Case-Shiller Tiers: High Tier Seven Percent Above 2007 Peak

Let’s check out the three price tiers for the Seattle area, as measured by Case-Shiller. Remember, Case-Shiller’s “Seattle” data is based on single-family home repeat sales in King, Pierce, and Snohomish counties.

Note that the tiers are determined by sale volume. In other words, 1/3 of all sales fall into each tier. For more details on the tier methodologies, hit the full methodology pdf. Here are the current tier breakpoints:

  • Low Tier: < $318,266 (up 1.3%)
  • Mid Tier: $318,266 – $509,596
  • Hi Tier: > $509,596 (up 1.3%)

First up is the straight graph of the index from January 2000 through May 2016.

Case-Shiller Tiered Index - Seattle

Here’s a zoom-in, showing just the last year:

Case-Shiller Tiered Index - Seattle

All three tiers increased once again in May.

Between April and May, the low tier increased 1.5 percent, the middle tier rose 1.9 percent, and the high tier was up 1.1 percent.

Here’s a chart of the year-over-year change in the index from January 2003 through May 2016.

Case-Shiller HPI - YOY Change in Seattle Tiers

Year-over-year price growth in May was larger than it was in April for the low tier, but flat for the middle and high tiers. Prices in all three tiers are still double-digits above last year’s levels. Here’s where the tiers sit YOY as of May – Low: +11.0 percent, Med: +11.3 percent, Hi: +10.3 percent.

Lastly, here’s a decline-from-peak graph like the one posted yesterday for the various Case-Shiller markets, but looking only at the Seattle tiers.

Case-Shiller: Decline from Peak - Seattle Tiers

Current standing is 5.6 percent off peak for the low tier, 1.8 percent above the 2007 peak for the middle tier, and 7.4 percent above the 2007 peak for the high tier.

(Home Price Indices, Standard & Poor’s, 2016-07-26)

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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.

77 comments:

  1. 1
    Erik says:

    When dumb money(low tier) gets above the red line on the “case-shiller tiered index-Seattle” graph, get ready to sell. I think that would be an indicator that we are in bubble territory.

  2. 2
  3. 3

    RE: SFraz @ 2 – Please realize you could probably post the same type of information every day. Some sellers are unrealistic and insist on a higher price than is realistic.

  4. 4

    RE: Erik @ 1

    Almost Correct Eric

    IMO, its the “Dumb Money” buying into the High Tiers…

  5. 5

    Real Estate Price History ACTUALS on My SE King County Home

    Per tax assessment documentation since 2007…..its lost about 25% in value. WAY UNDERWATER.

  6. 6
    David B. says:

    RE: Kary L. Krismer @ 3 – Someone across the street from me has listed their townhome (exact same size as mine) for $100K more than I paid for mine in late 2014 ($450K versus $350K). That’s significantly more than the average appreciation for the metro area over that time. Not surprisingly, it’s sitting on the market while I had to make an offer pronto and even then it went to a bidding war.

    If such things are writ large across the metro area, we could be seeing the start of an inventory recovery process.

  7. 7
    Doug says:

    RE: softwarengineer @ 5 – So you bought in Enumclaw at the peak?

  8. 8

    By Doug @ 7:

    RE: softwarengineer @ 5 – So you bought in Enumclaw at the peak?

    I thought it was Maple Valley, but either way, relying on the tax assessed value doesn’t mean much.

  9. 9
    Doug says:

    RE: Kary L. Krismer @ 8 – I like Maple Valley. Would love to buy this house, but it feels like guaranteed negative equity when the music stops.

    http://www.zillow.com/homes/for_sale/house_type/96674457_zpid/47.36717,-122.000985,47.32012,-122.081752_rect/13_zm/0_mmm/

  10. 10
    ARDELL says:

    RE: David B. @ 6

    So…you are saying the answer to the low inventory problem is for everyone to overprice their homes to create more standing inventory? Was that sarcasm?

  11. 11
    David B. says:

    RE: ARDELL @ 10 – No, I am not saying that it’s a GOOD thing for houses to sit, overpriced and unsold. But if that happens inventory WILL increase, and eventually some sellers will bow to reality and cut the price some.

    In general, higher prices act to both limit demand and motivate owners to list. We may be seeing a turning point. The turning point may take the form of prices overshooting the equilibrium point then falling.

  12. 12
  13. 13
    Buyer says:

    Has any one come across this website: https://www.faira.com/

    They allow sellers to list homes and buyers to make offers for a very small fee (no agent commission). The website was launched just last October and they have already sold more than 60 homes and is growing fast.

    Recently, they started to offer a new service. They will represent buyers for making offers on any house (even if not listed through their website) with a 2.5% commission refund.

    What do you think of this website? Does it have a chance to grow really big and start a new era of the RE market with much less or no agent commission?

    I myself think that it has a big chance. I believe that the work of agents is becoming less and less important day after day. Buyers can easily find listing online and can find all the information they need about the house and the area. All the sale paper work is now prepared and signed electronically and needs no big effort from the agent. Most of the service the agents offer can be automated. Even the access to houses. It can be changed so that buyers can buy an access code (password) and use it to open the lock themselves…

    What do you think?

  14. 14

    By Buyer @ 13:

    What do you think?

    I think you probably have some sort of connection to the site and that your post is spam.

