There’s been a lot of real estate news lately, and there’s been a lot of other news that in ordinary times would be considered extraordinary.  The tip of the news iceburg is more news than most of us can handle.  The NBA is in shambles, and yet the season is supposed to start in a couple of weeks.  You may not be into professional basketball, but there has never been more chaos in the NBA than there has been this year.  The European financial news is bigger than any financial news to come out of Europe in our lifetimes.  The political news in the U.S. is a gift that keeps on giving, and then there’s Lindsay Lohan.  As my mother used to say, “Oh my!”  Enough said.

Then there’s a humorous (and educational) news item about misconceptions of what would happen if a person fell into a volcano.  In all the movies where people fall into lava, they sink in the lava.  Even in the Lord of the Rings, Gollum sinks in molten lava.  Alas, now we find out that the density of lava is at least three times that of water, and the viscosity of lava is about one million times as much as water.  Almost anything you could throw on lava would float, including people.  [Indirectly, this is real estate news since molten lava becomes real estate after it cools off.]  The one movie that may have gotten this right is the Terminator in which the super heavy and extremely dense Robotic Arnold Schwarzenegger sinks in lava.  The author who wrote about this lava misconception entitled his article, The Right and Wrong Way to Die When You Fall Into Lava.

Real Estate News

In the real estate news world there is more published every day than you and I can read.  There is a lot of information to digest, but who can digest it all?  Buying a home with all the real estate news out there is no small challenge.  There is so much to know, and as I like to say, “there are many traps for the unwary.”  Discerning the “right and wrong” when buying a home today can be like reading too much news and trying to filter out the irrelevant.  

Real Estate News Made Easy

As a Sequim Buyer’s Agent I feel very privileged to work with the most incredible people in the world.  My clients are almost all retired professionals who are eminently qualified to buy a nice home in Sequim.  Sometimes I like to joke, except I am largely serious, that “my clients are all smarter than me.”  My clients are smart.  They are well educated, professors, authors, CEOs, financial advisers, teachers, engineers, wildlife officers, military officers, artists, and high government officials.

All of my clients have a lifetime of knowledge and experience in their chosen profession.  But one thing they don’t necessarily possess–a lifetime of education, knowledge, and experience in real estate.  There are many things I do not have, but a lifetime of knowledge and experience in real estate I do have.  I started in real estate sales 37 years ago, went to law school and specialized in real estate law and transactions for 20 years before coming back to my first love–real estate brokerage and representing buyers.  I’ve built the largest Internet real estate resources for buyers in the Sequim area, all absolutely free.  There are over 1,000 articles written for buyers on this blog.  Who does that?

Real Estate News Filtered for Buyers

Every day of the week I filter through the real estate news so that my clients get relevant and informed real estate news.  My goal is to give my clients real estate news and information that is true and helpful in their search for their retirement home in Sequim.  My clients deserve the best and latest information to help them make wise decisions in how they proceed, whether that is to buy a home or not.

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A Low ball offer.  What is a low ball offer and how should buyers and their agents decide how much to offer?  Imagine that you are a buyer, and before you make an offer or discuss price with your buyer’s agent, the listing agent warns your agent not to make a low ball offer.  What?  Where did that come from?  As a buyer, you might be thinking what makes the listing agent (who represents the seller) think he can tell my agent how much I will offer?  The reason I want to write about this is because listing agents are regularly warning buyer’s agents that their clients will not entertain low ball offers.  Let’s dig into this a little and find out what is going on.

Why The Warning About a Low Ball Offer

If a listing agent has a valid reason to expect that a buyer’s agent may submit a “low ball” offer, it would not be unreasonable to drop a subtle hint to that effect, but the warning is annoying when it comes out of the blue and is communicated to an experienced professional.  Why?   There are several reasons.

1. A buyer is the master of the offer, and that means the buyer and the buyer’s agent decide how much to offer.  The seller has no contractual or ethical right to tell the buyer how to draft the offer.  Indirectly telling the buyer’s agent is the same thing.
2. The buyer’s agent represents the buyer, and the listing agent represents the seller.  Each has legal and fiduciary duties to their clients.  One should not try to infringe on the other agent’s relationship.
3. A buyer has the right to make any offer they want, no matter how much it is, even if the seller thinks it is a “low ball” offer.
4. The seller has the right to accept, reject, or counter.  This is America, and that’s how it works.  Buyers and sellers are free to negotiate the best price and terms.
5. Many listing agents do not actually know what a “low ball” offer would be.  That makes warning against making a low ball offer especially unreasonable.

