Posted by: The Tim

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

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

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  1. joe dirt

    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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  2. David Losh

    RE: joe dirt @ 101

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

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  3. David Losh

    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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  4. joe dirt

    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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  5. Jonness

    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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  6. David Losh

    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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  7. Ray Pepper

    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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  8. David Losh

    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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  9. Ray Pepper

    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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  10. Hugh Dominic

    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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  11. Jonness

    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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  12. Ray Pepper

    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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  13. Hugh Dominic

    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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  14. Ray Pepper

    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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  15. David Losh

    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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  16. Scotsman

    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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  17. Ray Pepper

    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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  18. Jonness

    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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  19. David Losh

    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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  20. mukoh

    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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  21. Haybaler

    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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  22. Ray pepper

    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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  23. David Losh

    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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  24. Ira Sacharoff

    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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  25. Ray Pepper

    RE: Ira Sacharoff @ 125

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

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  26. Ray Pepper

    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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  27. Kary L. Krismer

    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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  28. Azucar

    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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  29. Ray Pepper

    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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  30. Jonness

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

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  31. David Losh

    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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