November Stats Preview: Where Did the Listings Go?

Get access to the full spreadsheets used to make the charts in this post by becoming a member of Seattle Bubble.

November has come and gone, so let’s have a look at our monthly stats preview. First up, here’s the snapshot of all the data as far back as my historical information goes, with the latest, high, and low values highlighted for each series:

King & Snhomish County Stats Preview

Sales dropped significantly month-over-month, as is typical for this time of year. Inventory also fell, which is also normal for the season, but the month-over-month drop in homes for sale was the largest on record (since 2000) in both King and Snohomish Counties. Foreclosure notices in both counties were down from a month earlier.

Next, let’s look at total home sales as measured by the number of “Warranty Deeds” filed with King County:

King County Warranty Deeds

Sales in King County slipped 22 percent between October and November (in 2014 they fell 23 percent over the same period), and were up 3 percent year-over-year.

Here’s a look at Snohomish County Deeds, but keep in mind that Snohomish County files Warranty Deeds (regular sales) and Trustee Deeds (bank foreclosure repossessions) together under the category of “Deeds (except QCDS),” so this chart is not as good a measure of plain vanilla sales as the Warranty Deed only data we have in King County.

Snohomish County Deeds

Deeds in Snohomish fell 20 percent month-over-month (vs. a 21 percent drop in the same period last year) and were up 4 percent from November 2014.

Next, here’s Notices of Trustee Sale, which are an indication of the number of homes currently in the foreclosure process:

King County Notices of Trustee Sale

Snohomish County Notices of Trustee Sale

Foreclosure notices in King County were up 16 percent from a year ago despite being down 16 percent from a month earlier, and Snohomish County foreclosure notices were down 25 percent from last year.

Here’s another measure of foreclosures for King County, looking at Trustee Deeds, which is the type of document filed with the county when the bank actually repossesses a house through the trustee auction process. Note that there are other ways for the bank to repossess a house that result in different documents being filed, such as when a borrower “turns in the keys” and files a “Deed in Lieu of Foreclosure.”

King County Trustee Deeds

Trustee Deeds were down 45 percent from a year ago, and down 25 percent from a month ago.

Lastly, here’s an update of the inventory charts, updated with previous months’ inventory data from the NWMLS.

King County SFH Active Listings

Snohomish County SFH Active Listings

Inventory fell dramatically in both counties month-over-month, more than is typical for this time of year. As a result, the year-over-year decline in each county hit its highest point since May 2013. King was down 37 percent from a year ago while Snohomish was down 28 percent.

Note that most of the charts above are based on broad county-wide data that is available through a simple search of King County and Snohomish County public records. If you have additional stats you’d like to see in the preview, drop a line in the comments and I’ll see what I can do.

Stay tuned later this month a for more detailed look at each of these metrics as the “official” data is released from various sources.


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.

141 comments:

  1. 1
    Blurtman says:

    Lingering on the market. Bought too high at auction? I know – hire a certified Realtor®.

    1/4 acre. Zero view. Built in 2006. Beater home to the left. Price dropped to $824K. Bought at auction for $772k. Margin squeeze!

    http://www.zillow.com/homes/for_sale/house,mobile,land_type/68016006_zpid/2-_beds/1-_baths/47.612313,-122.05644,47.609937,-122.06137_rect/17_zm/0_mmm/

    And what is up with Zillow? Very slow and screen freezes are common. More food to the gerbil cage, stat!

  2. 2
    Erik says:

    Hooray!! My prayers have been answered! I really want to see active listings under 2000 in King county.

    I told buyers this would happen. You foolish buyers pulled out because you were frustrated and owners raised the price. Wanna try it again? If you don’t settle on mediocracy in 2016, we are really gonna jack up our prices. Don’t believe me again????? Test me. I dare you. We are out for blood for the next 5 years.

  3. 3

    Tim’s Charts Remind Me of Patients on Death Beds in Critical Care

    With life support readings on “flat line”.

  4. 4

    By Blurtman @ 1:

    Bought at auction for $772k.

    Not sure what that has to do with the topic at hand, but that number appears to come from the prior sale several years earlier. The number from the source document is lower.

  5. 5
    occasional poster says:

    By Blurtman @ 1:

    Lingering on the market. Bought too high at auction? I know – hire a certified Realtor®.

    1/4 acre. Zero view. Built in 2006. Beater home to the left. Price dropped to $824K. Bought at auction for $772k. Margin squeeze!

    http://www.zillow.com/homes/for_sale/house,mobile,land_type/68016006_zpid/2-_beds/1-_baths/47.612313,-122.05644,47.609937,-122.06137_rect/17_zm/0_mmm/

    And what is up with Zillow? Very slow and screen freezes are common. More food to the gerbil cage, stat!

    But you gotta DIG the use of the drone / quad copter for the virtual tour, no?

    Yeesh!

  6. 6
    Blurtman says:

    RE: Kary L. Krismer @ 4 – What number do you have? I got this from Zillow:

    03/18/15 Sold: Foreclosure Auction $772,000+138% $265 Public Record

    The house is nice, but the location is a bit, I don’t know, forced, for a modern large craftsman. I hope they got it for around $650. Let me know.

    It seems that the trend is for new megamansions with small fishbowl yards. I guess no one goes outside to use their yards much anymore. Reese’s (Pieces) Run sold out quite fast. $900k and up. http://www.landcast.com/development/46392/reeses-run-sammamish-wa

    I think I saw Erik there off loading his beater pickup. Time to move.

  7. 7
    ConfusedInSeattle says:

    RE: Blurtman @ 1

    I am not sure how this specific house relates to the article. What are you talking about hiring a Realtor about? They paid $705,000 at the auction for this property. The 772k figure you cited is what someone paid in 2007 for it.

  8. 8

    Full Disclosure: I am the only non-MLS broker in Greater Seattle (and possibly the entire NWMLS).

    Is there another takeaway here? Perhaps that, with listings at an historic low, now is the time to forego paying a buyer’s agent? With Zillow et al., one can reach a sufficiently large enough audience of potential buyers to obtain fair value. So why list on the MLS, where you’ll likely pay 3% to someone who doesn’t even work for you?

  9. 9
    Cap''n says:

    RE: Craig Blackmon @ 7

    Kamal called and said there is plenty of room for you at his new self promotion blog. http://www.db.dooosh.

  10. 10

    RE: Cap”n @ 8 – Good one!!

    Question: Is it possible for me to make the comment at all, regardless of the comment’s merit, given my position? Or, perhaps, would there have been a better way to make the comment, maybe foregoing the disclaimer?

    Your insight – and that of anyone else who flips me you-know-what – is appreciated.

  11. 11
    boater says:

    RE: Craig Blackmon @ 10
    Since you asked.
    Buy an add on the site would be my suggestion and if you make a comment in this area leave it at the general ‘Now might be a time to explore the alternative brokers and see if they can save you some money. Check out the ads on the site for some options ‘
    It’s slightly less self serving while still promoting the idea that the system itself may be in need of change.

    My 2 cents

  12. 12

    By Blurtman @ 6:

    RE: Kary L. Krismer @ 4 – What number do you have? I got this from Zillow:

    03/18/15 Sold: Foreclosure Auction $772,000+138% $265 Public Record.

    You’re right–if you click enough things on your link Zillow does say that. But Zillow is wrong. I’m sure everyone is shocked that Zillow can’t get basic facts right! /sarc

    The $705k number mentioned above by Confused is the correct number per the source document.

    I wonder if those Auction.com prices Zillow posts are correct?

  13. 13
    ConfusedInSeattle says:

    RE: Kary L. Krismer @ 12

    Auction.com posts a lot of random numbers to Zillow which are at a minimum misleading if not fully inaccurate.

  14. 14
    Blurtman says:

    RE: ConfusedInSeattle @ 7 – Thanks. Zillow says the $772k price is what the home sold for at auction on 03/18/15. Kary has also pointed out Zillow’s inaccuracy.

    The owner is using a discount broker, and the home is not selling, hence my comment abut hiring a Realtor®.

  15. 15
    Blurtman says:

    By Kary L. Krismer @ 12:

    By Blurtman @ 6:

    RE: Kary L. Krismer @ 4 – What number do you have? I got this from Zillow:

    03/18/15 Sold: Foreclosure Auction $772,000+138% $265 Public Record.

    You’re right–if you click enough things on your link Zillow does say that. But Zillow is wrong. I’m sure everyone is shocked that Zillow can’t get basic facts right! /sarc

    The $705k number mentioned above by Confused is the correct number per the source document.

    I wonder if those Auction.com prices Zillow posts are correct?

    Zillow is representative of the New Economy that is fueling the stock market’s growth. What are you implying, exactly? ;>)

  16. 16

    RE: ConfusedInSeattle @ 13 – It’s the last part I was focusing on. I’m surprised no one has taken on some of the auction companies over their misleading pricing. I wonder if they just are not an attractive target?

    I haven’t really followed it recently, but in years past the auction properties were ones that failed to sell REO because they were huge pieces of . . .. They would go the auction route and still fail to sell and then be re-listed REO at a more reasonable price.

    More recently what I have seen are some listings where you can’t go in and can’t do an inspection because the property is occupied. As I understand it you don’t get access to the property until you own it. Even ignoring the condition issues, that would present a huge legal challenge because the person living in the property could have a valid claim of ownership which doesn’t show up in record title, and which would prevail over the purchaser’s claim of title. I’m not sure how they deal with that.

  17. 17

    By Blurtman @ 14

    They make it oddly difficult to find a page where you can find out if your agent is a Realtor, but here is a link.

    http://www.realtor.org/rofindrealtor.nsf/pages/FS_FREALTOR?OpenDocument

    The main advantage, IMHO, to using a Realtor is that you have some additional recourse for unethical behavior–sometimes it might be your only recourse if the activity doesn’t violate the brokerage laws or NWMLS rules. And it probably helps that at least part of the continuing education credits have to be in ethics, and can’t all be in things like how to decorate your listing. /sarc

  18. 18
    Blurtman says:

    By occasional poster @ 5:

    But you gotta DIG the use of the drone / quad copter for the virtual tour, no?

    Yeesh!

    Yes, indeed, although I’d prefer a different soundtrack. And the video ends by implying a water view. Tsk. Tsk.

  19. 19

    RE: boater @ 11 – I appreciate that insight! But that is so far from the point I am trying to make… :-(

    While I already have an ad on SB (between WaLaw and Surefield on the right side – check it out) I am not the same as the rest of the “alternative brokers” here in WA, including those advertising here. Every other “alternative broker” is a member of the NWMLS. I am not. And if there was ever a time to forego the MLS entirely, wouldn’t it be when listings are at an historic low? So simply saying “try an alternative brokerage” isn’t the point I am trying to make. In my case, yes a self-serving point. But isn’t the point valid nonetheless?

    I get it, tone down the rank promotion. If only this was the first time I got this feedback…. :-)

  20. 20

    RE: Kary L. Krismer @ 17 – Agreed, Kary! Consumers should use REALTORS(TM).

  21. 21
    Jay says:

    RE: Craig Blackmon @ 10 – If I were a home buyer, I would never use the same Realtor who also works for the sellers! If the sellers don’t want to pay for expensive commission, they can do “for sale by owners”!

