May Reporting Roundup: Double Quick Action Market

It’s time once again for the monthly reporting roundup, where you can read my wry commentary about the news instead of subjecting yourself to boring rehashes of the NWMLS press release (or in addition to, if that’s what floats your boat).

To kick things off, here’s an excerpt from the NWMLS press release:

Tight inventory, record-low mortgage rates fueling Western Washington home sales
Low listing inventory and plunging mortgage rates are fueling buyer competition for homes close to job centers, according to brokers who commented on the latest market report from Northwest Multiple Listing Service.

Instant Market Activity!
Instant Market Activity!

J. Lennox Scott, chairman and CEO of John L. Scott Real Estate, described activity as a “double quick action market.” He noted local home buyers are back purchasing homes, “igniting strong sales activity up the price points.” This, combined with the low supply, and in some areas, shortages of homes for sale, is creating what Scott said is “instant market activity from a backlog of home buyers” when market-ready homes are listed.

“Double Quick Action Market” sounds like it should be a super hero anime or something. “Instant Market Activity!” would be the team of heros’ catchphrase, shouted out as they fly into the air, fists-forward, slow motion against a background of multicolored rays.

Read on for my take on this month’s local news reports.

Eric Pryne, Seattle Times: House prices stay on rise in King and Snohomish counties

House prices rose in May in King County for the second consecutive month, prompting market-watchers to employ with greater certainty some words you may not have heard in a good long while:

Rebound. Stabilization. A seller’s market.

The year-over-year increase was the biggest since prices peaked in 2007 — and there have been few months since then with any increase at all.

Glenn Crellin, associate director for research at the University of Washington’s Runstad Center for Real Estate Studies, said the numbers didn’t surprise him. He’s been popping into open houses during walks around his neighborhood, Queen Anne.

Compared to three months ago, “the quality hasn’t changed, but the prices have,” he said. “They’ve gone up. And the houses are selling faster.

Eric also picked up my data about the 5-point drop in the share of bank-owned homes compared to a year ago. The article also touches on the buyer sentiment survey released this week by Redfin (my employer), that shows a shift in market psychology, as more buyers realize that it has become a seller’s market.

Aubrey Cohen, Seattle P-I: Seattle house prices post double-digit increase

Rising sales and low inventory helped push Seattle house prices up by 10.5 percent in May from a year earlier, according to a new report.

“Things that are in good condition are selling, they’re selling quickly, and they’re selling at good prices, from the seller’s point of view,” said Glenn Crellin, associate director of the Runstad Center for Real Estate Studies at the University of Washington.

So the bottom is clearly past, right?

“It’s still going to be pretty neighborhood specific, but we’re clearly past the bottom in some of the more desirable neighborhoods, Seattle and Bellevue, close to employment centers,” Crellin said.

I think this is the first true bottom call I’ve seen from Mr. Crellin. Although he was quite the sales booster back in the bubble days, in recent years I’ve found myself agreeing with nearly everything he has to say about the market, and this call is no exception.

Michelle Dunlop, Everett Herald: Home prices up again in Snohomish County

Home prices in Snohomish County increased again in May — establishing a two-month trend, according to a report released Monday evening.

The inventory of homes in Snohomish County is lower than that of any of the other 20 counties in the state tracked by the Northwest MLS. The county has a 1.5 month supply of homes on the market, meaning it would take that long to sell the homes available if no new houses were listed for sale. Analysts say that a 5 to 6 month supply of homes indicates a balanced housing market.

Not a lot of meat in this month’s article from the Herald.

Rolf Boone, Tacoma News Tribune: Local home sales up in May, prices steady

The inventory of homes in Snohomish County is lower than that of any of the other 20 counties in the state tracked by the Northwest MLS. The county has a 1.5 month supply of homes on the market, meaning it would take that long to sell the homes available if no new houses were listed for sale. Analysts say that a 5 to 6 month supply of homes indicates a balanced housing market.

Allen Realtors of Lakewood President and designated broker Mike Larson also pointed to the county’s falling inventory of homes for sale as another indicator of a more balanced housing market to stimulate sales. Inventory levels fell more than 30 percent to 3,758 units from 5,501 units, the combined data show.

“The supply and demand is not so extreme,” Larson said about the current state of the housing market. When the supply of homes is higher, such as when its closer to 5,000 units, buyers become choosier and sellers are forced to lower their prices to compete for those buyers, he said.

Hmm, perhaps demand isn’t very extreme right now, but supply is definitely extremely low.

Rolf Boone, The Olympian: Area home sales rise as prices remain flat

Thurston County’s housing market showed improvement for the third consecutive month and the South Sound real estate community is sensing a turnaround.

Home sales rose and median prices largely were flat in May, according to Northwest Multiple Listing Service data released Monday.

“Residential markets are perking up after nearly five years of decline,” said Ken Anderson, president and owner of Coldwell Banker Evergreen Olympic Realty, in an email. “Prices have stabilized and pent up demand is being unleashed.”

Apparently all the pent-up supply is still leashed.

(Eric Pryne, Seattle Times, 06.04.2012)
(Aubrey Cohen, Seattle P-I, 06.04.2012)
(Michelle Dunlop, Everett Herald, 06.05.2012)
(Rolf Boone, Tacoma News Tribune, 06.04.2012)
(Rolf Boone, The Olympian, 06.05.2012)

  

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.

75 comments:

  1. 1

    Seems odd having Tim more optimistic than I am (the Crellin bottom call comment).

    I’m not even sure May was higher than April. When you have over 250 more sales in May, but the number of REOs and short sales hardly moved, is a $2,000 nominal increase really an increase?

    I will say that the pending median really shot up. Highest number since November, 2010.

