“More sellers are dissatisfied with their real estate companies these days, griping mostly about the marketing of their home and some of the other services offered by the firm with which they’re working, according to a report released by J.D. Power and Associates this week.”  This quote is from the Wall Street Journal’s Market Watch.  This probably does not surprise you.  There are as many complaints about real estate agents as lawyers and auto mechanics.  But I have observed there is an increasing dissatisfaction with listing agents.  Why is that?  There are several logical reasons.

First, let’s get the obvious out of the way.  This is the worst real estate market for selling a home I’ve seen going back 30 years in real estate.   To state the obvious, it is harder to sell a home in this real estate recession.  That’s true in Sequim and Port Angeles as it is in so many parts of the country.  It’s no surprise that homeowners who hire a real estate agent to list and market their home are feeling dissatisfied when nothing happens, nothing meaning “the home hasn’t sold.”  But there are more substantive reasons so many sellers are not pleased with their agents.

There has been a dramatic shift in real estate sales and marketing.  Traditional real estate brokerage is struggling with this gigantic change, and many agents are going out of business, not just because the market is slow.  The vast majority of consumers readily acknowledge that print newspapers and magazines no longer are the big tools for selling homes.  The Internet and powerful technology has changed the game plan, and nearly all buyers are now using the Internet to search for and find their next home.  This has nullified the power of traditional sales media.  As consumer demand has shifted, tools have been developed to meet that demand, but the super majority of traditional real estate agents have not gotten on board.  It is such a huge shift, that agents must re-invent themselves, and you can image how uncomfortable that is for most agents.  Consumers may not comprehend the extraordinary changes in sales and marketing that have been taking place behind the scenes, but they do comprehend that something is wrong with a real estate model that uses old methods and old sales language to advertise their home, especially when the results are nil.  As a result, sellers find themselves dissatisfied with their agents.

There’s one other significant reason sellers are dissatisfied with agents and traditional real estate brokerage.  We live in a time when all of us have been so thoroughly bombarded by sales pitches all our adult lives, we feel like we can say, “Heard it all before, been there, done that.  Not interested.  Thank you.  Goodbye.”  Imagine for a moment that you could meet a professional real estate agent who has made the shift from the old to the new, and is using the most powerful technologies to sell homes today.  Is there anything he could say to you that would turn on a light bulb and suddenly give you the confidence to know that this agent knows how to market your home?  I can answer question.  The answer is, “No.”  Let me explain why.

People, and I do mean all of us, have become so skeptical, so jaded with sales pitches, lied to by so many sales ads in every industry, that we don’t know how to discern the real thing form the rest of the pack anymore.  Let me make the point another way.  If a gold salesman came to your home and told you he could sell you gold at a 30% discount over other salesmen, you would most likely send him away politely.  Who hasn’t learned, “If it sounds to good to be true, it is,” or “There’s no such thing as a free lunch.”  But suppose another salesman came to your door and opened his brief case and showed you a dozen gold bricks that he said he would sell you right then and there for a 30% discount.  What would you do?  I know what the vast majority of people would do.  So skeptical are we that you and I would probably send that salesman packing, too.  We wouldn’t trust him, even if he was legitimate.

And so it is with Realtors.  Most sellers can’t tell the difference between me (and the other true professionals who have made the shift) and the rest of the pack still using the same techniques and sames pitches.  But I can assure sellers that there is a vast difference between Realtors these days.  Because of the dramatic shifts in marketing, the differences are greater today than ever.  Your job is to figure that out.  After all, how many days on market do you want your house to sit before the price is low enough to attract some offers?

[Megan Kelly did not actually interview Chuck Marunde.  This is his effort at humor, although, should you read this Megan, Chuck is available for an interview.]

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It’s time for a break from Sequim real estate.  I don’t work all the time seven days a week on real estate.  I do have a life apart from real estate, and here’s a vignette of that life.  I spent the day with my daughter and her friends.  Imagine a daddy and five teenage girls who like to giggle and scream.

We took a drive to Silverdale, a one hour drive, and had a great time.   Have you ever tried to order at the Dairy Queen drive-up window with a car load of giggly girls?  While the day belonged to the girls, I did make my mandatory stop at Silverdale’s Barnes and Noble bookstore.  Love that place.

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One of the challenges of living in one part of the country for many years and then shopping for a home in a new area where you intend to retire is that markets tend to be so different around the country.  I’m in Las Vegas as I write this visiting my son, and it’s a great opportunity to look at houses.   How different the Sequim and Port Angeles real estate market is from the Las Vegas market.

Las Vegas has a much bigger market and inventory, and there is a large inventory of foreclosures, too, that dwarfs the Sequim market.  The architecture is dramatically different, and neighborhoods are different.  And the state of the real estate market has driven the prices of homes in Vegas way down.  A home can be purchased in Vegas for $150,000, and a very small home can be purchased for around $100,000.  A beautiful custom home with 4,000 square feet, two levels, four bedrooms, and bathrooms in each bedroom can be purchased for around $500,000.  This same home would have been closer to $800,000 a few years ago.