  22. 22
    Erik says:

    RE: Blurtman @ 6
    I still can’t afford sammamish.

    The only way it makes sense to move there is if I were in the computer industry and way over paid for my intelligence level. Still waiting for your area to crash again so I can make some more cash there.

  23. 23

    RE: Jay @ 21 – Well, first of all, every Realtor DOES work for the seller, at least to some extent. Most agents include both “buy” and “list” services in their practice, for obvious reasons (with exceptions of course).

    But remember that every Realtor (with a single exception) and every other broker is paid by the seller. Moreover, until the 1990’s, it was the law that every agent worked for the seller, even the agent helping the buyer. While that law has changed, I’m sure you’re familiar with the expression “follow the money.” Not to mention 100+ years of industry culture.

    And yes, you are right, sellers certainly can go FSBO – true FSBO, no listing on the MLS – to save money on the buyer’s commission. But that’s asking a lot. There is more to selling a house – if you want to get fair value, and avoid some nasty financial/legal pitfalls – than what the average consumer can achieve. I’m pretty sure, other than the true “broker-haters,” everyone agrees that a listing broker adds some professional value, particularly if they aren’t charging the typical (albeit less common all the time) 3% listing fee.

  24. 24
    Deerhawke says:

    Hey folks, interesting detour into a delightfully obscure and arcane topic, but would anyone like to comment on why inventory is falling off a cliff and whether this might change any time soon?

  25. 25
    Blurtman says:

    RE: Erik @ 22 – Sounds like you are doing OK. Keep your powder dry. But I think Sammamish is the Eastside equivalent of the Marin hills, and ceteris is not parabus.

  26. 26
    ConfusedInSeattle says:

    RE: Blurtman @ 14

    No disrespect intended to Realtors but let’s be honest. Price and professional photos do 99% of the selling on homes in this market. There is no secret sauce with the public availability of the MLS through places like Redfin. I have sold several homes FSBO at prices I had many Realtors laugh at me for thinking was possible.

  27. 27
    ConfusedInSeattle says:

    RE: Kary L. Krismer @ 16

    With Google capital providing a nontrivial amount of funding to auction.com who in their right mind would take on that behemoth? For what payout anyhow?

  28. 28
    Cap''n says:

    RE: Craig Blackmon @ 23

    Not that you care, but I totally approve of this post. Making your argument is constructive and interesting.

  29. 29
    ess says:

    By Deerhawke @ 24:

    Hey folks, interesting detour into a delightfully obscure and arcane topic, but would anyone like to comment on why inventory is falling off a cliff and whether this might change any time soon?

    I had read that some folks were not willing to list their properties as they were underwater, but dramatic price increases over the past few years should have alleviated some of those concerns.
    In addition, more people moved into the area as of last year, thus there may be even more potential buyers this year operating in an environment where there is less inventory than last year.
    Thus I wonder how much of an impact, if any, this will have on prices on housing in the area

  30. 30

    RE: Craig Blackmon @ 23 – So do you think that an attorney who is paid by an insurance company doesn’t represent the interests of their individual client?

    I can understand how a consumer, or even an ordinary agent might not understand how an agent’s loyalties don’t go to the party where the funds are actually coming from (assuming you think the funds come from the seller and not the buyer who is actually paying the money), but I have a very hard time seeing how an attorney could fail to understand that.

  31. 31

    By Deerhawke @ 24:

    Hey folks, interesting detour into a delightfully obscure and arcane topic, but would anyone like to comment on why inventory is falling off a cliff and whether this might change any time soon?

    I saw an article yesterday that suggested the problem is baby boomers not wanting to downsize. Interesting thought. I’m at the tail end of the baby boom and I have little interest in downsizing. The only problem with the theory is that earlier generations didn’t upsize in the first place, and raised families in under 1500 square houses and lived in them until they died.

  32. 32

    By ConfusedInSeattle @ 26:

    RE: Blurtman @ 14

    No disrespect intended to Realtors but let’s be honest. Price and professional photos do 99% of the selling on homes in this market. There is no secret sauce with the public availability of the MLS through places like Redfin. I have sold several homes FSBO at prices I had many Realtors laugh at me for thinking was possible.

    I’ve said in the past that FSBO sellers can get higher prices because they are more likely to deal with unrepresented gullible buyers.

    I remember one call in particular where a buyer called me after talking to a FSBO seller. She wanted to act right away because the seller told her he would only hold the price for a day or two. The house was a one bathroom house in Skyway that the seller was asking at least 20% too much, but the buyer thought it was a good deal!

    Occasionally NAR will come out with studies indicating listed houses get higher prices, but those studies are no more accurate than Zillow’s Zestimates.

    Ignoring the unrepresented buyer situation, any house can sell for (or fail to sell for) virtually any amount if you’re willing to wait.

  33. 33
    ConfusedInSeattle says:

    RE: Kary L. Krismer @ 32

    Anecdotally I have almost always sold my FSBO to Realtor represented buyers and paid their agent a commission so I understand where you’re coming from and don’t disagree but that has not been the case with my experience.

  34. 34

    RE: ConfusedInSeattle @ 33 – And that is probably better for you. Less liability for a seller if the buyer has an agent, regardless of whether the seller has an agent.

  35. 35

    RE: Cap”n @ 28 – I’ve been accused of being a rank self-promoter for a long time, and for the first 8 years or so it was absolutely true. I’ve tried to temper the schtick, but I’m still learning. But yes, it is VERY nice to hear I struck a nice balance in any particular post. Thank you!

  36. 36

    RE: Kary L. Krismer @ 30 – That is a gross simplification, Kary, something I would expect every attorney to appreciate.

    Hey, I’ve got a crazy notion: How about we BOTH stop using this incredibly tiresome rhetorical device – it’s been used by you ad nausem over the years – of suggesting that either you understand and agree and therefore are a competent attorney, or you don’t and thus aren’t. Just leave those comments out of the discussion (it will have the outstanding side benefit of shortening your comments significantly). Now, back to the discussion:

    (1) The culture of real estate brokers differs significantly from that of attorneys, and attorneys have NEVER worked for anyone other than the client. Until enactment of buyer agency laws in the 1990’s, all brokers worked for the seller even where the buyer was the “client.”

    (2) Attorneys are FAR MORE closely regulated than brokers. This is significant in two respects. First, compare the RPCs which govern attorneys, to RCW 18.86. Do you see a difference? Second, when an attorney serves a third party payor at the expense of the client, the client can file a bar complaint. The WSBA follows up on every single complaint and takes each very seriously. For a broker? The DOL is not known for its vigorous enforcement, and of course the REALTOR Code of Ethics is completely toothless.

    (3) Finally, your analogy is flawed. An insurance company is a third party disinterested in the matter. The same cannot be said of of the seller. Not only that, but there is an extensive body of law defining an insurer’s duty to the insured to protect against the harm that otherwise could accrue when the insurer pays the legal bills. Again, the same certainly cannot be said of a seller.

    Those are the thoughts of another licensed attorney.

  37. 37

    RE: Craig Blackmon @ 36 – The insurance company is a disinterested third party? Interesting theory, based on nothing.

    But the biggest problems I have with your arguments is they are more real estate agent spin to get consumers to bite than realistic arguments. It’s a sad fact that consumers bite on such spin, as best evidenced by the Hellicksons a few years ago, but that doesn’t mean I want in any way to make or be a part of such arguments. The one good argument you’ve made here is that this is a good market for sellers, but making arguments based on the chicken/egg argument of who pays the commission is just tired agent spin.

  38. 38

    RE: Kary L. Krismer @ 16
    Auctioned Real Estate in the Seattle Area

    Is buoyed up in price by unqualified/illegal[?] bidders, like HUD homes. All auction participants need to pay their own independent “CASH” and believe me, getting a bank to pre-approve a mortgage loan with no equity behind it is a “fairy tale”. How do we know the auction doesn’t have “bank plants” upping the bids? No way to prove that.

    How about do what I did….wait for a blood relative renting from a recently foreclosed landlord [believe me, there’s plenty of them], then buy the foreclosed property from the bank and the old owner fairly and cheap, before it hits the Seattle area inflated price “auction circuses” with clowns and seltzer bottles to spray you in the face .

  39. 39

    RE: Kary L. Krismer @ 37 – You missed the point: Insurance company, 3rd party; Seller, 2nd party. Right? And that’s a distinction with a very big difference. And what about the massive regulatory regimen that binds the former, not the latter?

  40. 40

    RE: Craig Blackmon @ 39 – My comment was about your use of the word “disinterested.” But in any case, you’re claiming that the seller is paying the buyer’s agent (a debatable proposition), so the seller is a third party as to the buyer and their agent.

  41. 41
    Homeshopperrr says:

    From the general comments posted, it seems like most of the readers and commenters are agents or others in the real estate biz. Are there many ordinary homeowners and buyers here?

    My guess on why inventory is so low relative to general seasonality is that prices are climbing steadily so homeowners assume they will keep going up and don’t want to sell. I have a condo in Cap Hill that I’m renting out instead of selling because the rent covers the mortgage and I’m assuming the value will continue to rise as it has in the last year or so. I also know a guy moving to Europe for work and he’s renting his home out instead of selling for the same reason. That’s just two data points, but assuming that rationale extends out to others, fewer homes are getting listed.

    On the buy side, companies in the area are still growing and hiring so the demand is still there. The dip in China’s stock market is probably decreasing buying interest from that side somewhat, but there’s still a lot of money flowing across the Pacific. There’s also the expectation that interest rates will rise, so potential buyers are looking to pick something up before rates rise.

    Thoughts? Any other factors folks can think of?

  42. 42
    Erik says:

    RE: Homeshopperrr @ 41
    Ya, I’m an ordinary owner looking to buy and sell at the right times. You are diving too deep into the details I think. I think it is as simple as low inventory and high demand equate to rising prices. It will take years to create enough supply to equal demand. I’ll think about selling after I see a surplus of inventory. For now, kick back and watch your equity increase. 18 years is the most common peak to peak interval. We probably have about 9 more years of price increases to go.

  43. 43
    HappyRenter says:

    RE: Erik @ 42
    As soon as interest rates go up, and they will some time soon, affordability will go down and we will be in bubble territory.

  44. 44
    MD says:

    Amazon stock has more than DOUBLED in the past year. As long as that stock stays at those price levels or goes higher, Seattle real estate will get more expensive.

    Period, end of story. 0.5% or 1% change in interest rates won’t change a thing if AMZN doubles again next year.

    On the other hand, if recession hits hard and AMZN falls by 50% or more…

  45. 45

    RE: Craig Blackmon @ 19

    :) At this point it’s almost endearing in a nostalgic kinda way.

  46. 46

    RE: Homeshopperrr @ 41

    The main reason that “standing” inventory is low is because of technology that results in homes selling more quickly. If more homes sell than there were more homes to be sold. What is left at the end of the month as “standing” inventory is pretty irrelevant these days.

  47. 47
    StupidLifeDecisions says:

    By MD @ 44:

    Amazon stock has more than DOUBLED in the past year. As long as that stock stays at those price levels or goes higher, Seattle real estate will get more expensive.

