Staging Success Story

About a year ago, I received my designation as an Accredited Staging Professional Realtor. What that means is that I have taken and passed a two day course on staging homes and helping sellers prepare their properties for sale.

Staging is one of the best ways to ensure that a home sells quickly and for the most money possible. The reason it works is that buyers have a hard time using their imagination to see what a property would be like if they lived there. All they can see is what it looks like now. And most of us don't live in our homes the way they need to be when we sell them.

Staging a property isn't just about making sure it's clean and clutter free. It's not about bringing in expensive furniture and decor. And it doesn't have to cost a lot of money.

It's about identifying what excites buyers and what turns them off, and solving any issues a house might have, BEFORE it hits the market.

Recently I got to work with a seller through the entire process of preparing their home for sale. Believe me, what we started with and the end result were two completely DIFFERENT things.

The home was a cute little rambler in a relatively inexpensive, but nice and safe, neighborhood. The best way to classify the homes in the area is that they are starter homes. They sit on very nice sized lots and are close to Boeing and other amenities.

Anyway, the seller had owned the home since it was built in 1984 and had never updated it. Carpet and paint were worn and dirty, and the entire house was cluttered and messy. To get top-dollar, it needed fresh paint, new carpet, and a thorough scrubbing from top to bottom.

Fortunately, the sellers were on-board with staging and willing to put in the work. They also went a little further than necessary, putting in a new mid-price kitchen with Corian countertops, new cabinetry and new flooring. This added value to the home, but wasn't strictly necessary from a staging perspective.

The sellers also worked on the home's curb appeal, making some changes to the landscaping that enhanced the view from the street.

This was the end result.

Average market time for comparable homes in the area was more than 30 days. This home sold in a week with multiple offers. The total amount spent on staging, upgrades and deferred maintenance was less than $8,000, but brought a price more than $40,000 higher than comparable, unstaged properties in the neighborhood had received.

That's the power of preparation and staging!

Here is a link to the full photo gallery.

Catching up the blog

Once again, I have gone too long between posts and now there are a bunch of things going on that I should probably write about here.

First in my announcements would be the fact that I was recently elected to the board of Habitat for Humanity. It's a volunteer position, and it's my first board position so I am pretty excited about it. I've been volunteering on the site selection committee for several months and really enjoying that, even though it is not easy to identify properties that are suitable for Habitat in our current high-priced market.

I'm really excited to be helping with the work Habitat does. In my job, I have the ability to have an influence on people's lives on a day to day basis, but the work that Habitat does really changes lives. It's "important" and I feel great about being a part of it.

I've also been traveling a lot recently, including a trip to Thailand where there recently was a bloodless coup. The military overthrew the elected government of the prime minister. We arrived "in-country" 2 days after a bomb threat against Prime Minister Thaksin, and left 2 weeks before the coup. I read the newspapers while we were there, and it was pretty clear something was brewing.

But happily there was no unrest in the air of the resort that we stayed at in Hua Hin, though.

Cool tools for finding property information

Here in Snohomish County, we are fortunate enough to be able to find a whole lot of real estate information online, for free, through the Snohomish County website. Snohomish County actually has won prizes for their website because of its extensive collection of online public records, and the tools are invaluable for anyone who's interested in buying or selling real estate in the county. You don't have to be a professional to use the site, either. It's all public information and free.

You can look up property information in a variety of different ways. For instance, if you drive by a parcel and are wondering who owns it and what they paid, you can search for it using satellite mapping of the county. If you know the street it's on but not the street address, you can use the map to find it. The property lines are overlaid the display in either the map or satellite imaging mode. So if you know the property is 3 parcels south of a particular intersection, you can look for it that way. Or, if you know the street number you can enter that into the search mode.

Once you find the property, you can click on it and all the tax information will come up, including the owner, date of sale, what they paid for the property, the assessed value, etc. This is valuable if you want to make an offer to the person who owns the property. Just write them a letter and send it to the address on the records. A lot of times, you can pick up a property this way for less than you might find one on the MLS. At any rate, if it's a particular type of property you are looking for that is hard to find, it opens up the possibilities beyond just what's on the MLS.

Another type of information that Snohomish County makes available is notices of foreclosure sales. For investor buyers, this is a great tool for identifying distressed properties for rehabs or flips. I use it all the time and love it. I check the notices, move over to the mapping and assessor's information to check further data on the property, pull up a radius search in the MLS to determine the loan-to-value outstanding on the homes, and then compile all of this information into a report that I email to my investor clients once a week.

