The real estate business is changing, but most people don’t know how dramatic these changes are.  When you’re in the midst of massive economic, cultural, and business change, as we are in the real estate industry, it is very hard to somehow get above the fray and all the chaos and recognize the bigger picture.

The real estate business is experiencing massive changes, and real estate brokerage as we have known it for 30 years is dying.  What is the proof?  The National Association of Realtors reported that 300,000 Relators have left the business in this recession.  Consumers are no longer walking into the big expensive bricks-and-mortar buildings or calling off newspaper ads.  Instead consumers (both buyers and sellers) are using the Internet and the wonderful free resources available to them 24/7 (like this site).

A large RE/Max office closed its doors downtown Seattle this past year (along with many others in King and Pierce Counties).  A few months ago the RE/Max office in Port Angeles went out of business (along with several others).  All over the country offices are closing, merging, consolidating, and even filing bankruptcy.  Realty Executives, a large national franchise, filed bankruptcy two days ago.

Inman News reported today that, “Real estate brokerage and franchise giant Realogy Corp. reported a $237 million first-quarter loss today, as interest expenses on the company’s massive debt outweighed improvements in operating income.”  Realogy owns Century 21, Coldwell Banker, Sotheby’s International Realty, NRT, and ERA, and Realogy also licenses the Better Homes and Gardens brand from Meredith Corporation.  Realogy is the classic traditional brokerage with a huge living nightmare unfolding right before our eyes.  The largest real estate brokerage empire in the country is very unlikely to survive in its present form.

Consumers are the driving force of these changes, but exciting advances in technology and the Internet have given consumers new power and control over how they buy and sell real estate.  My brokerage is on the cutting edge of these changes, and it allows me to serve my clients with all these cutting edge tools.  This chart shows how the old methods are being replaced by new tools on the right side.

The real estate business is dramatically changing, but the traditional bricks-and-mortar brokerages are falling left and right.  Ultimately consumers are going to be the real winners, and I’m delighted to be part of the change that serves consumers best interests here at eXp Realty, also known as Sequim and Port Angeles Real Estate.  I’m Chuck Marunde, buyer’s agent.

Possibly Related Posts:

• Port Ludlow Real Estate
• How Listing Prices Affect Offers
• Real Estate Without Offices
• Sequim Real Estate Broker – Attorney Still Giving It All Away for Buyers
• Top 20 Sequim Real Estate Posts of 2011

What does real estate and estate planning and death have in common?  We all will die eventually.  And a substantial percentage of us will have serious health issues before we die, including diabetes, heart disease, liver failure, Alzheimer’s, and so on.  The truth is we  all eventually grow old and the strength and vibrant youth we once knew fades.

If you own a home, and other possessions, you fall into one of two classes of people.  The first group makes up about 70% of the American population who have not done any estate planning.  When they die, or become incompetent to handle their affairs, the estate is a legal disaster for them and their children.

The second group is made up of the 30% of Americans who have taken the time and money to think through and complete their estate planning so that in their elder years they and their children will have order, not chaos, good tax planning and an orderly distribution of assets.  Here is a true life example of chaos from lack of planning, and this chaos has caused great problems for the entire family.  It has also put an elderly man into what he feels is a living hell.

The story begins with an elderly couple who lived in rural Alaska.  They raised their family and lived a very humble lifestyle, mostly because the father made very little money in his contracting business.  Contracting in Alaska is a feast or famine business, and that is especially true in the “bush” communities of Alaska.  One of the children moved to Sequim where he raised his own children.

The father was a typical Alaskan, conservative, rugged, independent, and spontaneous.  Despite having conversations with his adult children about the importance of estate planning (i.e., a basic will or a revocable living trust), and agreeing he needed to take care of his legal affairs, he never had any estate planning done.  He procrastinated for almost 50 years until it was too late.  In 2009 his wife passed away after struggling with cancer for many years.  She had written her own will, which was invalid because it did not comply with state law, but it didn’t matter as she had nothing of substance to leave.

