Erik's Rants and Resources

A First Time Buyer's Class without the Sales Pitch!

Erik Wecks (Windermere Real Estate/The Stellar Group) — Tue, 13 Feb 2007 13:57:21 -0600

Have you ever wished that you could get straight up advise about purchasing a home?

Washington state offers just such a class and taking the class meets one requirement for getting a home loan from the Washington State House Key program. That program offers borrowers who have not owned a home in the last three years a thirty year fixed interest rate that is often about a point lower than the regular market.

Find out more about the house key program and check their current rates here!

The best news for you! Lynn Posselt from Eagle Home Mortgage and I are not allowed to sell our services in the class. You can request more information about us, and we want to assist you in getting the perfect home but we are not allowed to solicit your business while teaching.

That means that the quality of our work has to be demonstrated by the quality of our class! Come check us out! It is a great way to learn about home buying without feeling like you are being pushed or obligated to anyone.

Classes will be held on February 24th and March 24th, 2007. For more information or to sign up contact Lynn Posselt at (360)573-4112 or Erik Wecks at (360)624-3674.

Erik Wecks

Providing the information you need to make great decisions

http://erikwecks.com

Your home can sell in a Buyer’s market! Part three--Quality

Erik Wecks (Windermere Real Estate/The Stellar Group) — Fri, 09 Feb 2007 15:28:19 -0600

I think many sellers find the advice they get regarding preparing their home for sale confusing. Some agents will tell you to just leave your home as it is, and some seem to tell you that you must put in a completely new kitchen if you have any hope at all of selling your home. Well I hope that I am not here to add to the confusion. My hope here is to give you as a seller a framework from which you can make your own decisions about how to improve the positive feedback on your showings.

If you have read the first two articles in this series you might have some idea of what I am about to say. (Article 1, Article 2) In the first article, I argued that the only reliable way to price your home is to compare it to other similar homes which have already closed, not to homes currently on the market. In the second article I argued that location remained an important feature of your property in a buyer's market but that it may not allow you to demand the previous premium that your neighborhood commanded during the seller's market. I encouraged sellers to consider location along with other factors as loss leaders which are used to make your home a better value than other similar homes on the market. In a buyer's market issues of quality may also be considered loss leaders.

Let me start by defining my term. When I am writing about issues of quality I am talking about your homes cleanliness, general maintenance and upkeep, as well as the value or perceived value of the finishes in the home. Besides location these are probably the two most important factors in any showing which give the client either a good feeling or a bad feeling about your home. While staging can make a difference and is another good tool to have in your toolkit, it is really the cleanness, the perceived care, and the value of the finishes for the price which give your home an edge when comparing it to the competition.

Let's take each of these three items one at a time. The first, cleanliness is at once the most obvious and the most inconsistent of my three areas of quality. I have three children. My oldest is seven and my youngest is under a year. I understand how difficult it can be for some of my clients to keep up on their homes and I work hard not to expect of them more than I expect of myself when it comes to cleanliness. Yet, it is just a fact, that for most of my buyer clients a clean home makes them more comfortable. Probably the most important thing you can do to sell your home is to thoroughly clean it. Why does this matter so much? To be honest I am not sure. The cleanliness of a home has very little to do with its maintenance. It can be perfectly clean but falling down and that is by far better for perceived value than if it is dirty and perfectly maintained. I think that it has much to do with lifestyle. The person who is perceived as messy is thought incapable of doing maintenance. The person who is clean is perceived as doing a good job on home maintenance. It also may have to do with the person coming into the home imagining what it will be like to live in the home. That is harder when the home is dirty and overly cluttered.

The perceived lifestyle of the person who is selling the home also is a good guide to the maintenance projects which should be considered. I once sold a home which continually got feedback as worn and "showing rough." The home was owned by a single mom who needed to get out from under a huge mortgage that her husband had taken out weeks before he died on a fishing trip. (It was a good reminder to me to make sure that I had enough life insurance to take care of my children. Are you covered?) I couldn't figure out why we kept getting the "rough showing" feedback. Yes it was a home with four children, and it wasn't always picked up perfectly, but it was clean and the walls had been freshly painted thanks to some neighbors. Yet I felt it too. It looked like a worn home which had been freshly painted. One day while standing in the kitchen I finally perceived what had been bothering me unconsciously. The trim was beaten up and scuffed. Four kids had taken their toll. I gave the home owner my tape gun for painting and suggested that she take a brush and touch up the trim as she had time. Wow! I was surprised just how much of a difference a little touch up painting could make. It was great! The whole home sparkled and we didn't get any more feedback that the home looked worn. So once you have taken care of the cleaning, it is time to move to the maintenance and, in particular, those perception issues which allow a buyer to feel comfortable about the quality of the home. Remember, when a buyer walks through your home they are not only looking at how they will fit their furniture. They are also looking at how much it will cost and how much time it will take to paint and put in new carpet. The more you can do upfront to address these issues the more the potential buyer's will relax when they look at your home.

So far, did we really change actual real quality of the home? Not significantly, but we can sure changed buyer's perceptions of a home and that can make thousands of dollars worth of difference. I have argued that this is because buyers make inferences about themselves living in that home and about the quality of the home based on the perceived lifestyle of the current owner. Now the question becomes whether or not it is worth the money to do major upgrades to a home just before you sell. In most cases I would say no. Many remodeling projects take time before you actually get back the full value of the project from the home. On the other hand, there are two reasons I could think of which might make these upgrades worth it. First, I have talked in other places about seeing some upgrades as loss leaders to make your home stand out in a flooded market. The same goes here for upgrades. You may choose to upgrade your choice of flooring because it will make your home stand out from the competition. That is a great reason to do an upgrade or two in a buyer's market. Just don't get carried away. The second reason to do an upgrade might be that your home nearly reaches another tier of quality but is just missing that one upgrade which would take it over the top. Maybe it might need that granite counter to go with the upgraded cabinets. Or it might support a quality crown molding. Again ever so careful here, most of the time you will spend too much money on these upgrades and end up dropping back to the loss leader idea for these finishes in a buyer's market. That may not be a bad way to look at upgrades but it can sure be disappointing when you were hoping to either make money on the investment or at least make dollar for dollar on that new countertop.

So to sum up, when considering how to prepare your home for sale, your goal is to give the potential buyer the sense that your home has been properly maintained. Cleaning is the most important thing you can do here. Secondly, take care of those maintenance issues which directly affect the perceptions of the seller as they walk through a home, dirty carpets, walls and trim should be high on the list. Finally, while upgrades right before selling do have their place they can often hurt you financially in the end becoming loss leaders used to make a home stand out from the crowd rather than dollar for dollar investments.

Any questions?

Feel free to email me at: erikwecks@windermere.com

http://erikwecks.com/

There goes our first builder! More to follow?

Erik Wecks (Windermere Real Estate/The Stellar Group) — Fri, 26 Jan 2007 18:49:32 -0600

I received an interesting call yesterday from a sales representative for a local builder. He explained that the builder would not be able to close on a home that my client was purchasing by the original closing date. He explained that the seller did not have the money to purchase the needed air conditioning unit and that until they could purchase the air conditioning unit they would not be able to complete the transaction. He said that he thought that the investor behind the company would keep them solvent but he would know more tomorrow.

Well I guess it didn't come as a surprise. I had been watching the company closely and I had put my clients on notice that it might happen. There were nearly $60,000 in mechanics leans on our initial title report. Just about every agent I know in Clark County Washington had been waiting for that to happen to some builder. The home market over $400,000 had been dramatically over built in the last years of the boom market and there are way too many homes sitting vacant. Worse then that, some of the builders still seem to keep churning out these homes even though sales in that price range are completely flat.

The good news for my clients is that the home is basically finished and so there should be no problem for either the builder or the investor to finish off the property and get this thing closed. The not so good news this afternoon is that the title company is no longer issuing title policies for this builder because they have had exposure based upon mechanics leans filed after closing. So as of this point my clients will have to make a decision on whether or not they sign an extension to see if this company can provide clean title after the original closing date. My clients are not in a rush because they have a home they are renting currently so we don't have any real pressures on our side that keep us from waiting. The question becomes how long will we wait, and will we have to sign a new purchase and sales agreement if the investor takes over the property?