Anyway, these are just a few of the tools that are out there, public and free, that anyone can use to find out property information. I'm sure other counties offer similar information though I think Snohomish County's site is one of the most robust and comprehensive. Anyway, if you have any questions about how to use these sites, feel free to contact me at sandy dot kaduce at gmail dot com for a tutorial.

Snohomish County Online Property Information (SCOPI) - this page takes you to the property mapping. Once you find a property using the map, you can click on it for a link to the county Assessor's online tax records.

Snohomish County Online Public Records - This is where you can go to find out about foreclosure notices and other types of public filings. Also, marriage records are available here if you are doing any genealogy projects, although I am not sure how far those go back. Also, if you ARE interested in doing genealogy and your search leads you to Snohomish County, you should know that a lot of historical records prior to 1910 are missing due to a fire at the original county courthouse. Little-known historical trivia!

Foreclosures, Pre-Foreclosures and Short Sales

I have had an interesting week, working with a investor buyer who is trying to acquire a property that is in the foreclosure process. We weren't able to get the seller to bite on my buyer's bid, but nevertheless, it's been a very interesting few days.

When I very first got into real estate, I met a woman who worked for one of the big title companies who said to me something that at the time I thought was just a terrible thing to say, but now I realize was quite prescient. She said that I should be saving my money so as to be able to invest in the wave of foreclosures that she predicted was coming. Not being the kind of person who WANTS to profit from others' misfortunes I thought this was pretty heartless but in retrospect, I think she was right on the money.

Unfortunately, the last 4 or 5 years have seen lenders really lowering their standards as far as who they will lend money to. In one sense, it's good because it has allowed a lot of people to qualify to own their own homes who years ago would have been turned away. But it also means that a lot of people are in homes they can't afford, with 3 and 5 year ARM loans that are approaching the end of their fixed period. And, a lot of loans are what are called "no docs" loans, which means that people can claim a means of payment that may or may not exist, just to get into the house of their dreams. There are also negative amortization loans, which, rather than paying down interest and principal, actually ADD interest to the outstanding principal against the home. So, your interest rate is 2% as far as what you pay for now, but the extra interest (4% or more) is added to the principal, and counts against any equity in your home. So, when you sell it you end up owing money!

These loans suck. They prey on people who don't have a lot of income, have poor credit, and are not very financially savvy. Not surprisingly, the chickens are starting to come home to roost.

Back to my investor client. He was looking for a property that met a very specific, difficult to find set of criteria, and it so happened that I found a house that was a perfect fit. So we went out to take a look at it. Something about the house (perhaps it was the dirty diaper that greeted us at the bottom of the basement stairs, or the dead pet rabbit in the backyard? Don't believe anyone who tells you that real estate is a glamorous profession!!) made us feel that something about the place wasn't right. When you've been in enough houses, you start to get a feel for when a divorce, a death or financial problems are part of the picture. Anyway, we did some research and sure enough the house was subject to a pending Notice of Trustee's Sale. In other words, it was in foreclosure.

A search of the county records will usually tell you if a Notice of Sheriff's Sale, or a Notice of Trustee's Sale has been recorded against a property. Typically, if you haven't made a payment for 6 months, and you haven't made any arrangements with your lender to catch up on your payments, your lender will begin foreclosure proceedings. The first step is one of the two above Notices. I would explain the difference but that would get us into a discussion of different ways to hold title and it would probably be boring.

Anyway, these Notices are intended to inform the public that the house will be sold at auction unless the "arrearage" is "cured" or cleared up before a certain date. Here in Washington, that certain date is 11 days before the auction. Any money from the auction will go to pay off the creditors with a claim on the house. If the situation is bad enough, there won't be enough money to pay them all, and some of them will remain outstanding against the house, and the new owner can end up taking them on. This is a risk you take when you buy a house at a foreclosure sale. You also don't get to inspect the property.

A seller can stop the sale from happening if he is able to make arrangements with the lender, or if he is able to sell the house for enough money to pay off all outstanding debts recorded against the house before the cure date. If he gets an offer to purchase the house but it isn't enough to pay off all the debts, then he has to get his creditors to agree to a payoff that is less than they are owed. This is called a short sale.

If none of these things occur, the house will go to auction. The lender doesn't really want this to happen because the price they get at auction is often less than they are owed, plus, they aren't in the real estate business. They are in the lending business, which means what they really want is just to be paid back. But, if this is the only way they can get what they are owed they will do it.

