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.

37 comments:

  1. 1

    Presumably “traditional real estate agent” means an agent who works as an independent contractor and splits the commission with the designated broker without any rebate to the client. Assuming that’s accurate, and since this is Seattle Bubble, home of the “Alternative Brokerage Run-Down” of a couple of weeks ago, I’d love to see comments from folks who are standing by the traditional model…

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  2. 2
    Eastsider says:

    I would definitely use a traditional agent for home sale…

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  3. 3

    RE: Eastsider @ 2 – Well, the poll was in regards to buying a home, but in any event…

    Why? What is it about the “traditional agent” that beats an alternative agent, since a traditional agent is more expensive?

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  4. 4

    I’m not going to defend the model of traditional real estate agents, and I don’t consider myself to be one, but I can give you an answer.
    Some traditional real estate agents are thought of as absolutely brilliant at selling houses. Not most of them, but I’ve encountered some selling geniuses out there. In theory, if you employ one of these geniuses as your agent when you’re selling your house, the price the house sells for may be far in excess of what you’d save in commission by using a nontraditional agent. It can be argued both ways. Some nontraditional agents will say ” There are no genius real estate agents out there, a trained gorilla could do the job, and they don’t need no stinkin’ commission, they’re willing to work for bananas.” Some non traditional agents will say ” Yeah, they’re geniuses, but I’m smarter than all of them, and I cost less.”
    The problem is, of course, that simply by employing a generic traditional agent, you’re most likely not going to be retaining a genius. There are also the agents who are rude slimeballs, and others who are dumb as posts(4×4’s, not posts on a blog).

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  5. 5

    RE: Ira Sacharoff @ 4 – Thanks Ira. A follow up question or two: Why are some “traditional agents” assumed to be geniuses? Why doesn’t the same assumption apply to “alternative” agents?

    I understand that everyone wants to hire a rock star. But why the assumption that a “traditional agent” may be a rock star, but an “alternative agent” surely isn’t?

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  6. 6

    By Craig Blackmon @ 5:

    RE: Ira Sacharoff @ 4 – Thanks Ira. A follow up question or two: Why are some “traditional agents” assumed to be geniuses? Why doesn’t the same assumption apply to “alternative” agents?

    I understand that everyone wants to hire a rock star. But why the assumption that a “traditional agent” may be a rock star, but an “alternative agent” surely isn’t?

    Because the nontraditional model hasn’t been around as long. The nontraditional agents I have encountered have mostly been very competent. The traditional agents I have encountered have ranged from genius to moron.
    I also think there is a perception, partly perpetuated by the traditional brokerages, that the seller or buyer is going to do more work by employing a nontraditional agent, that they’ll save money, but it will require work. The perception is that nontraditional agents are not full service. And it’s true for some of them, which is not a reason not to hire them.But I don’t think you can really put nontraditional agents in a box. Craig, Ira, and Ray Pepper may all consider ourselves nontraditional, but we’re also not like each other.
    In my career I’ve encountered a few agents I considered really savvy, agents who delivered a tremendous amount of value.. They all were traditional agents. I’m sure there are brilliant non traditional agents too, and God knows I’m a genius, but in my professional capacity I haven’t seen the marketing savvy I’ve seen in those few traditional agents by non traditional agents. But it probably exists, and will become more apparent over time.

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  7. 7

    RE: Craig Blackmon @ 5 – Craig, you’re starting to sound like Ray! ;-)

    The money isn’t the most important thing. Not making a major mistake is the most important thing, and for those whose time is valuable, not wasting a lot of time (having the agent preview) is important. There are some great agents who are traditional and some who are alternative, but which they are won’t tell you how good they are. It also won’t tell you how likely they are to really put your interest first, and advise you about the issues with a property or even to walk away from a property once in contract.

    With the possible exception of the buyer only interested in one property, deciding to get an agent based primarily on whether they are traditional or alternative makes about as much sense as buying a smartphone based primarily on its color.