    Period, end of story. 0.5% or 1% change in interest rates won’t change a thing if AMZN doubles again next year.

    On the other hand, if recession hits hard and AMZN falls by 50% or more…

    I agree that there is a strong correlation between amazon stock price and the price of real estate here. The fun part is that amazon is probably one of the most over valued stocks in history and will probably be the cause of the next major SEC regulatory act (think enron territory). It’s so great to know that I saved for two years for a 20% downpayment because I didn’t want to pay PMI, then pretty much got priced out of the market as soon as I had saved what had been enough, mostly because of a 20 year old company that can’t turn a profit. They have some major threats looming from other online retailers and it’s going to be fairly easy for some major playors to put a huge dent in their cloud business. This isn’t the 90’s anymore.

    I read something about how the san fran techies are moving up here and think the price of real estate is cheap. I am trying to stay hopeful that the tech sector will crash in the next year or two.

  48. 48
    Deerhawke says:

    When I see that inventory in King County is down 37% year to year, that represents such a huge supply-demand imbalance that I am wondering if something is wrong with the data. But then we need to remember that this is just an exaggeration of a trend that has been evident since 2012. It is like the guy who had a drinking problem finally went on a full-fledged bender.

    I think we are going to see a real spike in prices this spring regardless of what happens to interest rates.

  49. 49
    MD says:

    RE: StupidLifeDecisions @ 47 – Honestly it would not surprise me if AMZN doubled again in the next year. I know it sounds insane, but we’re near the peak of the business cycle, and in these bubble stocks, there’s often a “blow-off” top where retail investors bid the stock price WAY up before it crashes.

    Your assessment of Amazon’s vulnerabilities (and its overvaluation) is spot-on. Eventually the market will return to earth. But it’s really impossible to say if that will happen in the next year, or 5 years from now.

  50. 50

    By Ardell DellaLoggia @ 46:

    RE: Homeshopperrr @ 41

    The main reason that “standing” inventory is low is because of technology that results in homes selling more quickly. If more homes sell than there were more homes to be sold. What is left at the end of the month as “standing” inventory is pretty irrelevant these days.

    Huh? You think the technology of selling homes has change significantly since 2009?

    Rather obviously ending inventory is beginning inventory, plus new listings, less sales. In fact I think there was a comment last month on the NWMLS stats that basically pointed that out (difference in inventory that month from last year was pretty similar to difference in new listings, or some such thing). What’s limiting sales right now are the number of people wanting to put their houses on the market. What was limiting sales in 2009 was the number of people wanting to buy. Two completely different markets, with the main technical difference being we now have even more inaccurate valuation tools like the Zestimate. ;-)

  51. 51

    I think Seattle is probably at greater risk from the various startups coming back to earth than a change in valuation of Amazon.

  52. 52
    Erik says:

    RE: HappyRenter @ 43
    I just care if housing prices go up or down. It doesn’t matter to me if we are in a bubble or not. I don’t care if affordability is down. Pretty sure housing prices in Seattle are going to go up for a while as in 5 years or so.

  53. 53
    Erik says:

    RE: StupidLifeDecisions @ 47
    It’s very unlikely that they will crash in the next year or two. You have made a lot of stupid life decisions. Don’t make another one by believing there will be another real estate crash in the next couple years.

  54. 54
    Blardian says:

    RE: Craig Blackmon @ 8 – Of course you’re right, but sellers can reach the most potential buyers through the MLS and by reaching the most buyers they can get the highest price on their property.

    You’re right that in a market this hot they could get “market value” asking price easily without being on the MLS — but on the MLS they’re getting far above asking, resulting in this upward pressure we see on “market value”. To deny or omit this reality is what makes your comment come off as self-promotion. Like the pastor who loves his one true god, yours may be an honest and healthy delusion.

    The MLS is a monopolistic plague on the efficiency of the real estate market, but it’s the smart place for seller’s to list their house to get the highest offers they can in any given market. Buyers are smart to look beyond the MLS if they can find what they want in the limited inventory.

  55. 55
    js says:

    RE: Homeshopperrr @ 41 – Fully agree with your guess on why inventory is so low.

    Anecdotally speaking, we moved away from Seattle but hung onto our house as a rental instead of selling because the rents are so high and the low inventory looks to be a harbinger of higher appreciation.

  56. 56
    js says:

    RE: Craig Blackmon @ 8 – Why do Realtors insist on a fixed price as a percentage of the sale price? Why do they all charge the same fixed price, regardless of how good they are? And why don’t they get paid unless the sale goes through?

    In my opinion, this is the part of the real estate industry that is antiquated and really needs updating. Charge an hourly rate like any other profession. Charge whether the house sells or not. Charge different rates for different agents depending on their experience level and popularity.

    Until this happens, there is an obvious conflict of interest.

  57. 57
    whatsmyname says:

    King County inventory hit a new lowest on record. Did that not warrant a comment because it will just happen again next month? Is that where we’re at?

  58. 58

    By js @ 56:

    RE: Craig Blackmon @ 8 – Why do Realtors insist on a fixed price as a percentage of the sale price? Why do they all charge the same fixed price, regardless of how good they are? And why don’t they get paid unless the sale goes through?

    JS, why is none of that true?

  59. 59
    Erik says:

    RE: whatsmyname @ 57
    Read comment 2 where I celebrate low inventory. See, there was a comment on the low inventory. You need to read the comments more closely.

  60. 60
    js says:

    By Kary L. Krismer @ 58:

    JS, why is none of that true?

    What part is not true, please enlighten me.

    As far as I understand, most full service agents will charge me ~6% (~4.5% for redfin), regardless of agent, and regardless of how long it takes to sell. If my house doesn’t sell, they don’t get paid.

    Personal experience:
    I purchased a house from a neighbor 20 minutes after he signed with an agent. The agent did a few hours work for his 3% seller’s commission and split the buyer’s commission with the seller. He said he felt terrible about it, but took his $20K and said he had other transactions that didn’t go through that made up for it.

    I shopped houses for 9 months with an agent. My buyer’s agent drove me to countless houses and did a great job, but I never pulled the trigger on one. She never got paid for her time.

  61. 61
    whatsmyname says:

    RE: Erik @ 59
    I did see your comment. To me, it wasn’t the same as factually contextualizing the data. Maybe it’s just me.

  62. 62

    By js @ 56:

    RE: Craig Blackmon @ 8 – Why do Realtors insist on a fixed price as a percentage of the sale price?

    Agents charge different amounts. This webpage has agents, such as WaLaw that don’t charge a percentage. I once charged a varying percentage depending on the amount of time it took to find a buyer.

    Why do they all charge the same fixed price, regardless of how good they are?

    Again, agents charge varying amounts, and again I’d refer you to the agents advertising here. But even within full service brokerages, not all agents charge the same amount. You are correct though that price paid is not necessarily correlated to quality of service offered. That’s true in other areas too, such as medical or legal services, or products that you buy.

    And why don’t they get paid unless the sale goes through? .

    WaLaw I believe still charges you a fee even if you don’t close a transaction within a year. Some agents, including myself, are willing to work on an hourly basis. That is not terribly popular though because people don’t want to pay something if they don’t buy something.

  63. 63

    The NWMLS official but not guaranteed numbers are out. Active SFR listings in King County at 2,302, so Tim’s number was very close. Last year it was 3,658! Median just under $500k.

  64. 64
    js says:

    By Kary L. Krismer @ 62:

    Agents charge different amounts. This webpage has agents, such as WaLaw that don’t charge a percentage. I once charged a varying percentage depending on the amount of time it took to find a buyer.

    Yes, I know WaLaw charges a fixed rate seller’s fee (but still a percentage to the buyer’s agent). Your varying percentage you offered once upon a time is the exception, not the norm, and I’d guess it went between 2.5% & 3% or something fairly inconsequential. Even so, why is it a percentage of the sale price? What about the price of the house changes the amount of work you have to do to buy or sell it? And what about the buyers’ agents? Why does it cost twice as much to sell a $1mil house as it does to sell a $500k house? My guess is it’s because the seller has deeper pockets.

    WaLaw I believe still charges you a fee even if you don’t close a transaction within a year. Some agents, including myself, are willing to work on an hourly basis. That is not terribly popular though because people don’t want to pay something if they don’t buy something.

    People pay consulting fees all the time with “buying” something. When I buy a boat, I pay a surveyor to look at the boat. They get paid whether I buy the boat or not. Otherwise it would not be in their best interest to tell me all the things wrong with the boat. Same thing with a car. If someone with expertise helps you make a major financial decision, they should be reimbursed for their time regardless of whether or not the transaction goes through.

  65. 65
    boater says:

    RE: js @ 64
    I’ve negotiated the commission on every house I’ve bought except the first one. It’s easy and if you spend just a little time you will find someone who will work for just about any price you are willing to pay. You may get what you pay for or you may get more or less.

    Most people who get paid regardless simply give you a work product or an opinion and deal very little with trying to drive a sale through. That’s part of why sales people get commission so they care more about the deal actually happening. Whether that works or is worth it is another discussion.

  66. 66

    RE: js @ 64

    I don’t blame you for being confused, because it can be confusing. Most real estate agents/brokers are independent contractors “housed” within a brokerage firm. Unlike Redfin whose agents are employees, Independent Contractor tax law limits what the broker can and cannot direct their agents to do including what they can and cannot charge. If the Brokerage were to tell their agents what time to start work, stop work and what they can and cannot charge, then they would be employees vs independent contractors who file their own Schedule C business return.

    That means every agent/broker can charge what he or she deems appropriate. Each agent cannot advertise their charges as that would give the appearance that the brokerage and all other agents might charge the same.

    I have charged flat fees, consulting fees, hourly fees, more than 6%, less than 6%. I am free to do whatever my client and I agree is fair and reasonable in a given situation. I have worked for a few major national brokerages and for 25 years have always been free to charge what me and my client agree is fair and reasonable.

    The only difference is you will not see those charges publicly for the reasons I mentioned, and also because for Kary and I and Craig as example to discuss fees is considered collusion to fix fees and against anti-trust laws.

    BTW Redfin does not charge what you say, so check on that. It is incorrect. Many agents are free to charge and do charge about the same as Redfin does now. Often a traditional agent charges less than Redfin in that as example my recent listing of a condo at $165,000 was below the amount Redfin would accept. They would not even show it at that price point.

    So if you are a big enough boy to worry about commissions you are a big enough boy (or girl) to address this with an agent vs needing it stated in big bold print on the internet. There are reasons, which I have outlined, why you won’t get it all handed to you on a silver platter. If your price point is under $300,000 your options will be vastly different than if your price point is over $800,000.

    As to being paid for service rendered, there are some limitations in different states as to “agent” “broker” and “consultant”. Some states require a higher standard to claim to be a “consultant”. But the idea of not being paid if you don’t buy is the same as a lawyer being either fee for service or a “contingent” fee. Contingent fees are higher. Every buyer is free to shift from contingent fee to a lower certain fee. Most don’t choose to do so, but some do.

    All options are available. You just have to have a conversation with a few agents to find your best option. Sellers have always known this and always consult a few agents before listing their house. Buyers are no different and should do the same. Most don’t because they are too focused on getting inside a house and don’t start at square one.