  15. 15
    Erik says:

    RE: Buyer @ 13
    Quit spamming d!ck!

  16. 16
    Buyer says:

    By Kary L. Krismer @ 14:

    By Buyer @ 13:

    What do you think?

    I think you probably have some sort of connection to the site and that your post is spam.

    RE: Kary L. Krismer @ 14

    I have absolutely no connection of any sort with the site and I am not posting a spam. I posted several times at this blog during the past year and as I introduced myself am a buyer looking for a home to buy.

    I was just wondering about whether this model will work or not. I even wonder why no one tried this idea before.

  17. 17
    Buyer says:

    By Erik @ 15:

    RE: Buyer @ 13
    Quit spamming d!ck!

    I am not a spammer. I have no relationship with this company at all.

  18. 18

    RE: Buyer @ 16 – Then how do you know they’ve sold 60 properties?

    BTW, assuming that’s true, they have huge issues with the NWMLS and promoting unlisted properties.

    Also, offering to rebate 2.5% of SOC is rather naive given the fact that the SOC might be less than 2.5%. Also, offering sellers free inspections is just ignorant. Sellers should not want to be involved in inspections.

    This, IMHO, is just another instance of yet another alternative model that doesn’t make any sense. You see them all the time, they’ve existed for years, and many are covered here on this site, but not much ever comes of them. Even the best of the results (Redfin) ended up with something that isn’t all that different, and hasn’t been all that successful.

  19. 19
    Drone says:

    RE: Buyer @ 13 – We’ve seen these pop up before. Everyone sees the big agent commission and wants to find a way to undercut the market. I think that is generally a good thing, but nobody has cracked the formula yet.

    From reading this blog (and others), I’m convinced that there is quite a bit of value to hiring an agent. In a fast-moving market they can help craft a winning bid (or extract maximum value if you’re selling), and in a slow market they can help get things moving. I want to save money as much as the next guy (Sorry Kary and Ardell). I just don’t see how it’s possible if you’re not in the market buying and selling every day. Stated differently: Since I’m not a sales guy or a professional stager+interior designer, I’m fairly certain that I will gain more value by using an agent than I will save by going the discount route.

    Someday, maybe things will be cheaper. I’m not convinced that today is that day.

  20. 20
    Buyer says:

    By Kary L. Krismer @ 18:

    RE: Buyer @ 16 – Then how do you know they’ve sold 60 properties?

    I saw their ad on facebook and they had some stats in it.

    By Kary L. Krismer @ 18:

    RE: Buyer @ 16
    BTW, assuming that’s true, they have huge issues with the NWMLS and promoting unlisted properties.

    I believe that they do list the homes through NWMLS. They allow people to submit offers electronically on their website without needing to work with any agent. They also make the prices of all the offers received on a certain house available for everyone to see. So, in case of multiple offers, the auction will not be blind. It becomes an open auction style.

    By Kary L. Krismer @ 18:

    RE: Buyer @ 16
    Also, offering to rebate 2.5% of SOC is rather naive given the fact that the SOC might be less than 2.5%. Also, offering sellers free inspections is just ignorant. Sellers should not want to be involved in inspections.

    My understanding is that they only take 0.5% commission no matter how much the actual commission paid to them by the seller is. So, e.g., if the commission is 2% they get 0.5% and give the buyer 1.5% .

  21. 21
    greg says:

    RE: Buyer @ 20

    Kary spends his time attacking all and any new competitors. Kary feels very threatened by anyone suggesting that fees are too high or that there might be a better for consumers.

    It is very clear that the US system is designed to serve the needs of agents and agencies over the needs of consumers. NAR outspends virtually every single industry lobbying to protect the status quo.

    Kary of course stamps his feet and refuses to accept the reality that US based agents are by far amongst the most expensive on the globe. UK , Germany, China, India, Spain etc etc etc all charge half or less than we do.

    example, complex multi million dollar homes in London are sold for a 1% fee! as are 200k and 1 million and 10 million pound homes too. Why? How? Well most countries simply don’t allow market monopolies such as the 850 mini monopolies in the USA that control 99% of retail sales..

    To your point, Faira looks like a good model and costs little to try , of course MLS agents will avoid dealing with them like the plague in order to drive them out of biz, but they will do it gently and never admit it publicly.

  22. 22

    RE: Drone @ 19

    Not sure why you are apologizing to me. My fees are based on the work at hand.

    Tracking Backward:

    Price $252k – My fee 3% including staging and professional photography – seller
    Price $390k – My fee 2% as property was very close & past client discount – buyer
    Price $550k – My fee $3,000 to $4,000 off for some client participation DIY – buyer
    Price $512k – 3% Difficult Scenario to accomplish – VA buyer
    Price $665k – $10,000 flat including staging and professional photography – seller
    Price $410k – $10,000 flat including stagen and professional photography – seller
    Price $1,050,000 – My fee $13,650 past client discount and limit on time to purchase – buyer

    For many years I have adopted my own method of charges that are specific to each client and the market. Recently the larger discounts are for sellers because homes sell fairly easily. In a previous buyer’s market it was the reverse. Some consideration given to ease of client objective as well as client’s ability to participate in the duties and outcome in a strict timeline.

    Why do you assume you know what my fees are and are not? For that matter how do you know what anyone charges? It’s not public information when the firm itself doesn’t have a stated charge, and most don’t. Where the agent is an independent contractor, and that is the case with most brokerages, the agent is free to set their own fee arrangements with their clients. The brokerage does not dictate what the charges will be. So why assume a number that is not true in many, many cases?