From an investment perspective, buying a property at auction or on a short sale can be a good way to pick up a house for less than the market price. However, there are risks involved. For instance, you can get stuck with any outstanding liens against the house, or there can be problems with the house that are expensive to fix, such as needing a new roof. But if the price is right, a lot of investors are willing to take this risk in order to reap the profits on a flip. A lot of the time it works out pretty well.

Unfortunately, this particular house was also subject to more liens and judgements than the house itself was worth, and it was still the seller's right to accept or reject an offer to purchase the house. So, in order to obtain clear title, we needed to work with them as well as their lender to get them to accept our offer. The only way the sellers could pay off all their creditors and also pay closing costs would be if a buyer paid more than $50K over the fair market value of the house. My buyer wasn't going to do that.

So, we came in with a pretty low offer that was enough to pay off the first mortgage but not the home equity line, and we offered to pay closing costs. If we'd have gotten the sellers to agree it would have just been the beginning of the process. Sometimes it can take months to get a lender to agree to a short payoff. Doing so can be to their benefit--actually foreclosing on a property costs a lender quite a bit of money in terms of legal fees and so forth, so sometimes it makes more sense to cut their losses before it gets that far.

It can also be to a seller's advantage, because it reduces the damage to their credit rating of having a foreclosure recorded.

And it is obviously to a buyer's advantage, because they don't have to overpay for a property or take on the seller's debts.

But it's a complicated process and a lot can go wrong. Unfortunately, we didn't get out of the gate with this one. The seller didn't go for it--maybe they were not desperate enough yet! But it was a real eye-opener, and gave me something to talk about in ye olde blog. These sellers were a perfect example of WHY we will probably see a lot more of this kind of transaction in the years ahead. They had no way to make a payment (no verifiable income!) yet, they received a loan for a $400K house, then a 2nd home equity loan just 7 months later. They had a no down payment, negative amortization loan, and this wasn't even the first time they'd been in foreclosure!

Home Pre-Inspections and Doing the Right Thing

One of the areas where real estate agents can provide a good deal of value to sellers is in the process of preparing a home for sale. In recent years, many homesellers have realized what developers have known for years--proper preparation is a huge part of getting ready to sell. It's not just about making sure the beds are made and the grass is mowed and the furniture nicely arranged, it's also about making sure that you don't get blindsided somewhere down the road with having to address "delayed maintenance," or those maintenance tasks that were put off until later or half finished. Your home needs to be ready to sell in all respects, not just the cosmetic details.

That is why I recommend to all my sellers that they have a home pre-inspection done. It serves several purposes, and costs very little relative to what NOT having one done can cost--think rescinded or low-ball offers. The first purpose it serves is to help you identify any major or minor jobs that need to be done. Just because a problem is identified--such as failing siding or a roof needing repair--doesn't necessarily mean you have to address it, but it gives you an opportunity to determine your strategy for dealing with any issues. Forewarned is forearmed, as they say.

The second purpose it serves is as more of a marketing tactic. A good real estate agent will often create for your home a "marketing book" that contains all the pertinent information about your home and neighborhood. Buyers love these--they love being able to go through them at their own pace and learn about the house in question. In the ones I provide, I usually have a few pages about the town and neighborhood, the schools in the area, all the title information for the house itself, pictures of the home and flyers, mortgage information. When a seller has a pre-inspection done, we also include the pre-inspection and a letter detailing all the work the seller has done to prepare the home for sale. It shows the buyer that the seller is pro-active and not just waiting to sell the house to the "greater fool." It can actually encourage a buyer to make an offer on your house as opposed to another, because the home has been better cared for and the seller will be more reasonable.

Some sellers, of course, feel that this is unnecessary and of course, it's their house and ultimately they have to decide how much they are willing to do to get it ready to sell. In some cases, it might make even make more sense to sell a house in more of an "as-is" condition and not worry about doing the fixing up. Some buyers are looking for a "fixer-upper" and if your house falls into that category, then you want to let the buyer take on the expense and hassle. That's where they are going to add the value and take the profit. However, if you would rather take the profit yourself and get the best price you can, it's something to consider. Just realize that you will not be able to get "top dollar" for a house that is not in "top dollar condition."

The other argument I sometimes hear is, "well, it's a seller's market and with so little inventory out there, buyers are just lucky to buy whatever they can." This kind of falls under the "a sucker is born every minute" category of thinking. A year or two ago, maybe you could get away with thinking this way, but since rates have started to go up, we are in a different market. It's still a fast paced market, but buyers are being much more careful about what they buy and making sure that they are not committing to a house that will be a money pit. They are not desperate to get into a house this week or this month just because interest rates happen to be low and there isn't much to choose from. Rates are good, but not good enough to create a "feeding frenzy" type of atmosphere. This is a good thing. The kinds of price increases that real estate experienced in the last few years will inevitably slow down as interest rates go up. Sanity will and must return to the real estate market.

