18-Months Later, Reflections on “A House By The Park”

A few weeks ago I linked to Urbnlivn’s follow-up with Mike Davidson regarding his custom-built home near Discovery Park, mentioned on these pages back in 2009: Q&A with A House By The Park

Today Mike posted his own follow-up on his own site that’s well worth reading: A Year And A Half After Moving In

Like the site itself, this follow-up post is full of insights and reflections on specific features of his home, and his thoughts after living with all of his decisions for the last year and a half.

Here’s an example from the post, where he talks about his heating solution (a topic that came up on this week’s poll):

Heating and Cooling

We went with an electric heat pump for the house’s main heating and cooling, and then put electric radiant pads only in the master bathroom and one other concrete slab. This strategy has worked out superbly. I don’t wish I had “real” whole-house radiant heat at all, and in fact, I think that in most cases, it’s overrated. Forced air is able to heat and cool the house a lot more quickly, and it’s well-suited for solar retrofitting when that becomes affordable.

Lesson: Don’t write off radiant heat, but don’t think it’s going to make you automatically more comfortable either. An electric heat pump will give you both heating and cooling in one shot. That said, an inexpensive radiant pad in your bathroom will keep your feet toasty in the morning.

Thanks for the follow-up, Mike. Great stuff. If you’re thinking of building your own home, I highly recommend that you read Mike’s entire site, start to finish.

  

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.

133 comments:

  1. 1
    jesus christ says:

    over a million dollars of course! nice house. probably would have been vaffordable to do for most people thirty odd years ago. Not now,so sad 99,rs.ordinary people priced out of the American dream forever I guess.

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  2. 2
    David Losh says:

    I had to come back, because I got lost in his web sites. This guy is amazing.

    I’m going back to read more of the blog.

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  3. 3
    David Losh says:

    The guy hates Real Estate agents, and screwed his agent around mercilessly, what a maroon.

    He’s in the Internet Business so he does internet business design, so maybe some internet brokerage will hire him. MY GAWD!!!

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  4. 5
    Jonness says:

    RE: Mike D. @ 4 – Mike, you chestnut! Just kidding. You did a great job on the site. I ran across it a few months back via a google search and proceeded to devour it. I really appreciate the hard work and level of detail you provided. Awesome stuff!

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  5. 6
    David S says:

    I have to agree with the first poster that a little extra money spent can buy a little bit more happiness for certain.

    I also have to agree with Mike about the Kohler Flipside. I’ve upgraded with a few Kohler fixtures before and they’re remarkable. Kohler employs skills of artisans, sculptors and computational fluid dynamics scientists when they create their products and it shows.

    Nice blog.

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  6. 7
    joe dirt says:

    Great house and great blog. I love modern.

    I wasn’t clear why his wood siding won’t have the aging problem or his cement floor won’t crack again (I was in a modern house with a floor like that last summer and it was full of cracks).

    The urbnlivin article claims it’s “sustainable”, whatever that means. Most of the construction is the same as other homes, at least geothermal heat would be green, but was cut to save maybe 20k out of 1 million.

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  7. 9
    joe dirt says:

    RE: Mike D. @ 8
    Mike, I’m not clear how a large area of thin concrete won’t crack over time and can’t tell from the picture how well the cracks blend in. If you were starting over would you still go with concrete?

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  8. 11
    Ray Pepper says:

    Mike whats the home worth now? It appears you love Zillow (at least their mortgage market referral system)..What kind of price you get there on Zillow? Or this site: http://www.eppraisal.com/home-values.mvc

    I was very impressed when I watched your video awhile back but one of the most important aspects of taking on an endeavor like this is having the cash for unforseen events like your low appraisal..etc. I know you don’t want to sell…Nobody does but then..BOOM you have to for some unforseen reason! How upside down are you? You have been so upfront on everything and maybe I missed out where you reported this. Its good for potential builders to be prepared to be buried at close..Don’t you think? I just see so many of these stalled projects everywhere in different states that I do NOT recommend anyone build while the prices of standing inventory (especially in this price range) will AT BEST remain flat but most assuredly come down further…Maybe its the Nevada (Reno) and California (Sacramento) in me and the 80% drops that make me REAL WEARY of the only 30% drop up here….

    My contention is that going forward, in this market, its ALOT more financially lucrative to BUY someone elses endeavor via short sale or foreclosure then taking on ANYTHING like this..Unless of course someone has cash to burn and they don’t care..However, you made it perfectly clear you were cost conscious. Do you wish you never built and tucked all this cash away? Or, quite possibly, do you feel home is at or near value?

    Going to the Trustee sales every Friday I see an unyielding supply of homes like these coming on the market for many years to come thats why I ask..

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  9. 13
    David Losh says:

    RE: Mike D. @ 4

    Uhhh, I said you hate Real Estate agents.

    Russel is one of the best agents you could’ve gotten, but then you ran him around, didn’t listen to him, then went around him directly to the seller.

    He brought you a side deal, he did an excellent job. He got you the deal before it was listed, or on the market.

    You jacked him, is that love?

    Then you nickle, and dimed the commission because you could. Come on, what’s that? How’s that love?

    It’s OK though because most people here hate Real Estate agents also.

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  10. 14
    joe dirt says:

    RE: Mike D. @ 10

    Thanks for the info, and congrats on the project.

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  11. 15
    Scotsman says:

    Mike- thanks for your blog- I follwed it weekly during the construction period. It was a great learning experience and invaluable for anyone who wants to build a custom home.

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  12. 16
    Ray Pepper says:

    RE: Mike D. @ 12

    oh I disgree..There are alot of ways to tell prior to selling….You should know better then that…Is it more that you desire to not know at this given time? ….If nothing else it will assist you in fighting your property tax evaluations. Part of good financial planning is always knowing where you are at throughout your life on all your financial investments. You do agree your home was an investment don’t you? Surely spending a mill+ was an investment for your life that you chose to undertake.

    You see Mike your endeavor was documented splendid but you left out a MAJOR DETAIL for people who desire to undergo such a project. In the end when all was done, and all the costs of your time and labor were recognized, are you upside down? Consumers should take note this could and DOES happen! Can you tell us what Zillow says so the final piece of the story can be told?

    I must admit I did NOT dig through your story to see if address was divulged. If you did I apologize and I would simply tell you what your home was worth today or at least what a bank would loan on it. Furthermore you could track its appreciation/depreciation throughout the years ahead because I’m here to tell you Mike, sometimes you will be forced to sell for reasons you never saw coming!

    Always know where your at Mike! ALWAYS!

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  13. 17
    Scotsman says:

    RE: David Losh @ 13

    Sounds like business to me. Or are real estate agents exempt from the laws of economic competition? When it comes to agents the term “trust, but verify” always pops into my head. Sorry, but it’s hard to love when there’s little or no transparency and a big old heaping spoonful of self interest underlying the relationship. Agents, like hookers, are used and serve a purpose but are rarely truly loved.

    I can’t help but think how Ardell challenged Tim back in the day, telling him he should listen to professionals. OMG, the pride . . . before the fall. All that’s changed is that the pride has been tucked away into its secret spot, where it waits.

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  14. 19
    Ray Pepper says:

    RE: Mike D. @ 18

    You know Mike, I have been in the business nearly 20 years in 4 states. Do you know how often I hear that? So many NEVER want to sell…but, then life happens.

    Mike, I have been with Seattle Bubble since Tim started this outting and I believe I had the same avatar. Why does that bother you? Did I touch on a nerve?

    You have been so upfront with everything yet not what the value is today based on a simple Zillow search. You documented every dollar yet do NOT give us a value in January 2012. May I ask why this offends you when you discuss costs so much throughout this entire ordeal.?

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  15. 20
    Scotsman says:

    RE: Ray Pepper @ 19

    Ray, you’re just being a pri@k. Who cares what it’s worth. Some people can afford to drive expesive cars and live in $M homes, some can’t. Should those who can spend time listening to those who can’t?

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  16. 21
    Azucar says:

    By Ray Pepper @ 19:

    RE: Mike D. @ 18

    You have been so upfront with everything yet not what the value is today based on a simple Zillow search. You documented every dollar yet do NOT give us a value in January 2012. May I ask why this offends you when you discuss costs so much throughout this entire ordeal.?

    So, are you saying that you think a Zillow search will give him an accurate assessment of the value of his home?

