edit 3/17/08: DONE! Remodel complete.  Probably a few scraps to still clean up here and there, but for the most part I’m done! Let the blogging begin!

Lack of communication with client - Communication between agent and seller is crucial. Do not put up with an agent who doesn’t return your calls or emails.

Incomplete or error-filled listing on the MLS - This is simply filling out a web-based form accurately and thoroughly. I’ve seen egregious errors such as a $400K house listed at $4 million (added one too many zeros) and had it sit on the market with the wrong price for 3 days before the error was noticed and corrected. A friend of mine gave me another example. The condo next to hers was listed with the wrong address. After days of no showing activity, the agent convinced the seller to reduce the price of the house. Never mind the part where nobody could find the house to go show it because of incorrect information.

Limited number of pictures or no pictures added to the listing – Pictures are worth a thousand words. In this day and age of digital cameras, there is no excuse not to have multiple pictures included in the listing. It’s fast and easy. Yet, every day I see new listings with no pictures. I even see listings near the million dollar mark without pictures. It really isn’t doing the seller or their house any justice. Equally disappointing is just bad pictures; pictures that don’t really show anything. For instance, 10 pictures of the yard doesn’t tell a buyer anything about the house. Is there something wrong with the interior?

No follow-up with potential buyers and their agents - Your agent should follow-up (or try to) with any buyer or buyer’s agent that expresses interest. Even if they’re not interested in buying, your agent should try to get as much information out of them as possible. What did they think of the property, why aren’t they interested, etc.

Pressure tactics to drop price - Price drops are sometimes inevitable. However, it shouldn’t be the first thing the listing agent turns to if there’s no action on the house. Have they properly marketed the house? What’s the feedback been saying?

Buying the listing - This is the practice of promising the seller that their house can fetch a very attractive (high) amount just to get the listing. Once they’ve got you under contract, they’ll complain that nobody’s interested because the price is too high. Make them justify their price.

Cheap flyers – There are some agents that want to save a buck so they go cheap on their advertising material. Flyers in the flyer box, in my opinion, has to be in color. Preferably a somewhat designed flyer to showcase the house as well as possible. I’ve seen agents use the standard printout from the MLS system or what looks like a print-out from a website. Then when the price changes, they cross out and hand write the new price on the old flyers. Thank goodness I don’t see this a lot, as it would drive me crazy that someone is actually paying that agent for that kind of marketing.

Lack of knowledge or due diligence – About a month ago I took a client to look at this one house. It was okay, nothing great, yet nothing particularly bad about it. My clients thought about making an offer, but we ended up not doing anything about it. I tracked it to see when it would sell and for how much. It recently closed and I noted its final price. Almost a week after that house had closed, a new house came on the market $50k under the house we had looked at. The catch was…this new house was right next door; same style home and similar size but $50k less. My clients (the same ones) wanted to make a move on it just because it was so cheap. I get a call from the listing agent that evening telling me basically that they didn’t realize how much the house next door sold for so they are raising their price $20k to be more in line with the market. I don’t know the exact circumstances, but as a seller, I would expect my agent to know about the house right next door that closed just before I was going to put my house on the market.

This list is not meant to alarm you. There are many agents that do their job as they should with the interests of their client at the forefront. However, if you or anyone you know encounters a situation where they don’t like the performance of their agent, the listing contract can be cancelled at anytime regardless of how long the listing is for. Some agents will claim you can’t get out of the contract until expires. Nonsense. It can be cancelled,… anytime. If they refuse, document what you don’t like about your agent’s performance, your attempt(s) to cancel the listing agreement and then contact the listing agent’s managing broker. Or when you sign the listing, include a written agreement that you will be let out of the contract with no hassle should you choose to. If your agent isn’t working for your business, they don’t deserve your business.

My first impression was, ..wow! That’s definitely interesting. However, never having been a person to just take someone’s word blindly, I did my own number crunching. I originally posted these findings over on Rain City Guide earlier today. More discussions on this are on 360Digest, Bloodhoundblog, Freakonomics, and another one on Rain City Guide.

According to the NWMLS, there were 69,048 closed transactions for residential and condo homes in 2006 (in King, Pierce, and Snohomish Counties). In the same tri-county area, Redfin was a part (listing or selling) of 224 transactions. That equates to 0.3% of the sales…that’s three-tenths of 1%.

