Windermere Woodinville Blog

A new Washington State law - House Bill 2770 - makes clear …

• That real estate agents who directly or indirectly make misrepresentations or allow misrepresentations to be made to a mortgage lender are guilty of mortgage fraud - a class B felony crime.

NWMLS is concerned that real estate agents may inadvertently violate the law by failing to provide information to mortgage lenders regarding the condition of the property discovered in the inspection process. Form 35R has been revised to reduce this risk.

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 Using data from the Office of Federal Housing Enterprise Oversight, the PMI Mortgage Insurance Company has given us a prediction of real estate markets where home prices will be lower in a couple of years.  Washington State has a 0.0% to 10.0% chance that prices will be lower two years hence.  Seen nationally, this is a low risk.

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The chart above developed by Windermere Real Estate/East. Corp. shows one of the tools that real estate agents use to counsel buyers and sellers.  In today’s market, it’s particularly important to convince Seller’s to price their properties correctly so they will sell.

This chart tracks the resale market in the Woodinville-Juanita area.  The green color indicates a buyer’s market.  Homes are remaining longer on the market; the inventory remains up.  Buyer’s are more in driver’s seat.

Red would indicate an inventory paucity and mean the seller’s had more leverage in negotiations.

The yellow markers mean a balanced market where buyer and seller faces one another on a level playing field.

The emergence of more yellow on the supply-of-inventory charts bode’s well.  The market may be coming into balance and inventory getting ready to move.

The chart above is superior to many in that it tracks listings, pendings and supply of inventory on a week-by-week basis.  With this type of chart buyer and sellers don’t have to wait until the end of the month to assemble statistics.  They can know, currently, what’s happening in the area where they may want to buy or sell.

Good tools like this are necessary for agents to service their clients properly in today’s challenging market.

Thanks for reading this blog.

Net Listings … What’s the Story on Them?

A net listing is a situation where a seller says, okay I want a minimum of $400,000 out of this sale. As my agent you can have, as commission, anything paid above the $400,000. 

Can agents and their clients make this commission arrangement?

 Northwest Multiple Listing Service Rule 4 – Listings Not Eligible says that net listings will not be accepted by the Multiple and shall not be taken on NWMLS Listing Forms.

Query: What if the Seller doesn’t list and you don’t use NWMLS forms? What if an agent sets up a net listing commission arrangement on a lawyer drafted Exclusive Commission Agreement For Unlisted Property?

In today’s residential real estate market - where moving the inventory and enticing buyers is a challenge - we see many more imaginative arrangements involving:  commissions, selling bonuses, mortgage buy downs, seller financing, contingent sales, and short sales.  The net listing concept has also emerged from the lips of sellers.

It’s a new ball game and agents and their clients willing to face market realities, embrace flexibility, think creatively, and wander out-side-the box … are succeeding.

Thanks for reading this blog.

 Brokers routinely review the purchase and sale agreements of their agents.  Every deal should be reviewed for compliance with laws, ethics, policies, and Multiple rules and regulations.

The broker looks to see that the “contract” has all its elements.  For instance, is the legal attached?

The broker’s comments and observations act not only as a double check that clients receive competent service … the comments are also a teaching opportunity for the broker.

Practicing real estate requires constant continuing education to keep up with changing laws, forms, legal decisions, and revisions in standards of practice. 

What do the broker’s comments look like in a typical transaction review?  What does the agent get in their email or delivered to their desk?  Here’s a sample.  Drop into the inside of residential real estate practice from the broker’s point of view.  You’ll be surprised at the expert value your agent brings to the table.

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Homebuilders made too many houses, prices rose too high, and credit standards dropped too low. We live in a new era of  higher down-payments and real credit scoring.

The result?

Many say the nation suffers a housing recession. It is the uniqueness of the current housing slow down that puzzles real estate experts.  It’s certainly unique in Washington State where we see low unemployment rates, high housing inventory combined with good lending programs and low rates … and still low sales.