    Basically what I am saying is Kary is correct. :)

  67. 67
    GoHawks says:

    Hard to see how 2016 is any different than 2013-2015. Just no darn inventory.

  68. 68
    js says:

    By Ardell DellaLoggia @ 66:

    RE: js @ 64

    I don’t blame you for being confused, because it can be confusing. Most real estate agents/brokers are independent contractors “housed” within a brokerage firm.

    I’m not confused, just find the current system very antiquated.

    You are saying how the system is flexible and any agent can charge anything they want. However, go into any brokerage in Seattle and tell them you want to sell a house. They will tell you it’s going to cost ~6%. If I say “how ’bout I pay your guy $150/hour for his time and you put it on the MLS for me”, I’d get laughed out of the fancy office and sent over to visit Mr. Pepper.

    Here’s an novel idea:
    Sellers no longer pay the buyers’ agents. Buyers pay the buyers’ agents an hourly rate to help them find houses, write offers and make good decisions. Wishy-washy buyers like me making you drive around for 9 months without buying anything? Not a problem.

    Seller’s agents work at an hourly rate and maybe charge a fixed fee for putting the house on the MLS. If I want the Michael Jordan of used house salesmen, maybe I pay $500/hour. If I want some Redfin scrub who just completed his online Realtor course, maybe I pay $50/hour.

  69. 69
    ARDELL says:

    RE: js @ 68

    It’s not a novel idea. It’s just not common place. But you are clearly not the first to suggest it. I have seen it tried, but it doesn’t work very well.

    You do not understand what I said or you wouldn’t say “Walked into a brokerage and asked…” You can’t ask a brokerage. They are not allowed to negotiate for their agents.

    It takes more work to keep time records. Most buyers don’t want to pay for that time. Those who have tried hourly can never get the buyer to agree on the time spent when the buyer is not present when the agent is working.

    Check Real Estate Cafe in Boston. They were the most recent I saw trying hourly as an option. I think it failed, but not sure. I saw A la Carte tried many times and as far back as 1996. It works for sellers better than buyers.

    Like a lawyer and paralegal, hourly works if there are different rates for the showing agents vs the agent who writes and negotiates the contract. It doesn’t work out as well for the buyer to have a lesser agent plus a better agent, both. That is why it hasn’t been adopted on a large scale. To some extent Redfin’s system works that way and most teams as well.

    Your plea is not new and it has been tried and will continue the be tried. Outside of hourly which just fails too often, most anything else is an option.

  70. 70

    By Ardell DellaLoggia @ 66:

    RE: js @ 64 – Unlike Redfin whose agents are employees, Independent Contractor tax law limits what the broker can and cannot direct their agents to do including what they can and cannot charge.

    I’m not so sure they couldn’t, but I don’t believe I’ve ever heard of any one that did–probably because it would make it difficult to attract agents. But ignoring whether or not they can, I’ve found the limited sample of brokerages I’m familiar with to be surprisingly flexible given that often the deal an agent negotiates affects how much the brokerage will retain. I would guess the thinking is to leave it up to the agent to maximize revenue.

  71. 71

    By js @ 68:

    By Ardell DellaLoggia @ 66:

    RE: js @ 64

    I don’t blame you for being confused, because it can be confusing. Most real estate agents/brokers are independent contractors “housed” within a brokerage firm.

    I’m not confused, just find the current system very antiquated.

    It may be antiquated, but that’s because it works in a variety of different markets. Alternative models have been around a long time, but companies using such models typically fail because they don’t work in all markets.

    You are saying how the system is flexible and any agent can charge anything they want. However, go into any brokerage in Seattle and tell them you want to sell a house. They will tell you it’s going to cost ~6%. If I say “how ’bout I pay your guy $150/hour for his time and you put it on the MLS for me”, I’d get laughed out of the fancy office and sent over to visit Mr. Pepper.

    You have some really strange perceptions that have little basis in reality. Ardell adequately addressed why you’re wrong on that.

    Here’s an novel idea:
    Sellers no longer pay the buyers’ agents. Buyers pay the buyers’ agents an hourly rate to help them find houses, write offers and make good decisions. Wishy-washy buyers like me making you drive around for 9 months without buying anything? Not a problem.

    Not a novel idea at all, and there are a couple of brokerages with models with that, or close to that result. The problem is it really limits your buyers, and that means it limits the seller’s price. Remember, the current system is set up to benefit sellers, and allowing buyers to finance their agent’s costs into their mortgage means they don’t need as much money to buy a seller’s house.

    Seller’s agents work at an hourly rate and maybe charge a fixed fee for putting the house on the MLS. If I want the Michael Jordan of used house salesmen, maybe I pay $500/hour. If I want some Redfin scrub who just completed his online Realtor course, maybe I pay $50/hour.

    There are firms that will charge a relatively small fixed fee for putting the listing on the MLS, and have an ala carte system for additional services. But again you show an odd perception of reality. Don’t assume Redfin agents are “scrubs” or that they just completed their courses. Like virtually every other brokerage with over 5 agents, some of their agents are good and some not so good. And not certain of this, but I don’t think Redfin hires agents without a certain number of sales under their belt.

  72. 72
    wreckingbull says:

    By ARDELL @ 69:

    RE: js @ 68

    It takes more work to keep time records. Most buyers don’t want to pay for that time. Those who have tried hourly can never get the buyer to agree on the time spent when the buyer is not present when the agent is working

    Of all the reasons, you cite time tracking as the reason? Or are you inferring that real estate agents don’t have the ethics to bill accurately and fairly? In my consulting years, I had plenty of problems, but accurate time tracking was not one of them. Your comment is confounding.

    The real problem is that you would not make much money this way.

  73. 73
    js says:

    By Ardell DellaLoggia @ 66:

    So if you are a big enough boy to worry about commissions you are a big enough boy (or girl) to address this with an agent vs needing it stated in big bold print on the internet. There are reasons, which I have outlined, why you won’t get it all handed to you on a silver platter. If your price point is under $300,000 your options will be vastly different than if your price point is over $800,000.

    “Big enough boy to worry about commissions?” Really? Hopefully you don’t speak to your clients in such a condescending manner. Or perhaps I’ve hit a nerve?

    Interesting that I won’t get a discount “all handed to me on a silver platter.” Sounds like I would need to haggle with the agents in an effort to get an unpublished discount that they only give to their extra special sellers who are smart enough to ask and know the secret Realtor handshake. But that would only work if I was an $800K seller, not a $300K seller. Geesh.

    But you’ve missed my point. Regardless of what the exact final commission winds up being and how it is negotiated, why is it that most brokerages will charge a LOT more to sell a $1mil house than a $500k house? Is it more work? Are the richer people are more of a nuisance to deal with? Does it take a rare set of social skills to cleverly banter with the elite?

  74. 74
    js says:

    By Kary L. Krismer @ 71:

    It may be antiquated, but that’s because it works in a variety of different markets. Alternative models have been around a long time, but companies using such models typically fail because they don’t work in all markets.

    Not a novel idea at all, and there are a couple of brokerages with models with that, or close to that result. The problem is it really limits your buyers, and that means it limits the seller’s price.

    What markets wouldn’t this model work in and why? And why is the buyer pool limited?

    It probably wouldn’t work in the existing market because it goes against the monopolistic behemoth that is the existing real estate industry. With the current system, who would hire a buyer’s agent on their own dime when the competition is providing a very highly paid one to them at the expense of the seller? And what seller would choose not to offer at least a 2.5% buyer’s agent commission with the knowledge that most agents depend on that money alone for their survival and may not show the listing to their clients with the same fervor (if at all)?

    The system is cleverly designed to preserve the status quo. However, it’s ripe for an overhaul and I suspect its days are numbered. Hats off the the people like Craig who realize the woeful inadequacies of the current system and have the wherewithal and zeal to instigate change.

  75. 75

    By js @ 73:

    Regardless of what the exact final commission winds up being and how it is negotiated, why is it that most brokerages will charge a LOT more to sell a $1mil house than a $500k house? Is it more work? Are the richer people are more of a nuisance to deal with?

    Good questions, and the answer is yes and yes. There can be a lot of extra services, but beyond that it really is a different market with different skill sets. And some wealthy people can be difficult to work with. So again, yes and yes.

    http://www.pbs.org/newshour/bb/business-jan-june13-makingsense_06-21/

    But looking at it from the other side, people who own more expensive homes are also more likely to rely more on professionals for all sorts of things. And they’re also likely to be successful and understand the importance of hiring the right person to do the right job from other aspects of their life, AND they’re more likely to want to do as little as possible themselves to sell their house because they’re busy doing other productive things (and probably aren’t changing their own oil and spark plugs either).

    So yes, it can be different in many ways.

    But one more point. I think you’re assuming that if agent Bill charges a total of X% to list a house and that agent Susan charges 1% less that the seller will net 1% more hiring Susan. It doesn’t work that way. Bill might have a listing strategy or other advice that generates a 10% higher sales price.

  76. 76

    By js @ 74:

    By Kary L. Krismer @ 71:

    It may be antiquated, but that’s because it works in a variety of different markets. Alternative models have been around a long time, but companies using such models typically fail because they don’t work in all markets.

    Not a novel idea at all, and there are a couple of brokerages with models with that, or close to that result. The problem is it really limits your buyers, and that means it limits the seller’s price.

    What markets wouldn’t this model work in and why? And why is the buyer pool limited?

    It probably wouldn’t work in the existing market because it goes against the monopolistic behemoth that is the existing real estate industry. With the current system, who would hire a buyer’s agent on their own dime when the competition is providing a very highly paid one to them at the expense of the seller? And what seller would choose not to offer at least a 2.5% buyer’s agent commission with the knowledge that most agents depend on that money alone for their survival and may not show the listing to their clients with the same fervor (if at all)?

    The system is cleverly designed to preserve the status quo. However, it’s ripe for an overhaul and I suspect its days are numbered. Hats off the the people like Craig who realize the woeful inadequacies of the current system and have the wherewithal and zeal to instigate change.

    Okay, since you mentioned Craig, I’ll answer your first question. Craig’s is a classic example of a model that only works in one market (assuming it works at all)–a strong seller’s market. And by work I’m looking at it from the brokerage/broker point of view. Having a system that so focuses on sellers is a system that will fail when the market becomes more balanced or becomes a buyers’ market.

    But even looking at a different model–Redfin, where they pay hourly for their agents to work, that requires some nimbleness. From an outsider’s view, in 2009 Redfin was shifting more to representing buyers, because listings were harder to sell and paying an agent to work on a listing that didn’t sell could cost a lot of money. Currently it’s the other way around, so presumably they’re trying to focus on sellers more. That takes a lot of conscious work, where in a more traditional brokerage the various brokers associated with the firm sort of do that automatically, and to the extent some of them don’t the brokerage doesn’t really care, because they don’t pay them if they don’t produce. In fact, brokerages actually encourage their brokers to do things that probably won’t pay off for over half of the brokers who try the activity. They don’t care, because they make money off the ones that do have success with the strategy, and typically don’t pay squat for the efforts that don’t pay off.