Redfin may be perfectly correct in their analysis of their data …that a Redfin buyer paid $4,474 less on average, but I’m going to argue the point that using 224 transactions out of 69,048 to draw any kind of conclusion about the other 99.7% of the transactions and the agents that represented those transactions is not only silly, but very misleading and not statistically sound.

To emphasize my point that Redfin over-generalized the other 99.7% of transactions, I did some number pulling from the NWMLS. I wanted to see how Redfin agents on the selling (buyer’s) side compared directly to other brokerages and compare them straight up rather than every brokerage lumped together. I first wrote down the first 5 brokerages I could think of (I just pictured driving down a local road and which brokerages were there). Since Redfin is listed in the NWMLS as being based in Seattle, I picked offices that had a Seattle presence. I came up with the following:

Century 21 North Homes
Windermere Real Estate Co.
John L. Scott Inc.
Coldwell Banker Bain
ReMax Metro Realty

I pulled closed Residential (no condos) sales with Redfin’s first year time frame of 2/6/06 to 2/5/07. I did not limit it to King County as they did. When pulling data I checked the option to include all company sales ..not just the office I input since one company can own several offices. Here’s what I got:

Median Sale Price to Median List Price comparison:
100.97% - Redfin - based on 149 closed sales
100.31% - Century 21 North Homes based on 575 closed sales
99.72% - Windermere Real Estate Co based on 1032 closed sales
100.00% - John L. Scott Inc. based on 5274 closed sales
99.43% - Coldwell Banker Bain based on 4093 closed sales
100.19% - ReMax Metro Realty based on 940 closed sales

Let’s translate that into dollars. Based on the same data, I averaged the Median selling price of all 5 companies and got $412,850. Round up to $415k for easier number to use. So, based on the above percentages and a house that’s listed for $415k:

Redfin buyer pays $419,016
Century 21 North Homes buyer pays $416,306
Windermere Real Estate Co. buyer pays $413,828
John L. Scott Inc. buyer pays $415,000
Coldwell Banker Bain buyer pays $412,646
ReMax Metro Realty buyer pays $415,776

…continuing the number analysis…I broke down the Sale Price to List Price percentage based on Cumulative Days on Market. For homes that were on the market:

between 0-30 days, Redfin was 1st at 99.86% while the others ranged from 100.07% to 100.90%. This means that a Redfin buyer paid the least (99.86% of list price).

between 31-60, Redfin’s 98% was 2nd to Windermere’s 97.58% with the most at 99.17%.

between 61-90, Redfin’s 98.74% was 5th with only Century 21 North Home’s 98.89% higher than it. Lowest and best was Windermere’s 96.44%.

between 91-120, Redfin’s 99.08% was again 5th with again Century 21 North Home’s 99.32% higher than it. Again lowest and best was Windermere’s 97.48%.

From 120+ days, Redfin stole the show with 93.45%. The others ranged between 96.13% and 98.04%.

Wow, ..93.45% ..something is way out of line. So I looked at the 149 closed homes Redfin had and filtered out the ones that were 120+ CDOM. There is an element of error here that I must mention …CDOM is based on the listing agent accurately entering when the house actually went pending. Those in the business knows…this does not always happen. Which may explain when I actually looked at the individual listings ..there were 18 homes showing 120+ days in the CDOM with an average SP/LP of 95.93%. Now…of these 18, four of them were $1 million + homes. For homes that high in price, huge price reductions in final sale price is not uncommon. So I simplified it. I eliminated all four of them. The remaining 14 homes now had an average SP/LP of 97.42%. At this number, it would put them at 4th, with the high and low of 98.04% and 96.13% respectively. But if you don’t like how I eliminated the million+ dollar properties, then fine,.. Redfin wins the 120+ day category with their 18 sales whereas say…John L. Scott had 605 sales of 120+ CDOM and Coldwell Banker Bain had 411.

So… looks like brand new listings ..Redfin agents did slightly better. However, as the listing ages, ..the Redfin agents did progressively worse.

I’d be happy to share my spreadsheet that I have all this data in.

