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!

Best of Everett/Mukilteo: MidCentury Modern and Northwest Contemporary

Midcentury modern is one of my favorite architectural styles. Though the period of 1945 to 1975 is normally associated with the commodification of architecture--see the great number of split-levels, tri-levels and ranch homes built during the period--there were some very innovative things going on during this time. In 1945 John Entenza, publisher of Arts and Architecture magazine, sponsored the Case Study House program in Los Angeles, which prompted promising young architects to experiment with new designs and ideas. The works created as part of this program influenced an entire generation of architects and builders, and their work continues to be influential today.

Architects and designers such as Richard Neutra, Pierre Koenig, Charles and Ray Eames, and Eero Saarinen, and many others designed homes that emphasized open space, relationship to the outdoors, and the use of economical building materials. Immediately post-war, building materials were somewhat limited leading to a heavy reliance on wood and glass, but as industrial materials developed during the war became available for residential construction, new materials and techniques such as steel frame construction began to be used. This in turn allowed builders to experiment with a variety of angles and rooflines, providing more flexibility to the design.

What differed from pre-war construction methods and architectural styles was that rather than hiding the construction materials being used, they became part of the design itself. The use of exposed metals, concrete, wood and glass showed that this was a new era, with a new aesthetic.

Mid-century modernism continues to influence today's architecture, through its emphasis on the use of natural light and materials, its use of open/flexible spaces in the home, and its whimsical touches that echo the future-looking ethos of the post-war era. Mid-century modern was also about making good design available to the masses, so homes in this style are often not expensive.

Another unique feature of midcentury modern architecture is the way the style was adapted according to the tastes and available building materials in various regions of the country. Here in the Northwest, mid-century modern is the progenitor of our own Northwest Contemporary style, which shares most of the features and aesthetics of mic-century modern, but because of the availability of wood as a building material, and our role internationally as a major lumber exporter, the use of wood as the primary building material is more pronounced. Whereas Neutra might have used exposed industrial steel to frame his glass houses, a Northwest Contemporary home would be framed in exposed cedar, with extensive use of pine, cedar, teak or douglas fir paneling as a design element. Many other design elements remained the same, including low or no-angle rooflines, emphasis on bringing in natural light, and a sense of relationship to a home's outdoor spaces.

Here is my favorite midcentury home currently available on the NWMLS in my area, which includes Mukilteo and Everett. I'll be covering other properties that typify this style, both on the market and not, as I discover them.

1308 Maryland, MLS # 27102852





What makes this such a great example of mid-century modernism? Teak accents including a living room wall paneled in teak, built-in cabinetry throughout the home, doug-fir flooring, Roman brick masonry (oh-so-'50s), floor to ceiling windows to bring in natural light year-round, and original 50's tile bathrooms. There is also a covered patio area that allows you to enjoy outdoor living year-round. The home has more than 2400 interior square feet and an enormous 16,000 square foot lot with mature landscaping. And the price tag, $384,950, makes it a great value, well in keeping with the modernist ideal that great architecture should be within reach of everyone.

Neighborhood Review: Harbour Pointe Village

Another new feature I'm bringing to the blog is "reviews" of different neighborhoods/subdivisions in the areas I serve, i.e., Mukilteo and Everett. I think this is interesting information for anyone considering buying a home in the area, and it helps with the "I don't know what to write!" problem that I have been having. Structure is good, at least it is for me.

The first neighborhood I'm reviewing is called Harbour Pointe Village--it happens to be the neighborhood where I live.

Harbour Pointe Village is a newer subdivision of about 250 homes in the planned community of Harbour Pointe in South Mukilteo. It's rather unique in Mukilteo in that it is the only community of moderately priced homes (under $650,000) that is situated on the Harbour Pointe Golf Course, and it is the only neighborhood in Mukilteo that has adopted some of the principles of New Urbanism, such as Walkability, Connectivity and Increased Density, into its design.

Homes in Harbour Pointe Village range from about 1,800 square feet up to 2,400 square feet, with lot sizes ranging from 3,000 square feet up to about 5,000 square feet. About 25% of the homes face directly onto Harbour Pointe Golf Course, and as you would expect, these homes tend to come in on the upper end of the price range for the neighborhood.

