Mid-Week Open Thread (2009-07-22)

Here is your open thread for the mid-week on July 22th, 2009. You may post random links and off-topic discussions here. Also, if you have an idea or a topic you’d like to see covered in an article, please make it known.

Be sure to also check out the forums, and get your word in the user-driven discussions there!

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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. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

61 comments:

  1. 1
    David Losh says:

    I spent some time last night looking at closed sales. The prices were very high. By my rough calculations properties were selling at 2004 and 2005 prices. Some properties purchased in the last three years sold without a negative so that would reflect a 10% gain in value.

    I’ve reluctantly come to the conclusion that Doctor Robert Schiller is right about the group think mentality about housing prices. People will pay too much for properties if they perceive others are also willing to pay too much.

  2. 2
    Kary L. Krismer says:

    RE: David Losh @ 1 – Of course there’s group-think. There is in any market. And often the group is wrong. More people will typically want to buy right before a peak, and fewer people want to buy right before a bottom–but that’s something that’s a lot easier to see with hindsight than when it’s occurring.

  3. 3

    RE: Kary L. Krismer @ 2

    I AGREE KARY AND DAVID

    George Orwell in his book 1984, would call the group thought of “buy now” Newspeak [brainwashing the masses into behavior with little thought by the masses]…his “thought crimes” would be our blogs….LOL

  4. 4
    Acerun says:

    http://mortgage.freedomblogging.com/2009/07/22/foreclosure-flip/14249/

    Here is short story from the OC Register about a flip of a condo near Disneyland.
    Apparently, banks would rather sell property at auction than accept short sales.

  5. 5

    RE: Acerun @ 4

    And the buyer referenced in your article was Newspeaked into “buy now”, even for higher prices than banks would carry the risk….LOL

    More information is needed….did the buyer pay a large down to be able to pay more than the banks thought it was worth?

    Its a RE website and it isn’t always pragmatic like Kary and David…LOL

  6. 6
    Kary L. Krismer says:

    RE: softwarengineer @ 3 – But there’s also group-think of don’t buy now, as occurred after Paulson announced the sky was falling last September. It works both ways.

    As may be obvious, I’m a contrarian.

  7. 7
    Kary L. Krismer says:

    RE: Acerun @ 4 – I commented here recently on foreclosures I’d looked at, and a number of them (maybe 4 out of 20???) already had offers on them after having been foreclosed in early June. One had even closed.

    The thing is, short sales don’t bring in as much as a normal sale, but it’s more than a foreclosure, and seemingly more than an REO. That last point might be a matter of sale mix or condition though. But if you count the time value of money (interest not being paid), the banks would do much better to process short sales better.

  8. 8
    David Losh says:

    It makes sense now that banks would be buying back houses at auction. If prices stabalize or even appear to stabalize at 2004 pricing banks will be dollars ahead to sell REO which relies on sales data to determine value.

  9. 9
    Kary L. Krismer says:

    Well, I just ran into a new level of REO listing incompetence. Yes, the place really needed painting badly, and the carpets were dirtier well beyond where you’d even considering just cleaning it. Very typical of REO. But you don’t usually see a 2 bedroom 1 3/4 bath unit listed as a 2 bedroom 1 bath unit. :-D

  10. 10
    David Losh says:

    RE: Kary L. Krismer @ 9

    There are good looking REOs. We just don’t see enough of them. If they are cheap we look and they are cheap based on condition. The idea banks don’t know what they are doing is a misnomer. Banks, bankers. asset managers, and field workers deal with hundreds of properties in a normal market.

    It all makes sense to some one.

  11. 11
    David Losh says:

    OK, I finished my research for home sales. Now I know why the redfin people are ignoring internet chatter about the company. They must have made a profit. There are 230 sales in the past six months.

    In most cases people paid close to asking price. redfin does have a policy of only writing offers at the range of 85% and up of list price. There were several that had been on the market a long time with price reductions. All in all, out of all those 230 transaction pricing was at 2004 and 2005 levels.

    In other words these are cream puff deals. OK let’s say you get a $10K rebate. If you pay $50K too much there is a negative value added incentive to use the service.

    Take a look for yourselves and flame on, but it looks like the web 2.0 experience is much more of the same rather than an improvement.

  12. 12
    deejayoh says:

    RE: David Losh @ 11

    In other words these are cream puff deals. OK let’s say you get a $10K rebate. If you pay $50K too much there is a negative value added incentive to use the service.

