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Home buyers and sellers

Why many real estate market reports are meaningless.

Statistically speaking, many Realtor market updates should be recycled immediately!

Facts are stubborn, but statistics are more pliable - Mark Twain.

Many real estate market reports are meaningless

Probably the most common question Realtors get is "how's the market doing?" Home buyers and home owners are always interested in knowing what direction the market is headed in their particular neighborhood. A Realtor's personal experience in the trenches and good old gut feeling are good, but solid real estate statistics are better at conveying what the real estate market is really doing.

Real estate agents have access to lots of real estate statistics either through their Multiple Listing Service (MLS) or through real estate statistics software like TrendGraphix. However, it's how they select and use that data that matters. Some Realtors produce excellent market upates. However, just as some real estate advertising can be misleading, some real estate statistics are best avoided.

Real estate market reports are everywhere and are probably the most common type of blog post that real estate agents write. The great thing is that you can use the same template as the previous month and just copy and paste the whole thing, remove September's numbers and replace them with Octobers stat's. Then hit the publish button and you're done.

Statistically speaking however, many of those monthly reports that Realtors stick in the mail or mail out to their clients are at best "for...

Beware Of These 5 Common Real Estate Ads

Beware of real estate advertizing with lots of astericks!

The first law of advertising is to avoid the concrete promise and cultivate the delightfully vague.  John Crosby.

5 common real estate ads to be wary ofAs with all advertising and advertisers' attempts to get you to buy their products and use their services, the real estate world is not immune to, let's say, over embellishing.  In an ocean of advertising, you have to do something to stand out I suppose. They need to hook your attention and hook it quickly before your short attention span, advertising-jaded mind, stumbles to the next exciting, act now offer.

Some embellishment is fine in general, but we're talking about real estate here, not a pair of striped socks for $4.99 on Amazon! This is your home and potentially involves thousands of your dollars, or worse, if you make a bad judgement call.

Here are some common types of real estate advertising targeted mainly at home owners that could potentially lead you down the garden path (and not in a good way).

Ad #1: Increadible low interest rates, refinance today!

The little brightly colored ad in the sidebar on your online newspaper, proclaims it can get you a 30 year fixed rate mortgage of 3.25%.

Amazing, you think to yourself. My bank just quoted me 4.0%. I should check these guys out.

You call the 1-800 number and someone in a state 2,000 miles away answers and then the sale pitch begins..... "Thank you for calling Too Good To Be True Mortgages, my name is Mark. Looks like you saw our great interest rate offer..... yada, yada yada!"

Mark now starts attempting to ingratiate himself to you. Eventually, after pulling teeth for 20 mins with Mark,...

10 potential home buyer cold feet warning signs.

Home buyer cold feet symptoms that sellers need to watch out for.

Once I make up my mind, I'm full of indecision!" Oscar Levant.

10 warning signs a home buyer may get cold feetA seller puts their home on the market, gets an early offer and accepts it. A few days later, the home is back on the market. What went wrong?

I call the listing agent and they will say "the buyers got cold feet!"

The home goes back on the market and is now perceived differently by the home buying public. Even if the listing agent emphasizes that the buyer got cold feet and "didn't even do an inspection", it's human nature to suspect that maybe, just maybe, there's something wrong with the home. The home might be perfectly fine but try convincing everyone of that. The home has now lost a little of it's new listing luster. 

So for you home sellers, how do you try and weed out those buyers that are more likely to bail on the sale for a little or no good reason?

There is no foolproof way to tell whether a buyer is guaranteed to bolt or not. However, there are certain warning signs that you should keep an eye open for that potentially will help you identify those buyers that are prone to the condition. You want to try and identify those buyers that are more likely to get buyers remorse and exit stage left BEFORE you get into a contract with them.

Many buyers bail on a sale for legitimate reasons. For example, the inspection revealed a lot of unexpected issues or the appraisal came in well below the sale price and the sellers are unwilling to drop the price. However, you are trying to avoid hitching yourself...

Your home might be less of an asset than you're led to believe

Debt is one person's liability, but another person's asset -  Paul Krugman.

Is my home an asset or a liability?The US real estate market is currently booming and  Seattle real estate is top of the heap.  At the time of writing this, Seattle home prices are up close to 13% year-over-year and a whopping  47% above the previous highs of 2007.

If you own a home, you might be gleefully looking at those newspaper headlines detailing the latest market surges, dwindling inventories and desperate buyers fighting it out trying to buy a home while driving prices upward. While sipping your morning coffee, you'll be silently pondering "I wonder how much my home is worth now?'

Yes indeed, times are great and homeownership is a great investment!

Or is it?