    As to your second question, limited buyer pool, models which don’t offer a commission to a buyer’s agent will limit the number of buyers. That’s because the banks effectively finance the commission. But think of this slightly different situation. Back when the market was much weaker sellers of condos not FHA approved were at a disadvantage because the private mortgage insurers were backing away from condos. That meant they could only sell to people who had much more than 3% down–the FHA down payment requirement at the time. That reduced the price they could obtain. Alternatively, sometimes you’ll see a buyer going with a 20% down loan as for some seller paid financing concessions, because they need that help with costs to get to the 20% down amount. Agreeing to that help can get a seller a higher sales price.

    As to your second paragraph, you’re assuming that the seller is the one paying the buyer’s agent. The money that gets paid to the buyer’s agent is coming from the buyer. It gets paid by the buyer, to the escrow, who then pays the agent. The seller is just setting the incentive, but the buyer and the buyer’s agent are free to change that (e.g. the Redfin model). And again doing that allows the buyer to finance the payment of the bulk of their agent’s commission over 30 years, and reduces the down payment they would otherwise need. That increases the number of potential buyers, and whenever you increase the number of potential buyers you increase the potential price.

  77. 77

    RE: js @ 74 – One more thing. I’d suggest looking at the entire system whenever you analyze the real estate market, because things are not always as they initially appear. The best example of that were the first time home buyer tax credits. Those didn’t benefit buyers as much as they benefited sellers and agents. But they were sold by the politicians as being a great benefit to buyers, when what they mainly did was help support the price of real estate–something not good for buyers.

  78. 78
    boater says:

    By Kary L. Krismer @ 75:

    But one more point. I think you’re assuming that if agent Bill charges a total of X% to list a house and that agent Susan charges 1% less that the seller will net 1% more hiring Susan. It doesn’t work that way. Bill might have a listing strategy or other advice that generates a 10% higher sales price.

    How realistic is that statement? Shouldn’t that sort if advice/strategy quickly propagate throught the market?

  79. 79

    By boater @ 78:

    By Kary L. Krismer @ 75:

    But one more point. I think you’re assuming that if agent Bill charges a total of X% to list a house and that agent Susan charges 1% less that the seller will net 1% more hiring Susan. It doesn’t work that way. Bill might have a listing strategy or other advice that generates a 10% higher sales price.

    How realistic is that statement? Shouldn’t that sort if advice/strategy quickly propagate throught the market?

    No. First, agents are competitors with one another–even if in the same firm. They are not necessarily going to share advice. Second it can be as simple as having the wrong list price. I mentioned recently the listing that was priced low to get multiple offers, but was priced too low. The seller of that house probably got something close to 10% less than what they would have gotten with most other agents. Third, there are too many variables. What is right with one property is not necessarily the right strategy with another, so the agent has to recognize that. As an extreme example of that, one of my listing pictures made it into the detrimental listing photos thread here. It showed an extreme mess of a tenant. I showed that for a reason–not every agent would have. I haven’t had a need to do so on any other listing.

  80. 80
    js says:

    By Kary L. Krismer @ 75:

    By js @ 73:

    Regardless of what the exact final commission winds up being and how it is negotiated, why is it that most brokerages will charge a LOT more to sell a $1mil house than a $500k house? Is it more work? Are the richer people are more of a nuisance to deal with?

    Good questions, and the answer is yes and yes. There can be a lot of extra services, but beyond that it really is a different market with different skill sets. And some wealthy people can be difficult to work with. So again, yes and yes.

    I can understand how a more expensive listing could mean a little more work. More pictures, more square footage to show to a potential buyer, and all those annoying rich people taking up your time by asking for things that the proles wouldn’t dream of asking for. But does that really warrant the bigger price tag? What about the difference between the commission on a $1mil house and a $2mil house? Are the $2mil buyers and sellers that much more work than the $1mil buyers and sellers?

  81. 81

    RE: js @ 80 – I think you’re still assuming commissions are much more cut and dried (or static) than what they are. It might be better to focus on when an agent is more or less likely to agree to a cut in commission. Right now, for example I doubt many agents are very willing to offer commission rebates because it is so hard to get a buyer into a property and takes a lot of skill to do so.

    Also, don’t forget that agents on both sides sometimes cut their commission to hold a deal together when the clients can’t come to terms over something relatively minor in the scheme of things. I’ll again use an example from my attorney days, but once an attorney was complaining about a settlement that didn’t come together because the parties couldn’t agree on the number of outlets in one room! I suspect one of those attorneys could have gotten to a settlement by agreeing to cut their fee, or not bill costs that month, etc.

  82. 82
    boater says:

    RE: Kary L. Krismer @ 81
    I’d be a little shocked to find out that it isn’t the norm for the million plus home crowd to negotiate for a discount. When you’re buying a home in that range it’s probably not your first time and some of what your paying i commission is to help navigate through the process. If you’ve done it a few times that value drops.

  83. 83
    js says:

    By boater @ 82:

    I’d be a little shocked to find out that it isn’t the norm for the million plus home crowd to negotiate for a discount. When you’re buying a home in that range it’s probably not your first time and some of what your paying i commission is to help navigate through the process. If you’ve done it a few times that value drops.

    No doubt the $1mil+ crowd isn’t paying 6% (my friend paid 4.5% at Redfin). No argument there. But it’s still a fee not at all dependent on the amount of work it takes to sell (or buy) a house.

    It doesn’t make sense to me. Some houses are harder to sell than others. Some agents are better than others. With the current system, it’s sort of an “everything will average out” attitude with not much transparency. I’d really like to know how many hours agents actually spend selling (or buying) houses. It would be a very interesting metric.

    Buyers’ agents might spend 9 months showing houses to a picky client and not get paid, but for an easy client it may only take 2 weeks to find a house. So the easy client in essence pays for the picky one’s indecisiveness.

    Same for selling. One of the houses I bought the deal was made less than an hour after the seller signed with the agent. No marketing material created, no lockbox, no showing the house, no buyer’s agents, and only 1 straightforward offer to review. Yet the seller paid the same 3% (+ half the buyer’s agent commission), and the Realtor said he felt bad but that it “all averaged out.” His hourly rate for that deal was definitely in the thousands.

    My guess is that the hourly rate for selling (and buying) a house is most often ridiculously high and that’s why the agents don’t like to track their hours or divulge this information. Ardell explained the complicated legal reasons why they can’t divulge this information, but I think Wrecking Bull hit the nail on the head:

    The real problem is that you would not make much money this way.

  84. 84
    HappyRenter says:

    RE: Erik @ 52
    The problem with being in a bubble is that you don’t know when exactly it will pop.

  85. 85

    RE: js @ 83

    I don’t think not making much money that way is the issue at all given we haven’t pinned down the hourly rate. Generally hourly fails because the client and the agent don’t agree on where that time is spent. For instance Kary has mentioned several times that he previews homes for his clients. The client may not want to pay for that previewing. The hourly rate fails when the client starts to dictate exactly what the agent can and cannot spend that time doing. So it’s not an issue of price so much as not wanting to be someone’s puppet as they pull the strings directing every minute of what you should and should not be doing.

    Here is the company I mentioned earlier and a full outline of their hourly fees, et al They are the only ones I have heard about in passing, but there are likely others.

    http://realestatecafe.com/menu-of-fees-and-rebates/hourly-fee-options/

  86. 86
    Irrational Exhuberance says:

    RE: StupidLifeDecisions @ 47

    Disagree — I know plenty of San Fran Google X Lab techies and such that visit here and consider it not cheap but a little less expensive. Wait till six months of rain hit in a summer.

  87. 87
    Irrational Exhuberance says:

    If you sit in the parking lot of Windermere in Kirkland in the morning on the way to the 520 or on the way home and hear the talk about bilking buyers out of their money, it reminds me of recordings and transcripts of Enron traders. The whole real estate market is rigged for upside only — it’s always in bubble territory. There is NO review system on real estate websites to let buyers work with other buyers to put downward pressure back on the market — it’s all hype! Windermere sells homes like Enron sells energy. They get paid more by pushing up or turning faster and since turns are down, they drive prices up. Supply and demand is a very simplistic view of commoners — demand is manipulated, supply is manipulated.

    Seattle is going to pop just like Vancouver will and taxpayers will be left holding the bag — all those people who bought at insane prices paying property taxes on millions.

    And then they’ll try to pass tax laws like California where owners only pay taxes on the purchase price which drive prices up even higher.

    And the traffic… Piss poor planning and real estate is a big issue right now. Yes we own a home and own in California, it’s lovely but I cringe when my workforce tells me about their rent increases and how their down payment savings mean nothing anymore. It’s a sad state of affairs and disguists me — a news reporter should listen to real estate agents collude — they don’t even hide it, sound familiar? Yes. Just like Wall Street brokers pre-2009.

  88. 88

    By js @ 83:

    With the current system, it’s sort of an “everything will average out” attitude with not much transparency. I’d really like to know how many hours agents actually spend selling (or buying) houses. It would be a very interesting metric.

    It would be interesting, but most agents don’t keep track of hours.

    But is this really all that different than other areas where you’re dealing with a lot of competitors? Go get a bid on a roof and see how much variation there is in the bids.

    Or even worse, get a medical procedure done. Back when there was the healthcare thread I posted about how I got a shot for something at the Mason Clinic downtown. Because that clinic is attached to the hospital they charged me something like $95 for the examination room, even though they wouldn’t have charged me anything for the room if I had just seen the doctor and not been given a shot. They also wouldn’t have charged me anything for the room if I’d seen a doctor for the exact same thing at one of their other clinics. Or more recently I asked the doctor what the charges would be for an elective procedure, and I was given two numbers to call.

    And don’t even get me started on attorney billing.

  89. 89

    By Ardell DellaLoggia @ 85:

    For instance Kary has mentioned several times that he previews homes for his clients. The client may not want to pay for that previewing.

    Previewing is to save the client time, and you’re correct they probably wouldn’t be as concerned about wasting their time if they had to pay me hourly to look at places.

    One other disadvantage to hourly is a client might be inclined to look at places too quickly if they had their mind on the clock ticking while they looked.

  90. 90
    Green-Horn Real Estate Investor says:

    It looks like there are a lot of pros hanging around here.

    I might be interested in buying another house… or perhaps even a small apartment complex.

    The real estate market around here looks like it’s on fire.
    Could it make sense to pull some chips out of wall street and put it on land, cement and drywall?

    I have some capital, but not any experience in real estate. I don’t want to make the management and administration my life’s work. If it’s possible to get in without managing day to day and being available 24/7 for the tenants I might be interested to do it.

    I thought about going to the forum, but there are no recent entries over there.
    It’s too bad it’s not more active.

    In particular there is a property in my neighborhood that Zillow shows as going up for auction next friday. Any experience or advice on that?

    Look forward to hearing your advice.

  91. 91
    whatsmyname says:

    RE: Irrational Exhuberance @ 87
    You sit in the Windermere parking lot in the morning?
    How do you hear the brokers?
    Do they hang out, high fiving in the blustery rain?
    Or does your hat have a special device?
    How do they manipulate supply and demand?
    Do they sneak in our bedrooms at night and whisper “buy” or “sell to our unconscious minds?
    How do buyers put downward pressure on the market, except by not buying?
    Are you proposing a housing Yelp? (I didn’t buy that house, but the service was terrible)
    What could be less credible than a dissatisfied non-customer?
    Is there another business where sellers finance a system (however lame) to anti-advertise?
    Why don’t you start the review site yourself, and quit whining about what you’re not handed for free?
    Sheesh!