  23. 23
    greg says:

    RE: Drone @ 19

    Drone, please understand one can buy and sell property, charge 1% and make a great living. I know this as a fact because I have paid 1% (total) I have paid 0.75% (yes less than one percent) and on that sale we set a new record for the street, the estate.

    Of course some Agents in the USA wish to pretend this is not true. But the simple fact is Agents in top tier cities, in 1st world countries can market a home, reach full price and charge a low fee! How? Is it magic? Nope it is called an open and unfettered market. A market where clients are served extremely well, where full market prices are achieved . Unlike the USA , most countries don’t allow groups like NWMLS to maintain a monopoly. Worse still the USA is made up almost 1,000 local monopolies that control almost all retail residential sales. Each one sets terms that ensures clients are powerless to fully negotiate fees. Divide and conquer , it is an old trick but a good one.

  24. 24
    It transplant says:

    My friend just sold a condo in Seattle DT through Faira.com. Faira did the inspection, professional photos etc for free. The buyer did not have a realtor so ended up paying just .5% in commission. Its a win win situation. This model might not work for all, but for whom it does, its a lot of savings!

  25. 25

    By greg @ 21:

    RE: Buyer @ 20

    Kary spends his time attacking all and any new competitors. Kary feels very threatened by anyone suggesting that fees are too high or that there might be a better for consumers..

    I an skeptical of those who make false claims (e.g. give back 2.5% of the commission) or make claims to mislead consumers (a free inspection is a good thing for a seller).

    Bottom line is most these companies just burn through money before they terminate, and don’t do their clients much good because they don’t know what they’re doing. Redfin is the exception, not the rule, and as noted, they’re not all that different now.

  26. 26

    By It transplant @ 24:

    My friend just sold a condo in Seattle DT through Faira.com. Faira did the inspection, professional photos etc for free. The buyer did not have a realtor so ended up paying just .5% in commission. Its a win win situation. This model might not work for all, but for whom it does, its a lot of savings!

    So where was the condo listed? They don’t seem to have any listings, past or present, on the NWMLS system, notwithstanding the fact that they are members.

    Maybe someone else can find one of their listings????

    BTW, doing a seller inspection on a condo is probably less risky than doing one on a house. And I’m not sure anyone charges for “professional photos” so not really a saving. But it sounds good to consumers who don’t know any better.

  27. 27
    Buyer says:

    By Kary L. Krismer @ 26:

    So where was the condo listed? They don’t seem to have any listings, past or present, on the NWMLS system, notwithstanding the fact that they are members.

    Maybe someone else can find one of their listings????

    Here is one example.

    Here is the listing on their website: https://www.faira.com/listings/WA/Bellevue/98005/2427-138th-Ave-SE/10673

    You can also see the same listing on redfin and zillow as a regular NWMLS listing.
    https://www.redfin.com/WA/Bellevue/2427-138th-Ave-SE-98005/home/507551

    They accept offers with no buyer’s agent through their platform or through a buyer’s agent in the traditional way.

  28. 28
    It transplant says:

    Re: Kary L. Krismer @26

    If a friend from work tells me that he sold his condo through Faira and was not charged a commission, I usually take his word for it. My apologies, I should have known better and asked him to share the NWMLS listing, sales deed and other relevant documents so that you can verify the sale. My bad. I don’t know why I did not think of all this when he told me about selling the condo.

    Since, I am not that well versed with the entire process I thought of asking you the great knowledgeable one- Do all realtor do free inspection and don’t charge any commission from the seller to sell their house? So, no savings here either, right. What a bummer!

  29. 29

    RE: Kary L. Krismer @ 26

    Kary,

    Any brokerage or agent can have a “faira” component. To find the listings put “faira” in the agent remarks search field and you will find many and even at least one from an agent in your own company.

    While the Faira fee for the platform is .5%, that does not mean the listing doesn’t carry an SOC of 3% and the ones I am seeing all do have BOTH a .5% fee to Faira AND a 3% SOC.

    It reads the buyer has to pay both, so it costs them more and not less as people here are suggesting. So the ones IN the mls cost .5% more to the buyer and those with only .5% charge would not be in the mls as far as I can see.

    That’s how I am reading it.

  30. 30

    RE: It transplant @ 24

    The inspection and photos are not “free”. The buyer is paying for those and that is what the .5% is for and paid by the buyer. There are no agents or any commission on the one your noted. It’s a For Sale By Owner and an Unrepresented Buyer with the buyer paying for the seller’s photos and the seller ordered buyer inspection in the .5% faira fee.

  31. 31
    ess says:

    In case any of you missed this very interesting article and discussion down below. We are not San Francisco – perhaps SF lite. The ace in the hole for those arguing we are not going to be another SF is the fact that we have inexpensive suburbs. This may be true – but as we all know – facts on the ground can change. I would not consider places such as Redmond, Bellevue, Mercer Island etc to be inexpensive suburbs.
    What was also interesting that there isn’t much talk about a bubble for the Seattle area. If there is a bubble – it is made of very strong material that apparently isn’t going to burst any time in the immediate future according to these folks.