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  17. 22
    Ray Pepper says:

    RE: Azucar @ 21

    of course not Acuzar but he had mentioned he was a fan of Zillow and their “mortgage mkt” so I offered that resource.

    But, since I had time this early am (taking wife to airport) I dug a wee bit more and now I understand why Mike does NOT want to discuss current value with taking into consideration what he paid for the original house on location. Good Lord Almighty!

    Lets, just say I’m truly happy Mike had cash to burn and kept so many people working throughout that time frame. This was a god send to so many it appears..

    Tim, this reminds me of a new segment you should instill..You have the “Bad Listing Photos” and such..Why Not “Biggest Real Estate Blunders” or something like that. I thought you started a segment like that awhile ago..maybe not…This would be a good one to kick-start the segment off with. I know, I know…He bought it as a place to live…..He is a tech guy so you have a special bond with him…..I understand….but this one is a monster in all aspects of the term..

    Good Luck on the Condo Mike! I wish you a speedy sale……those condo dues, assessments, taxes, and payments can be excruciating for sellers!

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  18. 24
    Jason says:

    Mike,

    Just wanted to let you know that I had bamboo floors installed in my house based on your posts and pics from your blog. My wife and I didn’t even know that such a thing existed! We’ve been really happy with how it turned out, both from the look and the lack-of-maintenance aspects, and we owe it all to your blog.

    http://www.ahousebythepark.com/journal/archive/2010/06/27/the-bamboo-floor-saga/

    Thanks again!

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  19. 25

    By Scotsman @ 20:

    RE: Ray Pepper @ 19

    Ray, you’re just being a pri@k. Who cares what it’s worth. Some people can afford to drive expesive cars and live in $M homes, some can’t. Should those who can spend time listening to those who can’t?

    I do find it a bit ironic that a real estate agent is asking the owner of a house what they think it is worth. It would have taken Ray less time to just do a search of his own and develop his own opinion.

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  20. 26
    Dorothea says:

    RE: Ray Pepper @ 22 – Zillow? Really?

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  21. 27

    By Ray Pepper @ 22:

    But, since I had time this early am (taking wife to airport) I dug a wee bit more and now I understand why Mike does NOT want to discuss current value with taking into consideration what he paid for the original house on location. Good Lord Almighty!

    Lets, just say I’m truly happy Mike had cash to burn and kept so many people working throughout that time frame. This was a god send to so many it appears..

    I’m going to go Losh on your ass and say that you don’t understand real estate.

    When you put money into a house to live in, there are two returns. First, there’s the daily enjoyment factor that you get every day you live in the house for as long as you live in it. Second, there’s the return when you ultimately sell it.

    As to the first, I could make the same type arguments you are making about luxury automobiles, because I get little pleasure out of such things, and consider them a waste of money. I could ridicule those who own luxury cars, but I understand that those who buy them enjoy them, and hopefully have enough in resources that they can afford them. The same is true of houses of this type being discussed.

    Also, as to the first point, on our prior house about 15 years ago we did a $35,000 remodel on a small house in Skyway. At the time I realized that it only made economic sense if we lived there for at least three years, to get some enjoyment out of the improvements. It wasn’t the type of thing we would have done prior to sale.

    As to the second, most people who are not interested in selling don’t really care what their house is worth. That was perhaps different 5 years ago, when learning about what your house was worth might give you a warm fuzzy feeling, but other than that it really didn’t matter to most people. While a few did, most didn’t rush out to sell their homes because of its increased value. In reality, the only time it matters what your house is worth is when you either want to sell, or have to sell.

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  22. 28
    Peter Witting says:

    RE: Ray Pepper @ 22 – Okay, Ray, that’s enough.

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  23. 29

    RE: Jason @ 24 – The nice thing about bamboo is it is relatively impervious to water compared to other wood flooring.

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  24. 30
    Passed Doo says:

    You know, most of you posters responding here on this topic (the first useful one this year IMO) are really rude, jealous little petty individuals.

    Here is a successful, smart, motivated individual who created a custom liifestyle for himself, and then took the trouble to document it (beautifully I might add) in the hopes of helping anyone else in a similar situation, and all you rubes can do in response is piss on every detail and argue over ‘what its worth’.

    You F@$%ing SUCK. So does this blog. Mike D, you would be well off never coming back to this POS and trying to have an adult conversation with these useless dullards. I’m through with these clowns. I am a small investor and at least have learned some dupes to steer well of in the future, not a total loss of time.

    Mike D, Congratulations on your project. You did an amazing job.

    Shakespeare was Right.

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  25. 31

    By Passed Doo @ 30:

    Shakespeare was Right.

    Kill all the lawyers?

    Oh, and welcome to the Internet. I assume this is a new thing for you. ;-)

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  26. 32

    One thing I’m not seeing is mention of the roofing material.

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  27. 33
    sally buttons says:

    RE: Passed Doo @ 30 – go away,
    take Mike witch ‘ya.

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  28. 34
    Ray Pepper says:

    I hope this will clarify for you Mike and Kary:

    Mike, your story is very entertaining and informative. We also have the same opinion of the real estate profession and the insanity of 6% but I will NOT get on my pedestal and begin preaching that here now because Kary has heard enough of it. Furthermore, we are both fans of Steve Liesman and I have been a junkie of CNBC for 25 years and a week doesn’t go by that I don’t think of the late Mark Haines. You seem to be an educated homeowner who dotted your i’s and crossed your t’s throughout this entire production.

    Your story invites questions and you answered everyone with honesty it appears throughout the process. Last night when Tim ran your story it just made me wonder what you were into this project. I noted 1.1mill and simply asked a question that millions of Americans are asking themselves each and everyday…”Am I upside down?”

    When you came back at me with ” It may be worth a lot more or it may be worth a little less. No way to tell until you sell” I had to correct you with the fact that you are wrong. There are many ways to know what your home is worth prior to selling. Furthermore, I do believe you know what your home is worth based on your relationship with your Agent (who is a good friend) and a possible equity extraction/refinance that was done on the property. Surely the “institution” did an appraisal?

    So I’m left with this impression..”this guy does not want to divulge for it darkens the story” ” this guy is saddened/embarrassed by it” “this guy is in denial ” or… Either way, when I detect deception it sickens me. Surely, I’m not the first to tell you that you are down BIG TIME? I don’t think so..

    So I was hoping for an honest answer provided to me like you provided everyone else with factual data based on your keen knowledge of your area, business sense, and the current market conditions in an effort to help others who may find themselves in the same scenario as you. When you became “hostile” and attacked my lousy avatar it just stirred the pot and made me wonder why.

    When Tim began Seattle Bubble it was perfectly clear that this was the place for honest info to buyers and sellers. There was no patting on the back and kudos here or there. Even when we advertised on Bubble there was never a push to use 500 Realty, Red Fin, or??

    Again, because of my opinion that you were less then truthful in your remark “No idea. It may be worth a lot more or it may be worth a little less” that I came out you with guns slinging. Mike do you play poker? I have played since I was 18, while in nursing school, and then in the Army. For 25 years I have played and one thing for sure…If there is never a Sheriff at the table then deceipt is sure to follow…

    Mike..I have no axe to grind. I never met you. I only sell about 12 homes a year because of my incessant Coaching of youth sports, family, nursing obligations, and weekly time spent at Trustee Sales.

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  29. 35
    Ray Pepper says:

    RE: Passed Doo @ 30

    please stay off the inhalants..

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  30. 36
    David Losh says:

    RE: Scotsman @ 17

    I agree, It’s just business, and there is always another deal to do, so you move on.

    Actually it’s a great project, and beautiful blog. My suggestion is that the Real Estate agent portion should reflect the happy ending. The Real Estate agent turned out to be the hero here.

    The Real Estate agent did leg work the Internet failed to do. The agent successfully negotiated the transaction in spite of interference from his client. Hey, it’s OK, we all do it. We all get anxious, and think we can do it better. Some times it works, other times not so much. I’ve done it.

    In the end the agent did the deal he was dealt. He worked in his clients interest flawlessly from what Mike has written.

    In my opinion Mike’s posts about his agent should be more positive, because it’s how the system should work. There are a lot of bad agents out there, but when some thing goes right, I think it should be high lighted.

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  31. 37

    RE: Scotsman @ 20

    There’s Two Sides to This “Tax the Rich” Conundrum

    The billionaire Buffet side is the rich don’t pay enough taxes, including Romney at $41M income [BTW, Clinton is $73M]….the Republican politicians allege don’t raise taxes, butcher ax government [real estate interest tax deduction too?]….

