NWMLS: 2012 Ends on a Sour Note for Buyers

December market stats were published by the NWMLS this morning. Here’s a snippet from their press release: Northwest MLS Tallies Busy December as First-time Buyers, Investors Return.

Brokers expect the housing market rebound to continue, while cautioning sellers to refrain from becoming too greedy and expressing hope for “controlled natural growth” to sustain the recovery. They also believe distressed properties, rising rents and re-engaged investors will have an impact on activity for the foreseeable future.

“Buyers are taking note of sellers who overprice their homes,” reported Northwest MLS director Darin Stenvers. “These buyers are not wasting their time looking at that section of the market for fear of losing a “turnkey ready” home that they can buy and close on,” added Stenvers, the office managing broker at John L. Scott, Inc. in Bellingham.

You may recall that nearly a third of sellers will overprice on purpose.

All righty, on with our usual monthly stats.

CAUTION

NWMLS monthly reports include an undisclosed and varying number of
sales from previous months in their pending and closed sales statistics.

Here’s your King County SFH summary, with the arrows to show whether the year-over-year direction of each indicator is favorable or unfavorable news for buyers and sellers (green = favorable, red = unfavorable):

December 2012 Number MOM YOY Buyers Sellers
Active Listings 2,945 -20.8% -46.4%
Closed Sales 1,741 -4.8% +18.8%
SAAS (?) 1.24 +19.9% -23.0%
Pending Sales 1,617 -21.2% +1.6%
Months of Supply 1.82 +0.5% -47.2%
Median Price* $380,046 -1.3% +18.8%

Feel free to download the updated Seattle Bubble Spreadsheet (Excel 2003 format), but keep in mind the caution above.

A few stats of note: before November of last year, King County single-family inventory had never (since my data starts in 2000) dropped below 4,000, let alone below 3,000. Inventory is insanely anemic. Also of interest, pending sales dropped to their lowest year-over-year increase since the post-tax-credit sales hangover.

Here’s your closed sales yearly comparison chart:

King County SFH Closed Sales

Pretty typical for this time of year.

Here’s the graph of inventory with each year overlaid on the same chart.

King County SFH Inventory

Another record low for inventory, dropping below 4,000 single-family homes for the first time on record.

Here’s the supply/demand YOY graph. In place of the now-unreliable measure of pending sales, the “demand” in this chart is represented by closed sales, which have had a consistent definition throughout the decade.

King County Supply vs Demand % Change YOY

Well, we definitely ended the year on a low note for buyers.

Here’s the median home price YOY change graph:

King County SFH YOY Price Change

Down just a bit from last month, but we’re still comparing to a time a year ago when bank-owned sales were through the roof. I expect this to drop dramatically over the next few months.

And lastly, here is the chart comparing King County SFH prices each month for every year back to 1994.

King County SFH Prices

December 2012: $380,046
September 2005: $381,250

Here are the headlines from the Times and P-I:
Seattle Times: Local inventory of homes for sale hits another record low
Seattle P-I: December saw slowing home sales, rising prices

Check back tomorrow for the full reporting roundup.

  

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.

266 comments:

  1. 1
    Erik says:

    Don’t overprice your home if you want to get your real estate agent a quick sale. But if you want to try and make some money, right now is a great time to overprice your home. The reason the 2012 curve has a steepest slope is because people are overpricing their homes and buyers are buying those overpriced homes.

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  2. 2
    uwp says:

    Inventory sucks.
    Anything decent and priced semi-reasonably goes pending in a week.
    My Redfin watch list is probably 98% pending. Ugh.

    I’ve been watching since 2006. Ready to buy since 2011. And wishing I did last spring.
    Maybe I’ll get lucky this year.

    Rate this comment: Thumb up 0

  3. 3
    Lily says:

    O shadow inventory, where art thou?

    Rate this comment: Thumb up 0

  4. 4
    A. Ebright says:

    As a buyer it’s now my belief that currently every house in Seattle is technically “overpriced”, it’s just a matter to what degree.

    I’m interested in hearing from someone explain to me how record low interest rates, record low inventory and a fairly strong local economy cannot produce a temporary bubble?

    Also, sourcing financing is not difficult if you’re actually someone whom should be buying a house. So that is not a limiting factor at this time. If it was any easier, then I would 100% walk away from this market.

    Seems to me we just hit the last “peak”, unless wage inflation can outpace future increases in inventory and interest rates…we might remember January 2013 as one of those moments where the writing was on the wall and we all just drunkenly ignored it.

    Am I missing something or is it a fools market right now?

    Rate this comment: Thumb up 0

  5. 5
    HappyRenter says:

    By Erik @ 1:

    The reason the 2012 curve has a steepest slope is because people are overpricing their homes and buyers are buying those overpriced homes.

    I agree with you there. I have heard a lot of people say that the home they were looking at sold within 2 weeks for 50-100K$ above the listing price in some neighborhoods of North Seattle. Crazy.

    Rate this comment: Thumb up 0

  6. 6
    whatsmyname says:

    “Buyers are taking note of sellers who overprice their homes,” reported Northwest MLS director Darin Stenvers.

    Uh, oh. Will this go on their permanent record?

    Rate this comment: Thumb up 0

  7. 7
    whatsmyname says:

    Interesting facts from your MLS link near the top. The NWMLS is in 21 counties, has over 21,000 brokers, but less than 18,000 active listings. Ouch.

    Rate this comment: Thumb up 0

  8. 8
    Erik says:

    RE: whatsmyname @ 6

    Ha ha ha. The warden may have to come around and enforce the low housing price reform.

    Rate this comment: Thumb up 0

  9. 9
    ARDELL says:

    RE: HappyRenter @ 5

    Same in some neighborhoods of Bellevue.

    Rate this comment: Thumb up 0

  10. 10
    David S says:

    When was the last time there was a positive in the buyer column? It doesn’t seem like very many times over the past two years.

    Rate this comment: Thumb up 0

  11. 11

    By whatsmyname @ 7:

    Interesting facts from your MLS link near the top. The NWMLS is in 21 counties, has over 21,000 brokers, but less than 18,000 active listings. Ouch.

    Not every agent is an active agent, and not every active agent is a listing agent.

    But on that topic, a few years ago the NWMLS was selling boxes and boxes of the Supra keyboxes. Now I doubt they are selling hardly any, and I’ve seen some agents trying to sell their old ones.

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  12. 12
    softwarengineer says:

    RE: uwp @ 2

    My Y Gen Daughter Needed a Used Car

    But inventory is in the gallows, so even dealers are taking trades at 1.25 times Kelley Blue Book.

    I never did it before but researched it for her….I joined the automobile dealers at their auction and got her a low milage rig for half Kelley Blue Book. She’s had it a year and half now, its had no maintenance needs except windshield wipers and oil changes….its a newer Mopar six cylnder, so auto trans and engine tuneups are scheduled every 100K too.

    Same with houses, don’t follow the brainless lemmings lined up to jump off the fiscal cliff…..go the opposite direction; save your money and buy $CASH$ where the dealers buy. If you can’t save fast enough, put down as much as you can and NEGOTIATE a lower price.

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  13. 13
    patient says:

    Is there any here in the home building industry? For an outsider this looks like a dream scenario with record low competition from existing homes and record low cost of financing. What is holding you back from building anywhere you can? Is it fear or just a lag due to the time to ramp up the needed resources from shedding them during the bust?

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  14. 14
    Mike says:

    By A. Ebright @ 4:

    I’m interested in hearing from someone explain to me how record low interest rates, record low inventory and a fairly strong local economy cannot produce a temporary bubble?

    The missing piece needed to make it a bubble is an increase in prices that then drives additional consumption. The price increases have been minimal lately and speculative buying doesn’t seem to be that prevalent. There does seem to be a lot of fix and flip activity, but I consider that normal in a market where a lot of previous owners stopped doing maintenance, repairs and upgrades on underwater homes.

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  15. 15
    Marc says:

    RE: patient @ 13 – Lack of capital and/or financing are probably the biggest limiting factors. Small builders have got it tough if they’re limited to what they can self-finance or beg/borrow from friends & family.

    The big builders are very active and ramping up, e.g., Toll Brothers bought local builder Camwest, they even bought a poorly performing development in Magnolia. I haven’t seen whether they’ve actively started marketing the Magnolia development but I’m sure they will pretty soon. I know they and many other builders are rising prices on the east side pretty frequently and aggressively.

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  16. 16
    softwarengineer says:

    RE: patient @ 13

    Most of Their IA “Under the Table Cash Workers” Went Home to Their Motherlands When the Housing Fabrication Layoffs Hit Seattle

    Now the organised crime building contractors can’t illegally pocket extra profits on 2007 higher prices compared to now, the game is over.

    Rate this comment: Thumb up 0

  17. 17

    RE: Marc @ 15 – I think another factor would be the time lag on permitting. Just a guess. Wasn’t there a news report last month about an uptick in requests for permits?

    Rate this comment: Thumb up 0

  18. 18
    softwarengineer says:

    RE: patient @ 13

    I Complained to My Hair Stylist That My HOA Fees Went Up $20/MO to $170/MO for Water/Sewer and Park/Road/Cabana Maintenance

    She laughed at me and told me her Renton Condo’s HOA fee is $612/MO….my friend tells me there’s Seattle condos “they’re giving away” right now if you agree to pay the MONSTER HOA FEES. He thinks the reason is the building contractors lost all their “under the table” illegals and now you have to pay for local scarce contractor low inventory price gouging still left in the Seattle area….

    I’m wondering too, if we’ve lost the building skills to the disappearring “on the cheap labor workers” too; creating this inventory shortage of building contractors….

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  19. 19

    RE: softwarengineer @ 18 – There can be any number of reasons for high dues. I know of one association that raised them significantly, to the range you mention, simply to build up reserves. The property itself was very well maintained, so it wasn’t a deferred maintenance issue. It took the owners about a year to recognize that would impact the sales price they would get. In other cases it can be the downward spiral caused by owners not paying their dues.

    Building skills are disappearing. Based on the number of condos re-sided in Snohomish County In 2005-2009 the contractors apparently couldn’t even install vinyl siding correctly.

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  20. 20
    ray pepper says:

    Buyers……………………S A V E like you never have before in the years to come. However, ALWAYS look! The Gem you seek could be tomorrow or in 2016. Walk away from ALL multiple offer scenarios and KEEP LOOKING. When asked to engage say NO THANKS! Let them have it!…Never put your MONEY at the mercy of ANY seller.

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  21. 21
    Erik says:

    RE: ray pepper @ 20
    I agree, when a property is bid up, the buyers aren’t getting a great deal.

    I got a great deal because the owner that foreclosed wouldn’t let anyone in to see the property. I put the one and only full price bid in and got a great price.

    Ray, do you know any other ways to be the one and only bidder. I want to repeat the process, but I don’t know how to because I just kinda got lucky last time. It may take me years of looking to repeat that process. Please let me know if you have any methods or strategies.

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  22. 22
    ray pepper says:

    RE: Erik @ 21 – legally no…Go on the darkest of dark days when the weather is horrific and rain is pouring and wind is blowing the circus tents over. Then stay until 230-3pm…The bitter end….You may just see a bald guy in the corner wearing a pink beanie. That will be Me and You bidding on the only one worth waiting around for. But, most likely, someone else would be bidding for me while I’m on the phone with them. That kind of cold weather makes my bald head freeze.

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  23. 23

    By Erik @ 21:

    RE: ray pepper @ 20
    I agree, when a property is bid up, the buyers aren’t getting a great deal..

    Depends on the list price. Not wanting to bid over 10% above list is just as bad as wanting to bid 10% under list. In determining what you’re willing to offer you should determine your own valuation for the property, and not base it off the list price. In some rare situations you may want to go well above list, and take advantage of the fact that others will be reluctant to go over by very much.

    Similarly, if you make an offer and then learn others have bid, dropping out would be foolish. First, the highest offer is not necessarily the best offer. Second, avoiding properties that people want to buy leaves you with something you cannot sell when you want to sell. Third, that others are interested shouldn’t affect the decision you already made that the property is worth $XXX,XXX.

    Stated differently, there are some buyers out there who would offer $190,000 on a house listed for $200,000, and $210,000 on the same house listed at $220,000, but not be willing to offer $210,000 on the house if it is listed at $200,000. They are letting the seller control their decision. Those who drop out on multiple offers are letting other buyers control their decisions.

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  24. 24
    Erik says:

    RE: Kary L. Krismer @ 23
    I don’t base my buying price on the suggested sale price. I think the point is that if there are multiple bids, you are locked into NOT getting a deal way under value. You are going to get a fair price or within 10% either way. I wouldn’t buy a property for 10% under a fair price. I would prefer a free home, but the banks don’t give them away free, so instead I will take one deeply discounted for whatever reason. I want to find those reasons and exploit them.

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  25. 25
    Ray pepper says:

    RE: Erik @ 24 – oh Erik. I’m sorry. I thought u were talking about Trustee Sale homes.

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  26. 26
    Erik says:

    RE: Ray pepper @ 25
    I’m a rookie. I just got a real estate agent and started looking for good deals. I found one, but it took a really long time and a lot of looking.

    This trustee sale thing seems like an avenue that I need to look into more though.

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  27. 27

    By Erik @ 24:

    RE: Kary L. Krismer @ 23
    I don’t base my buying price on the suggested sale price. I think the point is that if there are multiple bids, you are locked into NOT getting a deal way under value.

    I don’t think that’s necessarily true–that was supposed to be my point. It’s rather rare to get great deals in this particular market, but it’s not impossible. People still both over and under-price properties.

    It’s best to act quickly, if possible, to avoid multiple offer situations. Sometimes even being the first day isn’t fast enough. But my point though is that if you make a bid, and another bid comes in, there’s no reason to do anything but wait and see what happens. Withdrawing your offer is defeatist.

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  28. 28
    Erik says:

    RE: Kary L. Krismer @ 27
    Yeah, I imagine these current market conditions make it real tough to get a great deal. I reread your comment considering the current market and it made more sense. I was talking general strategy and you were commenting on the current conditions.

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  29. 29
    ARDELL says:

    RE: Erik @ 28

    I don’t do this and never have done it, but I know a lot of guys who buy houses cheap and flip them around the Country. They drive around in GOOD areas, the best areas even. They look for signs of someone not having enough money to keep up with their homes. Patched roof, tall grass, weeds, gutters hanging down, fence pieces missing and fence leaning over.

    Then they knock on the door and hand the people a written offer. Let’s say the house is worth $550,000. They offer them $400,000. Oh…and it has to be someone with equity. So they look for OLD people who have owned their home a long time and maybe have no mortgage at all. But from the look of the place, they are having a hard time just paying the electric bill.

    One of the reasons they don’t sell is they can’t face the task of getting it ready for market. But when someone hands them an offer and they can walk off with $400,000 without having to clean or repair anything…totally “as-is”. They take what they want ONLY and leave everything else. All their crap stays.

    They are happy to walk away with $400,000 and their prized possessions with no work involved, and you get a great deal.

    That is the standard for the agents I know who do that. They buy them for themselves, fix them up fast and resell them. I have not met any female agents who do this, but I have met LOTS of guys who do this.

    So the first step is get a real estate license. You can’t be in the business of buying and flipping using agents. You need a license or you waste too much money on the in and out fees and don’t have ready access to all the info you need. The serious players have a license they use ONLY for themselves, and they hire an agent to sell the pretty flip version so they can get E and O insurance on the sale.

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  30. 30

    RE: ARDELL @ 29 – Keep in mind that much of that type of activity was made illegal by the distressed property law which passed back in about 2008. The key would likely be whether they seller was in any financial distress. If there was actually no mortgage debt, that might be hard to prove, absent many not having made real property tax payments for three years.

    There are even some criminal portions of that law, although I don’t remember what you need to do to trigger those.

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  31. 31
    ARDELL says:

    RE: Kary L. Krismer @ 30

    ??? How can it be part of the distressed property law when you are only approaching people with no or little mortgage???

    The property is distressed…but owned free and clear or with a tiny mortgage.

    Read my comment again. I think you missed something.

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  32. 32

    RE: ARDELL @ 31 – I addressed that a bit in my post. With no mortgage it would probably require no payment of real estate taxes for three years. Beyond that what I was thinking was even a small mortgage can be foreclosed. After a time a bank would foreclose on a $500,000 house even if only $30,000 was owing. I’ve seen that in the past.

    But since you asked, I went and looked at the statute. A “distressed home” is one “in danger of foreclosure.” “In danger of foreclosure” means:

    (11) “In danger of foreclosure” means any of the following:

    (a) The homeowner has defaulted on the mortgage and, under the terms of the mortgage, the mortgagee has the right to accelerate full payment of the mortgage and repossess, sell, or cause to be sold, the property;

    (b) The homeowner is at least thirty days delinquent on any loan that is secured by the property; or

    (c) The homeowner has a good faith belief that he or she is likely to default on the mortgage within the upcoming four months due to a lack of funds, and the homeowner has reported this belief to: [several different types of people].

    http://apps.leg.wa.gov/rcw/default.aspx?cite=61.34.020

    Or stated differently, just because some real estate agents are doing it, that doesn’t mean it’s legal. ;-)

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  33. 33
    ARDELL says:

    RE: Kary L. Krismer @ 32

    Whatever…you are seriously a PITA. Did you take classes on being perfect at that? Do they give PITA degrees now?

    I saw your milky white thumbs down posts from the end of the year all got reverted back to ZERO thumbs down again from 140 or so. How do you do that? Do you threaten to sue SB? How do 140 thumbs down turn into NO thumbs down a week later?

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  34. 34

    Wow, you ask a question, I answer it, and somehow I’m a PITA?

    Judging by your reaction I would guess that you’re a bit more heavily involved in that type of activity than what you let on.

    As to the thumbs down, in case you don’t remember, I don’t care about the thumbs down because I consider people who cannot express their opposition to what I say to be complete and total morons. I consider those who don’t even try to be cowards. They can think what they want–that is assuming they have two brain cells to rub together, which is doubtful. Although I guess they can click, so they must have some minimal level of intelligence. But that doesn’t change the fact that they are morons.

    Stated differently, I don’t care about the thumbs down, so why would I threaten any action over them? I have noticed though that very old posts lose their thumbs.

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  35. 35
    Marc says:

    RE: ARDELL @ 33 – I’m not one to defend Kary but he raised a very good point. The purpose of that law was to protect people from equity skimming. The conduct you described sounds exactly like that to me: house worth $550,000, flipper offers $400,000, to “OLD people” no less.

    Send those old people to me and I’ll gladly represent them in their dealings with these do gooders.

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  36. 36

    RE: ARDELL @ 33 – I really should know not to raise legal issues with you. You can’t understand them. You get everything backwards. You get upset.

    Rate this comment: Thumb up 0

  37. 37
    ARDELL says:

    RE: Kary L. Krismer @ 36

    Kary…you turn EVERYTHING into a “legal issue”. It’s pretty sickening really.

    I answered the man’s question and I said I DID NOT do that…but you know darned well that is how it is done. Or maybe you don’t…your being a lawyer vs a real estate expert.

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  38. 38

    RE: ARDELL @ 37 – You’re going to have to point out to me what question Eric asked that you answered. I’m not seeing it. What you did was describe a course of action that some people may be doing which is possibly illegal. I thought it best to point that out so that people here don’t get the idea it’s a good thing to do.

    Stated differently, when you or anyone describe people doing something that is seemingly illegal, I feel compelled to point out that it’s illegal.

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  39. 39

    RE: Marc @ 35 – Marc, I’m really glad you have two thumbs down on that post. That can only mean that two people here read the link to the definition statute and realized that what Ardell described is not “equity skimming.” “Equity skimming” requires buying a property while promising to make the existing mortgage payments, not doing so, and another act such as pocketing rents.

    That people are recognizing your error make me want to reconsider my claim that they are morons.

    (Read entire post with a great deal of sarcasm.)

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  40. 40
    Marc says:

    RE: Kary L. Krismer @ 39 – Touche. My usage of equity skimming was in the same vein as republican usage of death tax. It makes the point succinctly.

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  41. 41
    whatsmyname says:

    I have studied the charts in this post very hard in order to make a definite determination for looking forward into 2013. What I have determined is that Tim should definitely use a bold yellow line with circles or triangles for charting the 2013 numbers, or maybe with squares like in 2012.