    The best news is that housing and rents are much cheaper than SF. Good news for renters – as they don’t have to pay as much for rent, and good news for property owners insofar as there is a potential upside in the next few years, and that if we are another SF lite – anything is possible. So everyone should be happy with this article, a rare feat!

    Happy reading!

    http://www.seattletimes.com/business/will-seattle-really-become-the-next-san-francisco/

  32. 32
    GoHawks says:

    Funny, not too many folks on here been calling AMZN a bubble in the past few months.

    The wealthiest two Americans now both live here.

  33. 33
    Buyer says:

    By Ardell DellaLoggia @ 29:

    RE: Kary L. Krismer @ 26

    Kary,

    Any brokerage or agent can have a “faira” component. To find the listings put “faira” in the agent remarks search field and you will find many and even at least one from an agent in your own company.

    While the Faira fee for the platform is .5%, that does not mean the listing doesn’t carry an SOC of 3% and the ones I am seeing all do have BOTH a .5% fee to Faira AND a 3% SOC.

    It reads the buyer has to pay both, so it costs them more and not less as people here are suggesting. So the ones IN the mls cost .5% more to the buyer and those with only .5% charge would not be in the mls as far as I can see.

    That’s how I am reading it.

    Faira rebates the whole SOC comission 3% or whatever to the buyer. So the buyer only pays 0.5%. This happens in case the house is not listed through their platform.
    If the house is listed through their platform, the buyer only pays $500 flat rate fee.

  34. 34

    By Buyer @ 27:

    By Kary L. Krismer @ 26:

    So where was the condo listed? They don’t seem to have any listings, past or present, on the NWMLS system, notwithstanding the fact that they are members.

    Maybe someone else can find one of their listings????

    Here is one example.

    Here is the listing on their website: https://www.faira.com/listings/WA/Bellevue/98005/2427-138th-Ave-SE/10673

    You can also see the same listing on redfin and zillow as a regular NWMLS listing.
    https://www.redfin.com/WA/Bellevue/2427-138th-Ave-SE-98005/home/507551

    They accept offers with no buyer’s agent through their platform or through a buyer’s agent in the traditional way.

    That’s an MLS4Owners listing. They are providing the MLS listing, not Faira (as Ardell seemingly explained.)

    Faira’s website says that their clients get a listing for free: https://www.faira.com/seller

    Apparently MLS4Owners isn’t charging their usual fee, or that information on the Faira website is misleading.

  35. 35

    By It transplant @ 28:

    Do all realtor do free inspection and don’t charge any commission from the seller to sell their house?

    Informed agents would tell their seller clients not to do a pre-inspection. I don’t kick my listing clients in the balls either, and then try to claim that it’s good for them because it’s free!

    BTW, there’s an inspection company out there too that is based entirely on sellers allowing a pre-inspection, which is also free, which buyers can then pay for at a reduced free. Inspectors are not my competitors in any way, but I’m totally opposed to this firm’s business practices because it’s based entirely on the seller doing something stupid (and also their own false statements on their own website).

  36. 36

    RE: Buyer @ 33 – Interesting you can’t tell from their website what exactly they do do. https://www.faira.com/seller

    But much of that information about “other sites” is very misleading.

  37. 37
    IT Transplant says:

    Kary L. Krismer @35

    RE: Buyer @ 33 – Interesting you can’t tell from their website what exactly they do do. https://www.faira.com/seller

    But much of that information about “other sites” is very misleading.
    ————————————————————————-
    They have a video that explains what they do. Being a lawer, you shoud be able to figure out what they do. But if you don’t want to understand it, thats a different story.

    I understand that they are competing with you so you don’t like them, but straight out lying about them is not the right thing.

    How about this, they are bunch of liers and are just scamming people. The cost of selling a house is 6% and if someone can bring it down to .5% they must be doing something fishy, right? Sue them for false advertising- SARC

  38. 38

    Just got this in my email. New startup by one of the Uber founders where agents post listings and buyer agents submit offers and the offers are visible to other buyers.

    The ebay like site people have been asking for.

    https://haus.com/

    Always exciting to see new ideas in the real estate space.

  39. 39

    RE: Buyer @ 33

    I checked and yes, some do that and many have an agent so the SOC is not given to the buyer on those. Both options are available on the mls listed property. The buyer can have an agent or not.

    Whether the buyers with agents pay 3% plus the .5% is between them and their agent I would think.

  40. 40
    David B. says:

    RE: ess @ 31 – I doubt Seattle will become the next SF. Every past such period of rapid appreciation (since I moved here in 1989) has had talk of Seattle becoming the next SF, and the feared has yet to happen. This period of rapid increases will probably end fairly soon.

  41. 41
    Buyer says:

    By Ardell DellaLoggia @ 37:

    RE: Buyer @ 33

    I checked and yes, some do that and many have an agent so the SOC is not given to the buyer on those. Both options are available on the mls listed property. The buyer can have an agent or not.

    Whether the buyers with agents pay 3% plus the .5% is between them and their agent I would think.

    Here is how it works for buyers (that’s my understanding):

    – If the house is listed by Faira and If the buyer comes with an agent, the 0.5% fee is NOT required. The buyer can use the platform to submit an offer for free or submit an offer using the traditional way. 3% commission is paid by seller to the buyer’s agent.

    – If the house is listed by Faira and if the buyer has no agent, they buyer can submit an offer through the platform for free. If their offer gets accepted, the buyer has to pay $500 flat rate fee for using the platform to submit an offer.

