Northsound News Round-up

I'm a bit short on time today, but I've been saving up tidbits for the blog in my Google Reader, so I'm going to round 'em up and head 'em out!

This year's Seattle Street of Dreams home show is now in progress. This SOD differs from previous years in that the show is incorporating a focus on green building techniques. Though the homes featured are still large by any definition and of course they feature all manner of bells and whistles (this is about dreams after all!) , square footage is capped this year at just under 5,000 asf. Street of Dreams takes place in Quinn's Crossing, a community of 48 homes near Maltby.

Redfin has announced that it has received $12 Million in VC funding from Draper Fisher Jurvetson, and is now open for business in the Washington DC market. This has been covered with varying degrees of seriousness all over the blogosphere, but I'm going to chime in with my own two cents here anyway.

The real estate industry today reminds me very much of the IT industry about 8 or 10 years ago. I was involved in that industry at that time, and I recall that retailers were very concerned that their brick and mortar business model was doomed to go the way of the dodo, with the advent of companies like Amazon.com, Drugstore.com, etc. There was a huge influx into the Internet marketplace of online retailers and discounters. Some of these retailers have lasted, and others burned bright and flamed out.

Take as an example, HomeGrocer.com. The media played it up that ordering groceries online was the wave of the future, and competing grocers were concerned that it was a threat to their business model. HomeGrocer soaked up huge amounts of VC funding, but never turned a profit and eventually went out of business.

Even those pure-play dot-com retailers that outlived the dot-com bust, such as Amazon, still struggle. Meanwhile, those companies that effectively combined the best of the web with a brick-and-mortar presence eventually won out. Look at Nordstrom--fabulous website, and fabulous service whether you visit their store online or in real life. At Windermere, we often look to Nordstrom as the gold standard of service and what we should aspire to in our business.

The major real estate brokerages had it good the last few years, with lots of easy sales and plenty of cash to go around--very reminiscent of the 90s dot-com boom. The industry has NOT been quick to adapt to changes in the marketplace but by and large we have a business model that still works. It could be more consumer friendly, and we need to be more proactive about adopting technology.

Technology will revolutionize real estate and the way we do business will change. But the real estate agent will survive, even if we do our jobs somewhat differently, because we provide a service that people want and need. Maybe not EVERY person will need a real estate agent in the future, but enough of population values what we do that we are in no danger of following the dodo into extinction. Though, I would say that the easy money of the last few years has inflated our ranks, and it's likely that there will be a thinning coming. And frankly, it will be good for the industry to have that happen.

What I hope from all this is that companies like Redfin will help the industry move in a more consumer-friendly direction, and that it will force the industry to embrace change, rather than resist it. But will Redfin be the one to outlast the field? I don't think so. They just don't seem to have a business model that will take them to profitability, and they don't have the kind of universal appeal that will allow them to work with the population at large. They are and will always be a niche player. But we do NEED what they are bringing, even if we don't always like it.

Okay, moving on!

There's been ongoing talk of converting the Smith Tower office building in Downtown Seattle into condominiums. Looks like we are a step or two closer to having that happen. The developer is down to the last city approval before they can move forward with the project. Seems like that would be a pretty cool building to live in, if they can upgrade the systems to modern standards. In particular, a faster elevator would be good! And it's a great way to preserve an important piece of Seattle history.

Last item. 3Oceansrealestate blog ran a great feature this morning on how to know when it is the right time to buy a home. Regardless of what the market may or may not be doing, here are the factors buyers should be thinking about:

• You found the home you really want and you can see yourself living
  there.
• It’s affordable.
• You can get a reasonable loan.
• It will serve you and your family for years to come.
• You’re not looking for perfection.
• No home is perfect.
• You’ve given up trying to beat the market.
• You’re comfortable with your compromises, whether it’s location, size,
  price, features, or condition.
• You’re confident the home you’ve chosen is desirable enough that you will be
  able to sell it in any market.

While it makes sense for investors to try to time the market, with home-buyers, it makes less sense since you are talking about a longer holding period, and also, there are other reasons--tax relief, pride of ownership, stability, etc.-- to buy besides the investment possibilities.

Okay, that's it for today. I. Am. Outta here!

Mukilteo on Money Magazine's Top 100 Places to Live!

Mukilteo is number 69 on the Money Magazine "Top 100 Places to Live," one of only four Washington communities to be featured. Other Washington towns to make the top 100 are Silverdale on the Kitsap peninsula in 99th, Camas in the Portland/Vancouver area at number 63, and Sammamish on the Eastside, which came in at number 11.

So how does Mukilteo stack up against the rest of the Top 100?

Median family income is a little lower, with the average family earning $83,569 compared to $90,316 for other communities in the Top 100. Job growth in the area is higher at 15.83% versus 13.41% for the rest of the Top 100. Real estate is more expensive here, with the average home in Mukilteo being priced at $401,510 compared to an average of $359,352 for the rest of the Top 100. On the other hand, property taxes are lower, as is auto insurance. And while sales tax here is higher than other towns in the Top 100, there are no income taxes in Washington state, so our overall rate of taxation is well below the average for the Top 100.

As for schools, approximately 100% of students in Mukilteo attend public schools, compared to 91% for other towns in the Top 100. Test scores for reading are .7% lower than other towns in the Top 100, but math scores are 17% higher. This makes sense given our proximity to Boeing and other high-tech employers.

Mukilteo is also one of the more diverse communities in the Top 100. The average racial diversity index for the Top 100 is 59.2%, while Mukilteo scored 81.3%, with higher numbers indicating higher levels of racial diversity.

Click here to see how Mukilteo stacked up in all other areas considered by the Top 100.