    I hate all politicians….especilly the ones alleging butcher ax federal spending on them, not me….

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  32. 38
    David Losh says:

    RE: Ray Pepper @ 34

    I did the calculation in my head while I read the blog.

    It makes no difference what the property is worth. It’s a well documented project of considerable value to a lot of people. It is by far the most informative blog post, or anything written, about new construction practices.

    There’s a project over in Elford Park, in Seattle, that cost millions to produce, and is still worth millions based on it’s vision. You just never know, and you can’t put a price on your own desire.

    I know that sounds strange coming from me, but I personally think this particular project has a value, that’s yet to be realized.

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  33. 39
    ARDELL says:

    RE: Mike D. @ 10

    Thank you for all of the time you spent blogging on your wonderful home and the full experience of building it.

    I sent the link to a client of mine who bought a similar modern style of home for about the same price with a roof top deck and view of Lake Washington. They were so happy to have the link to your blog as a reference for some of the smaller details like your doorbell, house numbers and smaller accents that they wanted to address on the their home in the future, and possibly change.

    Apologies if this is on the blog, but what did you put on the roof deck? We were contemplating these large “eco-rubber tiles” to protect the roof surfacing, but easily lifted for roof maintenance.

    http://www.ecosmartinc.com/catecorubber_tile.php?fr=er

    Walking directly on the roof, especially for large parties, concerned me. Did you use wood? Consider other materials like large rubber or other type of pavers?

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  34. 40

    Tim, for tomorrow can you do a piece on Bill Gates house? Ray can then ask him what it’s worth and point out that he probably can’t sell it for what he put into it, but we’ll be able to interact with Bill Gates!

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  35. 41

    RE: David Losh @ 38

    Its a Proven Science

    If we took this T#1 custom home and replicated it in a large home development, we could cookie cutter ‘em on a 70% Learning Curve for home construction.

    This means the second copy will cost 70% of the first, the fourth copy will cost 70% of the second [about half the cost of T#1], etc, etc….

    Everytime we double the cookie cutter units built we reduce costs 70%….wake SWE up when they built like the 100th like unit, otherwise ya pay way too much, IMO….

    And as far as rich wanting to spend money anyway….ask Buffet, he drives a modest priced 2006 Cadillac [loves it BTW] and lives in a cheap lower middle class home he kept over the decades without trading up….how the Hades do you think the rich got rich? Being gullible dummies? LOL

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  36. 42
    Ray Pepper says:

    RE: David Losh @ 38

    David…I assure you..the losses have been realized…most likely many many times over..

    “but I personally think this particular project has a value, that’s yet to be realized. “…wrong again…the value WAS realized in 12/2010

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  37. 43
    The Tim says:

    By Ray Pepper @ 16:

    \Can you tell us what Zillow says so the final piece of the story can be told?

    …I would simply tell you what your home was worth today or at least what a bank would loan on it.

    Wait, you think those two things actually have anything remotely to do with one another? That’s a riot, Ray.

    Even on a more typical home Zillow’s computer-generated estimates are often way off from the true value. You think they even have a chance of getting close on a custom-built home on a unique view lot like this?

    I’ll have what Ray’s having.

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  38. 44
    Ray Pepper says:

    RE: Kary L. Krismer @ 40

    I’m IN for that!

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  39. 45
    Ray Pepper says:

    RE: The Tim @ 43

    again Tim…WFC lent money on this property in 12/2010….Surely an appraisal was done…Mike says he had no clue. It could be more or less. I disagree with this. I believe he does know based on his hostile answers, his good real estate friend, and his appraisal…

    Its in my opinion he is BURIED up to his eyeballs in that house and only him, me, and WFC appear to know the truth..The truth will set you free Mike..Unload your pent up emotions now Mike and you will be FREE from this burden…(not the financial losses) just the burden..

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  40. 46
    Pegasus says:

    RE: Ray Pepper @ 45 – Ya Ray. Think about all of the money he wasted building that albatross that could have been better spent dining at the Claim Jumper restaurant.

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  41. 47

    RE: Ray Pepper @ 45 – A refinance appraisal isn’t likely to be any more accurate than Zillow. The only difference is, unlike a refinance appraisal, Zillow might be low.

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  42. 48
    Howard says:

    Thanks Mike for the informative blog.. I read it before I was reading the bubble. Your attention to detail helped contain costs and got it done for as close to on budget as can be expected. You time is money though, and that is not factored in. Labor of love..

    If everything in the world made economic sense:
    There would be no movie theaters
    There would be no concerts
    There would be no luxury cars
    There would be no boats/yachts
    There would be no hunting rifles (People spend FAR FAR more hunting than going to the grocery store )
    There would be no Starbucks
    There would be no cameras to document the fun things in life

    Shelter/Food/Clothing…. Oh wait Mike took care of the shelter part… Maybe he doesn’t have a BMW and rides the bus!

    Thanks for all the information Mike!.

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  43. 49
    Dirty Renter says:

    Great house, Mike.
    Better yet, you’re happy in it.
    It looks to me like you got first rate quality at a very reasonable price…and what a view!

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  44. 50
    wreckingbull says:

    Great site, Mike. Someday when I sell my 130 year old farmhouse, I would like to build a passively heated modern place.

    I will say that I take a different view than you on “laying as much Ethernet as you can”. If it were me, I’d lay as much conduit as I could, then as technologies change, you simply pull the new cable through, using the old cable as your fish-tape.

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  45. 52

    RE: Mike D. @ 51 – Re the standing seam, does the main part of the house have a slope to the roof? Is there a picture of it on your page?

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  46. 54
    Ray pepper says:

    Enjoy your home my friend and all the pleasures it should bring you in the coming years. I think your “crazies” term is misdirected and should b placed on our huffing specialist Mr Doo who apparently is no longer with us.

    Absolutely taking that cash out at these rates was the correct financial decision based on the circumstances that you were presented with post construction. But, seriously. Just between you and I what did appraisal come back at?

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  47. 55
    wreckingbull says:

    Wow, nothing makes people testy like seeing what the Jones’s have done next door. Relax, everyone. Sure, there is a faint whiff of narcissism, but look at the invaluable tips you get from a well-written blog like that. For anyone who plans to build, I’d keep that site bookmarked. Heck, it was even enough for Sally Buttons to join us again with one of her bitter one-liners.

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  48. 56
    ChrisM says:

    Hi Mike, to echo others, excellent blog. Gorgeous house!

    You stated you preferred induction to gas stove – can you elaborate? I’ve never had an induction, but I cook w/ cast iron and thought there would be a good chance of me destroying the stove.

    Also, I’m rather forgetful & it is easy to tell if the gas stove is on or not!

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  49. 57

    By wreckingbull @ 55:

    Sure, there is a faint whiff of narcissism, . . ..

    No! Not on Seattle Bubble.

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  50. 58
    ARDELL says:

    RE: ChrisM @ 56

    I’m going to add to ChrisM as I am listing a home in Lakeridge with an Induction Stove, and it is the first I will have one in a home I am selling.

    I’m thinking that the fact that all pots cannot be used on this stove is something we need to disclose beyond merely saying it is an “induction stove” and providing all of the manuals and paperwork that came with it.

    The owner is going to put something on the Form 17 Seller Disclosure form, but not sure what potential buyers of the home need to know before they try to cook on it with “the wrong” pots and pans, or what might happen if they do.

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  51. 59
    ARDELL says:

    RE: Ray Pepper @ 42

    “A Man’s Home is His Castle.”

    A car is just something you drive until it croaks, or you get a new one to replace it.

    When I worked in Manhattan Beach CA…many a rich man paid millions to have the right piece of land…and tore down the expensive home on it…to build his Castle exactly where and in the way he wanted it.

    Being “smart” sometimes includes not treating your home as “an investment”.

    I do think first time buyers and people with transient job opportunities DO need to be conscious of the potential for loss in value. Not try to guess that either as you don’t know when you will sell and what the market will be like at that time. You should buy something you know you can improve come time to sell, if you worry about loss of value. The perfect new house will always be worth less, later, in a flat market.

    But the Rich Man…can afford to treat his home like a home, Ray. Not everyone has that luxury, but if everyone DID…their home would NEVER be looked upon as “an investment”. No one I know buys a home because it is the essence of accumulated wealth they will leave their children when they die.

    In fact anyone thinking about dying…shouldn’t be buying a house at all.