    – If the house is NOT listed by Faria and the buyer doesn’t have an agent, Faira can represent the buyer and help submit an offer in the traditional way. If the offer gets accepted, Faira will refund to the buyer the SOC – 0.5%. Faira provides free [pre-]inspection to the buyer as part of the deal.

  42. 42

    RE: Buyer @ 41

    As Kary noted, all of the ones I saw were not “listed by Faira” but rather had a faira option in the agent remarks of listings by other companies. Not sure how kosher it is to put the faira option in the public remarks if inside the mls, but I did see a few of those. Likely more to advise that there were reports available.

    The original “guy” and sorry I can’t remember his name, who started “faira” by a different name also had an appraisal in addition to a home inspection.

    Do they still have an appraisal?

  43. 43
    Buyer says:

    By Ardell DellaLoggia @ 42:

    RE: Buyer @ 41

    As Kary noted, all of the ones I saw were not “listed by Faira” but rather had a faira option in the agent remarks of listings by other companies. Not sure how kosher it is to put the faira option in the public remarks if inside the mls, but I did see a few of those. Likely more to advise that there were reports available.

    The original “guy” and sorry I can’t remember his name, who started “faira” by a different name also had an appraisal in addition to a home inspection.

    Do they still have an appraisal?

    I don’t think they have an appraisal. It’s not mentioned anywhere. Only inspection.

  44. 44
    ess says:

    By David B. @ 40:

    RE: ess @ 31 – I doubt Seattle will become the next SF. Every past such period of rapid appreciation (since I moved here in 1989) has had talk of Seattle becoming the next SF, and the feared has yet to happen. This period of rapid increases will probably end fairly soon.

    True – there are very few cities as expensive as San Francisco in the US, and probably none the size of SF. On the other hand, the cost of owning a house in Seattle has rapidly moved up over the years and Seattle has become one of the more expensive cities in the US to own a residence. If the less expensive suburbs that the author alluded to have dramatic increases in prices and rents (as they have started to have), then we may see a similar model to the SF experience. Time will tell. In addition, incomes and the availability of well paying jobs will have to increase dramatically in order to experience another dramatic upward increase in prices that Seattle has experienced in the past four years.

    Another city I have lived in is a prime example of what can happen due to external and unforeseen forces unleash major price increases. Vancouver BC had been a city where one could afford to buy a residence if one was a typical working resident – no more. Talk about unanticipated consequences that forced real estate prices into the stratosphere. Vancouver, BC is the poster child for that experience. Thus anything is possible – as the typical renter in Vancouver BC ruefully will acknowledge.

  45. 45

    By Ardell DellaLoggia @ 39:

    RE: Buyer @ 33

    I checked and yes, some do that and many have an agent so the SOC is not given to the buyer on those. Both options are available on the mls listed property. The buyer can have an agent or not.

    And if that’s correct, that’s another issue I would have with them. Any system that in any way discourages a buyer from having their own agent is a bad system, both for the buyer and the seller.

    Now maybe they don’t understand these things, and that they do them is just due to ignorance. But if they do understand these issues, then that’s much worse. Either way it doesn’t paint a pretty picture.

  46. 46

    RE: Ardell DellaLoggia @ 42 – Is this the same one that popped up a few months ago when the Zillow CEO was selling, where they would somehow try to guarantee that your house would sell for a price they set?

  47. 47

    By Buyer @ 41:

    Here is how it works for buyers (that’s my understanding):

    – If the house is listed by Faira and If the buyer comes with an agent, the 0.5% fee is NOT required. The buyer can use the platform to submit an offer for free or submit an offer using the traditional way. 3% commission is paid by seller to the buyer’s agent.

    – If the house is listed by Faira and if the buyer has no agent, they buyer can submit an offer through the platform for free. If their offer gets accepted, the buyer has to pay $500 flat rate fee for using the platform to submit an offer.

    – If the house is NOT listed by Faria and the buyer doesn’t have an agent, Faira can represent the buyer and help submit an offer in the traditional way. If the offer gets accepted, Faira will refund to the buyer the SOC – 0.5%. Faira provides free [pre-]inspection to the buyer as part of the deal.

    Well since neither Ardell nor myself have been able to find a single NWMLS listing that was ever listed by Faira, presumably only the third one applies.

    One positive thing is they do seem to be good at including “attached documents” like title reports. I wish more agents were that good at providing that information.

    Here’s what I found on the issue of appraisals. It seems to only protect the buyer from having to pay the Faira fee if the appraisal comes in lower than a certain point (but not necessarily the purchase price). Unless I’m missing something, that doesn’t seem like much of a guarantee.

    Finally, I really wonder who they think they represent in these transactions. They have some sort of a deal with a seller to use their system, so presumably they would be the seller’s agent, but their system really isn’t clear.

