Seattle’s skyline is a-changin’ – a look at how new condos in Seattle will look over the years

http://www.nwmls.com/discover/nwreporter.cfm?SectionListsID=25&PageID=4020

 

This article from the NW Reporter provides a composite picture of how upcoming condominium projects will change the face of the Seattle skyline. There is also a short section of commentary about the condo market and what all these new condos are doing to the local real estate market as they bring on new units.

My personal take is that so far these condos haven’t negatively impacted much of the overall local market but they do impact those that are trying to sell higher end units in areas that aren’t as popular and/or they make it tougher for an owner with only a couple of years ownership to sell their home if they are in the same price range.  Granted, that is more the case for conversions (pre-existing buildings converted from apartments to condos) than it is new construction – but they do overlap here and there.

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Are flippers really contractors?

There are changes coming regarding how a contractor is defined and it is most likely that those investors who like to flip houses for a living may be affected. The link below is to the document in play in Washington State.

http://www.leg.wa.gov/pub/billinfo/2007-08/Pdf/Bills/Session%20Law%202007/1843-S.SL.pdf

For a synopsis of what all this means from a real estate attorney’s point of view read the following post from Russ Cofano over at Rain City Guide. http://www.raincityguide.com/2007/10/03/are-you-a-contractor/

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Rockin’ it in women’s volleyball and at Team Reba!

I captain a women’s volleyball team that plays in Kirkland on Monday nights.  It’s a blast partly because the women I play with are aggressive, fun, and focused.  We have a great time and it seems that everyone’s attitude is very positive which makes for fun times for me when I’m not focused on working.

For the past several years our team has either won or been in the top 3 standings in the league.  I’m expecting us to be high in the standings already into our 3rd week as we’ve got a great line up this year and the addition of Joylyn to our team has been a boost to our defense. She’s got great instincts and is a wonderful all around defender.  Thanks for joining us, Joylyn!

I’ve used my passion for playing volleyball frequently as a metaphor for how we handle our work at Team Reba.  We all have a position to play and if we aren’t all covering our area then we’re exposed to a loss or at least losing a point.  So, we work hard at making sure we all know our positions and what is expected of us as well as knowing what each team member’s job is so we can either cover, if needed, or to switch out if necessary to execute a particular play.  Michael and I do this regularly as we work with investment clients and the more time we have with Nina in our office she is learning more and more about working with me on our residential listing business and our Concierge Services.

We don’t use the typical model of a team that we’ve seen growing more and more where one big agent is the face of the organization and then a bunch of people come in to act as buyer’s agents. What I’ve noticed in these kinds of organizations is that sellers and their listings end up getting hurt because sometimes the best pricing may not be competitive enough to sell the home in a reasonable amount of time – the goal of the agent is to have several open houses.  Nationally the average is that only about 1% of all homes sell from activity generated at a public open house.  What an open house is used for is to bring in new business to the agent holding the house open because prospective buyers will be there – and they’re usually not working with an agent yet because they are early on in their search and “testing the waters” to determine if they’ll buy. Several reports done over the years have proven that most of the public will work with the first agent they talk to regardless of recommendations that at least 3 agents should be interviewed.  The statistics make a strong argument for some of agents to continue using this method of open houses.  Many new agents are the faces you’ll see on a given Sunday holding a house open and usually they are pretty bored the majority of the time unless there is a lot of activity going on in the house.

Part of the activity might be interested (read nosy) neighbors who come by to see the house and it’s a chance for the agent to get a name and maybe an email address for follow up.  Most agents know that open houses are a marketing tool for them and with the Internet today they are less useful than they used to be in helping sell a home.  We only use them when we have a particularly unusual home or one that needs a little help getting people in the door because of difficult location circumstances such as being on a busy road.