  92. 92
    Erik says:

    RE: HappyRenter @ 84
    That’s where you are wrong. Bubbles are predictable.

    Bubbles always go through an expansion period, which we are in right now. You want to consider selling when supply catches up demand. When King county supply is 6-8 thousand, think about selling. Until then, relax and be happy your home is appreciating.

  93. 93
    HappyRenter says:

    RE: Erik @ 92
    I hope for you that this prediction is correct. A lot of people did not seem to have the right prediction tools when they missed to sell their home at the 2007 peak.

    Here is an interesting article claiming that the top end of real estate has peaked at the national level:

    http://www.armstrongeconomics.com/archives/40052

  94. 94
    Mike says:

    RE: HappyRenter @ 93

    This has been going on since 2011: Real estate agents are reporting that mortgages are now taking far longer to process and approve and have caused transactions to come nearly to a halt. To get a mortgage, one must prove they have the capacity to pay it and must document everything that has gone through their bank accounts.

    But if you look at the Seattle market in that time, it’s up 40% or so. Does that mean longer mortgage processing times are driving up prices?

  95. 95
    Anonymous Coward says:

    RE: Green-Horn Real Estate Investor @ 90 – Weren’t REITs created for people with your exact same lines of thought?

  96. 96
    boater says:

    If you want low management you need either a bew building or a completely remodeled one (including plumbing wiring sewer etc). You’ll still get calls when things break just not as often. I’d be nice to say screening your tenants will weed out nuisance one but it doesn’t work as well as youd think. One might never call you because they let problems go one without treatment. Another might look competent and rational and call you to change light bulbs.

    A management company helps but you pay 1 months rent at lease signing to the and 6-10% of each months rent as well. They handle things but you still get calls when you dont want them and dont get calls whe you do want them.

    Look at REITs or some if the private property investment groups. You might like them more. Maybe not. I’ve had friends do well with them and it’s minimal time investment.

  97. 97
    GoHawks says:

    RE: Irrational Exhuberance @ 87 – Vancouver housing prices are at all time highs.

  98. 98

    By Mike @ 94:

    RE: HappyRenter @ 93

    This has been going on since 2011: Real estate agents are reporting that mortgages are now taking far longer to process and approve and have caused transactions to come nearly to a halt. To get a mortgage, one must prove they have the capacity to pay it and must document everything that has gone through their bank accounts.

    Huh? There are new regulations that went into effect for transactions starting after October 3 or thereabouts, and they might add a bit of time as the lenders figure them out. Initial articles were suggesting adding 15 days, but I think that’s probably excessive, and there are probably lenders who don’t need any additional time.

    And tracing funds has been important for a long time, if not forever. Some programs have restrictions on the funds that can be gifted, and more importantly, they lender wants to know they are getting every party who is investing money to sign on the deed of trust. That’s why you typically cannot just take a money order to escrow for your earnest money.

    But more to the point, look at the sales data above. Inventory is down because of sales. Sales are not coming to a “halt.”

  99. 99

    By boater @ 96:

    If you want low management you need either a bew building or a completely remodeled one (including plumbing wiring sewer etc).

    Not really. While a new building has the advantage of every component being at the start of its useful life, the quality of the components might not be that high. Using the most likely example of that, a house built in 1980 with a new 50 year roof will have a better roof than well over half the houses built in 2015. I’ve never understood why so many builders use such low quality roofs, because the cost difference isn’t that great. And you’re also much less likely to see copper plumbing in a 2015 house, and even a 1920 house might have a sewer line that was replaced with modern materials in 2010.

  100. 100
    Jasper says:

    RE: Kary L. Krismer @ 99 – There are lots of features of “typical” newer homes that are lower quality than “typical” older homes. But the materials you mention are actually examples of the ways that “typical” newer homes are better than corresponding older homes.

    50-year roofs were not “typical” in new 1980 homes. Architectural shingles (with 30- to 50- year lifespans) are becoming “typical”, whereas 20-year “three-tab” shingles were “typical” in 1980.

    Depending on one’s water chemistry, and on one’s choice of PEx, today’s “typical” potable water lines can be better than copper plumbing. I choose PEx-B; it costs the same as the now-typical “PEx-A”. As a bonus, PEx pipes don’t have solder joints, so they cannot have lead solder joints. Either copper or PEx is far superior to the 1970s polybutylene pipes or the older galvanized steel pipes.

    A 1920s-vintage sewer line is much more vulnerable to tree roots than a sewer line installed today.

  101. 101
    redmondjp says:

    RE: Kary L. Krismer @ 99 – You nailed it. I have watched every home go up in my neighborhood since 1998 and it simply amazes me that the builders use the same bottom-end materials on the $1M+ homes as they would on the now-mythical ‘starter’ homes. One should never find a 50cfm tornado-loud $25 bathroom fan in a 4K square foot home!

    And they do other really dumb things, like install horizontal furnaces in the attic spaces of two-story homes. Not only do these furnaces have two sources of moisture (burner secondary condenser, and A/C evaporator) that can leak down onto the ceiling below, but they are darn near impossible to service, and good luck when you need to change the furnace in 7-10 years (since they use the least-expensive furnace that they can get, and that’s about how long they last these days) since you’ll have to get it in and out through the tiny crawl space opening in the ceiling. The HVAC service technicians will not be happy at all when they are working on that furnace for you. Nobody likes to crawl around in 16″ of blown-in insulation to change a furnace filter every few months.

    My other favorite down the street was the $750K home with two garage doors so narrow that a full-size pickup can’t fit through even with its mirrors folded in. They could have just used one wide door. Also in the same house: two low-grade 80-gallon water heaters side by side in the garage and no circulating pump. The master suite was at the opposite end of the house, upstairs. So expect 5 minutes to get hot water in that bathroom. They could have at least used a circulating pump, or installed one of the two water heaters in a small utility closet upstairs to serve the bathrooms. And on-demand water heaters? HAHAHAHAHA! A builder is going to pay for those? Only if code-mandated.

    But buyers seem to oooh and aaaah about the granite and stainless and don’t seem to give a rip that the mechanical systems in their house are absolute crap, or that their entire house will need repainting in 3 years (two of my friends who bought brand-new homes in the past decade have already had to replace rotted trim and siding and then do complete repaints, and one has repainted their trim 3 times in ten years and I think had to replace all of the trim once as well).

    Oh, and I won’t even mention the plastic pipe that snapped off underneath the kitchen sink on my friend’s new house in Bellevue (it may have gotten caught by the hose on the pull-out faucet sprayer). Despite the fact that they were home at the time and standing right in the kitchen when it happened, by the time they had the water shut off, it had ruined their kitchen and dining room floors and the ceiling of the bonus room in the basement. It took several months for the repairs to get done.

    There has been a lot of good discussion in this thread about how people in the business get paid, but the much bigger issue to me is the lack of education of the buyers on what is probably the most expensive purchase of their life. Until something dramatically changes here, I really don’t see enough pressure for any of the other issues discussed above to change.

    Also, make sure to catch the hilarious reading in today’s Seattle Times about the poor souls on Mercer Island that don’t like the new McMansions being put up next door to them. Too bad these people didn’t buy outside of the Urban Growth Boundary.

    Hooray, another 100-comment post!

  102. 102
    Irrational Exhuberance says:

    RE: whatsmyname @ 91

    Do I sit in the parking lot? No. Did I hear two realator’s that worked there, at Menchies late one night that worked their talk about how they can work together to bid up a house? Yes. Was I pissed off? Yes. Did they refer to buyers as stupid. Yes. Was it a parking lot conversation yes — they said so, the typical style — so I was talking to Bill yesterday after work outside and I have a buyer for his home. Is it a conspiracy. No. Is it allowed to happen — yes, I used to live in DC and see blind eyes turned away from things many time. What I am saying is there is an imbalance in the market, that there are numerous crimes most likely happening as it is the best way to make money right now and that I am really feeling it for the little guy. There is criminal activity in the real estate market and just read WSJ’s compliance section — there really is. I am sure the Feds are already investigating and once interest rates rise and other investments offer returns, it’ll come to the light of day. It always does.

  103. 103

    RE: Jasper @ 100

    Jasper: “50-year roofs were not “typical” in new 1980 homes. Architectural shingles (with 30- to 50- year lifespans) are becoming “typical”, whereas 20-year “three-tab” shingles were “typical” in 1980.”

    My mind went there too when I first read Kary’s comment. But a 1980 home sold today would not be on the original roof, given as you yourself say the standard back then was a 20 year roof. Generally most roofs last 20 to 25 years including cedar shake, which surprises me. Cedar Shake should last longer and I have come to hate them given the rat in the attic issues I have seen recently, and more pronounced with cedar shake roofs near a water source like a lake or retention pond or creek. I call them “rat party” houses. :)

    I think Kary is saying that if the 1980 house replaced the first roof with a 50 year roof in 2000-2002 or so, then it now has more life left on it than a brand new house. Most new houses I see have a 30 year shingle and a 50 year roof put on in 2000 (after the 20 year roof failed in 2000 on the 1980 home) not a huge difference. But change that to 80’s build home as in 1989 with a replacement in 20 years in 2009 with a 50 year roof vs a new 25 to 30 year roof and there is a more considerable difference.

    The 50 year roof is supposed to emulate the thickness of a wood shingle and are usually a lot more attractive than most any other roof. The aesthetic is most often quite stellar and not simply a matter of remaining life expectancy.

  104. 104

    RE: Irrational Exhuberance @ 102

    “…so I was talking to Bill yesterday after work outside and I have a buyer for his home.”

    How is that a crime?

  105. 105
    boater says:

    By Kary L. Krismer @ 99:

    By boater @ 96:

    If you want low management you need either a bew building or a completely remodeled one (including plumbing wiring sewer etc).

    Not really. While a new building has the advantage of every component being at the start of its useful life, the quality of the components might not be that high. Using the most likely example of that, a house built in 1980 with a new 50 year roof will have a better roof than well over half the houses built in 2015. I’ve never understood why so many builders use such low quality roofs, because the cost difference isn’t that great. And you’re also much less likely to see copper plumbing in a 2015 house, and even a 1920 house might have a sewer line that was replaced with modern materials in 2010.

    The problem with every home is similar to boats. Every year away from new is a year an owner could have monkey about with a system they know less than they should. Your 1985 house may have copper pipe but what wall thickness and did part of it freeze and the home owner repair it in a half assed way. For me the jury is still out on how PEX fittings will hold up over time.

    The roof should be a little easier to inspect than guessing what is behind each wet wall.

    The recirculating pump isn’t an issue if you’re renting it out. Why would the owner care if the renter has to run the water for 5 minutes?

  106. 106
    Jay says:

    RE: Irrational Exhuberance @ 102 – Wow, you should report those Realtors! I don’t trust bidding wars, because they only benefit sellers and their agents!