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  2. 2
    wreckingbull says:

    Crellin has reformed his bubbleish behavior. I can forgive him, although I feel bad for those who viewed him as an authoritative source during the bubble years. Don’t be surprised if his pom-poms get dusted off, though. One look at the board of trustees of the WCRER tells you everything you need to know.

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  3. 3
    David Losh says:

    OK, you got me with the double quick action market comment.

    For the first time is suspect there may be something wrong with Lennox Scott.

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  4. 4
    Peter says:

    I’ve looked at a lot of places and have been heartily encouraged by my buyer’s agent to make full price offers the day after the property is listed, but funny enough, I’m starting to see things slowing down a little, at least on the Eastside.

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  5. 5
    Yerbolat says:

    “lies, gollyed lies, and statistics” :)
    At this moment, only reasonably priced REOs can give some piece of mind of not having regrets for the next 5 years after purchasing them. Sadly, most REOs have either bad location or bad condition.

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  6. 6
    Tom says:

    By the time the newspapers recognize and write about a trend–it seems to be almost over. The housing market is at a very fragile point. We would love to buy a home in North Seattle, but not at any cost. The “multiple offer” situation scared us off. On the advice of this blog we will start seriously looking again at the end of the summer. Houses do not seem to be pending as fast as they were a few weeks ago, but we will wait and see…

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  7. 7
    Feedback says:

    I’m glad the housing market is back in the black. Great cartoon, by the way!

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  8. 8
    corncob says:

    I am still seeing pretty fast action on the Eastside (500-600k) for the types of homes we are looking for. Just got beat out by an offer nearly 10% over list price, went pending in two days. So there is still some amount of insanity going on this side of the lake. Hoping that it settles down after summer, finding houses and getting beaten by ridiculous offers like that above are making me want to just sign another lease and save up some more funds. I doubt rates are going anywhere by next year…

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  9. 9
    ivan says:

    I walked through my old neighborhood today. It’s a street of apartment buildings and condos. This time of year, from 2006 through last summer, there was always 8-10 condos for sale on my block. I used to count them to see how high it would go. This summer there is not one single unit for sale.

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  10. 10
    Scotsman says:

    LEN! NOX! LEN! NOX! LEN! NOX! LEN! NOX! LEEEEEENNNNNOX!!!!!

    Faster than a speeding bullet!
    More powerful than a locamotive!
    A legend in the minds of realtors!

    Heeeeee’s . . . . BACK! ON! TOP!

    (Buy now, or be priced out forever) /

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  11. 11
    ray pepper says:

    Buy now? 500-800k in Bellevue? Personally, I’d rather get the “Hungarian Cross-Bow” then saddle myself with that debt….

    http://www.youtube.com/watch?v=2xHTKYbBFbo&feature=related

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  12. 12

    By Feedback @ 7:

    I’m glad the housing market is back in the black. Great cartoon, by the way!

    That cartoon was very odd, including lacking a volume control.

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  13. 13
    Tim McB says:

    Strong Bad rules the real estate market!!! Do you use your powers for good or for awesome!!!!

    Yes, I’m a geek and I’m referring to the anime cartoon from homestarrunner.com

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  14. 14
    Chris says:

    I just lost out on a home with ten offers in a “main and main” location in north seattle. The 3 most competitive offers came within a couple thousand of each other, at 50k over list price (on a home listed well under assessed value and reasonable market value). All three were first time prospective homebuyers with 20% down, who presumably sat out the last several years of the market. It remains to be seen whether these types of prospective buyers retain discipline and back off on houses that come on the market too high, or whether sooner or later these types will cave and start to drive prices up substantially. Probably somewhere in between I’d think. I’m hoping a ton of latent supply follows if and when prices do rise.

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  15. 15
    ess says:

    What is the real estate operational definition of “close to job centers”? Five miles, ten miles or more? How far away from Seattle and Bellevue would be considered “close to job centers”?
    Thank you

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  16. 16
    Peter says:

    Oh, boy. The wife and I were at an open house a few weekends ago and I put down my spam folder email address for the agent. I just checked that account, and there’s a mail from the agent that said buyers had better act quickly or else risk being “priced out” of the market.

    I’m sure this bubble will be different!

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  17. 17
    patient says:

    RE: Chris @ 14
    It shouldn’t be hard for sellers to pickup on how irrational and impulsive motivated home buyers are when they think it’s a good time to buy, are afraid of getting priced out or can get their hands on government handouts. Don’t be surprised if listing prices soon are above 2007 and offers will still come in, for a while that is…rinse and repeat and learn nothing. This time around though, the govs coffers are exhausted so it could get much, much uglier.

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  18. 18
    wreckingbull says:

    RE: Peter @ 16 – Did you get warned that the last spaceship leaving planet earth is about to take off?

    http://www.seattlepi.com/local/opinion/article/Home-ownership-delineates-today-s-economic-divide-1217673.php

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  19. 19
    Peter says:

    RE: wreckingbull @ 18 – Not yet, I am sure that is coming soon though. I am stocking up on squirrel chow as well.

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  20. 20

    RE: Chris @ 14 – People need to realize that outside of bank listings, the highest offer is not necessarily the best (and that is sometimes even true of bank owned listings). Good listing agents realize that.

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  21. 21
    Sarah says:

    Yes, I think things are slowing down on the Eastside because there’s hardly any new inventory. Also, there are some homes that were in the market a while back, that just raised their prices (probably from all the good news of sales going up). As a buyer, I’m more interested in those homes that are priced fairly and when I see homes that have been on the market that raise their prices, it raises a red flag and become disinterested in those houses. Especially if they’ve been on the market for a while and really have no reason to go up in value.

