December Stats Preview: Inventory Erasure Edition

As we wrap up our 2011 coverage, let’s have an early look at December’s stats. Most of the charts below are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

First up, total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Similar November to December bump as last year, though not as dramatic. Notice that for the first time since June, 2011’s sales came in below 2010. It will be interesting to see if the NWMLS stats line up with that.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Snohomish County Deeds

Snohomish still came in above 2010, though not by as much as previous months. Since this data includes foreclosure deeds, it’s hard to say if this is indication of strength in regular sales.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Snohomish County Notices of Trustee Sale

Same basic story we’ve seen throughout the second half of the year. Still low, probably still being depressed by state legislation from earlier 2011.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

Basically flatlining for the last three months.

Lastly, here’s an update of the inventory charts, updated with the inventory data from the NWMLS.

King County SFH Active Listings

Snohomish County SFH Active Listings

December was the lowest point in over four years (since before the NWMLS changed their definition of “active listing”) for both King and Snohomish County. Here’s hoping we start to see some uptick in selection in 2012.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.

  

About 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.

128 comments:

  1. 1

    At some point we’re going to have to look for some other reason for the decline in NTS besides the legislation. Unfortunately the transition rules are somewhat complex, but at this point I think there has to be another reason.

    I’m pretty sure it’s not short sales, so maybe the banks are doing more loan modifications????

    As to YOY NWMLS volume numbers for December, I think 12/11 will come out slightly over 12/10.

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  2. 2
    ray pepper says:

    RE: Kary L. Krismer @ 1

    They will pick up Kary Bank on it. 2013 and the years forward we will all note the unyielding foreclosures because they are all coming back, but in due time. The banks are dotting their i’s this time around and the courts will be bogged down with unprecedented number’s. Mediation will be a mere speed bump for the banks and the declines in home values will continue.

    We must pity the unknowing who continue to pay in hopes of a recovery. Those who continue to bend over backwards to accommodate bank demands should be educated.

    Those who modify without principle reduction need to be seriously counseled about financial implications of kicking the can down the road. Just so very sad to hear the happiness of people who get a “golden loan mod.” What they simply do NOT realize is the only winner was the investor who granted the mod and kept the loan performing.

    In years the masses will all know what they should have initiated in 2008-2009 but until then professionals still push loan mode down the throats of families while they continue to gobble them up.

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  3. 3

    RE: ray pepper @ 2

    Rich Guys Like Trump Would Default on Original Real Estate Contracts

    And re-negotiate a new principle he could afford. Of course you’re dealing with several attorneys, bands of business leaders and a different “can-do” atmosphere with the rich elite than small home ownership. There’s also money for the attorneys to get paid too.

    Today’s home foreclosures could be solved using Trump’s rich elite techniques, if they had a million or two laying around for the legal help….the bottom 99% don’t, so expect “forced” price degradation over time [not all at once] as the only solution and yes, its gonna take years for this legal dust to settle and by that time, a new round of the same waiting in the bleachers…some of the same units too, I imagine.

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  4. 4
    David Losh says:

    RE: ray pepper @ 2RE: Kary L. Krismer @ 1

    I agree with Kary that something else has happened in the foreclosure market. My opinion is that the foreclosure market is irrevocably broken, and it won’t be coming back.

    Banks must be at a saturation point. It can’t just be with home loans, but with all loans. You can not get blood out of a turnip.

    There is nothing more the government can do.

    I don’t know what it is, but there is something in the wind, and I don’t think a big rash of foreclosures is on the horizon. There must be something else.

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  5. 5
    deejayoh says:

    On the foreclosure numbers, I assume you are referring to the “Foreclosure Fairness Act” from July affecting the numbers. I tend to agree with Kary that there has to be more at work.

    According to RealtyTrac - there were ~23k foreclosure properties available in WA state in November
    This article says that according to the author of the legislation, the legislation had “saved” ~600 homeowners in it’s first 3 months of existence. (assume this is Aug-Oct)

    I am not sure that this is the best apples to apples comparison, but probably good enough for a rough estimate that 600 homes saved vs. 23k active foreclosures would mean that the legislation only had about a 2% impact in terms of reducing the number of active foreclosures in the first 3 months of existence. Has to be more at play here. Your chart shows a 60% reduction in trustee sales in the same 90 days since the legislation passed. And it doesn’t make sense that everyone could be stuck in the process either, since the window for mediation is only 60 days.

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  6. 6
    Ray pepper says:

    RE: deejayoh @ 5 – I will go with what the revered Bank of America analyst states that 2013 will be the biggest in history. Makes sense considering we have postponement after postponement every Friday.

    The odds r better in Tim successfully picking up a million marbles with his sphincter then foreclosure numbers to decrease in 2013 and beyond.

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  7. 7

    By deejayoh @ 5:

    According to RealtyTrac - there were ~23k foreclosure properties available in WA state in November
    This article says that according to the author of the legislation, the legislation had “saved” ~600 homeowners in it’s first 3 months of existence. (assume this is Aug-Oct)

    I am not sure that this is the best apples to apples comparison, but probably good enough for a rough estimate that 600 homes saved vs. 23k active foreclosures would mean that the legislation only had about a 2% impact in terms of reducing the number of active foreclosures in the first 3 months of existence.

    I forget which attorney here said this, but apparently there was a transition provision in the law which allowed those people relatively late in the foreclosure process on the effective date to take advantage of the mediation provisions. One of my criticisms of the bill even prior to enactment is that people had to act too early in the process be likely that they take advantage of it. Basically my concern was many people would procrastinate, and by the time they acted it would be too late for mediation. To the extent that those 600 were part of those taking advantage of the transition provisions, your 2% analysis might be high!

    One thing it could be that would still be legislation related is the banks just holding back to fine tune their procedures with a smaller number of cases.

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  8. 8

    RE: Ray pepper @ 6
    I’d make that bet with you but I don’t think Tim is going to reveal how many marbles he’s picked up with his sphincter.

    Rate this comment: Thumb up 0

  9. 9
    ChrisM says:

    Interesting – what is up w/ the ratings on post # 2 – someone testing the system?

    I may be reading too much in the posts on this particular thread, but for those of you who went through the S&L failures of the 90’s we ain’t seen nothing yet on foreclosures. All that needs to happen to clear the supposed logjam is mandate a RTC-style purge of properties. Force the banks to mark a 120-day delinquent loan as a loss, and put it out on the market. I bet it would take less than two years.

    My major beef with the proposed solution is that they’re limiting it to institutional investors. I do not think that is necessary.

    Once we take our pain, the market will recover. Just think – had this been done in 2009-2010 (feasible at the time) we’d nearly be back to a normal market!

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  10. 10
    Pegasus says:

    No mystery here about the delays. Bank after bank had to pull their fraudulent paperwork and a year later they are just starting to crank up again after telling everyone that it would only be a two month delay at most a year ago in October. I also think that since we are a non-judicial foreclosure state and they would not have to blatantly lie to a judge about the fraudulent paperwork that they continued to process foreclosures here with bad paperwork albeit somewhat less. With the Attorney General’s office and the public becoming more aware, many of these scrutinized foreclosures are finally being cancelled and delayed while the banks try to figure out a new way to create documents that don’t exist.

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  11. 11
    The Tim says:

    By Ray pepper @ 6:

    The odds r better in Tim successfully picking up a million marbles with his sphincter then foreclosure numbers to decrease in 2013 and beyond.

    Um, ew.

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  12. 12
    David Losh says:

    RE: Ray pepper @ 6

    About a year ago I heard rumors of a resurgence of Real Estate wholesaling, where an investor buys a bulk of properties to manage. Nothing ever happened with that, never heard another word.

    Then there were reports that the government forced Bank of America to buy up Countrywide. That also died down.

    http://seattletimes.nwsource.com/html/realestate/2013641713_realcountrywide12.html?syndication=rss

    My opinion is that Bank of America first, and foremost, will have to play ball, to sort out the mess they have of financial instruments. They did a lot of “minority lending” before they ever bought Countrywide.

    My opinion is that Bank of America is a predatory lender who thought they could bully their way through the Countrywide loans, and collect a ton of profit from these Notes they bought at a heavy discount. Now they are finding themselves in court more, than people just rolling over.

    Bank of America may well need to be broken up. I see that as more likely than a tidal wave of foreclosures.

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  13. 13

    RE: Pegasus @ 10 – That’s a possibility, but it would assume that some of the extra processing in other states would require the use of services of employees who also would process Washington foreclosures, taking away from the time to process our foreclosures.

    I don’t buy the argument that they care about the political statements and actions of our AG, especially when he probably won’t be in office next year as AG. As long as they comply with the act (e.g. have a physical location here in this state which was a problem for some), they will probably think they are fine.

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  14. 14

    RE: David Losh @ 12 – Lots of those issues were seen at the time as being potential issues.

    http://www.abajournal.com/news/article/4b_boacountrywide_deal_price_tag_doesnt_include_legal_woes/

    I suspect they are turning out worse than what BOA was expecting, and clearly worse than what the general public was expecting.