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  52. 60

    By ARDELL @ 59:

    In fact anyone thinking about dying…shouldn’t be buying a house at all.

    Why not? If you die owning a house, you don’t need to worry at all about the 9% costs of sale!

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  53. 61
    Peter Witting says:

    RE: wreckingbull @ 50 – Great idea on the conduit!

    Rate this comment: Thumb up 0

  54. 62

    That’s the awesomeness of buying custom homes!

    Rate this comment: Thumb up 0

  55. 63

    RE: Kary L. Krismer @ 29

    Yes Kary

    That nice looking oak flooring everyone flocked to the last decade or so leaks water and can easly damage glueboard subflooring [the glueboard subfloors puff up from too much moisture with chronic leaks, destroying the oak floor] contractors tell me.

    When ya got glueboard subfloors [or newer soft lumber for that matter], paint it with oil base paint to water proof it or better yet cover it with linoleum before putting the rug or oak floors down…how many quality home builders/remodelers do this? My guess, very few.

    Same with glueboard exterior panels, totally goop the seams/cracks with water proof glue during construction, then paint it. How many quality home builders do this? Probably hardly any. I redid my exterior glueboard that way years ago and I haven’t had to repaint it every year to stop rot [BTW, that stops working after about 10 years anyway]. My neighbors all had major remodeling costs I avoided with $500 worth of plastic goop, they’re jealous too.

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  56. 64
    ARDELL says:

    RE: Kary L. Krismer @ 60

    Good one, Kary!!!

    The most memorable custom house I’ve seen belonged to “show dog” owners. The finished basement had six dog showers and doggie grooming tables. They did have trouble getting their money back on all that when they tried to sell though. :)

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  57. 65
    ARDELL says:

    RE: Mike D. @ 51

    Thanks Mike! BTW…I am in total agreement with you on the way you treated the agent arrangements, and I’m sure your agent is/was as well. Not sure what David’s gripe is about the agent arrangement or Ray’s about value. I think you did an awesome job from start to finish!

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  58. 66
    Peter Witting says:

    RE: ARDELL @ 65 – Ray probably hasn’t realized yet that not everything in life (certainly not the most important things) can be adequately measured in dollars and cents.

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  59. 67
    Marc says:

    I live in the same neighborhood and bought a home in ’07 with an extra parcel and dreams of building a home so I followed Mike’s blog very closely as he built his house. It’s been an invaluable resouce. I’ve directed several clients considering custom construction to the site and discussed induction stoves with several more based on what I read there. For the life of me though I can never remember the word induction and routinely refer to it as convection knowing full well that’s incorrect.

    I’ve even cribbed some language recommended by Mike’s attorney regarding a city required indemnification agreement and passed it along to yet another attorney.

    Thanks for the great resource Mike.

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  60. 68
    David Losh says:

    RE: ARDELL @ 65

    Read the blog post about Real Estate agents. It’s typical Seattle Bubble stuff.

    The bottom line was he couldn’t find a place on his own, hired an agent, refused to sign a Buyer’s Agency Agreement, the agent finds a place another guy in his office is working on.

    Before there is any agreement in place the agent shows it to Mike, and Mike loves it.

    Then Mike decides he’ll take over.

    The end result is Mike got the property.

    However he has left standing this scathing account about how Real Estate agents are worthless than Mike’s own time.

    He spent, I think, a year, before he hired the agent he loves.

    Read the blog posts, it’s a hoot.

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  61. 69
    joe dirt says:

    RE: David Losh @ 68

    That was not my impression. Unless the blog dates and entries were altered later, Mike had stated his position on agents months before he ever saw the place he bought. He said 3% commission was too much for something anyone can find on internet, but was fair if an agent brought him a good deal off market. That is exactly what happened, and he was willing to pay the full 3% to his agent, though it sounds like 0.5% may have gone to the other agent.

    That 0.5% didn’t matter anyway, because Mike has continued to work with his agent and has since listed a condo with him.

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  62. 70
    David Losh says:

    RE: Mike D. @ 51

    Because I don’t care about your house. I really, really like the blog. That’s your talent.

    I take it by *I* you mean you negotiated the purchase.

    Hmmm, let’s see, you used the CMA prepared by the “other” agent for your negotiating terms, you presented a low ball offer, against your agents advice once again then you “decided to put my first offer in at $100,000 less than the bottom of the range my agent gave me, $300,000 less than the top of the range, and $150,000 less than what I’d feel 100% comfortable with.”

    In 48 hours with no reply the seller said “thanks, but no thanks.”

    Then you decided to take charge!!!! Because the other agent was wrangling for a commission.

    Wowser!

    Let’s see the last deal fell apart because you were on some other strategy, but you saved $100K, now this one is sideways. But hey! You are negotiating!

    Alright, I wasn’t going to spend any time on this at all, but now I’m just curious as heck about what Ray Pepper was talking about.

    I’m glad you put a link to Russel Katz, on your blog http://www.russellkatz.com/ , because he is a good agent, and deserves a lot more credit here than you give him.

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  63. 72
    lecadidupe says:

    Many thanks to The Tim for the link to Mike’s extraordinarily interesting blog. Somehow it had escaped my notice in the five years I’ve been reading Seattle Bubble. I don’t doubt that his gorgeous place (and this is speaking as a “tudor” aficionado) would likely Zillow for faaaar less than what Mike’s put into it. My sister and brother-in-law built a house on five acres of Joshua Tree Nat’l Park-adjacent land; it’s a sprawling place with stone-clad walls, a big courtyard, workshop, garage, “eco,” “green,” (I’m still a bit skeptical) and passive everything…and Zillow has it at $134,000. As with any custom-built house, the place is sui generis and thus thoroughly resistant to any algorithm thrown at it.

    Mike’s blog may just give me the gumption I need to build my own place. Maybe I should print the whole thing out before lest it get hacked by sinister RE industry forces ;).

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  64. 73
    David Losh says:

    RE: joe dirt @ 69

    I does matter, a lot, now that I know where the house is.

    The old house, I’m sure, was on a lot of people’s radar. It was old, and out of place. An agent made contact with the trust, and presented a Comparative Market Analysis, which Mike refers to, in detail, so he looked at it. That was the basis of “his negotiations.” He was willing to pay full price. The seller is the one who objected to paying a commission, so Mike’s big play was to cut out the original agent.

    The agents made this deal happen, and Mike’s a good talker.

    His big play was over the $90K in commissions. That sounds like a lot doesn’t it? In the scheme of things the sellers sold for $1.5 Million dollars, and Mike tore it down to spend another $1.2 Million?. So in this grand blogging scheme, Mike saved $45000 in the middle of spending $2.7 Million for a house, by cutting out the agent who did the original leg work. Then he left his agent to deal with that mess, that he made.

    It is a very typical story.

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  65. 74
    Jonness says:

    By David Losh @ 13:

    RE: Mike D. @ 4

    Uhhh, I said you hate Real Estate agents.

    Russel is one of the best agents you could’ve gotten, but then you ran him around, didn’t listen to him, then went around him directly to the seller.

    He brought you a side deal, he did an excellent job. He got you the deal before it was listed, or on the market.

    You jacked him, is that love?

    Then you nickle, and dimed the commission because you could. Come on, what’s that? How’s that love?

    Losh, you of all people should know when you build a house, it’s imperative you kick and scratch for every cost cut you can get your hands on. And even if you do that well, the chance of not going over budget is 0%. So what gives? This guy did a fantastic job, and his RE agent made a ton of money with more on the way if he does his job well.

    And to Ray Pepper, I’m not sure what you are getting at? I’ve never seen you go pit bull before. What’s up? Apparently, this guy either makes more than both of us put together or came into a large inheritance. Either way, I’m envious of his experience. You only live once, and designing and building your own home is something we all dream of doing at least 1x before we die. It sounds like with his time frame, he’s got nothing to worry about if he prefers to think of other things than money all the time.

    Eventually, the Fed will manage to reflate, and then everything will run out of control for a while. In the meantime, you and I have a lot of intelligent investing to do. :)

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  66. 75
    ChrisM says:

    RE: ChrisM @ 56 – Ah, looks like the induction stove info is here:
    http://www.ahousebythepark.com/journal/archive/2009/02/02/thinking-about-induction-cooking/#comments

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  67. 76

    RE: lecadidupe @ 72 – Zillow has problems with houses which have never been sold (built by the current owner) or haven’t been sold for decades. All they have to go by then is the tax records and what neighboring houses have sold for.