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  42. 42
    ChrisM says:

    RE: Kary L. Krismer @ 32 – I’m definitely not a lawyer, but I started reading the definitions in RCW 61.34.020 and don’t see where the law would be broken by buying a property as Ardell describes.

    “Any person who wilfully engages in a pattern of equity skimming is guilty of a class B felony”

    Can you dumb it down for us non-lawyers?

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  43. 43
    ARDELL says:

    RE: Kary L. Krismer @ 38

    It’s possibly illegal for me to cross the street 2 inches outside of the crosswalk too. Jaywalkers! Illegal! OMG! But most NORMAL people aren’t constantly looking for the “possibly illegal” in EVERYTHING and running around checking if someone is coloring a little outside of the lines.

    YOU are the first person to say that a home in bad condition, smelly, dirty, trash outside, junker cars in front yard…will sell for less than market value. You say it ALL the time when talking about short sales and bank owned property.

    But now that I am saying the same thing…except not talking about banks…just messy hoarder people with no mortgage. Now it’s illegal. Pu-leez. Stop dragging every topic over to your legal turf so you can answer it. Learn something outside of the law so you don’t have to drag every topic into your field.

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  44. 44
    Erik says:

    By Erik @ 21:

    RE: ray pepper @ 20
    I agree, when a property is bid up, the buyers aren’t getting a great deal.

    I got a great deal because the owner that foreclosed wouldn’t let anyone in to see the property. I put the one and only full price bid in and got a great price.

    Ray, do you know any other ways to be the one and only bidder. I want to repeat the process, but I don’t know how to because I just kinda got lucky last time. It may take me years of looking to repeat that process. Please let me know if you have any methods or strategies.

    Kary, above is where I inquired about techniques to get a great deal on a house.

    Thank you for your reply Ardell. I will get my Real Estate license when I finish grad school. I will finish this year. I have read about this process in a book. This confirms that it can be done. This is valuable information… thanks.

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  45. 45
    ARDELL says:

    RE: Erik @ 44

    You are very welcome, Erik. I remember a classic and stellar example involving a house like this. Fence falling down, obviously no money to fix anything. It was a tear down on a $1.1 Million Dollar piece of land that the builders coveted. Agents were bugging them almost every day to let them list the house. Builders were bugging them almost every day to sell them the house.

    I heard a bunch of agents whining about “Why wont those people sell that house! They obviously can’t afford to live in it…maintain it anyway!”

    I took one of them aside and said what do you want it for? He said to tear it down and build a house there for $3.5 Million (a taller house would have an awesome view and 3 X lot value is a standard rule of thumb). I asked him how long it would be before he could start building…get his architects, permits in place, approvals, etc. He said about a year.

    I told him their youngest daughter goes to school with my daughter and will be graduating high school in a year. They likely are holding out and hanging in there without making any fixes (because they know it’s a tear down anyway) until the daughter graduates from high school.

    I told him to bring an offer…a written offer…with a big fat Earnest Money check. In the offer give them from closing to 60 days after the daughter graduates to stay in the house for free as part of the offer. It worked. The builder/buyer was beyond thrilled. The other people who wanted it were ticked off. The family who owned it were so happy to be able to stay in the house until the daughter graduated, with tons of money to live well, and then retire to a cheaper area for 20% of the money they received from the sale.

    Everyone was happy. Sometimes it is the terms when you are wanting to be the only one in the room for a coveted property. Often even.

    The key is patience. Investors have no real time frame. They are not in a hurry to have something. They are never in a hurry to have it sooner vs later. Investors don’t act like people who are buying a property to live in it. It is an unemotional process. They write 10 offers and hope to get 1 of 10, and they do that often. The ones who do many offers often put in a one line clause “this offer expires upon receipt” so they can show they are serious without being in too many binding contracts all at once. Most offer a non-refundable deposit as well. Depends on the circumstances.

    To be an investor you have to play by a different set of rules. I have no interest in that area of real estate, but I know how it is done and I have seen many do it very well. I personally prefer owner occupant buyers and not investors. Why? Because REAL investors should have their own license and not need me except to sell the finished new home or flip property. No investor should need an agent to buy a property. Most don’t. They pay “scouts” to find the property.

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  46. 46

    By ChrisM @ 42:

    RE: Kary L. Krismer @ 32 – I’m definitely not a lawyer, but I started reading the definitions in RCW 61.34.020 and don’t see where the law would be broken by buying a property as Ardell describes.

    “Any person who wilfully engages in a pattern of equity skimming is guilty of a class B felony”

    Can you dumb it down for us non-lawyers?

    61.34.020 is merely the definitions statute. That was cited because Ardell asked how there could be a problem with a seller who is either free and clear or has a “tiny” mortgage. The definitions statute casts a very wide net, including (11)(c) quoted above where the owner simply has a good faith belief they might default in four months that they’ve reported to someone like an attorney, etc. The definitions statute brings you possibly within the scope of the act, but does not deal with actual wrongdoing.

    The class B felony pertains to “equity skimming” which is something different than what Ardell described. 61.34.030 makes a “pattern of equity skimming” a felony, and the definitions statute describes that as being three instances of “equity skimming” within a three year period.

    The part that makes Ardell’s scheme possibly illegal is 61.34.120(b)(2), which requires the purchaser:

    (b) Make payment to the distressed homeowner so that the distressed homeowner has received consideration in an amount of at least eighty-two percent of the fair market value of the property as of the date of the eviction or voluntary relinquishment of possession of the distressed home by the distressed homeowner.

    Ardell’s numbers of 400/550 would be about 72%. So if all the other elements of the Act have been triggered, it could be illegal.

    BTW, I should add that there are some very old laws that might also trigger relief for the seller where property is sold well below FMV. So the idea that buyers could be in legal trouble for ripping someone off is hardly a new concept. The distressed property law though applies in much more specific and much broader ways.

    Finally, if you want to read either of those other statutes, the link to the definitions statute above will get you there. Just click on the “chapter” link at the top of the page and you can navigate to any of the individual statutes. I’d post them here but multiple links often trigger the spam filter here.

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  47. 47

    By ARDELL @ 43:

    RE: Kary L. Krismer @ 38

    It’s possibly illegal for me to cross the street 2 inches outside of the crosswalk too. Jaywalkers! Illegal! OMG! But most NORMAL people aren’t constantly looking for the “possibly illegal” in EVERYTHING and running around checking if someone is coloring a little outside of the lines.

    YOU are the first person to say that a home in bad condition, smelly, dirty, trash outside, junker cars in front yard…will sell for less than market value. You say it ALL the time when talking about short sales and bank owned property.

    Whatever Ardell. You’ve had two attorneys tell you that your scheme is problematic, but you fail to listen. Typical Ardell behavior.

    As to the second paragraph, your facts were the house was worth $550,000, but they offer $400,000 on the spot. But no, I don’t say that the condition of a house causes it to sell for less than FMV. I say it causes it to sell for less. As to banks, they sell for less than FMV because of uncertain condition (with limited inspection rights), bad contract terms and poor marketing. That creates lower demand, which in turn lowers prices. Totally different. Rather obviously the condition of a house affects its FMV, but in your scenario the FMV was higher than the purchase price.

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  48. 48

    By Erik @ 44:

    By Erik @ 21:
    RE: ray pepper @ 20
    I agree, when a property is bid up, the buyers aren’t getting a great deal.

    I got a great deal because the owner that foreclosed wouldn’t let anyone in to see the property. I put the one and only full price bid in and got a great price.

    Ray, do you know any other ways to be the one and only bidder. I want to repeat the process, but I don’t know how to because I just kinda got lucky last time. It may take me years of looking to repeat that process. Please let me know if you have any methods or strategies.

    Kary, above is where I inquired about techniques to get a great deal on a house.

    Thank you for your reply Ardell. I will get my Real Estate license when I finish grad school. I will finish this year. I have read about this process in a book. This confirms that it can be done. This is valuable information… thanks.

    Thank you for pointing that question out, but don’t get the idea though that “this confirms that it can be done.”

    Prior to becoming an agent I attended an attorney continuing legal education course, which if memory serves was presented by one of the attorneys how helped draft the distressed property law. This was before the distressed property law was enacted, and one of her comments was that deposing buyers using these schemes was very easy, because they were proud of what they had done and didn’t think they had done anything wrong. They would openly spell out and admit exactly what they had done. Someone (probably a get rich investing in real estate course they paid for) told them step by step how to rip people off, and they went out and did it. It never occurred to them that it was actionable conduct.

    Ardell’s post 29 above is like the get rich investing in real estate course that the defendants described above attended. It describes how to rip people off. The problem with post 29 and the get rich investing in real estate classes is they don’t address at all the legalities, and in Ardell’s case it’s seemingly because she’s oblivious to the problems. Those who teach such courses, however, they probably know or suspect what they’re teaching is suspect. They are con men, but their con is teaching other people how to be con men.

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  49. 49

    RE: ARDELL @ 45 – You don’t mention the price paid in that scenario, so it’s not clear it fits withing the how to get a bargain topic, or the discussion of the distressed property law above. I would point out though that it touches on one of the other triggers of the distressed property law: Transactions designed to lure distressed sellers in with promise that they can stay in their property. I don’t think what you described necessarily triggers that, but it is one of the things to watch out for in structuring a deal.

    I would also point out that a 14 month close might also be problematic. Most attorneys would probably use an option to purchase agreement rather than a purchase and sale agreement in that scenario. Seemingly it worked out for your client, but that doesn’t mean they weren’t at risk.

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  50. 50
    ray pepper says:

    Oh Yes…..Stay in the property sell it now..get caught up on your property taxes…medical bills…pay off your debts…and not have to leave your home..Buy it back later…Then the largest Crash in Real Estate History occurs with FRAUD rampant everywhere in our Capital markets and banks.

    I would guess that since 2008 very few, if any, of these cases have even been prosecuted successfully. Everyone went BUST including the equity “skimmers” . I suspect at the first sign of legal notification of “skimming” the perpetrator will have gladly signed the home back to the seller.

    It was a great idea but as with everything else…2008 was just a bit too late to the party…

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  51. 51

    By ray pepper @ 50:

    It was a great idea but as with everything else…2008 was just a bit too late to the party…

    The distressed property law, being passed in 2008, actually contributed to the downturn in our market, but beyond that, it meant some people were locked into their properties in a declining market. By trying to protect people, they took away some options, and ended up screwing them royally.

    One of the members of the legislature said something to the effect that it would be better that these people be foreclosed than take one of these deals. I would strongly disagree, at least for some of the types of transactions covered by the Act. It was the Nanny State deciding what was best for people, rather than letting people make their own decisions (preferably with advice of counsel).

    As a result of the legislation, undoubtedly a few people ended up with both a foreclosure and a bankruptcy on their record.

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  52. 52
    ray pepper says:

    RE: Kary L. Krismer @ 51 – The downtown in “our” market had ZERO to do with the distressed property law. Not even a fraction of 1%. The downtown in our market had far more powerful forces at play: http://www.500realty.net/crisisofcreditvideo.php

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  53. 53

    RE: ray pepper @ 52 – I said contributed, not that that it caused the downturn. When you take buyers out of the market, prices will fall further (or rise less) than they would otherwise.

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  54. 54
    Erik says:

    RE: Kary L. Krismer @ 48
    I don’t think that bailing someone out of the though situation they are in while getting a good deal is conning them at all. The situation Ardell described was good for both the buyer and the seller. I think we are getting into semantics and I think that I see it differently than you do Kary. I think taking advantage of a poor old person is wrong, but that is not the situation Ardell is describing. Within the scenario she describes, you can either be unethical or ethical. Unethical could break some laws, but being ethical is usually legal.

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  55. 55
    Erik says:

    RE: ray pepper @ 52
    I like in the video when it goes from prime lenders to subprime lenders, they start smoking, drinking and they get fat in the picture. Ha ha ha! Seems pretty accurate.

    Homeowners should do what is best for them. I blame the bankers.

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  56. 56

    By Erik @ 54:

    RE: Kary L. Krismer @ 48
    I don’t think that bailing someone out of the though situation they are in while getting a good deal is conning them at all. The situation Ardell described was good for both the buyer and the seller.

    I sort of hit on that when I was describing what the member of the legislature said when the Distressed Property Law was being considered. There are times where such an offer would be beneficial to the distressed property owner. The example I usually use is someone who is a week away from foreclosure, has $20,000 of other debt, and gets a cash offer which would net $40,000, but which is $70,000 below FMV. Absent that offer their choice is either filing a Chapter 13 bankruptcy to try to get the equity out of their house through a sale, or losing the house to foreclosure and then possibly even filing a Chapter 7 bankruptcy to deal with the $20,000 of debt. They could very well decide that taking the cash offer is a better option for them, but the Distressed Property Law makes such an offer very risky for the buyer, because it’s probably illegal.

    So there are really three issues here: (1) What is an okay option for the seller; (2) What is ethical for the buyer; and (3) What is legal. On Ardell’s hypothetical the sellers were apparently in no particular time rush to sell (not in foreclosure), so if the property were really worth $550,000, then the transaction at $400,000 would possibly be none of the three.

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  57. 57

    RE: Kary L. Krismer @ 56 – There are two more potential issues. If the buyer is also an agent, it’s possible that there might be licensing issues involved, and if they are a Realtor there would possibly be ethical violations too.

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  58. 58
    Plymster says:

    Kary, do you have a quota of supplying over 33% of the comments on the Seattle Bubble? ;-)

    If I were a cash buyer, purchasing a home for personal use, and expected a discount for cash, what discount (if any) would I be able to request, but still be safe within the law? 10% off the nearest bid? 10% off of some other “market bid” (ie: zillow, tax appraisal, random appraiser valuation)? Or is it moot because I’m buying a home to live in versus an investment property?

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  59. 59

    RE: Plymster @ 58 – First, cash doesn’t really generate much of a discount, except on houses needing repairs. Sometimes you’d just be looking at getting whatever interest savings the seller would have closing in 7-10 days rather than 30-45 days. Almost every transaction is cash on the seller side, in that the lender provides the cash.

    As to what’s safe, that statute I quoted in post 46 uses an 82% of FMV standard. The problem would be proving FMV, but the statute provides:

    There is a rebuttable presumption that an appraisal by a person licensed or certified by an agency of the federal government or this state to appraise real estate constitutes the fair market value of the distressed home;

    Keep in mind there may be other standards which might apply as to what’s too low, but 82% is a fairly high number. I would suspect most other standards would be a lower number, so you’d probably be okay with 82% as far as I know.

    Probably a good time to mention the need of getting your own legal counsel to answer such a specific question.

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  60. 60

    RE: Plymster @ 58 – I should also add that there are many conditions for parts of the act to apply, and some exceptions–the most notable being if the seller is represented by and attorney or real estate agent.

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  61. 61

    The morons are out again today. I wonder if they are smart enough to feel stupid after giving Marc’s post 35 a thumbs down?

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  62. 62
    Erik says:

    RE: Kary L. Krismer @ 61
    Kary, people are on here generating their ideas and opinions. You are punching holes in their ideas and opinions, so you have taken on the role of the villain. You may be correct in some of these cases, but people will still give you a thumbs down for appearing negative or maybe you previously tried to punch a hole in their idea. If you added more positive ideas as opposed to “throwing darts” at others, I think you may get more positive feedback. I’m not a psychologist, I’m just using my intuition.

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  63. 63

    RE: Erik @ 62 – I’m not punching holes in any ideas, because the people I’m calling morons haven’t expressed any ideas. They haven’t said squat, presumably because they are too stupid.

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  64. 64
    enatailurker says:

    I don’t understand the anger with Kary. If you were investing $400,000 in a real estate deal, wouldn’t you want to know the potential legal pitfalls? If you don’t know the law, you don’t ask the sellers the right questions, you don’t structure the deal in the way that minimizes your liability exposure. Of course Ardell’s “normal” person doesn’t think of these potential issues. That’s why the smart normal person consults with an attorney or other relevant expert before investing large sums of money.

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  65. 65
    Anonymous Coward says:

    Uhh…. Kary. According to your posts, the seller must be in financial distress, namely the house must be “in danger of foreclosure”, in order for the distressed property law to apply. Ardell’s post in 29 simply said the investors were looking… “for signs of someone not having enough money to keep up with their homes”, which I, for one, did NOT take to mean someone who was in danger of foreclosure. Particularly when she mentioned, and I quote “…and maybe have no mortgage at all…” Which means she was, in all likelihood, not talking about distressed property, but about people who were very interested in selling but unwilling to put forth the effort to make the house “sale-able”.

    It would have been very helpful for you to point out that such an investor would run the risk of violating the distressed property law should the homeowner be legally classified as being “in danger foreclosure” and the completed deal be for less than 82% (or whatever the number is) of FMV and should at the minimum verify that the house is not in foreclosure (or is owned outright).

    Unfortunately, you didn’t say that the investor was at risk of unknowingly running afoul of the law. Instead, you said that “much of that type of activity was made illegal” which strongly implied that she was suggesting a course of action which was less than legal.

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  66. 66
    Pegasus says:

    RE: Kary L. Krismer @ 63 – Hee haw, hee haw, hee haw, hee haw. The jackass brays nonsense again. I am always amazed at your continuing role of looking as stupid as is possible. They say God protects fools and babies. That must be why you are getting a free pass to spread the rationale of a mad man.

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  67. 67
    Erik says:

    RE: Anonymous Coward @ 65
    Ha ha ha. That’s hilarious… “Anonymous coward.” So you are one of the cowards that gives poor Kary a thumbs down.

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  68. 68
    Erik says:

    Where did that David Losh go? I haven’t seen him on here in a while, but he loved going head to head with Kary. Someone said they’d leave the tim a tip if he had a seattlebubble party and had Kary and Losh go head to head. :)

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  69. 69
    2kt says:

    RE: Pegasus @ 66
    If you just occasionally looked in a mirror…

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  70. 70
    Pegasus says:

    RE: 2kt @ 69 – Thanks. For a guy that has been more wrong about almost everything you have posted except for possibly Kary I view your comment as confirmation that Kary is a complete jackass as are you. Bray away guys.

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  71. 71
    ARDELL says:

    RE: Erik @ 68

    David did NOT love Kary beating the living crap out of him every time he tried to speak here. It is why he is not here. We are not all Rocky…but I’m closer to being Rocky than most. Still, it isn’t worth the hassle most of the time to put up with that kind of ridicule and nonsense.

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  72. 72
    ARDELL says:

    RE: Anonymous Coward @ 65

    Thank you. Also Fair Market Value is never an exact number, so “82%” of “it”is kind of funny.

    BUT …HERE is where I am coming from on lawyers and laws. Until they make it ILLEGAL for a buyer to pay more than the SAME % OVER FMV, I don’t give a RA about a law that only makes it illegal for a seller to get too low but not for a buyer to pay too high.

    That law be gollyed until there is a corresponding law protecting buyers of homes and not just sellers of homes.

    Kary doesn’t like it when I get all “let’s be fair” when it comes to laws and lawyers. I believe in “Courts of Equity”, not the fine print that protects the seller but not the buyer. It’s just who I am…and he doesn’t like it. Oh well.

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  73. 73

    By Anonymous Coward @ 65:

    Uhh…. Kary. According to your posts, the seller must be in financial distress, namely the house must be “in danger of foreclosure”, in order for the distressed property law to apply. Ardell’s post in 29 simply said the investors were looking… “for signs of someone not having enough money to keep up with their homes”, which I, for one, did NOT take to mean someone who was in danger of foreclosure. Particularly when she mentioned, and I quote “…and maybe have no mortgage at all…” Which means she was, in all likelihood, not talking about distressed property, but about people who were very interested in selling but unwilling to put forth the effort to make the house “sale-able”.

    It would have been very helpful for you to point out that such an investor would run the risk of violating the distressed property law should the homeowner be legally classified as being “in danger foreclosure” and the completed deal be for less than 82% (or whatever the number is) of FMV and should at the minimum verify that the house is not in foreclosure (or is owned outright).

    Unfortunately, you didn’t say that the investor was at risk of unknowingly running afoul of the law. Instead, you said that “much of that type of activity was made illegal” which strongly implied that she was suggesting a course of action which was less than legal.

    Thank you. My plan worked. Someone came out of the woodwork.