Another reason we don’t push them as a top marketing tool (we focus on the Internet instead) in our tool chest is because there are some security risks involved for the seller and the agent. Putting out a bunch of signs to tell the random public invites people you don’t know to come see you in an empty house.  It’s not imaginary that many agents across the nation are attacked in vacant homes on an annual basis – sometimes it’s an open house and others are because of targeted attacks. The local NWMLS posts on the agent only site when unusual activity is reported with agents in our area but not all occurences get reported. We’ve also seen reports where items are stolen from the home from personal items, to medications, to decorative items, to electronics, and more.  If only 1 person is covering a large home at an open house then the potential for security risk goes up.  Although every once in a while the violence happens between a client and the agent.  This story highlights an agent in CA being killed by his seller in a dispute over which offer to take in a competing offer situation.

If you have an agent that is pushing you to have lots of open houses get the details about why they really want to do them.  Arm yourself with information and use it to work with your agent and to not be run over by them.  If an agent isn’t focused on selling your home and explaining to you exactly why they use particular methods of marketing then they may not be the best agent for you.

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Do you want to be our “friend” and get some great deals?

We’ve been able to be part of a great promotional concept that is called “From Your Friends” that is exclusive to our RE/MAX office on Eastlake (and our Eastside office too).  Each month we send out postcards with some kind of excellent local offer which is  usually either a local event or a great eating venue.  Previous mailings have included Icon Grill, Jet City Improv, Oil & Vinegar, Diane’s Market Kitchen  (a current offering till Nov 2007), Cactus Restaurant and more…

Are you a hockey fan?   month we can offer a “up to 4 buy-one-get-one-free” ticket offer for the Seattle Thunderbirds (expires Oct 28, 2007).  If you’ve never seen the T-Birds play you’ve got to check it out at least once to see how these young hockey players really put their heart into playing on the ice.  The next games are coming this weekend on Friday and Saturday so contact us ASAP if you’re interested in attending!

 

These mailings are a great way to get to know the Greater Seattle area if you’ve just relocated here and they’re a great way for anyone to save money!  Now, who couldn’t handle more of that?!?!?

Just send us your mailing address (US Postal) telling us you’d like to be on the list and we’ll get you added. There is no obligation and your information will not be sold or given to any 3rd party. If you are interested in our monthly electronic newsletter you can ask to sign up for it and/or any of our other events (including investment classes, etc). 

We look forward to hearing from new “friends” like you!

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Home warranties – what are they and why would a buyer want one?

Now that homes are taking a little longer to sell there are also increases in buyer incentives to attract a buyer to consider one home over another. If you are a seller, what can you do to make your home more attractive than another similar home down the street?  If your home is a resale product (not new construction) then you might consider a home warranty.

We discuss this with our clients prior to going on market and typically we offer the American Home Shield (AHS) 1-year warranty.  In some markets around the country, like California, these policies are standard and required; in others they are not mandatory but might be de rigeur; and in Washington they are not required but their use is on the uptick.  A few years ago you would hardly ever have seen them but now they cover almost 10% of the homes on the market.

For between $300-500 you can get a policy that covers most of the major systems of the house and since about 40% of all sales have something go wrong within the first 60 days of transfer of ownership it makes sense to consider paying for a policy at closing.

For Buyers, it might be a good thing if a policy isn’t already offered to either negotiate one into your deal or to just buy a policy at closing for yourself.  Almost anyone can pay for the policy – the buyer, the seller or the agent.  Usually what happens at closing, if it’s part of your transaction, is that the escrow company will pay the policy out of the closing funds as long as they have instructions to do so.

Depending on the area of the country you live in you might want added coverage above the basic policy.  For instance, A/C is rarely covered here in Western WA because only about 8% of all homes on the West side of the Cascades have the systems installed.  In Kansas, the majority of homes have some kind of A/C.  Read the terms of coverage and costs involved and decide which policy is best for you.

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Estate planning advice… Can you find your loved one’s assets?

A friend sent a link to a Wall Street Journal article by Jeff Opdyke last night that was right on the money about issues regarding how difficult it is for executors of an estate to do their job after a loved one has passed.  In the article were remarks from a few people on how hard it was to get things done, or how long it took to complete but the one thing that really stuck out for me was a link to a document that seems essential for any family discussion on estate planning.  The document was called the Essential Document Locator and it is a one page sheet that lays out various places where documents might be located and then it outlines various assets and lets you mark which location you can find the asset, or information about the asset.