    David, thanks for sharing that. This is exactly what I meant on another thread when I said they “skim the cream”. My view was that Redfin does the easy deals at volume. Prequal’d buyers, know what they want, offering close to full price. They close easily so don’t require a lot of people time. Your data seems consistent.

  13. 13

    RE: deejayoh @ 12

    I’ll second that. No criticism of Redfin intended, but they have a guideline of only presenting offers of 85% or more of the list price, they won’t represent buyers or sellers on short sales, and will not list property or make offers on homes listed for less than 175,000( I know, there aren’t too many, but they are increasing, and some aren’t that bad.)

  14. 14
    David Losh says:

    RE: deejayoh @ 12

    That’s 230 transactions in six months. A guy in my office has thirty nine solds, one guy.

    What actually caught my attention was a family in our neighborhood bought a new construction house for a million dollars and listed their home for $560K. which was asking too much and they knew it. After about thirty two days it sold by redfin. One price reduction of $20K got an offer $15K less than asking.

    He had asked local Real Estate agents who told him he needed to list below $499,950, and wait. He got a Bellevue agent who gave them a work list and the $560K price. That’s not the end of the story, but it’s the best. There are other over priced houses in my neighborhood that buyers purchased through redfin.

    This particular house was purchased in 2005 for $460K and after a little paint and some press on tile flooring the house sold for $525K, washer and dryer were not included in the sale.

    I’m saying that these are transactions redfin will be keeping under wraps. The buyers may be well qualified, but they are still paying retail, and maybe a bit more. In the listings that sold it seems that the sellers have the price reductions then a little less than asking for a sales price.

    The end result seems different from the promises that transparency was supposed to have given us.

  15. 15
    patient says:

    Does it feel like the inventory is kind of static?
    It’s not just a feeling. Check this out from The Tim’s inventory tracker.

    07.22.2009 22:00 10158
    06.22.2009 22:00 10147
    05.22.2009 22:00 10133

    It held within 25 units the last 3 months for this time of the month. That’s a 0.25% diff.

  16. 16
    nutterbutter says:

    Can anyone tell me what is the official rule from the MLS regarding how much notice agents must give a seller before showing a home? I had an agent who refused to show me anything without giving 24 hours notice, but now another agent is telling me it’s only 1 hour notice.
    thanks

  17. 17
    Sniggy says:

    By nutterbutter @ 16:

    Can anyone tell me what is the official rule from the MLS regarding how much notice agents must give a seller before showing a home? I had an agent who refused to show me anything without giving 24 hours notice, but now another agent is telling me it’s only 1 hour notice.
    thanks

    I think you are assuming there is a rule.

    Often times I request to be see a house, and the seller will not be able to accommodate us for a couple of days.

    The 24 hour person may just be using this as a reason to get their own affairs in order.

  18. 18
    Kary L. Krismer says:

    RE: Ira sacharoff @ 13 – How can they only make offers that are 85% or more of the listing price? I’ll have to look into that one. I doubt a “Realtor” could do that, but I’d also have questions about that under state law, absent them just firing the client.

    Beyond that though, I’d agree that’s just lazy.

  19. 19
    Kary L. Krismer says:

    RE: nutterbutter @ 16 – There is no rule set by the NWMLS other than to follow what the listing says. The seller sets the terms, and most are either show anytime or call first and show if there’s no answer, or something of the sort. If there is a restriction it’s often pet or day sleeper related. There are a few that have more stringent requirements, and generally those don’t sell or take longer to sell.

    You typically only see 24 hours on property that is rented out. That, I believe, is what state law requires.

  20. 20

    RE: nutterbutter @ 16

    If it’s tenant occupied, there must be 24 hour notice, unless the tenant agrees to other arrangements.

    There is no official MLS rule otherwise, at least not the Northwest MLS. Sellers and their agents will make an agreement on that stuff, and it will be in the “agent remarks” section of the listing, viewable only by other agents.
    Some sellers want notice, some say ” just come on over’, some don’t want any direct contact with buyers and want it all to be arranged through agents, and some say ” Come on over but I ain’t leaving.”
    But if the place is a rental, there is a state landlord tenant law requiring 24 hour notice, unless the tenant agrees to other arrangements. It’s not an MLS rule.
    What’s easiest is where you call to say you’re coming, and the seller quickly takes a one hour walk or goes for coffee, etc and lets you have free time there without the seller present.