What is a Low Ball Offer

I know there are Realtors who will write any offer without regard to fair market value, market conditions, and professional appraisal considerations.  I’ve turned a couple of buyers away because they literally wanted me to draft low ball offers on houses until they got one accepted.  Their concept of a low ball offer was to find a reasonably priced home and offer 30% below that.  I won’t do that.  But I also wrote an offer on a house two years ago that was a reasonable offer, but the seller rejected the offer and her agent called it a “low ball” offer.  It was not, but the seller and the listing agent had an unreasonable definition of what “low ball” was.  That house never sold, and has been on the market for two years now.  They have dropped the price several times by huge amounts.  I doubt the seller and listing agent would admit that the offer my client made was not a “low ball” offer at the time.  I remember that Realtor actually laughing on the phone and calling the offer a “low ball” offer.  I had solid proof at the time that the offering price was reasonable with other comparables and appraised values.  After two years, the proof has clearly demonstrated that the offer was definitely not a low ball offer.

This is a Low Ball Offer

My point is that what is often called a low ball offer is not a low ball offer at all.  On the other hand, there is such as thing as a low ball offer.  If the true FMV of a home in this market is $325,000, and a buyer makes an unreasonably low offer of $245,000, that is a low ball offer.  But as I’ve written above, the buyer has the right to make any offer he wants.  The seller can accept, reject, or counter.  What you don’t need is a seller’s agent telling a buyer’s agent what to offer, directly or indirectly.  That is inappropriate.

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Traditional real estate brokerage is on the precipice of disaster, bankruptcy, merger, consolidation, and maybe just closing the doors permanently.  The 20-year old business model of the big bricks-and-mortar and all the expensive accoutrements that go along with that business model are like a damaged ship with a heavy anchor dragging bottom in a storm in uncharted territory.

Traditional Real Estate Brokerage in Uncharted Territory

The uncharted territory is the new world of marketing, changing consumer preferences, and advances in technology that the traditional real estate brokerage has been quite unprepared to embrace.  The big luxury bricks-and-mortar buildings are symbolic of an archaic business model that relied upon the telephone, walk-ins, print newspapers and print magazines, flyers, billboards, and even open houses. And let’s not forget the large physical building with massive mortgage payments and heavy tax and maintenance costs.  In this storm (aka this real estate recession), these huge corporate real estate franchises would have been well advised to throw all this ballast overboard.  Alas, they have not and they don’t know how to completely restructure and get rid of the excess.

Traditional Real Estate Brokerage on The Precipice of Disaster

Hundreds of traditional real estate brokerage offices have filed bankruptcy, merged, consolidated, or just closed their doors around the country these past three years.  Here is the biggest proof of how the traditional real estate brokerage is on the precipice of disaster.  Realogy is the largest real estate conglomerate in the U.S.  Realogy is an umbrella investment company that owns Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, The Corcoran Group®, ERA®, and Sotheby’s International Realty®.  Unfortunately, when Apollo Global Management LLC bought Realogy in 2007, they paid $6.6 billion dollars and today they are $7.7 billion dollars in debt.  They plan to borrow another $215 million to make interest payments, and Century 21 and Coldwell Banker this month will use its $652 million revolving credit line to fund payments on its unsecured notes and second-lien loans.  Meanwhile, they are counting on a real estate recovery to save the ship.  This ship is on the precipice of disaster.  Read more about the sinking of America’s largest real estate ship at Will Realogy File Bankruptcy?

Traditional Real Estate Brokerage vs. Consumers

Why is the traditional real estate brokerage sinking?  I think you know the answer to that question.  I think consumers know exactly why the big bricks-and-mortar real estate brokerage isn’t getting their business.  Ask yourself this simple question, “How do you search for real estate today?”  For that matter, how do you search for almost any product or service today?  You go on the Internet and search, right?  You and roughly 90% of all Americans.  That’s what I do.  It’s what everyone I know does.  So is it any surprise that Realogy is like a ship in uncharted waters dragging anchor?  No.

Perhaps the best way of thinking about why the traditional bricks-and-mortars are sinking is to look at changing consumer preferences.  Consumers have left the building, and they prefer to do business in entirely new ways.  Consumers (buyers and sellers) want to be treated differently, too.  They want the latest technologies and Internet marketing, but they also want the best level of personal service.  The truth is that traditional brokerages are ignoring these changing consumer preferences.  Consumers have moved on.  They not only want to do business in different ways, they are using entirely different processes to do their real estate business.  The traditional brokerage that ignores consumers will eventually be out of business.

I don’t sit in a luxurious office waiting for the phone to ring or hoping a prospect (or should I say “suspect”) will walk in the front door.  I don’t use traditional print advertising, which doesn’t sell homes anymore or connect with buyers.  I don’t waste time and money with all the extra ballast that simply weighs down the ship.  And I don’t believe in massive debt to support a business.  A business today needs to be lean and mean, and it needs to put the client at the center of the Universe so that everything I do, my business model, my technology, my marketing, and my customer service must all be focused on meeting my clients’ needs, not a corporate structure.