  48. 48

    There’s a link to their “improved” Purchase Sale Agreement here: http://info.faira.com/blog/simple-home-selling-contract

    Rather obviously it wasn’t drafted by an attorney. Some things of note: No agency disclosure. The buyer assumes charges and assessments due after closing (no negotiation). The language regarding quality of “title” is absurd. The type of title insurance required isn’t clear, but most likely not what a buyer would actually want (a “homeowner’s” policy). The buyer can terminate the contract at any time (sorry seller the day before closing). The lead based paint terms don’t comply with federal law (sorry parties for the risk of fines). No right for the buyer to do an inspection of their own. No right for the buyer to inspect the property prior to closing to make sure it’s still okay. No description of what’s included in the sale (e.g. drapes?). No mention of liquidated damages in the event of a breach (assuming it’s possible to breach a contract that the buyer can terminate at any time). No discussion of a financing contingency (which again, why would you need it if the buyer can terminate at any time). Finally, there’s a statement that Faira didn’t provide “real estate advice” to either party (notwithstanding what the facts might actually be).

  49. 49
  50. 50

    RE: Kary L. Krismer @ 47

    They are a service to agents or directly to buyers and/or sellers. I met with them very early on when they offered me the service for “free” and I declined. It had an appraisal at that time in addition to a home inspection. It’s possible they could also be an agent, but I think it’s more like Zillow where a buyer and seller can connect directly…or via agents. When they connect via agents, the standard process is used. When they connect directly, some other means.

    Kary if you do a general search and just put *faira* in the agent remarks section you will see that most are listed as Chris Nye with MLS4Owners. So they are an XA listing, fsbo in the mls, on the list side. If you flip through the “full” display, you will see that some show a “regular” agent at the bottom, and those have an SOC. About 25% or so, and those are not many in unit count, show Chris again at the bottom. those would be the ones where the buyer went direct to the faira site without an agent. So those were XA as to agent for seller AND XA as to agent for buyer, but still “in” the mls.

    The “agent” in the mls acting in “no agency” capacity would be Chris and not Faira. Not mandatory to be that way, but so far that is how most are happening.

    You could have a “faira” listing as could I or any agent. Searching for “faira” to be the listing agent is not going to pull those up for you.

    I was looking forward to your rant about “variable rate commission”. You’re slipping. :)

  51. 51

    RE: Ardell DellaLoggia @ 50 – They are licensed as brokers, and if they are providing “brokerage services” their agency (or non-agency) needs to be disclosed. RCW 18.86.030(1)(F) and (G). That would also require that they provide the Law of Agency pamphlet.

    Brokerage services can be provided “directly or indirectly” and include “listing” and also: “Advising, counseling, or consulting buyers, sellers, landlords, or tenants in connection with a real estate transaction.” RCW 18.86.011(16).

    At least they are licensed. There’s another entity that is clearly providing brokerage services, particularly for one bank, and the last time I checked they were not licensed.

  52. 52

    By Ardell DellaLoggia @ 50:

    I was looking forward to your rant about “variable rate commission”. You’re slipping. :)

    I don’t see that’s a problem here, because it’s seemingly disclosed (although perhaps not well-disclosed). It is though bad for the seller since it could discourage offers, and anything that discourages offers is bad for sellers.

  53. 53
    ARDELL says:

    RE: Kary L. Krismer @ 52

    Do you ever think long and hard about how to progress the industry to be better for buyers? You’re not wrong, but you are always protecting the seller and talking about what’s bad for the seller.
    It surprises me that you don’t find more value in less controls for less cost to consumers, because I think you are a Republican. One would think fewer obstacles at less cost would be appealing to the “get out of our way with costs and rules” crowd.
    I’m all for protecting my sellers but both buyers and sellers might like “less government” rules that add to cost. Isn’t that what Republicans are supposed to be in favor of?

  54. 54

    RE: ARDELL @ 53 – Well first, you’re sadly mistaken if you think I’m a Republican. Just because I thought Romney was better than Obama???? I’m more a Libertarian. (As an aside, IMHO Obama is better than any of the last two of either party this year. And as you may recall, in your Obama piece right after his election I was hopeful, because I didn’t know then he didn’t have a clue and would be so decisive.)

    Second, what makes you think I don’t care about buyers? Roughly half my transactions are buyers (remember you have to check my wife’s transactions too). I’ve said above any system that encourages a buyer to go without an agent is bad. I’ve said above that these seller pre-inspections are bad for both buyers and sellers. And while the issues just addressed on disclosure of agency go more to the shortcoming of the “improved PSA,” proper disclosure is good for both buyers and sellers.

    But I’ll turn it around. What makes you think that just because something is different that it’s somehow better? I could be wrong, but this Faira thing just screams of tech people sticking their noses into something they don’t know about just because they can create a webpage or an app. That inspection company I mentioned is clearly in that group. And while I didn’t check out that other site you linked above, there are clearly seller downsides to disclosing the amount of other offers (at least in every instance).

    As to Faira, I’m not sure what they think they’re doing that couldn’t be done better simply by being a really low commission rebate broker. At least that way they wouldn’t be playing with things that they don’t understand, like seller inspections and drafting boilerplate contracts.

  55. 55

    RE: Kary L. Krismer @ 54 – That last word of the first paragraph should read divisive.

  56. 56

    RE: Kary L. Krismer @ 54

    Redfin was the same way when they started Kary. You have to give these things time to grow and evolve without picking them apart.

    I agree with you about pre-inspections unless the house is so perfect there is nothing much in the report. However I have to admit that in at least two instances the seller over disclosing did help my buyer clients’ immensely.

    The primary reason for a seller to get a pre-inspection is if he wants to fix everything the inspector finds. I have had some clients who used a pre-inspection that way and only got a verbal vs a written so they knew what to fix in preparation for the buyer’s later inspection.