  21. 21

    RE: Kary L. Krismer @ 18
    Seemed weird to me too when I’d heard that, and maybe it’s not true, maybe it’s anti- Redfin propaganda.
    ” Sure, they’ll give you a commission rebate, but you have to give up your first born son to get it.”

  22. 22
    Kary L. Krismer says:

    RE: David Losh @ 11 – I think you need to go back to the drawing board on your stats. Looking at 6 months of SFR at Redfin and the three full service firms I use in my periodic comparisons, Redfin has the lowest percent of sales price to list price of the four, when you look only at transactions where they represented the buyer. But the thing is, where they’re making their money is off of the high end stuff, and that is likely to have higher discounts. The mean price for Redfin is over 50% higher than the full service firms on the buyer’s side. That, if anything, is “the cream” because of the high revenue per transaction.

    If I limit the stats to SFR, King County under $500,000, I get similar results, but for one of the full service firms shooting up to over 99% of list!

    I suspect the difference in percentage to list though probably says more about the buyers than the firms. Redfin buyers would presumably be more cost conscious. And I’d suspect because of that Redfin probably has to do a bit more work going back and forth with offers.

  23. 23
    nutterbutter says:

    RE: Ira sacharoff @ 20 – Kary and Ira, thanks for the info. We are actually sellers, status “pending BU” and my agent is saying I still have to show it with only an hour’s notice. That is quite a pain in the tushie, given that I have a foot injury which makes it hard to keep the place “show ready”. Hopefully, there is a small likelihood of someone wanting to see a property that’s *sorta* sold anyway.

  24. 24
    nutterbutter says:

    RE: nutterbutter @ 23 – hey also, don’t I count as a “tenant” since we’ve been “renting” the house from the bank since we bought it? :-)

  25. 25
    Civil Servant says:

    Redfin buyers may be more cost conscious, per Kary @ 22, but this is not the same thing as being market savvy. When I attended the Redfin info session, I was surprised at how poorly informed and credulous most of the audience was, how fixated on the rebate and the finally visible glorious promise of homeownership. Whether or not these people are actually getting rooked — and I don’t have an opinion on this yet — the overall buyer profile was pretty rookable.

  26. 26
    Kary L. Krismer says:

    RE: nutterbutter @ 23 – Is your listing a short sale? If so the agent probably wants to keep it on the market because of the high likelihood that the buyer will walk while the bank is taking months doing nothing to make a decision.

    As a practical matter, not too many people look at Pending BU properties, unless they’re in a special area.

  27. 27
    nutterbutter says:

    RE: nutterbutter @ 24 – correction: “bought” it

  28. 28
    Kary L. Krismer says:

    By Civil Servant @ 25:

    Redfin buyers may be more cost conscious, per Kary @ 22, but this is not the same thing as being market savvy. When I attended the Redfin info session, I was surprised at how poorly informed and credulous most of the audience was. . . ..

    Ding, ding, ding, ding!

    A lot of posters here seem to think that most people don’t need full service agents because buying real estate is somehow simple. I usually focus more on the fact that it’s not all that simple, and how even attorneys tend to use full service agents. The other part of that is a lot of people simply are not well informed on anything, and very few people are well informed on real estate issues. And going even further, there are a lot of people that even if they had the desire to become well informed, don’t have the ability to become well informed.

    There are people out there who have during their lifetime bought over ten pieces of property that don’t understand the process or the issues.

  29. 29
    nutterbutter says:

    RE: Kary L. Krismer @ 26 – yes, it’s a short sale but super close to what is owed, so the bank seems to be acting quickly on it. As quickly as a bank can act, I guess. We’re just happy to be getting rid of it.

  30. 30
    cheapseats says:

    Hmm Microsoft numbers are ugly…

  31. 31
    Rally dude says:

    So are people stil comparing this rally to the Great Depression rallies? Or did people abandon this idea altogether?

  32. 32
    D. in Ballard says:

    I am not at all surprised that Redfin isn’t quite the deal it’s cracked up to be. Nor am I surprised about the credulous people Civil Servant met. You would think since redfin customers are doing most of the work themselves that they would be pretty vigilant. Not so. Read the forums. Some people ask the stupidest questions like:

    I am planning to buy a new house.