The homes were built between 2000 and 2003, by well-known local builders John F. Buchan Homes and Lozier. Both builders typically build more high-end homes, and therefore the finishes in the subdivision are of a quality you would typically expect to find in a more expensive neighborhood, such as 10 foot ceilings, extensive millwork, high-quality hardwood flooring, etc. The homes built by Lozier tend to be more "modern" on the inside with more flexible floorplans and clean lines throughout, where the Buchan floorplans and finishes tend to be a little more traditional with formal spaces.

One of the most interesting things (at least to me) about the neighborhood is that it is styled in the manner of some of the older Seattle neighborhoods such as Capitol Hill or Queen Anne, with alley access in the rear and home facades facing directly onto the street. This gives the homes a friendlier street feel and encourages more neighborly interaction than the typical suburban home that has a garage in front taking up 2/3 of home's street "face."

Another unique feature of Harbour Pointe Village is the use of public green spaces. Certain of the homes in the neighborhood face onto a "village green" that increases privacy between the homes and counteracts the effects of the smaller lot sizes typical in the neighborhood. If you live on one of the greens, you get the advantages of a large yard, without the responsibility of caring for it, since these spaces are maintained by the Homeowners Association.

I really enjoy living in the neighborhood for several reasons. The design of the homes in the neighborhood is really great, and reminds me of the neighborhoods where I used to live in Seattle. Tudor-, Dutch Colonial-, Federalist- and Craftsman-inspired homes are intermingled with more modern ones, which prevents the neighborhood from having an appearance of "sameness" while still retaining an overall sense of unity.

The neighbors are friendly, which is important, and there is quite a bit of diversity in terms of life-stages and ethnicity. There's a nice mix here of families, dual-income-no-kids couples, and retirees so no matter where you are in life there are other people in the neighborhood who are similar to you. Yet, there is enough diversity to keep things interesting.

Another nice feature is that The Village is walking distance from elementary, middle and high schools, as well as Village Center, a small area with restaurants and shops. This gives residents the ability to get out of their cars and enjoy some of the benefits of a more urban-feeling setting.

Mukilteo Market Stats - May

I am bringing a new feature to this blog, which if nothing else will ensure that I post here at least once a month. I've decided to begin posting market statistics for the city of Mukilteo once a month--I'm starting with the month of May 2007.

In case anyone is wondering, now is a great time to buy real estate. And it's a good time to sell too, as long as you list your home at a reasonable price. By reasonable I do not mean LOW, I simply mean a price that is in line with the market. The reality is, 20% increases in housing prices every year are not sustainable unless we are all getting 20% raises every year, which I would submit we are not. I think we are moving out of that crazy seller's market, which is a good thing, as buyers have been getting the short end of the stick for several years now.

The big difference I am seeing between this year and last is that there is a lot more inventory on the market. Some of it is selling quickly, and some of it is not. Overall however, time on market is definitely up as compared to this time last year. Oddly, sale prices are up as well.

The usual relationship between time on market and sale price is that as time on market increases, sale price decreases, time on market being a pretty good indicator of demand for housing. But that pattern is not what we're seeing this year. We have a lot more supply than last year. But that doesn't necessarily mean oversupply, because if you were paying attention last year, you would have noticed that we had too few homes listed, which was driving prices up. Now we have lots of homes listed, but demand is still healthy enough to prevent any reductions in price. However, buyers definitely have a lot more homes to choose from.

Having more choices means buyers can now be more selective. Homes that aren't in good condition or that are over-priced are now sitting on the market, where a year or two ago, buyers' desperation to get into a home meant that even overpriced, ugly houses weren't too difficult to sell. One thing to note is that 57% of homes in Mukilteo that were on the market in May sold within 30 days. That is still a market where if your home is well-prepared and priced correctly, you are still very likely going to be able to sell it without much difficulty. Note also that Mukilteo has a lot of luxury properties, and those tend to take longer to sell.

By and large we're not seeing prices come down, but as you would expect we are seeing some fairly significant reductions (5% or more) among homes that have been on the market longer than 90 days. I would submit that those homes were overpriced anyway, and the price reductions are bringing them in line with where they should be.