Within a couple of months of her passing, the father was rushed to Anchorage Providence Hospital where the doctors told him that he must be on dialysis for the rest of his life, and since his little town clinic did not have expensive dialysis equipment, he could never go home.  At 75 years old and now completely blind, not being able to go back home where he had lived for 48 years was nearly a death sentence.  Alone in a hospital in a room with someone else who was incapable of conversation and far from family who could not afford to visit regularly, life went from difficult to hellish.

Because there was a lack of estate planning for such a scenario, applications for federal assistance through medicare/medicaid programs have become paperwork nightmares of denial after denial.  Before a Fairbanks facility is willing to take the father in, where he could be closer to some of the adult children and grandchildren, the facility is demanding that he sign a lien or deed giving up his house.  Income and asset limitations have created an impossible scenario.  The father has essentially lost everything he ever owned, feels like a prisoner in a room, and being blind has eliminated what little independence he had left.   In addition, he has nothing to leave his children as an inheritance since it will now all be taken for medical bills.

Good estate planning could have avoided much of this chaos.  Of course, health issues are beyond estate planning, hence the need for good estate planning.  But for those who neglect good nutrition and regular exercise for a lifetime, you know that you substantially increase the risk of serious sickness or disease when you get old.

If you own a home, you have an important asset that ought to be handled for estate and tax purposes, for health and welfare purposes, and as an expression of love and care for your children.  By the way, the child who moved to Sequim  . . .  is me.  The photo above is of me, my father and my late mother.

Possibly Related Posts:

• Buying Real Estate and How to Hold Title
• Real Estate and the Probate Process

If you search for real estate in Sequim or Port Angeles, this is real time breaking news you won’t read anywhere else but here! There’s a new and exciting and very powerful search engine you can use absolutely free to search for real estate, or anything for that matter, right now from the comfort of your desk on your own computer. Just go to Leapfish.com, and type in a phrase like, “Port Angeles Custom Home Builder” without the quotes, and you’ll get website results as you type as well as blog results, image results, and video results. This is even better than Google’s search!

Possibly Related Posts:

• Can Foreigners Buy Property in the U.S.?
• Buyer Hit by Identity Theft and Fraudulent Credit Card Charges
• Sequim Utilities – How to Get Connected When You Buy a Home
• Contingencies When Buying a Home
• How to Buy Real Estate and Consumer Protection

Getting a divorce is . . . well, a real pain-in a lot of ways.   It used to be that one of the arguments in a divorce would be who gets to keep the home, but now we have a new twist:   who gets stuck with the home?

With nearly one in six homes worth less than the mortgage owed on it, according to Moody’s Economy.com, divorce lawyers and financial advisers around the country say the logistics of divorce have been turned around. “We used to fight about who gets to keep the house,” said Gary Nickelson, president of the American Academy of Matrimonial Lawyers. “Now we fight about who gets stuck with the dead cow.” [Read Housing Market Divorce Twist]

I recently facilitated ((For more about how I “facilitate” a sale, email me at chuckmarunde@gmail.com)) the sale of a Sequim home to a California buyer, and the Sequim owners are in a divorce, but in this case, there is equity and the net proceeds are to be divided as in most cases, half and half.   These Sequim sellers were really quite lucky to connect with a buyer in this market and at this time of year.

A divorce creates a fairly serious dilemma for selling real estate, because a divorce is a time when all the dysfunctional baggage of both people creates a significant probability that one of them will end up sabatoging the sale.   I’ll write more about how to deal with such issues in another article, but believe me, as a real estate lawyer, I saw the worst in people come out during divorces when there was real estate and future income involved.

You’ll find more articles on handling real estate in divorce situations by going to the main real estate blog and typing “divorce” without the quotes in the search box.   This search will also work for hundreds of other topics on real estate.

Courtesy of Sequim & Port Angeles Real Estate, LLC.