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  68. 77
    ChrisM says:

    Awesome post — from Nov 2007!!!

    http://www.ahousebythepark.com/journal/archive/2007/11/01/on-real-estate-agents-and-finding-properties/

    “My opinion on real estate agents is that, as a whole, they are about 25% as useful as they were before the internet came along. That is not to say the best agents are not 100% or even more valuable than they once were, but the simple truth is that people need less from their agents nowadays because buying or selling a home can involve a degree of self-service that wasn’t practical or possible in the past.”

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  69. 78

    By Jonness @ 74:

    You only live once, and designing and building your own home is something we all dream of doing at least 1x before we die.

    Not me, but perhaps that’s because I lived through my parents doing that a few times during my life. Between my father and step-father, they built four houses after I was born. Yes it gets you exactly what you want, but it’s also takes a lot of time and work. So no, I’m not that eager to ever do that, and would actually avoid doing that.

    The one thing I remember about one of the houses my father built is the light switches were all right where you would expect them to be. That’s a small thing, but something that will constantly annoy you about a house if it isn’t right. A lot of custom built houses are a total mess in that area. When we did the remodel of that house in Skyway, I missed one new switch location necessary after a slight change in floor plan. It required a wireless X-10 switch to compensate.

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  70. 79
    Ray Pepper says:

    RE: Jonness @ 74

    Oh yes, he does make more then us combined…I’m sure of that….But, my problem is not with all the work he has done, the glorious tracking of the whole experience, or his slamming of my Avatar…

    I went “pit bull” on him because he lied…Go back to post # 11 when I asked a simple question..”whats the home worth now?” Surely an intelligent man must have the answer or at least plugged it into Zillow for kicks…Instead I got this: No idea. “It may be worth a lot more or it may be worth a little less”

    So this of course got me digging and I observed he refinanced the property in 12/10 and took a mill out…Well, surely an appraisal was done so that WFC would lend the mill right? But, noooooooooooo “No idea….maybe worth alot……”

    So there you have it.. I wished him luck on the sale of his condo and expressed a warning to any potential people out there like Mike, you can lose ALOT of dough in building your own home and live in denial as well that “I have no idea” what the value is…

    But, I also did give him kudo’s as to his opinion of the worthlessness of real Estate Agents and how the 6% remains a complete and utter SHAM..I believe he still over values their “worth” but I will fight that battle another day.

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  71. 80
    HappyRenter says:

    I like floor heating. This is achieved by installing pipes inside the floor. Warm water circulates inside the pipes and heats the entire floor and room. Your feet will never be cold. I have only seen it in Europe so far, but it must exist here, too:

    http://en.wikipedia.org/wiki/Underfloor_heating#Hydronic_systems

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  72. 81
    lecadidupe says:

    By HappyRenter @ 80:

    I like floor heating. This is achieved by installing pipes inside the floor. Warm water circulates inside the pipes and heats the entire floor and room. Your feet will never be cold. I have only seen it in Europe so far, but it must exist here, too:

    http://en.wikipedia.org/wiki/Underfloor_heating#Hydronic_systems

    Floor heating is a dream. We installed marble flooring on the first floor of our house in Japan because it’s generally warm-to-hot here, but in the winter, you just turn on the floor heater for an hour or two and the house is good for the evening. We installed floor heaters under the hardwood on the second floor as well, but hardly ever use it, and now I wish we hadn’t, because we lost a couple of inches in ceiling height on the main floor due to all the piping that needs to go in.

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  73. 82
    Hugh Dominic says:

    By Mike D. @ 71:

    Tim, if you could place a simple reading comprehension captcha in this comment form, it might eliminate some of this nonsense. A simple question like “My dog has fleas. What does my dog have?”

    Ok, that was hilarious, and perfect.

    I feel like I must apologize to you, our guest, for your treatment by some of the residents of this blog. Mostly what you have here are a bunch self-deprecating real estate agents and vengeful pundits who endured their gloating, equity-soaked neighbors from 2004-2007. Now we all relish a good mockery of the failed I’m-gonna-get-rich-quick bubble buyers. Perhaps someone has mistaken you for that, if so, I apologize.

    Then there are some who have made real estate investment their trade. They are unable to understand any other motivation for buying a house other than to find one that “pencils”. To them, you are welcome to blow $200,000 on fast cars and exotic vacations, but if you were to blow that same amount on a house that you enjoy then you are a fool. And then there’s Losh, who is like that but also illiterate.

    My advice: just skip ahead to the Ira posts.

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  74. 83
    David Losh says:

    RE: Mike D. @ 71

    Nice try, but I am really busy, and don’t have a lot of time for your blog.

    You refer to a CMA, repeatedly, and in depth. If you could read my comment, you’d recognize those are your words.

    So it’s good you corrected me about you signing a Buyer’s Agency Agreement. Every agent should get that from a buyer, as you have demonstrated.

    So insulting me doesn’t work. I’m used to it.

    You have a great Real Estate agent, who goes up in my admiration ever day that I have intercourse with you.

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  75. 84
    Ray Pepper says:

    David, how about this plan???………..You get us over to Mike’s house for a tour of the premises…You can both engage in further intercourse together while I shoot some nice pics of the premises and give him a FREE CMA, a 500 Realty T Shirt, a 500 Realty Pen, and a 500 Realty seat cushion that can be used at Husy Games. He will then FINALLY know the value of his home before we leave, have some gifts, and we will all leave satisfied in our own special way…….

    Just a thought……….???????

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  76. 85
    David Losh says:

    RE: Ray Pepper @ 84

    Ray, you promised that 500 Realty would have hoodies. Instead you have pens? and seat cushions?

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  77. 86
    David Losh says:

    RE: ChrisM @ 77

    This post from 2007 is exactly the point. Since that time Mike has shown the traditional Brokerage model to be the most effective for his plans.

    This is the second time in a week that the Seattle Bubble has demonstrated traditional agents are much more effective.

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  78. 87
    mukoh says:

    Mike,
    Your process was amazingly well documented, and the whole job was well done, with a lot of thought and throughput. Congrats on getting into something that you value for yourself for a long time to come. Its amazing what people can do when they go outside of the spec box, or the chocolate box remodel.

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  79. 88
    MacroInvestor says:

    By Mike D. @ 12:

    RE: Ray Pepper @ 11

    No idea. It may be worth a lot more or it may be worth a little less. No way to tell until you sell, which I’m not planning on doing. To me, it’s the best house for me, on the best street for me, in the best neighborhood for me, in the best city for me, so it’s hard to put a price on that. I would never build a house for the sole purpose of profits… it’s too much work. Build for the love, and profit later if and when you sell.

    During the bubble, every agent said houses never ever go down — so buy at any price and profit later. When that didn’t work out they all started saying exactly what you quoted here. Everyone knows what their house is worth, and they (at least secretly) are hoping to profit. Nothing wrong with that. Those who say otherwise are simply justifying a bad turn at the card table.

    Nothing personal, Mike. I wish you the best of luck. I just find it slightly insulting of our intelligence that you would parrot the agent sales jargon and expect us to swallow it. This is Seattle bubble, not some children’s web site where people don’t know what’s going on.

    I am quite sure you are under water. I get no pleasure from that, but a more honest answer might have been that you prefer to keep your personal finances private. Then no one would have asked again and harassed you over and over.

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  80. 89

    By MacroInvestor @ 88:

    By Mike D. @ 12:
    RE: Ray Pepper @ 11

    No idea. It may be worth a lot more or it may be worth a little less. No way to tell until you sell, which I’m not planning on doing. To me, it’s the best house for me, on the best street for me, in the best neighborhood for me, in the best city for me, so it’s hard to put a price on that. I would never build a house for the sole purpose of profits… it’s too much work. Build for the love, and profit later if and when you sell.

    During the bubble, every agent said houses never ever go down — so buy at any price and profit later. When that didn’t work out they all started saying exactly what you quoted here.

    He was clearly focusing on building a house. As I mentioned a few posts above, that’s involves a lot of time and work, not to mention risk. It’s entirely different than just buying an existing house, or even a house built by a builder.

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  81. 90
    joe dirt says:

    RE: David Losh @ 73

    Owners of old tear downs in a hot location get approached by agents all the time. You admit it was probably on a lot of peoples radar. The other agent failed to get them to sign anything, probably like other agents they had turned down in the past. Who wants to pay 3% when you have something easy to sell? On the other hand Mike and his agent were able to put a deal together that worked for the owner – its unfair to say Mikes “big play” was “cutting the other agent out”.