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  22. 22
    Sarah says:

    Peter, agents will always say that buyers should buy now or risk being ‘priced out’. They are salespeople first, with your interests, the buyers that is, second. Really, after evaluating lending standards, I hope the administration looks at selling standards of real estate agents.

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  23. 23
    Peter says:

    RE: Sarah @ 22 – I know Sarah, it’s just hilarious that agents feel emboldened to bring out their bubble-era vocubularies once again. If you do a search on this site for “buy now or be priced out forever” you will find a lot of examples of it during the bubble years.

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  24. 24
    Macro Investor says:

    By ray pepper @ 11:

    Buy now? 500-800k in Bellevue? Personally, I’d rather get the “Hungarian Cross-Bow” then saddle myself with that debt….

    http://www.youtube.com/watch?v=2xHTKYbBFbo&feature=related

    I’d like to do a survey. Has even one of these buyers considered what they’ll retire on after spending a lifetime working for the bank and tax man? They got burned by the nasdaq bubble, then the housing bubble, then the second stock crash. Anybody think this one will be different?

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  25. 25
    ARDELL says:

    The number of times the winner in multiple offers simply backs out without even doing a home inspection must be high, as today is the 3rd time in 6 weeks or so that my clients have gotten the house without being the winner in the multiple offers round. The property does not always go back to Active Status, so these stories are not being picked up by the media or in the stats.

    The agent simply calls someone else who was in the mix and it moves to a different buyer in escrow without it coming back on as Active. Each time my clients got it for a lower price and/or better terms than if they had won the multiple offer round at the beginning. In one case they got it for 4% under list price, even though they lost it in multiple offers by not bidding at or near asking price.

    It does seem to pay off to make a sensible offer in multiple offer situations. You may not “win”…but if the winner backs out, you may get a call without the property going back on market, and you don’t have to “beat” anyone to get the house. If you don’t submit any offer in the multiple offers, you will not be eligible for that 2nd chance. So it is a good idea to make a sensible offer and not get all caught up in “winning” in the first round.

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  26. 26

    By ARDELL @ 25:

    The number of times the winner in multiple offers simply backs out without even doing a home inspection must be high, as today is the 3rd time in 6 weeks or so that my clients have gotten the house without being the winner in the multiple offers round. The property does not always go back to Active Status, so these stories are not being picked up by the media or in the stats..

    Yesterday I was commenting that good listing agents know that the highest offer is not necessarily the best offer. Apparently you’ve had the misfortune of not dealing with good listing agents.

    When you have a crap listing and/or selling needing a sale really badly, sometimes you don’t have a choice but to accept an offer that you really don’t like. If you’re in a multiple offer situation you don’t have to do that. Of course, the listing agent has to know what to look for and what questions to ask. Otherwise they are simply making the same mistake banks make–assuming highest is the best.

    In the listing agents’ defense, however, the wild card can be the inspector. A bad or lazy inspector can kill deals. And I don’t mean an inspector who finds a lot of issues. I mean an inspector who doesn’t know what they are taking about.

    It does though help for the buyer’s agent to convey the message of why their offer is a great offer to the listing agent. I once even got a bank to revoke its verbal acceptance doing that sort of thing (letting them know that we would be there when the deal they picked fell apart).

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  27. 27
    David Losh says:

    RE: ARDELL @ 25

    The problem is the mind set of the market place we have right now, and if now is the time to participate in the market.

    I’ll point out again that in December, and January buyers were complaining there was nothing to buy, and today all those crap properties are sold, some in multiple offer situations.

    I’ll give a good example. We looked at a property that is darling. The sellers are transferring and have to sell. The house is story book darling with all the bells. and whistles. There is a definite hump in the hall way floor that kind of transfers to the second floor, which has three small bedrooms.

    The listing agent was quick to point out that the house has had full inspections, and the hump isn’t structural, which I know it isn’t, but it’s a bother.

    The seller is dumping the property. It got multiple offers, and yes the first people backed out, while the next set of buyers moved in.

    Is it a good purchase? The price is high, and in the end these buyers will be hoping for massive inflation.

    The only question a buyer should consider is if this is the market that is best for them to be in.

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  28. 28
    ARDELL says:

    Kary,

    You forget that if the Buyer’s Agent is doing their job well, the Listing Agent will not be dealing with all of the confidential information about the buyers that may assist them in choosing based on commitment to the property vs price and terms. Also one must be mindful that making decisions based on the who vs the facts at hand can lead to discriminatory practices. So playing God in deciding who looks flaky and who doesn’t can quickly lead to fair housing issues.

    Best to play the cards as they are dealt and not pretend to trade the seller’s dollars for perceived risk. Anyone can cancel on Form 17 or Home Inspection, and guessing who will or who won’t cancel based on perception can be a dangerous game for a Listing Agent to play, at the Seller’s expense.

    FYI of the 3 I mentioned, 2 cancelled on the CC&R’s (which were not out of the ordinary for a PUD) and 1 cancelled on the Form 17. So there were no Home Inspectors involved in the 3 instances I mentioned in my previous comment.

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  29. 29

    RE: ARDELL @ 28 – I purposefully took inspections out of the equation with an edit mentioning inspectors. I was thinking more of quality of agent and lender issues when I started the post.

    But to some extent you can sometimes determine inspections. One of the multiple offer situations I’ve frequently mentioned was based on expected inspection results. We researched the two buyers and found that one of the two already owned an early 20th century house. Since my client was selling such a house I advised my client to pick their lower offer because they would be more familiar with older house issues.

    The inspection report was one of the most detailed, nit-picky reports I’ve ever seen. Even so, the buyers only asked for a $500 credit.

