Archive for January, 2007
January 30, 2007 at 12:43 pm · Filed under Real Estate Bites, Sparks from Sparky
Life here in the beautiful Pacific Northwest definitely has its benefits. With Mt. Rainer to our East, the Olympic Moutain Range to the West, and the waters of the Puget Sound all around, we’re fortunate to reside among some of the most picturesque scenery on the planet.
Anyone who knows me will tell you that one of my favorite things about calling the Kitsap Peninsula home is the summer crabbing season. Several times a week, from the 1st of July until Labor Day weekend, I take my trusty C-Dory out onto Hood Canal in search of the prized bounty, the delicious Dungeness Crab!
The last couple of weeks in real estate have been especially challenging for me. It seems like every transaction I have has taken a turn for the worse. In many instances, circumstances occured that were completely outside of my control. Things just happen. Such is the Roller Coaster of Real Estate!
Earlier today I was thinking that many times being in real estate is a lot like going out crabbing.
Sometimes when I pull up my pots, they’re packed to the hilt! We catch so many “keepers” that we end up throwing the smaller ones back! We take ‘em home, boil ‘em up and pork out. Life is good!
Other times, when we pull up the rope, feeling a heavy weight, and thinking we’ve got another great catch, it turns out to be a HUGE starfish, all by itself, the bait completely devoured! We go home empty handed, feeling like total failures.
On a few occasions, we’ve even had our crab pots stolen. Talk about the ultimate frustration!
Being successful at crabbing takes proper planning. It takes time, money, resources, knowledge, and hard work. You have to have the right equipment and know how to use it. You need to understand the environment - the tides, depths, navigational aids & markers. In addition, there are ever-changing State regulations that specify set guidelines on size, type, and limits (The Fish & Game wardens are very active in Washington, and their fines are rather steep).
But one thing I’ve learned. Regardless of how much I may plan, spend, know, or work, sometimes it’s just a matter of luck - of being in the right place at the right time. If I just keep throwing out my pots, eventually I get to eat!
And conversely, I may do all the right things, in all the right ways, to the very best of my abilities, and still come up short, with an empty crab pot.
And occasionally, forces outside of my control (you lousy crabpot thiefs!) foil my efforts altogether!
One year, the catch is plentiful. Another, the pickins are slim. Sometimes it comes easy, other times you definitely earn every leg and claw.
But no matter if the cooler is full of crab ready for boiling, or whether it’s just that stupid starfish eating up all the bait, crabbing and real estate both have their seasons.
Some are good, some not so good.
Regardless of which one you’re in, you can always find cause to be thankful as you’re out in the boat of life, and cherish the ones who share the ride with you!
-Sparky-
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January 30, 2007 at 7:00 am · Filed under Bites of Buckwheat, Real Estate Bites, Buyers, Bite Me Blogs
Editors Choice
After a while, a real estate blog gets pretty big and the archive of previous articles begins to gather dust. It’s something like an attic, full of items you just can’t part with. On occasion, you find yourself sitting on the floor looking through old items, remembering past times, smiling to yourself.
Yesterday I was in the attic picking up and putting down treasure, wondering why not bring some of the older articles back out to look at for a short time
Here’s the first one. I hope you enjoy it!
This was re-published on November 7, 2007 and then headed back to the attic after a few days in the sun.
It’s America! Almost everything is for sale here.
You can buy an island or a Rolls Royce or even a pink plastic flamingo for your front yard. Realtors® are also for sale. They come in all shapes and sizes. They come in a variety of colors. They come with different amounts of onboard memory. And, they come with different features, goodies and gadgets. You can see them everywhere. They often have hardware attached to their ears.
Just like trying to purchase a car, it can be very difficult to decide which model is the best for you. Should you shop for what you want, or what you need? Should you get Old Faithful, or this year’s newest edition? Should it be fancy, or a base model?
You are not buying a puppy. You are hiring someone to guide you through what may be the largest financial transaction of your life. You don’t need a pretty face. You don’t need an Armani suit. You don’t need a Mercedes to look at houses in. It might flatter your ego, but hurt your wallet. Don’t get me wrong, I know some very attractive Realtors® who are exceptional at their craft. What I am saying is, this is one situation when judging a book by it’s cover is a mistake. Looks and stage props (like cars and clothes) are not nearly as important to you as skill. And, skill does not always wear a pretty package.