On a 30-year fixed loan, at the end of 5 years, I will have paid $69,356 in interest. …unfortunately …I still have 25 years left of payments before the loan is paid off. On Bankrate.com’s website, it allows you to add a monthly extra payment. I found that by adding $3000 extra per month, I’d have the loan paid off by the end of 5 years which in turn means I’ll “only” have paid $38,272 in interest.

So how does that compare to the interest only loans. My first thought was, if the interest rate is the same, the time period is the same and the amount is the same…the interest you pay should be the same as well. On an interest only loan that is recalculated monthly, you’d have to make $3770.49 in principle payments each month to pay it off by the end of 5 years. You’ll pay a total of $36,373 in interest. …all righty … pretty close to the fixed loan. So I feel fairly confident that my original assessment was correct. Doesn’t matter the loan, if the other variables are the same..you’ll be paying roughly the same amount of interest.

But…I got thinking. What if I paid more of the principle earlier in the 5 years? Or what if I paid less frequently, but just bigger payments? Here’s what I was surprised to find.

If I made quarterly payments of $11,500, I’d end up paying $35,864 in interest. If I made five huge payments of $46,000 each spread out randomly over the 5 years (I had 3 of the 5 payments within the first 2 years and the last 2 payments in the last year) I’ll have paid $34,749 in interest. If I made random sized monthly payments throughout the 5 years (payments ranging from $1000 to $25,000), I’ll end up paying $35,505 in interest. Hmmmmm…

The key factor in this that I’ve deduced is the time frame. If I paid off the loan in 2 years, the amount of interest I would have paid would be far less…but because all of these scenarios were constrained to 5 years…they all ended up to be essentially the same.

So what? Well, if you’re trying to decide between a fixed and an interest only loan and you want to pay off the loan early (…which is not what I would do), then this would tell you that it kinda doesn’t matter what you pick. You’ll end up paying roughly the same amount. So if you have a time-line to hit, doing it in equal payments vs big lump sums (like after you get a bonus check) ….won’t matter in the end. ..unless you want to bring the timeline in some.

Fortunately, I went to this one with a different purpose. I went in to try and learn about the latest trends and what’s hot. I left there a little bit more educated than when I walked in. Here’s what I learned.

Roofs. There seems to be a push for rubber roofs. A number of vendors were pitching rubber roofs. My first inclination was ..omg, ..rubber roof..what happens if your house is on fire ..it’s gonna burn for days! But of course, they apparently put some sort of fire inhibitor into the rubber so it doesn’t become a fuel for fire. Metal roofs are also getting fancy. Of course both are gonna cost more than a composition roof. The vendor that specializes in cedar shake of course says shake is still the best. I’m partial to composition, higher end composition. Cedar shake roofs require too much maintenance and cleaning for my taste and the orangy brown (or weathered gray look) doesn’t appeal to me. The comp roofs with definition (thickness) look sharp to me and they last a looong time.

Builders/Remodelers. There were a lot of them there. Only a few seemed actually interested in being there. Funny…one vendor was telling a guy who was looking to buy a house in Seattle to not use a real estate agent…’just do it yourself.’ Call a bunch of agents to get the info, but just do it yourself. Then turned to me suddenly and said…uh..you’re not a realtor are you? I just smiled. I don’t know what kind of advice that is. Using a buyer’s agent is free to the buyer. But anyway, ..I digress. So many to choose from, prices should be competitive.

Countertops. The current market wants to see granite. Granite granite granite. A lot of the granite counters are ones with big swirly designs. I’m really afraid the gaudy granite patterns are a fad and in a few years they’ll look as good as flower patterned wall-paper (no offense to those that like that kinda stuff, …just know that you’re in the minority). What I came away with is Quartz (aka, silestone, caesarstone, etc.) is cool. I’d take a hard look at quartz for my next counter remodel. The thing about granite is sealing it is a pain in the ass. Once sealed you can’t use certain things to clean it. Granite tile (which is what I have) can have two tiles next to each other that don’t quite match in color shade. I have one piece that’s significantly more black than a tile next to it. One advantage granite has over quartz is that you can apparently polish granite until it’s got a mirror shine. Quartz can’t get that shiny. But the stuff can get pretty shiny already. Definitely consider it when you do your kitchens remodel.