    BTW, I added that inspector to my referral list. I was very impressed with his detailed work and lack of errors (false positives).

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  30. 30
    Sarah says:

    I agree with your last comment, “The only question a buyer should consider is if this is the market that is best for them to be in.”

    I would state it even more specifically that the only question a buyer should consider is if the house they are bidding on is worth the listing price, weighing in market conditions appropriately.

    the housing market is like the stock market, with less volatility, in that it has its up years and down years. properties that have problems now will experience less appreciation in the up years and during the down years, could remain the same or depreciate more.

    maybe you agree or disagree with my last IMHO statement. but the bottom line is that buyers should be comfortable with the bid they put and shouldn’t let them be influenced by real estate agents – in the end, they just want to finish the sale, irregardless of how they conduct themselves in the process. they want to finish the sale, so they can report to NWMLS one more data point to fuel housing recovery. show me one agent that has gone back to a family they have sold a house to and ask if they were happy with their purchase. i doubt you will see such customer feedback or satisfaction checked, which is odd. Customer satisfaction is almost checked in almost every other product you buy – even my car dealership called to check on my experience with buying a car. There are standard surveys, percent of surveys are reported, etc.

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  31. 31
    Sarah says:

    I don’t think buyers will get that irrational…there are less buyers that are qualified for a loan due to slower lending. buyers have learned and been burned before. no buyer will overbid due to this lesson or due to their incapacity.

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  32. 32

    RE: Sarah @ 31
    And yet, despite the fact that there are less qualified buyers out there, the amount of listings of nice houses in neighborhoods people want to buy in is extremely low. So buyers are indeed acting irrationally. I think the bulk of people who used to able to qualify for loans but aren’t anymore are those who would want to buy a less expensive house. Which is a big reason that the upper tiers of houses have done better than the lower tier. But I’m seeing all kinds of irrational buyer behavior, no doubt prodded on by their agents. 500,000 dollar + houses in places like Ballard and Sammamish and Bellevue going for more than list prices in multiple offer situations. I don’t know what it is…maybe getting rejected makes you want something more? Or people getting convinced that the way the market is now is the way the market will continue to be?

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  33. 33
    ARDELL says:

    RE: Sarah @ 30

    “I would state it even more specifically that the only question a buyer should consider is if the house they are bidding on is worth the listing price, weighing in market conditions appropriately.”

    There are other considerations, one of which is how likely will the buyer find a different house that suits their personal wants and needs as well as this particular house. Sometimes I tell my client, houses like this one are a dime a dozen and similar homes will be readily available in the near future, hopefully without a bidding war. But that is not always the case.

    In the first situation most every home had a kitchen that my client perceived to be “too small”. The home they purchased had a unique kitchen remodel that included lifting the height of the ceiling from 8′ to 10′ and bumping out the size of the kitchen as well to be at least twice as large as comparably priced homes. Since large kitchen was her No. 1 preference item, finding a different house that suited that particular family as well, was not as likely to happen as with some other homes. Buying a home without the remodel and bump out and doing it themselves was not likely to be a real scenario, and would cost them at least $20,000 more to do it themselves, likely more. So it was a good deal for a lot of reasons specific to that particular family.

    The 3rd scenario was similar in that the home had at least 4 unique qualities that made that home uniquely different and also causing almost every other home in their area of preference to be inadequate in comparison. Adding those features to one of the other homes even in the same neighborhood was not even possible. So again, not being able to find a replacement home with the same qualities was a consideration. Not talking about what is “for sale” but what exists in homes whether they are for sale or not.

    The 2nd scenario was a run of the mill we can find this any day of the week kind of house, but that is the one where they paid 4% under list price (and a more than fair value) for the home that originally had multiple offers.

    You say, “show me one agent that has gone back to a family they have sold a house to and ask if they were happy with their purchase.”

    As to client surveys in real estate, the ones I have seen have been bogus and trumped up. There was once an ad campaign that said “9 out of 10 of our clients say they would use us again!”. That particular survey involved sending the client that question the day they chose the Company to represent them. How likely is it that the client would say no to a decision they made yesterday?

    The actual means by which agents are rated by their clients, is they send them more clients vs answering survey questions. My most recent escrow opened is someone referred to me by a friend of theirs who bought a home with me in 2006. The one before that is someone referred to me by someone who bought a home from me in 2005 who also referred the client above who bought in 2006. The one closing end of July was referred to me by 3 of their friends, all of whom bought homes from me in 2009, 2010 and 2011.

    “Reviews” are not the usual means of client’s indicating how much they were satisfied with their agent. Unsolicited referrals is the normal method of a client indicating their satisfaction. If all of an agents clients are “new” from advertising, and none from referrals by past clients, that is a big red flag…even if that same agent has drummed up some “testimonials” for their website.

    It really isn’t necessary to ask how a client feels about my service, as the client has already via email and note cards indicated how they feel. Also, as example, my new listing in Maple Leaf is a client for whom I sold her previous home in Green Lake. Why would I ask her via a survey if she is happy with my service, when she said so many times during our relationship, and is now hiring me again to perform the same service?

    Referrals and Repeat Business from the same clients is the better and best sign of happy with my service, not answers on a questionnaire I ask them to complete. I don’t “use” my clients in that manner to gain new clients by asking them to complete surveys.

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  34. 34
    ARDELL says:

    RE: Ira Sacharoff @ 32

    I just completed a valuation review of recent sold prices in Klahanie for a client, because under or over “Asking Price” is not the indicator of good or irrational behavior. Asking Price is not sacrosanct or an indicator of value, so judging irrational decision on under or over asking is a false premise.