    No wonder I have seen a pattern here, units that are sold by the Windermere agents tend to have a huge bidding war, ranging between $50,000 to $100,000, and the selling agents tend to be from Windermere as well. That is so crazy! That’s why I don’t trust agents from Windermere.

  107. 107
    Jay says:

    RE: js @ 56 – Try Redfin. My first agent from Redfin wasn’t that good. But the second agent was excellent, she was way better than the regular Realtors, and she negotiated for me. I think most of the agents from Redfin are decent. If you don’t click with the first agent or touring guide, try different ones. Some of the touring agents can be quite obnoxious and stupid, but you can request for the ones that you want to work with. I think Redfin is way better than Windermere. I tried one agent from Windermere who works with mortgage brokers frequently, I told her my price range, then she tried to bully me into purchasing a house that is $200,000 more than my maximum range. Obviously, after that time, I never contacted her or anyone from Windermere again.

  108. 108

    RE: redmondjp @ 101 – What I don’t get about the roofs is that should be a street appeal item. In my neighborhood you have to install a high quality roof because of the appearance!

    Agree on the comment about furnaces in the attic, regardless of their orientation.

  109. 109

    By Ardell DellaLoggia @ 103:

    I think Kary is saying that if the 1980 house replaced the first roof with a 50 year roof in 2000-2002 or so, then it now has more life left on it than a brand new house. Most new houses I see have a 30 year shingle and a 50 year roof put on in 2000 (after the 20 year roof failed in 2000 on the 1980 home) not a huge difference.

    Maybe I wasn’t clear, but yes I was dealing with a replacement roof. But I’d be surprised even half of the new houses have 30 year roofs. A lot seem to have paper thin roofing material.

    The 50 year roof is supposed to emulate the thickness of a wood shingle and are usually a lot more attractive than most any other roof. The aesthetic is most often quite stellar and not simply a matter of remaining life expectancy.

    Which again is why I’m surprised more builders don’t do it. You see a crappy roof on a house when you step from the car and what are you going to think about the rest of the house?

  110. 110

    By Jay @ 107:

    RE: js @ 56 – Try Redfin. My first agent from Redfin wasn’t that good. But the second agent was excellent, she was way better than the regular Realtors, and she negotiated for me. .

    I really don’t think you’re going to effectively find a good agent if your main criteria is what brand do they associate themselves with. I didn’t change as an agent when I switched form one company to another, and I haven’t found any one brokerage consistently better or worse than any other brokerage. I deal with a lot more agents than you, and as an example I can tell you that when I get an offer in on a listing the brokerage the buyer’s agent doesn’t at all concern me even though I am extremely concerned about the quality of the buyer’s agent.

    And just to repeat what I said above, Redfin does have some good agents–I’m not trying to take a shot at Redfin.

  111. 111
    redmondjp says:

    RE: Kary L. Krismer @ 109 – They call it a 30-year roof (I put one on a garage a year ago), but I’d be really surprised if one makes it to 20. I spent an extra $700 to go from a 30-year to a 40-year shingle when I had my roof done 11 years ago, and honestly I’m not sure if there is much of a difference. It grows moss so well now that I have to keep on top of the treatments and cleaning. I can definitely tell that the quality of my circa-2004 40-year shingles is lower than what was originally installed on my home in 1977.

    I looked at some homes in Carnation earlier this year with the 50-year architectural asphalt shingles and Ardell is correct – the visual impact is stunning (in a neighborhood with a HOA where cedar shakes were originally used and mandated until sometime later).

  112. 112
    Jay says:

    RE: Kary L. Krismer @ 110 – I am writing my experience as a buyer, which is completely different from your perspective as a Realtor! As a buyer, I can see clearly which “brand of agents” are greedy and obnoxious from touring open houses and personal experience dealing with them as a buyer! Windermere consistently disappoints me, and I don’t recommend any of their agents to anyone! I think my experience as a buyer will be valuable to future buyers. I am stating my own buying experience here. Redfin’s rebate definitely helped me a lot for closing costs!

  113. 113
    Jay says:

    RE: redmondjp @ 101 – Builders are certainly taking advantage of the current market. Brand new houses were sold around $850,000 to $950,000 in 2013, now similar type of brand new units are listed at $1,500,000 right across the street.

  114. 114
    Deerhawke says:

    You are right that builders are taking advantage of the current market, but you might remember that those of us who were in the business prior to the recession went for at least 3 years without an income. In my case, my tax return showed substantial losses for 2008, 2009, 2010 and 2011. If you think being a spec builder is your sure ticket to riches, jump on in– the water is fine.

    And for those of you who think builders are the ones making the big bucks, check out the prices being paid for land. Lot prices dropped like a rock during the downturn, but they are double 2007 levels now. Builders rode the wave up last year and did really well, but now most of us can’t find anything to buy that makes sense to us — or our bankers. The people who are buying at today’s inflated prices are 30-year-old wonders playing with Daddy’s money. When the music stops this next time, not only are they going to be without a chair, neither will their father.

  115. 115
    Erik says:

    RE: HappyRenter @ 93
    Do you really think prices will dump at record low inventory? We got atleast another 5 years of mania. I personally think more like 9 years. Also, rental prices will get more inline with mortgage prices before we bust again.

  116. 116
    boater says:

    RE: Deerhawke @ 114
    Do you even dare guess when the next drop is going to happen?

  117. 117

    By Jay @ 112:

    RE: Kary L. Krismer @ 110 – I am writing my experience as a buyer, which is completely different from your perspective as a Realtor! As a buyer, I can see clearly which “brand of agents” are greedy and obnoxious from touring open houses and personal experience dealing with them as a buyer!

    Nope, you don’t have sufficient experience dealing with agents, unless maybe you somehow manage to buy or sell over 10 properties a year.

  118. 118

    By Deerhawke @ 114:

    You are right that builders are taking advantage of the current market, but you might remember that those of us who were in the business prior to the recession went for at least 3 years without an income. In my case, my tax return showed substantial losses for 2008, 2009, 2010 and 2011. If you think being a spec builder is your sure ticket to riches, jump on in– the water is fine.

    And for those of you who think builders are the ones making the big bucks, check out the prices being paid for land. .

    I can’t even believe that builders taking advantage of the market is even a point of discussion. Of course they are–they would be nuts not to. But if anyone who disagrees has a cherry 1964 1/2 Mustang they bought new, I’d be happy to buy it for what you paid!

    As to the land, the builders really making a killing are those who managed to buy land when it was cheap. It wouldn’t surprise me that some land was picked up for less than the cost of the platting and other improvements to the land.

  119. 119
    js says:

    By Kary L. Krismer @ 88:

    It would be interesting, but most agents don’t keep track of hours.

    Seriously? I’m amazed you guys get away with this.

    But is this really all that different than other areas where you’re dealing with a lot of competitors? Go get a bid on a roof and see how much variation there is in the bids.

    Or even worse, get a medical procedure done.

    There may be a lot of variance is estimates, but roofing companies at least base their bids on the size and complexity of the project. Medical procedures are also based on the complexity of the procedure.

    If roofers were Realtors, they’d base their bids on the value of the house instead of the square footage and complexity of the roof they were installing. So a new 950 sq ft roof in Madison Park or Magnolia would be priced the same as a new 3000 sq ft roof in Renton or Skyway.

    If doctors were Realtors, they’d charge a sliding scale based on the value of the home you owned.

    In any case, pointing out how other industries have bad or outdated pricing models isn’t a very good argument.

    Gotta run, time to get back to work. Turning my time tracker back on so my clients don’t get billed for the time I spent playing on the internet.

  120. 120
    boater says:

    RE: js @ 119
    Um you really should try this experiment. I have multiple homes in both nice and not so nice areas. The bids you get often seem to fluctuate based on perceived ability to pay. I’m glad i have homes in cheaper areas to compare against.

  121. 121

    RE: js @ 119 – There’s no reason for agents to keep track of hours. Actually there is one, but even so it’s seldom done.

    For Worker’s Comp coverage agents are presumed to be full time agents. The only way a firm can report some agents as part time is if all the agents at the firm keep track of their time, including full time agents. Because that’s too much hassle, almost no firms report part time agents.

  122. 122
    js says:

    By Kary L. Krismer @ 121:

    There’s no reason for agents to keep track of hours. Actually there is one, but even so it’s seldom done.

    How about transparency?

    A good part of your industry is being automated by web based tools. What value are you adding for your commission? What do you spend your time on?

  123. 123

    By js @ 122:

    A good part of your industry is being automated by web based tools. What value are you adding for your commission? What do you spend your time on?

    The value I’m adding is I actually understand what’s important and how things work. The RE specific automation changes were relatively insignificant once the industry got past the point of actually publishing books of listings and email existed. Electronic signatures save some time, but also have some downsides. Being able to submit documents to the office electronically is nice, but not that much of a game changer.

    On the buyer side most things that consume time involve actually going out to houses, looking at them in person and understanding what you are seeing when you do so. That can’t be automated (and is the reason automated valuation systems suck so badly). On the listing side what needs to be done that takes time varies greatly from situation to situation.

    But you need to get away from being so concerned about time. If you’re paying hourly then time is important, but for contingent work time is not important. What is important is the skill of the agent.

  124. 124
    js says:

    By Kary L. Krismer @ 123:

    But you need to get away from being so concerned about time.

    Oh, I’m sorry, I’ll quit being so concerned about time. I’ll just shut my eyes and pretend the oddly priced Realtor magic that goes on behind the curtain is a great value for my money.

  125. 125
    David B. says:

    RE: js @ 119 – Location, location, location.

  126. 126

    RE: js @ 124 – The point I am trying to make is this. If your attorney is charging hourly you need to be concerned how many hours they spend and bill. If they are charging a contingent fee then you don’t need to be concerned. Assuming you have the money to actually pay hourly, you can have your attorney bill you either way.

    Ignoring situations where an agent fails to take a necessary action, the only situation where how much time an agent spends is important is when they are charging hourly, and that is a very rare situation.

  127. 127

    RE: Green-Horn Real Estate Investor @ 90
    There is an Easy Way Out

    I’m a landlord, but bought in for 1/10th Seattle prices…apples and oranges.

    Cash in your real estate ASAP. $1M in the bank= $5000/mo for about 20 years of retirement; start at age 60 with a cash annuity type income and by time your 80 [90% of all of us will be dead by that time]….save some of it to extend your annuity past 80, if you’re a lucky devil [and you retired early…LOL]. The work world is killing off women with heart disease recently, but we’re mysteriously living longer too? What a pack of lies. I trust the Census Bureau data on life spans, they’re lower to 1960s levels.

    Early retirees definitely out live late retirees on the average.

  128. 128
    js says:

    By Kary L. Krismer @ 126:

    Ignoring situations where an agent fails to take a necessary action, the only situation where how much time an agent spends is important is when they are charging hourly, and that is a very rare situation.

    Important to whom? Maybe not important to your billing department, but it is important to me and possibly to other consumers.

    It’s pretty clear why your industry is reluctant to provide this type of transparency.

  129. 129

    RE: Kary L. Krismer @ 109

    Kary: “But I’d be surprised even half of the new houses have 30 year roofs. A lot seem to have paper thin roofing material.”