I got into a small debate (argument?) with one vendor. They’re called Aqueous Solutions and they were pitching a product called the CleanSpace Crawl Space Encapsulation System. To my understanding, they encapsulate your crawl space in a thick (20 mil) plastic. So I had to ask…why bother? Well, it’s to keep moisture from entering your house. Their flyer says it this way, “The earth in your dirt crawl space is the major source of moisture in your home! This moisture is carried up into your house from the natural upward air flow created from rising heat. CleanSpace is the answer.” I’d agree that moisture in your crawlspace is a bad thing, but as they were showing me what and how they did the encapsulating ..they said they’d cover up the support posts as well. I asked them, ..well doesn’t the wood need to breathe. The answer I got was …no, house shouldn’t breathe, you don’t want that. You want it sealed. That got me going. Told the lady that I totally disagreed. You need fresh air flowing through your house. Stale air bad anywhere. Why do window manufacturers build small vents into the windows and new homes have automated systems that create periodic air flow through the home? Cause you need to keep fresh air coming in. New homes are built so air tight already that you have to create the systems that allow air flow. So about now, a guy steps in and takes over for the lady. I step back and ask him what they actually do to encapsulate. The essentially cover the ground, posts and foundation walls and block off all the vents. …..uh..say that again? You block all the crawl space vents? Why do they have building codes on how many vents you need per linear feet? To make sure enough air and cross-ventilation gets into the crawl space. This company or this CleanSpace product is solving a problem IT creates. They want to prevent moisture from getting into the house by completey SEALING OFF the crawlspace so you have nothing but stale air in there. Moisture will NOT BE A PROBLEM if you have proper air flow. Totally bizarre and totally against what I believe and understand.

One place I found useful as an agent is NVL labs ..they test for hazardous materials like lead paint and asbestos. The funny part was they told a lady next to me who wants to get her popcorn ceiling tested. I asked her when her house was built …1991. Wasn’t asbestos use regulated and/or abandoned in most home uses like in the late 70’s? The vendor encouraged her to still get it tested…i guess better safe than sorry, but if I was buying that house…I wouldn’t have been too concerned about it at all.

Lots of high end appliances. I left with aching feet, a bag full of flyers and brochures that I’ll probably never look through and a sort of empty feeling like…wow..I just wasted 2 hrs. Again, …if you’re looking for something specific, …this would be a good chance to see a plethora of options at once. But for the casual visitor … hard to see the value in it.

So… let’s examine what happened in 2006. This is a follow-up and a more broader look at the market than my 2006 county reviews earlier. I got curious so I pulled sales data from 2000 to date. 2006 did see a noticeable drop-off from 2005, but just how good was 2005? Is it a fair comparison? How’d the market do in 2006 compared to ‘04 or ‘03? or earlier? How about condos? It’s said that condos lag behind single-family homes. Okay, ..how much does it lag behind?

I looked at data for King and Snohomish county and for single-family and condos separately for both counties. Keep in mind, this is data on homes only in the NWMLS…that means the data does not reflect any homes sold through FSBO (for sale by owner) or anything other means that bypass the NWMLS. Legend of column terms are at the bottom.

Let’s start with King County Single-Family homes. Since 2000, King County has experienced pretty darn good gains. 2005 was indeed a record year clocking in at 11.4% annual appreciation and a record volume of just under 32,000 units. In 2006 the volume dropped off a noticeable 13.5% from 2005, but compared to 2004 it was 11.2%. Okay..that’s still pretty big. Compare it to 2003, and the volume dropped off 4.1%. Compare it to 2002, it gained 16.2%!! But but but … NO buts. Volume in 2006 was healthy. It was in much better shape than it was in anytime between 2000 and 2002. Now look at the annual appreciation. So 2006 volume dropped off a lot …but the homes appreciated nearly 10% in 2006 which is good enough for 2nd best since 2000 (of course 2005 takes top honors there). I’m not going to offer 2007 predictions here…this is an analysis of how “bad”2006 was. Here’s the raw data:

King County - Single-Family Homes

Okay, so we see that the single-family homes have been doing awesome since beginning of 2003. Here’s how the King County condo market has done. First thing you’ll notice is a lot more volatility from quarter to quarter. However the take-away is the annual positive appreciation. All except 2001 which was marred by a huge drop-off in the 4th quarter that wiped out any gains the year saw. My best guess is that it was the aftermath of 9-11 …the single-family stats also show the largest single quarter drop that same time period as well. Condo sales volume has been steadily climbing since 2000 with a peak in 2005 and only falling off about 4% in 2006, but the big shocker is though volume fell off in ‘06, …the appreciation that was gained was an eye-popping 13.1% !! That’s higher than any year (in this chart) for single-family or condos in King County! Condos was king in 2006!!