    The home that sold for 10% over asking price turned out to be the best value of 4 homes sold. The one that sold for less than asking in a much longer days on market scenario was still not a good deal. The Asking Price was much higher than real value, and the first home with the bid up was listed at less than real value to acquire many vs one offer in a short period of time. I don’t personally use that strategy as a rule. That was a bank owned home that wanted lots of offers in the shortest amount of time and was grossly under priced to achieve that result.

    The worst and most irrational “value” was the nicest looking house of the bunch with severe value issues that were overlooked. The most irrational behavior I am seeing in the marketplace is not about under of over “asking price”. It is about “oooh…look at the pretty granite and pendant lights!”.

    Beware of shiny objects causing distraction is the rule of the day when it comes to “irrational” valuation decisions.

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  35. 35
    Sarah says:

    I’m not sure what the cause of the irrational behavior is, but at some point, maybe it’ll die off. Whenever there’s a “hot sale”, there’s always a rush in the beginning and then things fade (beanie babies, Priuses, any fad really – usually at some point, rationality comes back). I’m not suggesting that this ‘hot sale’ of houses is a fad, but I do think that like all things, word of mouth fuels things up to a certain point. With houses, I’m hoping that rationality will kick in quicker because a house is such an expensive purchase and because loans are harder to get.

    Personally, I won’t succumb to believe that the market is the way it is and accept it until I see some solid data (and when I mean solid, I mean looking at numbers that are revised NWMLS numbers, usually a month after reported) for at least six months.

    As a buyer, I’ve had to change my strategy. I am now renting a house. Contrary to what the media has stated, that higher renting prices will feed a housing recovery, my rent is still far below what my anticipated mortgage would be. Though the rent may be money out the window, in that it does not go towards building up a home equity as part of a mortgage would, at least I am not paying any money for interest, closing fees and taxes either.

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  36. 36

    By Sarah @ 35:

    Personally, I won’t succumb to believe that the market is the way it is and accept it until I see some solid data (and when I mean solid, I mean looking at numbers that are revised NWMLS numbers, usually a month after reported) for at least six months.

    There are no revised NWMLS numbers.

    One of Tim’s main complaints about the NWMLS data is that the sales for May also includes some late reported sales for January though April. The NWMLS doesn’t go back an restate the prior months’ data when late sales are reported.

    In any case even if it were restated, the impact probably would never be even close to $5,000 either way. It has more of an impact on the volume numbers. If you have 100 sales reported in May for earlier months, and 150 sales for May that get reported late, your volume statistics will be off by 50.

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  37. 37

    By Sarah @ 22:

    Peter, agents will always say that buyers should buy now or risk being ‘priced out’. They are salespeople first, with your interests, the buyers that is, second. Really, after evaluating lending standards, I hope the administration looks at selling standards of real estate agents.

    Stereotype much?

    Typically the people agents deal with have already made the decision to buy a property. It isn’t necessary to convince them to buy.

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  38. 38
    Peter says:

    RE: Kary L. Krismer @ 37 – Kary, in my limited experience with agents – buyer’s agents at least – I don’t really feel like my buyer’s agent added anything that I couldn’t have figured out. For example, I can very easily go to a publicly available MLS database and do a search of recently sold homes for “comps”. I think this current market is the kind of market agents dream about because they can really play into the hysteria and put the hard sell on their clients to make offers that really aren’t in their best interest all in the pursuit of a sale. As I have said before, I am currently looking on the eastside and we have a buyer’s agent. We looked at a decent house that we liked and we were given the hard sell to make a full price offer 3 days after the house was listed or else face the dire consequence of not getting it (another buyer has looked at the house 3 TIMES! Make the offer now! NOW! NOW! NOW!) I resisted, and somehow, inexplicably, the house is still active two weeks later. I felt that the house was overpriced ($50/sq ft more than even the most expensive house in the area in recent sales) and it looks like everyone else does too – everyone, that is, except my agent.

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  39. 39
    Sarah says:

    Kary at 37.

    I am not stereotyping. my judgment is based on experience with an agent, not stereotyping. maybe i should have specified that.

    If you read what this website/forum is all about (under About tab):

    “Seattle Bubble promotes responsible home ownership by fighting ignorance, myths, and stereotypes. If you are a real estate agent that depends a steady flow of naïve home buyers or sellers, you probably won’t enjoy this site. However, if you are interested in buying or selling a home around Seattle and want to try to understand what’s going on in the market, this is the place for you.”

    I believe this forum is for all people, agents like yourself included and buyers like myself to present our experience, so that we can understand each other better. maybe you are not like these agents, but don’t be naive in thinking that all real estate agents are working for their clients best interest. that hasn’t been my experience – and I participate in this forum to share my experience which is just as valid as anyone else’s. I hardly think I’m the only person to believe this – google ‘working with real estate agents’ and i think you’ll find more than one person giving advice as to what to look out for in working with an agent, especially after the sub-prime crisis.

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  40. 40
    Sarah says:

    Kary at 36
    Thanks for pointing this out.

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  41. 41
    Sarah says:

    Peter at 38.

    Yes, this has been my experience as well – and this adds to my previous point to Kary. I do feel that real estate agents put pressure to buy. Buyers are a lot more savvy with websites such as these, zillow and redfin out there and can figure things out for themselves.

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  42. 42

    RE: Peter @ 38 – Not all agents are good, but in your agent’s defense, you do get a feel for when a property will go quickly and when it won’t. Sometimes they go faster than what you would guess and sometimes they go slower.

    In this market though if you find a property that doesn’t require a lot of compromises on your part (e.g. it’s very close to what you’re looking for), you really shouldn’t spend a lot of time thinking about it. It’s better to do that type of thing before you even see the property. If you don’t have strong feelings about it, then it probably isn’t that property.