Sanity is good, peeps.

Everyone wants to get as much money out of their house as they can, but sometimes in our haste to save a few dollars, we can actually end up costing ourselves in the long run. The cost of an average home inspection is $300 to $400 dollars. The repairs themselves can be considerably more. But these expenses pale in comparison to what it may cost if you lose a deal based on inspection issues, fail to recieve any offers, or if your home is sold with undisclosed and unrepaired issues and a buyer decides to sue.

Ultimately, doing the right thing always pays. And as Wilford Brimley would say (anyone remember him?) "It's the right thing to do."

More on Volunteering

So, one of the big things I have wanted to talk about in here is some of the other organizations I have been getting involved with. One of the reasons I wanted to get into real estate is that it's the kind of job where you have the opportunity to be involved in the community. As I mentioned, I joined the Chamber of Commerce for Mukilteo, and also have been working with Habitat. I am pretty excited about both of those--I think the Chamber puts on some great events and obviously, Habitat is a great organization too.

The third thing I am excited about is the Mukilteo Lighthouse Festival. The Festival is basically Mukilteo's "Town Party" and it's an all volunteer event and a very big deal. Because it's all run by volunteers they basically need all the help they can get. So I told them that I would be willing to help out however I could--they took me up on it and now I am the "Sponsor Recognition Chair." Wow! You volunteer to help and you end up as a chairperson!

Okay, so really this is not that big of a deal. The first thing on my agenda is...THANK YOU NOTES! Later I'll be coordinating certificates and plaques for sponsors, and making sure everyone is recognized on signage and so forth. But it sounds impressive doesn't it, being a chairperson?

All joking aside, it's always amazing how many people it takes to make one of these things come together smoothly. I just have one little piece of it, and there are at least 20 other people who also are volunteering, and there is still more to do. It'll work out though...these things always do. Maybe not perfectly but the only people who ever notice the glitches are the ones running the show.

Anyway, next time you are at a festival or other volunteer-run event, think about how every single thing that you see requires someone to donate time or money to the cause. Most of the time, no one is getting paid to make sure things work out like they are supposed to, and of course, most of the time and effort people put into it has to be in addition to whatever the volunteers do for a living. Kind of amazing they run as smoothly as they do!

Construction Is Not For Wimps

For many years, I have thought that Habitat for Humanity was an organization that I wanted to get involved with, but working 10-12 hour days at my old job made it virtually impossible to do much about it other than wish for the time or the money to support the organization in a way that would be meaningful.

As a real estate agent, time is still an issue but it's more feasible than it was previously, to volunteer. So I have gotten involved with Habitat, and I'm so glad I did. I think I've mentioned before that affordable housing is a big issue with me, so I am glad to be in a position where I can help an organization I believe in work towards the goal of helping people own their own homes who otherwise wouldn't be able to.

I am working with the Site Selection/Construction committee and I am also taking the Cornerstone Training Class so that I can work as a team leader on job sites. Cornerstone Training basically provides an overview of construction techniques so that volunteers can work more effectively on job sites and also, so that they can provide leadership as needed to guide untrained volunteers as to how to perform their tasks safely and effectively.

My first day of Cornerstone Training opened my eyes up to several facts. One is, hammering a nail properly is not as easy as it looks. There is actually a right and a wrong way to do it, and all my life, I have been doing it wrong. The second thing I learned is that my fear of circular saws CAN be overcome, but I will need to work on my upper body strength if I'm ever going to be much use with one. They are heavy, and make my arms and wrist hurt. But I am still proud of myself for overcoming my fear of using one.

The third is, that working construction for 5 or 6 hours will really wipe you out if you are not used to it. I am still very sore today!

The last thing I learned is that there is a lot to know about construction, and I think it will help me in my job to have more of a ground-up understanding of how houses are built. I can already think of several things (for instance, why it matters which way you lay down a flooring joist) that I understand better now than I did before my first day of training. And the opportunity to learn about things you ordinarily might not, is one of the great things about volunteering.

What I Did On My Mexican Vacation

In short, I did as little as possible.