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  8. 8

    RE: Kary L. Krismer @ 7

    I’d like to see someone define “traditional” agent. Many if not most are the same cost or less as Craig’s model and even Redfin’s from what I see on closing statements and depending on price of property. So “traditional” vs “alternative” can’t be about a higher or lower cost. It must mean something else. Maybe Tim knows since he drafted the poll.

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  9. 9
    Christian Wathne says:

    I’ll be sticking with my “traditional agent” because of the relationship him and I have built and my good experiences in the past 3 transactions (2 buys and 1 sell within 26 months).

    He made complicated deals easy on my end and I’m confident that had I had a less experienced and/or less known agent I would have not gotten the contract on the most recent purchase. My agent is very well known and I have no doubt this makes my offers more serious. My “traditional” agent also found me great homes that though I was searching zillow and redfin daily I was not able to find on my own.

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  10. 10
    Eastsider says:

    Most people will save money buying their homes through alternative agents. 3% commission is excessive when buyers are doing the legwork nowadays.

    Selling is a different story. Would you hire your neighbor to sell your house because he happens to be a part-time agent? Two agents selling the same house will produce two different results. In my experience, a good agent (and most if not all are traditional) will sell your home at the best price. A good agent deserves the 3% commission, if not more. How do one find a good agent? Hmm…

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  11. 11
    Eastsider says:

    Most people will save money buying their homes through alternative agents. 3% commission is excessive when buyers are doing the legwork nowadays.

    Selling is a different story. Would you hire your neighbor to sell your house because he happens to be a part-time agent? Two agents selling the same house will produce two different results. In my experience, a good agent (and most if not all are traditional) will sell your home at the best price. A good agent deserves the 3% commission, if not more. How do one find a good agent? Hmm…

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  12. 12
    Azucar says:

    By Craig Blackmon @ 5:

    RE: Ira Sacharoff @ 4 – Thanks Ira. A follow up question or two: Why are some “traditional agents” assumed to be geniuses? Why doesn’t the same assumption apply to “alternative” agents?

    I understand that everyone wants to hire a rock star. But why the assumption that a “traditional agent” may be a rock star, but an “alternative agent” surely isn’t?

    I live overseas in a country where I do not speak the language or even come remotely close to being able to comprehend something in the written form of it (i.e. it’s not the English/Latin alphabet). Sometimes when I am in the local grocery store looking for something, I might find something by looking at the pictures on the label. There might be three or four different brands of that item on the shelf, and there’s no way for me to differentiate between the quality of the products by looking at the cans that they are in… other than by looking at the prices.

    So, the thought process goes something like… “Well, there must be a reason why brand A costs more than brand B, and why brand C is so cheap. I don’t want to get the worst quality product out there, so I’m not going to buy the cheapest one. I also don’t think I should splurge and buy the “best” (aka most expensive) one”… so I buy the one with the middle price. That would be for a product where I don’t worry too much about it – say a can of beans or some noodles or something to that effect.

    Now, say, I go over to the raw fish section or the pork section. If I’m deciding between two different “price points” of say raw tuna that I’m planning to eat raw, or even two different cuts of meat (that I have no idea where on the pig they came from, so I don’t know which is more tender/tasty), I might say “What the heck, a few more bucks is worth it because I really don’t want to get sick” or “A nice, tender, juicy cut of meat is worth paying the most for.”

    I can see choosing a real estate agent as being something like buying raw tuna in a country where you can’t communicate… The stakes are higher (than if you’re just buying something that won’t make you hug your toilet if it’s not quite good enough), so spending a bit more isn’t really the issue – getting the best product is… and other people who might know more than me are willing to pay more for this guy… so I guess he must be worth more, and it will pay off to spend a bit more to get the better guidance.

    I’m not saying that I’d do that when hiring a realtor, but there are times when I do it at the grocery store.