King County - Condos

Onto Snohomish County…one of the alternatives to living in King County. Whereas King County closed out 2006 with a median single-family price of just about $440k, Snohomish County offered folks a median price of $357k. Note, the cumulative appreciation for Snohomish County vs King County here. Snohomish clocked in at 91.2% (since 2000) while King County did a handsome 79.4%. The cheaper alternative in this case has reaped larger rewards…and it’s done it with almost half of the volume King County did. So looks like …in hind-sight at least, that Snohomish County has been the better investment since 2000 …especially in 2005 when it hit a crazy 18% appreciation for the year.

Snohomish County - Single Family Homes

The Snohomish County condo market has performed respectably, but not quite at the same par as King County condos have. Doesn’t help that condos in King have outsold Snohomish about 4 to 1. Snohomish condos finally caught up to King County’s condos in terms of appreciation in 2006 with a 13.1% in King vs a 12.8% in Snohomish County. We see the same volatile trend for condos in Snohomish as we did in King County.

Snohomish County - Condos

Here’s a graph comparing the two county’s appreciation.

So was 2006 as bad as the media portrays it? Nah. It was definitely a down year compared to 2005, but it was still very strong. In some ways, it was even stronger than 2004! The media will continue doing what it does…presenting facts in an alarming way. I’ll still do my best to prove or disprove what’s being said. Hope you enjoyed the numbers.

-James

If you want to download the full excel spreadsheet of all this data, send me an email.

**Statistics generated by data owned by Northwest MLS**

Okay, say what? Negotiating has to be done in writing per real estate law? I didn’t believe it so I looked it up. Per RCW (revised code of washington) 62A.1-206 (statute of frauds law which says a purchase of property has to be in writing) it makes no mention that negotiating has to be done in writing, simply the contract for a sale of property is not enforceable unless in writing…so this other agent I talked to …I don’t know what he was talking about. We can talk numbers all day long verbally but the only thing that sticks is what goes down in ink. But I digress.

What I want to know is how has real estate negotiating come to the point where all we do is fax back and forth forms with certain things crossed out and changed. Is this real negotiating? I kinda envision negotiating where a lot more talking happens. One of the deals I just completed had a lot more of my kind of negotiating involved where certain terms of the purchase and sale were discussed and verbally agreed on before it was put on paper. Why doesn’t it happen more often? Usually …say I’m on the listing side… I’ll get a call from an agent that an offer is coming. I get the offer, present it to the seller, we make some changes, and send it back. Then they review it, make some changes and send it back. In one situation when I tried to circumvent all the back and forth and questioned why they were making some of the demands they were making, I got stonewalled…something like..that’s just what the buyer wants. Well ..that doesn’t help…maybe I have an alternative solution that would satisfy both sides, but since they didn’t want to talk about it …all we were doing was sending forms back and forth with numbers changing. How is that negotiating?

If this is indeed the case what people consider is negotiating, then what separates a good negotiator from a bad one? Anyone can change numbers and cross their fingers hoping the other side will take it. People who market themselves as an excellent negotiator … well..how is the excellence measured? Are they able to change numbers on a form better than most others? Or are they able to mold the other party into seeing things more their way and accepting terms that are beneficial to everyone?

The book I’m reading defines negotiating as “an exchange of information and ideas for the purpose of reaching a mutually accepted decision.” In real estate, the seller has certain needs and the buyer has certain needs. I would love to be able to sit down and hash out all the goals in person and see if we can agree on terms. Even if it’s just with the agent. It just doesn’t happen…and I’m not sure why. Actually, ..I’ve never attempted it and no one as attempted it with me….so I’m just assuming it doesn’t happen. I would love the opportunity.