    Rate this comment: Thumb up 0

  15. 15
    2kt says:

    RE: ray pepper @ 2

    May be most people who wanted to default already have. From the cycle stand-point, the pick years were 2005-2006 and first half of 2007. 2005 ARM buyers defaulted between 2007 and 2010 (on 2/28, 3/27 and 5/25 ARMs), 2006 people defaulted in 2009-2011 cycle. There’s small sliver of 2007 5/25 buyers that have not defaulted yet (in this state). There’s some 2008, 2009 % that will default, but you could not get no money-down deals and ninja deals then, so, and all people who made decent size downpayments will hold on just like they have in the early 90s cycle, Raymondo. How is that gravy train in Tacoma working for you?

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  16. 16
    Ray Pepper says:

    RE: 2kt @ 15

    Tacoma is rockin it! See here: http://realestate.msn.com/blogs/listedblogpost.aspx?post=ac96385f-74c6-497f-bf39-38f45ee90d1b HAAAAAAAAAAA..

    2kt you have seen nothing yet..forget the Arms and the resets…Its the loan mod recipients that will be giving theirs back in the next 5 years+ as well…Appreciation will be weighted down for so long and it will force more and more into foreclosure and short sale..

    Most of our buying has been in Gig Harbor but VERY slowly…2 flips (South Tacoma) and 2 long term holds that were purchased just as cash flow (21k and 40k). The smart money is keeping the powder dry because the best is still years away! But, we keep on looking. Gems pop up all the time and TIMING is everything!

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  17. 17
    Ray Pepper says:

    RE: David Losh @ 12

    David its common knowledge for the last 18+ months that BAC will be forced to shed Countrywide from its books. This is why BAC is holding at 4-6.00 because the inevitable POP from lifting of the DEAD weight is coming..

    As part of the absorbtion of Countrywide into BAC it was agreed that “at the discretion of the Board” BAC has the right to file independently on Countrywide without causing detrimental harm to BAC itself…We all know BAC is completely insolvent with Countrywide on its books but it does have solvency on its stand alone presence.

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  18. 18
    2kt says:

    RE: Ray Pepper @ 16
    Raymundo, mods are few and between to significantly impact any numbers.

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  19. 19
    Ray Pepper says:

    RE: 2kt @ 18

    wrong…entering Loan Modification keeps The Trustee at bay for a VERY long time…Millions that are sitting in one stage or another of Loan Mod combined with those who have already received Loan Mods will produce HUGE numbers down the road of foreclosed/short saled home..

    The Street already knows this and it helps explain a good % of retail success this season…So many millions not paying brings ALOT more money into the economy at a time our FED needs it…Knowing this you will have your answers going forward..

    2013-2020+……..sheer and utter ugliness for housing without MASSIVE FED INTERVENTION..

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  20. 20
    David Losh says:

    RE: Ray Pepper @ 19

    Wrong!

    Just wanted to get that in there.

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  21. 21
    2kt says:

    I don’t really have the numbers handy, but…

    If Track is correct, 23,000 properties were in foreclosure. Again, I don’t have exacts on this and what it means (all NODS, or else). I don’t follow stats on that, but say 25% end up not foreclosing for one reason or another. So, you are talking 18,000 properties in WA State. I am not sure of the distribution by county, but with current inventory levels that number is not as scary as you are making it and certainly will not last 10 years no matter how you slice it.

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  22. 22
    deejayoh says:

    By Ray Pepper @ 19:

    RE: 2kt @ 18

    wrong…entering Loan Modification keeps The Trustee at bay for a VERY long time…Millions that are sitting in one stage or another of Loan Mod combined with those who have already received Loan Mods will produce HUGE numbers down the road of foreclosed/short saled home..
    .

    Ray, do you have any evidence or fact base for that assertion?

    HAMP was barely used and a miserable failure. And per my post above, our state level program for loan modifications has had little or no impact. Not sure where you are seeing these millions of loan mods in the pipeline.

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  23. 24
    David Losh says:

    RE: Kary L. Krismer @ 14

    That is a good article. It is more to the point about the loan packages that were sold.

    Rate this comment: Thumb up 0

  24. 25
    David Losh says:

    RE: Craig Blackmon @ 23

    Wait a minute! How did Craig, the advertiser, get a bluey right off the bat, without any thumbs ups, or downs?!!!

    He posted a New Yorker article about strategic default, very old news, as he points out, and some nonsense about mediations slowing things down.

    Yes, I said nonsense.

    The pace will continue? Do you have some facts to go along with that? I’d like to know.

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  25. 26

    RE: David Losh @ 25 – I assume Tim still gets to do that, same as before.

    As to the article, I love comparing filing a Chapter 11 bankruptcy for a large corporation to deciding whether to default on a residential mortgage. But it does give me the opportunity to once again plug the possibility of stripping a second mortgage in a Chapter 13 reorganization if the conditions are right. That can be a great option for many of those who are unfortunate enough to have a second mortgage. There are also possible benefits to those with investor mortgages (i.e. those who bought rental properties.)

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  26. 27
    Ray Pepper says:

    RE: Craig Blackmon @ 23

    nice link..But, as you and I both know strategic default links can be dated back to 2007-8 on U tube with so many stories resembling the same. It picked up steam when that Professor hopped on board 3+ years ago and basically stated the same thing..60 Minutes 2 years ago also helped spread the word of what was going on everywhere…

    Deejayoh, remember I’m speaking in the absence of Fed Intervention. As I have said here for a LONGGG while the only answer is Universal Mortgage Cramdown/Principle and without it ALL the properties will be coming back…They will come back via short sale, trustee, and/or deed in lieu. Never a question of IF just when…Families do NOT have the money to cover teh negativity NOW and they surely wont have it in %-10 years…

    So in essence they all come back, get written down to current values, but the FED hopes that in 5 years we will have a different playing field to absorb the losses…I say we don’t and people will only remain STUPID for so long. Some ALOT longer then others..

    Whatever supports the family unit I agree with. Short sale is excellent for those who find themselves needing to sell or move. I cannot support Loan Mod without Principle Reduction unless someone shows me something astonishing….aka…Ocwen Financial Program..EXCELLENT deal for bank and Borrower!!!..No time to post it now..

    Deejoyah “millions in the pipeline” are what analysts on the Street (CNBC-Bloomberg) consistently remark day in and day out as to being “Baked into the current economy and financial numbers” and for this reason they believe the numbers being posted are skewed and in fact things are truly worse then they appear.

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  27. 28
    Ray Pepper says:

    RE: David Losh @ 25

    David……………….It pays to be an advertiser……….You should have given more then 50.00………..

    Rate this comment: Thumb up 0

  28. 29

    By David Losh @ 25:

    RE: Craig Blackmon @ 23

    Wait a minute! How did Craig, the advertiser, get a bluey right off the bat, without any thumbs ups, or downs?!!!

    He posted a New Yorker article about strategic default, very old news, as he points out, and some nonsense about mediations slowing things down.

    Yes, I said nonsense.

    The pace will continue? Do you have some facts to go along with that? I’d like to know.

    Dave,
    The Tim still gives out the blueys and can still fade posts to almost unreadable. Best as I can tell, lots of thumbs up result in a yellow. But what’s that Pinkey Ray got in post #2 ?

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  29. 30
    The Tim says:

    RE: Ira Sacharoff @ 29 – Yes, I will still highlight posts that I feel are especially interesting or informative. Those are the green posts (which I don’t understand why people call “blueys,” is it a color blind thing?). The post author’s comments (which is usually me) are highlighted in blue.

    For the user-rated comments, if thumbs-up minus thumbs-down is above a threshold, the comment is highlighted in yellow. If it is below a threshold, the comment is faded. If a comment has lots of votes, but they’re split fairly evenly between thumbs-up and thumbs-down, it gets highlighted in red, to indicate a hotly debated comment.

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  30. 31
    Pegasus says:

    RE: Kary L. Krismer @ 13 – I think it is pretty hard these days for a bank to sit down at a forced “mediation” with fraudulent paperwork. Whether or not the new law only results in 600 modifications it results in 1000’s of more documents and foreclosures that are being reviewed in that process that no longer enjoy the privilege of being rubber-stamped by the complicit trustees for the banksters without someone else that is knowledgeable taking a peek..

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  31. 32

    RE: The Tim @ 30
    The bluey doesn’t look even remotely green to me. Would it look green in IE or Firefox? I’m viewing it in Chrome. Or maybe it’s The Tim who’s the color blind one. He does step on the gas when the light turns blue.

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  32. 33

    RE: Ray Pepper @ 27 – Sure, Ray, lots on YouTube over the last few years. But surely The New Yorker carries a little more weight than a “U tube” video…. And I’m not just being an elite, effete NY’er!

    And for the record, David, if Tim were to “reward” comments from advertisers, I’d be pretty shocked… No, I’d probably drop dead from disbelief. Given the Tim’s consistent message over the years, I think his integrity is pretty close to “without question”. And I’m not just sucking up!!

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  33. 35
    Pegasus says:

    RE: Craig Blackmon @ 33 – C’mon you did not “earn” the highlight with the new rating system. You got a “free” pass that you paid for. I will take a “U tube” video even if it is made by monkeys anytime over a complicit media hack with an agenda pumping out whatever he is told to in order to engorge the pockets of Wall Street.