Gadgets are distracting. Technology can be a wonderful productivity enhancer. It can also get in the way. Ever seen someone chatting away on the phone while they all but sideswipe you coming out of Safeway? And they didn’t even notice you! Gadgets can make a Realtor® more valuable to you. If they refuse to carry a cell phone (”I’ve been doing this for 20 years without one”), their negotiation skills may also be in the dark ages. See Sparky’s article on a realtor® without tools. But, having all the gadgets is just not necessary. Why does anyone need a pager, a cell phone, a Blackberry and a laptop to go along with the office computer. Every single one of these devices requires attention. There may not be any attention left over for you, the client.
Now that I’ve got you wondering how the to pick and choose among your available options, I’ll tell you what I look for when I shop for a Realtor®.
Buy Cheap, Buy Twice! My mother taught me this when I was a kid. She was referring to clothes at the time. Her point was clear. Sometimes a bargain is not a good buy in the long run. This definitely applies to hiring an Agent. I ask each agent I interview if they are flexible on their fee. If they say “yes”, I terminate the interview. It sounds backwards doesn’t it? Realtor’s® fees cost thousands of dollars. Why not try to save a few? Well the fact of the matter is that there are no bargains on a Rolls Royce. And you want the Rolls Royce of Reators® working for you. He or she will save you much more than they cost you in the form of stronger negotiation skills and support after the sale. A Rolls Royce Realtor® will take your call 6 months after closing when the wet season arrives and the basement fills up with water. These Realtors® will work for their clients long after they get paid.
Find the busiest Realtor in town. Real Estate Agents don’t get busy by accident. They get busy because they know what they are doing and the community they work in knows it too. High demand Realtors® are in high demand because they have already been through a fire or two and they brought their clients through it safely. Don’t think that because an Agent is already busy, they won’t have time for you. You may have to wait a short time (see next paragraph) but it is the best thing for you. Impatience can cost you thousands of dollars.
Guarding the fortress. If the Realtor® has an assistant or receptionist that always has to take a message, I move on. An assistant that tries to connect me immediately, or offers to connect me to a cell phone, or tells me that “He’s on the line right now, but says he can call you back in 5 minutes”, gets my business. This assistant is trying to channel business efficiently. Don’t be put off if a busy Realtor® cannot pick up the phone right away. Do be put off if it takes hours to hear back from them. Every exceptional agent I have met is adamant about returning phone calls quickly. If it feels like the receptionist is protecting the inner sanctum from intruders, you may be talking to the wrong Realtor®. I expect to get through to my agent at least part of the time.
Don’t mistake confidence for arrogance. Excellent Realtors® are strong people. They know that they are smart. They know that they are skillful. They know that they are very good at what they do. They have confidence. They act confident, and they can appear to be know-it-alls. They usually have very strong opinions about their industry. But, do you really want a timid general leading you into a war? Not me, I’ll take the strong-willed leader every time. Arrogance is self-centered, confidence is not. If the Realtor® is completely focused on my transaction but appears to be really opinionated about how to handle things, I am probably dealing with a confident individual, not an arrogant one.
Ask for referrences. You hear this all the time, but it is one of the best ways to find out who you are dealing with. Twice in the past I have requested referrences from a Realtor® and left the office without checking them because the Realtor® simply handed me thank you letters! Now that is powerful. Satisfied customers will thank you for doing a good job. It takes a very satisfied customer to write a letter. If I find an agent with a shelf full of thank you letters or testimonial letters, I sit up and take note. This is probably an individual who will work hard on my behalf. He or she has already done it for other clients. Those clients were pleased enough to write a letter about it. There is not a stronger proof of excellence that I can think of.
Hopefully these simple steps will help you narrow the field the next time you need a Realtor’s® services. These guidelines have worked well for me. They can work well for you too.
Buy yourself the Rolls Royce, you deserve it!
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January 29, 2007 at 4:39 pm · Filed under Bites of Buckwheat, Mortgage Bites
Now, I don’t mean to offend anyone with this post but here’s an all too frequent scenario from the Loan Officer’s point of view.
John and Mary Renter have decided that it makes good financial sense to buy a home and let their landlord find someone else to pay for his investment. They spoke with Laura the Loan Officer and worked through the different loan options. They decided on the program that made the most sense and they went through the fat stack of papers that Laura prepared for them.
Laura let them know what she would need to get the loan closed. She doesn’t need anything special, she just needs the standard items like paystubs and bank statements and W2’s. She sees them out of the office with a smile and an agreement to meet in two days when John and Mary will drop off the needed paperwork.