    I am strongly suggesting that it was possibly less than legal. I am not saying it is illegal as an absolute certainty. The distressed property law is rather complex (and poorly drafted), so I would never say that the buyer’s attorney couldn’t craft some defense. But Ardell’s fact pattern was exactly the type of behavior that was occurring back in 2007 that caused the act to be enacted. People were going door to door making offers that the Legislature in its infinite wisdom deemed bad for them.

    I would also note that my post made it perfectly clear that the financial distress element might be hard to prove. I said:

    The key would likely be whether they seller was in any financial distress. If there was actually no mortgage debt, that might be hard to prove, absent many not having made real property tax payments for three years.

    Despite having explained that, Ardell asked about it, and when I explained it further she called me a PITA. I agreed before even being asked that was a prerequisite to the situation being actionable. After Ardell asked though, I looked up the statute to refresh my recollection, and saw how broadly financial distress is defined.

    There’s a lot of bad information on the Internet, and Ardell’s post explaining how some people go around taking advantage of the elderly, without disclosing the risks, is bad information.

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  74. 74

    By Erik @ 67:

    RE: Anonymous Coward @ 65
    Ha ha ha. That’s hilarious… “Anonymous coward.” So you are one of the cowards that gives poor Kary a thumbs down.

    Give him a break. He finally came out and deserves a lot of credit for that. That’s actually what I was hoping would occur.

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  75. 75

    By Pegasus @ 70:

    RE: 2kt @ 69 – Thanks. For a guy that has been more wrong about almost everything you have posted except for possibly Kary I view your comment as confirmation that Kary is a complete jackass as are you. Bray away guys.

    Post a link to a subject where I was wrong. You can make up false claims about what I said, but you can’t seem to support it.

    Interesting though that you said clients wouldn’t want to be “dominated” by me. Apparently used that term because you feel dominated by me because I kick your sad ass so badly in every debate you have to go running with your tail between your legs and then hide.

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  76. 76

    By ARDELL @ 71:

    RE: Erik @ 68

    David did NOT love Kary beating the living crap out of him every time he tried to speak here. It is why he is not here. We are not all Rocky…but I’m closer to being Rocky than most. Still, it isn’t worth the hassle most of the time to put up with that kind of ridicule and nonsense.

    David brought it upon himself. He would post nonsense attacks, totally lose every argument, and then claim he won. He was like the Black Knight from Monty Python. Very similar to what you do.

    But not to worry. I’m sure Losh is just on vacation. He’s probably driving through a neighborhood in some distant state coming up with valuations for the houses he is driving by.

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  77. 77

    Ardell at 72:

    Kary doesn’t like it when I get all “let’s be fair” when it comes to laws and lawyers. I believe in “Courts of Equity”, not the fine print that protects the seller but not the buyer. It’s just who I am…and he doesn’t like it. Oh well.

    That was never your argument above. You simply asked how someone like that could be in financial distress. When I explained, you called me a PITA.

    In any case, there are many laws on many things. The distressed property law was about protecting property owners. Buyers were protected in other ways, such as the new rules about appraisers that have gone into effect since 2007. Or just yesterday, this:

    http://www.chicagotribune.com/business/ct-biz-0110-mortgage-rules-20130110,0,649626.story

    What I don’t like about you is you are dangerous. You give out extremely bad advice and don’t seem to have a clue that you are doing it. Here you posted a fact pattern of an activity which is not only morally bankrupt, but possibly illegal. That Marc indicated he would jump at the chance to sue such a buyer didn’t deter you. You did seem to recognize the moral issues in that you said you don’t do that type of thing. But despite having worked in the industry when the distressed property law was enacted, and having worked in the industry when it was applicable to many “normal” transactions listed on the NWMLS, you didn’t recognize the possible legal risk in the behavior. That to me is incredible.

    If I were going to post on the Internet about that behavior it would be as a warning to people to make sure their parents don’t fall into that type of trap, not as a how to guide for others to pull it off. But yes, you’re all about being fair. Clearly. /sarc

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  78. 78
    ARDELL says:

    RE: Kary L. Krismer @ 77

    Kary, Let me break it down for you.

    1) People live in a house where the land is worth $1.1 Million to a builder. The house itself is a tear down. It is a tear down because the small cottage on the expensive piece of land is no longer highest and best use for that property as a whole.

    2) No one who would buy the property would be interested in buying it to fix it up. Anyone who would buy it would tear it down and put a new house on it. This is not the owner’s fault. The area has simply changed to the point where the small house relative to its now land value is best as a tear down.

    3) The owner knows this and so does not put money into fixing anything in the house. Putting money into fixing anything in the house would be like flushing the money down the toilet. The house will eventually be sold, and anything the owner puts into the property will be ripped out and thrown away, including the fence. The small house will become a McMansion with a view. It’s just a matter of when

    4) Everyone interested in building a house on that lot is bugging them day after day to sell the home for this reason. It is disrupting the owner’s “quiet enjoyment” of their property”. They do not want to leave that house until the daughter graduates from school. They don’t even want to think about leaving the house until the daughter graduates from school.

    5) Builder who wants the house can not “break ground” for a year after he owns the property, now does he care when he builds it. He just wants the property without being in a bidding war with everyone else who is knocking on the door.

    NOW LET’S GO TO ERIK’S QUESTION HERE ON SEATTLE BUBBLE.

    “Ray, do you know any other ways to be the one and only bidder.”

    I proceeded to outline the method used by a real builder in which he bought the property and granted the owner the right to stay in the house for a period of time that suited BOTH the buyer and the seller.

    This is NOT a hypothetical, Kary. It is a real life example that answered Eric’s question.

    You make it too difficult for people to ask questions and answer questions because of your throwing flags on the ground, sorry I don’t know enough about football to complete this analogy well. You keep blowing whistles and throwing out red flags and making it near impossible to have a conversation with anyone.

    I am NOT “scary” Kary. I am a hard working, knowledgeable and caring real estate professional doing real life successful real estate transactions every day for over twenty years.

    That YOU are scared of me…does not make me “scary”.

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  79. 79
    ARDELL says:

    Let’s talk about “old” for a minute. I am old. you are old. old does not mean “poor”. Not fixing up a house is often the smart thing to do with it if the structure is obsolete. There are many such homes not on market. I know at least 6 in Kirkland without looking, and I know the reasons why the owners will eventually sell, but not yet.

    All a buyer has to do is match up the seller’s need to sell it later vs now with their own objective, and they can work a good deal that is a good deal for everyone by exchanging terms against price.

    This is real estate. Every day real estate. A lawyer will find a monster in every dark corner to exploit people. It’s called “make a problem; fix a problem” to dig up potential clients.

    Back in 2007 it was understandable that you as a lawyer, trying to be a real estate professional instead, would have a hard time breaking away from your previous profession. I urge you to get up to speed or get out of the way. You simply have a very hard time changing careers, and maybe you don’t need to do that. Maybe you can retire instead. But if being a real estate broker vs a lawyer is your true goal, you have to stop being afraid of everything real estate. You have to stop thinking all real estate thingies are “dangerous”.

    There is a reason why MOST real estate transactions do not involve attorneys. They simply don’t have the skills needed to do a simple transaction without turning them all into the big black hole of Calcutta. It’s understandable to a point. But it also makes you a PITA.

    Let people ask and answer. You can answer your way…in your own different way…without disparaging everyone else who has something to say. Move away from the need to “discredit the witness”. I know that is a thing lawyers do to “win”. Blogging isn’t about winning. It’s about people being able to ask a question and get many and varied answers. You make it near impossible for people to get any answers…except for yours.

    And for the record…OWN IT. YOU absolutely DID chase David away, and I miss him. I know it for FACT. You make it too difficult for people to speak here and then you call them cowards for not speaking. You are a royal PITA that makes it difficult for people to say anything without having to “take you on” in the process. You may get your jollies that way…but for everyone you do it to…it really is not fun at all.

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  80. 80

    RE: ARDELL @ 78 – All fine and dandy, but that’s not the scheme we’re addressing. The one we’re addressing is the one where people go out looking for run down houses and offer the elderly owners on the spot $400,000 for a house worth $550,000. Don’t change the topic by changing the post being discussed.

    I don’t think you probably want me to address what possibly could have gone wrong with the other one, and I don’t really care to do so because I don’t want to be called a PITA again.

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  81. 81
    2kt says:

    RE: Pegasus @ 70
    My posts are factually correct. MF Global funds were found, were held by JP Morgan, as I wrote. Low housing inventory lead to price stabilization, as I suggested before. You, on the other hand, just blow smoke and post some links with poorly hash-out arguments that have no basis in facts.

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  82. 82

    RE: 2kt @ 81 – Pegasus is very gullible. He’s smarter than a lot of people here, but gullible.

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  83. 83
    David Losh says:

    RE: Kary L. Krismer @ 82

    Buy low, sell high. That is the coner stone of Real Estate investing, maybe you should take a class about that.

    You can buy a property, that doesn’t presently have a mortgage for $10, and sell it for a profit, it’s legal, look it up.

    Every property I have bought cheap I have advised the seller to talk with a Real Estate attorney, they are hard to find, but there are good ones in Seattle.

    You are a bankruptcy attorney? You don’t understand risk?

    No, you are insane. No one should engage you here, or anywhere.

    The buyer of a property assumes the risk of the property. The investor buys a property with the expectation of a reward.

    What don’t you get? What legal issues do you want to discuss now?

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  84. 84

    RE: David Losh @ 83 – The distressed property law can present risks to buyers. That was one of the main purposes of the law–to stop people from getting scammed. I brought one of the possible triggers for that risk,, both citing and quoting the statutes involved. Leave it at that.

    You’re in no position at all to express an opinion on what is legal. This is way over your head.

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  85. 85
    David Losh says:

    RE: Kary L. Krismer @ 84

    Tim, let me ask you what your liability is for having Kary Krismer here dispensing bad legal advice, all day evey day?

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  86. 86
    David Losh says:

    RE: Kary L. Krismer @ 84

    “You’re in no position at all to express an opinion on what is legal. This is way over your head.”

    Boy, you are just a sage. Now how do you know that?

    By the way, I do leave my Real Estate legal matter advice to Real Estate attorneys.

    Here’s a tip for the consumer. Never trust just any attorney to give you legal advice. Look for some one who can read, and interpret the law.

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  87. 87

    By David Losh @ 86:

    RE: Kary L. Krismer @ 84

    “Youâ��re in no position at all to express an opinion on what is legal. This is way over your head.”

    Boy, you are just a sage. Now how do you know that?.

    It’s rather F’n obvious when your refute to my legal argument is buy low/sell high.

    Which reminds me of a story. I was once working on a very complicated legal case that involved an auction and multiple causes of action. One of the attorneys tried to present a jury instruction that said: “If you find that a sale occurred at the fall of the auctioneer’s hammer, you must find for the defendant.”

    When I read that I immediately took it to another attorney in my office and we proceeded to spend the next five minutes laughing hysterically.

    So yes, David, some of us here missed you, but it was for the comic relief you provide.

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  88. 88

    By David Losh @ 85:

    RE: Kary L. Krismer @ 84

    Tim, let me ask you what your liability is for having Kary Krismer here dispensing bad legal advice, all day evey day?

    David, again you’re in no position to judge me. I don’t know how many times I have to tell you that. That I have to tell you that repeatedly indicates you either have a memory problem, you are extremely stupid, or both. If you have a memory problem, I apologize for insulting you. If you don’t then STFU you SFM. You may have all day for me, but I don’t have all day for your F’n nonsense.

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  89. 89
    David Losh says:

    RE: Kary L. Krismer @ 88RE: Kary L. Krismer @ 87

    You are a laughable person, though you are no longer entertaining. You’ve crossed the line.

    You haven’t refuted what I just said, you just started swearing.

    You have fallen for the oldest trick in negotiation; have the other guy lose his cool.

    Your legal advice had nothing to do with what Ardell presented, yet you ran with it.

    It’s very clear you lost touch with reality on that one. You couldn’t read the comment, or understand the comment, but off you went on a tangent.

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  90. 90

    RE: David Losh @ 89 – Yes, David. My statute that deals with potential issues for buying property at less than 82% of FMV had absolutely nothing to do with Ardell’s example of buying property at about 72% of value. /sarc

    Black Knight, you really don’t know what you’re talking about and are making absurd arguments. Just STFU. You’re wasting everyone’s time.

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  91. 91
    David Losh says:

    RE: Erik @ 68

    Sorry, we are extremely busy with our business, and this is the first week we have had that resembles normal.

    What Ardell outlined is essentiall correct, but her use of the term Old People may have caused her some regrets.

    I have an investor client who is now my buddy who owns seven properties that he has owned forever. I encouraged him to sell them in 2008, but he decided the market would be coming back. One property he has in Wallingford needed immediate work, all his properties need immediate work, but this one was bad. He spent $60K getting it in order, and wanted me to do a CMA. His $60K did nothing to improve the sales price, because everything he did was a cheap cover up. He could have spent $80K to make it right, but still the whole frigging place needs work.

    This guy is a big boy who would, and probably will, take a low ball offer on his properties. All of his places have cash flowed out of the gate and been paid off for over twenty years. We’ve talked about other places he could put his money, and he’ll eventually get tired of driving around being a handy man.

    He will, some day, probably take a random offer from a go getter like he used to be.

    What Ardell outlined is kind of the way it works. You are competing with investors who are buying places just to keep some contractors working, and making, what I call, low margins.

    It’s hard to get a deal, but you certainly did, so it is possible.

    There are also plenty of people who would love to sell, get some cash, and have you take over a problem. You need, an attorney, and they need an attorney to work it all out.

    You can also negotiate with the bank. There are plenty of Real Estate people who work with banks, and you can talk with them.

    I drive neighborhoods, but Kary doesn’t like getting out of the office so he has lambasted me for that. He would prefer you work with him and the NWMLS, I guess, but there are plenty of properties out there.

    You can also buy some places that may be getting ready for sale. You have to be careful, but you can spot them. You can look for that new fence, or work going on, there are tell tale signs of people getting ready for sale, but all of that costs money.

    Another problem we have had is people balk at what we charge to get a property ready for sale. I used to have a $10K rule, where we would come up with a budget of less than $10K, and do what the place needed most. The way the market is today that is getting harder to do.

    Buyers are picky, and Real Estate agents are a PITA, they want to negotiate every little thing in the inspection, if you don’t get it before the listing it can come back to bite you.

    Let me say that you don’t need a Real Estate agent for what I’m talking about, and probably according to this thread you would be much better off without one. Due some diligence, and think like an agent, you don’t need a license to do your own deals.

    Make offers, make lots of offers that make sense to you, they can only say no.

    I have an attorney on retainer who I have used since 1986, before that I used Clancy Tipton who is now with John P Nagle, he’s a good guy, but my guys are old, like me, and may not be taking on new clients.

    You need an attorney who knows something. Avoid taking random advice, find a Real Estate attorney.

    Play like a big boy, ask questions, and learn something, you are off to a good start in that regard.

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  92. 92
    David Losh says:

    RE: Kary L. Krismer @ 90

    Kary, sorry, give it up, get a clue, read a little bit, read the comments, then get back to me on that 82% Fair Market Value, because a property is worth what it will sell for. If it’s $550K, but needs $150K worth of work then the Fair Market Value is $400K.

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  93. 93
    David Losh says:

    RE: Kary L. Krismer @ 87

    ” “If you find that a sale occurred at the fall of the auctioneer’s hammer, you must find for the defendant.”

    In all the excitement, I didn’t really forget about this gem, of a couple of attorneys laughing at this old joke.

    Nothing is done until the paper work is signed.

    Get with it, that story is as old as we are.

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  94. 94

    RE: David Losh @ 93 – Zoom! Again, you missed the point entirely.

    Rate this comment: Thumb up 0

  95. 95

    By David Losh @ 92:

    RE: Kary L. Krismer @ 90

    Kary, sorry, give it up, get a clue, read a little bit, read the comments, then get back to me on that 82% Fair Market Value, because a property is worth what it will sell for. If it’s $550K, but needs $150K worth of work then the Fair Market Value is $400K.

    Nothing in the fact pattern said the house needed $150,000 of work. The fact pattern was that the buyer offers to buy a house worth $550,000 for $400,000. For all we know, fixed up the buyer might sell it for $700,000. Ardell didn’t say.

    But let’s assume you’re right–that’s what Ardell intended. Do we really need rather obvious advise that you can buy a fixer and fix it to make money? Talk about stating the obvious. That was not seemingly Ardell’s point.

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  96. 96
    ARDELL says:

    RE: David Losh @ 91

    The reason I think you need a real estate license, and recommended that to Erik, is if you are going to do more than 2 or 3 properties a year and approach sellers direct several times in a year, you run the risk of practicing real estate without a license.

    I don’t know where the cutoff is for needing a license vs not needing one. But at some point if you are going to knock on doors approaching sellers, you need to establish some basis for making it clear to them that you are not representing them, the seller of the home.

    That is easier said than done, and why I said I do not do that. Once in a blue moon I do have to approach sellers direct. For Sale by Owners, as example, who have a house that suits one of my buyer clients. But it is VERY difficult for sellers to understand that you do not represent them.

    A buyer understands when you don’t represent the seller better than a seller understands that you don’t represent them. That has always been the case given the sellers perceive they are paying you because of the way commissions are structured in almost all real estate transactions. Even when the seller is not listed for sale, if the buyer has an agent the seller does not seem to understand that the agent for the buyer is not representing the seller.

    It’s very hard to get that point across. So yes Kary, there are “dangers” and risks involved. But the one you mentioned is the least of them.

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  97. 97

    By ARDELL @ 96:

    RE: David Losh @ 91 – The reason I think you need a real estate license, and recommended that to Erik, is if you are going to do more than 2 or 3 properties a year and approach sellers direct several times in a year, you run the risk of practicing real estate without a license..

    I think you’re confusing the need to get a contractor’s license if you’re flipping houses, and I think the standard on that might be much tighter now. I’m pretty sure you don’t need a broker’s license to represent yourself in a real property transaction, but I don’t have the time to look that up right now.

    Getting a license might create more confusion, because the seller might wonder who you are an agent for. I’m not saying you would be the agent for the seller, just that the seller might be confused if you said you were an agent.

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  98. 98
    ARDELL says:

    RE: Kary L. Krismer @ 95

    Kary, the question I was answering of Erik’s was “do you know other ways to be the one and only bidder”. Apologies if that got “Lost in Translation”.

    I used elderly or OLD, as elderly people often stay in their homes longer than they otherwise would, mainly because they are embarrassed of its condition to let people in to view the home. Especially now with photos plastered all over the internet. When we had mls books, this was not an issue. There was a modicum of privacy for sellers. But these days lots of would be sellers will stay vs sell because they can’t face the reality that pictures of their mess will be plastered all over the internet.

    When people ridicule an agent for having only one photo of the outside…think about that. Representing the seller client well is usually not about showing their mess online. I think you either have to roll up your sleeves and clean up that mess, or the alternative could be fewer, and only the mandatory amount of, photos.

    It’s a complex business Kary. I can’t put every tiny detail in a blog comment. You will find “holes in my story” if that is what you are about, because the full story can’t be stuffed into a blog comment. You use that as an excuse to criticize and find fault instead of recognizing that a comment on a blog is not a “tutorial” on the ins and outs of every detail. I would think that goes without saying.

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  99. 99
    ARDELL says:

    RE: Kary L. Krismer @ 97

    Kary, you are only looking at the law you wish to look at and then choosing to “correct me” on that basis. NO, I do not mean what you are turning my comment into. Obviously there is some point at which you need a real estate license to deal with the general public on matters involving real estate. Otherwise why would any of us have one?

    I think if you knock on people’s doors to turn their homes into real estate transactions, you are crossing that line. Once a year? Maybe not. But at some point you are in the business of real estate and involving consumers in your business. So there must be some point at which you need to be licensed to do so. It is just common sense, Kary.

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  100. 100

    RE: ARDELL @ 98 – Whatever, Ardell. Backtrack all you want. Worth $550,000 doesn’t really mean worth $550,000. I get it.

    But in any case, that wasn’t even an issue when you called me a PITA. Read posts 30-33. There the issue was how someone with little or no mortgage debt could possibly be in financial distress.

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  101. 101

    By ARDELL @ 99:

    RE: Kary L. Krismer @ 97

    Kary, you are only looking at the law you wish to look at and then choosing to “correct me” on that basis. NO, I do not mean what you are turning my comment into. Obviously there is some point at which you need a real estate license to deal with the general public on matters involving real estate. Otherwise why would any of us have one?