    1) The contact person at the sales office says she represant both buyer’s and sellers side. Is it still a good idea to go through an out side agent?

    2) She told me that she cannot give some of her fees back. Is it not common now a days most of the agents gives some of the fees to buyer?

    3)She indicated that, the builder will not reduce the price from listing price but I can negotiate to pay some of closing costs, points, appliances and upgrades. Is it true that they will not reduce the price even in this market?

    This guy has sucker written on his forhead. True, a full-priced agent could take advantage of this guy too, but I would always recommend going with someone you trust.

    I’ve learned the hard way. The agent you choose really does matter and a bad one can mess you up big time.

  33. 33
    cheapseats says:

    RE: Rally dude @ 31 – I think that a couple people here said that they would not be surprised to see a bounce in the market up to 9 or 10k. But I am not certain if it was in comparison to any other period.

  34. 34
    Scotsman says:

    RE: Rally dude @ 31

    Yup. This rally is marked by very low trade volume, manipulation, and largely media driven. The fundamentals continue to degrade. A review of the market during the GD is very instructive- prices had almost recovered to their previous levels before falling to essentially zero. Oct. 29th, 1929 is the date folks remember, but the worst actually came much later, and lasted a decade. This pattern will likely be similar.

  35. 35
    The Tim says:

    By cheapseats @ 33:

    I think that a couple people here said that they would not be surprised to see a bounce in the market up to 9 or 10k. But I am not certain if it was in comparison to any other period.

    You’re probably thinking of Sniglet, who at least as far back as March has been calling for a “MAJOR rally (e.g. the Dow could rise to the 10,000 level) in all asset classes to last through the summer.”

  36. 36
    jon says:

    By cheapseats @ 30:

    Hmm Microsoft numbers are ugly…

    Not surprised. I’ve been installing various vendors’ databases and getting them running today. All are up except for Microsoft. I can’t even get the installer to go. I thinks I need to reboot again. and again. and again….

  37. 37
    David Losh says:

    RE: Kary L. Krismer @ 22

    Can you be a little more clear about what you are saying?

    I did a standard search of solds for listing or sales office. It came out about 230 for single family and condo. There were 2 multis and a couple of vacant land.

    The point is that in this selling season prices are high. Having the web 2.0 transparency doesn’t seem to change the fact people are paying premium prices.

  38. 38
    Kary L. Krismer says:

    RE: David Losh @ 37 – I thought what you were trying to say is that Redfin wasn’t negotiating very hard when representing buyers. I didn’t see that at all in the stats. Perhaps that isn’t what you were saying.

    BTW, I only looked at SFR in comparing firms because if you mix in condos the change in mix could change the result between firms.

  39. 39
    David Losh says:

    RE: Kary L. Krismer @ 38

    Negotiation aside, there doesn’t seem to be any taking place, redfin offers are still at 2004 and 2005 pricing if not more.

    The main point in my example of the property that sold for $525K was that local agents, and the family interviewed several, thought the property should be priced below $499950. They got an out of area, friend of the family, to list it at what they wanted, and at that sales price the buyers didn’t even get the washer and dryer.

    The point about the number of sales was about the press release that redfin made a profit. At a 1.5% commission they most certainly did make a huge profit. What they have is a web site.

    Let’s put all of that into a corner for a minute.

    Real Estate is a complicated business. I said that at the beginning of commenting on this blog. It’s more than pretty pictures, or going to an auction on the court house steps. There’s more to know than the get rich quick books, tapes, seminars, and blog posts. You either know the future or your out of the game.

    For all of the national publicity, and whining about people being mean to redfin, it comes down to the same old brokerage bs of we’ll do the paper work and you give us the money.

  40. 40

    D. in Ballard said ” You would think since redfin customers are doing most of the work themselves that they would be pretty vigilant. Not so. ”

    As Alexander Pope said ” A little knowledge is a dangerous thing.”

  41. 41
    Kary L. Krismer says:

    Be careful if you’re searching Thurston County records. The website takes you to a page for: “Document Search and Online Marriage Application.” I think it’s a trap!

    They only allow you on-line access to foreclosure related documents down there! :-(

  42. 42
    Sniggy says:

    I’m really lost here? People overpaying for a house since they are getting a kickback on the commission?

    Whats next people overpaying for owner contracts?

    “Real Estate is a complicated business.”

    Not completely, most transactions are pretty quick and painless. Especially when an agent has a good broker to fall back on.