Nearly 18 months into the housing “recession,” the national unemployment rate is still at what economists consider full employment.

Listings are up; sales are down.  We need to sell the inventory.

What factors do we see that can help? 

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A new Washington State law (2008 Chapter 115 - SB 6215) requires residential condominiums to conduct a yearly “reserve study,” prepared by a professional, to estimate the useful life of common areas whose cost of maintenance, repair, or replacement is significant but infrequent and impractical to include in the annual budget.

The Reserve study must include a physical inspection at least once every three years.

The Reserve study must include:

• The association’s reserve account balance,
• Special assessments already in the works,
• Interest and inflation assumptions,
• Actual and recommended reserve account contribution rate, projected balance for 30 years,
• And a funding plan to pay for projected costs from reserves without relying on future unplanned special assessments.

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There should be a good real estate market in Puget Sound.  But transactions are down.  Why should the market be good? What factors indicate residential real estate should be popping?

• Influx of people into the State
• Increase in jobs in the State
• Growing population of first-time-home buyers
• They live in apartments
• Rents increase to where a mortgage payment would be cheaper
• Very attractive interest rates and lending programs (e.g. FHA is back)

So why haven’t the buyer’s pulled the trigger?

• Paralyzed by the media and national press reports that real estate is in the trash can and values may fall.
• Gas prices and everything carried to market by gas (read groceries) is up and consumer confidence eroded.
• Some people moving into Washington State from the mid-west are shocked by our home prices.

What factors should we watch to tell when the market will explode and the first time home buyers pull the trigger?

• Gas prices stabilize (at least stop going up daily).
• Interest rates begin to rise (buyer realize that waiting for the cheap home will be offset by loan costs)
• Rents increase even further
• Even more people move into our lovely State.

Thanks for reading this blog.

Cody Christian Rembe passed away, Sunday, July 21st in Seattle.  He reposed at home, surrounded by his wife and three sons and other family members.  Many friends paid their respects and visited Cody during his final illness.

Cody attended the Lakeside School, Shoreline High School, the University of Washington and received his law degree from Willamette in Oregon. He practiced commercial real estate and was founder of Marathon Industries, in Seattle.

A superlative athlete, Cody quarterbacked the Shoreline High School football team to its first conference championship.  He played golf and tennis with skill.

He could play the guitar, sing and had a good musical ear.

He could play poker with the best of them.

Most will remember Cody Rembe for his outstanding and unfailing sense of humor.  He spark plugged any gathering.  Doubtless, he was one of the funniest men you would have the pleasure of spending time with.  In another lifetime, he would have been a major American comedian.

Others will remember that in quieter moments, Cody actually wanted to know what you thought about.  He would question and listen.

Asked how he was doing on his sick bed, he would say “praying a lot.”  He received the priestly blessing at his home before falling asleep in the Lord.

Besides his wife and sons, a brother and two sisters and many nieces and nephews survive him.

Cody Christian Rembe, family man, friend to so many, fine athlete and sportsman, realtor, business innovator, funny, loveable, a class act and in his final days … a man of prayer.

Thanks for reading this blog.

The debate continues that real estate agents aren’t worth their commissions.  Those critical of the traditional business model pronounce it dead on arrival in the face of on-line listings and limited-service providers.  Well, the Internet failed to kill travel agents (who are making a come back) and full service real estate agents  have never gone away.

Of course there’s a place for limited service providers.  Consumers should have a choice. You get what you pay for.  You want low cost tires … they’re available.  You want more long lasting rubber, you can pay for it.   You want limited services in the buying or selling of your home? Okay, there are those who will provide them.  And hey, many real estate transactions like many appendectomies go smoothly and without incident … so why not the low cost solution.  But when things go wrong, when the unexpected crops up in the house deal, when a bleeder cuts loose … who do you want watching your business?

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