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  82. 92
    Macro Investor says:

    RE: Mike D. @ 91

    Great comeback. I’m thoroughly impressed by your million dollar vanity license plate. You must be a real hit at parties, dazzling everyone with tales of the “extreme awesomeness” of your toilet bowl washers. And, no — your stories would never get tedious!

    On another subject… aren’t you one of the actors from this TV show:

    http://www.imdb.com/title/tt0077097/

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  83. 93
    Ray Pepper says:

    RE: Macro Investor @ 92

    Macro, the more Mike talks the more he resembles Peter:

    http://www.youtube.com/watch?v=0iqFO-Udq6s

    (seems I post this video here at least 1x per month for the next buffoon that seems to roll in-Tim, caught a ripe one with this guy..but the difference is this guy has dough…!!…Mike reminds me of Steve Tytler btw…He was one of my favorites that swam away dammit!)

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  84. 95
    Ray Pepper says:

    Scotsman, you continue to miss the entire point of what started this entire “attack.” Has nothing to do with money, a beautiful home, his story….I will sum it up for you here quickly:

    “No idea. It may be worth a lot more or it may be worth a little less” this is a post appraisal remark from a supposedly “smart” guy.

    and Macro nailed it when he said this: ” Everyone knows what their house is worth, and they (at least secretly) are hoping to profit. Nothing wrong with that. Those who say otherwise are simply justifying a bad turn at the card table”…the only competent remark on this entire thread!

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  85. 96
    David Losh says:

    RE: joe dirt @ 90

    I agree his agent did a masterful job. Mike points out another agent does show up in the NWMLS report. The seller obviously realized some value in that agent.

    The fact still remains that this is how agency works, and why we hire Real Estate agents.

    The agent found the dirt. Without the dirt there would have never been a project.

    As to the rest of the exchanges, Mike has some resentments that I don’t understand. What he is expressing is typical.

    In terms of procurement, I think he should shed some of his negativity, and be more positive about his experience with his agent. He is resisting, but begrudgingly admitting his agent did the job he was paid for.

    The other thing I don’t get is he spent a year on his own looking, I suppose, “on the internet” and came up with butcus. Then he turns around and says his agent only has 100 hours into the deal.

    Well the agent goes out every day, also. The agent brought him a property that worked, that was off market. The agent then wrote the transaction, dealt with the “other” agent, before Mike comes in.

    The way I read it, and for my own transactions, as a Principle, the transaction closed in spite of us. We can have all the pleasantries in the world, but cooler heads usually get the deal together.

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  86. 97
    Scotsman says:

    RE: Ray Pepper @ 95

    Alas, you’re the one who misses the signals:

    ““No idea. It may be worth a lot more or it may be worth a little less”

    Most of us see that as the polite way to tell an ass that the price isn’t the central issue, and that it really doesn’t matter- to the owner, or to the central topic of the discussion.

    But I can see how an “investor” who has already let several “investments” go back to the bank because they weren’t working out, and has now set his sights even lower (on future Tacoma crack houses) would be very, very sensitive to price above all else. Sorry, my bad, as they used to say. Carry on.

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  87. 98
    Ray pepper says:

    RE: Scotsman @ 97

    I don’t believe “most if us view” it as a polite way. I believe MOST of us view it as embarrassed or denial. Unlike our investments which I publicly address that we gave back and will continue to give back due to the rules of the game being changed. There will never be embarrassment just business decisions that are made in the best interests of our LLCs.

    You see Scotsman I don’t join the rah rah crowd and clap when I sense deception. You and Tim remain the clapping monkey while many Bubbleheads just shake their heads at the continued farce that Mike illustrates.

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  88. 99
    David Losh says:

    RE: Scotsman @ 94

    I don’t know why you Republicans throw out the class warfare card in any discussion.

    My message has been consistent for years. Good Real Estate agents are some of the hardest working people on earth, and the most dismissed.

    Every one thinks they “saved” the deal. Every one thinks it’s so easy. The procurement, and Real Estate agent parts of the blog are all I’ve addressed, the rest of it I’ve praised.

    I’ve tried for several years now to promote the positive side of Real Estate. There are good agents, and when you find one, or have that experience, I think that gets over shadowed.

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  89. 100
    Macro Investor says:

    RE: Ray pepper @ 98

    “There will never be embarrassment just business decisions that are made in the best interests of our LLCs.”

    Ray is one of the very few who understand business on this site. If you think walking away from a bad deal is somehow immoral, you need to de-program from the brainwashing you’ve been fed from the media, or the gov-provided education system. The banks made the rules and wrote the contracts. If you fail to use the few advantages we individuals have, they won’t thank you as you work well into your senior years, never able to retire.

    “I don’t join the rah rah crowd and clap when I sense deception.”

    You tell em Ray. Maybe it’s part of the west coast culture, but political correctness has gone way overboard. I say this is a blog for grown ups. If you can’t take some heat, stay outta that kitchen. Coming here with lame falsehoods is going to insult people, and that deserves to be called out. Accepting it meekly is the worst kind of insecurity. Man (or woman) up.

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  90. 101
    joe dirt says:

    By David Losh @ 96:

    RE: joe dirt @ 90

    Mike points out another agent does show up in the NWMLS report. The seller obviously realized some value in that agent.

    Do you know if that was the 3rd agent – the one the seller decided to sign with if Mike couldn’t close on his offer, or the agent you say was “cut out”?

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  91. 103
    David Losh says:

    RE: joe dirt @ 101

    It’s obviously another agent who does show as the listing agent.

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  92. 104
    David Losh says:

    RE: Mike D. @ 102

    Are you online, all the time?

    I think your blog is an important resource, this blog is an important resource. It’s the only blog that I’ve ever commented on where the site owner has a hands off policy. It’s been great, and opened up a lot of discussions, over the years.

    From what I understand about the internet it’s all about content, and controversy. I hope you take that in the spirit that it was given. People are looking at your site, and that’s a win for every one.

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  93. 105
    joe dirt says:

    RE: David Losh @ 103

    Sounds like the agent you claim did the “original leg work” and was “cut out” by Mike, was cut out by the seller.

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  94. 106
    Jonness says:

    By Ray Pepper @ 79:

    But, I also did give him kudo’s as to his opinion of the worthlessness of real Estate Agents and how the 6% remains a complete and utter SHAM..I believe he still over values their “worth” but I will fight that battle another day.

    Well, the funny part about that is, Losh is attacking him for ripping his agent off. Yet, he paid the agent over $500/hr after paying 3% commission despite doing most of the work himself.

    You and I seem agree he WAY overpaid his agent. He even agrees that agents aren’t as useful as they use to be because of the Internet. So all three of us agree he over paid. But Losh is going pit bull on him claiming he didn’t pay enough, and it’s not his place to perform his own negotiations. And as far as I can tell, Losh believes he should have hunted down the sellers’ original agent and given him another $50K to boot just for being a nice guy. I mean, Mike is a rich guy, but if he goes martyr on us too often, he’ll be living in my house sooner rather than later.

    I don’t mean to sound insensitive, but the last thing I’m going to do when I buy my next house is contact the sellers agent and ask if the seller treated him fairly and offer to give him $50K if he says “no.” And on that note, no way am I paying the $500/hr Mike paid his agent, let alone $1000/hr. Losh, you are sounding extremely greedy, and I’m beginning to understand why you hate discount Internet brokers.

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  95. 107
    David Losh says:

    RE: joe dirt @ 105

    We’re in a murky area here called procuring cause. http://homebuying.about.com/od/realestateagents/qt/Procuringcause.htm

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  96. 108
    Ray Pepper says:

    RE: Jonness @ 106

    to be honest I never really cared what Mike paid his Agent…..In general when people tell me I always say TOO MUCH and please continue with the story……But, if David’s talking I always get the popcorn out to observe and try to understand the thought processes..

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  97. 109
    David Losh says:

    RE: Jonness @ 106

    You don’t understand Real Estate, as Kary would say.

    I’ve done my own deals, and got screwed. I’ve gone around my agent, an agent I hired, and I liked, and done the deal, myself, then still paid the agent. Come to think of it I don’t think I’ve done any of my own deals well. Real Estate agents have netted me more, with less time, effort, and energy on my part.