So Clark County Washington buyers and agents, you are on notice.... What we as agents thought might happen is beginning to happen, and with the continued slow market you will need to be careful and make sure that your builders are still able ot keep their financial promises. Don't panic yet but dot all your "I"s and cross all your "T"s and if you look at it another way the builders are giving some great concessions. Just consider this one of the places you have to be careful in a buyer's market.

Caveat Emptor!

Erik Wecks

REALTOR, ABR

http://erikwecks.com/

Two website creation tools I really like.

Erik Wecks (Windermere Real Estate/The Stellar Group) — Mon, 22 Jan 2007 00:46:36 -0600

I don't yet know HTML which means I don't write code. However, I am very picky about my web presence. Which means that I do try and create my own websites etc. Last week I found two tools which I thought were really useful and reasonably priced.

The first is GIMP 2.0 which is a photo manipulation program intended to rival Adobe's Photoshop. The best part is that it is free. Considering the photoship runs in the hundreds of dollars I think that this is a great deal. Good photo manipulation software is an absolute must for any agent trying to improve their sales in a down market. We have all seen the listings with the bad photos where the lighting was wrong etc. Photo manipulation software can help correct some of these problems for your web photos and give prospective buyers a better look at your listing.

The second program is a flash animation program which cost me $70 dollars, which is an inexpensive price considering Dream Weaver the industry standard also runs in the hundreds of dollars. This program called KoolMoves allows you to create both flash based websites and website components such as movies. I really have enjoyed getting to know this program and I have found its interface pretty intuitive. The big advantage I found here over other freeware software is that it has a tremendously greater amount of flexibilty. Many freeware programs aproach creating flash based web "stuff" as a series of templates which your text or banner or website must fit within. Although KoolMoves does contain the same kind of template based system, it has so many templates and you can change the indivdual features of these templates to create nearly and infinite number of possibilities for the look movement and feel of what ever web component you are creating. If you go to the KoolMoves site look at the gallery of flash objects and websites which were created with the program. It is worth checking out.

I am sure that with a little practice I will be able to use both KoolMoves and GIMP to create online content that will make both my listings and my promotional materials stand out from the crowd.... I am really looking forward to using them.

Erik Wecks

http://erikwecks.com/

PS. The Colts are going to destroy the Bears.... It is finally Paton Manning's year

HEY! HEY! HO! HO! Relo Co.s have got to go!

Erik Wecks (Windermere Real Estate/The Stellar Group) — Wed, 17 Jan 2007 17:34:20 -0600

This fall I received a listing from a floor call. The client was being relocated, jumped the gun and got an agent before the relocation company could go through the process of giving him one of their vetted agents. So I thought that I had the usual 35% fee to pay. I could handle that.

But wait...Then I found out that his relocation company had a reciprocal agreement with my companies' relocation arm and that I would owe them a fee.

But wait...Then the sellers took a buyout and my own company's relo arm raised their fee to 50% of the remaining 65%.

So lets do the math...I am now down to 32.5% of the original listing side commission....before I pay any brokerage fees on the transaction.

You can bet I didn't pay for any advertising after that came down. They could fire me if they wanted and I didn't fill out any of their obnoxious weekly updates either.

Can you believe the arrogance? Between the two companies they are taking nearly 70% of my pay and they want me to happily waste my time filling out paperwork every week on what I have done to market their property. Just say NO!

So I am sitting here thinking that I am the only one who is getting bloodied in this transaction. Then because of the soft market we get an offer in which is lower than the buyout price.

The relo company decides to take it...on the condition that the corporation behind the relocation coughs up the difference. Remember it wasn't the corporation who decided what to pay the owner in the buyout. That came from the relocation company. Then when the market doesn't support the buyout they have the arrogance to go back and demand money from their client who has already signed up under a contract with them for a period of years which cannot have been cheap to begin with!!! It was at that point that the light bulb went on. It wasn't just me who was ripped off. There must be some very unhappy HR directors and personnel out there who don't like relo-companies either.

So how does all of this greasing of wheels and outright theft work? As soon as I got a call from the first relo company they really emphasized that the get smart "cone of silence" was to descend upon my head and that in no way was the client to know that I was getting ripped off on my commission. (I obeyed...but I didn't like it.) Remember that was the client who found me!

Erik's Business Theory Number One: Any business which has to require silence about its business model is ripe for a new business model.

Rainers I have had enough. Between all of us there must be some better business models which better serve the corporations, the agents and most importantly the clients!

No more cone of silence!

Here is my weak idea to replace relocation companies. There are two things the corporations get out of this whole deal. First they get a single phone number (they can call relo and move someone anywhere in the country) and the instant buyout when necessary. For these two items they pay money-and I would bet it is a whole lot of money.

I don't think that national brokerages are the solution here. If my own brokerage treated me this way, then I have no doubt that it is "industry standard." No if we want our commissions back we will have to figure out a way to take them back on corporation at at time.

Erik's Business Theory Number Two: Anything which is justified as being industry standard means that it is bad for the employee/independent contractor and the manager feels guilty about doing it so they cannot defend it directly.

What if that single number was your number? What if individual agents made a business model out of collecting a few corporations and being that number. They call you and you are the one who arranges the referral or takes the lead yourself. You get the money and charge a more reasonable referral fee than the thirty-five percent. (Or will you let your geed take over and make your business model ripe for a shake up?)

Then there is the matter of the buyout. That is where my plan gets weak. Individual agents probably don't have a pool of resources big enough to buy homes for corporations and hold them until they sell. Maybe the wealthiest of us could swing one or two but what happens when a whole wing of a company moves out of town? What would we do then...likely disappoint the corporation and send them back into the hands of the relo companies.

Here is my thought. What if the corporation placed a pool of money in escrow which it used to purchase the homes but place them in either the title company's name or in the agent's name? The best thing would be for the HR director to be a signer for the company then the company could hold the properties until they sold. The corporation receives any profits on the sale and takes the risk for the losses. After all, my experience this fall taught me that they are already taking the risk for the losses and probably footing the bill for my commission as well.

I think this idea is progress but is also so full of holes that it makes Swiss cheese look solid. It seems to me there is lots of room for lawyers and fraud here but it is the best that I have come up with so far.

Someone else out there must have a better idea than mine but at least it is something to bouce off of.

No more cone of silence!

I am also going to post a question on LinkedIn and see if we can get some HR types to weigh in. (I will update this post when I have the question up and running so you can follow it there as well.) I want to know what they want as well so that we can make sure this is a win/win.

Here is a link for the conversation on LinkedIn

Erik Wecks

REALTOR, ABR

http://erikwecks.com/

Your Home Can Sell in a Buyer's Market: Part Two--Location.

Erik Wecks (Windermere Real Estate/The Stellar Group) — Wed, 17 Jan 2007 01:55:38 -0600

In my first post on selling your home in a buyer's market I examined three different pricing strategies I have been taught over my career as a REALTOR®. I argued that the one reliable strategy for pricing a home is to find comparable homes which have already sold and base your pricing upon these comps. If you didn't get a chance to see that article you can find it here.

In this post I have two points which I want to make in relationship to location and selling your home in a Buyer's market. First, your improvements must be in line with your neighborhood if you expect to get full value for them. Second, your neighborhood may not earn you extra money in a buyer's market but it still adds value to your property.

Let me begin writing about improvements with an obvious example. A granite kitchen in my neighborhood just wouldn't make sense. I live in a neighborhood of starter homes which almost universally have Formica on their counters. If I put granite on mine, I cannot expect to get full value for it.

However, I don't think that is the end of the story when you consider improvements and neighborhood, especially in a buyer's market. I think that sometimes you need to look at improvements as a loss leader. For instance if I were to sell my home in my neighborhood, I would be tempted to put in the cheapest laminate possible in my kitchen. It needs a new floor and laminate is cheap, cheap, cheap. However, if I have an understanding of how location and upgrades work in a buyers market I wouldn't make that mistake. First time buyers have many, many homes to choose from. It is the home with the upgrades that catches a buyer's eye. Since I am in a starter home neighborhood I have to stand out from the Formica and Laminate competition down the street. One great way to do that is with say a real wood floor in my kitchen or since my brother cuts granite for a living and I can get it cheap I might put in that granite counter after all. I may not be getting "full price" for the upgrades I have put in. However, I will be getting a sale while the Formica and laminate homes down the street are sitting vacant.