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  43. 43

    By Sarah @ 39:

    Kary at 37.

    I am not stereotyping. my judgment is based on experience with an agent, not stereotyping. maybe i should have specified that.

    That is stereotyping based on a very small sample.

    I believe this forum is for all people, agents like yourself included and buyers like myself to present our experience, so that we can understand each other better. maybe you are not like these agents, but don’t be naive in thinking that all real estate agents are working for their clients best interest. that hasn’t been my experience – and I participate in this forum to share my experience which is just as valid as anyone else’s.

    I don’t think all agents have their clients’ interests at heart. That would be stereotyping on my part if I did.

    I don’t have a problem with your sharing your thoughts. I actually appreciate it. I was just pointing out that agents don’t typically have to convince buyers to buy. Sellers are more likely to want to consider their options, but buyers usually come to the agent already having made the decision they want to buy.

    My complaint about buyers is that too many of them are too difficult to hold back! They want to buy something now, even if the property is not a good fit. While it’s always the client’s decision, an agent that doesn’t at least try to point out the issues with the property is not really providing much of a service.

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  44. 44

    By Sarah @ 41:

    Peter at 38.

    Yes, this has been my experience as well – and this adds to my previous point to Kary. I do feel that real estate agents put pressure to buy. Buyers are a lot more savvy with websites such as these, zillow and redfin out there and can figure things out for themselves.

    With all due respect, I think you’re fooling yourself. I always like to say you don’t know what you don’t know.

    As your self these questions:

    1. What do I know about different types of siding?
    2. What do I know about different types of roofing?
    3. What do I know about septic tanks and sewer scoping?
    4, What do I know about remodel permits?
    5. What do I know about the various types of pests in the PNW?
    6. What do I know about the relative value of different styles of houses?
    7. What do I know about closing a short sale that is a rental?
    8. What do I know about the likely terms on an REO sale?
    9. What do I know about the terms on the financing addendum?

    I could give you information on all of those things, but just as an example, two months I ran into a loan officer who didn’t know what they needed to do to keep the financing contingency in place. They gave me a “I’ve been doing this for 20 years and I know what I’m doing.” Fine, I just warned the clients what they needed to do and left it. But for my concern, the clients would have been at risk of losing their earnest money when the “experience lender” couldn’t fund the loan on time. That’s not something you learn from Zillow or Redfin.

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  45. 45
    ARDELL says:

    RE: Kary L. Krismer @ 44

    You forgot the punchline…and it did close…and they didn’t lose their Earnest Money…and you scared the bejeebees out of everyone for no good reason and pissed off the lender…and looked in the mirror and pulled out your plum and said…”what a good boy am I”. :)

    Not quite my birthday…not until Saturday…but I thought I’d have a little fun early due to this crappy rainy period we’re suffering through.

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  46. 46

    RE: ARDELL @ 45 -Well first, what I had the clients do was probably sufficient to avoid the waiver of the contingency. In any case, I didn’t disclose the connection between what we were doing right after mutual acceptance and what we were doing right before closing until after we closed, so that the client wouldn’t worry. By then the clients had other reasons not to like him.

    The loan officer is now on my black list. I’ll never deal with him again. He’s an incompetent idiot.

    It’s similar to the time I prevented my client’s property from being accidentally foreclosed. I didn’t tell her about that until after we closed either.

    Speaking of rain, I’ve never seen rain like this in the Seattle area!

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  47. 47
    Peter says:

    RE: Kary L. Krismer @ 42 – Kary, this isn’t directed at you, but trusting an agent’s “feel” for whether or not I should put $10k, $20k, $nK on the table to buy a home isn’t something I’m comfortable doing. If the agent is able to provide a few concrete points that I can evaulate, I will evaluate them, but I don’t trust “feelings”.

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  48. 48

    RE: Peter @ 47 – I was going more for how long you likely have to make that decision. If the agent shows you 20 houses and thinks every property they show needs to have an offer right then, possibly something is wrong.

    It’s sort of like list price. Sometimes the agent should feel it’s high, sometimes they might feel it’s low. If every time they think a full list offer (or $10,000 over list) needs to be made, then probably something is wrong.

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  49. 49

    RE: Sarah @ 39
    My experience with real estate agents prior to my becoming an agent was pretty negative. And while I now see that there are agents out there who are decent folks working for their client’s best interests, I still see a lot of them as simply interested in closing deals. Since becoming an agent, I’ve encountered some honest, hardworking, very likable agents, but to deny that there are still a bunch of lying, slimeball agents out there is to deny reality.

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  50. 50
    Macro Investor says:

    By ARDELL @ 28:

    Anyone can cancel on Form 17 or Home Inspection

    FYI of the 3 I mentioned, 2 cancelled on the CC&R’s

    How does form 17 give a buyer the ability to cancel (presumably you meant without losing their earnest money)?

    Same question on the CCR. That is simply a factual part of the title, isn’t it?

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  51. 51
    ARDELL says:

    RE: Macro Investor @ 50

    You have a limited time frame to review these factual documents and cancel based on anything you may not like about those “facts”. This is true if you have secured and/or retained your right to do so in your offer. You have to be careful to sign in the correct place on Page 5 of the Form 17 to sign acknowledging receipt…but not on the line under it waiving your right to cancel.

    These time frames normally run concurrent with your other outs, like home inspection contingency. They usually expire before the home inspection contingency, thus giving you a free legal out vs paying for the home inspection if you run into strong buyer remorse on the morning after you win in multiple offers when reality sets in.

    And yes…I did mean without losing your Earnest Money.