Northsound Weekend Calendar

There are lots of fun things to do in the Mukilteo and Everett area this weekend. With a slight cooling in the weather, it's a great time to get outside!

Friday, July 13th

Wine Tasting - Wicked Cellars
Everett's Wicked Cellars is hosting a wine tasting of eclectic wines from around the world. 4 -6 pm, 2616 Colby Avenue, Everett. Call (425) 258-3117 for more information.

Everett Cinema Under the Stars
Take advantage of a balmy evening and see "Over the Hedge" at Everett's Cinema Under the Stars, an annual, summer-long festival featuring movies shown at Thornton A. Sullivan Park at Silver Lake."Over the Hedge," a family-friendly animated film, will begin at 7 p.m. tonight at the park, at 11405 Silver Lake Road in Everett.

For more information, call 425-257-8322.

Saturday, July 14th

Mukilteo Garden and Quilt Tour
The Mukilteo Garden & Quilt Tour promises to be an outstanding event for local gardeners and quilt lovers. The tour runs from 10 a.m. to 5 p.m., rain or shine

Jetty Island Sunset Harbor Cruise
Be dazzled by the splendor of the sunset over Port Gardner Bay. Enjoy the sights and discussions with a Jetty interpretive naturalist. This popular cruise happens only four times in conjunction with late-night campfires, and it always fills up. Call the Jetty Kiosk for reservations at 425-257-8304.

Sunday, July 15th

Sand Castle Building Contest
Test your sculpting skills against some of the region's most creative amateur builders in this increasingly competitive contest. Or just come to have fun! Bring digging tools, buckets and your imagination. Prizes awarded.All ages welcome for single or group entries.

All Weekend

Jetty Island Days
Jetty Island Days are still in progress. Ferry runs on the half hour between Everett 10th Street Marina and Jetty Island dock. Take the ferry or rent a kayak to get to the island (or, hitch a ride with a friendly boater).

For more ideas, see this article from the Everett Herald, Top Ways to Spend the Day.

Swing for the Fences

Here in Boeing-land, you can't swing a dead cat without hitting someone that either works for the big B or is married/related to someone who works there. When I was a kid growing up here, nearly everyone I knew had a dad or an uncle working for Boeing. Naturally, my rebellious nature caused me to swear I would never marry a Boeing employee. But, time has a way of proving us wrong, so naturally, when it came time to marry I married a Boeing engineer.

So yes, we are a Boeing family, like many other thousands of Boeing families here in the "Northsound service area." Quite a few of my clients work for Boeing, many of them on the 787 project, so it was with a special sense of pride that we watched the 787 roll out last Sunday.

Boeing is the largest employer in my little corner of the world, and while I wouldn't say we are a one horse town, Boeing is definitely a major driver of the local economy. One metric I've heard is that for every one Boeing employee, there are 5 to 10 other individuals in local businesses that depend on him for their job.

And while the North King/South Snohomish county area is now a bedroom community for Seattle and the Eastside as well as Everett employers like Boeing, the housing market here still rises and falls with Boeing's business outlook. Since the 787 project began, we've seen a huge number of people come here to work on the project, and I've had the good fortune to work with many of them. There's been an excitement surrounding the project that has spread to the community at large. On Sunday, that excitement finally bore fruit.

After all, it's not like we get a moment like this every day. The day of the 747 roll out is still etched clearly in the minds of a lot of people around here. That was nearly 40 years ago. This is the first new plane program to roll out in nearly 15 years. And it wasn't too long ago that the pundits were saying that Boeing's days as the leader in the commercial aerospace market were numbered. So Sunday meant a lot, to a lot of us.

And not just because it's good for the local economy. A few years ago on 9/11, the aerospace industry was hit hard. REALLY hard. It was a real blow to a lot of people in our neck of the woods. So, for us, Sunday's ceremony wasn't just a chance to share in a moment of civic pride. To a lot of us, it marked the triumph of American ingenuity over those who would like to harm us.

We were hit hard, but we came back swinging for the fences.

Northsound News Bits

Here are a few of the stories that are of interest in North King/South Snohomish counties today.

1. The Weather! The temperature yesterday was in the upper 90s, prompting many north end residents to suddenly become sick and have to leave work. Most parts of the country see temperatures in the 90s pretty consistently during the summer, but here in the Northwest its not that common. In fact, it's so uncommon that it tends to precipitate a lot of sudden illnesses. Illnesses that can only be cured by going to the beach, or taking out the boat.

2. Kenmore Redevelopment: According to to the Seattle Times, the city of Kenmore has signed an agreement with Kenmore Partners LLC to redevelop a large, city-owned parcel of downtown into a new city center with pedestrian-friendly shopping, in accordance with Kenmore's downtown master plan. Kenmore Village by the Lake will include housing, retail, and a central gathering space. The 9.6-acre site, at 68th Avenue Northeast and Northeast 181st Street, is now home to a temporary City Hall, a park-and-ride lot and a shopping center that dates to the 1960s and is currently home to Ostrom's Drug. The public comment period will begin in the fall.

Kenmore is one of the areas where I work, and I think this is great news given that one of the things that is less desirable about Kenmore is lack of this kind of infrastructure. It's actually a neighborhood that has a lot to offer in terms of its location and the kinds of homes that are available, but home values have been somewhat lower here than other nearby communities because of the lack of a central core. The completion of this project should increase home values in the area.

3. Arlington Fly-In is In Progress: The 39th Annual Arlington Fly-In began yesterday at the Arlington Airport and runs through Sunday. The Fly-In is one of the leading air shows in the country for experimental and "sport" aviation.