Don't get me wrong. I actually mean upgrades not incentives. I am not a big fan of incentives. Save the plasma TVs for yourself. At least in the Vancouver market a buyer would rather see an upgraded lighting package or living room floor than a plasma TV. It's all about perceived value. If your home is perceived to be the best value on the market for the price it will sell. Plasma TVs can't turn a fixer into a turn key home. Sellers aren't biting on the plasma TVs they want value instead.

My second point on location in a buyer's market has to do with premiums for neighborhoods and it is similar to the previous point I just made about upgrades. During a buyer's market neighborhood should be seen as a loss leader to create a sale not as a premium to increase value. During a seller's market certain neighborhoods can seem to demand any price they want. I remember two summers ago entering a new listing in a highly desirable neighborhood next to Washington State University Vancouver and asking the party who arrived just after us to wait outside as we had waited while another REALTOR® had gone in ahead of us. By the time we came out 10 minutes later there were seven groups waiting on the steps to come in. Now that is neighborhood appeal! I ended up writing one of three offers on that home that evening, and I presented the offer personally to the seller and their REALTOR® the next day. We didn't get that home, and my buyer's moved on to a neighborhood that had a little less appeal but also a little less demand. We got them the next home that we wrote on.

However, we don't have that market any more, and neighborhood appeal doesn't seem to show up as much in price. In fact when prices are equal many buyers are choosing to go with an upgraded home rather than that top of the line neighborhood. When two neighborhoods are right next to each other and one offers kitchen upgrades and the other offers prestige but no upgrades for the same price, buyers in this market are gravitating to the actual upgrades instead of the prestige.

So what does that mean for our prestigious neighborhoods? Are they no longer prestigious? Absolutely not. However, their prestige is measured in time on the market not in the price of the home. Again from the buyer's perspective prestige isn't necessarily as valuable as upgrades. However, if two homes have equal fixtures and equal pricing then the neighborhood may make one a better value than another. So as a seller remember that your location in a prestigious neighborhood does give you an advantage in a buyer's market it is just that advantage is going to be reflected in time on market not necessarily in price.

Next time I would like to talk about the issue of perceived quality in a buyer's market. Thanks for your time and interest. If you have any questions feel free to call me or email me.

Erik Wecks

REALTOR®, ABR

http://erikwecks.com/

erikweck@windermere.com

360-624-3674

The one thing needed for a successful referral based business

Erik Wecks (Windermere Real Estate/The Stellar Group) — Tue, 16 Jan 2007 21:27:50 -0600

[Originally posted the week of 01/06/07- 01/13/07. Apparently there is a 10 post limit if you want full credit. I am reposting this on for this week because I worked hard on it and want the points. (I won't worry about the one for my new daughter.) Sorry if this seems a little lazy and I won't make the same mistake in the future. Always something new to learn here at AR. I am sure that I will get the hang of it. --Erik]

A wise man once said, "A wise servant will rule over a disgraceful son, and will share the inheritance as one of the brothers." I take from this ancient saying that someone who is a good servant-that is, someone who watches out for the interests of those they serve-will be valued more highly than a son who has not cared about the interests of his family.

Sometimes when I listen to people teach seminars about getting referrals, I have to laugh to myself. Being consumer-centric (as Ardell puts it) often doesn't seem to be part of their three step, thirty-three touch, marketing magic, career coaching system to making bucket loads of money.

Talk about treating people well is often replaced with scripts and market research about the best words to use to get your desired results. I have heard all about what the focus groups say and what kind of picture to have on your business card and web site. I have even heard big long speeches about how my particular personality type is unable to negotiate well. The speaker's ex-husband had my same "personality profile" and the three of us in the room with that profile got to hear all about how that profile was unreasonable. Her speech was very passive aggressive...something mentioned in the speakers profile...hmmmm. ;-)

The worst I ever heard was a seminar teacher recommend that you join a church simply and purely to milk it for leads. Similar beliefs were not necessary but helpful. It was a kick to look around the room. You could tell the people of faith and the people with integrity because every one of their mouths were on the floor. The others were madly writing down the idea. I think he lost half his class that day and never recovered for the rest of the seminar.

I say that all the seminar training and coaching in the world is a waste without the right core in the apple. Bad core, bad apple. Good core, good apple. Consumer-centric servanthood is the heart of every successful referral based business. You just have to treat people well and care about their interests along side your own. That cannot be taught in three steps or thirty two touches because it is a matter of character and while character can be taught it is a difficult and humbling experience to learn. But, if the saying is true, in the end your bucket might have more money than the guy next to you who had all the training but didn't understand the heart of the matter.

Erik Wecks

http://erikwecks.com

2 Comments on One Reason Every Referral Based Real Estate System Can Fail

Amen brother. You are right on here.

Boittom line, even if you don't have more money in your bucket, you will have done the right thing for the right reasons and that's what really counts.

01/13/2007

by Marty Van Diest

Edit

Delete

Marty,

You are right that doing the right thing in the end is more valuable. However, I think you have to be careful what you define as the right thing. I am the sole provider for a family of five and I work to feed my childern. That means that I exist as a REALTOR in order to make a profit. My clients then are not even the primary people I serve in Real Estate, I exist to serve my childern and make money for them. During my first year in the business, I spent a long time thinkng about how I was going to do that without becoming consumed by greed. Let me give you a quick story and then I will conclude by giving you the mission statement which captures that idea.

Since we do so much stuff in our industry before we get paid I think that some of the public doesn't understand or respect our need for profit. For instance, I get many people who assume that my company reimburses me for milage on my vehicle and that I get paid a salary plus commission for my work. These clients do not respect my time at all. When I was first in the business I met a great couple who I liked a lot. She was a professor and he taught high school science. They were avid mountain climbers and had some money. They really wanted a view of Mt. Hood in our area. Well they didn't quite have enough money to get their view, plus the land, plus the absolutely perfect home they wanted. They were by far the pickiest buyers I had ever met. Worse yet they were based out of Wisconsin. They would call up say every few months and say they were interested in seeing homes. They would say that they were going to be in town for a week. They would come out and look for maybe a day turn down eveything I showed them and then spend the rest of the week hiking. Then when they got home their criteria would change slightly but never become financially realistic. They were not making the compromises necessary to get a home in Clark County, Washington.

As a new REALTOR I made a mistake and didn't explain to them that they were not profitable for me. I would certainly have had that conversation today. That conversation might have reshaped how they thought about my time and saved the relationship. However, I did do something which I think was equally valuable for me as a new agent. I fired the buyer because if I were to continue to serve them I would not have been helping my children.

I actually fired them mid-way through my second year in the business but thinking about them and thinking about these issues led to the mission statement below. It was the mission statement which gave me the courage to fire them.

"I hold a real estate license in order to create opportunities to assist individuals in achieving their goals as buyers and sellers of real estate. I always seek to have my customer's financial interests at heart. As an agent working to serve the total real estate needs of my clients I expect to earn a reasonable wage for my professional services."

Today I would have handling things differently and had a conversation about how I need to make money before I fired them. Making money is one vital part of my business and I make no apologies for it. However finding a way to do that without being consumed by greed is the trick. For me the mission statement above has been a really good thinking tool for how to do that.

Erik

Does anyone actually believe that the internet will take us down or is it really just greed?

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sun, 14 Jan 2007 02:37:06 -0600

I guess I am confused? I have seen a whole bunch of conversation on AR recently about how there are agents and brokers out there who believe that the end of the world is coming because of the information super highway. I guess I just haven't met them and I am wondering who they are?

OK that isn't quite true. I still know of markets who have yet to join a computer based MLS system. These tend to be small coastal markets in our area and yes there the brokers are frightened by losing control of the book of listings and making it public. But.... isn't it really only these guys who are crying about the internet? Are there really any reasonable agents who can make an intelligent argument that the internet will replace us one day? I guess I must be blind but I cannot see it happening. I guess in the end I think that no one is actually afraid the the internet will put them out of business. I think that these petty brokers and agents who talk that way are actually afraid of having to do legitimate real estat work to get paid. It is really about greed and not the internet.

Which brings me to my next question. If there aren't any real concerns, I wonder why we are wasting so much time on AR and in other venues fighting windmills? Greedy brokers and agents are just part of the business. I guess I don't see why I should argue with them anyways because the problem isn't the internet for them it is the greed. Why waste my breath?