That's my analysis, here's the data. All statistics are courtesy of the NWMLS, and include Mukilteo (in city limits) ONLY for the period May 1, 2007 through May 31, 2007:

Active Listings
Listing Count: 89
Average Time On Market: 90 Days
Median List Price: $582,450
Average $ Square Foot: $264

Under Contract (includes Contingent, Active STI and Pending):
Listing Count: 19
Average Time On Market: 86 Days
Median List Price: $595,845
Average $ Square Foot: $294

Sold Listings
Listing Count: 21
Average Time On Market: 90 Days
Median Sale Price: $434,000
Average $ Square Foot: $247

Here are a couple of statistical charts, courtesy of NWMLS. The first one shows the breakdown of how our inventory in Mukilteo is aging. You can see that even with all the inventory, 57% of listings still sell within 30 days. The second chart shows the relationship between list and sale price, illustrating that price reductions are tied to time on market.

Staging - It Works!

For about two years now, I've been an Accredited Staging Professional Realtor. Staging plays an important role in how I help my listing clients sell their properties quickly, but for some reason I have never blogged about the topic here.

Recently, I had a couple of great opportunities to prove to myself how effective staging is, as far as reducing time on market and attracting top-dollar offers. One listing was a home that had marketed previously without staging, the other listing was my own personal home. I'm not going to get into what we did on our personal home in this post, but will at some point in the future.

The listing I want to talk about was a wonderful home in a nice neighborhood that had been listed and failed to sell. Clients contacted me to find out what my suggestions were. When it had been listed originally, it was sort of oddly furnished and mostly filled with kids' toys, so buyers were having a hard time understanding how to use the spaces of the home. It was in a neighborhood which usually attracts buyers who have sort of upscale aspirations.

It seemed to me the lack of furniture and the confusing use of the rooms was putting buyers off from making an offer, so we determined that we would address these issues.

To do so, we gave the home a thorough cleaning and did some patching of interior paint. Then, we brought in furniture to show how the rooms could be used, and also to attract our "aspirational" buyers. We did some simple decorations using items that I and the seller already owned to make the home as appealing as possible.

When we returned the listing to the market, we received a full price offer in less than 6 days. This was a great result since typically in this neighborhood, it takes upwards of a month to get an offer and the house was listed at the highest per-square-foot price ever in its neighborhood.

Here are some before and after shots.




Here is a "before" shot of the dining room of this home, taken from the stairwell. You can see from this picture that it was not entirely clear what the space should be used for. It was also not a great picture to put on the Multiple Listing Service, because of the way the banister of the stairwell cuts off the bottom of the shot. It makes the room appear oddly shaped.









Here is an after shot of the dining room, showing the furniture and accessories we brought in to show off the use of the space. The professional photography also made a difference because we were able to get an angle on the room that shows how it flows to the rest of the house, and the lighting is better. Brown and neutral tones along with place settings and exotic flowers give the room a warm, modern feel.

Here is a "before" shot of the living room, before staging. You can see that although it appears neat and clean, there are children's toys and no real furniture in the space. The photograph doesn't provide any real feel for the dimensions of the room either.

This is a shot of the living room, after staging. It's a different angle on the room than the before shot, but you can see that we brought in furniture and arranged it to illustrate how the space could be used as a living room. We also took care to take the photograph in a way that illustrated the great open floor plan of the home, and provided an appearance of spaciousness for the MLS listing.

Everett Riverfront Development

As a lifelong resident of North Puget Sound I have long had a healthy dose of skepticism about any real estate development deals of city plans that are announced, but it does seem that the City of Everett is building a good reputation for itself on the planning and execution of the city's revival of the downtown area. It's a completely different place than I remember when I was growing up, and I think there is a lot to be proud of with the way the city has changed in the last few years.

Here is the latest grand plan for redevelopment of the Snohomish River waterfront, to complement the redevelopment on the Port Gardner side.

Snohomish County's Best Architecture

Okay, so you're thinking "what architecture? Snohomish County has architecture?"

Yes, we are out here in the 'burbs but we do have some examples of good architecture. Architecture that fits in with and enhances its environment. Some of the great architecture is residential, and some of it is public. Today I will focus on public buildings.

Several of the best works of architecture in Snohomish County are new. They are in downtown Everett, and symbolize the revitalization of Everett's downtown.

Here is a short list:

Snohomish County Jail

Snohomish County probably has the best looking jail in the country. It won an Honor Award for Washington Architecture from the Seattle chapter of AIA in 2005, which stated,

"the unusual urban placement and innovative form of a corrective
facility introduce a new way of conceiving the process of rehabilitation as a
civic function. Having this building in the middle of the city helps us all to
overcome our reservations about incarceration, transcending connotations of the
jail as a place removed from society and hiding transgressors. The designers and
the client have challenged conventions here, and we commend them for it."