    I know several agents that are very successful that I wouldn’t let broker a deal on a gallon of milk, but they make money hand over fist. Maybe it’s their extra white teeth or their Mercedes, that make the deal for them I still feel they shouldn’t be doing millions a year in transactions.

    People with the knowledge that many of the agents here have are rare, and unfortunately that knowledge and competence does not always translate to $$$ but it hope it has.

  43. 43
    deejayoh says:

    RE: David Losh @ 14

    David, the sum of anecdotes /= data.
    http://www.redfin.com/about/redfin-advantage

    Google is your friend, try it.

    You can download and read the entire report on the Redfin Advantage or you can scan the executive summary:

    Across the three counties included in this study, King County, Washington, and San Francisco and Santa Clara counties in California, Redfin buyers paid on average 0.603% less for their home than buyers who used other brokerages. This negotiating advantage saved our buyers an average of $3,594.
    The total Redfin Advantage, combining the average negotiating advantage and the average commission refund of 1.934% for the three counties was 2.537%. The total savings for the average Redfin customer was $14,114.
    In King County, Washington, Redfin buyers paid on average 98.885% of the listing price, while people who purchased a home through other brokerages paid 99.383% of the listing price. The difference of 0.498% represents an average savings of $2,490.
    Redfin customers in San Francisco County, California paid on average 100.771% of the listing price while buyers with other brokerages paid 102.406%. The 1.635% difference represents an average savings of $13,635.
    In Santa Clara County, California, Redfin home-buyers paid on average 98.755% of the listing price, while buyers who used other brokerages paid 99.834%. The 1.079% difference represents an average savings of $9,354

  44. 44

    Most of us here agree that home prices in King County are too high and likely to keep dropping.. Redfin buyers in King County paid on average 98.885% of the listing price, while non Redfin buyers paid 99.383% of the listing price.
    Does this mean that Redfin buyers are wise and smart, or does it mean that both Redfin buyers and non Redfin buyers alike are fools for paying that much?
    Is Redfin really ‘saving” you money if the value of your home is going to be 10, 15, 20 + percent less some time down the road?

  45. 45
    deejayoh says:

    RE: Ira sacharoff @ 44 – Ira. yes, I agree with your point. But that point is true no matter who the agent is, right?

    I was reacting to what I perceived as the implication that based on a few observations, redfin clients appear to be paying over *current* market prices. the company has gone to great pains to demonstrate that this is not the case. no other agency presents similar data that I am aware of.

    David, If I’ve misinterpreted the gist of that I apologize.

  46. 46

    “RE: Ira sacharoff @ 44 – Ira. yes, I agree with your point. But that point is true no matter who the agent is, right? ”

    Sure, but the truth is probably somewhere in between. If you are prepared to do some of the work yourself, these stats show that you will not do worse using Redfin, despite the assertions by some that Redfin is the Devil.
    But some people talk about Redfin as though they are the greatest thing since sliced bread, as though Redfin has cured cancer, as though Redfin will lead humanity to world peace.
    Redfin is touting these stats to show how great they are, but if you look at it, what they really say is that you won’t do worse using Redfin, you may do slightly better, and that Redfin won’t protect you from buying a really overpriced house.

  47. 47
    David Losh says:

    RE: deejayoh @ 43

    This is exactly what I saw in the search I did for redfin. Redfin has become a regular brokerage.

    My point is that for all the talk about the information people get on the internet, through redfin, zillow, and all of the blogs, people will still go out and pay retail. Even though we all agree, and even though most information on the internet says, home prices will decline further, peopl go out and make emotional purchases, for lack of a better term.

    RE: Sniggy @ 42

    I’m really lost here? People overpaying for a house since they are getting a kickback on the commission?

    It’s as simple as my first point that there is a group think. People are following the crowd no matter how much information they get. All the statistics, or all of the listings you put in front of some one, in all of the transparency, people will go out and buy the same way. The process has not changed.

    People read in the paper that now is the time to buy. They get a list of properties, go to open houses, then get some one to write it up.

    Purchasing a Real Estate takes a strategy.

    In the Real Estate business it’s called an asking price and an offer. There is actually a negotiation that takes place that’s different from getting the washer and dryer, or not, as the case may be.

    People in the past twelve years have gotten a Real Estate license so they can write up Purchase and Sales Agreements or list properties for sale. We have a bunch of yahoos in the business. The consumer has suffered, the economy has suffered, and all that happened is adding another set of yahoos telling people what they want to hear.