Erik

REALTOR, ABR

http://erikwecks.com

My new Stephanie!

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sat, 13 Jan 2007 10:52:29 -0600

I have not yet bragged on my new daughter on this site. Here she is. Stephanie Ruth Wecks my third child and third girl was born on December 10. She and mama are doing well. Although we are all a little sleepy in my household these days.

I have a funny theory about why 18th century doctors started removing men from the birthing process. If you look back at the history of Patriarchy. The really nasty stuff, the legal discrimination against women ironically comes from the enlightenment. (That is one that historians have been grappling with for a while.--We are all equal as long as we are white and male. How come that made sense in the 18th century?) So my humorous theory about why guys weren't allowed to see their women give birth is that if the patriarchal doctors allowed them to watch their women give birth the myth of male superiority would vanish. Men would know that many many women are mentally stronger than they are and can endure pain which would have caused most men to curl up in a little ball and whine for their mother. How could you deny them the vote? Men had to go!

My wife Jaylene is my hero and she is stronger than me. I have not doubts about that!

Erik

Where can you look out your window and see an erupting volcano? My House!

Erik Wecks (Windermere Real Estate/The Stellar Group) — Fri, 12 Jan 2007 19:46:37 -0600

Here is the view from my front porch this afternoon. That is Mt. St. Helens of the famous 1980 eruption. Did you know that it has been continuously erupting since 2004. (It hasn't made any spectacular plumes recently for the national media to pick up upon. That may be why they haven't noticed.)

I really want to have the view from the house across the street where the living room window looks striaght out on the Mountain. The view was more spectacular in March of 2005 when the mountain gave us a bit of a show. Here is the veiw from the Cascades Volcano Observatory in east Vancouver.

I love waking up on a summer morning and seeing the mountain silhouetted by the rising sun. It can be really beautiful when there is a steam plume coming off the growing lava dome. Just a quick primer on cascade eruptions. They can be extemely violent like 1980. The lava that comes out of the volcano can be extremely explosive. However, this eruption so far has had non-explosive lava and thus it is coming out onto the floor of the crater in the volcano and building up a lava dome which could eventually fill up the hole left by the 1980 eruption. (Cascade volcanos often put out solid lava which doesn't flow like Hawaiian volcanos. Think toothpaste not milk)

The scientists say that the new dome could be visible above the south rim (from my house) within about 10 years. Now I am looking forward to seeing that. There is a volcano in Siberia which has completely rebuilt itself after an eruption similar to Mt. St. Helens in 1980. It only took about 40 years. If it sounds like a long time then you need to come and see the volcano up close. The eruption in 1980 was the largest recorded landslide in human history. One quarter of the moutain slide away in about thirty seconds. Here is a computer enhanced video made from pictures taken on May 18, 1980. (requires Real Player)

If you haven't been to the Johnston Ridge observatory you need to come next summer. The observatory is named after a scientist killed in the explosion and sits only five miles from the mouth of the volcano. It is a beautiful and amazing place. There are some great places to hike around the volcano and it has even been reopened for climbing. Here is the link to the forest service Mt. St. Helens National Volcanic Monument which runs the actual sites around the volcano. While you are there check out the volcano cam. It gives you updated views every five minutes from Johnston Ridge. (While creating the link to the volcano cam I happened to catch the moutain right at dusk. You could see the glow off the new lava dome. Sometimes it is really fun to check it after dark so you can see the glow)

Here is a picture of my family and I at Johnston Ridge, labor day weekend this year. It really is a once in a lifetime thing to see an erupting volcano. I strongly encourage you to go and check it out.

Erik Wecks

REALTOR, ABR

Http://erikwecks.com

The REALTORS® code of ethics adds value for my clients

Erik Wecks (Windermere Real Estate/The Stellar Group) — Thu, 11 Jan 2007 11:19:41 -0600

There has been much talk on AR recently about how REALTORS® do not have a lock on morality. I fully agree that REAlTORS® are not the only ethical agents in the real estate business. Just read one of the posts by Ardell and you will quickly understand that you do not need to be a member of the NAR to care about your clients and to want to do the right thing by them. However, I think this debate about who owns morality is slightly off topic. The REALTOR'S® national code of ethics makes no claim to be the only source of ethical behavior in real estate. Real estate transactions are often national and run across state lines. In most instances the REALTOR® is only licensed in one of those states and doesn't know the ins and the outs of the law in another state. However it is the code of ethics which allows the agent a common language when dealing with problems across state lines. That adds value for the consumer. Let me give you an example.

A year ago I had some of my favorite clients ever. They are good friends to this day. They were purchasing a home in Washington and needed the proceeds from her home in Virginia in order to close the deal.

Over dinner one night my client let me know that her agent in Virginia said that there was some kind of trouble. So I asked to take a look at the contract again and the new addenda. Well after examining the documents I got worried. My client had received a contingent offer on her home and the first buyer had been bumped for another offer. However, my client did not have any properly executed paperwork showing the executed bump.

The next morning I started making some phone calls. It very quickly became clear that this was a real mess:

Red flag 1: My client's listing agent had been in the business for less than a year. (Please don't misunderstand; I am not one who always says experience is better. Often the hungry agent is the best agent and that can be the new agent. However in this case you will see why experience became a red flag when combined with other circumstances.)

Red flag 2: The agent for buyer #1 was claiming that he had removed the contingency, and so was entitled to own the home. However, the contract which I had read stated that he had to remove it by a certain date and in a certain way. The buyer's agent did not follow these guidelines but had clearly tried to remove the contingency in a different manner.

Red flag 3: My client's agent did not property execute the bump. The bump notice was given verbally and on an email instead of on the proper legal contracts.

Super Red Flag 4: Offer #2 came from in within the listing office

Super Duper Red Flag 5: It was the broker in the listing office which presented Offer #2. This broker was also the friend who got the listing agent into the business.

Super Duper Duper Red Flag 6: The second offer wasn't as financially beneficial to my client.

My client ended up with two legitimate claims on the home in Virginia. I ended up in my west coast office at 5:30 AM for a couple of mornings helping my clients talk to lawyers on the east coast. I have to confess that my favorite moment in the whole deal was hearing the owner of the listing company start by defending his broker (as an owner should). He then got really quiet when I told him what had happened and that my client was talking to a very prominent real estate attorney in town. He quickly got involved once he heard that the broker had presented the second offer. I really like moving the world for the sake of serving the consumer. It gives me a satisfaction like nothing else.

In the end we got the thing fixed in time to close on the house here, and I was the hero for my clients. So where does the code of ethics come in? Along the way I was able to use the Code of Ethics to explain to the listing agent why he and his broker were in such hot water and how it was in their best interests to figure it out. Once the listing agent saw what a mess he had made, the poor guy didn't sleep for a week and he and I worked hard to to serve our client.

After all of this, I don't think in the end there was a complaint filed with the local board of REALTORS®. I don't know, I think my clients were so tired at the end of the transaction that they didn't follow through. They just wanted to enjoy their new home here in Washington.

Why didn't I file a complaint? First, the listing agent was only guilty of any breech in the code because of his broker's advice and it seemed really petty to file a complaint against someone who was only following his broker. As soon as I used the code to explain the problems he created, he got it and worked very hard for his client. The upshot of this transaction was that he was thinking of leaving real estate. I actually thought that he would make a great agent because he cared and wanted to do the right thing, and I told him so. He was clearly bright and had a good head for contracts. He was just in the wrong office. I encouraged him to find an office where he could actually get some training.

Why didn't I file a complaint against the broker? I heard he was probably going to lose his job. The owner was not happy at all. Since the proper remedies were already being handed out there was no need to go through with a complaint. He was also "fined" $3,000 because he ended up paying for the loss in value when Buyer #2 got the house. (I guess his commission check wasn't as big as he hoped. When you add in losing your job and not sleeping at night, is dual agency really worth it? But that is another topic.)

Besides, to me the value provided for the consumer through the code of ethics isn't only in your ability to pursue punishment after the fact, it is also in the power it has to educate and guide behavior before and during the transaction. Once I was able to explain to the listing agent that they were on the wrong side of the code of ethics the light bulb went on, the demeanor changed and things got better. That is value for the client, a value I could not provide them unless the agent on the other end of the transaction was a REALTOR®. If we understand things correctly, we put ourselves under the code in order to provide a consumer-centric way of doing business across state lines. It takes a national professional organization like the NAR to provide this service to the public. I believe that the consumer friendly ways of doing business will always rise to the top and I know that the NAR and the national code of ethics it provides will be there.