I’ve already started getting a bit of a head’s up on how hard some of this will be with my parent’s estate after dealing with a lot of their financial and insurance details during the fallout after their accident in March. My dad has always been very organized but mom’s filing system stymies most of us even if she seems to know where everything is – but, unfortunately, sometimes she doesn’t know where a particular file or policy might be located.

Having a document like this that is easy to access would be incredibly helpful.  I plan on putting something like this together for them the next time I go visit and I’ll  put one in place at my own home too.

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TEAM REBA is ramping up pre-foreclosure investment opportunities

My partner, Michael, has been working hard the past several months finalizing the details of a pre-foreclosure option that we can offer to our clients.  Prior to now we had stayed away from much of this segment of the real estate world due to the onerous levels of work involved.  Granted, it can be a very lucrative type of deal for an investor but as the agent working with the investor it can burn some serious time cycles and if you’re not the one getting the return at the end of the day it’s not the best business practice to throw this in with your other business willy-nilly because you’ll lose track of time on other clients and that isn’t a good thing.

Our work strategy has always been about finding good deals for our clients.  We’ve also been able to do that by building our business methodically and with targeted intentions. In putting together this new program we have found a partner that has his sole business in the pre-foreclosure space.  Basically, he’s already out finding deals for himself but he can’t possibly take on each one – so he’ll farm out some of the deals to agents like me and Michael so that we can offer them to our clients. He’s got a team of people doing the up-front work so they can cover a big territory too.  It’s a big win all the way around because this guy still gets a little revenue for his work, we get to offer a good product to our clients that has been screened by the 1st guy and then also by us, and the client gets to walk (hopefully) into a built-in equity situation.  And, don’t forget (although I guess I hadn’t mentioned it yet), the seller also gets to walk away from a bad situation – and in the majority of these cases they get some money to start their life over and limit the damage to their credit.

We’ve had one informational meeting on it already and several clients have signed up to receive the listings.  The forms we put together were reviewed by our attorney and we are recommending clients talk to their CPA’s/accountants about the investing strategy. Where necessary, they should talk to an attorney to look into an LLC if that is appropriate for their situation.  Right now we’re expecting clients to net some significant returns and we’ll be working hard right along with them with analysis, strategizing on end pricing, offering our Concierge Services and more. We hope to also offer syndicates at some time in the near future so investors can spread the risk and limit out of pocket funds in some instances.

The other good news for these deals is that we have a couple of lenders who can help provide quick turnaround financing (if the client qualifies) which is nice since comparatively a true foreclosure deal requires all cash. The benefits of leverage and the potential to walk into built-in equity - these are good things. 

But, like all investing strategies there is always risk.  One client asked the question at our meeting about what the riskiest part of the deals would be.  My personal answer was that the client would be the highest risk element.  Why, you ask?  Because more times than not I’ve seen first time flippers get out of control with their budget and their time.  Unrealistic budgeting and a lack of planning and focus is what kills the return on these kinds of projects.  Poor choices in partners is another one.  Some people jump into it thinking “Hey, me and my buddy (or insert other person here such as relative, spouse, potential sweetheart) can do this.  We saw a show on HGTV and we think we can do better than them.”

You’ve GOT to be realistic and also know your strengths and weaknesses.  If you can’t calculate the square footage of a room and know how to convert prices back and forth between square feet and square yards – you might run into a problem.  If you think black marble flooring is a good idea in a starter home – you might run into a problem.  If you hire your nearly blind friend to help with painting – you might run into a problem.  Do you get my drift?  If you don’t keep track of your receipts and compare your payments to your budget – you might run into a problem.  I saw all of these things happen in one project and the bad ending for that client – who, by the way, didn’t use me when they sold the property because at that point they’d blown it and in the process they’d disenfranchised me in terms of wanting to work with them.  Their end product was no good and they didn’t make the money they expected.

If you’re interested in learning more about this new program Team Reba is offering use the contact info on the sidebar of this blog and give us a call or send us an email.

Happy House Hunting!

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Are some Seattle sellers in a state of denial?

Last weekend I was touring some homes with a new client and he seemed awfully dejected at what $600,000 could buy.  I know what he means.  I just kept thinking to myself that some of these sellers were either really too out of it to realize how bad their place looked or they just didn’t have the right agent with the guts to tell them they needed to drop the price.