    Of course I get a discount. I don’t have a problem with discount brokerage. I like my Real Estate attorney, John Wagner at John Wagner Escrow. For about $1600 he’ll write it up, and the $1600 includes the escrow fee.

    The Real Estate commission is the cost of doing business. In this case, for me, it’s all hindsight, but I would have gone for the discount, and left the Real Estate agents in place.

    In the big scheme of things kicking in the extra 1% for a 4% total makes sense to me.

    Instead we get this long drawn out drama of web entries that eventually peter out, and go nowhere. Then we get the after story here, of more drama.

    The Real Estate commission is the cost of doing business. You either get value from the commission or you don’t. Playing wait, and see on the internet for the perfect property, then paying a Real Estate commission seems like highway robbery to me. The best deals are the ones some one, maybe you, discovers.

    Real Estate agents are in the field every day. It makes sense to me to pay them for picking the property. I have other things to do, but can make a decision based on what’s presented.

    So it’s a matter of what my time is worth rather than the agents.

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  98. 110
    Ray Pepper says:

    RE: Mike D. @ 102

    Mike Mike Mike…if you only knew…”can rot in debtor’s prison as far as I’m concerned. Shame on you.”

    There are so many ways to go with this…………..but I just keep thinking of the same video I posted probably 20x…So I will do it for you personally in an effort to educate..Owner-Occupied or Investor it DOES NOT MATTER! Both have lives and both have responsibilities to answer to a higher authority……THEIR FAMILY! Whenever you do whats in the best interests of YOUR family it will ALWAYS lead you in the right direction..

    BTW..debtors prison? are you serious?..wake up!..non-recourse state!! LOOK IT UP!

    http://mobile.casttv.com/video/wb6rs61/the-hermit-with-davis-fleetwood-underwater-mortgage-walk-away-video

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  99. 111
    Hugh Dominic says:

    By Ray pepper @ 98:

    Unlike our investments which I publicly address that we gave back and will continue to give back due to the rules of the game being changed.

    The rules of the.. wha? Is that how you explain a market correction and rationalize your botched investments? Who have you found to blame? I don’t mind that you mailed back the keys as a business decision, but you need to own up to it.

    It’s surprising because no reader of this blog should have been investing in real estate between 2005 and 2009. I mean, except Ardell. If a bank would give her a 100% LTV loan, AND let her pull a 3% commission out of her own purchase, it deserved to get stuck with the house. It’s hard to fault her for getting paid to buy a house, regardless of the market data.

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  100. 112
    Jonness says:

    By David Losh @ 109:

    The Real Estate commission is the cost of doing business.

    I see it differently. “The Real Estate commission is the cost you MUST pay for doing business.”

    And the $1000/hr you are claiming is the fair rate Mike should have paid is WAY out of line!

    Take away the lock box, and the fair market rate for a RE agent is about $25/hr. And before you go wild on me at that rate, consider that it’s what a lot of working class folks earn these days in jobs they work very hard at and are very professional at doing.

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  101. 113
    Ray Pepper says:

    RE: Hugh Dominic @ 111

    I would NEVER call them botched investments because we made money on each and every home that was “released” by our groups….How? Well, for starters each home was wrapped with non recourse 2nds that got our original capital back for another purchase..Know how this is done? I doubt it…..Mail back keys? R U INSANE? The FAILED institutions were long gone bankrupt and their investors continue to pay us until this very day because they CANNOT prove they have ownership anymore then we can prove that we do..

    You see Hugh the longer this plays out the better it is for our groups and our families. As an RN in 2 states and a multiple sport Coach here in Washington for my kids and so many others my “good-will” is on display everyday of my life. Incessant charity functions, school drives, cancer walks, on and on it goes…

    However, I will NEVER..EVER..let a corrupt system of Wall Street affect my families life financially and OUR investments. Instead, we had to change the way we played in order to facilitate the outcome we desired….Hope You get it!

    This is why I tell people to STOP crying and get educated..

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  102. 114
    Hugh Dominic says:

    RE: Ray Pepper @ 113 – Ahhhh, I see what you mean now.

    The rules of the game being changed = the government changing the foreclosure laws to “protect” home occupants from banks that seek to exercise their rights of recourse due to a breach of contract.

    You’re referring to the new laws that extend and block foreclosures, which were sold to the public as necessary to help innocent victims of greedy banks. You’re using those laws to protect your speculative investments.

    Good on you. Too bad for everyone else.

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  103. 115
    Ray Pepper says:

    RE: Hugh Dominic @ 114

    This last statement depicts your knowledge on this subject matter: “Good on you. Too bad for everyone else. ”

    I will not slam you because it would be like kicking a dog..Instead I will offer you this test…Please understand this video is getting old but TRY and find the IDIOTS in this video. Keep in mind prices continued to drop another 30%+ since this airing:

    http://www.youtube.com/watch?v=jZOg1YPZSjk&feature=related

    BTW Tim, Spencer (if u know him via Red Fin is a buffoon in this video..Can’t even tell the truth and instead looks like a TURD stumbling over what he KNOWS and what he SHOULD SAY this homeowner must do…The other guy lying “You will NEVER buy a home again”..uggh..the bald guy “cause it will make you feel better” makes me embarrassed for ALL bald people.

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  104. 116
    David Losh says:

    RE: Jonness @ 112

    Let me try this again. I prefer to work for a living rather than be a Real Estate agent. Real Estate is a great and beautiful business that requires constant work. If I were a Real Estate agent i wouldn’t have time to spend here with you. I would be working.

    You snooze you lose. You’re constantly smoozing.

    In the run up of Real Estate prices we got Case Schiller who wanted to do an index for Real Estate. Zillow was, or is, tracking sales data, I guess. redfin was going to be the Etrade of Real Estate, and was going to change the way Real Estate is bought, sold, and traded.

    Well, what happened is that any time something half way decent hits the market people, from online I suspect, make multiple offers. It’s been the same sales technique for years now. Agent e-mails to buyer, and buyer rushes in. redfin updates by RSS and buyers rush in. It’s a trap.

    The way the Real Estate commission was set up was that two years of inflation would normally cover the selling cost of a property. Inflation at roughly 4%. So that’s appreciation of the asset outside of anything the buyer did. It’s just the cost.

    In theory if you sell in three years you cover the selling costs.

    The family home is a hedge against inflation.

    So I have a client that is still paying $600 a month mortgage payment on a property worth more than $500K. I did a CMA for him a few years ago when he cashed out his partner. I think he has another five years left to pay, maybe less.

    He’s paying his 30 year mortgage with future, inflated dollars. he could pay it off, but why bother, his income is $2400 from long term renters who pay everything, and keep the place up.

    In the scheme of things that Real Estate commission was nothing to him. The $6K, or $8K commission he paid way back when gave him the opportunity to make $300K in rental income, plus the value of the property.

    In the Mike scheme of things it was less than nothing, much less than the dollar amount. It gave him the opportunity to move forward.

    Real Estate agents, I mean real Real Estate agents, are in the market place every day, making things happen. You can buy a GEM!!! any day. Usually that GEM!!! will be brought to you by a picker. A guy I talked to last week will buy anything I bring him that makes sense. I’m busy, but I know of a place that has been on the market for a long time. I was shown it to get a price opinion before it went on the market because it’s unusual.

    The house two blocks up from me has been vacant since the woman in her 90s was moved to a home. Over a two year period the place has been painted, and cared for inside. It could take an offer. I have eight places in my note book that I’m watching. There are 36 expireds in my shopping cart that I’m watching.

    So you look at the time a deal takes, I look at the value of that time.

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  105. 117
    Scotsman says:

    RE: Ray Pepper @ 113

    “Well, for starters each home was wrapped with non recourse 2nds that got our original capital back for another purchase.”

    Hmmmm. Given the intent, could that be bordering on fraud? Ya know Ray, I’ve been reading your stuff for years now and while I’ll admit it can be entertaining I don’t see things ending well for you. A little too close to the line much of the time. You’ve got a lot going for you, but you’re not as clever or smart as you might think. Be careful out there, it’s going to get rougher.

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  106. 118
    Ray Pepper says:

    RE: Scotsman @ 117

    “Given the intent, could that be bordering on fraud”…nope we just always paid a higher rate for non-recourse ..we just never take real estate loans that are NOT non-recourse….

