Posted by: The Tim

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

266 responses to “NWMLS: 2012 Ends on a Sour Note for Buyers”

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  1. David Losh

    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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  2. Kary L. Krismer

    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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  3. Erik

    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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  4. Matthew

    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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  5. ARDELL

    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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  6. Kary L. Krismer

    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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  7. Kary L. Krismer

    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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  8. Kary L. Krismer

    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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  9. Kary L. Krismer

    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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  10. ARDELL

    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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  11. ARDELL

    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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  12. Matthew

    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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  13. ARDELL

    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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  14. Erik

    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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  15. ARDELL

    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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  16. Howard

    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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  17. ARDELL

    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!

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  18. ARDELL

    RE: ARDELL @ 17

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

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  19. ARDELL

    RE: ARDELL @ 18

    Who the heck called time out???

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  20. ARDELL

    RE: ARDELL @ 19

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

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  21. Blurtman

    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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  22. David Losh

    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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  23. Kary L. Krismer

    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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  24. Kary L. Krismer

    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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  25. Kary L. Krismer

    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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  26. Kary L. Krismer

    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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  27. Kary L. Krismer

    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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  28. Erik

    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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  29. Erik

    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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  30. ARDELL

    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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  31. Kary L. Krismer

    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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  32. Kary L. Krismer

    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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  33. Kary L. Krismer

    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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  34. corndogs

    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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  35. Kary L. Krismer

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

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  36. Erik

    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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  37. David Losh

    RE: Erik @ 236

    That is an excellent way to phrase it.

    Thanks for conversation it was great.

    Best of Luck.

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  38. ARDELL

    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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  39. Kary L. Krismer

    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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  40. Kary L. Krismer

    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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  41. ARDELL

    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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  42. corndogs

    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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  43. Kary L. Krismer

    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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  44. ChrisM

    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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  45. ARDELL

    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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  46. Kary L. Krismer

    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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  47. Erik

    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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  48. Erik

    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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  49. Erik

    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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  50. Erik

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

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  51. Erik

    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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  52. Erik

    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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  53. ChrisM

    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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  54. Erik

    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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  55. ChrisM

    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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  56. Kary L. Krismer

    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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  57. Kary L. Krismer

    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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  58. ARDELL

    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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  59. ARDELL

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

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  60. Erik

    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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  61. David Losh

    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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  62. ARDELL

    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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  63. ARDELL

    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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  64. Kary L. Krismer

    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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  65. Kary L. Krismer

    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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  66. ARDELL

    RE: Kary L. Krismer @ 264

    :)

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