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  13. 13

    By Eastsider @ 10:

    Most people will save money buying their homes through alternative agents. 3% commission is excessive when buyers are doing the legwork nowadays.

    What makes you think buyers are doing the legwork? Just what do you think they’re doing? What I can tell you is very few buyers are actually good at finding good listings to look at. I don’t mind clients suggesting listings, but I can only think of one past client who was excellent at the task, and a few more who were good. Usually it just means having to preview 10 listings instead of 8, and still finding only 3 that are worth showing. And once you’ve found the property, nothing at all has changed. Clients who do their own research still need just as much guidance and assistance as clients who don’t even have an email address.

    The main benefit of clients looking for listings directly probably comes indirectly, in that it might make them more likely to broaden the areas they look at or the types of property. That is always a good thing.

    Out of curiosity, do you think you should pay a doctor less now that there is WebMD? I would guess that website probably wastes more doctor time than it saves.

    Does anyone know if agents at a company like Redfin preview? And if so, do you tend to always get the same agent, so that they learn what you like over time?

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  14. 14
    SMarieDavis says:

    We just purchased a home less than 4 months ago. There are many homes for sale out there. Many I would never set foot it. We gave our realtor our specifications and let him do the looking. There are also many different way of bidding, some of which only a licensed realtor can do.

    The best way to find an agent is to ask for references from people who have used them. Do not use friends or relatives if they have not enlisted their services personally. Ask the prospective agent for more references.

    We also looked on-line and found different houses to look at. But the problem we encountered with that is people almost never update their listings. Whether the property was sold, off the market or in foreclosure. That was very frustrating. There are companies out there that take homes in foreclosure and force prospective buyers to have home inspections before the bank accepts the bid. We ran into this once – never again.

    Our realtor earned every penny of his commission as we took almost a year to find the right home. He was actually the second one we hired, the first one we fired for not listening to what we wanted and sending us on one failed listing after another. So don’t be afraid to fire a bad agent. There are good ones out there.

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  15. 15

    RE: Kary L. Krismer @ 13

    My experience is very different from yours, and possibly because we primarily work in different locations. 90% of my clients can get paid for doing some of their own “legwork” and/or for requiring less legwork. Very few of my clients are not excellent at online shopping.

    Maybe my clients are younger than yours? :)

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  16. 16

    RE: Ardell DellaLoggia @ 14 – Or maybe you’re just sucking up! ;-)

    Seriously, your clients might typically be looking for a narrower age group of house, and that would make it easier for them to find things.

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  17. 17

    RE: Kary L. Krismer @ 16

    Not age group of house, but narrower geographically maybe and almost always in areas of lowest inventory. We’re almost always looking at only the next one to be listed for sale and nine out of ten times can rule them in or out without having to see them using online resources including google maps, redfin, zillow, King County Parcel Viewer, placement of bedrooms as to level, etc…

    The majority of my clients work for Microsoft or Google and want to be fairly close to work. Even those that don’t work at Microsoft or Google have a pretty good handle on where they want to live and mostly want to live where there is an 8, 9 or 10 ranked elementary school and fairly close to the same work centers as my Microsoft and Google clients.

    Google clients are split between Kirkland and Seattle, but Google is also very good at letting them work from either location most times. My Microsoft clients work at main campus or Bellevue Downtown most of the time.

    I don’t know why you need to do so much previewing. It’s a bit old fashioned to need to do that a lot. Have the online tools not assisted you and cut down on the need to preview at all? Seems odd.

    (don’t get the “sucking up” comment. Who would I be sucking up to?)

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  18. 18

    By Ardell DellaLoggia @ 17:

    I don’t know why you need to do so much previewing. It’s a bit old fashioned to need to do that a lot. Have the online tools not assisted you and cut down on the need to preview at all? Seems odd.

    (don’t get the “sucking up” comment. Who would I be sucking up to?)

    As to the sucking up, it was a joke, but the “to” would be your past clients reading this page.

