or the other driver is determined legally responsible to pay, they won’t pay.

    If Ira wanted to push it I’d suggest small claims court, although that has legal risks. Once it’s reduced to judgment they’d have to pay on the other driver’s insurance, and they might pay before then because they probably also have a duty to defend. Again from my policy:

    We’ll also defend a covered
    person, hire and pay a lawyer, and pay all defense costs if
    the covered person is sued by someone for damages because of
    an accident involving a motor vehicle insured by this policy

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  75. Ira Sacharoff

    RE: Kary L. Krismer @ 79RE: Kary L. Krismer @ 79 – Ira’s not going to push it. Bad enough I havd to deal with real estate agents on a regular basis. Adding lawyers to the mix would be enough to ruin a perfectly nice day.

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  76. Kary L. Krismer

    RE: Ira Sacharoff @ 80 – Don’t forget the joy of dealing with people in the insurance industry. Part of the reason I like my HSA medical insurance is I know they will almost ever pay anything! Less disappointment that way.

    I actually dealt with a couple of insurance bad faith claims in my attorney days. Horrible experience, even though I won both times. They make you go the distance before they pay out, just so they can pay out later.

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