The Sequim market has been much more stable, and nice homes are not cheap.  You can find a beautiful home in the $275,000 to $450,000 price range.  Incredibly beautiful.   Lots are priced very low at this time, too.

It seems to me that when coming to Sequim or Port Angeles to look at homes, you have to shift your thinking from the style of homes and neighborhoods and prices where you live now to the local market.  Our Sequim market is unique and most likely quite different than the market where you live now.  As I jog through Vegas neighborhoods this weekend, I can see how dramatically different the market is here.

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The rule for buying real estate long ago was “caveat emptor,” meaning “buyer beware.”  Consumer protection has been one of the primary priorities for both state and federal governments.  Despite our governments’ best efforts to protect us, liars and cheats have not yet all repented, so . . . the rule of caveat emptor is not dead, certainly not to be ignored by a buyer of real estate.

As we enter the new year, we have some new major consumer protection activity regarding disclosures to consumers when buying a home and obtaining a loan.  The Real Estate Settlement Practices Act (RESPA) has been upgraded, so to speak.  Under the new rules, all lenders and closers must adhere to the new Good Faith Estimate (GFE) and HUD-1 Settlement Statement which is intended to simplify the disclosure of loan fees and closing costs and allow consumers to shop around for the best deal.  I think more important to consumers than shopping around for the best deal is a little fundamental concept many consumers have called, “old fashioned honesty by lenders.”

HUD recently released a great guide: Shopping For Your Home Loan: HUD’s Settlement Cost Booklet. Loan originators are required to provide consumers with the booklet within three days of a loan application.  The booklet provides a basic overview of the home buying and mortgage lending process. It also explains in detail each part of the new Good Faith Estimate and the new HUD-1 Settlement Statement.

Frankly, I was impressed by this guide.  Whoever drafted it actually understands real estate, the mortgage market, escrow, and how real estate agents work.  The guide has some excellent consumer protection advice, such as this:

Frequently, the first person you consult about buying a home is a real estate agent or broker. Although these agents and brokers provide helpful advice, they may legally be representing the interests of the seller and not yours.  .  .   It is your responsibility to search for an agent who will represent your interests in the real estate transaction. If you want someone to represent only your interests, consider hiring an “exclusive buyer’s agent”, who will be working for you.

A word of caution bolstered by personal opinion:  The reform to RESPA requires that certain documents be given to consumers, including disclosures drafted by attorneys who spent months plying their trade, and mathematics regarding fees and costs associated with the loan and closing costs.  All this is good, but my opinion is that we don’t have a panacea here.  We have more paperwork that consumers are supposed to read . . . and understand?  I applaud the feds and their well drafted RESPA reform.  It’s all good.  But two thoughts occur to me.  First, does anyone really think consumers will be better protected by giving them more legalese to read?  Consumers are already swamped with disclosures of all kinds and mandatory consumer protection warning labels everywhere!   It appears that the burden of watching one’s backside falls upon the consumer again, hence the phrase “caveat emptor” at the beginning of this article.  Second, don’t expect this new law and guide to transform the less-than-honest loan reps into Priests.  They are still prowling about seeking whom they may devour.  What they are doing right now is working on a new strategy to steal money from you.

Having said that, I do recommend that you review this HUD guide.  I am a strong advocate of consumer protection, and my small part in this Universe to help protect consumers is education with helpful articles and the latest in news and helpful tips on this blog.  I realized long ago I don’t have the power to save the world, but I can help one client at a time, and I do that as a Sequim Buyer’s Agent and a Port Angeles Buyer’s Agent.  My job is not only to help my clients find and negotiate the best possible deal on their retirement home, but to help protect them all the way through closing.

The image above is from this guide, and you can see how nicely it lays out the buying process in a simple graphic.  You’ll find the guide at RESPA HUD Settlement Cost Booklet.

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Washington real estate forms are constantly changing with additions, deletions, and new forms being added periodically.  If you are buying or selling real estate, you definitely want to be using forms that are required by state law, by your county or local jurisdiction, and you’ll most certainly want to be using forms that have been through the legal analysis and editing process for many years.

The danger in not using up-to-date forms and not using forms that have been standardized through the legal process is that you could be sued and lose on the basis of using non-standard language, or ambiguous language, or language that has been interpreted by case law to be invalid or not in your favor.  Using the correct forms is critical, and do-it-yourselfers could end up with a transaction that dies before closing, or worse yet, a transaction that closes and a year later you learn you are a defendant and must spend $40,000 on an attorney to protect yourself.  This is one of the Traps for the Unwary that I write about.

I wrote an article listing most of the standard forms that we use in Washington now, and you can see that list at What Forms Are Required to Sell or Buy Real Estate in Washington.  It’s a lengthy list.

On December 21^st, the Northwest MLS (NWMLS) will publish revisions to ten existing forms and publish two new forms.  The most significant revisions are to Form 22A (Financing Addendum) and Form 22AR (Financing Contingency Notice).  Realtors who are members of the NWMLS, or who purchase the NWMLS forms have access to all of these forms, and we get the updated forms immediately as they are published.

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