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  52. 52

    RE: ARDELL @ 51 – Sometimes you might not even get a Form 17, when it is required, and therefore you could cancel at virtually any point up to closing. Technically the seller is not required to give a form 17, it’s just that until a short time after they do the buyer can back out.

    Sometimes the Form 17 needs to be amended, and that will give the buyer a new period to back out. From memory, the amendment of a form 17 is not required, and thus will not give you a new period to back out, if the information comes to the seller from the buyer (directly or indirectly). Presumably that’s so the inspection response does not give rise to the need to amend the Form 17 and a new period to back out, and so that the buyer won’t have incentive to hold back information so that they can later decide to back out.

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  53. 53

    By Ira Sacharoff @ 49:

    Since becoming an agent, I’ve encountered some honest, hardworking, very likable agents, but to deny that there are still a bunch of lying, slimeball agents out there is to deny reality.

    There’s a third group. Those who don’t know what they’re saying is wrong, who might be trying to help their clients but actually harm their clients.

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  54. 54
    David Losh says:

    RE: Kary L. Krismer @ 53

    Let me get this straight, you sat down at a computer without much Real Estate experience, and began banging out articles for the Post Intelligencer Real Estate Professionals Blog.

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  55. 55
    wreckingbull says:

    RE: ARDELL @ 51 – Are ‘neighborhood reviews’ still common? Or is that the kiss of death if you include that in your offer?

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  56. 56

    By David Losh @ 54:

    RE: Kary L. Krismer @ 53

    Let me get this straight, you sat down at a computer without much Real Estate experience, and began banging out articles for the Post Intelligencer Real Estate Professionals Blog.

    David, I knew more about real estate the day I was licensed than you do today. Don’t beat around the bush with your innuendo. If you have a problem with something I wrote in a blog piece, ask specifically about it.

    I believe my second blog piece was about how agents in a certain area didn’t understand the difference in pricing between a 1.5 bath and 1.75 bath home. Do you have a problem with that?

    One of the first 10 was how as an expert witness for value my side prevailed on a value determination issue in a court proceeding where the opposing expert witness was an appraiser. Do you have a problem with that?

    Or perhaps my December, 2007 piece, where I took on Elizabeth Rhodes for her front page piece on a condo that didn’t sell after a whole 104 days on the market at the lowest price of $624,000. Undisclosed was that it was purchased for $604,000 in April, 2007, and there were no apparent improvements. Do you have a problem with that piece?

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  57. 57

    By wreckingbull @ 55:

    RE: ARDELL @ 51 – Are ‘neighborhood reviews’ still common? Or is that the kiss of death if you include that in your offer?

    Not a kiss of death, but it’s sort of a stupid thing to do.

    “I want to make an offer on your house, but I’m not really sure if I like the neighborhood it’s located in.”

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  58. 58
    ARDELL says:

    RE: wreckingbull @ 55

    Technically yes, but I know an office or two who require that their agents put it in, so I try not to hold that against the buyer or read anything into that if their agent just happens to work there.

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  59. 59
    David Losh says:

    RE: Kary L. Krismer @ 56

    The people who have a problem are the ones who read your articles, and comments, like the ones you have in this thread.

    You are bad information.

    That is as plain as I can make it.

    You’re a waste of time.

    Yes all of the things you just outlined are purely your speculation that your opinions were valid.

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  60. 60
    David Losh says:

    RE: Kary L. Krismer @ 56

    “One of the first 10 was how as an expert witness for value my side prevailed on a value determination issue in a court proceeding where the opposing expert witness was an appraiser.”

    This is the one I really liked, any person with a Real Estate license can do that.

    It is a common court trick. The question is why you would do it?

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  61. 61
    David Losh says:

    RE: Peter @ 38

    Tim started a Bubble blog, and that is a part of the reason you are here. Tim correctly pointed out the Bubble, and began making charts, and graphs with sales data.

    Right now those charts, and graphs are showing pricing declines, but during the Bubble those same charts, and graphs were strong buy signals.

    We are experiencing a period right now when prices are going up? or are the charts, and graphs showing a sever problem in the Real Estate market place, like during the Bubble.

    It depends on how you interpret the charts, and graphs, kind of the same as when you look at specific properties.

    There are some properties worth owning depending on your over all set of goals. Your agent should be able to hear you, understand your goals, and discuss those goals with you. Many people are busy, and need some one to monitor the market place for them. Things happen fast some times, like now.

    Most of the time people should have a second pair of eyes removed from the emotions of a Real Estate negotiation.

    What Ardell outlines many times beautifully is the art of the negotiation. Even with properties I have bought, or sold for myself I have gotten carried away, blinded, and stupid. I have saved more, and made more by using a Real Estate agent from time to time, than representing myself.

    There are a lot of good, decent, hard working agents out there. You just have to find them.

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  62. 62

    By David Losh @ 59:

    RE: Kary L. Krismer @ 56

    The people who have a problem are the ones who read your articles, and comments, like the ones you have in this thread.

    You are bad information..

    David, be specific. If you have a problem with something I’ve written in any of my blog pieces, say what it is. Otherwise, STFU.

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  63. 63

    By David Losh @ 60:

    RE: Kary L. Krismer @ 56

    “One of the first 10 was how as an expert witness for value my side prevailed on a value determination issue in a court proceeding where the opposing expert witness was an appraiser.”

    This is the one I really liked, any person with a Real Estate license can do that.

    It is a common court trick. The question is why you would do it?

    Yes, any agent in theory can do it. The point though is that to be successful at it you have to convince a judge that your opinion of value is better than the opposing expert witness. So in practice only a few agents can do it.