Downtown & North Everett Market Stats - June

Downtown and North Everett are a couple of my favorite areas to work and play, so I like to keep abreast of what is going on in that market. So I have decided to start publishing market statistics for the central Everett area (which includes Bayside, Riverside, the Business District, Stadium, Rucker Hill and Forest Park) here on my blog. If you would like a breakdown of a specific neighborhood let me know and I will be happy to provide that for you.

All statistics are hand calculated by me, using NWMLS data, and include the period June 1, 2007 through June 30, 2007

Active Listings
Listing Count: 104 (this includes ALL active listings through June 30, regardless of date listed)
Average Time on Market: 76 days
Median List Price: $298,450
Average $ Per Square Foot: $212 (range: $111 to $475)

Under Contract (includes Contingent, Active STI and Pending)
Listing Count: 53
Average Time On Market: 50 Days
Median List Price: $272,500
Average $ Square Foot: $252

Sold Listings
Listing Count: 40
Average Time On Market: 50 Days
Median Sale Price: $323,445
Average $ Square Foot: $193 (range: $110 to $364)

Interestingly, times on market are longest in the $300,000 to $500,000 price range, at 87 days. Five out of 39 properties in this price range have been on the market longer than 200 days. One property in this price range was originally priced at $1.8 million and was recently dropped into this price range in May. The property in this price range that has been on the market longest has been on for 379 days (it is new construction and part of a new townhome development called BelMonte Heights in Riverside).

Average time on market is shortest in the $500,000 and up price range at 64 days. There are only 8 homes in this price range currently on the market, with the top priced home in North Everett currently listed at $2.9 million. Excluding this particular home, which has been listed for 289 days, the average time on market would only be 31 days.

What does this tell us? Demand for homes in this area is strongest in the highest price range. North Everett, particularly Rucker Hill and Bayside north of 19th, has always been an area known for its high end homes, many of which boast incredible views of Puget Sound and Port Gardner.

Other areas near Everett's downtown, such as Riverside and Stadium, boast a lot of great starter homes and rental property for which demand tends to be pretty strong.

In between however, there are fewer options, and fewer buyers looking for those homes. That price range tends to be dominated by families, for whom schools are a big concern. Many of these families choose to live in more suburban areas such as Mukilteo, Mill Creek, Silver Lake or Snohomish.

Overall, the central Everett market has about 5 weeks of inventory based on June figures, indicating a strong seller's market for homes in this area.

Note that according to the NWMLS system-generated chart below - click to see a larger version - inventory is about evenly divided between new listings (less than 30 days on market) and older listings.

Craziest. Transaction. Ever.

For the last couple of months, I have been sitting on a great blog post topic and haven't quite had it figured out in my head, what I wanted to say about it. I was still pondering it. There was a transaction I did, not long ago, that probably will go down in memory as the craziest one I have ever worked on. Well, craziest one so far. Maybe someday there will be one crazier--after all, I expect to be in this business for a long time and part of what attracts me to it is the craziness! Gives me good stories to tell over beers...and over the internet.

Anyway, I had a client that contacted me wanting to do a rehab/flip of a property. After going to great lengths to explain the various ways these deals can go south, and making sure that they understood the risks involved and so forth, we in the end decided to go forward.

Several months went by, looking for the perfect property. Finally, we found a property that my clients felt like would be worth the work to fix up as they envisioned. The neighborhood was great--right on a golf course, in an area with a lot of older homes that are being fixed up. Prices range from $600K up to over a million. The commuting distance to two of the Northwest's major employers is about 20 minutes in either direction depending on traffic. The home also has a view of the lake. And, it was a very large home.

It was listed with a Limited Service agency. That meant, all contact had to be made with the seller directly. Dutifully, I called the seller to set up a showing. Up to this point, there was nothing to indicate that things were about to get strange.

I call the phone-to-show and a teenager answers the phone. I say that I am interested in seeing the house and can I please speak to Mr. or Mrs. Seller? I was informed that the parents were out of town, but I left a message for a parent to call me back. I did, and we set up the showing.

The next day promptly at 10, my buyers and I arrive. The first problem is, there is no lockbox. The second problem is, there are two large dogs barking their heads off on the other side of the door. There also appear to be kids home...several of them. How many kids are living here, my buyers and I wondered? Looked like a reunion of the Lost Boys.

Well, the only thing to do was to knock on the door, so I did. The oldest of the Lost Boys answers the door. I mention that I called about showing the house? Naturally, he did not get the message, but says it is okay to take a look around, so my buyers and I go inside and start looking around. The first thing to hit us is the odor of dog feces, cigarette smoke, stale beer and rotting garbage.

And they say real estate is a glamorous job? Anyone who has worked foreclosures or short sales more than once (which I have) would recognize this house as a "distress case." Normally if it looks like this, or smells like this, for a showing, the sellers have issues--financial ones usually go hand in hand with "other" issues.

First stop was the kitchen. There we found two large dogs eating dog food directly from the 50 lb. bag. We noticed that both of the double ovens were open, with the heating units on. I asked the young man about it and he announced that, "oh yeah, the furnace is not working."

Okay.

Next stop was the living room, where in the middle of April, the Christmas tree was still up. It was a real tree, not a plastic one, so it was completely dried out and had dropped pine needles all over the floor. It reminded me of nothing so much as the Charlie Brown Christmas tree. Shoot, evidently Pig Pen was living here so we even had some of the characters.

Continuing our tour of this lovely home, we went into the family room, which was built around a beautiful large fireplace. Every inch of floor in the room was covered in linens, dirty clothes and so forth, such that you could not see or feel whether the floor was carpet or hardwood. When I kicked aside a pile of clothes to see what kind of flooring was in evidence, I unearthed a large, petrified pile of dog poop.