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  34. 36
    The Tim says:

    RE: Ira Sacharoff @ 32 – Here’s the hex code for the background color of comments I manually feature: E6EEE6. That code indicates the color in red, green, and blue components in the form of RRGGBB where each two-digit slot is a hexidecimal number between 00 (0) and FF (255). All 0s would be black, (no color) while all 255s would be white (all color). 0000FF would be solid blue.

    E6EEE6 means 230 red, 238 green, and 230 blue. Since green has a slightly higher number and the amounts of red and blue are equal, the resulting color is slightly green. Since all the numbers are close to the max of 255, it is a very light green.

    This concludes today’s spontaneous CSS tutorial. :^)

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  35. 37
    Pegasus says:

    RE: Sweet Pea @ 34 – Amen.

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  36. 38
    Pegasus says:

    Suddenly Sweet Pea catches a highlight before the new system awards one. How strange is that? Not that he doesn’t deserve one but really? Could it be camouflage for Craig?

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  37. 39

    I don’t know how I’ll manage to get to sleep tonight, being so worried about the color of posts and all. /sarc

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  38. 40

    RE: Pegasus @ 31 – I’m not sure that would slow down the foreclosure process, unless a lot of people are requesting mediation, which they seemingly are not.

    To be clear though, I’m not against anyone going the mediation route. I think it’s especially important for anyone contemplating a short sale.

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  39. 41
    ricklind says:

    By Kary L. Krismer @ 1:

    At some point we’re going to have to look for some other reason for the decline in NTS besides the legislation. Unfortunately the transition rules are somewhat complex, but at this point I think there has to be another reason.

    I’m pretty sure it’s not short sales, so maybe the banks are doing more loan modifications????

    As to YOY NWMLS volume numbers for December, I think 12/11 will come out slightly over 12/10.

    Here are my comments from the peanut gallery, certainly not a professional 8^) :
    I have read through all 37 posts (so far) before responding to Kary’s original comment but still come to the same conclusions.
    While there are a number of valid thoughts and some conjectures the fact remains that there is no significant transparency as to what is driving, or delaying, the NTSs. We just don’t have enough information, or else are probably drawing meaningless conclusions from what data we have.
    Maybe the low NTSs are a conglomerate of reasons including hesitancy from lenders to forelose after getting slapped by Foreclosure Fairness Act (I doubt it), or modifications or modification requests delaying the transition into foreclosure (who knows, is this information public?), or people successfully hanging on temporarily and staying out of foreclosure (most people try to honor a contract).
    What’s even harder, I think, is trying to bet on which way things will go from here. We have diverging linkages of foreclosures and of the economy and housing prices , at least temporarily. I would simplistically expect foreclosures to rise as the economy and housing continued to decline, but that is not happening, thus this thread.
    I can’t figure it out yet, must be missing something. No clear trending market. I guess that means “sideways.”

    PS The Greenie looks like a different shade of a Bluey.

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  40. 42
    David Losh says:

    RE: The Tim @ 30

    There is nothing interesting, or informative in Craig’s comment.

    Here’s some facts for ya':

    248,000 for sale or rent by distressed home owners.

    Washington is sitting on 800,000 repossed homes, which makes the American tax payer the largest owner of foreclosed properties.

    89,819, the number of homes listed for sale by Fannie Mae, Freddie Mac, and the Federal Housing Authority on August 29th 2011. Georgia had 7,463, second behind California.

    The large inventory of listings reflects a high number of Alt-A loans, riskier than prime, but less risky than sub prime.

    Sorry there isn’t a wiki link, that’s from Bloomberg Businessweek in September. It’s just one of those common knowledge kinds of things.

    So Craig made an assertion, the same as we all do, but he has nothing to back it up, other than a New Yorker article that is a rehash of what we have seen here repeatedly for months.

    I want some facts about how the pace of that there foreclosure machine will resume. What does mediation or robo signing have to do with the glut of foreclosures? Who is going to buy them, and if they are sold what happens when the assets are actually shown to be worth far less than traded value on the secondary market?

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  41. 43

    RE: ricklind @ 41 – One other possibility not mentioned above is judicial foreclosures. I keep hearing rumblings that they might be coming, but I have yet to see a single one (not that I would have a reason to see one).

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  42. 44
    Pegasus says:

    RE: Kary L. Krismer @ 40 – Having to produce valid documents is NOT slowing the process down? Whether everyone requests mediation or not those documents are finally under scrutiny. No banker in this environment wants to show at mediation or thinks they might have to with fraudulent documents.

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  43. 45
    David Losh says:

    RE: Ray Pepper @ 28

    If only I could have gotten you to contribute, that would have turned the corner for me.

    Rate this comment: Thumb up 0

  44. 46

    RE: Pegasus @ 44 – They only have to show the documents if there is a mediation requested. If not many meditations are being requested, then that would not slow down the number of NTS documents filed.

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  45. 47
    ricklind says:

    By Pegasus @ 44:

    RE: Kary L. Krismer @ 40 – Having to produce valid documents is NOT slowing the process down? Whether everyone requests mediation or not those documents are finally under scrutiny. No banker in this environment wants to show at mediation or thinks they might have to with fraudulent documents.

    Pegs, What you say is true, and methinks also that it be a good thing to not have fraudulent documents.

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  46. 48
    JGBellHimself says:

    RE: Sweet Pea @ 34
    How Sweet (that) it is…

    Not living in PUGit Sound for the last 3 years (after 63 of it) we cannot match your local anecdotes. But, like ‘em – a lot more than the Seahawks.

    Two points:
    First, in AZ they are far more underwater than you are. But, your point still holds true here – that those who could afford the payments on a “dead year” RE mortgage still can. Unless, of course, a death, divorce, job loss, medical or child care problems. Even those of U.S. with Alzheimer may forget to make the payment, but we still could…, if only we would.

    Too many assume that for these folks, that bcuz they have not “strategic defaulted”, they never will do so. You are absolutely correct about them.

    The Good News is that since homes cost less in AZ – both pre-RE-collapse and now, the amount of their “lost equity” is less than in Seattle, so they have to come up with FAR less money to buy themselves out of this mess.
    The Bad News is that since the “average” assessed value in Phoenix is only down 62%, the amount of their lost equity is much higher than in Seattle, so they have to come up with far MORE money to buy themselves out of this mess.
    {For those who do not understand the differences between “percentages” and “raw” – no puns intended – “hard” – ibid – numbers; there is no way to explain those two sentences, except for you to ask Ta-da, Tim}
    [this will be much easier for TT to pick up and run with…
    than loosing his marbles…]

    Second, the very bad ARMs and subprimes.

    We, too, assumed that they all were gone, in the sand states – where most of them were created. But, no – that has not happened. Just as with conventional RE loans, those that could afford them then, appear to be able to do so now. They are NOT gone.

    True, the “bubble investors” are gone. As are those that assumed they could sell out and make “millions”, even if they could not afford to make the payments.

    But, for U.S. to assume everyone else panicked, is a mistake. With historic low interest rates, the ARM re-sets are no where near as bad as everyone assume they would be. And, again, absent “The Troubles”, they can still make the payments.

    But, this leads U.S into The Problems.

    For the underwater, tis that there is no recovery, so waiting is not solving the problem. Their home values are not going back up. So, what should they do now?

    For the ARMs and subprimes, tis that even with low interest rates they cannot get any bankster to REFI their loan payments – not the interest, and not the principal. So, what should they do now?

    As wonderful as it is for them to “Take a Sweet Pee” approach – they are simply doin’ nothing…, yet. The reality is that if not sooner, then a wee bit later, this WILL change.

    So, tell U.S. true, TT, which IS worse:
    to assume that these people do not exist
    or
    that what they decide to do will not happen?
    {We thought of asking you to “spit it out”…
    and then decided it best not to;}

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  47. 49
    JGBellHimself says:

    RE: ricklind @ 47
    ricklind, Pegs, n Kary…, some factoids 4 youses…

    What many do not know, even their attorneys, is that after you do a “modification” you will have lost any and all rights that you might have had to challenge in court the original defects in your mortgage loan.

    And, THAT is why the banksters are trying to cut a deal with the Feds and the states AG’s. And, that is some of why NY, NJ and Cal opted out.

    ALL of the MERS transactions were by “trusts” (was THAT not a joke) located in NY and NJ. And, did you notice that today “MBIA Wins Judgment Ruling Against Countrywide” – so that the issue of whom defrauded whom is now even more wide open.

    What WA did in the “mediation law” by requiring that there be proof of “standing” was to give a borrower a fall back legal position – IF the putative “lender” was not, in fact, the real lender.

    Would THAT give a phony lender some pause – you GD right it would.

    However, if you were to be, or not to be, BKofAm – and you have been told by the Feds that you MUST raise cash to cover for your ownership capital deficiencies – you might, might you not, sell anything to anybody who puts up “cash” for your foreclosures. Might that not explain the huge increase in beginning foreclosures on the West Coast + Nev & AZ?

    Cal’s foreclosure mediation delay just ended. Nev’s new foreclosure delay just started. WA’s mediation program hasn’t ended and didn’t just start. AZ wasted no time on any of those “communistic” things. That the rest of U like.