Erik Wecks

REALTOR®, ABR

http://erikwecks.com/

Providing the information you need to make great decisions

Your Home Can Sell in a Buyers Market! Part 1--Pricing

Erik Wecks (Windermere Real Estate/The Stellar Group) — Wed, 10 Jan 2007 08:55:42 -0600

There are all sorts of methods for pricing a home and they all work during a boom market. But not now.....Now it is time to find out which methods for pricing actually attract buyers, which actually attract listings and which are just plain funny. I have heard at least three different ways to price homes and I like one of them because it works. It has never failed me in selling a home or piece of land when the seller has been willing to take my advice about price.

Method Number 1: Pricing for a Dark Age

One popular method listing agents use to generate a price for your home is to price your home based upon where your current active competition has priced their homes. I first heard of this method in a class taught by a very old school agent who was retired but still teaching the state required real estate class for new agents. He argued that since home shopping was done by comparing homes a buyer would purchase a home which is priced just below its competition.

As I have thought about it, that method of home pricing would probably have worked before Al Gore "invented" the internet (lol). So what my teacher was saying would have made sense when he was at the height of his practice. Back in the "dark ages" buyers didn't necessarily have access to the prices of every home available on the market. They only knew the prices of the homes which they had seen. It was the agent who had the book and controlled the flow of information to the client. This wasn't a good or bad kind of situation it was just a reality--like life before copiers. Real estate offices and publications were the places buyers went to get prices. The internet has destroyed this practice and made it seem Byzantine. Today's internet savvy buyer has a whole range of tools to do price comparisons without having to see homes. In doing so, the internet has introduced a whole new level of rationality in our pricing and made pricing based upon comparisons of on market homes obsolete.

Let me explain that last statement. The pricing of homes on currently the market is not necessarily rational or based on what the market will bear. Think about this, the more over priced a home the more likely it will be on market when you go to price your home. If you only use on market comparables you are likely to overprice your own listing. Before the advent of the internet, niche markets worked because buyers didn't have access to all the listings on the market. They told the listing agent what they wanted to see and the listing agent took them to houses which matched their criteria. However, no buyer is set on every feature of a particular niche market and the internet allows buyers to get information on what they would pay if they were willing to move away from their current niche and into one which has more rational pricing.

So how does irrational pricing take place in the real world if you price homes based upon what is currently on the market? Let's look at an example. Let's say that in a given market there are 5 homes of 2000 square feet which have four bedrooms two and one half baths and a three car garage. They all have the same or similar value in fixtures. They are truly comparable homes. They are all priced right around $375,000, some a few thousand higher and some a few thousand lower. According to the active comparison method of pricing, it would seem to make sense for a highly motivated seller to price a home at say $369,000 just below the competition. If the comparison method worked the home should sell to the first buyer who needed what these homes offered.

However, what the seller and listing agent do not know, is that a price of $369,000 is still $10,000 over market. Each of the homes on the market in our example is over priced by at least $10,000 compared to other homes on the market. This means that these homes are sitting on the market while homes in other niches are selling instead. In fact in our fictional example two of these homes have been on the market for over six months and the rest have an average of three months on the market. Buyers who have the information provided by the internet are making the necessary compromises and finding something else which is priced appropriately.

Of course, if the seller had listed a week earlier they might have gotten the pricing right because there were two other comparable homes on the market which were priced at $359,000. In that case, the motivated seller might have priced at $355,000. However, those homes both sold quickly because they were priced correctly compared to the other parts of the market. Because they sold quickly, they are now pending rather than active on the market. In fact, although there were at the time 7 comparable homes on the market, one of the homes which sold last week in our example actually received two offers after being on the market for less than a month. (I have seen this several times this year. Homes which are priced correctly receive multiple offers while many homes sit on the market for months without any showings.)

You might argue that my theory makes great sense in the world of theory but that I still haven't given you an example from the real world. Let me do so from my market. During the recent boom years Prune Hill in Camas Washington was the flavor of the month for Clark County. There was high demand for these homes and the often received a significant premium perhaps 5% to 10% above their competition in Vancouver or other areas. As the market has cooled over the last year, so has the demand for Prune Hill. With more homes on the market many buyers are finding that they can get the homes they want in Vancouver without having to pay the premium of Prune Hill.

(The Home I sold on Prune Hill)

Correspondingly, Prune Hill has seen one of the bigger declines in home prices over the last year. In order to sell homes on Prune Hill you have had to bring your prices in line with the wider market. Many sellers on Prune Hill have not understood this and so have sat on the market without getting a sale because they are still trying to maintain the premium they received during the boom. If you use the active comparison method to price your home on Prune Hill you could easily end up with a price that is well above market.

Method Number 2: Voodoo Home Selling

The second method of home pricing was explained to me during a seminar I took in the fall of 2005. This one I really don't like. I think that it panders to sellers and completely ignores economics. The theory goes something like this. When you price a home you need to consider how many homes are selling in that price range and target your home to a reasonable price range which is near the value of your home but has the most available buyers. This theory argues that you might actually have to increase the price of your home in order to get showings and sell your property. (I had to actually work hard to keep my jaw from falling to the floor when I heard this.)

What a comforting thought for a seller! They actually are not getting showings and offers because they are priced too low, and if they go up in price and align themselves better with their neighborhood or a higher percentage of the buyers etc. they will sell their home faster. The theory goes that the right buyers are not seeing the home because it is priced below them. Again this might make sense in the dark ages before the internet. Agents might have assumed that the home was a dump and so they might not have shown the home. However!!! You cannot expect me to believe that with the advent of the internet that a buyer who can only afford Formica is going to miss an under-priced home which offers granite when it comes up for them on Windermere.com? If your home isn't selling there is only one direction for your price to go--down.

Method Number 3: Sold Comparables

I believe the most accurate method for pricing a home is to find comparable homes which have already sold. The only way to guarantee a rational price for a seller's home is to find out what buyer's have actually paid for that home. Only once you have done that should you consider how your active competition has priced its homes and if necessary adjust your price slightly in order to compensate for your competition.

Let me give you an example from this fall. The summer was a little spooky in the Vancouver Washington real estate market. There are over 2000 real estate agents registered with the Clark County Association of REALTORS. However, there were only 700 recorded MLS transactions in July and just a few more in August. That means that many of us were starving. (The fall has been better.) At the time we had nearly 6 months of inventory on our market and any home which wanted to sell had to stand out from the crowd. In September I received a listing from a relocation company. (That's another subject! Grrr!) Anyway, I looked at the pricing and based upon the sold comps I felt that an appropriate price would be $239,000. The home also offered a true cherry hardwood floor which was a significant upgrade for the neighborhood. Because both the seller and the relocation company were motivated to get rid of the home I had considered dropping the price below where the sold comps had come in, in order to give incentive to the buyers. However, I decided that I would price the home right at $239,000 and depend on the home's cleanliness and great flooring to provide the needed incentive. It worked very well and I had a sale within a month while I know that other comparable homes at the time had hardly a showing.

(This is a picture of the home I sold this fall.)

Again there is only one way to get a reliable price. You must work from comparable homes which have already sold. Homes which are still on the market are there for a reason. They are too expensive in their current location and at their current quality to generate a sale. Any other argument is more about mollifying an angry seller and not about generating a sale.

Of course what this article has not talked about is those two important words hidden in the last paragraph-Location and Quality. But those are a topic for a second and third post. For now, remember homes do sell in a buyer's market! If you are willing to price it based upon sold comps, yours can be one of them. Questions? Feel free to email me or give me a call.

Don't Panic! It isn't the Storm of the Century! Its just a PDX/Vancouver Thing

Erik Wecks (Windermere Real Estate/The Stellar Group) — Tue, 09 Jan 2007 12:18:16 -0600

Portland and Vancouver actually don't have any weather. Being west coast cities we have very little drama in our weather because we have the biggest weather cushon in the world directly to the West of us, namely the Pacific Ocean. We never see hurricanes, Noreasters or Tordados. With steady water temperatures of around 50 degrees all winter long the North Pacific gives us really mild and gentle ups and downs in our weather. Because of this it is actually very difficult to pile up more than an inch of snow in downtown Vancouver.