Possibly Related Posts:

• Real Estate Values Needed for Divorce
• Real Estate Divorce
• Real Estate Divorced
• Divorce and Real Estate

If you had a million dollars to invest, where would you put it right now (under your mattress is not an acceptable answer)?   Well, you definitely would not want to put it in the stock market.   You know I’m going to say that real estate is safer and more secure in the long run, but do you know why?   I’ll give you two reasons, both of which are rock solid.

Reason No. 1.   Real estate goes up and down, but nothing like the volatility of the stock market, and your 401(k).   This past 12 months alone, individual investors like you have lost trillions of dollars in value in the stock market because of economic conditions.   I hear retired people saying things like, “My mutual fund is down 30%,” or “We are really worried that we’re going to have to go back to work again.”   On the other hand, a home that has lost 30% in value this year (down to $420,000 from $600,000) may have been purchased 15 years ago for $175,000 (as is the case with many people).   But that real estate is solid, and still an excellent long term investment.   As a matter of fact, in my area homes are only down 5% to 15%, depending on the precise location and features.   (more…)

Possibly Related Posts:

• Is A Double Dip Recession On The Horizon?
• Those Wall Street Tokers
• Cash is King, Stock is Not, Real Estate is a Buy
• Buy Real Estate For Your IRA Retirement Fund
• Words of Encouragement for the Real Estate Market and Economy

Real estate investors are scooping up the deals and making millions.   Right?   Wrong!   I met with an investor the day before the Thanksgiving holiday, and he   was ready, willing, and able.   Like the vast majority of real estate investors     around the country right now, he is having trouble pulling the trigger on a buying decision.   Why?

People think the general state of the real estate market creates grand opportunities for investors, and it does, but only in a general sense.   The fact that the real estate market is in a major slump undoubtedly creates an environment of opportunity.   But an investor must find that diamond in the rough, and that is not easy.

We’ve all been talking about how many foreclosures there are, and it seems every day there is another news headline about the large numbers of homes in foreclosure.   But try to find a single home in a good area that has the parameters of a good investment, such as three bedrooms, two baths, a double car garage, including one that will crunch the numbers you need, well . . . that’s a horse of a different color.

Intelligent investors are not interested in junk, and there is a lot of junk out there.   There are homes in unattractive areas that are not going to rent or sell well.   Forget those.   There’s a home in a nice area, but the retired couple that owned it built only two bedrooms and an odd kitchen.   Forget that.   There is a nice three bedroom, but it only has one bath, and the home is built on a potential mud slide.   There’s a cute cottage on a busy street.   No.   There’s a perfect home in foreclosure, but the current owners are obstinate, and so that one won’t be available until the Trustee’s sale when there are 227 other people competing to buy it.   Don’t want to go there.

When you do find one (have you got 40 hours a week to do research and drive around?), the numbers have to crunch for you.   If it’s going to be a good investment, you have to be able to pick up some equity, and it’s hardly worth investing if you can’t pick up $20,000 to $80,000.   After all, you’re going to have to put some money into it to fix it up or make it sellable, and you’ll have carrying costs and selling costs.   If you want to flip houses, you’ll have to sell well below current fair market value, which means you definitely need a good chunk of equity built in to your investment from the beginning.

One has to be very careful buying homes in distress.   A successful investor I know purchased a foreclosure home at a Trustee’s Sale at a seemingly good price, but later discovered the timbers in the crawl space have to be replaced because of dry rot.   All his profit just went poof!

This is why it is not so easy to be a real estate investor, even in times of plenty.   There are plenty of houses for sale, but finding the perfect investment project is definitely a struggle.   They’re out there, but good luck finding them.

Possibly Related Posts:

• Gold or Real Estate?
• Is investing in real estate in Port Angeles wise now?
• Should I Invest in Real Estate Notes?
• Paper Transactions in Real Estate
• Sequim Real Estate Sales Slow Down