Redmond, WA Real Estate

February 8, 2006

RedFin Real Estate – My Experience

Filed under: Real Estate Issues — penguinhomes @ 9:48 pm

Elizabeth RhodesSeattle Times Staff Reporter Re: Buyers’ new buddy

http://seattletimes.nwsource.com/html/realestate/2002783012_redfin05.html

Sunday, February 5, 2006

Dear Ms. Rhodes: I have just finished reading your article and don’t even know where to begin. I am a licensed real estate agent with Windermere. My life has revolved around real estate since I was 6 years old and my mother became a licensed agent in the early 70’s and then I married a real estate agent before becoming an agent myself.After reading an article like this I always ask myself “Why us?” We are not the only industry that is paid on commission, but yet we are the only industry were people want part of our commission. I don’t go to Nordstrom and try on shoes and ask the salesperson for a kickback. When I buy a car, I don’t ask the salesperson to help me with my down payment, I don’t ask my insurance agent to pay for part of my insurance. “Why real estate agents?”

So after Redfin helps you write the offer – what do they do after that? Do they find you a home inspector? Attend the inspection with you? Counsel you on the findings? Help you negotiate through the inspection process? Counsel you on the many contingencies and time lines in a deal? Explain the difference between 5 days and 10 days? Is it legal to say you are putting 25% down when really your only putting 5% down and doing an 80-15? When is your earnest money due? And the list goes on. What now, hire a real estate attorney? But it’s Friday at 4:00 pm and the days are counting.

“A real estate agent can either make you or cost you thousands” Here are some examples:

The tale of two condos: There were to condos recently listed for sale in the Compass Pointe complex in Redmond Ridge. One was listed by a company I had never heard of (probably one of these discount brokerages) for $314,000 and sold in less than a week. One week later a similar condo in the same complex (same floor plan and square footage with some minor upgrades) was listed for $342,000 and also sold in less than one week. So, was saving 1 or 2% in commissions (approximately $3,000 – $6,000) worth giving up $28,000?

The One that Got Away: Last year we had a listing in Woodinville. A great house, but a fixer. This house was built in 1988, 3,700 sq. ft. on a large lot (.80 acre). With the repairs and some upgrading we estimated that the house could be worth $800,000 in the near future. We had bids totaling $80,000 for the work that needed to be done, so we listed the house at $569,900. Within the first week we had many showings and more than one offer. A potential buyer asked us to show him the house – we did. He and his wife loved the house, wanted the house. The first thing this buyer asked for was $10,000 from us as the listing agents. We explained to him that it would be an unfair playing field for the other buyers out there competing for this house and that he needed to get his own agent and present his offer with the others. We did eventually receive an offer from him which appeared to be prepared using the Redfin site, but he got beat by another buyer who had very good counsel and representation. He and his wife lost their dream house and the opportunity to earn instant equity because he was focused on that $10,000.

Really what is that $10,000 worth? On a 6% mortgage that’s savings of $50 a month or $600 a year. And since the average person keeps their mortgage for only 4.2 years, a savings of $2,520.00 over that 4.2 years. My feeling is that if you can’t afford $600 a year – you can’t afford a $569,000 house that needs $80,000 in repairs. He’ll probably spend that $600 in a bar trying to figure out where he went wrong.

The Repair that Didn’t Happen: I sold a house in September to a family moving here from California. Since they were out of the state, I handled the inspection and monitored the repairs for them. The biggest issue was water in the crawl space. The seller agreed to fix the problem and within a week we received a receipt for the work that was done. Good enough, most people would think. As well as being a licensed agent, my husband has had his general contractor’s license, has worked construction in Alaska, represented several builders our the course of 20 years and even built the house we live in today. He reviewed the invoice and had doubts. He went back to the house and for 2 hours tested the drainage system around the house and went into the crawl space and discovered that, in fact, nothing had been fixed. The first contractor merely cleaned up the mess, but fixed nothing. We went back to the seller and had him do the work correctly the second time by a reputable drainage contractor. That repair alone was over $4,000. So, was it worth it to my buyers to let me keep my commission?

In the end, you get what you pay for. Are you looking for a deal or a home. The right home can make you thousands of dollars and be one of your best investments, but a home can also cost you thousands of dollars.

 

 

 

www.Zillow.com-Not Even Close…..

Filed under: Real Estate Issues — penguinhomes @ 4:49 pm

2/8/06 Seattle Times article (http://seattletimes.nwsource.com/html/businesstechnology/2002791211_zillow08.html touts) the ambitious undertaking of this heretofore “hush-hush” venture company, headed by various former personnel from Expedia, Microsoft, Amazon, Hotwire, etc. Zillow is a website where you can learn the value of any real estate property by simply inputting the address.