    So that you can represent other people in transactions. This is pretty basic stuff.

    Again, I don’t have time now to look into your threshold comment, but I think as long as you are representing only yourself you can buy and sell as many properties as you want without a license, as long as you were doing all the work yourself.

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  102. 102
    ARDELL says:

    RE: David Losh @ 92

    My rule of thumb is to get $150 more you need to put $75 in. There has to be some profit for the trouble. $400 needing work needs $75 put in to be $550. basically twice what you put into it if you do it right. $400 add $50 get $500.

    However the spreads right now are MUCH wider than the norm, because there are fewer owner occupant buyers who want to do ANY work or buy anything that is dirty or smelly. The % of value in changing dirty and smelly to simply clean and livable is at an all time high.

    Using your $10,000 number, it is not beyond the realm of possibility for a $220,000 to turn into a $285,000 just for doing what your business does. I know…because I just did it for a client, and thank you for your advice on that.

    I am doing another one now. The return on $6,000 can be enormous if the property condition is poor enough at the outset.

    On the other hand I have another current prospective client who put in $150,000 and likely won’t get a dime of it back. There are several factors involved, and yes Kary, I can’t fit all of the ups and downs and ins and outs into a blog comment. Sorry.

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  103. 103
    ARDELL says:

    RE: Kary L. Krismer @ 1

    Kary, that is true for LISTED property. Not for unlisted property. Again, Erik was requesting information under the subset of being the only bidder, and so that would involve unlisted property more than listed property as a rule, more often than not.

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  104. 104
    David Losh says:

    RE: Kary L. Krismer @ 94

    No I didn’t, it’s an old attorney adage.

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  105. 105
    David Losh says:

    RE: Kary L. Krismer @ 100

    Grow up, learn something here, she’s not back tracking at all, but you should be.

    You’re making weird comments that don’t relate to anything here. It’s just bad information, that you will look up later?

    Now, I thought you didn’t have all day, but obviously you do.

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  106. 106
    David Losh says:

    RE: Kary L. Krismer @ 1

    OMG, it’s another laugh out loud moment.

    You are correct you can, as an individual, or partnership represent yourself in Real Estate transactions, so you can save yourself some time there.

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  107. 107
    Erik says:

    Thank you for the information Ardell and David. This gives me a clearer direction.

    Rate this comment: Thumb up 0

  108. 108

    By ARDELL @ 103:

    RE: Kary L. Krismer @ 1

    Kary, that is true for LISTED property. Not for unlisted property. Again, Erik was requesting information under the subset of being the only bidder, and so that would involve unlisted property more than listed property as a rule, more often than not.

    What are you talking about? Two unlicensed individuals can enter into a real estate purchase and sale agreement, each representing themselves.

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  109. 109

    RE: David Losh @ 5 – Whatever, David. You’re just repeating the same nonsense. She said what she said. I quoted what she said. Enough said.

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  110. 110

    By David Losh @ 6:

    RE: Kary L. Krismer @ 1

    OMG, it’s another laugh out loud moment.

    You are correct you can, as an individual, or partnership represent yourself in Real Estate transactions, so you can save yourself some time there.

    Not sure why you think that’s funny. Ardell said something that’s probably wrong, and I raised the question of it being wrong. How is that LOL? If you agree with me, I’m probably wrong!

    I’m not sure what you said is correct about a partnership. There you may need to be a broker. I’ve don’t remember seeing any case law on that. Corporations would be another situation, and there it’s probably more likely you’d need a broker’s license.

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  111. 111
    ARDELL says:

    RE: Kary L. Krismer @ 108

    It’s possible, though unlikely, that WA has not caught up with the rest of the Country on that, but I doubt it. It is illegal in most any state for anyone do do more than 3 real estate transactions without a real estate license if they are approaching sellers direct by knocking on their doors. If it isn’t illegal here now, then it’s only because not enough people are doing it to catch the attention of the Powers that Be. It clearly is an unethical and usually illegal activity without a real estate license.

    The limit is usually 3 transactions a year…but you could be right for “the wild, wild, west” :)

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  112. 112

    By David Losh @ 4:

    RE: Kary L. Krismer @ 94

    No I didn’t, it’s an old attorney adage.

    No it’s not. Quit making stuff up.

    The reason it was funny is because it was a very complex legal case, with multiple theories of recovery, and the attorney tried to get the judge to tell the jury that the defendant would win if something obvious was true–that there’s a sale when the auctioneer declares the sale. What reminded me of that was your nonsense trying to analyze Ardell’s scam by noting “buy low, sell high.” Same type of really stupid nonsense, trying to reduce something complex into something simple that has nothing to do with the issues at hand.

    You got totally zoomed. Yet another thing over your head. But rather than admit it, you make up some “old joke” or “old attorney adage.” Total BS.

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  113. 113

    RE: ARDELL @ 11 – So going to the door of an elderly person and offering $400,000 for a $550,000 house is okay, but it’s unethical to go to the door of three peoples’ houses and buy their houses without a license? You have a very strange sense of ethics.

    I have no idea why it would be unethical.

    One thing occurred to me though while I was out. Their may be income tax ramifications to multiple transactions.

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  114. 114
    David Losh says:

    RE: Kary L. Krismer @ 110RE: Kary L. Krismer @ 109RE: ARDELL @ 111

    Here’s what is funny. You raised a legal issue that had nothing to do with what Ardell outlined.

    In Real Estate you can buy a property for very cheap, and sell it for a profit.

    This seems like news to you, and you are an attorney.

    So you, as the attorney, raised a legal issue, that was completely off topic, and you can’t back off of it.

    Erik asked a question, which you didn’t get, Ardell anwered in her usual concise way, and you jumped all over the place.

    What for? She got it right, you got it all twisted around, and completely wrong, over a “legal” issue, your area of expertise.

    Sorry, but that is funny, either ha ha, or pathetic.

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  115. 115
    David Losh says:

    RE: Kary L. Krismer @ 12

    Kary, it’s not BS, you know, I know it, but you are trying to spin it.

    The deal isn’t done just because the auctioneer swings the gavel. That is old news, common knowledge, and your point about the complex case, is that it all needs to be in writing, and signed all the way around.

    The defense can’t claim a done deal on a say so, that would be the swinging of the gavel.

    You need new, or better material.

    BTW, I thought you didn’t have all day, obviously you do.

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  116. 116

    David,. please explain to me how in your tiny little brain how I responded to Ardell is not applicable. She claimed you need a license, I questioned that. Ardell has admitted it might not be true here, but I don’t think we’ve come to any certain conclusion yet.

    Zoomed again. What is that, four times today? I’ve said many times you don’t know squat. Apparently you also don’t understand squat.

    By ARDELL @ 96:

    The reason I think you need a real estate license, and recommended that to Erik, is if you are going to do more than 2 or 3 properties a year and approach sellers direct several times in a year, you run the risk of practicing real estate without a license..

    [By Me]I think you’re confusing the need to get a contractor’s license if you’re flipping houses, and I think the standard on that might be much tighter now. I’m pretty sure you don’t need a broker’s license to represent yourself in a real property transaction, but I don’t have the time to look that up right now.

    Getting a license might create more confusion, because the seller might wonder who you are an agent for. I’m not saying you would be the agent for the seller, just that the seller might be confused if you said you were an agent.

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  117. 117

    By David Losh @ 15:

    BTW, I thought you didn’t have all day, obviously you do.

    No, I don’t. And now I don’t have time to look up Ardell’s licensing issue. I’ve wasted too much time dealing with you. Totally pointless activity because you just make stuff up because you’re too embarrassed to admit you got zoomed.

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  118. 118
    David Losh says:

    RE: Kary L. Krismer @ 117RE: Kary L. Krismer @ 116

    I don’t make stuff up, you do.

    Look it you got spanked once again by Ardell on this phantom legal issue you raised, and can’t let go of, now you are off on this licensing issue that isn’t important at this point.

    You go spank, it wasn’t a beating, you just got spanked, now why can’t you take that like a man, and move on?

    Is it because she’s a woman, or that she isn’t an attorney, or that she talks about her kids, and clients, and she’s real? What is it? What is your problem.

    And you haven’t dealt with me at all. You’ve attemted to belittle me, insult me, call me names, and yet you haven’t addressed a single point. Why is that?

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  119. 119
    Erik says:

    RE: Kary L. Krismer @ 12
    I think David was implying that you are getting wrapped around the axle by reminding us of the fundamentals of “Buy low sell high.” There will surely be obstacles which can be legal or problems with the house, but the fundamental goal is to buy low and sell high. If I come across a legal issue, i will hire a lawyer to snake around it for me. Maybe the equation would be Break Even = (purchase price) – .2*(risk). Nothing is certain. There will certainly be risk involved in any purchase that is far below market value.

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  120. 120
    ARDELL says:

    RE: Kary L. Krismer @ 16

    Kary, you are correct that I do not put lawyers on pedestals. Never have and never will and my very close attorney friends would not want me to. They appreciate it when I call them on their crap in or out of their field. You seem to put all people with a legal degree on an unwarranted pedestal merely based on their having one.

    There is a VERY GOOD reason why I don’t, especially here in WA. There is an issue involving laws and lawyers here in WA and sometimes in CA that makes it near impossible to value their expertise when it comes to real estate. I will try to explain it some day…but not today.

    Sometimes you just have to give people the benefit of the doubt that they actually DO know a lot and they do know what they are talking about…even if you in your limited wisdom cannot grasp it based on a few words in a blog comment.

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  121. 121

    RE: Erik @ 119 – The concern is if you didn’t consult an attorney in the first place with Ardell’s scam scenario (or even her second one with the 14 month close), it would be too late. Your position would be set in stone at that point and the consequences would hit you, whatever they might be. That’s why I raised the issue. So that you or others wouldn’t just think that sounded like a great idea and run out and do it.

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  122. 122

    RE: ARDELL @ 20 – That’s all fine and good. I would agree with much of that, and I would even add that some well known local real estate attorneys are not actually that good of attorneys (same with well known bankruptcy attorneys). But almost any real estate attorney would understand most of the issues we’ve debated over the years better than almost any real estate agent.

    Regardless, however, that doesn’t change the fact that showing up at someone’s door and offering them $400,000 for a house worth $550,000 was exactly the type of behavior the Distressed Property Law was trying to stop. Depending on the other facts you may or may not have a problem with the distressed property law on those facts. But believe me, the last thing any buyer wants is the attorney who helped draft those provisions coming after them. She is extremely aggressive pursuing these types of claims. And remember, if you get sued you’ve already lost because you’ll probably spend a fortune defending yourself.

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  123. 123

    RE: David Losh @ 18 – Wow, you think I haven’t addressed a single point? You really are dense Mr. Black Knight. You’re getting your butt kicked and you don’t even know it.

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  124. 124
    ARDELL says:

    RE: Kary L. Krismer @ 122

    Kary…you tell us all right here and now what % of real estate transactions involve an attorney, residential real estate transactions. Because you know you are doing cartwheels around nonsensicals for your own God knows why reasons.

    Residential real estate is NOT an area where attorneys know more about real estate than real estate brokers…and most every attorney will admit that. Not because they are stupid…just because they do not have the volume of experience in real estate every day real estate that real estate brokers do.

    It is a basic principle of life that the higher the return you seek…the higher the risk you must take. That includes stocks, bonds and real estate. So to have a discussion of high returns without risk is just oxymoronic.

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  125. 125
    Erik says:

    RE: Kary L. Krismer @ 121
    The thing is that I read a book on this approach ardell outlined and they didn’t mention anything about contacting an attorney. Paying an attorney would be fine if I had a lot of money to blow, but I don’t.

    Here’s the book I read. You should read this and let me know where you disagree. This guy successfully made millions at it. This was written prior to 2008, so this may prove nothing…
    http://www.amazon.com/The-Pre-Foreclosure-Property-Investors-Kit/dp/0471692794/ref=sr_1_1?ie=UTF8&qid=1357948458&sr=8-1&keywords=preforeclosure

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  126. 126
    Erik says:

    RE: ARDELL @ 24
    I agree. The more risk you take on in real estate, the more possible reward. I guess the best way to reduce that risk is to have an attorney on retainer as Mr. Losh does.

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  127. 127
    David Losh says:

    RE: Kary L. Krismer @ 123

    You are totally, and completely out of your depth, in territory you don’t understand, and what makes it much worse is you don’t understand the Distressed Property Law,

    You got spanked all over this thread, long before I got here, and with me you just lost your way.

    Telling silly stories, reasserting this term scam, not knowing that in the business of Real Estate you buy low to sell high. You didn’t get the licensing issue, you had to look it up, then interjected another thing about the contractor’s license.

    Who asked you for bad, muddled, confused advice?

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  128. 128
    Howard says:

    http://www.homevestors.com/

    http://www.webuyhouses.com/

    http://www.webuyhousesforcash.com
    All of these are essentially doing the same thing Ardell is suggesting. They put up those annoying signs on every corner, they have billboards, and they are all over the Internet.

    The idea of approaching someone whose house isn’t actively for sale has been around forever. Why would an investor want to incur a brokers fee on transaction, eating up at least a 1/4 or more of potential profit.

    I everyone listed every property that traded hands on the MLS and then paid the brokers 6% just because and they retained lawyers to protect their interests the world would be a perfect place with everyone making money and no one would ever get screwed.

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  129. 129
    David Losh says:

    RE: Erik @ 25

    Pre Foreclosure isn’t the best route.

    There are plenty of properties out there that need help.

    Right now there are bank owned properties that may dribble onto the market. Banks like solutions, and like people with solutions. A lot of people like people with solutions, like Ardell’s story tells you.

    I think she is referring to a listing she just finished that was in rough shape, she went above, and beyond for her seller, but some one did make the seller a low ball offer before Ardell got there. She made her client more, by doing the work herself. That’s the kind of agent she is.

    I personally think there are plenty of land lords who would like to sell. I think taking a rental, and making it a family home, again, might be worth the effort. You could do a search for property owners who have owned for more than twenty years, and have little or no mortgage. Land lords are used to low ball negotiations, that’s how they got where they are, don’t be shy with them.

    I’d just stay away from personal problems if I could. If it’s pre foreclosure I would want the property listed with an agent. I’d want the seller to be represented. Of course it would lower my offer, but there are ways to present yourself to the bank as a solution they may like.

    Have your financing in order, take the property as is, get to know the seller, make your offer a quick close, be ready, stick to your numbers, and quote them often.

    BTW, you asked about a condo with a high assesment in one of these threads. The assesment isn’t negotiable, but it may be a good reason for some people to sell. It depends what the assesment is for, and the financials of the building. Some buildings have excellent financials, but issues, like rot. Rot may or may not be a good thing. If the building needs an assesment to maintain the building, run, if they have a project that makes sense, and the financials are solid, it may be worth looking at.

    Let’s say it’s a water front building that needs a dock repair, that can be $80K per unit easy, but it’s a good thing. A rental unit may want to sell out of that situation, and you might get a very good deal.

    It’s good you are reading, and looking, keep at it, it pays off.

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  130. 130
    ARDELL says:

    RE: Howard @ 128

    “If everyone listed every property that traded hands on the MLS and then paid the brokers 6% just because and they retained lawyers to protect their interests the world would be a perfect place with everyone making money and no one would ever get screwed.”

    LOL! Tell me that’s a joke, Howard. I know it is, but tell me you don’t believe in a world where “no one would ever get screwed” as if agents are the only ones ever screwing.

    I may be reading that wrong. I have tried on several occasions to have an attorney on every single real estate transaction the same as we have a home inspector. I have tried to include that as part of my service as I did for many years on the East Coast. But attorneys on the West Coast say it can’t be done and I can’t hire an attorney for my clients for every purchase and sale.

    I’m not quite sure why that is. They say it is a conflict of interest, though I don’t see how that can be when it wasn’t on the East Coast.

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  131. 131
    Howard says:

    By ARDELL @ 130:

    RE: Howard @ 128

    “If everyone listed every property that traded hands on the MLS and then paid the brokers 6% just because and they retained lawyers to protect their interests the world would be a perfect place with everyone making money and no one would ever get screwed.”

    LOL! Tell me that’s a joke, Howard. I know it is, but tell me you don’t believe in a world where “no one would ever get screwed” as if agents are the only ones every screwing.</

    It is not just the brokers, but it's the sellers, the tax collectors, the mortgage brokers, the banks, the home inspectors, the title companies and probably more. Plenty of people to screw you in the process.

    While I was indeed joking, it also is a reminder that the only one who is going to look out for you is yourself. Seek experts and knowledge, but don't use your head.

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  132. 132
    Erik says:

    Awesome advice. Thank you.

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  133. 133

    By David Losh @ 27:

    RE: Kary L. Krismer @ 123

    You are totally, and completely out of your depth, in territory you don’t understand, and what makes it much worse is you don’t understand the Distressed Property Law,

    You got spanked all over this thread, long before I got here, and with me you just lost your way.

    Telling silly stories, reasserting this term scam, not knowing that in the business of Real Estate you buy low to sell high. You didn’t get the licensing issue, you had to look it up, then interjected another thing about the contractor’s license.

    Who asked you for bad, muddled, confused advice?

    David, you’re in so far over your head it’s a joke.

    http://blogs.seattleweekly.com/dailyweekly/2013/01/vietnam_veteran_facing_foreclo.php

    (Thank you to the person who sent that to me.)

    But if that won’t shut your stupid F’n mouth up, I don’t even have a clue why you think I didn’t get the licensing issue. I said a license wasn’t probably required for an individual to buy multiple properties, as claimed by Ardell. What I had to look up is the possibility there might be such an exception, but I haven’t done that in part because I’ve been addressing your moronic ramblings. Are you incapable of reading simple English?

    I brought up the contractor law, because they changed that in 2007 (or so) too, making just the casual flipper get a contractor license. I thought Ardell might have been thinking of that change in the law. I was giving her the benefit of the doubt. But hey, I know contractor licensing is a touchy subject for you.

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  134. 134

    By ARDELL @ 30:

    I may be reading that wrong. I have tried on several occasions to have an attorney on every single real estate transaction the same as we have a home inspector. I have tried to include that as part of my service as I did for many years on the East Coast. But attorneys on the West Coast say it can’t be done and I can’t hire an attorney for my clients for every purchase and sale.

    I’m not quite sure why that is. They say it is a conflict of interest, though I don’t see how that can be when it wasn’t on the East Coast.

    I’ll take a stab at this. If you’re paying the attorney to review a transaction you get a commission from, the attorney is going to tend to be pressured to say everything is fine to allow the deal to go through. At a minimum there would be an appearance of a conflict. That would be particularly true if you were repeatedly hiring the same attorney.

    I’ve not actually come across that as an issue on real estate, but I have heard of it being an issue on pre-nuptual agreements, where both parties have to be represented by an attorney for the agreement to be valid. If one party is paying for both attorneys, there’s an argument that the other party isn’t really represented. I’m not sure of the current case law on that issue.

    Getting back to your issue, a similar problem exists today on the short sale area, although it doesn’t relate to payment. There are attorneys out there who will say just about anyone should do a short sale. If an agent is knowingly referring their clients to such an attorney, so that they can list short sales, I see a potential issue there. Probably doesn’t matter much though, because the attorney probably has better malpractice coverage than the agent.

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  135. 135

    By Howard @ 28:

    [links removed to avoid spam filter]
    All of these are essentially doing the same thing Ardell is suggesting. They put up those annoying signs on every corner, they have billboards, and they are all over the Internet.

    The idea of approaching someone whose house isn’t actively for sale has been around forever. Why would an investor want to incur a brokers fee on transaction, eating up at least a 1/4 or more of potential profit.

    Here’s another one:

    http://www.nwbuyers.net/

    It’s the one mentioned in the Seattle Weekly article I just linked. The attorneys could have a real time with that, because real estate transactions are publicly recorded. It makes it hard to hide what you did, and if you do something bad, they quickly discover more bad things. In a worst case scenario they will chase you into and out of bankruptcy, leaving you with a nice large non-dischargeable judgment.