Soon enough we had seen what we needed to see. The home was in terrible shape cosmetically, but beneath it all you could see that it was a lovely, well-built home.

And the signs of distress were so clear that I went home and did a little research on my own. I discovered that in addition to being behind on his negative amortization home loan, the owner was also subject to two tax liens totalling almost $80,000 and a judgement from the person who sold the house to him for an additional $5,000.

So, knowing all this, we decided to go to the seller with an offer that reflected the condition of the house, and explained to him that this would be a short sale situation. In fact, it would have been short whether he got full price or not. So I carefully explained our offer to him, and explained to him what would have to be done to actually sell his home. I explained to him that although I represented the buyers, I would be available to help him as he tried to clear title to his home so my buyers could purchase it.

After a few days of deliberation, during which time the contract expired, he finally accepted the offer. Now, we had 30 days to see if we could clear the tax liens, judgements, and get the lender to accept a short sale. Naturally, it was my job to make sure that all this happened. So, I was on the phone with the seller nearly every day, making sure that he had done his part, offering to run and fax documents around for him, and whatever needed to be done to make sure we got to closing.

Considering the situation, the actual short sale negotiation was relatively uneventful. The IRS worked out a payment plan and removed the lien, the judgement released their interest, and the bank accepted the short sale. The big trick was getting to talk to the right person at the lender, but a clever conversation with someone in the customer service department got me talking to someone at the right level to make a decision and we were able to get agreement.

The big hitch turned out to be with the buyer's lender. The appraiser had been pretty appalled at the general condition of the property and took some pictures, which made their way back to the buyer's lender who at the last minute (1 day before our scheduled closing) decided that they wanted to put some conditions on the closing. One of which was, that the property had to be cleaned up and the appraiser had to come back to take pictures showing that this had been done.
I explained the situation to the sellers who basically ignored it. So, the buyers and I were down there at 8am on the morning of closing cleaning up the property--it took 8 large contractor bags just to clean up the beer cans on the property. 8 LARGE CONTRACTOR BAGS of beer cans people. That is hundreds, maybe thousands, of beer cans.

Anyway, we got it cleaned up, the appraiser came back, the buyer's lender cleared the condition and we were good to go with releasing documents.

So, I go to the signing appointment with the buyers, all went well with no issues. That night, I went to the signing appointment with the sellers and a mobile notary, and we get down to signing all the paperwork when suddenly the seller stands up and asks, "hey, we aren't going to be able to move the washer dryer out before the buyers take possession, so can we come back for it?"

Well, you could, except that the washer dryer goes with the house. You signed a contract that said so. Which I explained to you line by line and point by point. Which you then looked at for over a week. During which time the contract expired...remember that?

I pulled out the contract and showed him where the box for "washer dryer stays with house" was checked. I showed him his initials next to the box.

"Well, I don't read contracts, I just assumed that it would be okay if we kept the washer dryer."

Finally he decided that it wasn't worth not closing on the house, just to keep the washer dryer.

Meanwhile, now that we actually could close, the seller realized he was going to actually have to move. The seller had found a place to move, but was working at a job site about 50 miles away on the day of closing, so his son, in his late teens or early twenties, was entrusted with the task of making sure that all everything was ready to go when the movers got there. The seller asked, since I was going to be there cleaning up, if I could maybe check in just to make sure things went according to "plan."

Now, the son was largely responsible for the aforementioned beer can issue, so I wasn't too sure that entrusting him with this job was the best of ideas. Sure enough, it wasn't. When I arrived that morning, the son was passed out (hungover I assume) in the master bedroom, none of the other kids were anywhere to be found and not one thing had been packed. The seller had left a list of what was to be moved and what was supposed to stay, which I made sure the movers had. They executed it to the best of their ability. About an hour before they finished, the son finally wakes up and starts pitching in. This only happened because the movers started moving the bed he was sleeping in, with him still in it.

We closed, my buyers took possession and everything seemed well until I get a call about a week later.

The seller, since he couldn't take the washer dryer with him, simply decided that he would go to the house to use it. My buyers asked if I could please discuss the matter with him.

I did, and that was the last we heard from him.

Carnival of Real Estate is Up

And my first submission to the carnival, "Salesperson or Consultant?" is listed! I didn't win, but glad I submitted anyway. Thanks Marty Van Diest of Wasilla Valley, Alaska for hosting the Carnival!

Everett Photoblogging--A Day at the Waterfront

We had a beautiful weekend here and so I thought it would be a great time to get out and take a few pictures with my new camera.

We tried to go to Jetty Island in Everett but it was a popular idea and we couldn't get on the ferry. Lesson? Get there early!

We may have missed the ferry but we were still determined to get some sun on our poor pale bodies. Lots of people were just hangin' out at the marina playing frisbee, fishing off the dock, working on their tan, picknicking, and waiting for the ferry to Jetty Island. So we just hung out at the Marina.



After we got tired of being at the Marina, we went up the hill to Grand Avenue Park to take in the view of the Everett waterfront. Eric just wanted to lay down and stretch out in the sun for a while.



While he made like a cat in a sunbeam, I took a bunch of pictures. I love North Everett! It is so beautiful. Here's a shot of Grand Avenue Park at the corner of Grand and 19th, with Puget Sound stretching into the distance beyond.



Grand Avenue is pretty spectacular itself. The neighborhood is about 100 years old, and this is where all the mill owners and wealthy citizens of Everett once lived. It's still a very nice neighborhood, with lots of beautiful old homes.