    Basically I just want you to not be what Greg calls you. :) One of my Mom’s favorite lines: “Don’t be what they call you!” Speaking to my brother and not me of course.

    Greg and many others want options outside of the 100 year old system we have. You have to let people try to improve it, especially as to cost. SOME things you say are right…but not necessarily the cost of monitoring that exists. When you add commissions, plus lender costs, plus Title Costs, Plus escrow costs, plus inspection costs and sometimes several in succession where there are multiple offers…

    Sure we have sound reasons for the way we do everything that we do. No question. But when you say …” just screams of tech people sticking their noses into something they don’t know about just because they can create a webpage or an app” you are just being an old fart.

    The industry has NOT found ANY way for people to save on the costs. The Government hasn’t either. So who else but the tech people should do it? If we all did it…they wouldn’t have to. Sure we know more about real estate than they do…or at least I do. :) But how can you fault anyone for trying to whittle down the costs of buying and selling houses? It’s a worthy effort.

  57. 57

    RE: Ardell DellaLoggia @ 56 – You realize Uber only considered the issue of insurance just over a year ago right? Any other business it would have been the first issue–especially one with that much money and in that industry. But because they are tech people they didn’t even have a clue that was an issue.

    Now you can call me an old fart for pointing that out, but I would say that was an oversight that wasn’t good for their drivers, wasn’t good for their passengers and wasn’t good for other drivers or pedestrians anywhere near them. It has nothing to do with age, it has to do with having a clue about how the world works outside of tech.

  58. 58
    Som says:

    RE: Ardell DellaLoggia @ 56 – First principles. If you want to disrupt a monopoly marketplace:
    1. First sell just a niche and for everything else direct customers to the marketplace. Marketplace will ignore your competition and be ok with the traffic routing. Build competitive advantage (customer service, look&feel, placement, etc.).. Slowly start selling the same items as the marketplace, at a marginally lower brokerage. Marketplace will be irked but will still ignore you. Then once you have hit even traction, go batsh*t crazy and go to war with negative brokerage. Sellers will come to you. Wait for the marketplace to die.

    2. If a marketplace is surviving through largely monopolistic advantage, it will get decimated by whoever has the patience and deep pockets to compete. The nature of tech is such. Look at how the television and cable industry will pan out over next 10 – 20 years. No one thought TV/cable providers can be disrupted because of their monopoly. But today it is a foregone conclusion.

    Once Redfin goes public, it will have enough shareholder pressure and pocket to use it’s store to disrupt the marketplace. There are several ways to do this by automating several things (even introducing notion of accredited buyers/sellers, etc.) but it will take me an hour to explain the different models that will work. Each one of them however requires resilience, perseverance, and deep pockets for execution. Only redfin I think will be in that place.

    Loan and mortgage industry is another one that will be revolutionized. Big banks will still be there but loan processes would be automated and distributed. Look at the work Formation 8 (now known as 8 vc) has invested in.

  59. 59
    ARDELL says:

    RE: Som @ 58

    What do you mean by “accredited buyers and sellers”?

  60. 60
    ARDELL says:

    RE: Kary L. Krismer @ 57

    Consider that everyone is now or should be a “tech people”. The point is to use the advantages of technology to improve every industry.

    There truly is no us vs. them in that regard.

    Consider that our mls purposely makes the legally required public site virtually inoperable to force consumers to use pricier options and largest of brokerages. It is not inadvertent stagnation of technology. It is intentional.

    We deserve what we are getting as a result.

  61. 61

    By ARDELL @ 60:

    RE: Kary L. Krismer @ 57 – Consider that our mls purposely makes the legally required public site virtually inoperable to force consumers to use pricier options and largest of brokerages. It is not inadvertent stagnation of technology. It is intentional..

    I have no idea what you’re talking about. What public site? Are you talking about this?

    http://www.nwrealestate.com/nwrpub/index.cfm?action=ptype&county=kin

    They don’t invest in that because there’s no return. And in case you haven’t noticed, people can use anyone’s website and then work through another broker. Do you think that when I was with Keller Williams I sent people to their site? Even now I’ll typically mention 3 sites that they could use.

    Finally, by tech people I meant people whose work and educational background was tech, not people capable of using technology, or people in other areas using tech. But in any case I think you overestimate the ability of most people to use tech. Yes tech can be useful, but not if it’s promoting things that are bad for the people intended to use it because the people who designed it don’t have a clue (or do but don’t care).

  62. 62
    ARDELL says:

    RE: Kary L. Krismer @ 61

    It’s intentional Kary. It’s orchestrated by a few votes from a few. It hurts consumers and it hurts small brokerages and it is why the techies need to “fight back” and make the advances “for us” and without us. If we did better they wouldn’t have to. So don’t blame them for putting their noses in our business. We gave them no choice. And badmouthing alternatives is part of the monopolistic culture. Don’t be that.

  63. 63

    RE: ARDELL @ 62 – Don’t most/all brokerages have their own sites? There are agents that have their own sites that allow consumers to search listings. I’m not even sure why the NWMLS bothers to maintain that site.

  64. 64

    RE: Kary L. Krismer @ 63

    It’s a requirement that they have one and it is supposed to be for the public benefit . NO ONE is allowed to have a brokerage site or agent site unless they agree to have a full public site…ours is deplorable and barely complies with the law. The DOJ required it and ours is a big thumb your nose at the requirement.