John and Mary then call their Realtor® to schedule some time to look at the nice homes that are for sale in their neighborhood. This is the fun part! We all have a little bit of the voyeur in us, so it’s interesting to see how other people live. Plus John and Mary get to pick out the type of house they like. Is a split level appealing or maybe a rambler? It would be nice to buy something where the neighbors have nice gardens. And of course the schools must be checked out. They want the best education possible for the kids. They find one they like and write up an offer.
The weekend passes and then it’s back to work for both husband and wife. The thoughts of down payment money and closing costs are starting to cause some anxiety. The day to day business of children, pets and grocery shopping must be attended to. Monday evening they receive a friendly call from Laura the Loan Officer reminding them that they were to have dropped off some papers and asking them to re-schedule a time to do that. Oops! Life is very busy when you are buying a home. Right after that phone call another comes in with the news that their offer has been accepted! The problem is starting to develop.
After the homework is done that night, Mary gathers up what she can find. One of the banks statements is missing, but no problem, John can stop on his way home tomorrow and get a print out from the bank. But one of the W2’s has also gone astray and John is no help at all with that. Mary takes care of all the bills. Mary decides she must look a little harder because she knows she hasn’t thrown anything out in years so it must be just misfiled. She does find it eventually, but it is Friday before it turns up. The problem is gaining momentum.
Saturday and Sunday go by in a flurry of visits to the property to meet the home inspector and phone calls from family wanting to know how the house buying is working out. By the time Sunday is over, some of the household chores have fallen by the wayside. John and Mary go to bed excited and tired out. The paperwork has not been delivered to Laura and a week and half has gone by in the blink of an eye. On Tuesday Laura calls and is sounding a bit stressed out herself. John and Mary wonder why. This is what she does for a living so why should she be anxious? Right?
This sounds like a perfectly normal scenario doesn’t it? It is a perfectly normal scenario. The problem is that now Laurie the Loan Officer only has 2.5 weeks to close the transaction! She is understandably concerned. Can it be done? Yes, it probably can. As long as no surprises happen. But it would have been much more of a sure thing if John and Mary had provided the paperwork on day two.
If you are buying a home or thinking about it, remember this story. You will be very busy during the month it takes to close your purchase transaction. But, behind the scenes, there are many people who depend on you to get your documents into the Loan Officer as quickly as you can. The transaction will get stalled at some point awaiting these critical papers. You can’t stand back and watch as everybody else handles your file. Getting a mortgage is not a spectator sport. It is a hands-on, full-contact situation.
And you are one of the key players!
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January 26, 2007 at 12:20 pm · Filed under Bites of Washington, Bites of Kitsap, Bremerton Real Estate, Sparks from Sparky, Business Bites
One step through the front door transports you back to a simpler time. The Big Apple Diner is a fun 50’s style diner, just off the beaten path and across from Kitsap Lake in Bremerton (The owners, Mark & Patty Nesby, also operate the adjoining Red Apple Market).
Follow the colored checkered floor to your padded booth, or spin around on the turnstile seating at the soda fountain counter. The interior is decorated as the old-fashioned diners were. From the pictures on the walls to the light fixtures overhead, everything is reminicent of yesteryear’s eateries.
The menu is huge and so are the portions. Enjoy their tasty burgers, fries, and delicious thick shakes, while the Jukebox plays your favorite oldies.
“Good Eats, huh Buckwheat?”
Their Breakfast faire is especially popular with the locals. You’ll want to allow yourself additional wait time on the weekends. But trust me, it’s worth every minute!
The prices are very reasonable ($7-$12 for any huge dinner), so bring the entire tribe!
Click on these thumbnails for a full-size view
Big Apple Diner 6720 Kitsap Way (west from Hwy.3), Bremerton, WA (360) 373-8242
Another highly recommended Bite of Business on the Kitsap Peninsula!
-Sparky-
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January 23, 2007 at 6:02 am · Filed under Friendly Fire
Friendly Fire is a series of articles with one topic and two viewpoints.
Sparky has all the usual hangups of a
Realtor® and
Buckwheat has all the usual attitudes of a Loan Officer. These two viewpoints are often at odds with each other which tends to create a lively debate. These articles are co-authored by Buckwheat and Sparky.
Buckwheat Sounds Off
Why do Listing Agents feel the need to interfere with a Veterans’ right to a VA Loan? It is a common scenario.
Many MLS listings make it clear that VA financing is not welcome. Rarely is this because the homeowner requested it. Invariably it is the listing agent’s distrust that instigates the caveat.