    BTW, David Leen mentioned in that article is a well recognized attorney. But David Losh probably thinks he doesn’t understand the Distressed Property Law. /sarc

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  136. 136

    By Howard @ 28:

    If everyone listed every property that traded hands on the MLS and then paid the brokers 6% just because and they retained lawyers to protect their interests the world would be a perfect place with everyone making money and no one would ever get screwed.

    Do I detect a bit of sarcasm there? If not, I think you’re being a bit optimistic.

    That said, going back to Ardell’s hypothetical, I’d be a lot more comfortable with an agent going to an old person’s door asking for a listing. There the interests of the owner and the agent would be much more aligned.

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  137. 137
    ARDELL says:

    RE: Kary L. Krismer @ 134

    Everyone I have sent to an attorney advised them to let it go to foreclosure and not do a short sale. They were not all the same attorney. Not a one recommended that they do a short sale. I think because the reason I send them in the first place is I didn’t think they had a good “hardship letter” or situation to pull off a short sale.

    I have wanted to have an attorney just review all of my contracts before the client signed them and explain those contracts if and when needed. Kind of like being on retainer by me. I thought it would be a nice adjunct, but the attorneys say they can’t do it because then they can’t help my clients sue me. LOL!

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  138. 138

    RE: ARDELL @ 38 – I did those two pieces on the advantages and disadvantages of a short sale because there are attorneys out there who think everyone should do a short sale and those almost no one should. It’s like asking people whether the 2001 film Moulin Rouge was a good movie. Some people hated it and some loved it, with little middle ground. I’m not sure attorneys on either side are doing their clients much of a service, because the clients really should be told the advantages and disadvantages in an impartial way so that they can decide based on the factors that are important to them.

    . I thought it would be a nice adjunct, but the attorneys say they can’t do it because then they can’t help my clients sue me. LOL!

    That confirms my suspicion above that it’s a conflict of interest issue.

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  139. 139

    By ARDELL @ 96:

    The reason I think you need a real estate license, and recommended that to Erik, is if you are going to do more than 2 or 3 properties a year and approach sellers direct several times in a year, you run the risk of practicing real estate without a license.

    I’ve now had time to look at this claim this morning, and I’m not seeing any statute that would apply such a threshold to needing a license. If you think about it, that would be an incredible restriction on people simply wanting to buy property, because to act under a license you have to have your license associated with a firm. But here’s what I did find.

    RCW 18.85.331 provides in part: “It is unlawful for any person to act as a real estate broker, managing broker, or real estate firm without first obtaining a license therefor, and otherwise complying with the provisions of this chapter.”

    RCW 18.85.331 provides in part: “) “Broker” means a natural person acting on behalf of a real estate firm to perform real estate brokerage services under the supervision of a designated broker or managing broker.”

    This is extremely poor drafting. They amended the statutes a few years ago to change “agent” to “broker” but they didn’t do much to clean up the other language. If you read that strictly, it’s only unlawful to perform services “on behalf of a real estate firm” . . . “under the supervision of a designated broker.” They don’t simply make providing brokerage services without a license unlawful.

    There’s also the criminal portion of the statute, 18.85.411, which provides: “Any person acting as a real estate broker, managing broker, or real estate firm, without a license, or violating any of the provisions of this chapter, is guilty of a gross misdemeanor.”

    Again, you could make the same criticism, and that would be more likely to be a problem with enforcement, given the criminal nature of the statute. There’s an old US Supreme Court case where a federal statute made it a federal crime to transport motorized vehicles across state lines, which described several types of motorized vehicles. The court held it didn’t apply to transporting an airplane across state lines because that wasn’t the same type of vehicle as those mentioned in the statutes. Criminal statutes need to be more precise so that you can’t just throw people in jail because they become unpopular.

    Finally, and more to the point, “real estate brokerage services” is defined by RCW 18.85.011 as:

    (16) “Real estate brokerage services” means any of the following services offered or rendered directly or indirectly to another, or on behalf of another for compensation or the promise or expectation of compensation, or by a licensee on the licensee’s own behalf:

    (a) Listing, selling, purchasing, exchanging, optioning, leasing, renting of real estate, or any real property interest therein; or any interest in a cooperative;

    (b) Negotiating or offering to negotiate, either directly or indirectly, the purchase, sale, exchange, lease, or rental of real estate, or any real property interest therein; or any interest in a cooperative;

    (c) Listing, selling, purchasing, exchanging, optioning, leasing, renting, or negotiating the purchase, sale, lease, or exchange of a manufactured or mobile home in conjunction with the purchase, sale, lease, exchange, or rental of the land upon which the manufactured or mobile home is or will be located;

    (d) Advertising or holding oneself out to the public by any solicitation or representation that one is engaged in real estate brokerage services;

    (e) Advising, counseling, or consulting buyers, sellers, landlords, or tenants in connection with a real estate transaction;

    (f) Issuing a broker’s price opinion. For the purposes of this chapter, “broker’s price opinion” means an oral or written report of property value that is prepared by a licensee under this chapter and is not an appraisal as defined in RCW 18.140.010 unless it complies with the requirements established under chapter 18.140 RCW;

    (g) Collecting, holding, or disbursing funds in connection with the negotiating, listing, selling, purchasing, exchanging, optioning, leasing, or renting of real estate or any real property interest; and

    (h) Performing property management services, which includes with no limitation: Marketing; leasing; renting; the physical, administrative, or financial maintenance of real property; or the supervision of such actions.

    Arguably subpart B above would apply to Ardell’s scenario, but if so it would apply on the first transaction. Somehow implicit in that should be “on behalf of others.” Again, these statutes are poorly drafted.

    Subpart E might also be applicable.

    Anyway, I’ve never heard of the multiple transaction threshold that would require licensing, and am not finding anything in the statutes which would support that position. That said, the statutes are poorly drafted.

    All the statutes cited are available here: http://apps.leg.wa.gov/rcw/default.aspx?cite=18.85

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  140. 140

    I only discovered this story I posted here late last night, after someone emailed it to me.

    http://blogs.seattleweekly.com/dailyweekly/2013/01/vietnam_veteran_facing_foreclo.php

    I’ve had more time to look at it, and factually it’s very similar to Ardell’s first scenario, except that the dollar amounts and percentages are lower, we know for a certainty the owner was in financial distress even though they had no mortgage debt, and rather than looking for run down houses it’s more likely these people were most likely looking at upcoming tax sales to select the target property. Legally it’s very similar.

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  141. 141

    As to the contractor bonding rules, I believe this is what I was referring to. There are exceptions to having a contractor registration bond for owners of property, but they are limited where the property has been owned for less than 12 months or the work is for resale. Here is the language of the exceptions:

    (11) An owner who contracts for a project with a registered contractor, except that this exemption shall not deprive the owner of the protections of this chapter against registered and unregistered contractors. The exemption prescribed in this subsection does not apply to a person who performs the activities of a contractor for the purpose of leasing or selling improved property he or she has owned for less than twelve months;

    (12) Any person working on his or her own property, whether occupied by him or her or not, and any person working on his or her personal residence, whether owned by him or her or not but this exemption shall not apply to any person who performs the activities of a contractor on his or her own property for the purpose of selling, demolishing, or leasing the property;

    http://apps.leg.wa.gov/rcw/default.aspx?cite=18.27.090

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  142. 142
    ARDELL says:

    Kary…two things I’d like your opinion on.

    1) Is the firm you are associated with the only one who adds a clause saying your buyer clients are “alllowed to be” up to 5 days late with no consequence, and is that not including Saturday’s and Sundays? How is a seller supposed to deal with that on an every day basis? Why was this added? I am finding that lender and escrow are just adding five days and then it’s late after that, so it’s being treated like an automatic change of close date. I think it’s pretty creepy.

    2) If a certain product (pesiticides come to mind) is banned in 38 states, but you live in a state where it is not YET banned, would you use that product when preparing a home for sale? I ask this as it relates to how our views our different. Once I know something is illegal in MOST places, I don’t really care if it is illegal here…YET. I was taught that I should be held to the highest standard I am capable, not the minimum the law requires where I happen to be standing at the moment.

    This touches on what I have been advised by attorneys when I raised this question many years ago when I came from East to West. One of the lead attorneys for CAR (California Association of Realtors) explained it to me this way. “Ardell, you come from a place where when there is a new law, everyone looks for the spirit of the law…the wrong that is being righted, and makes sure they expand on that law to incorporate the reason for it. West Coast is different. When a new law is passed they keep working to their own good advantage until someone actually gets nailed on it…then they ask “How much did it cost them to break that law?” and then they make a business decision whether or not to comply with the law based on % likely to get fined and the amount of the fine.

    There is a basic difference in our thinking. I don’t run to find the letter of the law. I know that if someone is going to make a business of knocking on doors talking to unrepresented sellers, that they need to get a real estate license to approach the general public in that manner. Is it a law…here in WA…at the moment? Maybe not. But I know it’s a law most anywhere else and rightly so. That is why my advice would be at some point if you are going to make a living knocking on doors talking people into real estate transactions…you need a license. Where’s the cutoff? I say over 3 transactions a year or maybe 20 doors or 100 doors…but there has to be some cutoff point.

    In fact I think “We Buy Ugly Houses” may have had that problem. If you are looking for a case where that problem kicked in for someone, I think it was them. They thought they didn’t need to be licensed because they were buying houses for themselves to resell. But I think the mere act of running a business that involves unsuspecting and not on market “general public”, does require a license, whether you can find that law or not.

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  143. 143
    David Losh says:

    RE: Kary L. Krismer @ 133

    God you are clueless.

    I forgot you took the Distressed Property Law Class so it must apply here.

    Now you are looking up other licensing rules, and still making a big stink because people buy property.

    You are demonstrating why people should probably avoid Real Estate agents. You are making up problems where none exist, and trying to prove you are worth a commission, I guess.

    To the readers here it should be clear; you need to do your own research, avoid blow hards, and turn off the noise of negativity.

    Yes, you might end up needing an attorney, but for the most part just look for the best deal you can get for you, and your family.

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  144. 144
    David Losh says:

    RE: ARDELL @ 42

    Look it, I’m not going to encourage this, but We Buy Ugly Houses has it’s own issues of out of State Brokerage. I don’t want to encourage any more Kary nonsense, or engage with him further.

    Kary represents everything that is wrong with the Real Estate business, and you are much better than this. Take a break, it’s a beautiful day, New Year, and this will be a great year for Real Estate.

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  145. 145
    Erik says:

    RE: Kary L. Krismer @ 133
    Kary, I think the “deceptive practice” happened when they offered him $120k and then the paperwork was only for $70k. The bank was gonna take his house anyway. It seems like it would have been legit if they offered him $120k and they would have had the paperwork reflect $120k. Also, this hasn’t been settled yet.

    Would you rather have $0k or $70k? I’d rather take the $70k. By offering him money they did him a favor. Where they went wrong was agreeing to one amount($120k) and writing up the paperwork for another amount($70k). This is not comparable to Ardells situation other than they gave an offer below market value.

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  146. 146
    Erik says:

    I think if you are making someone an offer on a below market value home that is not listed, you need to make sure you do not do anything illegal in the process. I don’t do illegal things anyway, so I would not be at risk.

    When I was looking up the legal issues on a “buy and bail,” where you buy a new place before letting your other home go into default, it was a similar situation. It is not illegal to do that unless you lie on your documentation you used to buy a new house. I would not lie, so this would not be an issue.

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  147. 147
    David Losh says:

    RE: Erik @ 145

    This case isn’t at all what Ardell described, and it’s slimey. There are good ways to deal with people, and this wasn’t one of them.

    What I said was to be a solution.

    You’re right that this person got something, but this was a better partnership situation than a rip off. You can see there is plenty of cash in the deal, and the house may have been too much for this person to handle. There is a solution in there.

    You should always be fair. There are plenty of deals out there. The buyer from the article bought a hundred homes, so you can see there is a pipeline, and you just need to be better than the other guy.

    The better your reputation, the better business you’ll get.

    Now if you want to rip some one off, rip off the banks, but get an attorney to help you with that.

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  148. 148
    David Losh says:

    RE: Kary L. Krismer @ 140

    This slime ball investor bought one hundred homes this year.

    With the low inventory excuses of the Real Estate community, this guy knocked on doors.

    Your client could have paid a fair price for this home if you would have found it first, but some how that would be beneath you.

    There’s always a deal, there are always good deals to be done, I just wish Real Estate agents would stop making excuses, and actually do the job.

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  149. 149
    ARDELL says:

    RE: David Losh @ 144

    :) I had two closing this week and am posting from the car on way with a 2nd load of staging stuff to u-district. I’m going to pop over to the farmers market 100 paces from my next listing.

    I just thought if Kary was going to be hell bent on answering questions I didn’t ask him, I might as well throw out a couple I might want him to answer. That new “we’re allowed to be 5 days late clause reads as if it might have been Kary’s idea.

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  150. 150

    By ARDELL @ 42:

    Kary…two things I’d like your opinion on.

    1) Is the firm you are associated with the only one who adds a clause saying your buyer clients are “alllowed to be” up to 5 days late with no consequence, and is that not including Saturday’s and Sundays? How is a seller supposed to deal with that on an every day basis? Why was this added? I am finding that lender and escrow are just adding five days and then it’s late after that, so it’s being treated like an automatic change of close date. I think it’s pretty creepy.

    I’ll deal with this separately. I’m not sure if you’re referring to some language in JLS/KMS’s addendum, or just such clauses generally, but I add my own clause to that effect. It isn’t just an automatic extension. It has to be an extension necessary due to no fault of the parties. The examples I give are a snow storm or earthquake that might make recording impossible, or the lender’s computers crashing the day documents are supposed to be out. For the first two examples it’s much better than needing to run around when the area is paralyzed by a snow storm or massive power outages caused by an earthquake. Quite frankly, I don’t understand why the NWMLS doesn’t have a clause like that in the optional clauses.

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  151. 151

    RE: ARDELL @ 42 – As to the rest of that post, if it was banned in 38 states because it was a health or safety hazard, I would suggest not using it.

    As to the rest, I don’t agree at all with the west coast/east coast distinction. With the possible exception of foreclosures after the Bain v. MERS decision, I don’t recall any situation where businesses simply ignore new laws.

    As to the first scenario example, I’m not sure what you gain by requiring licensing for multiple transactions. Educating the scammers how to scam better? If it’s to bring them under some type of regulations, you can do that without requiring licensing–just as the Distressed Property Law does. Think of that as a regulation that applies to people who go door to door. If you think of it that way, why do they need to be licensed? What more does a licensing statute get you that any other statute can’t get you?

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  152. 152

    By David Losh @ 43:

    RE: Kary L. Krismer @ 133

    God you are clueless.

    I forgot you took the Distressed Property Law Class so it must apply here.

    Now you are looking up other licensing rules, and still making a big stink because people buy property.

    You are demonstrating why people should probably avoid Real Estate agents.

    Wow. Did you even read the link? Someone is being sued for exactly what I said that they could be sued for under the Distressed Property Law (and probably several other causes of action I can think of).

    You are the reason people should avoid real estate agents. I’ll forgive Ardell for not thinking of the distressed property law when writing her scenario, because probably half the agents in the state wouldn’t think of that initially. Very few agents though would refuse to acknowledge the problem after being told of it and reading a news article where the situation actually occurred.

    You really are dense.

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  153. 153

    By Erik @ 45:

    RE: Kary L. Krismer @ 133
    Kary, I think the “deceptive practice” happened when they offered him $120k and then the paperwork was only for $70k. The bank was gonna take his house anyway. It seems like it would have been legit if they offered him $120k and they would have had the paperwork reflect $120k. Also, this hasn’t been settled yet.

    Would you rather have $0k or $70k? I’d rather take the $70k. By offering him money they did him a favor. Where they went wrong was agreeing to one amount($120k) and writing up the paperwork for another amount($70k). This is not comparable to Ardells situation other than they gave an offer below market value.

    I think they would have been sued in any event.

    But again, I agree with you that the “Nanny State” statute isn’t necessarily a good thing. The buyer should somehow have a choice. In this particular case the owner could have easily filed a Chapter 13, then sold the house and recovered most of the equity out of the house. It’s very possible though that he might have known of that bankruptcy option and still wanted to go with only getting $120,000 or even $70,000. But that’s an entirely different issue than the issue of whether this type of activity would violate the law as drafted by the legislature. Remember, one of them expressly said that she would rather see them be foreclosed out than get $120,000 in this type of situation.

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  154. 154

    By ARDELL @ 49:

    That new “we’re allowed to be 5 days late clause reads as if it might have been Kary’s idea.

    Which new clause are you talking about? That’s a somewhat common type of clause outside of the NWMLS forms.

    Unless the seller is trying to do a simultaneous close, it really shouldn’t be a big issue.

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  155. 155

    By Erik @ 46:

    I think if you are making someone an offer on a below market value home that is not listed, you need to make sure you do not do anything illegal in the process. I don’t do illegal things anyway, so I would not be at risk. .

    Not doing illegal things is always a good strategy, but prior to reading this thread, did you have any idea that paying under 82% of FMV would possibly be illegal?

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  156. 156
    Erik says:

    RE: Kary L. Krismer @ 155
    I did not consider that being illegal prior to this post.

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  157. 157
    David Losh says:

    RE: Kary L. Krismer @ 155RE: Kary L. Krismer @ 152

    No Erik probably didn’t know, but as I pointed out, please define Fair Market Value of a Distressed Property that needs repairs.

    In your example, where were you? This Vietnam Vet gets scammed along with 100 other people and where were you?

    Why weren’t you, or any of the other supposed Real Estate professionals when this guy needed help?

    You were at your computer compiling stats so you could tell people to make full price offers, get in multiple offer situations, and give you commission dollars for doing absolutely nothing.

    Real Estate is a business, and for ever bad agent, bad investor, bad business, there are a hundred good guys actually doing good work for the community.

    So get off your high horse, get out of the office, and go help some of these people, rather than dog, moan, complain, and fear monger.

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  158. 158
    ARDELL says:

    How about a bank owned property, Kary? Do I go to jail if I help a client buy a bank owned property for 80% vs 82% of “Fair” Market Value. :)

    I need to know by tomorrow because my client wants to make an offer and the listing agent already told him the asking price was a shot in the dark. True…not kidding. Got the email while I was out staging that townhome.

    Looking it up now to see what I think it’s worth relative to the asking price.

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  159. 159
    Erik says:

    RE: ARDELL @ 158
    Do you think you could be hauled off to prison just for making on offer under %82 FMV? If you get hauled off to prison Kary will come visit you and tell you “I told you so.” And that will close this discussion with one of us in federal prison.

    Losh and I will try and sneak you in a steel shank so you can defend yourself while you’re out in the yard.

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  160. 160
    ARDELL says:

    RE: Erik @ 159

    It’s always been a joke for lawyers to give seminars to agents about all the scary monsters in the closet. They do it all the time. Turns agents into little piles of jelly afraid to have an opinion about anything. It’s the legal field’s wet dream for every transaction to have an attorney. Been that way for as long as I can remember.

    I’m the one in the class who always asks if they will take me away in handcuffs. At my age it’s not a bad “retirement plan”. :)

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  161. 161
    ARDELL says:

    It’s actually a long standing joke/feud between lawyers and real estate agents. Lawyers say agents are “only allowed to fill in the blanks” of a real estate offer, and if the client has any questions about what they are signing, the agent is not allowed to explain the contract. Pretty funny when you think about it.

    Sad…but true.

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  162. 162
    ARDELL says:

    RE: Kary L. Krismer @ 41

    Everyone laughed at that law that says a seller can’t use any tools in his own house or rental property. Seriously, Kary. Do you really think someone who owns a home can’t change out their own kitchen light fixture “under penalty of law”?

    It’s like the tags on the pillows that people are afraid to cut off. LOL!

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  163. 163

    Lost at 157

    In your example, where were you? This Vietnam Vet gets scammed along with 100 other people and where were you?

    Why weren’t you, or any of the other supposed Real Estate professionals when this guy needed help?

    Seriously? You expect me to know about everyone in the county that might need help? I would have probably loved to have helped the guy, but there’s no way I would know of him. The same would be true of most other agents, except perhaps one that lived in his neighborhood.

    Back in my attorney days I did help some people that were in this type of situation, but they would come to me. I wouldn’t try to search them out. I didn’t have time for that then, and I don’t have time for that now.

    That your post got three thumbs up to those comments indicates there really are a lot of morons reading SB.