This next picture is the Jetty Island Ferry, its name is "The Queen's Launch." It holds about 30 people and runs every half an hour. It is free but there is a suggested $1 or $2 donation to keep it going. It is run by Argosy Cruises.



And here is Jetty Island. You can see there is a small dock on the Jetty side--if you have your own boat, kayak or raft, you don't have to rely on the Ferry to get there. The Jetty is about 2 miles long--plenty of nice sandy beaches for everyone to enjoy, plus they have nature walks and activities scheduled through Labor Day. If you are lucky, you will see the resident Ospreys, and on breezy warm days, the local kitesurfers will be out. No kitesurfers on this day--they usually come out in the later afternoons when the breezes come up.



Next week if the weather is nice we will go to Jetty Island and actually go to the beach!

10 steps to improving your credit score

1. Pay off or pay down your credit cards. However, do not consolidate your credit cards or close accounts. Pay them off or down, but keep the accounts open. Length of established credit is one of the criteria that affects your credit. Longer is better.

2. Make payments on time, every time, even if it is just minimum payments. Responsible credit behavior over time is what the credit agencies want to see. It will take about 2 years of consistent effort to improve a poor payment history. Collections, judgements and other such actions will take about 7 years to age completely off your credit report. Two years of responsible credit behavior, however, should be enough to go from bad credit to reasonably good credit.

3. Your FICO score depends in in part on the percentage of available credit used. In this post by Ardell, she explains how the percentage of used credit affects your score. This is important information. Basically, for every 10% of your available credit that you use, you will lose 10 points on your FICO score. That means 50% of available credit used costs you 50 points--depending on your score this could mean the difference between "A" credit, and sub-prime. Paying off or paying down your credit card will make a substantial difference in your score.

4. Don't open a lot of new accounts at once, and don't make a lot of credit inquiries (such as on purchases of cars, boats and homes where your credit report will be "pulled") within a short period of time. These will affect your score negatively.

5. If you are having trouble making ends meet, call your creditors and see if there is a way to work out a payment schedule or lower your payments. You can also meet with a credit counselor, but make sure they are a legitimate credit counseling agency. If you're wondering how to know whether a credit counselor is legitimate or not, read this article from the Federal Trade Commission.

6. If shopping rates for a new loan, do your rate shopping within a short period of time. This will tip off the scoring system that your rate shopping is for a single loan, rather than several and it will have less of a negative impact on your score.

7. When checking your own credit, the best way to keep the inquiry off your credit score is to order your credit report directly from the credit scoring agencies. Lenders will often be willing to pull your credit report for free but be aware that it does show up as a loan inquiry on your credit.

8. Don't open new cards just to have additional credit, or thinking that this will have a positive effect on your ratio of used to available credit. Using credit responsibly means using it only as necessary and not getting overextended with your credit.

9. Keep your balances as low as possible. Yes, this is basically a reiteration of the point about paying down your balance and using credit as little as possible, but the higher your balance, the lower your score will be. The very best credit behavior is to pay off your balance every month.

10. Use credit, but use it responsibly. Credit scores treat someone with no or very little credit history as a higher risk than someone who has shown they are able to have credit and use it responsibly. So, it's not necessary to close your accounts or try to live a credit-free life, you simply need to remember that your credit score reflects the credit establishment's assessment of your past handling of credit, and the likelihood based on your past credit behavior that you will pay back your obligations on time. If you treat your credit responsibly over time, you will have demonstrated to lenders that you are a good risk. This takes time, but is worth the effort.

Mukilteo Market Stats - June

Here are the market stats for the month of June in Mukilteo.

Sales activity was strong, with twice as many properties going under contract and closing in the month of June as were listed. However, we had a fairly large backlog of inventory coming into June, so even with the increasing sales activity, we still have a 2 month supply of inventory as of June 30.

As an aside, we calculate supply by looking at the number of listings on the market and dividing by the number of listings that went under contract or sold during a given period. Last month, we had a 2.5 month supply of inventory, which means that at the current rate of sales, it would take 2 fewer weeks to sell through the entire stock of housing inventory in Mukilteo than it would have during May. This tells us that things have in fact picked up for the summer.

I would classify this as a healthy market, if somewhat slower than last year (last year we only had about a 1 month supply of inventory). A balanced real estate market (a market that is neither a buyer's market nor a seller's market) occurs when there is about 2 to 4 months of inventory, though some would classify as a buyer's market any inventory levels of more than 6 months, and a seller's market as inventory levels of more than 6 months. Clearly, here in Mukilteo we are in a balanced market that leans towards still being a seller's market. But, with inventory levels up over the last two years, buyers definitely have more leverage than they have had in some time.

One sector of the market that plays a big role in how days on market numbers as a whole pan out is properties over $1,000,000. These properties comprise about 10% of the market in Mukilteo, and typically, we expect to see longer market times in this sector of the market. And this is what we are seeing. Currently, it is taking an average of 130 days to get properties in this price range "under contract" and it is taking an average of 139 days to get them to sell. But we have several properties in this price range which have been on the market in excess of 250 days, which has increased days on market figures for Mukilteo as a whole.

That's my analysis, here's the data. All statistics are hand calculated by me, using NWMLS data, and include Mukilteo (in city limits) ONLY for the period June 1, 2007 through June 30, 2007:

Active Listings
Listing Count: 92 (this includes ALL listings currently on the market, regardless of date listed)
Average Time on Market: 88 days
Median List Price: $622,475
Average $ Per Square Foot: $259

There were 25 new listings in the month of June

Under Contract (includes Contingent, Active STI and Pending)
Listing Count: 21
Average Time On Market: 55 Days
Median List Price: $579,900
Average $ Square Foot: $252

Sold Listings
Listing Count: 29
Average Time On Market: 123
Median Sale Price: $620,820
Average $ Square Foot: $238

This graphic shows the breakdown of time on market for properties currently listed. Last month, about 54% of our inventory was less than 30 days old. This month, we are seeing more balance between new and older listings.