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  48. 50
    JGBellHimself says:

    RE: JGBellHimself @
    ricklind, Pegs, n Kary…, some MORE factoids 4 youses…

    The most serious legal problem with the “bad docs” is not that they delay the process, or that the ones doing it face malpractice for filing fraudulent docs with a court…
    tis that the “entity” that filed the foreclosure did NOT have “the title, the title, where is the title?” to do so.

    Tis like if we sued TT for a divorce, asking for child support for the three of you.

    Under WA law we not only can file such an action, but we can require the county sheriff to serve each of you, too. True, we are not married to TT, and while marriage is the proximate cause OF all divorces, no WA court can or will grant me a divorce, from TT. So, don’t call ME asking for your cut of TT’s child support payments !!!

    Gentlemen, please note: we said that NO court in WA ever CAN or WILL grant such a divorce.

    BUTT, of the joke, almost every judicial state court WILL and did grant foreclosures to entities that did not, in legal fact, HAVE “title” and/or “standing” to sue.

    Not being “communists” like you, AZ is nevertheless a non-judicial state, like you.

    IF you assume that bcuz in a non-judicial state there is no judge required to determine your “standing to sue” before they CAN grant a foreclosures, YOU are exempt from having to prove that you DO have the right to sue…, you are flat out wrong.

    Just, is it not, as we cannot be given a divorce if we are not married…, how can any court or anyone standing on the court house step transfer/sell “title” to property that they do not have?

    One of the “activist” Federal Court judges in AZ (you DO see the humour in that one?) has recently ruled that is simply not, as far as he can see…, a legal problem.

    In Mass a foreclosure buyer sought to “quite title” against the person they bought from and was told that they could not. Not that they HAD a good title, only that the court would not give them one. Do you know what a “kettle of fish” is? Nice, if you do.

    But, there still IS a state land title problem. Federal Judges have great powers, but they do not have the ability or the power to re-write local state property title laws.

    Some title co’s who did not insure either the pre-foreclosure title or the foreclosure title will now not insure a post-foreclosure sale title. Some title co’s who did insure the prior titles WILL insure the next sales. What do they have to loose – more?

    IF you assume that this “nice legal question” has been addressed, or solved, we have some platted waterfront lots just West of Magnolia’s beach that we would be willing to sell you.
    {TT, Kary…, really, go look them up, “they are out there” !!}

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  49. 51
    Saffythepook says:

    By Ira Sacharoff @ 8:

    RE: Ray pepper @ 6
    I’d make that bet with you but I don’t think Tim is going to reveal how many marbles he’s picked up with his sphincter.

    Sounds like it’s time for a new poll.

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  50. 52
    Ray Pepper says:

    RE: Craig Blackmon @ 33

    Craig I guess I should have clarified…What I meant by U-Tube videos of strategic default are items like these from HUGE distribution areas but posted to UTUBE. The New Yorker is much less observed then most of these arenas:

    http://money.cnn.com/2011/06/07/real_estate/walk_away_mortgage/index.htm

    http://www.cbsnews.com/8301-505145_162-37142120/strategic-defaults-increasing-as-homeowners-choose-not-to-pay-their-mortgage/

    http://www.foxbusiness.com/industries/2011/09/19/new-face-foreclosure-strategic-defaults/

    but in all these years this one is STILL my FAVORITE:

    http://nocureforthat.wordpress.com/2010/01/27/walk-away-from-your-mortage/

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  51. 53
    Jonness says:

    Gotta love the Altos Research Seattle median price chart on Tim’s front page. Tom Petty’s “Free Falling” comes to mind. (Thanks to MacroInvestor for bringing this into the spotlight) :)

    2012 will prove to be yet another fantastic year for non-impulsive people who continue living frugally while saving a down payment.

    Meanwhile, impulsive buyers will get spanked just like they did in 2008, 2009, 2010, and 2011 when they rushed in to get a “good deal.”

    http://housingcorrection.com/images/seattlepricestudy.jpg

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  52. 54
    ray pepper says:

    RE: deejayoh @ 22

    deejoyah this may help you: http://www.cnbc.com/id/45858675

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  53. 55
    Sweet Pea says:

    RE: JGBellHimself @ 48

    I have a relative in AZ; this person purchased during the bubble, very underwater now, and having ongoing employment difficulty. Has not walked away because very attached to home and averse to the idea. May have to ultimately, in order to find more stable employment. This can be example 5.

    6. Young couple recently married. Both own places. Have a rental situation worked out for one home and both moved into the other. This works out as long as the tenant situation remains good and they are both employed. Both places likely underwater.

    7. Young couple with one partner going back to school, who was able to sell and get out from under condo during the tax rebate period, soon after ARM adjusted up. Condo was purchased around peak of bubble. Broke even on mortgage but lost amount equivalent to original downpayment due to decline in value. Couple now considering whether they will buy someday, as they were nearly back to square one saving for downpayment. New owner of condo is almost certainly now underwater.

    The common theme here is the demographic – most of these people are in their mid/late twenties to early forties. Vast majority of examples were first home purchases for each, made within the last 2-8 years. All sorts of implications here for employment location flexibility, whether to have (or how many) kids, and ability to sell and move up to a more expensive home.

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  54. 56
    ARDELL says:

    Part of the low inventory of foreclosed property is just due to an increase in the rate of their selling off in the 2nd half of 2011 vs the 1st half of 2011.

    A full 50% increase in the $100k to $200k range, sold in the 2nd half of 2011 vs 1st half 2011. That represents 40% to 45% of all foreclosures in King County. If an equal number sold in the 2nd half as 1st half…inventory would not be low.

    Right now inventory stands at about a 2 month supply. I would hope most banks price them to sell within 60 days as the norm. So 2 month supply doesn’t seem low to me. In fact there’s about a 2 month supply pretty much across the board regardless of price, as to REO’s. That absorption rate only compares REO for sale to REO sold and not all property sold. Keeping it apples to apples.

    There was a 37% increase in the sell off rate 2nd half vs 1st half in the under $100,000 market, which represents about 17% of the total REO market.

    Only a 24% change above $300k, but $300k+ only accounts for about 9% of the foreclosure market in King County these days.

    I think that % was higher back in the days of more “builder went belly-up” homes in 2008 and 2009. Those homes dried up for the most part in 2009, given lenders largely stopped funding the spec homes of small builders in the latter half of 2007.

    That is one area of the foreclosure market that will not be “coming back”. I see a few “new homes not completed” here and there. But not as many as in 2009. Hardly any new-home- completed- builder-walked homes. Those were some of the best homes at the best prices and I’m sorry to see them all gone.

    **required disclosure – stats not compiled, verified or published by The Northwest Multiple Listing Service**

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  55. 57
    MichaelB says:

    By ray pepper @ 54:

    RE: deejayoh @ 22

    deejoyah this may help you: http://www.cnbc.com/id/45858675

    “Happy Days Are Here Again!” The hedge funds are going to buy up all of the shadow inventory!

    Seems to me that over the next decade home prices will follow a repeating pattern of brief stabilization followed by another step down as homes pour onto the market. Each time prices begin to stabilize more properties will be dumped on the market – further driving down prices and further damaging the psychology of the market. This cycle is bound to re-occur over the next decade unless there is a huge crash at some point. It will be interesting to see how many times this pattern repeats until people and banks completely lose all hope and take their losses. Some people on this site seem to believe that shadow inventory and foreclosure problem have magically disappeared – magical thinking!

    Also interesting that only a small percentage of potential homebuyers can come up with a 20% down payment and qualify for a loan with a bank…

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  56. 58
    Howard says:

    The thumbs up and thumbs down has reinforced what I always knew to be true, but need to have more resolve to live by.

    Honey attracts more flies than vinegar..

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  57. 59

    By ARDELL @ 56:

    Part of the low inventory of foreclosed property is just due to an increase in the rate of their selling off in the 2nd half of 2011 vs the 1st half of 2011.

    A full 50% increase in the $100k to $200k range, sold in the 2nd half of 2011 vs 1st half 2011.

    That’s a really misleading use of stats.

    For King County SFR REO sales, I’m showing a total of 6 more sales in the second half than the first half. That’s not even a .5% difference in sales. If you want to break it out by price, under $200k (I didn’t run 100-200k), I’m showing an increase of about 23%, but that likely just means the banks are lowering the prices. I also found an increase of sales under $300k of about 9%. Given the steady rate of overall sales, that would again indicate that they are simply lowering their prices (although obviously it could be condition or size affecting that too).

    The point is, there’s no significant change in overall REO sales volumes, just the price that they are selling at. So changes in REO sales are not affecting the overall inventory numbers.

    Numbers from NWMLS sources, but not compiled or guaranteed by the NWMLS.

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  58. 60

    By Howard @ 58:

    The thumbs up and thumbs down has reinforced what I always knew to be true, but need to have more resolve to live by.

    Honey attracts more flies than vinegar..

    Or that people like to hear what they want to hear. That is how politicians survive.