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  164. 164

    By ARDELL @ 58:

    How about a bank owned property, Kary? Do I go to jail if I help a client buy a bank owned property for 80% vs 82% of “Fair” Market Value. :)

    I need to know by tomorrow because my client wants to make an offer and the listing agent already told him the asking price was a shot in the dark. True…not kidding. Got the email while I was out staging that townhome.

    Looking it up now to see what I think it’s worth relative to the asking price.

    There are exceptions to the distressed property law if the property is listed by an agent or if the seller is represented by an attorney. I suspect both are true in your situation, clearly they have an agent, but I am not in a position to provide you legal advise.

    You should consult your broker, an attorney, or advise your client to consult an attorney if you have such concerns.

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  165. 165

    By Erik @ 59:

    RE: ARDELL @ 158
    Do you think you could be hauled off to prison just for making on offer under %82 FMV? If you get hauled off to prison Kary will come visit you and tell you “I told you so.” And that will close this discussion with one of us in federal prison.

    Again, it’s “equity skimming” which is criminal, and what is described is not “equity skimming.” Not everything that is unlawful is criminal. That’s been discussed above on the first page.

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  166. 166

    By ARDELL @ 61:

    It’s actually a long standing joke/feud between lawyers and real estate agents. Lawyers say agents are “only allowed to fill in the blanks” of a real estate offer, and if the client has any questions about what they are signing, the agent is not allowed to explain the contract. Pretty funny when you think about it.

    Sad…but true.

    I’m glad you finally recognize that as true. Agents are only allowed to practice law in limited ways, and the creation of a contract for a third person is the practice of law.

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  167. 167

    By ARDELL @ 60:

    RE: Erik @ 159

    It’s always been a joke for lawyers to give seminars to agents about all the scary monsters in the closet. They do it all the time. Turns agents into little piles of jelly afraid to have an opinion about anything. It’s the legal field’s wet dream for every transaction to have an attorney. Been that way for as long as I can remember.

    I’ve said before that you should attend one of Annie Fitzsimmons’ Core classes, because you would learn a lot. But if you have that attitude, probably not. Annie says her goal is that agents don’t get sued for doing the things that she mentions. Disregard what attorneys say at your own expense, but when you do get sued, do expect everything you’ve said publicly on the Internet to come back to haunt you. You have a clear disregard for the law.

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  168. 168

    By ARDELL @ 62:

    RE: Kary L. Krismer @ 41

    Everyone laughed at that law that says a seller can’t use any tools in his own house or rental property. Seriously, Kary. Do you really think someone who owns a home can’t change out their own kitchen light fixture “under penalty of law”?

    It’s like the tags on the pillows that people are afraid to cut off. LOL!

    That they included landlords shocked me to, and I haven’t looked into the scope of it. I had thought the new rules were just intended to cover flippers.

    I’ve never helped anyone get a contractor’s license, or looked into it. As far as I know, no education or testing is required for a general contractor’s license, so I don’t know what the point of requiring the license would be, other than to provide a small bond. The consequences of not having the license, when required, are severe.

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  169. 169
    ARDELL says:

    RE: Kary L. Krismer @ 68

    Point being…some laws are just outright stupid. Telling a seller he can’t turn a screw in his own property? Talk about “too much government” intervention. The pendulum swung a little too far on that one, and I don’t know any owner of a property who is going to feel constrained by it for things they are fully capable of doing with their own property.

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  170. 170
    ARDELL says:

    RE: Kary L. Krismer @ 67

    Kary…I’ve been in this business for almost 23 years. Really? I’ve been a guest speaker on “how not to get sued” on a panel with 4 major industry lawyers, and me, explaining to several hundred agents how not to get sued.

    I don’t need the class, Dear. But thanks for the concern.

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  171. 171
    Erik says:

    RE: Kary L. Krismer @ 165
    I see. It’s not equity skimming because there is no equity when a house is foreclosed.

    What is the penalty for equity skimming?

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  172. 172
    ARDELL says:

    All kidding and sniping aside, there was a point where agents were told to sit out on the front step during a home inspection “to avoid being sued” and not pay any attention to what the home inspector was saying. There have been hundreds of classes telling agents to DO NOTHING and say VERY LITTLE as a means to avoid “getting sued”.

    Yes…I ignore those classes because what the heck would people need us for if all we do is worry about getting sued, and sit around with duct tape on our mouths and our thumbs up our butts?

    I’m not saying it isn’t good advice for lawyers to tell agents to sit in the corner with a dunce cap on, but really? Not my thing. Yes…I disagree with lawyers on that…a LOT!

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  173. 173

    RE: ARDELL @ 170 – There’s a lot of really bad and incorrect information given out at real estate agent courses.

    http://blog.seattlepi.com/realestate/2008/10/11/beware-the-clock-hour-course/

    So color me not impressed.

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  174. 174

    By Erik @ 71:

    RE: Kary L. Krismer @ 165
    I see. It’s not equity skimming because there is no equity when a house is foreclosed.

    What is the penalty for equity skimming?

    No, it’s not equity skimming, because (from memory), equity skimming involves promising to take over the mortgage payments, then not making the payments, and some other act, such as renting out the property and pocketing the rent. I addressed it in the first page responding to Marc, and I’m pretty sure I cited or even copied the definition.

    There’s a three incident threshold within a period of time. Three incidents within whatever that time is, and it’s a misdemeanor. That means the maximum penalty is a year in jail. Felonies are over a year. What we’ve been talking about here is not criminal, just civil, and the civil matter we’ve been discussing is just one of a few that could be brought.

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  175. 175
    David Losh says:

    RE: Kary L. Krismer @ 168

    I’ll take this last one because as you pointed out some place it is near, and dear to my heart.

    Laws are on the books to protect the public from bad business practices, or criminal activity. My contention for forty years is that the home owner has the right to work on their own properties, it just makes sense.

    We see it all the time, and buddies of mine call me up to look at places that are obviously an attempt to deceive people into thinking a home project was done correctly. The law is in place to protect people from deception, bad workmanship, and the liability of sub standard work.

    In 2007 there were way too many home owners, Real Estate agents, and flippers doing bad work then selling the properties that were, in my opinion, complete liabilities. I’ve got a hundred examples, that I won’t recount now.

    We have always told people that they have to have an electrical contractor, and plumbing contractor sign off on a project. Whatever they say you do. They then take the bulk of the liability. The home owner is allowed to help.

    Like with plumbing it’s ridiculous to pay the plumber to dig the trench to run the water or drain line. In some cases the plumber has the equipment and expertise that make the job cheaper, again I have examples, but let’s not get bogged down.

    The law is there to protect people from liability, and to ensure you are doing good work. As long as you are doing good work you shouldn’t be afraid of the law.

    BTW Kary, I did carry a specialty contractors license as a home inspector.

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  176. 176

    By ARDELL @ 72:

    All kidding and sniping aside, there was a point where agents were told to sit out on the front step during a home inspection “to avoid being sued” and not pay any attention to what the home inspector was saying. There have been hundreds of classes telling agents to DO NOTHING and say VERY LITTLE as a means to avoid “getting sued”.

    I have never heard that advice. Again, there’s a lot of bad information that is given out to agents.

    If you didn’t go inside I suspect you’d be violating an NWMLS rule for letting someone in without supervision. But beyond that, it would be very had to deal with negotiating the inspection items if you only knew of them from an inspection report. Also, on more than one occasion I’ve been able to point the inspector to something they would have otherwise missed. The more eyes the better when it comes to inspections.

    On the bad advice/NWMLS rule issue, at my first RE office they brought in someone who called herself the “Queen of Free.” All sorts of ways to do things to promote your business that are free. One of them was to claim listings in your neighborhood that are on Trulia where the listing agent hadn’t claimed it. I’m pretty sure that without written permission from the listing agent, that would be a NWMLS violation.

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  177. 177

    RE: David Losh @ 75 – I’m not being critical of the attempt by the legislature to keep people from doing shoddy work when flipping a house (or in otherwise in preparation for sale). I’m just saying I don’t know what requiring registration does, other than provide a small bond. While your inspector license would now require training, I don’t believe a general contractor license requires any training or testing. But as I mentioned, I could be wrong on that point–I’ve never helped anyone become a licensed general contractor.

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  178. 178
    Erik says:

    RE: Kary L. Krismer @ 74
    http://en.wikipedia.org/wiki/Equity_stripping

    From reading the definition, it sounds like there are certain red flags such as refinancing the property and then defaulting on the loan. I am sure this would anger the bank and they may blow the whistle on you. I bet if you got a property far below fair market value using Ardell’s scenario and paid the mortgage, nobody would say anything.

    Did you know that spitting on the streets of Seattle is illegal? The point of me bringing this up is that nobody will say anything unless you give them a reason to.

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  179. 179
    Blurtman says:

    RE: Erik @ 178 – Lots and lots of illegal things go unpunished. See TBTF and massive fraud. It depends on who you know. As a little person, you must be kept in line, so as not to revolt against a gamed system.

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  180. 180
    ARDELL says:

    RE: Blurtman @ 79

    Pretty spot on there, Blurtman. After all the damage is done…a show of protection spurts forth after it’s too late, and disappears by the time it is needed again. It’s a vicious cycle created by pendulum swings and laws written by people who haven’t a clue what happened and how to prevent it from happening again.

    Now for a chorus of “This is How We Do It”.

    http://www.youtube.com/watch?v=0hiUuL5uTKc

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  181. 181

    By Erik @ 178:

    I bet if you got a property far below fair market value using Ardell’s scenario and paid the mortgage, nobody would say anything.

    It’s the seller who usually later has second thoughts on the below FMV situation. Either that, or a friend or family member finds out what they’ve done and gets things started.

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  182. 182
    Erik says:

    RE: Blurtman @ 79
    Yes. Laws are put in place by rich people to keep us poor folk down.

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  183. 183

    By Blurtman @ 79:

    RE: Erik @ 178 – Lots and lots of illegal things go unpunished. See TBTF and massive fraud. It depends on who you know. As a little person, you must be kept in line, so as not to revolt against a gamed system.

    That’s very true, particularly depending on where you live.

    I had a client once have to defend against the Kitsap County Prosecutor for writing a bad check, where the reason the check bounced was the IRS grabbed everything in the bank after the check was written. Not surprisingly, the IRS did not give him advanced notice that they would grab the funds. The check was under $2,000.

    At the same time, in King County you’d have to have total fraud over $1,000,000 or defraud someone politically connected before any attention would come your way.

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  184. 184
    David Losh says:

    RE: Kary L. Krismer @ 63

    This post says that the year ended on a sour note for buyers. Hmmm, but the example you linked to found a Vietnam Vet who was swindled by a Real Estate huckster who bought a hundred homes in a year.

    A hundred homes seems like a good chunk of business for any Real Estate agent.

    Now your link shows one Real Estate huckster, when there are probably another hundred of these kinds of guys out there, doing deals, finding properties, looking for buyers, and sellers, but you don’t have the time.

    You’re busy waiting for clients to come to you. You don’t like the idea of looking for sellers for your buyers, you would prefer something jump off of the computer screen at you, I guess.

    At the same time you villify me because I know every property in my little neighborhood where something is going on. I pay attention, stop the car, ask people questions, and even knock on doors, but hey, that’s just me, and probably a few hundred working Real Estate agents.

    You have all day, every day, to post comments here on the Seattle Bubble, or write Trulia trivia, but you don’t have the time to look for sellers.

    We are in a time when thousands of people who own property need help, and our new crop of Real Estate agents seem to be symied.

    This is really simple, it’s not rocket sceince, it’s ham fisted, dumb it down, do some work, get out into the field, and make things happen.

    If you don’t want to go out there blind ask your Title Company to run some parameters for you, like people who have owned multiple properties for more than twenty years. How about just people who have owned properties for over twenty, or thirty years? How about those tax deliquencies?

    There’s a lot of busines that could be done, it would just take some work, some thinking, some drive, and ability.

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  185. 185
    ARDELL says:

    RE: Kary L. Krismer @ 76

    I know a guy who was advertising all houses that had Trustee Sale Notices saying “well…they are ‘for sale at auction’ so why can’t I?” and mls had no jurisdiction on unlisted property.

    There will never be a day when everyone agrees on everything, Kary.

    It’s time in 2013 for you to “recognize”. David knows a lot about a lot and so do I and Ray has seen more underwater property situations than the whole lot of us put together, me being all North of I-90 and all that glitters but not gold.

    Stop pretending in 2013 that everyone is an idiot except you. That’s a plea…a request…and some gollyed good advice.

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  186. 186
    David Losh says:

    RE: Kary L. Krismer @ 73

    You’re the one who brought up the Distressed Property Law Class you took, so color me unimpressed.

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  187. 187
    ARDELL says:

    RE: Kary L. Krismer @ 73

    Try that again Kary. It wasn’t a “local” clock hour class. It was a national stage with Russ Cofano and the attorney from NAR not local people.

    I’m not trying to impress you…just stop asking me to be impressed with some “local influences”.

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  188. 188
    ARDELL says:

    RE: Kary L. Krismer @ 81

    I have seen that happen when someone received 120% of Fair Market Value, and friends and family saying they could have gotten more. So why is it more relevant on the low side?

    The cold, hard fact is THIS: a distressed property owner leaves with NOTHING because it’s underwater whether they get 75% of FMV or 110% of FMV, and they are not happy people because they got ZERO either way. Lots of griping and complaints from people who were not happy. How the heck COULD they be “happy” with nothing?

    In fact the hardest hit poor schnook of a licensee got whammed because lots and lots of agents were jealous that he made way too much money. They jumped on him because there was blood in the streets and he was making a ton of money on it. Jealous agents blow lots of whistles…but not on their “friends”. Their friends doing the same thing, but making less, were just honky dory.

    I know this is not news to you…so as David said before…get off the high horse.

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  189. 189
    David Losh says:

    RE: Kary L. Krismer @ 81

    I had been a contractor working for Real Estate agents for a lot of years before I got a license to sell. During that time I had to write opinions about properties in some litigations that never went anywhere.

    In my forty years I have been threatened with law suits, and have threatened to sue people, but nothing every happens, it all gets worked out before the lawyers get too much money.

    Now to the point; one of my first sales was for a little house with a white picket fence that was an estate. My buyer offered an excellent price at the time because the house was as cute as a button.

    The property had been on the market for a couple of weeks before we made the offer, it was countered, we accepted, and proceeded to closing.

    One night I was in the office at about 9:30PM answering the phone, doing paper work, and when I answered the phone the caller asked for me by name. It was one of the heirs of the listing who told me, “I know all about you, and what you did.” It sounded bad, and he had obviously been drinking.

    Well we had to go meet in the attorneys office, the listing agent, the heir, and I when this big tub of lard attorney waddles in, sets his lunch out on his desk, arranges some papers, then sits down to confront us.

    He had been through the entire Purchase, and Sale Agreement, and told us “that this transaction would never work,” it was illegal, it was an attempt to swindle his client, and he was going to sue. I was unimpressed. The listing agent, and I had done business before, and I knew him to be a good guy, he was an old timer.

    The listing agent asked what the problem was, and the attorney sat up straight and said the financing was for only a 3% down payment, it was an FHA loan. We were a little confused, and asked for a few more details, and the guy was off on some tangent about how with 3% down, and my buyer asking for points to lower the interest rate, that she would be making money, and the seller would be losing money.

    I got up and left at that point, thanked the attorney, and went back to the office. We closed without further incident except the seller called to apologize.

    You see, the attorney, in this case, was interferring with a Real Estate transaction in progress. My client was due the property at the terms agreed to in the contract. The seller could have stalled, but he would then had to have paid more for my buyer to get the same transaction they had mutually agreed to.

    So, yeah, stuff happens, attorneys can get involved, in the way, look for problems, but all in all, it’s residential Real Estate. Be careful, but don’t let threats rule your thinking.

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  190. 190

    RE: David Losh @ 184 – Dave, I am busy enough with current clients, and I could not service my current clients if I spent time on this. As it is I work 7 days a week and have been working since 5:30 this morning on two separate client matters. I have seven business emails in today, and six out on just those two transactions.

    Also I have dealt with these type of people a lot in the past. It is not at all efficient to try to seek them out, because they tend to procrastinate and be in total denial. Also, if they are in the type of distress which appears in the public record, they are being bombarded by offers from all sorts of people, so then tend to zone everything out. You could contact 100 of them, not have one of them take your help, and be cussed out by 5 of the 100. Not worth it when I have other clients I need to do work for.

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  191. 191

    By David Losh @ 86:

    RE: Kary L. Krismer @ 73

    You’re the one who brought up the Distressed Property Law Class you took, so color me unimpressed.

    I’ve never taken a course on the distressed property law. What you might be confusing is the attorney continuing education course I took before the distressed property law was passed. As I’ve noted, the distressed property law is only one cause of action that can be brought in this type of situation. Others existed long before the distressed property law was enacted.

    As noted in my blog piece, attorney CLEs are full of good and correct information. The reason for that is largely because the people teaching the courses are better screened, and do not teach a course simply because they took a class allowing them to do so, or because they are selling something (e.g. 1031 services).

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  192. 192

    By ARDELL @ 88:

    The cold, hard fact is THIS: a distressed property owner leaves with NOTHING because it’s underwater whether they get 75% of FMV or 110% of FMV, and they are not happy people because they got ZERO either way. Lots of griping and complaints from people who were not happy. How the heck COULD they be “happy” with nothing?

    For the third time, the legislature was expressly of a different opinion. This is Nanny state legislation. I’m not trying to argue it’s right, I’m trying to argue that there’s a risk in your first scenario. This really should not have taken that much debate.

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  193. 193
    Blurtman says:

    RE: Erik @ 182 – Not necssarily to keep poor folk down by design. Just not to hinder those who are connected, and not to disrupt the gamed system. It is not really about right and wrong, just not disrupting the system by which the wealthy and connected keep making money and keep their money. That is why the TBTF’s could not be allowed to fail. The law will be applied against inconsequential people like yourself, for example.

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  194. 194

    By ARDELL @ 87:

    RE: Kary L. Krismer @ 73 – Try that again Kary. It wasn’t a “local” clock hour class. It was a national stage with Russ Cofano and the attorney from NAR not local people.

    Not a fan of NAR. Here’s some BS from them which is incorrect information.

    http://realtormag.realtor.org/daily-news/2013/01/04/mortgage-debt-tax-relief-extended

    A tax break for forgiven mortgage debt that was set to expire Dec. 31 was extended by lawmakers when they dodged the “fiscal cliff” this week.

    The tax break, which has been extended to the end of 2013, allows home owners facing short sales, reduced loan principals, or foreclosures to avoid paying taxes on any debt still owed to the bank. Otherwise, the debt would have been taxed by the IRS as income.

    It was that type of bad information which caused me to write this piece:

    http://www.trulia.com/blog/kary_l_krismer/2013/01/mortgage_debt_relief_act_falsehoods

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  195. 195

    By ARDELL @ 87:

    RE: Kary L. Krismer @ 73

    Try that again Kary. It wasn’t a “local” clock hour class. It was a national stage with Russ Cofano and the attorney from NAR not local people. .

    Spam filter is holding up a post. Compare this to the link in my next post.

    http://realtormag.realtor.org/daily-news/2013/01/04/mortgage-debt-tax-relief-extended

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  196. 196
    Matthew says:

    Nothing substantive to add to this discussion considering the comments jumped the shark about 175 comments ago. Just wondering if Kary sits on this website constantly hitting the refresh button and responds to nearly every comment. Is he a sock puppet for the Tim’s alter ego? I can’t imagine anyone with a full time job having enough hours in the day to play devil’s advocate against nearly every poster on this site.

    I’d love to see a time-line analysis on Kary’s activities on this site. It seems like he averages a post every 5 min. Seriously, what productive member of society has that much free time? Posting on SB is a full time job for K2!

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  197. 197

    NAR doesn’t care about accuracy.

    http://www.trulia.com/blog/kary_l_krismer/2013/01/mortgage_debt_relief_act_falsehoods

    BTW, why would NAR have a non-Realtor speak at an event?

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  198. 198
    Matthew says:

    Nice, as I was typing the above K2 added 2 more posts !

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  199. 199

    RE: Matthew @ 96 – Worry about yourself. I tend to post a lot here in the morning, and when business keeps me in front of a computer. On Wednesday, for example, I was stuck in front of the computer dealing with HUD.