    As to the previewing, hardly old fashioned. You can’t smell cat pee on an Internet webpage, but beyond that there are a lot of things you can’t figure out. Bedroom size and layout would be one. Seeing that the house behind has a do it yourself junkyard starting up would be another. All the reasons a client might not like a particular house are reasons to preview.

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  19. 19

    RE: Kary L. Krismer @ 18

    Interesting. My clients don’t read real estate blogs after they are done with buying or selling a house, so that is why that went over my head.

    As to previewing, it depends on the client. Most of my clients need to see houses they don’t want in order to be certain of the house they do want to buy. This is true for some period of time while they are testing their perceptions of “what they want” against reality. Sometimes they surprise themselves and change their mind completely as to what they want as part of the process. Sometimes they find exactly what they thought they wanted, only to find the picture of it in their mind was a whole lot better than the reality in person. :) It’s a journey.

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  20. 20

    By Ardell DellaLoggia @ 19:

    As to previewing, it depends on the client. Most of my clients need to see houses they don’t want in order to be certain of the house they do want to buy. This is true for some period of time while they are testing their perceptions of “what they want” against reality. .

    I agree with that. Typically the first one or two outings we won’t preview, because we are trying to find out what features/situations the clients like and don’t like. But I do warn them that they may see a lot that the don’t like.

    On the smell topic, I remember going to a newer house in a nicer neighborhood, and the smell just about knocked you over. I could barely make it to a table to drop off my card before leaving. I don’t even know what the smell was, it was unrecognizable but horrible. If there had been flies I would have suspected a dead body.

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  21. 21
    ray pepper says:

    Oh I disagree! ITS ALWAYS ABOUT THE $$$$$$$$$$$$$$$$$$$$$$.

    Just ask any seller who got shredded at the Escrow table for nearly 10% after dumping their home.

    However, there are ignorant people everywhere who live their lives paying RETAIL for everything. They are becoming fewer and fewer as the years pass. But, go get the STRAGGLERS traditional Agents!

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  22. 22
    Eastsider says:

    RE: Kary L. Krismer @ 13

    I see that Ardell has responded to you.

    3% commissions came from the old days before there was Internet. Agents then had to spend time flipping through the thick mls book and driving clients around. Why should buyers still pay 3% when they are now doing half the work? Most buyers are now looking through listing websites. With Google street view and other freely available information online, they can even preview the neighborhood. Given the amount of work buyers put in nowadays compared to the old days, they deserve part of the 3% commission.

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  23. 23
    Erik says:

    RE: ray pepper @ 21
    “Shredded at the escrow table”. :) Hilarious.

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  24. 24
    Erik says:

    A week or so ago, I asked Ardell to sell my property again and she basically told me to pop off because of some loophole about my intent to sell too early or something. I would fully expect Ardell to charge me full commission. Ardell is fully worth the commission because she can sell a property for more than an agent from one of these dog and pony shows that charge less… no offense Ray. If a discount agent put half the work into a sale Ardell does, they would be losing money. I am not on here pushing Ardell’s name because of a special bond or she is family or she is a business affiliate or whatever. I am telling my story because I firmly believe she is the best in the area.

    These days, real estate is all about the pictures. Do you want to pay someone $3k less so you can get 15k less on the sale? Allow me to quantify this. $15k-$3k=$12k. $12k is how much you would lose by getting a discount agent. I discount agent will not use their own money to buy stuff to stage your place. A discount agent won’t make their workout to work on your place everyday. A discount agent probably won’t use their own money to get high grade professional photos.

    Everyone can go round and round, but I know better. If you want to get market value or below, get a discount agent. If you want above market value, get Ardell…if she will work with you. You need to own your house 2 years i guess though or she won’t work with you.

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  25. 25
    ARDELL says:

    RE: Erik @ 24

    I didn’t say I wouldn’t help you sell it. I said I wouldn’t help you buy it as an investment unless you were truthful with the lender about your intent. Even discount brokers have a minimum under which they don’t discount. I don’t discount anything under $350,000 or so. A few exceptions.