Hm. Well, I'm not sure that I've overcome my reservations about incarceration, but I will say it's a very nice looking jail.

University of Washington-Bothell/Cascadia College

This also received an award from the Seattle Chapter of AIA, back in 2003. What they found commendable about the project was:

Extended eaves shade and shelter the pedestrian walkways while the lively
structural rhythms make an allegorical reference to trees

Everett Station

Reminiscent with it's rounded roofline of a European train station, the Everett Station was designed both as a transportation hub and also a gathering place. The Amtrak Cascade and Empire Builder lines stop here, as well as Sound Transit's daily Seattle commuter train and multiple bus lines. It's also home to the University Consortium, classroom space that is shared by Everett Community College, the University of Washington, Western Washington University and Washington State University. Don't miss the art gallery space inside.

Everett Events Center

With "sail" structures on the roof that give the building height, as well as reminding us of Everett's standing as home to a Navy homeport and one of the largest marinas on the West Coast, the Events Center pays tribute to and enhances its surroundings in Everett's downtown. As host to the Everett Silvertips, minor league basketball, arena football, and a variety of concerts and events, it is playing an important role in the revitalization of downtown.

AIA Top 150

Just finished looking through the American Institute of Architects' America's Favorite Architecture survey results and am happy to report that Seattle has 2 entries. Predictably, Rem Koolhaas' Seattle Public Library made the list and is ranked 108th. Less predictably, by me at least, is Safeco Field by NBBJ at 135th.

On the one hand I suppose we are lucky to see two entries since Seattle is not a city noted for its architecture (not that some of it isn't great). On the other hand it seems like there are some important structures from our city missing. What about the Space Needle? It is certainly iconic if nothing else! Or the new "Blob"--The EMP by Frank Gehry?

Professionalism in Real Estate

Reba Haas over at Rain City Blog wrote and excellent post about the sometimes contentious relationship between real estate agents and attorneys. She was responding to an attitude in the industry that attorneys are deal killers and that agents therefore avoid using them when they should, and as a result wander dangerously close to the unauthorized practice of law. She wrapped up her post with this:

This brings me to a subject I want to blog about in the near future -
raising the level of professionalism of the real estate industry in general.
That, and getting agents to stop those old sayings of things like “buyers are
liars and sellers are worse.” When I got in the industry 4 years ago I
couldn’t believe people in the industry said stuff like this around me all
the time. It seems like an ”us vs. them” mentality. How messed up is
that!?!? If you’re a professional you don’t walk into a meeting with a
prospective client with this kind of mindset and I’m glad that I don’t.

I have to agree with Reba. I have always thought this kind of thing was just appalling. These are your clients you are talking about, and to bad-mouth them is kind of like bad-mouthing your boss. It's a bad idea. In fact, it's worse than bad-mouthing your boss because this is such a competitive industry. Why not try having a little gratitude for the fact that you have a client? Why not also try improving your skill at working with buyers so that they don't end up in a position of wanting to lie to you? Why not provide better service so your relationships with listing clients will be stronger?

I know of some agents who seem to actually resent having to work and provide service to their client. This is a tough industry to be successful in, but the ones who will be successful are the ones who are good at building real relationships with their clients. It's hard to do that if you only care about the check, don't enjoy the work, and most importantly, don't enjoy the people.

Guide to Everett

I just posted my "Guide to Downtown and North Everett" with Everett's top 10 places over at my website (www.sandykaduce.com). I posted my favorite places in categories, so there are more like 30 individual favorites. I bet you didn't know it was possible for a former Seattleite and self-admitted snob to HAVE 30 favorite places in Everett! Well, it is!

This brings me to the topic of tonight's blog post--why do people always diss Everett? When I was growing up, and even when I first moved to the north end, I always looked down my nose at Everett. Everyone I knew did. And maybe our reasons for doing that made sense 20 years ago. But in the last five or ten years Everett has really transformed. Yet, people still think of it as the blighted, dying, blue-collar mill town that it was in the 1970s and 80s.