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  200. 200
    David Losh says:

    RE: Kary L. Krismer @ 190

    You interjected the link into a discussion about buying property. It some how was supposed to prove something about bad business, but I still don’t get the point.

    My point is very clear, there is a lot of business out there, that people are doing, it just doesn’t seem to be filtering down to the buyers who frequent this blog.

    You’re too busy? Well, like I said, you are not too busy to villify me, or Ardell, or any one else who has opinions different than yours.

    I knock on doors, you don’t like that, you think that is a waste of your time, but thousands of Real Estate agents across the country are knocking on doors, doing open houses, looking for sellers who would like to sell, but don’t have a strategy.

    Hucksters are prevailing today because Real Estate professionals don’t want to get dirty. Everybody’s a big shot, everybody is talking about the new phone app, but the vast majority of Real Estate agents are worthless toads waiting to catch a fly.

    You’re busy? Welcome to Real Estate.

    Real Estate is a 24 hour a day 7 day a week business. That’s the job.

    When I say there isn’t enough money in doing Real Estate sales, you say there must be something wrong with me, but here you are lamenting your time spent in the business.

    I’m just saying that your buyers have hundreds of options other than the NWMLS, but the computer seems to be keeping you busy.

    I’m also saying your buyers don’t need Real Estate agents if all the agent is going to do is show the buyer what redfin will give them for free, and a rebate.

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  201. 201
    David Losh says:

    RE: Kary L. Krismer @ 91

    Well, the Seahawks are getting cramed so I’ll be going back to work.

    These are all your interjections. You brought up the Distressed Property Law Class, and now it’s something else, I can’t keep track of what you are saying.

    It’s probably because I’m an idiot, and a moron. Yeah, Kary, I’ve had a chance to read through some of your other comments.

    Holy Cow!

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  202. 202

    By David Losh @ 100:

    I’m just saying that your buyers have hundreds of options other than the NWMLS, but the computer seems to be keeping you busy.

    Those options are bad options if it puts them at risk of violating the Distressed Property Law. Why do you think Washington Realtors pressed so hard for the amendments that exclude listed properties?

    BOut of curiosity, when you want to buy a used car, do you hang out in parking lots waiting for people to come back to their cars so that you can make an offer on one?

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  203. 203
    Erik says:

    RE: Kary L. Krismer @ 202
    This is not a good analogy. And for that I will give you a thumbs down.

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  204. 204
    Matthew says:

    RE: Kary L. Krismer @ 99

    LOL, you are telling me to worry about myself? Now that is the very definition of the word irony coming from the biggest thread hijacker in the history of this website.

    You say that you would rather have people call you out instead of just giving you thumbs down’s for every comment you make? Well guess what K2, I’m calling you out.

    You post in the morning, the afternoon, the evening, holidays, the Sabbath, leap day, etc. There isn’t a time you aren’t trolling this website and posting contradictory opinions just for the sake of feeling the need to fill every conversation with your 2 cents. Half the time you aren’t even contributing to the discussion, you are just pointing out flaws in other people’s logic.

    There is a reason who are universally despised on this site and everything you post gets a -1 attached to it. The only other reason I can think of people giving you the thumbsdown is that self righteous smug looking head-shot you attach to every post.

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  205. 205
    ARDELL says:

    RE: Kary L. Krismer @ 97

    Because NAR was a guest at the event. They don’t run every show in town, Kary. In fact…they run less and less of “The Show” every year.

    Also I have been “a Realtor” in my career at least twice as long as you have. You act as if I don’t know it from top to bottom. Incorrect.

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  206. 206

    By David Losh @ 201:

    RE: Kary L. Krismer @ 91 – Well, the Seahawks are getting cramed so I’ll be going back to work.

    Real estate agents have DVRs so that they can watch football games and TV shows and still take phone calls, etc. I hadn’t started watching the game when I read that, but I’m now caught up. Please don’t post spoilers.

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  207. 207

    By Erik @ 3:

    RE: Kary L. Krismer @ 202
    This is not a good analogy. And for that I will give you a thumbs down.

    Thanks for explaining the vote, but how is that any different than knocking on doors looking to see if people are willing to sell their house? Oh, wait, you’re right! There is no distressed car owner law! ;-)

    I’d rather contact people who have expressed an interest in selling.

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  208. 208

    RE: Matthew @ 4 – In case you haven’t noticed, the vast majority of post here I’ve made has been a post responding to someone responding to my post. It’s called a discussion.

    As to hijacking the thread, that was Ardell when she responded to my now proven point about the distressed property law by calling me a PITA. If she’d just admitted the issue, we’d have saved about 150 posts.

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  209. 209

    RE: ARDELL @ 5 – I didn’t know you had ever been a Realtor. Sorry. I have a recollection of your not wanting to be a Realtor for some reason, but I don’t recall the reason.

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  210. 210
    ARDELL says:

    RE: Kary L. Krismer @ 2

    Kary…it’s a new year. Reinvent yourself.

    1) Buyers and Sellers know a lot more about real estate than you give them credit for.

    2) A lot of agents know a lot more about real estate than you give them credit for.

    3) You can’t keep the industry “alive” by pretending everything NOT “in the mls” is a big scary monster lawsuit waiting to happen.

    4) A lot of buyers and sellers know a lot more about real estate than a lot of agents.

    5) Real Estate is NOT about the paper it is printed on and that 5 day clause is a joke. That you think it might be good is something you need to re-examine. It’s a joke!

    It’s hard to switch careers from lawyer to real estate. But if you can’t make the transition and BE a real estate professional vs a fear mongering lawyer, then maybe you want to go be one of those retirees flipping burgers.

    It’s 2013. Be someone else this year. It’s time.

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  211. 211
    ARDELL says:

    RE: Kary L. Krismer @ 9

    Kary…23 years in this biz and you thought I had never been a Member of the National Association of Realtors? Really? That’s not even possible. When NAR became all about the agents vs the public at large…when it broke “The Public Trust”, I broke away.

    NAR forgot what it was supposed to be…so I forgot about them. NAR never grasped the concept of Buyer Agency and never will. No one who believes in the rights of home buyers could possibly be “a Realtor”…unless they have no choice. Many have no choice. That is very sad.

    NAR is still great for Sellers and being a Realtor when I represent sellers would not be a problem. But when it comes to Buyer Agency…NAR is still 100 year old thinking. Can’t be “with them” on that.

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  212. 212
    Matthew says:

    K2,

    The more you post, the more you prove my point. I’m not talking about you hijacking just this thread, I’m talking about your entire existence on this site.

    I’m sure you are a great guest to have at cocktail parties.

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  213. 213
    ARDELL says:

    RE: David Losh @ 1

    I scheduled my work and workers for 2 to 7 today…Kim’s not giving up. He’s very happy at the moment. Interception…touch down…don’t give up David. It’s 27 -21 !!!!!!!!!!!!!!!

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  214. 214
    Erik says:

    RE: ARDELL @ 210
    Ha ha ha… that’s pretty funny. I don’t think at this point in life Kary can reinvent himself. I feel like when you choose a career path such as a lawyer, he kinda committed to forming a specific personality type. Lawyers make a lot of money which is great, but at the same time your personality develops into thinking like a lawyer and interacting like a lawyer.

    I strongly considered being lawyer because some of them make tons of money. My uncle was trying to talk me into it. He makes $425/hr and works all the time. I decided that I do not want a life like he has and decided I would be better off with less money while being a Design Engineer. Not sure it was the right choice, but this situation reminds me of why I made that decision. I look at things other than money when I chose my career path.

    I’m sure I’d get along just fine with Kary, but he does think differently than most of us here on this site.

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  215. 215
    ARDELL says:

    RE: Erik @ 14

    That would be fine if he could just stop thinking that “thinking differently” means the other person is uneducated or an idiot…and saying so. If he could just stop the flaming…well, maybe there would be hope for him. Not in the biz…but on the internet at least.

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  216. 216
    Howard says:

    Gallagher the comedian has a bit about other drivers. Those going faster are morons. Those going slower are idiots.

    Kind of reminds me this discussion.

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  217. 217
    ARDELL says:

    RE: ARDELL @ 13

    Oh MY GOD!!! Tied!!!! With seconds to play they tied it UP! David…where did you go? Oh Ye of Little Faith! 27-27 and time for the extra point!

    Rate this comment: Thumb up 0

  218. 218
    ARDELL says:

    RE: ARDELL @ 17

    It’s GOOD! Seahawks are AHEAD!!!! 20 seconds left…

    Rate this comment: Thumb up 0

  219. 219
    ARDELL says:

    RE: ARDELL @ 18

    Who the heck called time out???

    Rate this comment: Thumb up 0

  220. 220
    ARDELL says:

    RE: ARDELL @ 19

    Oh well…good game…good season…off to work I go.

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  221. 221
    Blurtman says:

    RE: Erik @ 203 – So this is how it works under fascism. The government will viciously prosecute (persecute?) the little guy, especially if he seems to challenge the industrial state, but somewhow, they just cannot and will not make the case to prosecute massive financial fraud, claiming it is too difficult, and the case too tenuous.

    “Aaron’s death is not simply a personal tragedy. It is the product of a criminal justice system rife with intimidation and prosecutorial overreach. Decisions made by officials in the Massachusetts U.S. Attorney’s office and at MIT contributed to his death. The US Attorney’s office pursued an exceptionally harsh array of charges, carrying potentially over 30 years in prison, to punish an alleged crime that had no victims.”

    http://nymag.com/daily/intelligencer/2013/01/swartzs-suicide-spurs-outrage-at-prosecutors.html

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  222. 222
    David Losh says:

    RE: Kary L. Krismer @ 202

    Well, yeah, my son wants a very specific car. He has looked everywhere, all the dealers, craiglsit, the internt search sites, and prices are just too darn high.

    So when he sees a car that is the car he wants, he puts a little card under the wind sheild asking if the owner wants to sell.

    He just came up from downstairs and I asked him where he got that idea. His freind’s dad, who is in the car business, does it. BTW his freind drives a BMW. Who woulda thunk it?

    What’s your point?

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  223. 223

    By ARDELL @ 10:

    RE: Kary L. Krismer @ 2

    Kary…it’s a new year. Reinvent yourself.

    1) Buyers and Sellers know a lot more about real estate than you give them credit for.

    Seriously, that’s a dangerous assumption to make, and it’s also dangerous to represent a client how thinks that. Once I asked a potential client if he was familiar with the lead based paint rules. He answered yes, but it turns out he didn’t know those rules at all, and could have gotten in trouble earlier when he was trying to sell his house himself. I had assumed he might because he was an attorney. Also, I’ve seen some attorney drafted (not RE attorney) P&S agreements that did not comply properly with the lead based paint law.

    But Ray recently made a comment to the same effect, that clients don’t want to ride in a car because they know more about real estate than the agent. I thought that odd at the time, but then it occurred to me more recently that investor types probably get sick of agents that aren’t familiar with valuation methods or repair issues, etc. What I thought further was that if a client actually thinks they know more than their agent, and if they are right, they have the wrong agent for what they want to do. The agent should help them with what they want to do, not hinder them.

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  224. 224

    By Erik @ 14:

    I strongly considered being lawyer because some of them make tons of money. My uncle was trying to talk me into it. He makes $425/hr and works all the time. I decided that I do not want a life like he has and decided I would be better off with less money while being a Design Engineer. Not sure it was the right choice, but this situation reminds me of why I made that decision. I look at things other than money when I chose my career path.

    With the right area it can be very satisfying, but also very stressful. The latter is why I gave it up after 20 years.

    Bankruptcy was particularly nice because there was a lot of variety. In addition to the straight bankruptcy issues you had to deal with some of the other issues the client had prior to bankruptcy, like for example having someone defraud them out of their home, or having someone defraud them when buying a home.

    But you’re right. Attorneys do think differently than other people. People with economic degrees also think different than other people. It’s just based on your training. Law students get tested in law school by reading hypothetical situations like the one Ardell described above, and then spotting and analyzing as many issues as they can. Then when they go to work, a client will come in and describe a fact pattern, and they again have to issue spot and analyze. Also, attorneys tend to think about the worst case scenario, because if it happens they: (1) Want to prevent it from happening; (2) Don’t want to be blamed for it if it does happen and they didn’t try to prevent it; and (2) Want to have warned the client about it before hand. Real estate agents, on the other hand, just tend to assume every deal will close just fine, because every deal in the last year closed just fine.

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  225. 225

    By ARDELL @ 15:

    RE: Erik @ 14

    That would be fine if he could just stop thinking that “thinking differently” means the other person is uneducated or an idiot…and saying so. If he could just stop the flaming…well, maybe there would be hope for him. Not in the biz…but on the internet at least.

    LOL Ardell. You were once practically the only agent that thought that the Arms Length Notice document required that you spy on your own clients, and you wrote a piece to the effect “Am I right or am I right?

    In your particular case though, you have an incredible ability to not be able to understand legal issues or contract language. I’m fully aware that people can have different opinions on legal issues. Look at all the split court decisions at the appellate level. You and Losh though are just so far off base it’s incredible.

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  226. 226

    By ARDELL @ 15:

    RE: Erik @ 14

    That would be fine if he could just stop thinking that “thinking differently” means the other person is uneducated or an idiot…and saying so. If he could just stop the flaming…well, maybe there would be hope for him. Not in the biz…but on the internet at least.

    BTW, let’s not forget that based on the lawsuit David Leen filed I was right and you were wrong. Losh too. And remember I said above once you’re sued, you’ve lost because of the cost of defending yourself, and the stress.

    Marc saw the issue right away, and was eager to jump in and represent someone who sold under the circumstances you described. That didn’t give you a clue.

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  227. 227

    Losh at 157

    In your example, where were you? This Vietnam Vet gets scammed along with 100 other people and where were you?

    Why weren�t you, or any of the other supposed Real Estate professionals when this guy needed help?

    An alternative answer to this would be the distressed property law made it very dangerous for real estate agents to contact such people. Prior to the law going into effect it was an area I was interested in, because my knowledge of bankruptcy would allow me to send people that direction if it was appropriate. But the legislature basically stopped that because a “Distressed Home Consultant” is defined by RCW 61.34.020 as:

    (3) “Distressed home consultant” means a person who:

    (a) Solicits or contacts a distressed homeowner in writing, in person, or through any electronic or telecommunications medium and makes a representation or offer to perform any service that the person represents will:

    (i) Stop, enjoin, delay, void, set aside, annul, stay, or postpone a foreclosure sale;

    . . .
    (vii) Save the distressed homeowner’s residence from foreclosure;

    . . .or

    (b) Systematically contacts owners of property that court records, newspaper advertisements, or any other source demonstrate are in foreclosure or are in danger of foreclosure.

    Doing what you suggest would put a real estate agent at great risk. Not happy with the 2009 amendments which protect real estate agents and sellers, I still have language in my purchase and sale contracts indicating that neither I nor my buyer client is a “distressed home consultant” and are not providing any such services. The last thing you would want to do is bring yourself under the coverage of that law.

    So basically, the Distressed Property Law by trying to keep scammers away also kept everyone else away.

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  228. 228
    Erik says:

    RE: Kary L. Krismer @ 224
    Agreed. I am taking a course in Engineering Leadership. In this class we learn the “Myers Briggs Personality Indicator.” (MBPI)
    http://www.personalitypathways.com/type_inventory.html

    In the MBPI, there are 4 dichotomies. In the second dichotomy, you have developed your Thinking side as opposed to your Intuition side. I was doing stress analysis, and I noticed that everyone used Thinking as opposed to Intuition.

    My main point is this… It seems like you rely on facts and logic which is great and works well. Losh, Ardell and I are using Intuition. These are 2 different ways of thinking that can both be effective. In general if one person is dominant in Thinking, they cannot understand Intuition and visa versa. These opposites usually get angry with one another as we’ve seen in this case.

    I guess the question is which one works best here in real estate? I obviously would say Intuition since I am intuition dominant, but I’m guess you’d say Thinking or facts and data since you mainly use that technique.

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  229. 229
    Erik says:

    RE: Kary L. Krismer @ 24
    One connection I missed to make is that you developed the Thinking side which relies on single facts and data by becoming a lawyer early on. If you started your career as a real estate agent you would have perhaps developed more Intuition.

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  230. 230
    ARDELL says:

    RE: Kary L. Krismer @ 225

    I just can’t imagine a world where the agent for the seller would not know on the day of closing if the seller had left by closing. It is just a foreign concept to me.

    You call that “spying on my client”. I just can’t imagine how it would be possible for me not to know whether my client had moved out or not, considering I have to give the key to the new owner or the new owner’s agent as part of my job. I always make sure the seller has moved out, and make a record of the condition it was left in, before I give the new owner the key to the house.

    What if the buyer’s mover made a big hole in the wall and then tried to blame that on the seller having left it that way? How could I possibly know that my client did not in fact leave that hole in the wall, if I don’t walk through it after it is empty and before giving the new owner the key?

    I’m not “spying on my client” to make sure the house is empty and in “broom clean” condition before I hand over the key to the new owner. It’s just part of my job as far as I’m concerned.

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  231. 231

    By Erik @ 28:

    I guess the question is which one works best here in real estate? I obviously would say Intuition since I am intuition dominant, but I’m guess you’d say Thinking or facts and data since you mainly use that technique.

    I think it depends on what you’re talking about, and how risk adverse you are.

    This might not be the best example (or completely accurate) but keeping this to real estate, let’s say an agent has a seller client that doesn’t want to do a Form 17 Seller Disclosure document. The buyer has a period of time to review that disclosure statement and then walk from the transaction, so if they are not given the document, the buyer can walk at any time prior to closing. Is that a good thing? No, it extends the period of risk for the seller. Would it affect most sellers? Possibly not, although some buyers would walk at the beginning upon finding out that reluctance to disclose. Few buyers however would walk near the time of closing, because most buyers want to buy! So that lack of a Form 17 would bother a lawyer more than an agent.

    When I first became an agent people would ask how I liked it. I said it was good, but there are so many things to worry about on every transaction, and it affects me because I know about them, where the average agent doesn’t. They just assume the transaction will close, and they’re right most of the time because buyers and sellers both have the same goal.

    Connecting up to what we’re talking about here, if I were acting as their attorney, I’d advise someone to avoid the type of situation Ardell described in her first scenario. Someone who is a real estate agent with a lot of money on the other hand might think this is a great thing and try to do three of these transactions a year as flips. And they could do five or ten of these and still think it’s great, until they get sued.

    As to the issue I just raised yesterday, going door to door as an agent and thereby becoming a “distressed home consultant,” if I were advising someone as their attorney I wouldn’t necessarily advise them not to do that. I would simply advise them of the risks and of the things they would need to do to comply with the act. Depending on how risk adverse they were, they may or may not do that activity.

    So I’ll ask you. Which is better in real estate? Doing something and then getting sued into bankruptcy because you were unaware of the Distressed Property law, or not doing that thing? Doing something and then getting sued because you didn’t comply with the Distressed Property law, or complying with the requirements of the law and helping people you find in financial distress? To me the answer is obvious. Ignorance is seldom a good thing.

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  232. 232

    By Erik @ 29:

    RE: Kary L. Krismer @ 24
    One connection I missed to make is that you developed the Thinking side which relies on single facts and data by becoming a lawyer early on. If you started your career as a real estate agent you would have perhaps developed more Intuition.

    But would I have ever developed the other side?

    I’ve caught and reported at least three errors in the NWMLS forms, two of which have been corrected. Thousands of transactions are done using those forms, but most agents simply don’t see the problems because they don’t understand the contracts. The most recent one is probably the best example though of what you’re talking about with the difference between attorneys and agents.

    http://www.trulia.com/blog/kary_l_krismer/2012/12/minor_nwmls_forms_issue_short_sales

    As described there, the backup form and short sale form conflict as to when certain time periods begin to run. The backup form says they run when the seller gives notice that the first transaction failed, and the short sale form says they run starting when the seller gives notice of bank approval. Now I will admit that part of the reason this hasn’t been an issue caught earlier is that backup offers on short sales would have been rather uncommon until recently, but I do think agents and attorneys would think about that differently. An agent would just assume everyone is contemplating the time periods beginning to run on bank approval, and that probably would be the case 99% of the time. But what if say the inspection goes bad after bank approval, and the seller wants to contest the buyer’s ability to walk without losing their earnest money? They could point to the backup addendum and try to claim that the inspection was late. If the earnest money deposit was supposed to be delayed until after inspection, they could even file a complaint against the buyer’s agent for not handling the earnest money properly.