Last Saturday, Eric and I left for a much needed vacation in sunny Los Cabos, Mexico. We spent most of our time curled up on a lounge chair in the sun drinking pina coladas and working on our tans. Or, in my case, working on my sunburn and future skin cancer, since I don't tan. Although it was later in the season than the last time we were there, for some reason I found the weather much more agreeable.

I should mention that last time we were there we got engaged, so the place has a special significance for us. I just love it there.

In addition to vegetating on the beach, we also went into town and did a little sightseeing. Being in real estate I couldn't help but be curious about what is going on with real estate in the area. There is a new development that is going in just north of San Jose called Puerto Los Cabos. They are building the development around a new marina which has already been dug. Should be nice. As far as the town itself, I find San Jose much more charming and fun to visit, as it is less overrun with American tourists and has the small town feeling of colonial Mexico.

The other new development that is going in down in Baja, which I think is going to be pretty cool, is in the town of Loreto about 300 miles north along the Sea of Cortez from Los Cabos. It's called Loreto Bay. Loreto was a colonial Spanish town which was the original seat of the California missions, and was also the original seat of government for Baja California until the provincial government was moved to La Paz, so there is a lot of history there.

One of the things I particularly like about Loreto Bay is that it is emphasizing sustainable development both from an environment as well as an economic and social development perspective. To me, this is really important, as these developments SHOULD, ideally, promote a better quality of life for the local residents and workers as well as those who buy homes there...unfortunately, they often don't. Development in Mexico often seems to occur willy-nilly without regard for the long-term effects on the environment or on the types of jobs created.

Also, Loreto Bay is attempting to create an Urban Village type environment which will be more oriented around walking than on driving. This is in contrast to Los Cabos where American car culture has definitely been transplanted and there isn't quite the infrastructure to sustain it. Also, bad for the environment and creates more people dependendent on fossil fuels.

So that's my little Mexico Real Estate report. One thing I have noticed is that in the real estate business, you are never really "on vacation." It's more of a busman's holiday!

Food for Thought

Here in Mukilteo one of the big questions on everyone's mind centers around the Multi-Modal Transportation Hub that is being built down on our waterfront. The idea is to tie the ferry terminal, buses and our new Sounder commuter train together in one station, thereby improving the ease of commute for residents in the area.

Jay Inslee, our state representative, discussed the issue at today's Mukilteo Chamber meeting. Rep. Inslee has been a big supporter of this transportation hub, as am I, so it was interesting to hear what he had to say about it. He also talked about his Apollo Energy Bill which is a multi-pronged approach to helping break America's dependence on fossil fuels.

As Inslee said, American dependence on fossil fuels isn't just an economic issue it's also a security issue, as it makes us susceptible to the slings and arrows of whatever happens to be going on over in the Middle East. Inslee sees transportation, energy and security as intertwined and to solve any one of them, you have to solve all three.

I'm not meaning to get all political here, the point I am trying to make is that as gas prices top $3.00 a gallon I hope we will see a better, more integrated approach to energy and transportation policy as well as sustainable living. The reality of the matter is that high housing prices and quality of living issues do mean that a large proportion of the population will choose or be forced to live a long distance from work, which is not bad in and of itself. What is bad, is having those individuals make that commute in individual vehicles, which in many cases are not fuel efficient and emit large amounts of greenhouse gases.

Later on, I was asked by one of the chamber members if I thought there was a "bubble" in the real estate market. My response was that I didn't think that what we are seeing this year is a bubble bursting, at least not here in this area. We have a good hiring market and a limited amount of land to work with, so that insulates us somewhat from any real "bursting." But what I have seen is a softening of the market at least as compared with last year.

I also told her that I thought it was a good thing too, because affordability is starting to become a real issue. The kinds of rises in home prices that we have seen in recent years cannot be sustained forever or it becomes impossible for first-time buyers or those who are not wealthy to purchase a home. Which is a little bit of a self-fulfilling thing, given that home-ownership is the best way there is to build wealth--it's kind of like how you can't get a job until you've had a job!

So, a slight softening is a good thing. If the market never does anything but go up, eventually it prices out everyone but the rich. It's better in the long run to see things return to a more "sane" and businesslike environment. Better for buyers, and ultimately better for sellers too (as sellers in their turn are also buyers!)

That's all for now...it's good to be back!

Choosing Sides

One of the not-so-great things about working in the particular market that I do, is that because a lot of the homes out here in the 'burbs were constructed within the last 15 years or so, we see a lot of the faulty construction issues that were common during that period. The major one being LP siding.