    “I don’t see things ending well for you. A little too close to the line much of the time. You’ve got a lot going for you, but you’re not as clever or smart as you might think. Be careful out there, it’s going to get rougher. ”

    you mean like death? or bankruptcy? loss of business license? loss of nursing license? divorce? Heck, my wife is already fighting cancer and nearly everyday for the last 4 months I drive her to Swedish…Other then the first all the others are VERY manageable and only a hiccup in the grand scheme of things..My wife will be fine because she is 39 but is this carma for the “bad” things our investments groups have done/are doing? What comes around goes around?

    Scotsman, I don’t believe in that. Pretty Agnostic. Been on ALOT of deathbeds and rolled alot of eyelids shut at various hospitals…You play the hand you are dealt to the best of your ability while loving all you can and casting away those that seek to harm or destroy.

    But, I do agree with one point you said…”Its going to get rougher out there”…but I assure you Scotsman I will be ready Unless I’m dead or disabled…but, even in that event my family and their kids will NEVER have to work again based on the coverages I have on myself in the event your prediction is true.

    and I strongly disagree with you on another point..”but you’re not as clever or smart as you might think.”…. I truly am Scotsman..Just ask me anytime….just not after a loss of one of my Hot Pepper teams basketball games..

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  107. 119
    Jonness says:

    RE: David Losh @ 16 – What you despise about Redfin is what I like about it the most. It removed the “insider information” barrier and opened up free data to the consumer.

    But I get what you are saying about home appreciation and equity. However, the end of this era isn’t due to anything Redfin did, it’s due to a masochistic voting population continuing to purposely screw itself into oblivion.

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  108. 120
    David Losh says:

    RE: Jonness @ 119

    Great opening for me, thanks!

    There is no insider information in Real Estate, and there never has been. Real Estate agents put signs in front of houses for sale. Most people pick a neighborhood, and they should drive it.

    Even in the bad old days of the 3X5 cards an agent having the “information” did no good unless they could capitalize on it. That meant releasing the information to a buyer pool. The trick, the insider information, has always been who the buyers were.

    redfin collects buyer information.

    redfin is a huge corporate planned entity that collects data. It collects buyer data to match with loan programs. It keeps sales data, puts mortge money into the hands of consumer after closing, and could also share that information with partners. I said could because each person signs up with redfin, and agrees to a set of terms, and conditions, like a credit card.

    Every house in the world is for sale. It all depends on price, terms, and conditions.

    The government is supplying sales data, and if you wanted you could also search for who has held mortgages the longest, or own free, and clear. Better yet you can get that sense by getting in the friggin car and spotting properties.

    How do you think Real Estate agents get information about properties? I mean some of the agents are the ones that actually get people to sign contracts so the house can be listed in the MLS. How does that happen? Do you think those agents sit in the office reading the paper waiting for the phone to ring? How do these agents get the “inside information” that some one is selling?

    To be an insider, you need to be inside. Agents will always be the insiders. Mike got insider information.

    Better yet, how do you know what to buy? What’s your educational back ground that makes you, or other people, better at determining what’s a good value? I’ve stood in a lot of houses of happy new home owners that have signed a 30 year mortgage for a complete liability.

    Agents always have the inside track. Maybe agents have more of an advantage today than ever before. The internet gives agents more access to buyer information. Buyers sign up for mortgage information, RSS down loads of property profiles, there are phone apps for Real Estate. All data is collected, and correlated to target you, as the consumer.

    redfin and Wal Mart are the same to me. Huge corporations looking for ways to reach into the pockets of the consumer are always a source of concern, or should be.

    I could go on about ETrade, but I think you get the idea.

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  109. 121
    mukoh says:

    RE: Ray Pepper @ 13 – Ray, business is not a personal ordeal, when it comes to making money we all make decisions that are a’la Galt style.

    What Mike is saying is that when it came to him and making a personal choice on where to live and how to live, it really made no difference on market value.

    I am in the same boat as far as my future purchase in Talbot Park area. The end result market value makes no difference $200 higher or lower then market or $500. Its what I get for myself and my family and a home that no spec or custom builder throw around.

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  110. 122
    Haybaler says:

    RE: David Losh @ 120

    “How do you think Real Estate agents get information about properties? I mean some of the agents are the ones that actually get people to sign contracts so the house can be listed in the MLS. How does that happen? Do you think those agents sit in the office reading the paper waiting for the phone to ring? How do these agents get the “inside information” that some one is selling? ”

    Actually, yes. It’s called Floor Duty.

    This is another reason that the big brand name chains were able to grow. They offer newby realtors a shot at doing business by virtue of simply being the person who answers the phone call which was driven by the companies’ brand marketing, image and location.

    I’d call that the ultimate insider info being on the receiving end of the call, …”Hello, I’d like to talk about selling my house”.

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  111. 123
    Ray pepper says:

    RE: mukoh @ 121 – for the 10th time on this thread it has nothing to do about the house or what he spent. It had everything to do with his false claims of not having a clue what his home us worth. Please review thread at start to see his “claims” post appraisal that got me fired up!

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  112. 124
    David Losh says:

    RE: Haybaler @ 122

    redfin is the ultimate “floor time” Real Estate business model. Working agents don’t have time for the office.

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  113. 125

    By Ray pepper @ 123:

    RE: mukoh @ 121 – for the 10th time on this thread it has nothing to do about the house or what he spent. It had everything to do with his false claims of not having a clue what his home us worth. Please review thread at start to see his “claims” post appraisal that got me fired up!

    So what should he have said, Ray? ” My house is worth less than what I paid for it, but I don’t give a rat’s butt because it feels like home and I’m enjoying it immensely?”

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  114. 126
    Ray Pepper says:

    RE: Ira Sacharoff @ 125

    yes!..that would have been an honest answer..

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  115. 127
    The Tim says:

    RE: Ray Pepper @ 126 – Mike’s answer was honest, Ray. Unless you’re selling your home and you’ve found a buyer, you don’t know what it’s worth. Appraisals, assessments, BPOs, and Zillow’s black box can be (and quite frequently are) very different from the true value of a home. On an appraisal specifically, all that really matters is that it comes in high enough for the amount being loaned to be 80% or less than the “appraised value.”

    Obviously you know this already, so I don’t really understand why you’re feigning outrage about this. It’s a non-issue. Unless and until Mike sells his home to a new owner, he doesn’t know how much it is worth. Get over it.

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  116. 128
    Ray Pepper says:

    RE: The Tim @ 127

    trust me I’m way over it but I still politely respond to those that inquire…Seems everyone else keeps bringing it up..

    I also disagree with you. Most every homeowner I know (especially the educated) know what their home is worth. Combine that with an appraisal (remember WFC gave him 1 million-and told him what his home is worth). He outright lied! I very much doubt that Mike said to his Lender “just give me a mill” and don’t tell me anymore about your opinion of value. GOOD GOD! You brought a real sparkler here with this guy..

    Dang Tim, WAKE UP! Read the thread and see why you are AGAIN wrong in your assumption…there is no changing my mind on Mikes “I have no idea what my home is worth” so I would say to you..”get over it!!”

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  117. 129

    By Ray Pepper @ 28:

    Most every homeowner I know (especially the educated) know what their home is worth

    Most people can throw a number at you, and chances are it’s probably high, so they don’t know what their house is worth.

    Sometimes the number they throw at you is high by over 50%. As a real estate agent, you should know that.

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  118. 130
    Azucar says:

    RE: Ray Pepper @ 128

    You asked him what his home is worth, not what it had been appraised at… they are two different things. Then you started to ask him to give us the Zestimate of it. That is a third different thing.

    A custom built house with unique features on lot with special features (view, waterfront, abutting a park, etc.) can vary in worth tremendously from the appraisal (and the Zillow estimate). The true value of the house… or what it could be sold for, anyway… is not known until he either gets a committed/binding offer or actually sells it. Don’t you know that as someone involved in real estate? Haven’t you ever been surprised by what a property sold for? Especially a unique one?

    Yet you keep pursuing him for a Zestimate.

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  119. 131
    Ray Pepper says:

    RE: Azucar @ 130

    oh…sigh…..Acuzar you truly do remind me of the lipstick researchers: http://www.youtube.com/watch?v=8iKuQQ42ZZ8&feature=related

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  120. 132
    Jonness says:

    RE: David Losh @ 120 – Protectionism never works for long.

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  121. 133
    David Losh says:

    RE: Jonness @ 132

    Protectionism? What are you talking about?

    Every house in the world is for sale for the right price, terms, and conditions. How are you, or any one, going to protect against that?

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