    As to why I would do it, that’s explained in the blog piece. That one I did for free. Typically I do that sort of thing where the issue is stripping away a second deed of trust in a Chapter 13 bankruptcy. In one case I managed to convince the judge that the appraiser’s MAI designation stood for Made As Instructed and the judge found none of his comps to be valid comps.

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  64. 64
    wreckingbull says:

    RE: ARDELL @ 58 – These always seemed strange to me, since the inspection contingency pretty much gives you a free pass to back out if needed.

    Would you agree with the statement that if a buyer wanted to, he or she could always find a way out of the deal based on the results of an inspection? I can’t imagine that an inspector would ever find a perfect home.

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  65. 65
    David Losh says:

    RE: Kary L. Krismer @ 62

    Really nice try at debate tactics, or wasting my time. I have a specific problem with your constant comments.

    You want me to go through your thousands of comments, and articles to word by word engage you further? Come on.

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  66. 66
    David Losh says:

    RE: Kary L. Krismer @ 63

    Convincing a judge, you could have stopped there. In other words you convinced a judge based on what? Probably you being an attorney which is your fall back position.

    I can do the same thing because I do look good in a suit. The problem is doing it for free. Your brokerage is on the hook for your opinion.

    Most Real Estate agents, and Brokerages know enough not to get involved.

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  67. 67
    David Losh says:

    RE: Kary L. Krismer @ 53

    My point exactly.

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  68. 68
    sarah says:

    Kary @ 44.

    You sound like a decent and thorough agent. That hasn’t been my experience – my experience sounds more in line with Peter and Ira’s.

    I wasn’t fooling myself when I said that buyers can figure things out for themselves, especially with websites like zillow and redfin – what I meant, was that buyers can figure things out IN RESPECT TO prices. For example, I was shown a house that should not have been priced as high as it was – especially compared the its neighbors and the recent sold comps – it was clearly an outlier. And yet, the agent was insistent that this price was fairly priced and that it would sell right away! HUH? It’s still on the market – there were two other houses that are being sold around it that have lowered its listing price. It doesn’t make sense to me why that house is still as high as it is other than maybe the sellers don’t want to bring the price down – that would be the only explanation.

    As for your questions, I agree that those questions are what I expect a good agent or an inspector to help answer. But that’s not what I was aiming at.

    Yes, to your other post, there is a 3rd category of agents out there that are plain just inexperienced and will just say anything for a sale.

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  69. 69

    By David Losh @ 65:

    RE: Kary L. Krismer @ 62

    Really nice try at debate tactics, or wasting my time. I have a specific problem with your constant comments.

    You want me to go through your thousands of comments, and articles to word by word engage you further? Come on.

    No, but if you have a complaint about what I write, then that should at least be based on something. Why can’t you come up with at least one example of something I wrote in a blog piece which you disagree with?

    You at least are consistent. Even if President Obama does something that is a complete disaster, it’s genius. If Ardell writes something that is nonsense, it’s genius. If I write something it’s bad. You really need to start thinking about ideas on their own merit and quit basing your analysis of them on who said or wrote what.

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  70. 70

    By David Losh @ 66:

    RE: Kary L. Krismer @ 63 – Convincing a judge, you could have stopped there. In other words you convinced a judge based on what? Probably you being an attorney which is your fall back position.

    No. I testified as to my comps and the appraisers comps. I testified as to the condition of the house.

    Do you have any understanding at all of what an expert witness does?

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  71. 71

    RE: sarah @ 68 – One other thing you haven’t mentioned, which I think is actually more important. If you as a buyer go into enough houses in a small enough area, you’ll get to be a pretty good judge of what a property is worth, especially if your agent is sending you updates on the houses you have already looked at.

    Done long enough, that will also give you an idea of how quickly you have to act to make an offer. That though is less accurate than the price opinion you’ll develop, as it is for agents. I always like to say that listing a house for sale is like fishing. You never know for sure when someone/something will bite.

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  72. 72
    ARDELL says:

    RE: wreckingbull @ 64

    You are correct, but generally cancelling on the inspection contingency costs something and cancelling on the other legal outs of self conducted neighborhood review, reading the CC&Rs and cancelling on something you don’t like, cancelling on Title Review and.or the Form 17 Seller disclosure review period are all cost free legal outs. So if you have buyer remorse when the dust settles after multiple offers, your first option would not be to cancel “on inspection”.

    The process is designed to give the buyer the first 10 days or so of a 30 day escrow period to do their due diligence and then cancel or ratify the contract. The finance contingency runs longer, but I am not usually worried about my client getting financing, so our due diligence and legal out phase is usually the first trimester.

    I will generally not work with someone who wants to throw offers around to tie up property, only to later decide if they really want the property or not, as a strategy. There are a few exceptions, but those usually go to Pending Feasibility vs Pending Inspection. When you make an offer on a property…but only want it if you can add a 3rd garage or if you can do something with the property that is not its current use, you make an offer Pending Feasibility vs Contingent on the Home Inspection.

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  73. 73
    ARDELL says:

    RE: Kary L. Krismer @ 52

    That may be true, but clearly not a good strategy to depend on the Form 17 needing a revision.

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  74. 74

    By ARDELL @ 73:

    RE: Kary L. Krismer @ 52

    That may be true, but clearly not a good strategy to depend on the Form 17 needing a revision.

    True. I just brought that up because I was also dealing with the probably much more commons situation where a seller thinks they are exempt from giving a Form 17, or simply doesn’t want to give a form 17.

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  75. 75
    Leanne says:

    The first paragraph of the ‘Tacoma’ article appears to be a duplicate of the Everett story above. Not sure which place the next two paragraphs refer to.

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