VA borrowers go to a loan officer expecting to use their government granted right to a VA loan. They usually have a fairly good understanding of the benefits a VA loan offers. They rarely have a bank account full of cash because our government is not known to overpay the guardians of this country. And they never expect a seller to turn up their nose at government guaranteed money.
VA homebuyers are frequently shocked to find out that many homes are not available to them because the seller will not consider VA financing. Is it the seller who refuses to consider VA financing? No, almost always, it is the sellers’ agent. In most cases the listing agent gives the seller misinformation concerning VA loans and thus convinces them it is not in the sellers’ best interest to entertain offers from buyers using VA financing. Yet in conversation with these same agents, they will tell you with obvious pride, they view their fiduciary responsibility to their seller as a great responsibility.
The most common reasons I am given by agents who wish to avoid selling a home to a VA buyer are:
- The appraisals always come in low (Is the appraisal low, or is the property overpriced)
- The VA inspector picks the house apart (There is no such thing as a VA inspector)
- The buyers don’t have any money (So what? Many conventional borrowers have none)
- The seller has to pay more fees (That’s true, about $400! Let’s blow a deal for $400)
- VA loans take longer to close (The fastest closing I had last year was VA. It took 17 days)
None of these reasons have any merit. All of these reasons are rooted in the agents unwillingness or inability to acquire accurate knowledge. This, I presume, is because they take their fiduciary responsibility so seriously.
Well Sparky, care to defend the Realtors®? Is there any defense?
Sparky Sounds Off
Okay, Bucky, as “Ask a Ninja” says, “Gauntlet thrown down, gauntlet picked up!”
You’re absolutely right. There is a sizeable segment of real estate agents out there who deliberately counsel their Sellers NOT to entertain VA Buyers. And some probably don’t even take the time to discuss the matter with their Sellers and simply fail to check the “Available for VA Financing” box on the MLS data entry form.
Almost every seasoned, experienced real estate agent at one point in their career has had a bad experience with a VA Buyer. I would suggest that for many real estate markets, encountering Buyers using a VA loan are an exception. However, in markets like Kitsap County, where you have a very substantial military presence, VA loans are very commonplace.
I myself have had several deals fall through, primarily because of VA appraisers (I’ve posted on this topic before). One of the difficulties in our area with VA loans is that the appraisal process is like playing Russian Roulette or Forest Gump’s Box of Chocolates - “You never know what you’re gonna get!” Whoever is next on the VA approved vendors list, gets the job of appraising the home. Many times it’s an appraiser from outside your market. In our area, even just a few miles can make a huge difference in price valuation.
Why can’t VA allow “area-based” appraisers to participate? Why are we subjected to this “Hit and Miss” approach?
Buckwheat Bites Back
I can empathize with you about having deals go bad.
But, it concerns me somewhat that you are seeking inspiration from “Ask a Ninja”. Is this one of your continuing education resources? That would explain many things about the level of professionalism I see in some of your real estate compatriots.
After having handled dozens of VA loan transactions, I can only think of one time that the appraiser blind-sided the deal. Even then, VA has a system in place to challenge a VA appraisal. As a matter of fact, one of the Realtors in your office successfully challenged a VA appraisal. It happens so rarely, that you just don’t hear about it.
The VA process for chosing an appraiser has been a hotly debated topic for years. So far there are no indications of change on the horizon. And just because a system ocassionally fails, is not a good argument for boycotting. The vast majority of VA transactions go just as smoothly as conventional transactions. The realtors who guide their sellers away from VA buyers, are eliminating a large pool of buyers. In many cases the realtor makes this decision for the seller, without the sellers awareness.
Real estate agents seem to think VA loans are just too much trouble. My question is, aren’t they being compensated to take that trouble on behalf of their clients? Does that not define, to some degree, fiduciary responsibility?
Sparky Bites Back
There’s some very sage advice from “Ask a Ninja.” At least I don’t have to put my license number on my business card!
You wanna talk about “Blind-Siding Appraisers?” I had a VA Buyer (young Navy couple with a cute little boy) desperately wanting the home-ownership dream. It was challenging to find them something in our market within their budget. We finally found a VA repo (a fairly new manufactured home on a 1/2 acre) and successfully won the bidding process. Everything was looking great. The appraiser came out and proceeded to critically analyze every detail and to call out a boatload of defects. And we’re not talking about structural concerns, or primary system defects, or safety-related issues. The majority of conditions were cosmetic. And, of course, all conditions were required to be corrected PRIOR to funding. My Buyers were cash-strapped as it was. There was no way they were going to be able to afford all the repairs called out by the appraiser. So we had to back out of the transaction. And guess what? The property sat vacant on the market for several more months, as VA continued to lose money!