Today I had the interesting experience of touring 2 homes in succession that had failing LP, and in both cases neither the sellers nor their agents were aware of it. One agent claimed that it couldn't be LP, because the house was built in 1988, and LP was only sold in 1994 - 1995. In fact, the product was sold and put on more than 800,000 houses nationwide between the period of 1985 - 1995. The earlier product, that is, pre-1992, was the most prone to failure, so in fact, this agent's house is a sitting duck, and he just doesn't know it yet! But, since the failure of the siding is plainly visible to the untrained eye (i.e., mine), I'm sure he will soon find out...

As a Realtor, it only takes one listing with LP siding for you to become something of an expert on the subject because it can be the cause of so much heartache for your sellers. Heaven help the naive seller and agent who go merrily traipsing along, assuming that because the LP "looks okay" to them, that all will be well. There are a lot of different stages of failure, and some are not immediately apparent. The process of breakdown begins with tiny cracks, and without vigilant maintenance of the LP, you may have these cracks which allow water to seep into the siding, and not even know it.

I think it usually pays to know what you may be looking at up front, so a pre-inspection of the property can be beneficial, and having been through it once, I would now recommend any seller with LP siding have this done. In some cases, I can visually determine if damage exists, but I can't as easily determine the extent of the damage...or "how bad is it really?"

That's a big distinction, depending on whether the moisture has penetrated behind the siding and into the actual structure. Is it a matter of replacing all siding on the house, or is it possible to paint, seal and caulk the siding to keep minor damage from progressing? A pre-inspection can help answer these questions, and will allow you to formulate a plan to deal with the problem. The way I look at it, you'll either end up paying for it up front, or in the form of a price reduction or failed sale when the problem is uncovered.

In Washington state, sellers are required to disclose if there is LP (or and fiber-board type siding) on their home, and if the siding has begun to fail, most lenders will not lend on the home. (Clearly, the agent mentioned above either didn't read his seller's disclosure, or maybe the sellers don't know either! ) This can make it extremely difficult to sell, even if the siding only has minor damage, simply because most buyers do not want to put themselves in the position of buying a home knowing that there is a $10K-$15K repair job that will have to be done...and with LP and a lot of similar siding products, it is not a question of IF it will need to be replaced, but when. So, if a homeowner has this siding, they will most likely end up having to make some sort of arrangements to deal with this problem.

I guess the long and short of it is, if you are a real estate agent or a homeowner whose home contains these products, it pays to educate yourself about the products, know your options and have a plan for dealing with any problems that may arise.

The Golden Rule in Real Estate

I was just thinking about a situation that came up recently, and wanted to write a little bit about how I think the golden rule applies in real estate. And no, I'm not talking about that golden rule that says, "he who has the gold makes the rules," but rather, the one that says you should do unto others as you would have others do unto you.

Every real estate agent out there, no matter what company they work for, has the ability to pretty much decide how they are going to do business. Obviously, we all have to obey the law, but within the law, there is a lot of grey area. There are things you can do that are legal, but may not be ethical or proper.

For instance, is it ethical to undertake an action that serves your own client well, but basically "screws" the person on the other side of the table?

For instance, say you are working with an out-of-town investor client who wants to buy a property. Maybe this investor doesn't even come to town to see the properties before making offers. Maybe their agent simply selects three of the best, then the buyer makes offers that are subject to inspection on all three, and no disclosure is made that this is the case. After inspection, the buyer rescinds two of the three offers, selecting only the house that is in need of the least repairs.

Smart, right? But what about working in good faith?

When this is a buyer's strategy, the seller usually doesn't know about it, and then when the inspection is disapproved and the transaction terminated, they now have a house that is less marketable because other agents all know that this is a house where something went haywire during inspection. It's a pretty crappy thing to do to a seller who is working in good faith and would have been willing to make the repairs. It could end up costing them thousands of dollars.

As the buyer's agent, maybe your thinking is that the only person that matters here is your own client. But remember that under the Washington Law of Agency we are required as agents to act in good faith towards all parties. This isn't to say that an agent can't still be a tough negotiator, and get a great deal for their client...neither of those things is precluded by acting n good faith.

I guess the way I look at these things is, if I wouldn't want to have someone do something to me, I'm not going to say it's okay to do it just because it's good for business.

Renovate versus buy new?

In the last few weeks, one topic has come up repeatedly among people I've talked to who are thinking of buying a new home, so I thought I would mention it here. With home prices rising so fast, people are really excited to hear about the values of their own home, but when they think of what the money they will clear in a sale will actually buy them in today's rising market, the excitement tends to fade a bit.

In a lot of cases, people ask, "well, what if I stay put and take the money I might have used to buy a new home and use it to renovate the one I'm already in?"