Mukilteo July Goings-On!

Mukilteo Chamber of Commerce just sent out its Chamber calendar for July. Here it is!

By the way, you don't have to be a member to attend a function (if there is a charge you just pay a dollar or two more), and it is a great way to meet all the business-people that make Mukilteo special.

After Hours Social

Hosted By: Sound Accounting Solutions (Troylyn Goldsberry) & Loan Network (Kathryn Hale)Address: 829 2nd St #4 (old town Mukilteo)Phone: 438-2920
Date: Thursday July 12th
Time: 5:30-7:30pm

Please join us for our July After Hours Social to be hosted by chamber member Sound Accounting Solutions & office partner Loan Network. Hope you can stop by for some appetizers, wine, beverages, networking and enjoying the summer evening with fellow chamber members.

General Membership Breakfast Meeting

Date: Thursday July 19thTime: 7:30 am
Place: Harbour Pointe Golf Course

Cost: $10 (Members) & $12 (Guests) * please make checks payable to The Pointe Restaurant

Guest Speaker: TBD“5” minute chamber speaker: NW Double Agents (Jeanmarie Trapp & Gordon Matheson with John L. Scott – Mukilteo)

Raffle tickets are 4 for $1.oo and proceeds benefit our scholarship fund.

Mukilteo Family YMCA
Groundbreaking Celebration

Date: Wednesday, July 11thTime: 5:00-7:30pm
Place: Mukilteo YMCA – 10601 47th Pl W.

Program: 5-5:30pm = Member BBQ & Social Time5:30-6:00pm = Groundbreaking Celebration: 6:00-7:30pm = Community Celebration & BBQ continue

Celebrate the expansion of the Mukilteo Y!

Volunteers Needed – Mukilteo Lighthouse Festival

The Mukilteo Lighthouse Festival Association is looking for volunteers to help out with:

· The Run-A-Muk (August 25th between the hours of 7am-10am)

· The Tour-de-Muk (August 26th between the hours of 7am-11am)

Please contact Kathy Wisbeck or Mimi Landsberg and staff @ the Lighthouse Festival office @ 353-5516 or info@mukilteofestival.org

Also--don't forget the Art Walk in Old Town on the last Wednesday of the month, and Farmer's market at Rosehill Community Center every Wednesday afternoon!

Your credit score

Following on the tails of last week's post about lease-option purchases, I wanted to say a few things about credit scoring and what to do if you are thinking of buying a home but are faced with credit challenges.


The first and most important thing you can do, is sit down and get a full understanding of your situation. People are very funny about their credit. Some people with clean credit think that they have terrible credit (they were late with a payment once, 5 years ago, and think that the lender will never forgive them for it!). Other people have terrible credit and are completely oblivious. But one thing I've noticed is that when people have credit problems, they are sometimes so afraid of what they will find on their credit report that they choose not to find out what their situation is by getting a copy of their credit report.

This is like thinking you have AIDS and not getting an AIDS test. Realize that getting a copy of the test, or your credit report will at worst confirm your suspicions. Best case scenario is that you find out you were worried for no reason.


Anyway, it's important to face the music about this. Only when you understand the problem can you create a plan to solve it, and only with a plan can you put this problem in your past. This is about gaining control of your financial life, and the fact that you have bad credit is not an indictment of you as a person. I'm not sure that it's fair to say that everyone has had credit problems, but certainly, there are many people out there who have faced these problems and successfully put them in the past.


So, the first thing you should do is get your hands on a copy of your credit report. Sometimes if you are really upfront with a lender about your situation and tell them that you want to work on your issues, they will pull a copy of your credit for you at no charge. If you are not comfortable with sharing this information with anyone else, you can also order your credit reports from MyFico.com for about $16 dollars.


Go ahead and order reports from all three credit bureaus--Experian, Equifax and Transnation. It sometimes happens that things show up on one bureau but not on another. At this point, you want to know everything, so get a report from each bureau.


Now that you have the reports, you need to understand how your credit score affects you. First thing to know is that your lender is going to qualify you based on your middle score. That is, if you have scores from the 3 agencies of 650, 690 and 700, the lender will use the 690 score.


What does that mean? The lending industry is always changing but typically if you have a score above 680, you are what most lenders consider a pretty good credit risk. You should be able to qualify for better rates, and you should have many lenders and loans to choose from. Between 620 and 680, you are considered to have average credit. You can get a loan pretty easily but your rates won't be as good as "A paper." Below 620 but above 580, you are what most lenders call "C paper." You are falling into the subprime category--fewer loan programs to choose from, and the lenders see you as a higher risk so they charge a higher rate of interest.


Recently, the sub-prime and prime lending markets have really tightened up, because many of the subprime loans written under the lax lending standards of the last few years have gone into foreclosure. Because of this, there has been a shift away from sub-prime and back towards safer government loans such as FHA and VA for people with credit issues. These offer fairly competitive rates and can be good for people with credit challenges.


In my next post, I will talk about how to improve your credit, and how long it takes for changes you make now to take effect.

Mukilteo / Everett News Roundup

Here is some of the latest news for the Mukilteo / Everett area:

July 5th marks the opening day for the Jetty Island Ferry. If you have never visited Jetty Island, you are in for a treat as it is a great family day trip and arguably Snohomish county's best beach. The ferry only runs to the island from now until Labor Day, so don't miss your chance to enjoy the sandy beaches, warm water, and natural beauty of this great beach. You can also observe the local kite surfers, who flock to this beach and park for its predictable westerly afternoon breezes.