A couple of places had crazy layouts with bad color schemes and poor workmanship in much of the updates that had been completed.  My client kept commenting that after a couple of houses he would know there were problems when he kept hearing me go “hmph” several times in a row or I’d comment “interesting” as I walked through the home or even “whoa”.

Now, I know from looking at houses pretty much every day there are plenty of good properties still out there.  My comments to this client after we were finished with our tour centered around reminding him that he’d asked me to show him houses that “needed work”. 

His main criteria for a purchase was its long term investment value but I had to temper that a little too by telling him that while we are still #1 in the country right now for appreciation we have softened down from being in the double digits (12-35% annually) to the high single digits (6-9%).  Granted, that would mean a $600,000 house would be worth (at 7% annual growth for 3 years) around $735,000 a few years later and that’s not including any updates, and the increased appreciation for them, that he might put in. 

I’m pretty sure he wouldn’t get that kind of return on his money in the stock market – but maybe he’d get lucky and pick a Google of a stock.

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How do you choose the right flooring for a house?

We’ve been thinking a lot about flooring lately. In fact, I think about flooring – a lot.  Between watching how my pets all impact a certain type of flooring over time to now considering what I’ll get in a new home it has become almost a bit of an obsession.  Today we hit Contract Furnishings Mart to see what they had to offer since my contractor sent me there to price out what I wanted.

But, since this blog is more for public consumption I will try to keep my focus on the more general topic of how to pick the right kind of flooring for a home.

Considerations should include:

1.  Wear.  Who will be using the space?  Do you have kids, pets, or otherwise?  If there are lots of people moving in and out of the area you’ll need something that can handle high traffic and possibly a fair amount of staining and/or dirt over time.  Does the flooring need to go over stairs?  How safe will that kind of flooring be for those that use it?

I’ve been considering this as I look at a combination of wood flooring and carpet.  My contractor, Patrick Howe of Artisan Structural Innovation, originally suggested since I was interested in putting in maple hardwoods that I put the same maple wood floors on the floating staircase in the house I’m buying.  I told him that wasn’t an option for me since my 3 dogs are all aging (a 13-yr old flat coat retriever, and 2 Jack Russell Terriers) and I don’t want them slipping on the stairs and getting hurt.  I’ve also got a 21 year old cat and I want to make sure he is also comfortable in the house.

I’m actually considering having some kind of rubber product put on the stairs to help give them grip so they won’t slip through and break a leg or possibly wipe out on a landing and break a hip.  The benefit is that it will make it safer for me and the people in my house too.  Right now I’m not sure where to find such a product but I’ll bet it’s out there somewhere – we just might have to get creative.

2.  Function. How do you use the space?  Are you lounging or is there a lot of shuffling around?  If the space is your kitchen you likely don’t want something that will dent or stain, or be too hard if a glass drops.  For other rooms, is there furniture or toys that could scuff softer types of wood flooring or maybe snag berber?  I know my cat has caught his nails in berber several times over the years.  Is it possible that there might be other kinds of scratching that could damage a product like vinyl?

3.  Comfort.  Do you have a “shoes off” policy in your home?  This might make a difference on the color or type of floor product you choose. Tile might be very cold unless you get to wear shoes or you’re considering radiant heat underneath. The same could be true of wood.  I’ve found cork does a great job of providing a neutral surface (temperature-wise) and it is pretty easy wearing. Our pets haven’t destroyed it in our office like they did when we had carpet in that room.

4. Cost/Price.  A lot of flooring doesn’t come cheap but you’ll need to ask lots of questions to make sure you’re getting a fair cost comparison between products.  A wood floor may or may not compare well to a carpet once you take into account the need for padding and possibly all new tack strips.  Considering radiant heat?  That will cost you too.  Can you install it yourself or is it better to have a professional do it?  Does laminate hurt or help resale over actual hardwood or engineered flooring?  Personally, while in lower priced homes wood laminate is a great deal and can look good, if the price point is $500,000 or more (reasonable in Seattle) it should be either the real stuff or engineered wood otherwise it detracts from selling price.  Wood products like the handscraped style below are becoming quite popular but I’m really wondering if the Amish really do scrape the wood by hand or if it’s really a marketing ploy.