The answer from a realtor's point of view is that it depends why you are doing it. Do you want to stay put because you love the house, love the location, love the schools and can't imagine living anywhere else? Are you thinking it will increase the value of your home? Or are you doing it because you are concerned about the cost of a new mortgage?

Whether you decide to renovate or move, the cost to do either can be considerable. Some factors to consider in your decision include:

• Do you need more space, or a larger yard?
• Do you want better schools, parks and community facilities?
• Do you want to be closer to family or friends?
• Are you looking for less expensive housing or wanting to downsize?
• Do you want a better neighborhood or a new lifestyle?

Before deciding to renovate, make sure the improvements you are considering are not overimprovements. Consider the neighborhood and market prices of comparable homes in the area. If your home is currently worth $300K and you are considering spending $80K to renovate, will the home be marketable in the $380K range? If not, you may be taking on a great deal of additional debt that you may not be able to recover upon sale. It might be time to accept that this home may have met your needs once, but perhaps it is time to consider moving to a home that fits your needs now.

My advice as a realtor to those faced with this choice is to speak with a contractor and get a valid cost estimate for the improvements you are considering. Then speak with a realtor to find out whether there are any homes currently on the market that meet your needs better than your current home, and ask whether the planned improvements would add enough to the value of the home to merit the cost.

A general rule of thumb is to never spend more than 25% of the value of your home on renovations or improvements. Kitchen and bathroom renovations are usually a safe bet, because they often add more to the value of the home than they cost to accomplish, but other types of renovations can be riskier.

Some guidelines for those considering renovations include:

• It costs 50 percent more to demolish a brick wall than timber
• It is cheaper to extend out than up
• Swimming pools rarely add value (especially in Seattle!), though in some parts of the country, most notably Florida and California, not having one can detract from value
• Architects cost less than you think and can actually save you time and money
• Get at least three quotes from reputable builders and contractors, check references, and check their work
• Consider all your options thoroughly--including moving to a new home--before making a decision.
• If you are doing the work yourself, be sure to get a permit! This will ensure that you don't run into any marketability issues later--and this point is absolutely critical for those on septic considering adding bedrooms to their home.

Here's some more information on the cost vs. value of a variety of remodeling projects.

Seattle Mayor Pulls Support From Monorail Project

Transportation issues aren't really my forte, but there is something about the whole monorail project that has never made sense to me. I don't have an issue with the cost, because it seems like any large-scale transportation project of this nature, whether it's monorail or light rail or roadway improvements or whatever, is going to cost a lot of money and take a long time to pay off. The problem I have had with it is that the proposed monorail project would not really do very much to alleviate what I perceive to be the major traffic problem facing the Seattle metropolitan area.

Combine that with the fact that we have a light rail system also going in. Now to me, as a person living in the 'burbs, it makes more sense to have one mode of transport capable of alleviating our traffic problem not just in the city, but out in the 'burbs as well. And, as a person who has at one time or another done just about every commute you can think of (Eastside to Seattle, Queen Anne and Capitol hill into the city, Capitol Hill to Eastside, Bothell to Kirkland, Fremont to Kirkland, Mukilteo to Kirkland and even Whidbey Island to Seattle!) I don't think the in-city commute is the most pressing transportation problem. The more pressing problem is the people sitting in stop and go traffic from Seattle or Bellevue to points as far north as Marysville and Arlington, as far east as North Bend, and as far south as Pierce County.

People who do those commutes don't do them just because they like their cars, they do them because decent affordable housing is hard to find in Seattle. A family looking for a 3 bedroom house with a yard and in a good school district that only has $300K to spend is going to have a hard time finding that in the city. So they feel they are forced to make the longer commutes. Snohomish county is now one of the 5 fastest growing counties in the nation and Pierce is right up there as well. So you end up with more and more people making these long treks every day. Bus service out to these areas exists but it can literally take hours both ways, only runs at limited times, and just isn't a very viable option for most people.

So, we have these huge traffic jams on I-5 and I-405. It's even a problem for businesses like Boeing that have to use the roadways to move products around. So, it isn't just a quality of life issue for the people who've "chosen" to live in these areas, it's a jobs issue as well.

So just to throw my hat into the ring on this, I'm in favor of the light rail system, and would rather see us spend 11 billion to make that a viable option (for instance, more service on the north-south lines so that it actually becomes convenient to use, and getting the east-west lines built), than continue putting that money into a transportation system that only benefits a small number of neighborhoods.