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  59. 61

    RE: Pegasus @ 35 – Do me a giant favor: Read the link before commenting on it. Trust me, you’ll sound a lot less stupid. Had you bothered to read it — heck, if you’d taken the few seconds to skim it and just read the conclusion — you would have read: “The truth is that banks have been relying on homeowners to do the right thing. It might be time for homeowners to do the smart thing instead [i.e., stop paying their mortgages].” Sure doesn’t sound like a media hack spouting the Wall Street line to me…

    Or, I guess you can just keep watching those monkey-produced YouTube videos as your sole source of information about the world around you…

    And for that matter, if I’m linking to a “Wall Street hack” then by implication I’m part of the problem as well. So do me another favor: Get a clue about what I have been saying for a very long time……:
    http://www.kuow.org/program.php?id=22637

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  60. 62

    RE: Craig Blackmon @ 61 – You’re making a big assumption that he didn’t read the link. Reading comprehension has never been his strong suit.

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  61. 63
    WillyNilly says:

    RE: The Tim @ 36

    Tim,

    This is showing up blue for me.When I go to colorhex.com and enter in E6EEE6 it shows up as a pale green, also on several other sites that preview hex colors.

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  62. 65
    David Losh says:

    RE: Craig Blackmon @ 61

    You’re forgetting the great Rick Santelli rant, also on YouTube:

    http://www.youtube.com/watch?v=or-EKjfVCoA&feature=related

    Do me a favor and come up with some facts for your assertions.

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  63. 66
    The Tim says:

    RE: WillyNilly @ 63 – As I said, comments by the post author (which is usually me) are highlighted in blue. However, the posts by other people that I manually highlight, such as Kary L. Krismer @ 64 that I just did as an example, are green (E6EEE6).

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  64. 67
    Pegasus says:

    RE: Craig Blackmon @ 61 – I did read it before commenting and found it to be regurgitated pablum probably copied from some old blog. You portrayed it as some big find. Whooo Hoo!!!! As Ray pointed out it was very old news. You argued that “The New Yorker carries a little more weight” somehow even though the article is three years too late to be meaningful. My point still stands. The mainstream media especially the New York financial media hardly ever prints anything without an agenda. You would know that if you ever did some original research and tried to follow where and how these articles originate down the rabbit hole. Perhaps the article is to be used by placing it under the noses of our Congress to scare them into passing something favorable for the banking industry to stop strategic defaults? There was a banker settlement being negotiated when the article was published. Who knows? You certainly did not deserve to have your post automatically highlighted for that untimely unoriginal trash. Of course you then tried to pretend that did not happen after others here also had expressed their concern about the obviously biased highlighting.

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  65. 68

    RE: David Losh @ 65
    Fact: Robo-signer scandal delayed foreclosures. http://consumerist.com/2011/09/slew-of-foreclosed-homes-to-hit-the-market-in-early-2012.html
    Fact: New “mediation” law delayed foreclosures. http://www.northwestlandmatters.com/real-estate/foreclosure-fairness-act-passes-giving-hope-to-troubled-homeowners/
    Fact: A lot of people believe the pace of foreclosures will pick back up again. http://bottomline.msnbc.msn.com/_news/2011/11/17/8858067-new-foreclosures-begin-to-pick-up-pace

    And that Rick Santelli rant? You watched it, right? He’s criticizing “big government” “bailouts” of homeowners who can’t “carry the water.” The New Yorker piece does not address that point. Rather, the New Yorker piece suggests that underwater homeowners should stop being suckers and start acting like businesses by defaulting on their debts when it is in their financial interests to do so.

    The problem with blogs? The hard-core contributors often-times bring their own personal agendas and have a very, very difficult time listening to and actually responding to other comments.

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  66. 69

    RE: Pegasus @ 67 – Three years too late to be meaningful? Because if you haven’t wised up and stopped paying the mortgage on your grossly underwater home (paraphrasing the article), it’s too late to do so now? That doesn’t make any sense.

    And yes, when the New Yorker conveys that message — rather than blogs that originate somewhere outside of the “rabbit hole” — it IS a find. But from your perspective, I guess, the mainstream media is always wrong, regardless of its message. Not exactly a coherent argument…

    And finally, you’ve got a very “interesting” editor’s eye if you think the New Yorker piece was “copied from some old blog.”

    OK guys, berate me to your heart’s content, I have work to do and plan on exercising incredible self-control by not following this thread further.

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  67. 70

    By Craig Blackmon @ 68:

    RE: David Losh @ 65
    Fact: Robo-signer scandal delayed foreclosures. http://consumerist.com/2011/09/slew-of-foreclosed-homes-to-hit-the-market-in-early-2012.html
    . . .
    The problem with blogs? The hard-core contributors often-times bring their own personal agendas and have a very, very difficult time listening to and actually responding to other comments.

    I believe the first is a national article. From memory though, I think some of the bank moratoriums for review did also include Washington, but I think it’s still undetermined that robosigning affected the December numbers.

    I would agree with the last point 100%.

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  68. 71
    Pegasus says:

    RE: Craig Blackmon @ 69 – By three years late I was comparing The New Yorker article to others that had made the same leap three years earlier. It is old and rehashed info. Did the New Yorker portray something new? Nope…only in your mind maybe. Your info while it may be valid has been out there for years and years and thoroughly discussed even in this “outside” the “rabbit hole” blog right here in the PNW. First in the blogosphere and little by little by the mainstream and now finally you have discovered it? Yippee!! It is NOT a find. Earth to Craig, please tune in. What you are saying makes you look like you just discovered Christmas comes on December 25th. I will give you a hint…it is the same date every year. You probably don’t think there is a major media conspiracy about coverage in this country against Ron Paul either.

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  69. 72
    Ray pepper says:

    Tim, I think this highlighting has got to go. I found myself clicking thumbs up for my post and that’s idiotic. I was also saddened that one of my posts went to white and found myself asking….but why?????

    I also noted that Craigs post was immediately shaded to a different color which smacks of RCG which I no longer even look at. Tim, you have appeared to be a bit of a Cheerleader for Craig and alot of the regulars know this. You have curtailed Red Fin favoritism quite well compared to the past but what I really want to know is do you encourage people to plop down 500 up front and then 4500 in 6 months if they have not found or closed on a home they desire?

    I have nothing against Craig and support his model but only if he corrects a few critical components that I find to be a sheer and utter rip off that I don’t want any family ever to face. I simply cannot imagine, in the last 16 years of licensure, collecting from a client 5000 when a home purchase they desired has not yet been achieved. Furthermore , if these funds are rarely collected I do NOT like the pressure that would be placed on a family to buy something they do not want because of a perceived penalty.

    I know you were not pressured to pay these fees Tim but would you suggest others do? Knowing what you do about the difficulties of short sales, reo’s, and the current market environment? Hasn’t the public been screwed enough Tim?

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  70. 73

    RE: Ray pepper @ 72 – I would agree on the shading based on voting, with one exception. If a single post gets 5 or more up AND down votes, that would indicate it was controversial. But just a positive or negative vote could mean any number of things.

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  71. 74

    RE: Kary L. Krismer @ 39

    LOL Kary

    Ya got a pink slip for sarcasm….hey, SWE could easily control the colors on the blogs, just get 10 different computers and email addresses on Seattle Bubble, and vote ya down thumb 10 times if I don’t like the way ya blog….LOL

    Its a friggin’ joke, I wonder if someone mysterious at Seattle Times is calling the thumb shots that way too….LOL….ever since we joined Seattle Times????

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  72. 75
    redmondjp says:

    By The Tim @ 66:

    RE: WillyNilly @ 63 – As I said, comments by the post author (which is usually me) are highlighted in blue. However, the posts by other people that I manually highlight, such as Kary L. Krismer @ 64 that I just did as an example, are green (E6EEE6).

    Count me in the camp that also doesn’t see the green there, I would also call it blue if forced to choose between the two colors. But I have color deficiency in certain hues so I’m not the best judge.

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  73. 76
    FenceSitter says:

    RE: redmondjp @ 75
    I can see green when I tilt my laptop screen all the way back (it goes back farther than it should – broken hinge); but at my normal reading angle the blue and green are almost indistinguishable.

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  74. 77
    ARDELL says:

    I had an opportunity to speak with a respected source just north of Sacramento over the holidays, given their market turned in 2005, earlier than ours. Other markets like Vegas and Detroit and San Diego and almost all markets except NYC and Boston turned earlier than ours, but Sacramento area has more relevance IMO as a data point.

    While a few types of foreclosures there have run their course in the 6 to 7 years since their market turned, there is no slowdown of distressed property sales in sight as a % of total homes sold. That includes foreclosures and pre-foreclosures (short sales).

    Consequently home prices continue to fall, even though there are fewer foreclosures, because there are MUCH few homes for sale that are not foreclosures. So it continues to be a foreclosure driven market, even with the fewer number of foreclosures.

    1) The first group were those who were living off of their appreciation like an ATM card. They had no source of income, except maybe staying at home and being a “day trader”. They were simply doing a cash out refinance every year off the appreciation, and then paying the mortgage (and their living expenses) with the money they received from the refinance. Given they maxed out the mortgage every year, those people went into foreclosure pretty early on with no equity to borrow against.

    2) The second group were people who were able, and even willing to some extent, to continue to pay their mortgage. But they didn’t want to pay their $300,000 mortgage while new people were coming in and buying the same home as theirs for only $200,000, which was the inventory created by the people in the first group. They started buying up their neighbor’s homes at $200,000, while still owning the home with the $300,000 mortgage.They then defaulted on the original home. Lenders have pretty much nixed that parlor game of trading houses between neighbors. So that group of foreclosures is gone.