  48. 48
    Kary L. Krismer says:

    RE: deejayoh @ 43 – Statistics that are based on a percentage of list price are pretty meaningless. I used them myself above, but only to show that Redfin’s numbers weren’t considerably different than other firms (except that one that was over 99%).

    The thing is, list price isn’t the same as value, so a percent of list isn’t like some sort of savings. Also, the buyer controls the process a lot. I really suspect any difference is more due to the buyers and not the agents involved.

  49. 49
    Kary L. Krismer says:

    By Ira sacharoff @ 44:

    Most of us here agree that home prices in King County are too high and likely to keep dropping..

    That doesn’t really mean much, because the folks here are bears. But in any case, it’s not most the population of King County that controls the price of real estate. It’s a very tiny portion of the population–those out buying a home. Perhaps someone can do the math, but I suspect if you added together all the condo and SFR sales in King County for six months, that wouldn’t be anywhere near 1% of the population.

  50. 50
    Kary L. Krismer says:

    By deejayoh @ 45:

    I was reacting to what I perceived as the implication that based on a few observations, redfin clients appear to be paying over *current* market prices.

    I have a problem with that too. It’s the statement that they’re paying 2004-2005 prices, and somehow that’s too high.

    First, I don’t know how you could possibly determine that when you’re talking 230 listings. You’d need quite a large staff to make that determination.

    Second, the market is what the market is. If you want to buy a house at a given point in time you have to pay what the market dictates at that point in time. You can’t go up to a buyer and say you want to pay what you think the house will be worth in two years. That will just get you to the point where the seller adds 20%, wanting to sell if for what they think it will be worth in two years.

  51. 51
    Sniggy says:

    I’ll get back to the original statement.

    “The main point in my example of the property that sold for $525K was that local agents, and the family interviewed several, thought the property should be priced below $499950. They got an out of area, friend of the family, to list it at what they wanted, and at that sales price the buyers didn’t even get the washer and dryer.”

    A lot of listing agent are looking for a quick buck as well. the 3% on $25k isn’t worth waiting years to sell a house.

    The buyers proved all of the people that priced it at under $499,950 wrong didn’t they.

    Did Redfin fail their clients here? All we can do is throw out a wild asses guess because we dont even know what property you are talking about here.

  52. 52
    Kary L. Krismer says:

    RE: Sniggy @ 51 – I’d agree with this. It’s irrelevant what a bunch of local agents thought. Locality is over-rated.

    I sort of view it like managing an apartment house. Apartment house managers, and even the residents, are probably the last people you’d ask to determine the condition of the property. The manager’s boss, who only comes by once a month would probably be better, because they don’t see everything every day and get used to it. Someone in the business who had never seen the property before would probably be a much better source of information (once they actually saw the property).

    I’ve seen several situations where local agents couldn’t see the forest for the trees. And I think I’ve probably been guilty of that myself in areas I think I’m familiar with.

  53. 53
    David Losh says:

    RE: Sniggy @ 51

    The value of the property is maybe at best $425K, let’s just pick a number because I think that’s too high. I think closer to $380K.

    redfin fulfilled it’s function as an agent to write up an offer. That’s the problem, been the problem, and is continueing to be the problem. Agents are writing up offers or listing properties based on Comparative “Sales” Data.

    It’s a very real problem that has now negatively impacted the global economy so you can’t say “So what?”

    We need an exit strategy. This very real problem of over priced properties needs to be settled. Web 2.0 was supposed to give the Real Estate market a new perspective, I think it just made thing worse.

    This “selling” season is kind of the proof.

  54. 54
    David Losh says:

    RE: Kary L. Krismer @ 52

    Holy cow, we are talking two bedrooms and a bath on the main and two bedrooms and a bath in the basement. I mean basement. It sold for a half of a million dollars. Over a half of a million dollars of debt generated in one transaction. That’s fifteen or thirty years of interest income that will about double to selling price.

    It’s unsustainable without inflation.

  55. 55
    Kary L. Krismer says:

    RE: David Losh @ 54 – Assuming you’re talking about the listing on 85th, I don’t find that price that outrageous (although I hate to value things over the Internet).

    First, it was an extensively remodeled house that was nicely staged. The kitchen isn’t to my taste, but I’ve seen more expensive places with similar kitchens.