    I had a lot of fun staging your place and you helped with the heavy lifting. We bought some very cool stuff. It looked great and most of that was you.

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  26. 26

    RE: Erik @ 24 – Maybe there is a distinction between “discount” and “alternative.” Because most of what you say does not apply to Quill or most of the other “alternative” models recently featured. But it does describe $500 Realty… ;-)

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  27. 27
    ray pepper says:

    RE: Craig Blackmon @ 26 – Yes, we are CHEAP…So is MLS4Owners…but both the BEST deals for a competent seller. If having the ability to sell your property for 500 or 200 to an unrepresented seller and saving 6% sounds absurd then the seller is an idiot or simply unknowing.

    Yes, the seller must shoot their own pictures, be able to answer their phone, and have a tiny bit of commonsense…Unfortunately, many are unable to perform or possess 1 of these 3. So they are STUCK with a Quiz Realty, traditional agent, or some other buffoon!

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  28. 28

    RE: ray pepper @ 27 – Another reference to “Quiz Realty” – nice! Shades of the dearly missed Mr. Losh here, what with his “Redfun”…. Although at the end of the day, Mr. Losh had integrity, he never pretended to be a legitimate business model. There’s only one “buffoon” on this thread, Ray…. ;-)

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  29. 29
    ray pepper says:

    I meant Quill…ooppsss..sorry…multi tasking…and strategically putting a basketball offense in thought wondering if 8th grade girls could comprehend it…weather too nice for real estate debate!

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  30. 30

    There’s nothing more entertaining than a real estate agent cat fight.

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  31. 31
    wreckingbull says:

    RE: Ira Sacharoff @ 30 – Although in the end, there is always the usual mess of scattered boilerplate MLS forms, shreds of camel hair sportcoats, and BMW peel-out marks to clean. Still worth it, though.

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  32. 32
    wreckingbull says:

    RE: ARDELL @ 25 – Good call. Furthermore, having said intent fully documented on the web will be quite convenient for interested parties if things ever go pear-shaped.

    What he is proposing is often viewed as a gray area and often abused, but something I see happen quite a bit. The difference is that most are smart enough not to broadcast such intent on a public forum.

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  33. 33
    Blurtman says:

    RE: Craig Blackmon @ 28 – Just so everyone knows, I have started a new religion based upon a resurrected Losh. There is a market need.

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  34. 34
    Erik says:

    RE: wreckingbull @ 32
    Ouch. You are hurtful.

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  35. 35
    Erik says:

    RE: wreckingbull @ 32
    I do agree with you. I lack some self awareness. I do and say things without considering the repurcussions. It was stupid if I had a plan to break the laws. I really didn’t understand that rule. I haven’t decided what to do yet. I will buy now and figure it out like I did in 2004. Worse case scenario, I ride the hampster wheel a couple years and end up even.
    I am working on my problems. Are you?

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  36. 36

    By wreckingbull @ 31:

    RE: Ira Sacharoff @ 30 – Although in the end, there is always the usual mess of scattered boilerplate MLS forms, shreds of camel hair sportcoats, and BMW peel-out marks to clean. Still worth it, though.

    Camel hair sport coats are nice. Most real estate agents don’t have enough class to wear them.

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  37. 37
    Erik says:

    RE: wreckingbull @ 32
    Sometimes I do really good things. Sometimes I fall flat on my face and look like a complete fool. A few examples… I am really not that smart as I am sure you would agree. I did very well in grad school because I attacked it with all my effort. I fell on my face by getting laid off last December. I remodeled that condo and went from poor to fairly comfortable. My first remodel was a big flop.

    It’s not about the number of times you get knocked down, it’s the number of times you get back up. I will always fight to get up.

    You have a different strategy. Mine is to bum rush everything and get back up after getting beat down.

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