    Most roofs these days are minimally 30 year, but sometimes the thickness is not the indicator of warranty. I ran into that about 5 years ago when a client was buying a bank owned house that needed a roof prior to closing. My client was able to pick the roof material and color and was opting for a “lifetime warranty” shingle that looked paper thin. It was partly fiberglass.

    “Because of the composition of the fiberglass mat, less asphalt is needed to give the shingles their durability and strength. The result is a lighter weight and thinner roofing material…”

    I worried about it blowing away. So far so good, but it’s only been 5 years.

    The worst problem I have had with a roof was a great roof with great thickness only about 8 years old…contractor used the wrong nails. One of the oddest problems I have ever seen. The nails had worked their way through the shingle making irreparable holes in the shingles. The whole roof had to be thrown away and replaced. The seller said they had a warranty but the company who put it on was out of business. The seller made good and put a new, like-kind roof on using a contractor of our choice prior to closing. But it was very sad. A beautiful roof…with the wrong nails.

  130. 130

    RE: js @ 128 – Not important to anyone. It doesn’t affect squat.

    But again, why is time so important? Jessie Jones had a story a couple of years ago about a sale that was held up by a judgment that was not actually a judgment against the owner. The agents on that transaction probably spent a lot of time on it, and finally in frustration went to Jessie after the transaction was delayed. I would have spotted the problem and taken care of it with a couple of emails. Which agent should be better compensated? It’s skill, not time, that is important.

    And what about the time agents spend on deals that never go through? Are you at all concerned about that, or just that sometimes some agents might not spend that much time on a transaction?

  131. 131
    js says:

    By Kary L. Krismer @ 130:

    And what about the time agents spend on deals that never go through? Are you at all concerned about that, or just that sometimes some agents might not spend that much time on a transaction?

    Actually time spent on deals that don’t go through is particularly of interest, because everyone else indirectly pays for that time.

    If you all spend your time reading blogs, marketing yourselves and driving fancy cars around to view all the houses on market, that is fine. Just tell us and show us the numbers. I’d like to know what I’m paying for.

  132. 132

    By js @ 131:

    I’d like to know what I’m paying for.

    You’re paying for a skill set, not time spent.

  133. 133
    Jay says:

    RE: Kary L. Krismer @ 117 – Well, I know for sure, I will never recommend you to any potential home buyers because of your offensive attitude!

    By the way, didn’t you say that you bought your house in Renton? I wonder how much Real Estate experience that you have had that makes you want to own a house in Renton! Compare to downtown Bellevue, Mercer Island, Capitol Hill, Ballard and the Eastside, the rate of appreciation in Renton is still minuscule!

    I would have thought that an experienced lawyer/realtor like you (since you have claimed that you have had so much professional experience on this blog) would have been smart enough to buy in an upper class neighborhood!

    A number of comments here have shown how much buyers despise the Real Estate industry. There is not enough transparency and adequate data to help both sellers and buyers to understand what is going on. Even buying a water bottle on Amazon gives you hundreds of reviews on a product. Perhaps, Amazon should start selling houses and allow people to write comments about them.

  134. 134
    js says:

    By Kary L. Krismer @ 132:

    By js @ 131:

    I’d like to know what I’m paying for.

    You’re paying for a skill set skill sets of your agent as well as other agents whose deals didn’t close, not time spent.

    Fixed that for you.

  135. 135

    By Jay @ 133:

    RE: Kary L. Krismer @ 117 – Well, I know for sure, I will never recommend you to any potential home buyers because of your offensive attitude!

    You’ll have to be specific about what you claim I said is offensive. That you don’t have sufficient experience to be able to rate brokers by brokerage? Just the fact that you think you can do that shows your inexperience in the area.

    Your comments about Renton are also ignorant, but at least that’s consistent with the rest of your understanding as to real estate issues. I won’t even bother to address them.

  136. 136

    By js @ 134:

    By Kary L. Krismer @ 132:

    By js @ 131:

    I’d like to know what I’m paying for.

    You’re paying for a skill set skill sets of your agent as well as other agents whose deals didn’t close, not time spent.

    Fixed that for you.

    Interesting theory. Just so I understand, can I charge more to some people if I have more of my own transactions that don’t close or can I also charge more because of transactions of other agents that don’t close? I want to make more money so I certainly hope it’s the latter! And just where do I find people who are willing to pay for failure? ;-)

  137. 137

    RE: Jay @ 133

    Our clients do make public comments about us.

    http://www.zillow.com/profile/ARDELL-DellaLoggia/?rx=true

    We have restrictions as to how and when we can be in people’s homes, what we can and cannot do in the homes and what we can and cannot publicly say about the homes. These limitations are placed by the seller-owner of the homes, not by the agents. Any agent can privately tell their buyer client anything about a house including their negative observations and recommendations.

    If a seller authorizes open comments from anyone about their home, then you can do that as can an agent. But almost none authorize open discussion about their property. It is usually stated as “no-blogging” by the owner, but comments on blogs or facebook posts or tweets are generally considered “micro-blogging” and also not permitted ONLY if the seller says “no blogging” when they allow their home to be “in the mls”.

    It isn’t “the industry” that prohibits it, it is the seller-owner of the home in their limitations to our overall duties and privileges.

    When you sell a house you can authorize agents and the public to make any comments or reviews that they want about your house. The agent and mls will not say no if you as the owner of the home say yes.

  138. 138
    redmondjp says:

    In the spirit of this website, hereafter reads a data-driven analysis of the previous 137 comments, with a heap of snarky observations thrown in. We had a total of 29 posters who made a grand total of 138 comments, including this one. I’ll hit the highlights so as to keep this semi TL;DR, so don’t feel slighted if you didn’t receive a mention (conversely, don’t let your ego become any more inflated if you did).

    Bankers’ nightmare Blurtman got things off to a rousing start, but petered out less than a sixth of the way through, with a 6-comment post total. Then, resident bubble-troll and one-time-lucky-flipper Erik stepped into the mix, going 2/3rds of the total distance with only 8 comments (not one of Erik’s better efforts if I do say so myself, which I just did). Kansas slumlord SWE jumped in early as well with the third comment, popped up later at #38, and then finished off near the end at #127. Quality doesn’t mean quantity, so way to go, SWE.

    Not to be left out of any comment thread ever created, professional self-employed commenter Kary L. (“what the L”) Krismer jumped right into the pool and swam the entire distance, blowing away every other commenter with a massive THIRTY-EIGHT posts book-ending almost the entire comments section with posts at #4 and 136, respectively. Where would this site be without Kary? Wait, it already happened once, so we do know the answer to that.

    ‘Occasional poster’ stayed true to form with a single entry at post #5. Living up to your screen name is an excellent way to develop that online credibility, so way to go OP!

    And ConfusedInSeattle somehow cleared the mental cobwebs long enough to get in a full seven comments in the early innings, but things got real cloudy after comment #33, apparently (so.many.420.jokes.not.going.there).

    Then, not-in-the-MLS broker Craig Blackmon chimed in with a solid 8-comment effort, but was done for good after post #39. You’re going to have to try a lot harder than that, Craig, if you want to get people to step outside of the warm, comfortable MLS box with the hot cocoa with those tiny marshmallows on top. And decorated with LED Christmas lights, at this time of the year. Did I mention the free miniature candy canes? Yes, they are glued to the agents’ cards – you have to take both.

    Boater, who may or may not actually use the boat more than twice a year, or who may in fact be living on it due to our high housing costs, came in with a solid 8-comment effort that went almost the entire distance, spanning from post #11 to #120. Got that motor winterized yet, Mr. B?

    Then relief-commenter Jay pitched seven posts ranging from #21 and ending at #133. There is something to be said for sticking it out until near the bitter end in a SB comment thread. I’ll leave it to our readers to determine what that something is . . .

    Homeshopperrr tried once at #41 and gave up. Come on now HS, in this market, you can’t let one failure get you down. Try, try, and try again! Bid on as many homes as you can; maybe you’ll end up with at least one of them.

    HappyRenter is still doing just that, but with all of that extra free time not spent regrouting the tile shower or recaulking exterior window trim for the fifth time, only managed to post three comments.

    Eastside RE expert Ardell, late to the party because she was showing a $850K Redmond house with a 25-year-old cedar shake roof to people not from this country, got into the swing of things at comment #45, but then went the entire rest of the distance, ending things with the final-word post #137 (before this one, heh heh) and coming in third place in the total comment count. Who is going to get in the last comment here at SB, Ardell or Kary? Flip a coin . . .

    StupidLifeDecisions only made one this time at #47. With a handle like this, less is definitely more.

    Then, out of nowhere, suspected software developer ‘js’ (for javascript?) jumped in midstream at post #55 and finished the race, with a second place (to KK) at 15 comments. This is just the kind of solid performance we need more of here in the SB comments section, so kudos to js for giving Kary something that he has to write three comments in reply to!

    After that and along the way we had a smattering of one, two, and three-commenters, with an honorable mention going out to Anonymous Coward, who somehow summoned up the courage to write a single comment at #95. Way to go AC, we’re here for you!

    Well, that’s about it for the comment thread on this comment thread, so as the rain continues overnight, remember: don’t drive around the “water over roadway” sign! And if you’re trying to figure out if the place you’re interesting in buying has any water issues, then this is the perfect week to do it.

  139. 139
    boater says:

    RE: redmondjp @ 138
    Nice summary! Not living on the boat yet. I think that would be a fantastic way to spend a few retirement years but I have small kids. For now it’s just cruising on the lake. The boat is winterized. Thanks for checking.

  140. 140
    Jay says:

    RE: Ardell DellaLoggia @ 137 – “It isn’t ‘the industry’ that prohibits it, it is the seller-owner of the home in their limitations to our overall duties and privileges.
    When you sell a house you can authorize agents and the public to make any comments or reviews that they want about your house. The agent and mls will not say no if you as the owner of the home say yes.”

    Redfin’s agents leave comments about the properties that they have toured. They are good starting points to give buyers some insights, so that you can decide to tour it or not. But I wish that potential buyers are allowed to leave feedback about the neighborhood, etc. That way, people can get advice from both sides, agents and buyers who have toured the units before.

    Real Estate is flooded with tons of unworthy Realtors, and I agree with the people here who think that agents don’t deserve a huge commission!

  141. 141
    ARDELL says:

    RE: Jay @ 140

    Those comments don’t appear unless you are a registered user of the site. They did a slight workaround to speaking freely only to their clients. There are no restrictions to what we can and cannot say directly to a client to assist them in buying a house.

    Last I heard their buyer client also has to approve the agent being able to comment. Often their buyer can’t be considering making an offer. There is a conflict of interest to their client to say good things about the house if their client is making an offer and also a problem if they say bad things to scare other buyers away.

    Usually when you see a comment it is because the client is both not interested in making an offer and approved the agent being able to post a comment. There were some hefty fines involved in their first attempt at public comments on listed property .

    Tim can do it and I have seen a spectacular site by a non- agent in a very high end CA city.. But the non- agent became an agent after the site got a large, local following. He was also anonymous for a very long time.

    Zillow the obvious best place for that type of activity. Their Q&A component was designed to that purpose.

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.