Quote: “Sellers can use our home-valuation tools to arrive at the right selling price”.

I just spent an hour perusing properties on Zillow and found the following:

Based on Northwest Multiple Listing Service data, and personal experience selling properties in the same area, Zillow’s property valuations are off by as much as THIRTY PERCENT (30%). On average they are off by 10%, all to the detriment of the respective property owners.

Isn’t this a neat service? So let’s say you are smart enough to recognize that Zillow’s values are bogus. It’s time to sell and you hire a reputable, full service real estate agent. Your house is priced correctly for the market. Then here comes the do-it-yourself shopper with their Zillow valuation in hand for your property. Don’t worry. Your full service agent will delight in educating this buyer.

(NOTE: these people usually show up without an agent of their own, demanding that your listing agent concede half of the commission to them. SEE ARTICLE ON DELUSIONAL BUYERS).

Elizabeth Rhodes of the Seattle Times wilts under the bright lights generated by millions of venture capital dollars and high tech guys driving exotic cars. Elizabeth should check to see if thing works before touting it’s claims. To compare Zillow.com to HouseValues.com is to compare a  Ford Pinto to a Porsche. HouseValues uses real estate agents that do real work and research, on a house by house basis, to arrive at values that are relavent to the marketplace. Zillow is not even close. (No, we are not members or subscribers of HouseValues.com, but we know people that are and they are professionals, like us.)

I submit that no matter how many genius techies a company assembles to attempt to extrapolate real estate property vaules on a wholesale basis, they will get it wrong about 80% of the time. I don’t know what great commander said it, “there is no substitute for boots on the ground”.

Face it. Computers don’t see landscaping, marble, granite, appliances, fences, hot tubs, built-in barbeques, irrigation systems, views, schools, etc.

Zillow’s claims that it inputs ZILLIONS of statistics to arrive at your value is simply not the case because:

1. they do not have access to multiple listing service data

2. they rely entirely on county tax records

So you ask, “how did they come up with a value for my home that is different from my assessed value?” Simple. County tax records show all sales, and the date that they occurred. By averaging the sale prices of similar properties around yours, Zillow takes the average price per square foot and multiplies that times the size of your house. Voila!

As professionals, if we relied solely on this type of analysis we would be out of business in a heartbeat. This type of data yields information of the most general type. House are not a general type of product. They are as individual as the people that live in them. As neighborhoods age, this becomes even more the case as some people will expand or improve, some will simply maintain, and some will allow their home to fall into disrepair. To obtain a fair market valuation, it requires “boots on the ground”. The houses, the comparable properties, must be seen in person and evaluated, one at a time.

That’s what professional, full time, real estate agents do. There is no more important responsibility to our job than getting the price right. Compared to Zillow’s 10 to 30% off the mark valuations, a 6% commission should look like a bargain.

 

Welcom to the PenguinHomes.com Blog

Filed under: Welcome To http://PenguinHomes.Wordpress.com — penguinhomes @ 4:52 am

Redmond, WA is a special place to live, work, raise a family, and enjoy the many recreational opportunities at our disposal. It is also home to a diverse cross section of cultures and interests, making it a dynamic community that feels like a part of the world stage.

Diana and I have lived in Redmond for over 21 years and have witnessed the “growing up” of Redmond and the surrounding unincorprated communities. It’s been a fascinating progression.

One of the biggest changes has occurred in real estate. The adoption of the Washington State Growth Management Act, known as the GMA, the Act (Chapter 36.70A RCW) was adopted in 1990 http://www.gmhb.wa.gov/gma/. This Act alone has produced the wholesale changes to Redmond’s zoning and land use policies about which we receive questions all the time:

 ”Why are the lots so small for new houses?”

“Why can’t I afford a new house on a large lot?”

“Why can’t I find a lot to build on?”

Over time we will address your questions individually right here. Our desire is that this site will become a community resource where people can talk about ANYTHING REDMOND, not just real estate. We urge to participate, share your thoughts, ask your questions, and visit often.

If you wish to know more about us:

Bill and Diana MacDonald of Windermere Bellevue Commons Real Estate. Our business website is http://www.penguinhomes.com.

Your privacy will always be protected. Your name and email address is required in order to post, but will never be shared unless you include it in your message.

Thank you for visiting! Let the blogging begin!

The Silver is the New Black Theme. Blog at WordPress.com.

Follow

Get every new post delivered to your Inbox.