    With those two groups of foreclosures being removed from inventory, one would think that foreclosures would be less…and possibly in pure numbers they are. But foreclosures have grown significantly in the % of total inventory and the % of total sales.

    With lower inventory and decreased number of homes sold, the foreclosure market is taking over the entire marketplace at this point 6 or 7 years out. I do think that is our future if the number of non-distressed homes on market does not increase.

    Pay less attention to the # of foreclosures, which may become less, and more attention to the % of total sales that are foreclosures. There is no light at the end of the tunnel until and unless the foreclosures become a much smaller % of total homes sold, even if the number of foreclosures reduces.

    That is why I look at snapshots like this http://bit.ly/zYjfv3, because you can half the # of foreclosures, yet still have a foreclosure driven market in areas where the other side of the coin (regular sales) are only 42% of total sales vs 87% of total sales.

    Looking at the increase and decrease in # of foreclosures is important, but tracking their % of total sales is even more important looking out from here as a predictor of future home prices.

    A smaller # of foreclosures can, and will, still push home prices down continually, as long as those smaller #s continue to be a high % of the marketplace in general. That will vary from one area to the next, as the link indicates.

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  75. 78
    ChrisM says:

    RE: FenceSitter @ 76 – I’ve got multiple monitors, and never bothered adjusting them beyond “auto adjust.” One of them is significantly yellower than the others.

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  76. 79
    AndySeattle says:

    RE: The Tim @ 36

    Maybe change the Hex to #8fee98… at least it’s deliberately green and not so open to color interpretation. I’m with the others… it presently looks blue.

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  77. 80

    RE: ARDELL @ 77 – Sacramento has a 10.9% unemployment rate. Down from 11.4% in October.

    http://www.bizjournals.com/sacramento/news/2011/12/16/sacramento-unemployment-drops-seasonal.html

    I wouldn’t use anything in CA as a comparison to anything else outside CA.

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  78. 81
    ARDELL says:

    I have a suggestion, though off topic. Why have any blue hyper-linked commenters? When I answer questions in the Redfin forums it does not link to me or my blog. Doesn’t curtail my willingness to try to be of value…and I don’t even use my last name.

    Perhaps if you had all commenters in black with no link, it would add something of value to the site? Just a suggestion, as a few people over time have noted a distaste for the “marketing” aspect of the hyper-linked names.

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  79. 82

    By ARDELL @ 81:

    I have a suggestion, though off topic. Why have any blue hyper-linked commenters? When I answer questions in the Redfin forums it does not link to me or my blog. Doesn’t curtail my willingness to try to be of value…and I don’t even use my last name.

    Perhaps if you had all commenters in black with no link, it would add something of value to the site? Just a suggestion, as a few people over time have noted a distaste for the “marketing” aspect of the hyper-linked names.

    Hmmm. I don’t think it’s blue hyper link with our names that bothers people here, but the fact that some people with the blue hyperlinks tend to market themselves in the content of the posts. I don’t mind the hyperlink. I don’t have to click on it. But when I read someone’s post boasting about how great they are, or how much expertise they have, that turns me off. If you’re going to do that, pay for an advertisement.

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  80. 83

    By ARDELL @ 81:

    Perhaps if you had all commenters in black with no link, it would add something of value to the site? Just a suggestion, as a few people over time have noted a distaste for the “marketing” aspect of the hyper-linked names.

    I don’t recall anyone complaining about the hyper-linked names. It’s the thinly veiled sales tactics of some with hyper-linked names that people complain about.

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  81. 84
    MichaelB says:

    Error

    Rate this comment: Thumb up 0

  82. 85
    Scotsman says:

    RE: ARDELL @ 81

    Um. Ardell- you’re the one who provided the hyperlink when you entered your website on the login page. You can always take it off.

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  83. 86
    David Losh says:

    RE: Craig Blackmon @ 68

    So you Googled your talking points to make them facts.

    The public has discussed those points into the ground.

    Kary made a point that I agree with, and that is we should start looking at other explanations for the slow down in foreclosures.

    I went to dig out that article that I saw.

    Rather than discuss your assertion that after we clean up the talking points about foreclosures:

    “The pace will continue? Do you have some facts to go along with that? I’d like to know.”

    You chose a hit and run.

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  84. 87
    ARDELL says:

    RE: Scotsman @ 85

    This is true. But when the option is available, and professionals don’t use it properly, it just makes them look too stupid to know better. I would prefer it be not an option for me or anyone else.

    A better option for me might be to just take on a pink pony avatar with no link at all. Maybe even take the name Pink Pony. But something tells me there is a law that a licensed real estate agent must identify themselves when speaking in public about real estate. I know that law exists in many states. Not sure about WA. So when I see someone talking who is obviously an agent, who isn’t identifying themselves as an agent…it feels slimy to me.

    Kary might know the law on this issue. Can a licensed real estate agent talk publicly and hide the fact that they are a licensed agent? I know many do that, but isn’t that illegal or unethical or against some rule?

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  85. 88
    Scotsman says:

    RE: ARDELL @ 87

    That has got to be the biggest load of self-justifying bs I’ve heard this year. Yup, gotta keep the link, gotta keep the pic, etc.

    You’re the best. You said it yourself.

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  86. 89

    RE: Ray pepper @ 72 – It’s stunning. WaLaw Realty has rebated over $1,000,000 to date to its buyer clients while charging less than a typical broker (and for houses >$1m, tens of thousands of dollars cheaper), in addition to providing the full legal counsel of an attorney. Yet somehow we are “ripping off” the consumer! Hey Pegasus, I think Ray needs to get in touch with planet Earth too!

    As you’ve revealed elsewhere, Ray, your brokerage is really a hobby and you make your money on investing. That’s great. But that’s not my model, nor is it a model that can be adopted in any sort of widespread fashion. Instead, a successful brokerage needs to know how to make money AS A BROKERAGE. My model allows me to do just that. Unlike a traditional brokerage, where the closed transactions have to subsidize EVERY client, many of whom absorb lots of time without closing, in my model every client pays to hire me, period. Everybody pays the same fee for the same service. That alone strikes me as a lot more fair than a fee based on a percentage of the sale price.

    You act like a flat fee, due regardless of closing, is totally absurd, yet most every other professional works on this model. Commissions? Those are typically associated with salespeople. And any buyer, in particular, who is comfortable getting representation from a salesperson needs to reconsider the meaning of the term.

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  87. 90
    ARDELL says:

    RE: ARDELL @ 87

    I think your perception that I “am the best” has translated in your brain to my having “said” that. I don’t remember saying that here. But by all means…feel free to “quote” it if I did.

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  88. 91
    ricklind says:

    I think the color coding is an interesting and noble experiment that has not added any value and needs to go away.
    Rick

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  89. 92

    By ARDELL @ 87:

    Kary might know the law on this issue. Can a licensed real estate agent talk publicly and hide the fact that they are a licensed agent? I know many do that, but isn’t that illegal or unethical or against some rule?

    There are, or at least were, rules about an agent properly identifying themselves on advertising and business cards, etc. It’s not very well enforced, but once the DOL did check for compliance all the cards in my old office which were at the front door. But in your scenario, as long as you didn’t make your real identity known, and don’t provide any links to your services, etc., it wouldn’t be advertising, so I doubt the rule would apply. But since I haven’t even checked to see whether those rules changed when we all became “brokers,” obviously I haven’t checked to see if it would fit within any current law.

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  90. 93
    ray pepper says:

    RE: Craig Blackmon @ 89

    no no no..Read my post again…I support your model except for a FEW CRITICAL POINTS!

    A family should NEVER EVER feel pressured into buying ANYTHING especially a HOME due to a financial time line to make one decision or another . Furthermore the family is faced with a situation of PAY 4500 to keep my relationship with my Attorney or lose my relationship and be force to find someone else for representation..

    I don’t care if you REBATE a 100 million dollars! I don’t care if the Conventional Brick and Mortar give back millions to the Community! When I see a RIP OFF or a potential dilemma for someone I post my feelings..

    What was good for Tim should be good for everyone…FIX IT!

    No family should have to face that 4500 question. As usual crickets from Tim in/re to this but the silence answers my question. There is no way IN THIS WORLD or as you say ON THIS PLANET that Tim would have EVER cut you a check for 4500 without a home.

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  91. 94

    RE: ray pepper @ 93 – Ray, you have a fundamental misunderstanding of our fee agreement. Yes, the balance of the fee, $4500, is due at six months. However, we remain obligatede under the fee agreement to continue as your attorney and broker. A family is NEVER forced “to make one decision or another,” because we still owe them the work long after they’ve paid the fee. Indeed, we have clients who paid the balance of their fee two years ago and who have yet to buy, yet we’re still their attorney and their broker. So there simply IS NO “4500 question.”

    Absent the $4500 Question, I guess you’ve got no problems with my model, right? Hooray! Ray Pepper is a WaLaw Fan!!