Over-improvement

We had my husband's parents in town last week, and it is always fun when they come to visit. Went to Whistler for a couple of days and hiked around, watched crazy mountain bikers...it was lots of fun.

While they were in town, we got to talking about the house they just built. It's a beautiful log home, built overlooking a river and 200 acres of federally protected original prairie that the family owns. My parents built the home for a retirement house, because it's near their parents and brothers and sisters. The area has great pheasant hunting as well, so there is some business potential for using the house as a hunting lodge.

Sounds great, right? The only downside is that building costs overran their original loan and when they went to the bank to try to get a second loan, the bank would not lend them any more, since they already had a loan out for about the max of what comparable properties in the area were selling for. It had nothing to do with whether they were good for it or not, or how nice the house was, it simply had to do with the bank being unwilling to take the risk on further improvements to the property in a market that might not support it.

People over-improve their homes all the time, and that's okay as long as they are clear that the improvements are for their enjoyment and that they may not recoup their costs. It's important to remember that there are improvements the market will bear, and ones that it won't. If you have the nicest home in the neighborhood, that may not mean that you can sell your home for significantly more than your neighbors. The value is in the enjoyment of the property while you live there.

To know if your improvements are over-improvements, it helps to make sure you understand whether the local market will pay for the work you have in mind. Talk to a real estate agent or appraiser that specializes in your neighborhood and ask what the value of your planned project will be when completed. Then decide if you want to do the improvements for your own enjoyment or not.

First of all--welcome to my blog! I hope that this will be a great resource for you if you are looking for information about what is going on in the north King and south Snohomish counties, which are the primary areas that I work with as an agent with Windermere Real Estate in Mukilteo.

I'm a long time resident of the Puget Sound area (born and raised here), and as such I never cease to be amazed at the changes this area has undergone in my lifetime, which doesn't span THAT long a period of time (I'm in my 30s). One of the things that particularly gets my attention is our current real estate market which is, as anyone will tell you, a crazy one at times.

One topic that comes up with great regularity is whether or not the current trend in rising prices is just the market at work, or if it is a bubble that is about to pop. Anna, of the Rain City Guide, recently discussed this in her Seattle-based blog, saying that frankly, she doesn't find such talk to be all that interesting. She and I both tend to be in agreement with David of the City Comforts blog, that Seattle has space limitations that are largely behind our rising prices, and since those limitations are not going away, we are somewhat insulated against a popping bubble type of scenario. In other words, the rise in prices is simply the law of supply and demand at work. Other cities, such as Las Vegas, are also experiencing rising prices but pricing there is more affected by outside forces such as speculation that lead to rising prices but may not be supported by the market once those forces pull out.

That's a lot for a first entry, so I will close with this comment, which I initially posted over at Anna's site:

...Two thoughts. One is, to me a “bubble” signifies a rise in prices that is brought about by outside forces and which is not sustainable over a long period. The behavior of housing prices in places like Las Vegas is a good example, where you see a lot of outside investors coming in and driving up prices beyond what the area might normally be able to sustain. This is not the case here in Seattle because the forces driving up prices are inherent to our market. The little usable space and unhospitable topography combined with growth restrictions result in a lack of supply, and a relatively healthy employment base and low mortgage rates results in lots of demand, therefore, prices go up. Even when rates go up and we go through challenges with the local economy, the long term trend will still be upwards…barring any sort of economic or natural disaster.

As an aside, it cracks me up that folks are freaking out about bubbles when we are sitting right in the middle of one of the most seismologically active regions of the world, less than 100 miles from one of the worlds most dangerous volcanoes… It seems like if you want to worry about something, Mt. Rainier blowing up or a 7-9 richter-scale earthquake might be just as valid a concern.

The other is, the rise in prices is not limited just to within the Seattle city limits–we’re seeing it across the eastside and Snohomish county as well. I think one of the things we are going to see over time if Seattle can’t get this traffic situation figured out and as gas prices keep going up, is a real solidification of the neighborhoods and suburbs, with folks making more of an effort to keep their commute distances as short as possible. People will be trying to live and work in the same place. We’re already seeing this to some extent as what used to be bedroom communities (Bellevue, Redmond, Kirkland, etc.) have grown to become commercial centers, and as gas prices continue to rise people will be forced to make choices about where they are going to work and live. Which, frankly, is why I don’t particularly mind that gas prices are now topping $3 a gallon. The sooner we get to the point where people stop thinking it’s okay to drive their cars 100 miles a day roundtrip, the better for the environment and for people’s sanity too!