And getting back to my earlier point about “Out-of-Area” appraisers…why is it, that in all of my years of real estate, through all of the transactions I’ve been involved in, that the ONLY deal I’ve had where the property didn’t come in at value was with a VA appraiser? And we’re not talking a few dollars, it was over $15,000 below value! The appraiser came over from Kirkland! He was totally clueless about our market here. Last time I checked, there weren’t any Microsoft Execs in West Bremerton! We spent several days going back and forth with suitable comps. I don’t know how the Lender finally pulled it off, but we got the numbers to work, but not without a lot of grief and lost sleep!
Let’s put the shoe on the OTHER foot, Buckwheat! Are there Mortgage Brokers out there who purposely steer VA Buyers away from using a VA loan, not because another loan product is necessarily a better fit for them, but because the Broker can make more money using a different loan product? Hmmmm????
Buckwheat’s Last Bite
Let’s start with your last, and weakest, point first.
Somehow, the Lender closed the deal. It cost the Realtor® some time, some grief and some sleep! Oh my, that’s a great reason to avoid VA transactions! It certainly sounds like the clients’ best interest are the top priority here. You make my argument for me. We, Realtors® and Loan Officers alike, take on the responsibility of caring for our clients’ best interests when we agree to work with that client. This is not optional behavior for a professional. Yet, because a little sleep might be lost, or because of a difficult transaction in the past, an agent will guide a seller in a direction that eases the life of the agent, but does not automatically benefit the seller. Something is seriously flawed with that line of reasoning.
Let’s apply that line of reasoning. Did you enjoy paying your taxes last year? Well then, don’t pay them this year. Do you lose sleep when a child misbehaves? Just let them misbehave then. If your dog bites a neighbor, it causes you grief. Oh well, let Cujo do what he wants, because it’s just too much trouble. I hope you get the point.
The responsibilities of Realtor®s and Loan Officers include education and research. We are supposed to find the best solutions available to our clients. Then we are supposed to present that information to our clients. VA financing is frequently a viable solution. I don’t challenge your statement that VA Loans have their own set of issues. I challenge the right of a Realtor® to decide for a client what is best for the client, without educating the client first. The benefits and the disadvantages should be presented to the seller in a clear fashion. And the seller should be allow the dignity of making his or her own decision. The property belongs to the seller. If the property does not sell, it is the client that gets hurt, the Realtor loses nothing but time.
Your issue about out-of-area VA appraisers is a valid point and I won’t attempt to argue it. It is the primary flaw in the system. It should be changed. It has not been changed. It is the nature of the game. It has little bearing on the fact that by offering to sell a home with VA financing, the Realtor® increases the number of potential buyers for a property. And THAT is the Realtor’s® job.
In addition, using your example above, the appraisal was corrected to more accurately reflect market values in this area. That happened because VA has a system in place to address that problem. And that part of the system works. A little extra labor on the part of the Agent of the Loan Officer should be shrugged off. A little extra labor is entirely irrelevant.
As to your last point; yes, Loan Officers are guilty of the same thing. It is just as inexcusable for a Loan Officer.
Sparky’s Last Bite
Well, at least you’re willing to admit that both Realtors AND Loan Officers are equally guilty!
I totally agree that as real estate professionals, we exist to serve and represent our client’s best interests. But our experiences, good or bad, help to shape the advice and counsel we provide them. So when I am working with VA Buyers, I explain to them the potential pitfalls associated with that particular financing product.
When I represent Sellers, I provide them with information on what is involved in offering their home to VA Buyers. I never deliberately or intentionally discourage anyone from using VA financing. As a Listing Agent, why would I want to limit the pool of potential Buyers by NOT offering the home to VA Buyers? Unless, of course, I know that there is something obviously wrong with the house that would make it extremely difficult to qualify for a VA loan. Even then, am I the one most qualified to make that determination?
My job is to sell the house, for as much as the market will bear, and in a reasonable amount of time. As a real estate professional here in Kitsap County, many of my clients are Active Military. Some of my most enjoyable transactions have been with VA Buyers. My first two homes were purchased using a VA loan. At the time, it was the only way I could have afforded a home.
Regardess of the difficulties associated with VA loans, ultimately, if it benefits the client, we should put our jaded experiences aside, and do what is best for our clients!
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