    If you have any further questions or concerns — or maybe I should say mistaken assumptions — about our fee agreement, Ray, just check out our web page: http://walawrealty.com/fees/
    We don’t hide anything, our fees are clearly stated and easily found. And note that final sentence of the second paragraph… Would a client pay the $4500 before they bought a home? Well, that’s what the contract says they have to do. But that just means they’ve paid in full, in advance of the services provided. Really not a big deal.

    Finallly, what and when Tim paid or didn’t pay — and for that matter any other aspect of the attorney/client relationship — is not my business to disclose. If he wants to keep that information confidential he has every right to do so.

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  92. 95
    ray pepper says:

    RE: Craig Blackmon @ 94

    Tim already disclosed to us Bubble Readers he did not have to pay that because it was not instituted prior to his engaging in a business relationship with you..

    Let me just say this..First your NOT talking to David Losh here so I will not engage in circles of incoherent rhetoric. There is no misunderstanding of your fee structure on my part.

    The FACT remains that 4500 is DUE at 6 months if a Buyer purchases or not and wants to keep you as their Attorney to close their transaction in the future (if there is one). With the difficulty of the current market and many Buyers who may decide to NOT buy for some reason they will be OUT 5000 and never achieved their property. The “Decision” they are forced to make is whether they should pay you 5000 for services that may or may not result in a purchase due to many many factors.

    Also Craig, what if you go out of business? Die? Break your relationship with your partner? Suffer a loss of your license? Buyer loses job? Buyer dies? Divorce? Buyer moves for job? Just so many factors come into play that COULD cause a HUGE financial loss to a Buyer when it is simply not necessary other then a “looming threat” that dangles over the head of a Buyer that is simply not necessary..

    Heres a better idea………Screen your clients HEAVILY before engaging!

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  93. 96
    JGBellHimself says:

    RE: ARDELL @ 77
    Your points about the foreclosures changing is dead on.

    Somethings you might want to watch for in WA:
    In the last year in AZ there was huge decline in bank purchases of their own foreclosures, but a steady increase in “third party sales”.

    Total Phoenix foreclosures for Nov & Dec 11 this year are about the same as last year 10. First, 1st Q sales for the last four years are about the same, so the REAL-ty question in AZ is: will the 1st Q of this year jump back up to last years numbers, or will it show U.S. a REAL decline. Lots of opinions, no data, yet.

    What “all cash investors” now appear to be doing is buying cheap homes AT foreclosure, and not later as REO listings through the AZ MLS.
    What that means is a huge decrease in both the supply and sales of REO properties, by Realtors.
    What that also means is that about 20% of the lowest priced homes never get into the RE market MLS – which drives UP the reported MLS “average sales prices”.
    What we are also seeing is that as the supply of ALL cheap “foreclosures” drys up in AZ, the “all cash investors” appear to be buying NEV’s cheapest properties.

    The assumptions in AZ are that the “all cash investors” will now buy more expensive homes; that does not appear to be true. And that deeply underwater home owners will, now, sell at 50% on the dollar, that also does not appear to be true. Why should they not wait, and see IF the market really does heat up, this summer, and they can cut their losses even more?

    Many in AZ have held on through all this, why panic now – unless you have to sell, why do it?

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  94. 97
    ARDELL says:

    RE: JGBellHimself @ 96

    Thank you…I appreciate your comment. I have many friends in AZ that I discuss “the market” with, but have never been there. There is an annual RE event there that I would go to, but it coincides with my Spring visit to L.A. during my granddaughter’s Spring Break. I’ll get there some day.

    What part of AZ are you in?

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  95. 98
    Scotsman says:

    RE: Kary L. Krismer @ 92

    What ever happened to: “I don’t know?” Short and sweet.

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  96. 99

    By Scotsman @ 98:

    RE: Kary L. Krismer @ 92

    What ever happened to: “I don’t know?” Short and sweet.

    When was the last time you ever heard an attorney mutter those words?

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  97. 100
    One Eyed Man says:

    RE: Ira Sacharoff @ 99

    I don’t know.

    Rate this comment: Thumb up 0

  98. 101

    RE: ray pepper @ 93 – I find it a bit ironic that a broker that allows consumers a choice, has such a problem with there being some other choice besides his.

    Craig can correct me if I’m wrong, but he doesn’t go and drag people out of their houses and put a gun to their head forcing them to utilize his services. It’s something people choose after considering the normal brokerage option and various alternatives. If they don’t like Craig’s terms, they go elsewhere.

    Also, keep in mind that Craig probably deals more in higher end prices, so the buyers are probably more likely to actually buy something (“they’re homeowners”) and the money is probably not that big of a deal for them.

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  99. 102

    By Scotsman @ 98:

    RE: Kary L. Krismer @ 92

    What ever happened to: “I don’t know?” Short and sweet.

    Because what I did instead was give the answer under prior law, without taking the time to check out current law.

    It’s not an issue I’m interested in enough to actually look up the answer. Just as here, my business cards and advertising provide full identification, so I don’t care if they loosened the standards.

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  100. 103
    David Losh says:

    RE: Craig Blackmon @ 94RE: ray pepper @ 95

    You’re right, these aren’t discussions, they are ads.

    Ray, you come here, and everywhere to advertise.

    You and Craig are advertising dueling rebates.

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  101. 104

    By Scotsman @ 98:

    RE: Kary L. Krismer @ 92

    What ever happened to: “I don’t know?” Short and sweet.

    Here’s a tip for people about attorneys. If when you’re asking them questions they are giving you very definite answers, you should get up and walk out of the room and find a new attorney. They are just making things up.

    Of course it depends on the question. If, for example, you ask them the amount of the homestead exemption in Washington state, it wouldn’t be surprising that they can give you a precise number. But if they’re giving you a definitive result on say a contract dispute, they’re probably just trying to sucker you into using their services, or otherwise trying to impress you.

    The law often turns on the various fact patterns of a case. For example I once avoided summary judgment defending someone who signed a note where the plaintiff’s suit was brought one or two days before the expiration of the six year statute of limitations. I argued that they had waited too long, and the judge found a question of fact based on what else had occurred during those six years.

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  102. 105
    ray pepper says:

    RE: Kary L. Krismer @ 1

    Kary, if you read my post I do not have “much” of a problem with Craig. Furthermore, I’m just one guy with an opinion.

    But, I do know that many people decide not to buy after engaging in what sometimes turns out to be a nightmare of a short sale/REO/conventional purchase experience. The fact that a promise in writing exists of services “down the road” does NOTHING for a family who has changed their mind or has no ability to buy for whatever reason..

    But, again..I’m just one guy that pounces when I see RED FLAGS…and this is a HUGE one for me…but you are entirely correct in that Craig’s model is a change from the insanity of the 6% brick/mortar sham that most here are enslaven to..

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  103. 106

    By ray pepper @ 95:

    RE: Craig Blackmon @ 94

    The “Decision” they are forced to make is whether they should pay you 5000 for services that may or may not result in a purchase due to many many factors. . . . Just so many factors come into play that COULD cause a HUGE financial loss to a Buyer when it is simply not necessary other then a “looming threat” that dangles over the head of a Buyer that is simply not necessary. Heres a better idea………Screen your clients HEAVILY before engaging!

    a) The “Decision” is made when they hire us, Ray. At that time, they sign a contract that obligates them to pay us $500 up front and $4495 at closing or six months, whichever comes first. I mean, before you sign a contract, you should know and accept the obligations (in exchange for the benefits, of course), right? And Kary is right, we don’t even have firearms in the office, let alone point them at potential clients to get them to sign up…

    b) Your concern about financial hardship caused by our fee agreement holds a lot more water when we represent sellers, because sellers do not need cash on hand to close the transaction (well, maybe not in this market). Accordingly, a seller really might have a degree of hardship in paying our fee at six months. But we work with our clients in that regard.

    On the buyer side, though, the buyer should have the cash on hand to close (down payment plus closing costs). Payment of our fee is really an advance on those funds, because once the fee is paid the rebate at closing increases accordingly, virtually assuring a credit that will cover all closing costs. With your deep and abiding concern for the financial hardship to buyers created by our fee agreement, you’ve created a real Straw Man. Certainly better than “circles of incoherent logic” but still a pretty cheap rhetorical device.

    c) Yes, I could read another “WaLaw hater” comment — there seem to be quite a few here, which is astonishing given that we stand in such stark contrast to the salespeople at the NAR — and stroke out from disbelief. Yes, that would cause hardship for my current clients. This is no different than any other professional practice that maintains an ongoing relationship with clients.

    d) Finally, you’re right that “heavy screening” of potential clients is an absolute must for real estate brokerages. And that’s exactly what our flat fee does. If you’re not ready to commit to our fee, then you’re not a good fit for our services. And presumably, you’re ready to commit to our fee because you know you will be buying a new home. We’ll be there for you until you do so (subject to the terms of our fee agreement as related in detail on our web site).

    Now its a quck comment to Tim before getting back to something productive… ;-)

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  104. 107
    David Losh says:

    RE: ray pepper @ 105

    Baloney.

    Craig provides a service, your business model does something different.

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  105. 108

    Tim, the “thumbs up/thumbs down” and color-coding feature might work well with a varied and disparate community of clear thinking and open-minded individuals anxious to engage in meaningful discussion. In this forum, it just feels an awful lot like the shenanigans in the 7th grade cafeteria…. I vote for removing the feature.