Call or text me at 360-775-5424 or email me to find out how my business model is dramatically unlike the traditional real estate brokerage.

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What are the most powerful Sequim real estate Internet resources for buyers?  What if there was a real estate agent who took great personal pleasure in giving buyers the best and the most powerful resources online to find their retirement home in Sequim?  What if he had Internet sites and search tools specifically designed and programmed to help buyers do all this at no cost to buyers and with absolutely no requirement that buyers register or share their personal information?  This real estate agent would probably be doing a lot of things outside the box, different than traditional brokers and agents.  This Sequim real estate agent is Chuck Marunde.  There have been many firsts for Sequim real estate along the way, and here are some of them.

Sequim Real Estate

I’ve written many articles over the past several years where I would include the phrase, “another first,” because each time these new tools were onthe cutting edge and the first time Sequim had ever seen anything like these tools for buyers.  For example, one of these firsts was to create a programmed Sequim MLS search site that included the option to search either the Olympic Listing Service or the Northwest MLS.  For years other brokers had one or the other, but not both, and believe it or not, even today there are brokers who are are members of only one of the MLS’s. 

Another first was a Sequim Real Estate Blog with over 1,000 articles dedicated to Sequim and Port Angeles real estate issues, buying and selling tips, prices, negotiating, legal issues (I was a real estate atty for 20 years), and hundreds of issues that buyers want to know about before they buy their retirement home in Sequim or Port Angeles.

Sequim Real Estate

Another first was to have my MLS site optimized for the search engines.  They goal is to make it easy for buyers to find exactly what they are looking for, and connecting buyers with sellers is not only good for buyers, but sellers probably have no idea how important this is in a programmed MLS site.

Another first was to have a series of Sequim real estate videos, over 100, which include more help for buyers on many aspects of buying a home, from making offers to negotiating to inspections to buying land to hiring a builder.

Sequim Real Estate Internet Resources

Another first was to optimize a Sequim real estate blog specifically for buyers.  No one had ever done that here, but buyers wanted it, and so I gave it to them.

Another first (bear with me because there have been many firsts) was to create a large social media presence to continue to bring Sequim real estate resources to buyers wherever they may be looking or networking.

Always seeking to find new and better ways to serve buyer needs and wants, another first was to have a Sequim App (a mobile MLS search) in the Apple iTunes store available as a free download for anyone with an iPhone or iPod or iPad, which is a complete Sequim MLS search tool.

The goal has been to make it easy and convenient for buyers to search for their retirement home in Sequim, but also to give them the most powerful tools that technology has available for them today, and at the same time to allow them to search and use these various tools at their own leisure, on their own time, and without any obligation to talk with a salesman or to reveal confidential information.  The principle at the core of this business model is that clients, not the brokerage, are at the center of the Universe and everything should be designed with that in mind.

Another first was to write and publish a 310 page book just about Sequim and Port Angeles real estate.  The book is a lifetime of education and experience put to words to benefit buyers who want to make wise decisions in their home purchase.  The title of the book is, Buying and Selling Real Estate in the Rain Shadow by Chuck Marunde, J.D.  Having practiced as a real estate attorney in Sequim and now as a full time Sequim real estate broker, the book includes articles on how to avoid traps for the unwary, legal issues unique to the Sequim area, and practical tips about buying and negotiating in this local market.  It also details the challenges of working with a home builder and the checklists to avoid trouble.  The last thing a retiree needs when they move to Sequim to live their retirement dream is stress and nightmares.  This book helps make the transition as smooth as possible.

Another first, although this first is more for Realtors than it is for buyers, is the publication of a brand new book to be released within a couple of weeks, The New World of Marketing for Real Estate Agents.  This book teaches real estate agents how to effectively market real estate and serve clients today in this new paradigm of marketing.

Another first, although less significant, but still important to buyers as a valuable tool, is a video which shows buyers exactly how to get the most out of a Sequim MLS search.  This is part of the continuing Sequim real estate videos to help buyers optimize their time on the Internet and find the ideal home in the inventory.

Another first for Sequim is this new real estate market snapshot tool for buyers.  This allows you to look under the hood, so to speak, and see a lot of the data that only Realtors see on their subscription side of the MLS.  You can see active listings and the ones that sold with charts and maps and days on market, the original listing prices and the final selling prices, and much more.