5.  Availability.  What is the turnaround time from order date to install in your home?  Do you need to pack up your stuff and move it all out (likely) and how long will it have to be that way?  Chances might be good that you’ll need to get a short term storage option unless you’ve got lots of extra storage space in your home.

6. Maintenance. Many people don’t realize when they buy a new house that the grout used in their tile floor or bath surround didn’t get a coating of sealant. Nor do they realize that sealant needs to be applied more than just one time – it’s a yearly or bi-yearly event.  White grout is likely the worst since it shows staining so quickly although I’ve heard there are some bleach products (pen style) that can help to bring back their white-ness. Companies exist that specifically clean grout because it’s not a fun task if you have to do it yourself.  Wood floors sometimes need refinishing depending on the level of wear.  Carpet can get stained (I saw a woman bust a glass of red wine on a client’s newbeige carpet last weekend) or snagged, etc, etc.  It’s always good to ask the person selling you the product what kinds of maintenance you can expect over time.  I’m not positive but my guess is that concrete has got to be one of the lowest maintenance flooring options available but it’s just not reasonable for all homes.

Only you can decide what is best for you but hopefully this little post (ok, not so little now) might help you begin your search armed with some good questions.

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Image Resizing Problems

One of the things I hate to hear from a client is “your images don’t look good when I ____”. This is generally because something or someone has resized the images after they left my hands. I wanted to explain a little bit about what happens to an image when it gets resized. But first I need to explain some terms to go along with the article.

Pixels are what comprise digital images. A pixel as defined by Wikipedia is a single point in a graphic image and for a picture is a specific color and brightness. When you gang up thousands of different colored pixels you can recreate a scene.


The size of an image is defined by how many pixels tall and wide there are. The more pixels an image contains, the more detail the image will contain.

The number of pixels will also determine how large an image is when it is printed. Most printers today will print very nice pictures at 300 dots-per-inch (dpi). This means an image that is 300 pixels wide by 300 pixels tall printed on a 300 dpi printer will print 1″ wide by 1″ tall. Note that printing is the only time dpi should be referenced. It is irrelevant unless you are printing.

Image Resizing

A lot of problems can occur when an image is resized for specfic uses. Say you have an image from a 12 Megapixel camera. The camera I shoot with produces images that are 4368 pixels by 2912 pixels. If printing this image on a 300 dpi printer with no modifications it would produce an image 14.5″ wide x 9.7″ high. Now that’s great if all you need to do is print an image of that size. For any other use the image has to be resized.

Going Up/Going Down

When making an image larger the software that is resizing the image actually has to create more pixels than the image contained originally. It does this by making good guesses based on the pixels in the image. When making an image smaller pixels are removed and this can be done on a row-by-row or column-by-column basis within the image. There is new technology on the horizon that promises some improvements in these areas, but what happens now is generally pretty good when done properly. The problem is that it almost always take human intervention for it to be done properly.

When software creates or removes pixels from an image there is an inherrent loss of detail and the image will tend to “soften-up” and lose some of it’s sharpness. To counteract this process any time an image is resized it should be run through a sharpening routine. I do this for each image I prepare and it should be done as the last step just before delivery for a specific purpose.

The biggest problems come about when software has to resize images on the fly. Here is an example. This first image is one that is 800 pixels wide. I have made the web browser resize it to 300 pixels wide.

The second image was resized in Photoshop to the same finished size, and then sharpened. Take a close look at the slanting lines of the crown molding in the picture. Notice how in the first image it is all jagged and the second image it is very smooth. Now compare the curtains in each image. Much smoother in the second. The pattern in the carpet is much more recognizable in the second image. The bright brass detail in the fireplace is very distracting in the first image and much more subtle in the second.

Resize For Specific Uses

While I hate to hear from my clients that my images don’t look good, I would much rather hear about it and be able to offer some help than have the client put out images that don’t look their best.

For each image that I provide I offer to resize and optimize that image for a specific size and use for one year.

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