On the other hand, maybe I’m totally off base and what we do as agents all the time is indeed what everyone considers negotiating. My sinus is so stuffed up right now I could be dreaming that I’m writing this and I wouldn’t know the difference. I would love to hear from agents that have been in the business from a long time ago. How was real estate purchase contracts negotiated back in the day …say 80’s or even earlier? Was there ever at time where the two sides just sat down and tried to hash it out? Hmm..I also just realized my whole opinion on this may change when I finish the book.

This first chart has figures for all single-family in Sammamish, 3+ bed, 2+ bath, 2250-3000 sqft, built in 1999 or 2000. One interesting thing to note. Annual volume of this configuration of home in 2003 through 2005 were very steady while 2006 saw a 27% drop in volume but 2006 also saw the highest appreciation in 3 years.

This second chart looks at all single-family homes in or around the Vintage community. Actually to be more precise, it’s all single-family homes within a 0.5 mile radius from Stacey’s house. Like the last set, annual volume from 2003 through 2005 remained fairly steady, but 2006 saw a 40% drop in volume, but prices still climbed almost 10%.

This third set looks at all single-family homes in Sammamish that are 2400-2600 sqft. All configurations and ages. Yet again we see the same trend in annual volume…this time 2006 saw a 39% drop from 2005…. So okay, ..we’ve seen this trend pop up in three different sets of data…so I took a look at annual volume for years prior to 2003. Annual volume for this size of home for 2002 was 114 units, 2001 was 82 units, and 2000 was 27 units. I have to check with the NWMLS to see how accurate their data is for these much earlier years. I had to pull these from their archived data…not sure if all the sales data are in there. But anyway…let’s assume it’s accurate. 2006’s volume was 68 units…which is closer to 2001 and 2000’s volumes. So..clearly … buyers are moving slower on purchases than they have been in many years…yet…they’re still paying more.

sooo…for the most part, …annual apprecation in all three sets were pretty good. (except 2004 in set #3). It’s quite amazing that we have an average cumulative apprecation among the three sets of 65.5% from the beginning of 2003. A lot of it coming from 2003, 2005 and 2006. Which is interesting since 2004 has been equated to being a part of the big boom (at least that’s how I’ve perceived it) in real estate. The data here would seem to show …that at least for a segment of homes in Sammamish, 2004 was a down year compared to the years surrounding it. In that case, 2004 was probably the prime year to buy if you bought in the last few years. Got any questions or comments? Post them!

Legend:
#Sold - number of units sold
Median $ - the median price of all the homes that sold in that quarter
Q% chg - Quarterly percent change, the change in price from one quarter to the next
cumul chg - The cumulative change in price from Q1 2003
Annual vol - number of units sold that year
Annual app - appreciation percentage from Q1 to Q4

**Statistics generated from data owned by Northwest Multiple Listing Service (NWMLS)**

Now I cannot speak for all agents out there, and I’m sure there are agents who do exactly as Gandel accuses, but I want to believe (call me naive) that the majority of agents out there remember their duties to their buyers and are working on the behalf of their buyers to try and find and help them buy the best house for them at the best price. Would you as the buyer feel cheated if the perfect house for you that you got at a screaming deal just so happened to also pay your agent more than the traditional commission? I kinda doubt it. If you would feel cheated, how would you feel if the perfect house for you that you got at a screaming deal paid your agent far less than the traditional commission? Your agent shouldn’t care too much either way. For me as an agent, the goal is to find you the right house, in the right location, for the right price…and be thorough. As in any business, do it well and do it right, the money will follow. If you don’t trust your agent to do this for you, …then find another agent. Having a trusting relationship with your agent is imperative!

Okay, in response to the three things that Gandel tells buyers to do.

1. Go it alone. yah..wrong. ! Today’s tech savvy buyers are …believe it or not…more technologically inclined than most agents. Buyers are and will look up listings they want to see and the agents job is becoming more and more helping the buyer sort them out and then guiding them through the whole process of buying a house. For most folks, it’s a daunting and scary process…a process of a whole bunch of unknowns and firsts. If the buyer wants to see a property that pays less than the norm, then that’s how the dice falls (to a point…more on this later). My job as your agent is to still do my job. Many listing agents would jump on the chance to represent the buyer as well so they could…as Gandel says… collect both sides of the commission. This …as cool as it sounds for the agent … does neither side of the transaction any justice. Usually to do this, the agent will have to get written permission from the seller and the buyer. In practice, I try to avoid these situations unless it works to the best interest of all parties. Gandel’s suggestion to ask for 3% off the final price cause “if you did the work; you deserve the rebate” makes me wonder where he gets his ideas from. If you are an unrepresented buyer trying to buy my listing, chances are extremely high that I will end up doing the work for both sides, so there’s slim chance I’ll simply negotiate down the sale price cause you are unrepresented. In reality, my first reaction would be to recommend the unrepresented agent to go get an agent. Don’t go at it alone.