However, if you were to listen to our news media you would think that the threat of snow this evening was the end of the world. It is the local joke around town about the turf war among the networks for the coveted Sivan overpass when there is a flake of snow in the air. I cannot tell you how many times I have sat down to watch the evening news and heard "Well there isn't anything happening here right now but this misty rain is expected to turn to snow any moment now."

When there is a flake on the ground the news media whip the metro area into a frenzy. During the last ice storm they went live 24 hrs a day for about three days. You would have thought that Katrina had just landed in Portland. It is absolutely rediculous. But...we love it! The ratings for those shows are super high and you bet the media will do it again and if they are smart they are charging Les Schwuab a huge premium for their commercials during their storm team coverage because they have some of the highest ratings of the year in our market. So why all the weather hype in Portland and Vancouver? I think it goes right back to what I said at the beginning Portland doesn't have any drama in its weather so the media and the viewers who tune in very large numbers have become drama queens when it comes to the weather. We don't really have anything to complain about so we make something to complain about.

Now don't get me wrong I am a bit of a weather geek myself and I really like Mark Nelson's blog on the Fox news site. It is the epicenter of weather geekdom in Portland. However, it isn't necessarily the actual drama which makes weather in Portland interesting to so many of us. It is the difficulty predicting what is going to actually happen. First of all you have the fact that there are not any weather stations out in the Pacific Ocean giving us an acurate picture of what is coming that means that our forcasters start off somewhat blind and dependent on models instead of real data. Secondly, the Columbia River cuts a deep gorge through the middle of the Cascades and gives us a wierd pattern which even Seattle doesn't have. Often in the winter there is a cold dry high pressure system in eastern Washington which a wet warm low off the coast. That means that predicting our weather is not only a matter of working blind but also includes understanding just how much wind will come through the gorge at any given moment, how cold that wind will be, how far it will travel once it leaves the gorge and whether or not all the friction of that wind will actually warm our tempurature or cool it. That makes Portland weather fun and keeps up a lively conversation on Mark's blog. Before the snow event like the one expected this evening I have seen upwards of 700 posts on a single entry. If you like weather science it all makes for very fun reading.

If you are traveling to the Portland/Vancouver area and you just want a good forcast you can catch Mark's forcast here. It will help you cut through all the hype and just give you what you need, the best possible forcast for Portland and Vancouver. Just remember we don't really have any weather, no matter what our media tells you.

How a 7 foot Sturgeon has taught me about Slow Markets

Erik Wecks (Windermere Real Estate/The Stellar Group) — Mon, 08 Jan 2007 14:49:41 -0600

This picture was taken last May of 2005 during a Sturgeon fishing trip on the lower Columbia. My client and I had a rather slow day with just a few shakers (undersized fish) until this rod went straight down. For the next twenty minutes it was shear chaos as the guide, his father, my client and myself all did an elaborate dance around the boat while this oversized fish fought like crazy. The guide used the boat to run the fish down twice as it nearly spooled us (used all the line on the reel). When the adrenaline wore off we had successfully released our seven foot fish, broken the fishing rod and cracked the guide's ribs. Yes, that is right, the fish decided it didn't want its picture taken, even though we followed protocol and left it in the water, so with a flick of its tail it slammed the guide into the side of the boat and cracked two of his ribs. Final Score: Fish 2, Fisherman 00. It remains my favorite fishing story to date.

I think the same part of me which loves fishing makes me a good Realtor. When the run is on it doesn't take any skill to catch fish, and the last few years in real estate have definitely been like a record run of choice fish. But times have changed. Our market changed from a strong sellers market to a more balanced market during the fall and winter of 2006 and became a real buyers opportunity in the summer and fall. The signs of change are everywhere. Since Last spring there has been a dramatic increase in the number of listings on the market. In the month of January alone our inventory moved from 3.3 months to 5.4 months of available housing and by fall we were looking at 7 plus months of inventory on the market. That means that at our current pace it would take over seven months to sell every listing. Compare that to last summer when it would have taken just under two months and you can see that a buyer has a whole lot more power today than yesterday. On top of that, many of the major builders have reduced their prices. Last spring I remember saying "Oh no!" when I witnessed a lottery in a subdivision where fewer buyers showed up than the number of lots that came available. Over the year we have also seen a slow trickle of agents leaving the business. Certainly, the national predictions of the end of the world have not come to pass. However, one thing is for certain: we won't be returning to our record runs any time soon. Now it's time to sort out the fisherman from those who were merely riding the wave.

The biggest key to being a successful fisherman is time on the river. The same holds true in the real estate business. You have to put in your hours before you close a sale. Yet I think there is another important skill both fisherman and Realtors share. They both must be experts in the fine art of patience. Any fisherman who goes to the river and only finds happiness when they are catching a fish will soon lose patience with the sport and move on to "better" things. Yet any fisherman who says its not about catching fish is just a plain liar. The same holds true for me in Real Estate. If I didn't make money I wouldn't do the job and yet, if I only found joy in my work when I was making money, there would be no way to endure the dry spells which are part of the job. The greatest satisfaction in my work comes from people, and it is the relationships I have a chance to build which get me through the times when the market is slow.

Perhaps this doesn't make a lot of sense to those of you in the public who don't understand how my business works. I am paid on a commission only basis. That means I don't make any money when I don't sell homes. So for me, as the sole income for my family, a market downturn can be nerve-wracking. If I allow that reality to control me there is no way I will get up in the morning and go to work. Not that I am perfect. There are days.... However, when I focus each day on helping people and not on whether or not I am going to get paid for my work today, I find great satisfaction in what I do. In this way my job is just like the fisherman who throws his or her bait in the water one more time to catch the big one. For both of us, this is an act of willed patience.

My Clients Gave me a Salvadore Dali!

Erik Wecks (Windermere Real Estate/The Stellar Group) — Mon, 08 Jan 2007 14:28:40 -0600

This picture hangs above my desk at work and bears the signature of Salvadore Dali, the great surrealist painter from the 20th century. It was given to me by a client as a closing gift. At the time I thought it was an outrageous gift. I now know that my clients have a wonderful sense of humor. You see it hangs above my desk because it is practically worthless. By the end of his life Dali would sign his name to any piece of paper which was put in front of him. Not only that, but many of the original plates for his lithographs were circulating as well, which allowed con-artists to make forged lithographs signed by Salvadore Dali, created with his original plates. Because of the prevalence of these forgeries his lithographs have little if any market value.

I have to confess that I didn't really enjoy this picture when I first started looking at it. It seemed harsh and crass but it really has grown on me over time. I see it as a warning. A cautionary tale of what we can become as we age. If my guess is right I think that the piece dates from the early 1970s, or at least the plates do. when Dahli would have been aware of his own aging. The "old man" in the picture has long since lost any physical appeal and yet he continues to reach out. He is incredibly vulnerable. He is naked. His organs are on the outside of his body. Yet he still drools and has a look of desire on his face. He has many grasping hands which all reach out toward the unseen object of desire.

I am not sure what the object of desire is for all of you but since I am at work when I look at this lithograph, I take it as a reminder to not make success in my job the main value I place on my existence. I see this painting as the visual representation of what Arthur Miller wrote about in "The Death of Salesman." It is a great reminder to me to go home in the evening and not to take it all too seriously.

The problem with judging success based on my career is that I might be consumed by my desire for my career. As Arthur Miller points out this can leave us "salesmen" tremendously vulnerable and insecure and yet still grasping for that next success. I hope that I can approach aging with more dignity and perspective than Willy Loman (Miller's salesman). In order to do that I have to be able to know when to go home at night and when to be with my children. The painting reminds me when to do just that.

Why "The Couv" is One of the Coolest places in the State!

Erik Wecks (Windermere Real Estate/The Stellar Group) — Mon, 08 Jan 2007 13:07:11 -0600

Talking with some Portlanders you would think that the Columbia River is a hundred miles wide. They act as if Vancouver and Clark County are on a separate planet from Portland. When I moved across the river in 2001 I think that I might have agreed with them. It did seem like a different world. For one thing there was a definitely a more blue collar feel to Vancouver than Portland and Vancouver can be very suburban in its outlook and development. However, Clark County has always been more than a just a bedroom community for Portland and since 2001 Vancouver has really come into its own. Today it stands on its own two feet as a great sister city to its larger neighbor Portland.