The Mukilteo Art Walk is seeking artists to display their works at the next Art Walk on July 25th.

Lease Option Purchases

One of the conversations that I always find difficult in my job is when a person comes to me wanting to buy, but is unable to because of credit issues. It's frustrating because I can really sympathize with people who are in this position, but unfortunately, I can't give them a lot of good alternatives to solving the problem. The reality is that it takes time to establish a poor credit history, and it takes time to turn things around. But people are always hoping that there is some quick-fix or a secret way to improve their credit, or some way that they can buy a home without having credit history be an issue.

Keep in mind that having poor credit doesn't always mean that a person is totally irresponsible. Sometimes it does, but there are a lot of other reasons why a person can have a low credit score. So, when I am having this conversation, I don't judge and focus mainly on what to work on going forward so that the client can achieve their goal of buying a home.

One of the things that comes up with some frequency is the idea of a lease option purchase. The client may have seen TV commercials or signs up by the road saying things like "Bad or no credit? Let me help you Lease to Own."

Folks with credit issues will ask me if I think this is a good alternative for them. Unfortunately, I have the unenviable task of saying no, given what I know about these kinds of deals.

Why? Well, typically on a lease option purchase you are putting a buyer with credit problems together with a seller who has an overpriced or otherwise unmarketable property. Think about it--if the seller could unload the property today, rather than a year or two from now, why would he choose this route? And if the buyer could buy today, why would they choose go this route either?

While sometimes it can work out, more often it is a recipe for disaster.

Let's look at the seller's side first. Most sellers will only consider doing a lease option if they are unable to sell in a normal-financing transaction. And why would that happen? Because the seller did not price his property at a level where there is market demand--in other words, it's overpriced.

That's one scenario. Another involves a seller who doesn't even try to sell his property in a normally financed transaction. This is the serial lease-option seller, and he is basically hoping that your lease-option purchase falls apart. Here's why.

In a lease-option, the buyer pays an earnest money deposit just like if they were going to buy the property outright. This is usually between $5,000 and $10,000 depending on the purchase amount. This is non-refundable, as compared to the deposit amount on a normal lease, most of which is refundable.

So, the buyer hands over his earnest money, and then pays rent for a year or two while trying to clean up his credit.

If all goes well, at the end of the lease period the buyer gets a loan and buys the home. But very often, this doesn't happen. Frequently, the credit problems are bad enough or the bad credit behavior is ingrained enough, that the buyers are not able to get their credit cleaned up enough in the period of the lease to qualify for a loan they can afford. Or, perhaps the buyer discovers there is a problem with the home and decides not to buy it. If this happens, at the end of the lease the buyer may have to walk away from the transaction. That means they also walk away from their deposit.

At this point, the seller may do another lease option, and collect another deposit from another buyer.

The serial lease option seller can put his property on the market over and over again, collecting $10,000 from each buyer, in addition to rent money. The property is making him money whether the individual buyer is able to close or not.

Sellers can lose out with a lease-option too. Sometimes the buyer decides to back away from a lease-option purchase for other reasons besides credit. If the market happens to be weak at the end of the lease period, the seller may have to put the property back on the market at a lower price. But, if this is the case, at least he has the earnest money amount from the first buyer.

Now, I'm not saying that there is never a time when a lease-option couldn't be the right course of action, and I'm not saying that every one of these transactions fails. What I am saying is that both the buyer and the seller need to control their risk by having their eyes wide open about what they are getting into.

And for buyers with credit issues, the truth is that the best way to resolve those problems and be able to buy a home of your own is to find out what factors are affecting your score negatively, and resolve those issues. This approach takes time, but it is the best and safest way to go.

Everett/Mukilteo Summer Fun

With school FINALLY out and 4th of July right around the corner, I thought this would be a great time to post some community calendar information. Here are some fun summer activities that are going on in or near Mukilteo and Everett during the summer months.


4th of July Celebrations

Everett Community Parade sponsored by the Everett Jaycees: 11 am on Wetmore and Colby Avenues, between Wall and 26th Street.

Family Freedom Fest at the Everett Navy Station: Tour the aircraft carrier Abraham Lincoln, and enjoy all the other fun events! All day.


Thunder By the Bay: 10:15 over Port Gardner. Best viewing is at Naval Station Everett, Grand Avenue Park, Harborview Park, 10th Street Boat Launch, and Legion Memorial Park.


For all the activities the City of Everett has planned on the Fourth, visit their website.

Family Fourth at Lake Union (Seattle)

Fourth of July-Vars (Seattle)



Farmers Markets


Edmonds Farmers Market, Saturdays from 9 to 3 at the 5th and Bell parking lot

Everett Farmers Market, Sundays from 11 to 4 in the Lombardi's parking lot on W. Marine View Drive

Mukilteo Farmers Market, Wednesdays from 3 to 7 at the Rosehill Community Center in Old Town

For a complete list of farmer's markets in the Puget Sound area, check out this link at the King county website.

Garden/Home Tours

Mukilteo Garden and Quilt Tour from 10 - 5, rain or shine, on July 14th.



Arts & Entertainment

Mukilteo Artwalk--last Wednesday of the month in Old Town Mukilteo. See Mukilteo Arts Guild website for more details. Through September.

Open Mike Night--Every Wednesday evening from 6 to 8 pm at Whidbey's Coffee in Old Town Mukilteo, through Sept. 12.