    Second, there are at least two somewhat similar properties in that area that sold for more within the same time frame. The selling office on one was a small boutique firm and another a very large full service firm. And it’s possible this one had a superior view (based only on the representations in the listing).

    The market is what the market is. The buyer can’t buy the property for less just because they or some agent thinks it’s worth less. If they think it’s worth less, they simply don’t buy it, and if no one else does, that will drive down prices. If someone does buy it for more, then the prices won’t fall.

  56. 56
    David Losh says:

    RE: Kary L. Krismer @ 55

    85th is just another example. The fact is that in today’s market people should have been making offers. We should be seeing sales prices below asking price. This thing about waiting until some one lowers the price on something shows that buyers are picking a very low per cent of properties on the market today.

    Given the stats we should be seeing offers accepted at 10% to 20% off list price. If “sales” data is the norm and prices are declining then the offers should be for less than asking.

    They are not. it’s the same old bs of no one making “offers.” Let’s just pay retail. Let’s write it up for what the seller wants because that’s the easiest. Let’s not make low ball offers because that would be too much like work.

    What does a cunsumer pay for? Show a bunch of pictures, open some doors, and do an easy deal. Heck, that’s what you pay a discount or rebater for.

    Where is the agency in today’s over priced market place?

  57. 57
    Kary L. Krismer says:

    RE: David Losh @ 56 – Well, first, again I think comparing anything to list is a bit absurd, because it’s comparing to something that isn’t value. You’re starting to sound like Adell using assessed value.

    Second, buyers are not afraid to make lower offers. It happens all the time. But making the lower offer doesn’t mean it will be accepted or that someone might not come in with a higher offer.

  58. 58
    David Losh says:

    RE: Kary L. Krismer @ 57

    My value is what I would pay for a property. Assessed value is meaningless, everybody knows that.

    There are let’s say fifty properties on the market, some over priced some under priced and some just right. You look at all of them.

    I base value according to what I know about property based on forty years of working in the Seattle market place. Land use, construction practices, neighborhood development, and infrastructure are all a part of value.

    So today every one wants top dollar for a property. If you are waiting for a seller to lower the price the listing agent is selling the home owner short. There may or nay not be a deal there. Just because a seller starts out high and lowers doesn’t make for a value.

    What I’m saying is that buyer’s agents should have been making offers on over priced stuff rather than waiting for the price to come to them. According to the statistics that didn’t happen. That means buyers paid according to list price. That’s a problem.

    The Real Estate industry is still calling the shots. redfin is just another cog in the wheel. Worse in my opinion because they promised a change that didn’t happen.

  59. 59
    deejayoh says:

    RE: David Losh @ 47 – yes, I’d agree that people who expect to save money on anything but commissions at Redfin are setting themselves up for disappointment.

    that said, there are always people who’ll overpay for things no matter how hard you try to protect them from themselves. The phrase “there’s a sucker born every minute” has great staying power for a reason! w/r/t housing – I think that is the raison d’etre of this blog!

  60. 60

    David Losh said “The Real Estate industry is still calling the shots. redfin is just another cog in the wheel.”

    David, sometimes you take many sentences to convey a simple thought. Not this time. You hit the mark on the head, and said what I’ve been trying to say but taking too long to say it and not saying it clearly enough.

    Redfin’s not the devil, but they sure as hell ain’t the messiah neither. They are very much a part of the real estate machine.

  61. 61
    Kary L. Krismer says:

    RE: Ira sacharoff @ 60 – I think we can all probably agree on that.

    I often say that your biggest concern in picking an agent might be how hungry they are. Same for other professions, where your medical procedure might only be needed to help with a boat payment. Simply put, if your agent needs that commission to get by the next two months, they may put their own interests ahead of yours in giving you advice. Again, that’s the same with other professions.

    At Redfin, perhaps they don’t need them to get by at the moment, but that’s only because of past borrowing or contribution of capital. From the point of view of an entity that needs income to sustain itself, they need every sale they’ve made to date. And presumably the employee/agents need to have certain stats to be able to keep their jobs.

    Based on that, I just don’t see that Redfin is necessarily the best way to go, if your desire is to have your interests represented. Some employee/agents of Redfin are undoubtedly better than some other normal agents, and some employee/agents of Redfin are undoubtedly works than some normal agents. The point is, the business model does not necessarily make your representation better.

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