Esther Short Park

At the heart and soul of this great city is Esther Short Park. The park has always been the hub of downtown and Royce Pollard our mayor has worked diligently to change its reputation as a hang out for transients and methamphetamine dealers. The park is now surrounded on three sides by living quarters, two condominium complexes and some really cool apartments. On the fourth side is the new Hilton hotel. The addition of the Hilton with its conference space and great restaurant made an instantaneous difference in the feel of the park. I remember eating dinner in a restaurant which faced the park on a Wednesday night two weeks after the hotel opened and commenting to Jaylene about the number of people on the street. The residences haven't hurt either. Now on an August night (when there isn't a concert) the park is full of families and children at play. The dealers and transients have moved on to other places.

The Farmers Market

On Saturday mornings the park is packed with people for the local farmers market. One of the most successful farmers markets in the metro area, it is rivaled only by the Portland Saturday Market and the farmers market in the Portland park blocks. Beyond the veggies and flowers the Farmers Market has also become a popular campaign stop for local politicians. It is a great place to get face time with local politicians and find out about their views before you see their names on a ballot. If you go to the farmers market. First look for the booth that is selling the eight dollar crab omelet. Just make sure that you are hungry or bring someone to share it with because it is gargantuan. Secondly make sure that you stop by and see Michael and Missy at the Millenium Farms booth. He has some really great produce and in the spring he is the only place to get your vegetable starts. See the pictures here

Uptown

One of the common complaints leveled against Vancouver is that it doesn't have the cool neighborhoods of Portland. In some senses this is a fair complaint. The farther east you go in Vancouver the more suburban it can feel, but if you think that tract homes and soulless suburbia are all that Vancouver has to offer you are sadly mistaken. One of my favorite areas in Vancouver is the uptown neighborhood. Uptown runs along Main St. from approximately McLoughlin Blvd to Fourth Plain. Here there are great little shops and places to eat. One of my families favorite hang outs has been Ice Cream Renaissance where you can get great home made ice cream and keep the price under ten dollars for four of us. Just down from Renaissance are three of my very favorite businesses in all of Vancouver. First there is the best bakery around at Main St. Bakery. Their apple rhubarb gallettes are to die for and their ciabatta and other breads area being featured at restaurants all over town. Just across the street is "Mon Ami." This little café serves Stumptown coffee and crepes. Many are traditionally European and others have a distinctive northwest style. Last week they offered a buckwheat crepe with smoked salmon in it. (I highly recommend the southwest chicken crepe.) I am finding that Mon Ami makes a great place to work and meet people from the community. I am looking forward to making Mon Ami one of my local hang outs. Finally there is Moe's. Moe's is the only place to get a hair cut. Don't let the semi-industrial punk exterior fool you. Carrie and her staff know hair. They do a great job for my whole family. Jaylene has especially appreciated finding someone who does a good job without over charging you. The best news is that a haircut will only run you 17 bucks, 10 dollars if you want a buzz cut.

More....

I could go on. I haven't even mentioned the community centers with their swimming pools, community gardens and great classes. Of course there are the schools which are so much better than those in Portland. How about the traffic? The average commute time of those living in Vancouver is two minutes shorter than in Portland. Or what about our great places to eat? Have you ever been to Beaches? And as of this fall the Vancouver area has two four year institutions, Clark College and Washington State University. Both of these have great extension courses for those of us with a passion for learning but other careers. In the five years I have lived here I have fallen in love with this town. It is really a great place to be.

Curious? Know someone who might want to live here but isn't sure that they will be able to find all the coolness of their next door neighbor PDX? Have them give me a call. I would be happy to take them on a driving tour of our great city.

Serving your clients best interests can sometimes seem callous and rude...

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sun, 07 Jan 2007 19:26:41 -0600

Sometimes I wonder if I am looking at my job incorrectly. There are many agents who see it in a more collegial way than I do. Let me be clear. I strongly believe in politeness and professionalism during negotiations and I don't like it when agents try to mislead or imply things in order to smoke more money out of my clients. However, I also believe that the buyer and seller we serve on opposite sides of a transaction have fundamentally different interests. That makes our work together as listing agent and selling agent in some way competitive and adversarial. Its like being lawyers on different sides of a case. We can have respect for the other person but we are only doing our job when we serve our own clients interests.

The other day, I made a phone call to an agent on a home which my client was considering purchasing. I thought a phone call to the listing agent would help us make our decision. She called back and left a message on my phone saying that she already had an offer in and that we could get in a backup posiiton. I was curious how far along this offer was so I called back. The listing agent explained that she did not have a signed around deal but that she was in position to have one later in the day and that the two parties had reached "verbal agreement." Again, I was encouraged to put in a back up offer.

As I hung up the phone I thought how differently I would have handled that situation and how differently I have handled that situation in the past. My job as a listing agent is to serve the financial interests of the seller. The best financial interest for the seller would be to encourage multiple offers not to discourage them even if I have a "verbal agreement" on terms with a prospective buyer.

In the past I have had an offer come in for my seller which my client reluctantly agreed to accept. We had "verbal agreement" but it was $25,000 below asking price. We heard that the buyer was going to sign the agreement the next day. (Here I fault the buyer's agent because it was in the summer of 2005, the market was super hot and we had already had six offers come in on the property.) Later that afternoon I received a call from another agent saying they wanted to write an offer on the property. I told them that they needed to get the offer to me that evening. They did get me the offer and at that point I called the first agent and informed them that a full price offer had come in. He was furious, suspecting that I had pulled a fast one and was trying to smoke $25,000 out of his client. He was also very angry because the two sides had verbally agreed to terms but I was still entertaining other offers. I proceded to get the second offer signed by my client and go to my office and remove our first offer and then submit the signed around second offer. (I spent the next day catalogueing times and dates using fax cover sheets to reconstruct the series of events because the agents broker had called me that morning. Then I called his broker back and read him the timeline. The broker said "oh" and that was the end of that.)

The law is very clear in Washington state. There is no such thing as a verbal contract in real estate. Anything that isn't in writing doesn't count and I am responsible to serve my clients financial interests. I believe that means that I must encourage another offer even if I have "verbal agreement" on a first one. While I a may choose to negotiate terms over the phone they don't mean anything until they are signed on paper. In fact I bet that I could be sued in court if a lawyer found out that I discouraged another offer based on a verbal agreement to terms which hadn't been put on paper. That isn't a situation I want to be in. Therefore I will put everything in writing and I will continue to seek offers for my seller until I have a signed around deal on paper.

Am I missing something here? Are there other points of view that I haven't thought about? I would love to hear from you.

First time buyers are back in Vancouver!

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sun, 07 Jan 2007 16:17:26 -0600

Well after sitting on the sidelines all summer the first time buyers are back in the Vancouver Washington real estate market. Suddenly they have been coming out of the woodwork this fall. I have seen several multiple offer situations in the starter home market and the best priced starter homes seem to be disappearing quite quickly. Sometimes they are disappearing within a month of being on the market. Considering that the average time on market right now in our are is over 70 days, this is quite fast. Beyond this, both the lenders I know and the other agents I know who work with first time buyers are saying that they are quite busy.

What does this mean for prospective buyers? Well some of the leverage they had with sellers early in the fall seems to be disappearing this winter. I recently put in an offer with a builder who was offering townhomes at a starter home price and they refused to negotiate away from their asking price. When I investigated how many units they were closing a month it was easy to see why. They were closing between five and six a month during the fall. While that isn't a super fast pace it is fast enough for a savvy builder to turn down an offer unless the buyer is willing to pay the asking price.

There are still many many starter homes on the market in Vancovuer Washington and you certainly can still negotiate with sellers. Certainly when you are considering repairs you can expect most sellers to be accomidating. However, some of the great deals and desperation of the early fall seems to be going away.

For you sellers who have a starter home. If you are not getting showings you really need to look at price. There are certainly buyers available for a home which is a good value but there are not enough of them yet to justify a premium price for a home.

Erik

Washington State First Time Buyers Class in Vancouver

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sun, 07 Jan 2007 00:34:20 -0600

Washington State offers qualified first time home buyers a great deal on their mortgage. Their current rates are between 5.375 and 5.875 on a 30 year fixed mortgage. They offer zero down home assistance programs allowing you to get into a home for right around 1000 dollars.