And one last “first” is a live online chat took accessible through the real estate blog, so that if I am online, any client or prospective client can ask me a question live.  This is another effort to provide the highest possible customer service experience.  In addition, I have only one phone number, 360-775-5424.  This is the only phone number on my sites, on my signs, on my business card, and which I have with me all the time.  Do clients take advantage of me?  Absolutely not.  Clients respect my time as I do theirs, but I love to help my clients any day of the week, and when they have a question that they really want to get an answer for, I love to help them any time on the phone or by email.

Does all this marketing work?  Absolutely.  See proof that Chuck Marunde’s online system has sold more homes as a Sequim Buyer’s Agent than any other this year (calender year from January through September of 2011).  But the whole point of this system is that it is not about Chuck Marunde, but about every single client.  It is about serving clients’ needs and designing systems that do that exceedingly well.  That is what customer service is all about in this age of technology.  At the core of this business model is the belief that clients are looking for a professional, experienced, and trustworthy real estate agent, and that the entire marketing system is built with the purpose of creating great relationships that are mutually beneficial.

Stay tuned, because this Sequim real estate agent will continue to be on the cutting edge for buyers, and undoubtedly will be giving you many more “firsts” in the Sequim real estate market.

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What is involved in a septic system inspection?  When you buy a home with a private septic system, you will want to have a septic system inspection.  Here a home seller, Steve Lambert, and Septic Designer Eric Hibbard of Soils Application examine a septic system in compliance with a buyer’s request.

Septic System Inspection Required by Buyers

Septic System Inspection by Certified Inspector

There are several things a septic inspector is looking for.  He will examine the septic tank, which is usually 1,000 gallons, and make sure it has been designed and installed correctly, that all plumbing and electronic components are in place, and that the drainfield is working properly.  He also measures the solids to see if the tank needs to be pumped.  The County now requires an annual septic system inspection for all residential systems, although this is not policed.  Here are some of the items an inspector examines in his written report:

Septic System Inspection

In this photo you can see a hose has been placed in an outlet beyond the septic tank with the water running into the drainfield.  If the water backs up at this stage, it would be an indication that the drainfield has problems.  That could be because the plastic drain pipes have blockage in the small holes drilled in the pipe, possibly caused by a garbage disposal used too often in the kitchen sink or other abuses.  A septic system inspection can tell a lot about how the residents have been using it, and understanding how to properly maintain a septic system would be wise for every homeowner.

Some trees have extensive root systems that can grow into a drainfield and destroy it over time.  Some trees and shrubs have slow growing root systems that do not extend far from the plant itself, while others, like a Leyland Cypress, have root systems that will grow far underground and wreak serious havoc to your drainfield.  Having to replace a septic system or drainfield could cost a small fortune, so knowledge could save you money on this subject.

You don’t have to wait to sell your home to have a septic system inspection.  You are required to do an annual inspection anyway, so I recommend contacting Soils Application for an septic system inspection that can help you better maintain your system, and you can do the annual inspection at the same time.

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The future of the Sequim real estate market is bright, despite what is happening across the country now.  This survey from Trulia takes the heartbeat of Americans, their plans to buy a home, where they want to invest their money, and it is promising.  Be sure to enlarge this slideshow (lower right side) so you can read the little print in the slides.

The Sequim Real Estate Market in Context

Sequim Real Estate Market

Research showed that 80 percent of respondents surveyed were planning at least one additional home purchase in their lifetime. Granted, that’s a long way into the future of the Sequim real estate market or any market, but clearly everyone wants to own a home or a second home.  While all of these buyers aren’t actively searching, this is still positive news.  Around 65 percent of respondents from age 18 to 34 said home ownership is still part of their American dream.

Survey results showed, across the board the suburban McMansion  trend of the housing boom is dying. Only 6 percent of those surveyed said their ideal home size is more than 3,200 square feet, a 36.6 percent decrease from 9 percent in 2010. In addition, both Baby Boomers (55+) and responders in the 18 to 34 age category expressed their primary interest in urban environments for different reasons. The older group wants to be closer to shops and restaurants and the younger generation is interested in shorter commutes.  Source:  The American Dream Lives On

Sequim Real Estate Market

I’ve written about the future of the Sequim real estate market in earlier articles, including Are Houses Getting Smaller.  I wrote:

Are houses getting smaller [in the Sequim real estate market]?  There have been many articles written about how retirees are building smaller, more energy efficient homes.  Of course, “energy efficient” and “green” does not necessarily mean smaller, but less square footage does facilitate the two.  Another factor that has been an inducement to build smaller homes is the increasing cost of land development and home construction.  With higher price tags, mortgage payments have grown dramatically, and the mortgage debacle and record foreclosures are more than a shot across the bow for retirees.

With all the retirees moving to Sequim, I believe the future of the Sequim real estate market is much brighter than 95% of the rest of the country.

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