    Bare minimum is not a good way to represent “the mls”. It’s a creepy thing to do. So let “the techies” have at us and build great things that replace us. Because we are not being cooperative even when required to do so.

    The longer we keep our finger in the hole in the dike the more we deserve to lose our finger.

    It’s a long complex story as to why every mls was forced to be more public, and not just through brokerage sites. Our “public” face is crazy bad and your reason why is absolutely wrong.

    http://www.realtor.org/topics/nar-doj-settlement/virtual-office-website-vow-policy-nar-doj-settlement-details

  65. 65
    Scotsman says:

    My gawd- the pros are still having fits over the 6% model’s eventual demise. But back on topic- price increases are definitely area specific. Homes on my street shot up in value last year but have clearly leveled off this year. Not sure why- desirable area 30 minutes from downtown Seattle on I-90, nice mix of $500k-$2.0m homes, good schools, etc. I keep waiting for prices in the city to push people further out like 2005-2007 but not happening yet.

    As an aside, enjoyed reading in today’s Times about home prices in the Bay Area still being much, much higher. Room to grow!

  66. 66

    RE: Ardell DellaLoggia @ 64 – Well first, I’m not sure that even applies to the NWMLS since it’s not a Realtor MLS. I don’t remember if they were a party to the suit, although I do suspect they try to comply with the settlement as much as possible to avoid being a future target.

    Second, I’m not sure what you’re right about your point that the public MLS site is required by that order–I think it deals more with the issue of MLS entities allowing broker firms to have their own websites which display MLS data. Do you have a specific section of that site you’re referring to?

    But more than anything, even assuming you’re right on those two points and that the public site is mandated by the government, I still don’t see the harm that you see coming from this lousy NWMLS public site,. How does the fact that it’s lousy somehow push buyers to more expensive firms when even low cost firms have their own websites?

  67. 67

    By Scotsman @ 65:

    My gawd- the pros are still having fits over the 6% model’s eventual demise.

    Actually it’s only the laypeople talking about 6%. I’ve been talking about practices that are bad for buyers and sellers. Things that sound good to laypeople (e.g. “Free Inspections!”) but which are really bad for them. Those things are bad regardless of the model.

  68. 68
  69. 69

    By ARDELL @ 60:

    Consider that everyone is now or should be a “tech people”. .

    Yes, everyone clear is a tech person! /sarc

    http://www.seattletimes.com/business/technology/washington-state-to-sue-comcast-over-pattern-of-deceptive-practices/

    400,000 people in Washington signed up for this service. People in general clearly don’t know anything about tech.

  70. 70
    greg says:

    RE: Doug @ 68

    Given that rates will not stay at these levels forever, what happens to prices when rates increase to sustainable level.

    (assuming of course we are not in a “new normal”)

  71. 71
    Doug says:

    RE: greg @ 70 – Define forever?

    If rates go up, prices will probably go down, but there have been periods of increasing interest rates where home prices also rose – so I don’t know.

    Japan first starting dropping rates 25 years ago and have held rates at zero now for 16 years. We’re only on year 7 of ZIRP and the economy is slowing (see latest GDP print).

    Why aren’t the current levels sustainable? Serious question.

  72. 72

    RE: Kary L. Krismer @ 66

    Obviously if the DOJ was involved it was a huge issue that “minimum compliance” merely skirted. But let’s end this as I agree with Scotsman that even though someone else started the off topic conversation…we are dragging this way too far off topic.

    You can facebook message me if you want to understand the underlying egregiousness of skirting this DOJ mandate.

  73. 73

    RE: Ardell DellaLoggia @ 72 – So in another words, you can’t answer any of my questions. That the NWMLS may have a lousy website actually helps encourage alternatives, not discourage them.

    But you’re right, it is off topic, as are 90% of the posts here, because we’ve been working with basically the same statistics for almost 2 years now. Low inventory is the driving factor, and it’s hard to say new things about that for 2 years.

  74. 74
    greg says:

    RE: Doug @ 71 –

    ref sustainable ..
    The current situation punishes those who don’t wish to buy risk. I don’t see how the economy works long term when one has to make a choice between seeing ones capital decline or buy what most would consider extremely expensive risk. The risk reward is way out of whack. Well it works but only in a deflation economy that rewards deferring.

    It is my view that the USA values home ownership, if that is correct we will have to address the current price / income situation, otherwise we will see ownership levels continue to fall.

  75. 75
    Blurtman says:

    I am wondering if HELOC’s are now again on the increase. Even if you bought in 2011, you are sitting on nice equity, which is rock solid and will only increase. (wink, wink). Perhaps folks are more wary and wiser now. And loan qualification hopefully identifies responsible types who won’t go hog wild and tap equity.

  76. 76
    Corndogs says:

    RE: Erik @ 1 – Lot’s of dummies trying to buy houses now, Uber drivers, Bernie Sanders supporters and the like. It’s a good time to sell a property or two for those who have multiple properties.

  77. 77
    Gooddeal says:

    RE: SFraz @ 2

    I’ve noticed a lot of price drops in Kent, Renton and Maple Valley as well. I believe the homes were priced high to begin with but they’re nice properties, like this one:

    https://www.redfin.com/WA/Maple-Valley/19417-SE-232nd-St-98038/home/390490

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