    Is that likely to happen? Not really. But it is something you should be aware of so that you can avoid the possibility altogether, because avoidance of the problem is easy.

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  233. 233

    By ARDELL @ 30:

    RE: Kary L. Krismer @ 225

    I just can’t imagine a world where the agent for the seller would not know on the day of closing if the seller had left by closing. It is just a foreign concept to me.

    You call that “spying on my client”.

    There’s a difference between knowing and spying. When you think you have to report the information to someone else, it becomes spying.

    I just can’t imagine how it would be possible for me not to know whether my client had moved out or not, considering I have to give the key to the new owner or the new owner’s agent as part of my job. I always make sure the seller has moved out, and make a record of the condition it was left in, before I give the new owner the key to the house.

    What if the buyer’s mover made a big hole in the wall and then tried to blame that on the seller having left it that way? How could I possibly know that my client did not in fact leave that hole in the wall, if I don’t walk through it after it is empty and before giving the new owner the key?

    Your analysis of the form would have applied to you if you worked as the buyer’s agent or the seller’s agent. The seller’s agent would not necessarily know, but according you your interpretation they would have to find out. If memory serves correct, the agent raising the issue originally was in fact the Seller’s agent. For the benefit of others, what happened was the transaction was a short sale and the seller at some point asked if he could rent from the seller after closing, and the seller said no a couple of times, but then changed his mind. The seller’s agent didn’t learn of this until weeks after the closing. He was asking whether the arm’s length notice required him to disclose that rental to the bank which approved the short sale. Ardell was about the only person who thought the answer was yes, and there were hundreds of responses. As a result of that, Ardell wrote her piece on “Am I right or Am I Right?”

    For those of you who are really masochistic, here’s the original piece where the issue was raised:

    http://activerain.com/blogsview/2075529/what-s-the-penalty-for-breaking-the-arms-length-transaction-notice-

    Here’s Ardell’s “Am I right or am I right” piece: http://raincityguide.com/2011/01/20/short-sales-the-new-mortgage-fraud/

    Here’s my piece explaining why Ardell was FOS (and why agents should not give legal advice): http://www.trulia.com/blog/kary_l_krismer/2011/01/real_estate_agents_are_not_licensed_to_practice_law–part_iii_arm_s_length_transaction_notices

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  234. 234
    corndogs says:

    RE: Erik @ 28 – If you’re a design engineer who thinks using intuition, please tell me you are not designing airplanes…

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  235. 235

    Ardell, you never addressed why you were asking about automatic extension clauses, or even which one you were addressing.

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  236. 236
    Erik says:

    RE: corndogs @ 234
    Ha ha ha. I am designing airplanes. I do well in math, but intuition is important in seeing the big picture. I think Kary is good at specifics, but not as good at seeing the bigger picture.

    I am not the final checker that goes through things looking at every possible problem. That’s for guys like Kary to do. I’m sure he would be good at analyzing all the details and punching holes in my designs. I create stuff that seems like a good idea, and guys like Kary analyze it.

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  237. 237
    David Losh says:

    RE: Erik @ 236

    That is an excellent way to phrase it.

    Thanks for conversation it was great.

    Best of Luck.

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  238. 238
    ARDELL says:

    RE: Kary L. Krismer @ 235

    Is there one besides the JLS one? Is there a Standard NWMLS form with the auto 5 day extension? I know anyone one could custom write it, but as a standard clause I have only seen it in the JLS form.

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  239. 239

    RE: ARDELL @ 238 – They seem to have changed the forms library so that you cannot see all the different company forms. You used to be able to look at the forms offered by different companies. Many of them were funny, and obviously not drafted by attorneys.

    Not all JLS offices are owned by JLS. Some are franchise entities, so they may have their own forms. I don’t believe the NWMLS has it’s own form that I recall, but I have seen others.

    That said, I’m still not understanding your problem with the clause. If a party has a problem with the clause they can always try to negotiate it away. If there is no concern about closing on a precise day, having that type of clause could be very beneficial for both parties and the agents involved.

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  240. 240

    By Erik @ 36:

    I am not the final checker that goes through things looking at every possible problem. That’s for guys like Kary to do. I’m sure he would be good at analyzing all the details and punching holes in my designs. I create stuff that seems like a good idea, and guys like Kary analyze it.

    I wouldn’t agree with the bigger picture comment, but I would agree with what I quoted. On the legal side, I would much rather edit (or analyze) a contract or statute drafted by someone else than draft it myself.

    Getting back to bankruptcy, it’s said that bankruptcy is the acid test of documents such as deeds and deeds of trust, because the trustee has incredible powers to “avoid” (basically wipe out the position of the owner and then use it on behalf of the estate) such documents. That was much of the type of work I would do as an attorney if I represented a Chapter 7 trustee or a Chapter 11 reorganization debtor. I think to do that sort of work you need to understand the bigger picture, because you need to know how the pieces interact.

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  241. 241
    ARDELL says:

    RE: Kary L. Krismer @ 39

    In the end they were way longer than 5 days late and it all worked out OK for all parties. I just think setting the precedent that “late is OK” is not a good thing. Would be pretty difficult to suss out the circumstances of why, even though the clause is well worded as to the ONLY whys that would apply. Seems to me the agent for the buyer just treated it as “OK to be late”.

    I’m over it, but I was wondering if you knew the impetus for the standard addition pretty much only for agents from your company.

    Thinking back though, I remember when I started in Real Estate and contracts were fairly basic the office I was with, which was a Coldwell Banker Office, added a clause every time there was a perceived potential risk/problem. Got to the point where we had 3 full pages of “special clauses” only for our office. So I really can’t complain when I see it now. It was just surprising and problematic recently. But that happens a lot on transactions that run into Christmas and New years. Original close date was 12/12…ended up closing on 12/28.

    One thing the professionals don’t take into consideration is that when a seller sees a close date of before the 15th, they don’t plan on making another mortgage payment before closing, as most mortgage payments are due on the 1st but late after the 15th. In fact most escrows advise the seller to NOT make that payment as it messes with the payoff amount. Then all of a sudden they say “oh…make another payment” and sometimes, especially around Christmas, the seller was banking on not needing to make that payment.

    Happened twice this year and escrow says “just make another payment” as if it is not an issue at all to be late to the point where the owner has to dig up $2,000 to $3,000 with no advance notice, and after being told they should not make that payment.

    I think there was likely a good reason for “we can be 5 days late IF…” clause. But people are really just treating it like a different close date and sometimes being late after than anyway. Once escrow or lender just sees it as a different close date, it doesn’t do the job it was intended to do, and that is what I am seeing.

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  242. 242
    corndogs says:

    RE: Erik @ 236 – So do you actually have a 4 year degree, or are you a tech designer calling yourself a design engineer?.. Where did you go to school? Are you a mechanical engineer? or?

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  243. 243

    RE: ARDELL @ 241 – I just looked, and mine is limited to situations beyond the control of either party. So they shouldn’t have the idea that it’s okay to be late. I don’t remember whether I made that conform to our office’s form when I joined JLS, and I’m too lazy to check.

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  244. 244
    ChrisM says:

    RE: Erik @ 228 – Meyers Briggs – developed by amateurs:

    “The original developers of the personality inventory were Katharine Cook Briggs and her daughter, Isabel Briggs Myers; these two, having studied extensively the work of Jung, turned their interest of human behavior into a devotion of turning the theory of psychological types to practical use”

    http://en.wikipedia.org/wiki/Meyers_Briggs

    Fluff piece here: http://www.personalitydesk.com/story/story-of-mbti-briggs-myers-biography

    Of course I’m not arguing psychology is a science!

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  245. 245
    ARDELL says:

    RE: Kary L. Krismer @ 243

    LOL…everyone thinks every problem was “beyond their control”…back to the left brain-right brain kind of differences that are being pointed out by some fabulous comments on this thread.

    Some time ago I posted this song for you:

    http://www.youtube.com/watch?v=p8_FOQ7-P30

    I’m going to stop my urging that you simply recognize that in this flat and short communication medium, you need to stop jumping to the conclusion that everyone else is an idiot. You have some valuable content….as does everyone else…EVERYone else. You don’t have to beat every nail until the head disappears.

    Less fighting in 2013? Less name calling in 2013? Less outright flaming in 2013?

    Last request. Hoping for a better year with less angst and anger. Happy New Year, Kary.

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  246. 246

    By ARDELL @ 245:

    RE: Kary L. Krismer @ 243 – LOL…everyone thinks every problem was “beyond their control”..

    And if there is a question, you get a signed extension. Clearly there shouldn’t be an extension simply because one of the two parties didn’t do something on time. But what if the escrow didn’t order a payoff timely?

    But so Losh can see an example of a real really old attorney joke:

    Two men are sitting in their insurance agent’s office, and they start to compare their situations. The first had his house burn down, and he was there to make a claim. The second was also there to make a claim, but his house had been destroyed by the eruption of Mt Saint Hellens. When the first man heard that his eyes got big and he asked: How do you start a volcano?

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  247. 247
    Erik says:

    RE: corndogs @ 242
    I am a design engineer corndogs. I got my undergrad at central washington university. I am in my last quarter of finishing my masters degree at UW. Central offers a Mechanical Engineering Technology degree which is very similar to a Mechanical Engineering degree. Since it is not exactly the same, I am getting my Masters degree in Mechanical Engineering at UW. My advisor is Ramulu Mamidala. :)

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  248. 248
    Erik says:

    RE: corndogs @ 42
    Do you need a tutor to teach you? ;) I can school you for free here on Seattle Bubble, but additional help will require a fee.

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  249. 249
    Erik says:

    RE: ChrisM @ 44
    I think I missed something… It sounds like you do not believe in this. That’s fine, but this is what they are teaching your boss to believe.

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  250. 250
    Erik says:

    RE: corndogs @ 242
    What do you do when you are not crushing people on Seattle Bubble?

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  251. 251
    Erik says:

    RE: corndogs @ 42
    The reason I am on here is to learn as much about real estate that I can because a Design Engineering lead and I want to start flipping real estate. I have the know how and he has the money. As you know from blogging here, timing is crucial. From what I’ve collected using my INTUITION, we may have a good opportunity to buy low this summer.

    Do you think that will be good timing?

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  252. 252
    Erik says:

    RE: Kary L. Krismer @ 231
    I agree with this. I have not really disagreed with anything you’ve said since I really don’t know these details anyway. I assume you are correct.

    I am more of a risk taker I think. I’m not rich now and I never will be rich if I don’t take some risks. To me, the chances of getting in trouble doing this up to 3 times a year is worth the reward. It sounds like there wouldn’t be criminal penalties if I got caught anyway. You said it would be civil, and I would guess I’d just need to give the money back plus maybe a small amount.

    Anyway, stay on here. It’s good to learn this stuff so that I know what i’m getting into. People were teeing off on you cause know different stuff and maybe think differently. Til next time.

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  253. 253
    ChrisM says:

    RE: Erik @ 249 – Agreed & understood (except I’m self-employed). But I find it it is helpful to understand there’s no *there* for Meyers Briggs. As a budding engineer, you should appreciate that position. FWIW, I’m INTJ.

    Career advice: get your PE once you’re out!!

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  254. 254
    Erik says:

    I think it is very interesting to hear what someones personality type is. Thanks for the info. I am ENFP.

    I will get my PE after I get through my masters program. I passed the EIT, but it took a lot of dedication and willpower…and 3 attempts cough cough. Congratulations on getting yours.

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  255. 255
    ChrisM says:

    RE: Erik @ 254 – Oh, I’m no PE. I’m a scumbag “software engineer” who has no legal duties. In all seriousness, I think the state of computer software is absolutely pathetic.

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  256. 256

    By Erik @ 52:

    I am more of a risk taker I think. I’m not rich now and I never will be rich if I don’t take some risks. To me, the chances of getting in trouble doing this up to 3 times a year is worth the reward. It sounds like there wouldn’t be criminal penalties if I got caught anyway. You said it would be civil, and I would guess I’d just need to give the money back plus maybe a small amount.

    You’re absolutely correct that getting rich involves taking risk. I am not a risk taker but my brother is. His wealth is on orders of magnitude much greater than mine as a result.

    I would recommend that you consult your own attorney before jumping in though, so that the risks can be fully explained and procedures developed to minimize risk (e.g. don’t offer $120k and then lower it to $70k). As to explaining the risk, I don’t have time to look it up know, but I strongly suspect the Distressed Property Law is a Consumer Protection Act trigger, and if so, that would involve not only paying back the damages, but also limited treble damages and paying the other side’s attorney fees. The latter alone could easily be six figures. So if you do go in, go in being fully informed by proper legal counsel.

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  257. 257

    By Erik @ 54:

    I think it is very interesting to hear what someones personality type is. Thanks for the info. I am ENFP

    I’m the personality type that hates taking tests to determine what personality type I am, and doesn’t give a rat’s ass about the result. ;-)

    Some real estate agents are really into that type of BS. That said, I will admit it is important. My wife and I are totally different personality types and it helps in that a client who doesn’t like one of us is likely to gravitate to the other.

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  258. 258
    ARDELL says:

    Erik,

    I have not seen real estate investors bitten by legal issues, as the Title and Escrow Process pretty much covers most everything unless you are buying AT auction/Trustee Sale.

    I HAVE seen many investors bitten by City Code changes or erroneous assumptions as to what they thought they could do with the property. The new and huge case in Kirkland is very interesting. Sometimes a Code Change goes into effect after you buy the property and even after you get your permits to make the intended changes.

    The investor who was building all the townhomes in the backyards in Seattle made a fortune, but I think they have or are trying to close up that loophole that allowed him to do that.

    The Kirkland case regarding Potala Village is fascinating as it drops the number of units down from 143 to 58! There was no # of unit restriction when he got his permits a couple of years ago, but then the process was stalled until they imposed this new density related restriction. He is suing.

    http://seattletimes.com/html/localnews/2020128460_potala14m.html

    So the rule of real estate investing is NOT to eliminate risk…not possible. It is to expect risk…and manage that risk as well as you can.

    You can run all of your numbers perfectly and have an attorney review everything, but the HOA can slap you with a massive assessment, City or County codes can change, lots of things can happen even when you do everything right.

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  259. 259
    ARDELL says:

    The old rule of “investing” is, never “invest” a dime you can’t afford to lose.

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  260. 260
    Erik says:

    RE: ARDELL @ 258
    Real estate is complicated. I agree, that there is no such thing as no risk in real estate. One way I am trying to reduce risk is by learning here on Seattlebubble. Good article. Thank you.

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  261. 261
    David Losh says:

    RE: Erik @ 252

    There are a thousand reasons not to buy Real Estate, it’s risky. You can make all the right moves, do all the homework, and some guy who thinks he’s smart will throw something in that is annoying.

    Most deals go well.

    The problem here in this thread is the throwing in of a bunch of nonsense about the law that doesn’t apply to what Ardell presented.

    You can get all caught up in these deatils, but ultimately residential Real Estate is an agreement between two parties, one to buy, the other to sell, according to terms that are mutually acceptable.

    So you can talk to an attorney until you are blue in the face, but it won’t change your risk. You are the one in the transaction, your attorney isn’t. Your attorney is only responding to what you present, and mostly the paper work.

    You need to do some deals. I, of course, disagree there will be good deals this summer unless you really look.

    If you want to flip, you will need a good crew of people who can help you, you need a good lender, excellent escrow, and a Title rep who can read a Title report. Retain a Real Estate attorney if you want, I do because I’m just trouble.

    Do some deals, find a bank owned property Real Estate agent, get connected, be humble, listen, learn, and don’t be afraid to lose some money.

    That’s the best I’ve got for you.

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  262. 262
    ARDELL says:

    RE: Erik @ 260

    The “townhome in yard” scenario of Seattle goes back to my legal thinking being different than many attorneys I have met on the West Coast. I was taught (in my former business as a Trust and Estate Officer) to fully comprehend the SPIRIT of “the law” and not simply the language of the law so as to find the loopholes. To understand WHY there is a law and honor the spirit of that law, vs looking to see if the thing you want to do that is doable within the exact wording of the law, i.e. “loopholes”.

    Seattle had a provision so that elderly people could put a 2nd small structure on their lot to provide a smaller place for them to stay when they retired (and rent out their home) or to stay in their home and rent out the small 2nd structure. This to help with growing RE taxes and expenses and help them be able to afford to stay in their homes as they aged and expenses grew. That was the “spirit” of the law/code. A builder took advantage and started building tall, 3 story, structures in the yards of a lot of Seattle residences.

    Here is an article on this issue, one of many written. Fascinating topic.

    http://www.seattleweekly.com/2012-07-25/news/dan-duffus-crowded-houses/

    It’s a classic example of taking a good idea and dishonoring the spirit of its intent.

    That is why Kary often criticizes me for disagreeing when 2 or 3 attorneys have not agreed with me on various topics online. It is just a different way of looking at things. If the spirit of the law is built on a poor foundation, as regards consumers and real estate, then I don’t necessarily agree with the attorneys. One of these is regarding the “arms length agreement” as to “seller must leave property” on a short sale. One is regarding what real estate agents can and can not say and do. Another is whether a 2nd mortgage is covered the same as a 1st mortgage.

    I don’t consider a single case law decided badly to be relevant…or as relevant as some attorneys do. Just because one judge got it wrong is no reason for everyone else to get it wrong thereafter.

    Goes back to some children being smarter than some adults. Ask WHY about that law…and honor the why and not simply dot the I’s and cross the T’s while skirting the why of the law. It’s a different way of thinking and I have been told by many attorneys that it is an East Coast vs West Coast perspective to some degree.

    I have been on the West coast for almost 15 years, but I choose to honor intent of laws vs hammering down a loophole to skirt the underlying issue. That’s why I chose the song for me and Kary to be “There’s only you and me and we just disagree.” We just don’t look at things from the same angle.

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  263. 263
    ARDELL says:

    RE: David Losh @ 61

    David,

    I agree to a large extent, but more for owner occupants than investors. There are MANY agents who “answer objections” by telling home buyers they can do something with a property after they own it, that they can NOT do. It’s pretty common.

    Oh, you can build out or up or knock out that wall…as example.

    As long as someone wants the property long term “where is – as is” it usually is pretty straight forward. But the minute someone wants to change something…they should not rely on an agent OR an attorney for solid info before they purchase. It could be as simple as someone buying a house with a wood shake roof thinking they can replace it with a blue metal roof or even a composite shingle. Some HOAs say no roof can be replaced with wood shake even though it is currently wood shake. Others say must be wood shake.

    This is where I agree with you 90% of the time about real estate. The answer is not “attorney review”. A LOT of European buyers think they can pour concrete all over the place, as they like solid walk ways and sometimes even super-sized poured patios. Agents often say “sure you can” when in fact there is a limit to non-permeable surfaces.

    CLASSIC example is when there is a creek or a stream on the property. Just had a Listing Agent say “sure you can!” when the answer was clearly NO you can not. His logic was the house was already closer to the creek than current zoning allows so yes…you can pour a patio and or expand the deck and disregard current zoning on that too. Not so. The structure is grandfathered. If your house burns down…you may not under current code be able to rebuild it at all. Different rules for Class B vs Class C streams. But when you see a lot “with water running through it”, the existing structures are not the guide as to how close you can put something permanent, even a deck post or fence post, near it.

    P.S. So glad you are back, David. Off to work on that townhome in U-District. It’s coming together. Hopefully only another couple of days and on market by Friday.

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  264. 264

    By ARDELL @ 58:

    Erik,

    I have not seen real estate investors bitten by legal issues, as the Title and Escrow Process pretty much covers most everything unless you are buying AT auction/Trustee Sale.

    Escrow does not provide any legal services to either of the parties, other than filling out simple deeds and an excise tax affidavit. Title companies only deal with title issues, not the topics we’ve been discussing here.

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  265. 265

    By ARDELL @ 59:

    The old rule of “investing” is, never “invest” a dime you can’t afford to lose.

    I would agree with that, which is one of the reasons I don’t like buying AT a foreclosure sale for the typical home purchaser.

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  266. 266
    ARDELL says:

    RE: Kary L. Krismer @ 264

    :)

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