In order to qualify for these rates you need to take a first time buyers class. It will be held on January 20th from 8 AM to 1 PM.

If you are interested in learning more about the house key program you can go to http://www.wshfc.org/buyers/key.htm and to sign up for the class call me. (Erik Wecks - Windermere Real Estate/Stellar Group) at 360-624-3674.

Erik Wecks
Providing the information you need to make great decisions
http://erikwecks.com/

Over the Hedge!

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sat, 06 Jan 2007 13:56:39 -0600

Has anyone seen the movie Over the Hedge?

I know they do not say that the "bad girl" Glady$$$ is a real estate agent but they don't have to.

Here is the evidence:

1. Yes she spells her name on her black escalade with dollar signs. (Three of them)

2. She wears a black pants suit throughout the whole movie

3. She is president of the HOA in "Rancho Camelot." The fictional suburb in the movie

4. She has very big hair

5. She can be overheard informing a neighbor that their grass is 1/2 inch longer than the CCandRs allow.

6. She worries that a "dead" possum might hurt property values in the neighborhood.

7. And the final and most obvious giveaway...She makes a delivery driver wear booties when he comes into her home.

So am I offended? Absolutely not! I think she is hilarious and worth a laugh. (After all I have met her before.) I highly recommend you see this movie just for her character. I think our industry ought to stop responding defensively to every perceived "attack" (e.g. Zillo) and start responding with a sense of confidence and humor. No one can beat our expertise. So what do we have to be defensive about? Besides being able to laugh at yourself makes one a happy person.

Listing Agents Can't Serve Buyer's Well...Get a Buyer's Agent.

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sat, 06 Jan 2007 11:44:45 -0600

One very common mistake made by home buyers is finding their agent by making sign calls. The sign in front of a listing has the name and number of the Listing Agent. These agents are under a contractual obligation to serve the interests of the Seller.

Calling them puts you about twenty years in the past when it comes to real estate practice in the state of Washington. In the bad old days before buyers agency, the agent who showed a buyer a home worked for the seller. This changed in the mid 1980s and now buyers agents are legally bound to serve the financial interests of a buyer in a home purchase.

So...if you are driving around looking at signs and you call the listing agent you are hurting your own interests in a transaction. The best they can do for you is be a dual agent. That is they can represent both sides in this purchase. However, when an agent represents both sides in a purchase they really represent neither side. Under Washington State law they are bound to avoid harming either parties interest in the transaction. This means that neither party could receive advice or guidence from the agent which might harm the other parties intersts. They become a glorified currier taking documents from one party to the other but unable to help either side make a good decision. (I can't really see why many seller's agree to this either. They need the advice about market conditions and the features of an individual offer as much as a buyer does.)

So what do you do as a buyer? You need to interview agents just like you would as a seller. As a seller you want an agent who gives you the confidence to know that you will be well taken care of after you sign a listing agreement. The same holds true for a buyers agent. You want to pick the agent that gives you confidence that they can do more than drive you around and look at the pretty counter tops in the kitchen. Pick the agent who shows that they understand negotiations and care about their responsibilities under the law. They are the ones who will serve you well.

Follow the money....Or Not

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sat, 06 Jan 2007 11:30:14 -0600

Before the mid 1980s one could simply follow the money to understand how the relationship between real estate agents and their clients worked in the state of Washington. Both the seller's agent and they buyer's agent were paid from the proceeds of a real estate sale. In fact, there was actually no such thing as a buyer's agent. Since the seller was paying the fees here, the "buyer's agent" was actually known as a sub-agent of the seller. The sub-agent was paid by the seller for having found a buyer for the property. This led to a lopsided situation when it came time to negotiate the purchase of the home. On one side you had the seller and the two real estate agents and on the other side of the table all by themselves were the buyers. This led to some really damaging situations for home buyers. Often they would have revealed much of their negotiating position to the sub-agent during the process of looking at homes. This information would then be used against them as the sub-agent suddenly turned out to work for the seller when it came time for negotiations.

RCW 18.86 was written by the Washington state legislature in cooperation with the Washington realtors in order to correct this inequality. While it may have been "natural" for the "buyer's agent" to work for the seller because they got paid by the seller it certainly wasn't good for the real estate industry in the state of Washington. In every transaction the buyer felt potential animosity and alienation from the real estate agent who was showing them properties.

RCW 18.86 sets up a legal foundation for buyer's agency in Washington. If you are interested in a fuller explanation of my responsibilities under RCW 18.86 click here. For our purposes the important change which this new law of agency made came in creating new legal responsibilities for buyer's agents. They were now responsible to fight for their clients financial interests in a transaction and they could be held accountable if they violated this responsibility. Now when a buyer sat down at the negotiating table, the table was theoretically even.

However, still run into clients who point out that no matter what the law says it still runs against a real estate agent's own financial self-interests to work for a buyer's best interests in a transaction. I often find that these clients have difficulty trusting me when I am working for them as a buyer's agent and I won't deny that what they say has some merit but it is a very short sighted perspective which does not take into account the realities of the real estate industry.

A successful real estate practice depends upon referrals. I get up to 75 percent of my transactions per year from referrals. I cannot get referrals from clients who feel that I did not serve their interests in a transaction. That means that if I were to consistently abuse my legal responsibilities and not do my best to serve the financial interests of my clients I would be cutting out the source of seventy-five percent of my future business. Secondly, if a buyer could prove that I intentionally damaged their financial interests in order to pad my commission I would be liable for damages in court and could easily loose my license to practice real estate in Washington.

Finally let's do the math. How much influence do I really have on the price of a sale and how does that influence my commission? Let's look at some numbers on a pretty nice house say 1,000,000 dollars. (By the way I have yet to sell a million dollar home so that these numbers are way above the temptation I actually face in day to day business.) In my market a buyer's agent commission on a million dollar home will likely be 2.25 percent. So in this case I am looking at a gross commission of 22,500 dollars. Assuming that I haven't yet paid all of my company dues for the year, 40 percent of that will go to the company and I will pay another 5 percent in taxes and fees. So I am actually going to net about 55 percent of that 22,500. That works out to $12,375 which is a really great pay day by any standards. However, how much influence do I really have to boost that commission? In the Vancouver and Clark County real estate market most clients start their offers about 10 to 20 percent below what they are truly willing to pay. So if I were to give away the buyer's bargaining position or subtly influence the negotiation toward a higher selling price I would end up padding my commission somewhere between 1,200 to 2,400 bucks. That is way less than the value of a single referral from a million dollar buyer. On a more reasonable $300,000 home I would end up padding my commission by a whopping 400 to 800 dollars. That would be a really shortsighted way of doing business.

So, for all of you who continue to argue that I cannot truly serve as a buyer's agent because I am paid by the seller, rest easy my friends. My financial interests are much better served by truly helping you, rather than by ripping you off for a couple of hundred dollars. Not only would it land me in legal hot water but it just doesn't make financial sense.

Commissions should be negotiated outside of earnest money agreements

Erik Wecks (Windermere Real Estate/The Stellar Group) — Sat, 06 Jan 2007 11:25:01 -0600

In the Vancouver Washington market probably about 50 percent of earnest money agreements ask for a seller to contribute to the buyers closing costs. Often an astute seller will recognize that they are paying commission on these costs and ask that commission be paid on the selling price minus these costs. This has always seem reasonable to me and as a buyers agent I have never seen fit to object when asked to agree to this. (usually it means a reduction of something like 20 dollars in my net commission.)

However too many agents in my market are requesting that this change be made by adding the language as an addendum to the earnest money agreement. In my opinion this is a real mistake and reveals an agents lack of understanding of the legal boundaries of the earnest money agreement. Buyer's agents are not party to the earnest money agreement. The earnest money agreement is an agreement between a potential buyer and the seller of a property. Buyer's agents don't have to sign this agreement (except on the LBP addendum--by federal law).

If a seller and a listing agent want to reduce the sales price on which commission is paid, it cannot be done on an earnest money agreement. It must be done on a contract separate from the EM agreement. In my opinion you should send the buyer's agent a separate note to sign stating the new sales price used for commission. When a listing agents asks for this change as part of the EM agreement it lacks professionalism and worse reveals to the potential buyers that the listing agent does not understand EM agreements.