Some background might be helpful. My family has its roots in Everett--my grandfather was a personnel manager at the Weyerhaeuser mill in the late 1960s, and my family lived in Eastmont from 1967 to 1970. So, my family remembers living in Everett near the end of the time that Everett's downtown core was still a thriving community. Throughout the '60s and 70s as people moved to the suburbs and became more dependent on cars, businesses one by one moved out of downtown to malls in outlying areas. Then the lumber industry went into decline in the 1970s and '80s. By the time I was in my teens, downtown Everett was nearly a ghost town, full of empty storefronts, pawn shops, and plasma donation centers.

However, the city government and concerned citizens recognized the value in preserving and reviving the historic core of downtown Everett. Beginning in the mid-1980s, the city government worked hard to attract jobs to the area. A major success was the Navy's decision to build a homeport here. A variety of other projects and measures encouraged development and revival in downtown, most notably, the construction of the Everett Events Center and Everett Station. So far, it's working. It's not a 100% recovery--there are still a few empty buildings, mainly because a few absentee landowners have chosen not to invest in retrofitting and upgrading their buildings, so they sit empty. But, most of the storefronts in downtown are now filled with a variety of thriving businesses.

But, because Everett had a bad reputation for so long, many people still think it's the dying mill town it once was. The good news is, because of that you can still buy a decent house in Everett and not spend a fortune on it. Yes, Everett is still a blue-collar place in some respects but that kind of diversity is part of being an actual city, rather than a suburb or bedroom community. Part of being a real city is having rich and poor, young and old, white, black and all shades in between.

Everett is a success story and I think in five years, everyone will know about it. Right now, it's still something of a secret. If you've never been here (and most people who don't live nearby haven't--we are very parochial here in Puget Sound) you wouldn't know what you're missing. The word is starting to get out, but it's happening slowly. Maybe that is a good thing.

A few years ago I never thought I would say this, but I love Everett. There is a great community of people here, it has a lot of cultural and entertainment opportunities, and abundant natural beauty, yet, it is a diverse community that hasn't lost touch with its blue-collar roots. I like that about Everett. That's what keeps it from turning into a sterile, "Disneyland for the rich" like other neighborhoods that have similar attributes. Everett is a city in its own right, with all the good and bad that goes with that, yet it has a friendly, small-town feel and an energy that I, and many others enjoy.

Everett may be a secret now, but I doubt it will remain one for long.

A Marketing Process for Selling Homes

I came to real estate from the consulting world, where everything is done via a defined process. I've spent most of my career in real estate trying to develop and apply a strategic process to marketing the homes I list.

I like to break it down into stages that take place before, during and after the time a seller lists their home for sale. To my mind, the preparation is really what will determine whether you are successful in selling it. Everything else--pricing, promotion, etc., will depend on how well prepared the property is.

The first step in the process is to understand your target market. In real estate, the question we must answer in order to be effective as listing agents is, "who is the buyer that will buy this home?"

Not every home appeals to every buyer out there. You wouldn't market a high-rise urban condominium in the same way you would market a retirement community, suburban residence or a luxury estate. Each of these has a different target market and has to be marketed differently.

So first, you have to identify your target market and understand what is important to them. What makes them get excited about one house, or product, over another? What is the best way to reach them? How do they make decisions? Once you know the answer to these questions, you can proceed to the next steps--developing the plan to attract the targeted buyers, implementing the plan, and then measuring your results.

Let me give you a real world example of how the preparation and target marketing part of this works.

I recently had a listing appointment with a seller whose listing had expired. They called and invited me to come and present a marketing plan to them and identify some of the reasons why their house hadn't sold.

The home was a lovely newer construction home on a greenbelt, with a low maintenance yard, in an upwardly mobile neighborhood. Most of the families have young children, and two parents working. They tend to stay in these homes for 3-5 years. It's a mid-price commuter neighborhood in an affluent area, surrounded by homes selling for as much as twice what these homes sell for. The neighborhood is on a golf course.

All of the above tells us a lot about our target market. They see this neighborhood, with it's smaller, attractive and conveniently located homes, as a good stepping stone towards the lifestyle they aspire to. This is the kind of neighborhood where staging makes a big difference because its not just about the four walls, it's about the life they envision living once they are in the home.