2. Set the Fee. Bad Idea. This one is easy. Try it. You as the buyer could get screwed and have to pay your agent out of your own pocket. Look at it this way. Gandel wants me to set what my fee will be (percentage wise) and guarantee it for every house. Fine. Let’s take the average commission being paid for all the listings in the area. Assume it calculates out to be 2.75% We go look at a house that’s paying only 2.5%. Well, sorry mr. buyer, but you made me guarantee a 2.75% commission and that is what I will expect. Are you going to now make up the difference? The fee the buyer’s agent gets is really between the listing agent and the buyer’s agent. If you the buyer wants to know for each house, …ask your agent! Again…going back to this trust thing …there’s nothing wrong with asking what your agent is getting paid, but really, the focus should be on finding you, the buyer, the right house.

3 . Put it in dollars. Not sure how this is different than #2. Not sure how successful you’d be in trying to get this negotiated as well. Gandel shows his lack of understanding buyer agency when he claims that by setting a set dollar amount the buyer agent will have no incentive to show overpriced listings or discourage the buyer from negotiating the price down. If I’m finding you the right house at the right price …I should be showing you the overpriced houses ..cause it might be the right house and because it’s overpriced, we have a fair chance of negotiating it down to the right price. For instance, if we found the right house and it’s $20k overpriced according to my research, well we’ll obviously be trying to get it at the right price, otherwise I’m not doing my job. Besides, 3% of $20k is $600 bucks. The per transaction fees I have to pay are on upwards of that much. An agent is not going to turn you away from clearly the right house over $600 bucks. If they are … so sad. Go find an agent that will actually work for you.

Folks, keep in mind here. The agents don’t get a dime until your house is successfully closed. If you as the buyer get any inkling that your agent isn’t bleeding for you, then find someone else that will. There’s lots of agents. (Lynnwood has about 1100 licensed agents. I couldn’t count how many there were in Bellevue.) As for me, if you’re not happy, then I’m not happy and we keep looking till you are happy. It all goes back to trust. Gandel clearly doesn’t trust the buyer’s agent. Maybe he had a bad experience. There are thousands of agents and most take their job very seriously. It is how many folks, including myself, keep a roof over their head and provide for their families. Which is much too precious to risk doing a bad job. You gotta trust whom you work with. If you don’t, find someone that you can trust.

I looked at four categories of homes.

1. Homes 1500 to 2000 sqft
2. Homes 2001 to 2500 sqft
3. Homes 2501 to 3000 sqft
4. Homes 3001 to 3500 sqft

I did not take into consideration the number of bedrooms or bathrooms, nor did I include the age of the homes. The goal was to get a general sense of how the market did from a county wide perspective.

Here’s how King County did.

As you can see, the smaller homes category appreciated the most…finishing the year at 13.8% appreciation. Strangely enough, the next segment up, the 2001-2500 sqft category finished the lowest at 6.9% appreciation. Still pretty good, but almost half of what the smaller category did. To round out the categories,…2501-3000 appreciated at 8.1% and 3001-3500 came in at an even 8%.
This link has the raw data I pulled broken out by quarter. It’s got both King and Snohomish County data on it.
2006 County Review

Here’s how to read that document:
“#Sold” is the actual number of homes sold in that particular category.
“Price” is the average sold price of all the homes in that particular category.
“DOM” is the average Days on Market of all the homes in that particular category. Basically, how long was the house listed for before it sold (more technically…before it went Pending).
“% +/-” is the percent increase or decrease in the Avg Sold price from the previous quarter.

If you have any questions or you’re curious about some other stats, let me know and I’ll see what I can do!

- James

Statistics not compiled or published by NWMLS.