    Well, there’s that big steam whistle — I gotta start my shift!

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  106. 109
    David Losh says:

    RE: Craig Blackmon @ 6

    See, I’m trying to be nice here, and you want to insult me.

    You’re not saying anything. You, and Ray are having dueling ads.

    I do still want to know what special insight you have that foreclosures will be ramping back up.

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  107. 110

    RE: David Losh @ 3 – A conversation initiated by Mr. Pepper, not me — but when he bashes WaLaw, you better believe I’m going to stand up to defend it — or more accurately, explain it as no defense is necessary……

    Rate this comment: Thumb up 0

  108. 111

    RE: David Losh @ 9 – Can’t… stop… commenting……

    Special insight? None. Sorry if I ever conveyed otherwise.

    Rate this comment: Thumb up 0

  109. 112
    Ray pepper says:

    RE: Craig Blackmon @ 108 – Craig. Shhh. Don’t let this get out. But…., I just gave u a thumbs up on this comment from my I phone. Now you owe me one!!! ….

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  110. 113
    ChrisM says:

    RE: JGBellHimself @ 96 – Hi JG, this is a long shot, but do you have an idea what then happens to the houses bought at auction – are they flipping them, renting them out, or god forbid actually living in them?

    If flipping, then it seems it wouldn’t affect the MLS stats much. What am I missing?

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  111. 114

    RE: Craig Blackmon @ 110
    If I’m not mistaken, either the NWMLS has a rule prohibiting agents from bashing other agents, or at least there’s an expectation. So I never bash agents by name in public forums. I’ll certainly bash the industry, and I don’t feel that it’s a bash if I state that there are a lot of sleazy agents out there who will sell their grandmothers for a commission, and state that she’s 50 years younger. As far as the WA LAW model, I don’t really have a problem with it in the least. But like Ray alluded to, what happens if circumstances change after six months, and the client is no longer in a position to buy? Like they’ve lost their job, gotten divorced, seriously ill, or died? Does WA LAW keep the 4995$, or is there some flexibility or stated policy about that?
    Enquiring minds need to know.

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  112. 115

    RE: Ira Sacharoff @ 114 – I’m not sure what to make of your comment about “agent bashing” — did I run afoul of the rule in my comment? I don’t see how…

    Is a client obligated for the full fee when they sign the fee agreement? Yes. If the client changes their mind about buying a house, would we be willing to waive some or all of the fee due? Perhaps. That conversation would probably turn in part on how much work we had done to date. If the client suffers some horrific catastrophe that seriously impairs the client’s ability or willingness to buy a house, would we waive some or all of the fee due? Almost certainly, although again I’d want to make sure that we at least got paid for the work done to date. We are always happy to discuss our fee and some adjustment with a client. But our contract obligate the client to pay at closing or six months.

    Obviously we need a business model that allows us to be successful. Your model, as a traditional agent, requires payment of a 3% commission at closing. This means that (a) you will have many clients who will use your services without paying you a penny, so other clients by definition have to “overpay”, and (b) the fee charged to the remaining clients (indirectly, since otherwise had they used WaLaw the SOC would be theirs) is determined by the sale price, not by the amount of work you did. I mean, you work just as hard for a client buying a $300k house as you do for one buying a $900k house, right? Yet the former pays $9k, the latter $27k. Neither (a) nor (b) seem particularly fair to me. By definition, any model will have some drawbacks. I humbly suggest that the drawback to mine is a whole lot better than the drawback to yours.

    Mr. Losh, note that again I am replying to a comment in elaborating on the benefits of WaLaw (an implicit plug, for sure).

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  113. 116
    ray pepper says:

    RE: Ira Sacharoff @ 114

    let me answer this for you Ira without all the jibberish…THEY LOSE 5K!! If they like you and your story is good enough you will lose a PORTION of the 5k….

    http://www.youtube.com/watch?v=VDW0ZnZxjn4

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  114. 117

    RE: Craig Blackmon @ 115
    My comment about agent bashing was more a general comment about agents who participate on Seattle Bubble and not really with you in mind at all.
    It’s not a black and white world out there. For someone who is certain that they want to buy or sell a house, your model works great. I’ve referred a client to you(or rather Marc) with absolutely no hesitation. But it’s also true that not all agents work the same way commissionwise. Some agents do charge flat fees, some rebate commissions, and a few still work for 3% commissions. Some of the agents who are affiliated with large brokerages have no choice but to charge 3% commissions, either because of brokerage policy or because their expenses are so high. For some home sellers, a genius agent who can get a home sold for the highest amount quickly is worth every bit of that 3%. I am not that agent, and almost exclusively represent buyers. If I owned a brokerage, I’m certain I’d come up with an entirely different model, different than the traditional model and probably different than yours. We all have to make a living. It’s how we make it that matters. If I work hard and put in a lot of hours for a client, I do deserve more money than if it was a very simple transaction, and that is usually reflected in the amount of the commission I rebate. But that’s not perfect either. I want my clients to feel that they got their money’s worth, and that even if the seller “pays” all the commission, it’s the buyer who provided that money.

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  115. 118
    ChrisM says:

    I have to say, as a consumer I don’t understand the controversy about the $5000. It’s right there, up front. Not a whole lot of mystery. Anyone who doesn’t like it is free to shop elsewhere.

    Is there really a need to keep beating this dead horse every month?

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  116. 119
    David Losh says:

    RE: Craig Blackmon @ 115

    You couldn’t leave me out of it?

    I also like to get paid, and it is a requirement for my services. People pay us to prepare properties for sale. We do get business from the Seattle Bubble.

    Thank you to each and every one of you, for the entertainment, and the business.

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  117. 120
    Pegasus says:

    RE: Ira Sacharoff @ 117 – Quit beating around the bush. These clowns keep showing up here pulling all kinds of stunts to advertise their business. If you point out their shortcomings they label you as stupid. If you point out they might be breaking the rules and laws they come back and pretend it was all a mistake and sort of apologize to cover their backs. There is NO WAY I would ever use these clowns for anything except to clean my cat’s litter box.

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  118. 121

    RE: ChrisM @ 118 – No. Thank you, Chris. I won’t take the bait next time. Not even from Ira.

    Rate this comment: Thumb up 0

  119. 122
    Scotsman says:

    Sounds like we need more buyers/sellers so you boys won’t have so much time on your hands.

    If any of you except Ira think you’re doing an effective job of marketing yourselves or your businesses on this site you’re nuts. You’d be better served by keeping quiet. IMHO.

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  120. 123

    RE: Craig Blackmon @ 121
    I must have missed previous discussions about the business model. All I did was ask a question. There was no judgement involved, and I didn’t think I was anything other than respectful. Now I’m being accused of baiting? If anything, I’m an amateur baiter. But some here can claim the title of master.

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  121. 124

    RE: Scotsman @ 122 – Thank you, Scotsman. Duly noted and I appreciate the feedback.

    As Ira can attest from a prior exchange, I’m passionate about my business and that passion sometimes gets the best of me. Last time, I spouted off about WaLaw in a tangential comment — and that’s being generous. This time I at least responded directly to other comments, but the point remains a good one: Overselling the business is a lousy way to advertise and a good way to come across as an overbearing jerk. And repeatedly engaging Mr. Pepper or Mr. Losh — or even Ira — over the minutia of the model is quickly construed as oversellling. “Click!” goes the lightbulb in my head. Another lesson learned.

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  122. 125

    RE: Ira Sacharoff @ 23 – Being accused of baiting ONLY because when I responded I got drilled. The regulars in this forum know my model and their patience for hearing about it ad naseum is exhausted. So ANYONE who asks me about my model in this forum is, whether they know it or not, baiting me because when I respond, I get a negative response.

    But again, lesson learned. Other than always offering up a link to my site, I’m going to keep my discussions of WaLaw to a minimum.

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  123. 126
    David Losh says:

    RE: Craig Blackmon @ 124

    I also have referred people to your business. It’s a good business model that in my opinion can be a bargain if used correctly. You are an attorney, and some transactions need an attorney.

    You did a drive by comment, and I baited you. Actually I baited Ray, because Ray always wants a bluey comment.

    Kary brought up a great point that is continuing to be discussed. There must be some other reason why foreclosures are slowing down.

    You even came back with a great bit of information that Aurora Services pulled their listings. The topic still has me looking at news about foreclosures.

    I have never seen a market place where, from what I look at, it appears most of the low end listings are short sales or bank owned.

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  124. 127
    One Eyed Man says:

    RE: Craig Blackmon @ 125

    Relax Craig. Your explanations were fine and I at least viewed the discussion as one of business models and not as self promotion. Ira wasn’t baiting you. He’s way too decent a human being to bait anyone except maybe innocuously for a little humor. You’re passionate about what you do but IMO all the discussion here was reasonably informative and didn’t appear to me to be directly related to commercial gain through self promotion. Ray and David will take their shots as advocates for their own positions but that’s just part of the intellectual discourse.

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  125. 128

    […] time once again to expand on our preview of foreclosure activity with a more detailed look at September’s stats in King, Snohomish, and Pierce counties. First […]

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