No, this is not an article about whether we are in the midst of another real estate bubble, but rather a look at how the biggest purchase of your life can be an asset or a liability, or neither.  Also, even if you walk away with $200,000 in your checking account after the sale of your home, was your home really an asset / good investment in the strict sense of the word?

A home can be a potential asset or quickly spiral into a financial albatross around your neck. Alternatively, your "investment" can just sit there and do nothing. Some things, like sudden economic changes, are out of your control, but others like taking too much equity out of your home to buy a speedboat are within the realm of human stupidity.

Historically, home prices have gone up in value but it's not a smooth, linear upward trend. Here's the Case-Shiller US home price index, adjusted for inflation, starting way back in 1890. Note that the index measures the changes in the sale price of single family homes...

What percentage of homes in Ballard, Seattle are purchased with cash?

The Ballard neighborhood Seattle is a great place to live and is a sought after area by many Seattle home buyers. Currently, the Seattle real estate market is ranked as the hottest in the country, overtaking Portland, Oregon late 2016. Seattle home prices went up up 12.7% over 2016.

Many buyers looking to buy a Ballard home and who may have lost out on a home already, are probably wondering what percentage of the homes for sale in Ballard are likely to be purchased by an all-cash offer. Also how do Ballard condos and single family homes compare. Finally, how does the Ballard neighborhood compare with other areas.

To answer this question, I looked at statistics for the following:

  • The 100 most recent sales for each of Ballard and Capitol Hill (Seattle neighborhoods) and Bellevue (city on the other side of Lake Washington, for those of you who are newer to the area).
  • Looked at both condos and single family homes (houses and townhomes) of all sizes and prices.
  • Data was taken from the NWMLS on February 2nd 2017.

When you compare the percentage of cash buyers for each of these 3 areas, you see the following:

What percentage of homes in Ballard Seattle sell for cash

For Ballard, about one in ten single family homes sell for cash and about 1 in 5 condos (11 and 19% respectively). For the Capital Hill neighborhood in Seattle, twice as many houses sell for cash compared to Ballard but slightly fewer condos (22 and 15% respectively).

When you pop over to Bellevue, it jumps up again with about one third of...

How to read between the lines of online real estate listings

We almost take it for granted now, but it’s incredible that someone can now sit in a Starbucks, open an app and search for online real estate listings to their heart's content. They get to see a detailed description and photos of the home, schools ratings, a street and aerial view and lots of more details in the palm of their hand. As the much touted statistic goes, 90% of buyers  now look for homes through the internet. The Sunday edition of your local newspaper doesn’t stand a chance anymore.

How to interpret online real estate listingsHow buyers find homes for sale has changed a lot over the years. Not so long ago, buyers were completely reliant on their agents to find out what homes were for sale. Now the masses are truly empowered and can be notified of a new listing just as quickly as their agent. The other day I was texting a listing to a buyer who at the same time he was sending me the very same listing. I beat him by a whole 5 seconds.

Having all this unfettered access to information on homes is great for buyers and sellers. However, do you know based on what you see online whether a particular home is worth speed dialing your Realtor about or gulping down your coffee and dashing out to the door to do a drive-by?

Obviously nothing beats going to see a home in person, but you can tell a lot from reading between the lines of online listings as to whether a home is a gem or an over-hyped dud.  Conversely, some homes can be a lot better than the online listing portrays because the listing agent skimped on a professional photographer or advised the seller that staging was a waste of time.

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Buying and selling a home and the joys of waiting. How to stay sane.

Estragon: “I can’t go on like this.”

Vladimir: “that’s what you think.”

      - Samuel Beckett, Waiting for Godot

 Whatever side of the home sale transaction you are on, either as the buyer or the seller, the whole process is undeniably a bit stressful. Even the Dalai Lama probably gets a little stressed out buying a home, and you know how relaxed he looks all the time.

The most excruciating aspect of the whole process can be the WAITING! Waiting for this to happen, waiting for that to happen. HURRY UP already!

It will seem like the laws of quantum physics and the space / time continuum are being violated.  Just ask Stephen Hawking about when he bought his first home! There are periods of rush, rush, go, go…rush to go see a new listing, rush to make a decision whether to make an offer, rush to get an offer submitted, followed by....periods of deafening silence which feel like they drag on forever. Whoever said patience is a virtue obviously never bought or sold a home before.

When it comes to buying or selling a home there are several periods of waiting, some longer than others and some potentially more excruciating than others. Allegedly, all good things come to those who wait, but first you have to, um, wait!

Real estate waiting periods: The Classics!

The wait between submitting your offer and waiting to hear back if it has been accepted. This is probably the most stressful wait of all. You finally find THE HOME, it meets all your criteria and you really, really want that home! Unfortunately, so do four other buyers. You put your best foot forward...