Unfortunately, the home had not been staged in its previous listing. In fact, because the family didn't have much furniture, most of the spaces in the house were used as play areas for the kids. The previous agent had taken pictures of the home with kids' toys cluttering the shots. Poor lighting exacerbated the problem, making the home appear dingy in pictures. The home still had the original flat finish builder's paint and was in need of some color treatments to bring life to the rooms. And furniture was needed to help buyers understand the potential of the rooms and how the home could fit their lifestyle.

The marketing plan for a home like this one would have to solve the issues of room usage, clutter, lighting and color. The price for the home needs to be right as well. And the home needs to be marketed to those buyers who are most likely to buy. For the demographic looking at this type of home, internet marketing is probably the most effective tactic.

People often ask, "can't buyers look past that and use their imagination?" The answer is no. Buyer's need to be shown that a home is right for them. Without furniture, without some color, without a feeling of space and light, it is hard for a buyer to imagine what their life will be like when they are living in the home. Without good pictures, it's hard for buyers to understand why they should come to see THIS house, when there are others on the market that may look more inviting.

This all comes down to packaging and preparation. You have to package your product so that a buyer can appreciate what it has to offer. To do it, you have to understand who your buyer is, and how to appeal to them. This is the kind of expertise that makes the difference between selling for full price, selling for less than full price, or not selling at all. And it's what home staging is all about.

Top 10 Staging Tips

Thinking of selling your home? Want to get the most money possible in the least amount of time?

Then staging is your friend. Here are my top 10 tips for staging any home.

1. Make sure your home is CLEAN. I mean, spotless. You need to be looking at your home the way buyers do, and you would be amazed at the kinds of they notice. One of the things they notice is dirt. Grime. Dust. Cobwebs. These will literally distract buyers from the positive qualities of your home, and cost you offers. It may make sense to hire a professional housecleaner and have the home professionally deep-cleaned, including around, under and behind everything. Have carpets and windows cleaned, and scrub any walls that may be dirty.

2. No CLUTTER! Don't leave papers or anything else on flat surfaces. Countertops, tables, floors must all be kept neat and free of unnecessary items.

3. COLOR is important. Your home doesn't need to be "real estate beige," but if you have any wild colors on the walls, the time to tone them down is before you sell. Same goes for purple carpet. Offering a paint or carpet bonus doesn't work because buyers "only buy what they can see." If there are 2 similar homes on the market and one needs paint, the one that needs paint will sell last.

4. "If you can smell it, you can't sell it" So, take it easy with cooking those spicy dishes while your home is on the market. Keep the catbox clean and take out the garbage EVERY DAY. I know, you probably already do that, but this message is for those who don't. I have seen buyers pass up homes that they otherwise loved because of strong odors. So don't let this happen to you.

5. "If you can't see it, you can't sell it" This is another Barb Schwarz-ism that sums up very nicely the ill-effect of overgrown landscaping and indoor plants. Don't let them overshadow what you want buyers to see (your home).

6. Deferred maintenance--take care of it BEFORE going on the market. You will have the luxury of shopping for the best price, rather than going with the only contractor who can replace your roof before you close (rush jobs cost more). If you don't know what needs to be done, talk to your realtor or have a home pre-inspection done.

7. Vacant vs. "vignettes" If you're trying to sell your home vacant, it probably makes sense to consider leaving a few pieces of furniture and decor behind, in order to help buyers see how furniture fits in the rooms, and how the space can be used. Buyers have a hard time warming up to vacant rooms.

8. Go outside and look at your home from the street. How does it look? Grass should be mown, hedges trimmed, weeds weeded. Flowers are an inexpensive way to improve your home's curb appeal and provide contrast and texture to a yard that otherwise doesn't catch the eye.

9. Clean out your closets and garage, and STORE all your extra stuff while you are on the market. It doesn't make sense to stage the entire house and exterior and then leave a pile of stuff in your closet, waiting to fall on the next unsuspecting buyer. It detracts from the overall impression of the house, and makes it seem as if the home doesn't have enough space. Don't give buyers a chance to think this--if you don't need it while you are on the market, hire a POD (portable on demand storage) to get rid of it until you sell. You may even find that after going a few weeks without the stuff, you don't need or want it after all. Moving is good for helping us sort the wheat from the chaff!

10. Make sure your MLS pictures look great. If your agent doesn't take great pictures (ask to see samples!) have them hire a professional so that all your hard work staging doesn't get overlooked on the MLS due to bad pictures.

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!