Concerts

Mukilteo Chamber Concerts in the Park--August 4, 2 to 8 pm in the Harbour Pointe Village Center.

Snohomish County in 2040

The Puget Sound Regional Council has released Snohomish County growth projections for the year 2040. The City of Mukilteo is expected to nearly double in size as compared to 2000 census numbers, as is downtown Everett. North Edmonds, on the other hand, is projected to be one of the slowest growing areas in the county.

To see how your Snohomish County neighborhood is expected to change, click here:

HeraldNet: Your Neighborhood in 2040

Mukilteo Multimodal Terminal Stalled

According to the Mukilteo Beacon, The planned Mukilteo Multimodal Transit Station, which was supposed to combine the Mukilteo Ferry terminal with a bus and train station for Sound Transit routes, has run aground. A "significant funding gap" exists, which means that the project is being delayed for an indeterminate amount of time, pending environmental and feasibility studies that could push completion to as late as 2011 or 2013.

Aside from funding, issues also exist with the site currently being proposed, which is prone to liquefaction during an earthquake.

This is unfortunate for Mukilteo's waterfront businesses, residents of the Old Town area, and for Whidbey Island ferry riders, as the current ferry terminal / bus station is unable to handle current and projected traffic levels. On Friday afternoons, it can be extremely difficult to get from South Mukilteo to Old Town and the waterfront due to the amount of ferry traffic using the Speedway from Olympic View Middle School to the turn at Mukilteo Boulevard.

Now, anyone who knows me, knows that I am a girl who believes in public transit. But I would say that currently, public transit really underserves the City of Mukilteo. To use the Sound Transit train means driving either to Everett or Edmonds stations, and then having very few ride times to choose from. Buses serve the area more often, but still provide limited options in terms of routes. And ferry traffic is a nightmare for residents on both sides of the water.

Salesperson or Consultant?

Real estate is a funny business. There are so many different kinds of people involved in it and so many different ways for people to manage their business that I think it can be very difficult for people who are new to the industry to figure out how they can be successful in this business without selling their soul.

The challenge is, if you got more than 5 Realtors or mortgage folks together in a room and asked them what their role/job is, you would probably get 5 different answers.

That said, it really boils down to TWO basic philosophies. You are either a salesperson, or you are a consultant.

The salesperson is the guy or gal who really just wants to get you to sign on the dotted line, and doesn't care what happens after that. They don't care if the house is a piece of crap, or in a declining neighborhood, or what kind of mortgage you've gotten yourself into. All that matters is getting you under contract, and collecting their check. After closing, you will probably never hear from the salesperson again, because he has moved on to greener pastures.

On my "sunny optimist" days, I would like to believe that there are fewer of these people in our industry than the industry's detractors think. On my bad days, I fear that our industry will be destroyed by the "salesperson" attitude, no matter how many or how few of them there might be, simply because when an individual has a bad experience, it has a much stronger power over their actions and perceptions than a good experience. They say that if you have a good experience you will tell three people, and if you have a bad experience, you will tell ten people. So, obviously, the bad experiences have a lot more power over the minds of the average consumer than the great experiences that some individuals may be having.

For this reason, the salesperson is constantly trying to find new clients who haven't heard about his crummy service, rather than cultivating the relationships he already has, and ensuring that each and every client has a positive experience. He can't slow down and take the time to educate and inform his clients, he's too busy looking for the next kill.

The consultant type, on the other hand, is really more focused on making sure that his clients' needs are met--both with regard to the home or mortgage product they buy, and also with regard to the service they receive during the process. The clients' wants are important too. The consultant is interested in helping you solve problems both before and after the sale. The consultant understands that his job is really about relationships. He needs to be able to stand behind whatever he's sold you, so that he can look you in the eye after the sale is over and continue to be the person you choose when you need his services.

The consultant will take responsibility for you, help you understand the pros and cons of whatever choices you may be facing, and generally display a level of caring that goes beyond a simple salesperson/customer relationship. He will refer to you as his client, most likely, rather than as a customer. He sees his role as that of a trusted advisor (the definition of "fiduciary," a concept which the real estate industry is moving away from at its peril). He is focused on the relationship, the experience, and the service, rather than making the sale or cashing the check. He is focused, quite simply, on you.

I got to thinking about this today because of these two posts:

Blown Mortgage: The Responsibility of Mortgage Brokers...

Rain City Guide: Buyer Beware...

In our industry, we have the ability to enhance, or RUIN, people's financial lives, and that is a responsibility that must be taken seriously. I believe that only as a consultant can a Realtor or mortgage broker provide services that reflect the serious nature of the business that is being conducted.

What's Wrong With This Picture?

Yet another new feature of this blog is "What's Wrong With This Picture," which will be where I feature a picture that is just wrong, wrong, wrong, and explain the reasons why.

For the inaugural WWWTP post, I submit the above picture. For the last couple of years I have driven by this business and its sign advertising "Mortgage Loans, Real Estate Services and Quality Auto Sales." Below these bullet points, the sign assures us that these are "Affordable Luxury Cars." In the same location (and presumably run by the same people) is a drive through coffee stand, auto repair shop, and a stereo/audio store.

I know that there are several real estate brokerages that combine the role of the real estate agent with that of the lender. But really, isn't this taking taking things a bit too far? Real estate brokerage, mortgages, used cars, auto repair and a drive through espresso stand all in one location really seems a bit excessive. Lending and real estate are both complicated enough without combining them. And it's bad enough people think of real estate agents as being on par with used car salesmen, do we actually have to BE used car salesmen to boot?

Well, that's what I think is wrong with this picture. If you see a picture that is just wrong, wrong, wrong, send it to me and maybe it can be published here!