If you are selling real estate in Sequim or Port Angeles, are you aware of the dramatic changes taking place in real estate brokerage?  The way  real estate is being sold is changing.  Do you know that across the United States traditional full commission brokers are struggling to survive (many are going out of business) and new models with flat rate or discount commissions are springing up everywhere?  Why?  First, consumers are tired of high commissions and second, according to consumers, they are tired of so-called “full service” brokers who are actually “full commission” brokers rather than “full service” brokers.  This is not coming from me, it’s coming from consumers all over the country.

Inman News, a major national real estate news service, has been conducting surveys on the issues of commissions and the evolving nature of the real estate industry.  Real estate professionals and consumers all over the country have been involved in this survey, and here is what they are saying. (The quotes are from the Inman summary.)

1. The traditional brokerage model ends up costing home sellers too much money because there are too many people involved (selling side broker and his agent, buying side broker and his agent, and assistants, secretaries, etc.).  “Too many parties are involved in the real estate value chain — directly or indirectly earning sales commissions, in some cases disguised in fees. This adds expense to the transaction, discourages sales in a low-inflation housing market and creates confusion for the consumer.”  See Inman Summary.
2. The effective use of technology (most agents and brokers are not technology savvy) can eliminate massive overhead that translates to lower commissions for consumers.  “Technology adoption allows for agents and brokers to conduct business virtually, and can eliminate the expense of office space. Online home-shopping tools can help consumers narrow the focus of their home searches even before contacting an agent.”
3. The traditional brokerage model is broken.  I’ve been writing about this for a couple of years now from several perspectives, all of which are focused on the best interests of the consumer, not the Realtor.  “The current broker model is in disrepair and should not be fostered by broker inaction and industry enablers.”
4. The big brick and mortar real estate brokerage is top heavy and consumers are just not willing to pay for all of that with huge commissions, especially when it all boils down to one professional agent who knows how to sell a home.  Consumers don’t hire a building.  They don’t hire a huge staff.  They hire one agent, and they expect that one agent to market and sell their home effectively.  Technology and the tools available to consumers has reduced the value of large buildings and expensive conference rooms.  “Brokers who run “body” shops — warehousing agents, no matter the skill level, in massive offices — must slim down their agent pools to the best and brightest. This is for survival’s sake. Those brokers who provide true value in their services will have an easy time recruiting quality.”
5. For a decade top producers around the country have been saying that print advertising is not as effective as it once was to sell houses.  Over 80% of all home buyers start their search on the Internet, and print advertising has gotten ridiculously expensive and less effective at the same time.  Advertising open houses in the newspapers is not effective either.  Open houses don’t sell houses (only 1% to 2% of homes are sold at open houses).  Open houses are lead gathering opportunities for the listing agent, and do not benefit the home seller.  “Wasteful advertising spending also contributes to the cost of the transaction and could be minimized by improved measurement around successful online ad investments. Agents should be encouraged to adopt social media and mobile technologies into their businesses to communicate more instantly and transparently with consumers.”

A logical question for any Sequim or Port Angeles home owner who wants to sell their home would be, “Okay, Chuck, so what are you?  A full commission broker or a discount broker?”  I am a full service broker who does NOT charge a full commission.  I could talk for an hour on this topic.  My business model puts clients at the center of everything, and I use technology more than any other broker in Sequim or Port Angeles, but the big point is I only use the most effective means to market a property.  I don’t waste money or time on ineffective tools just to try to impress clients.  How’s that for blunt and honest?  If you are interested in details, email me, and I’ll be glad to share everything openly and honestly.

Chuck Marunde, J.D.
Broker/Realtor
Sequim & Port Angeles Real Estate, LLC
Real Estate Website:  SequimPortAngeles.com
Real Estate Blog:  SequimRealEstateNews.com

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The real estate market and the economy are in tatters.  I was going to write next that this isn’t front page news, but it still is.  Every day.  And next week on November 4th America elects its next President and Vice-President.  Who will that be and what will it mean for the real estate market and the economy?

Without expressing my personal preference here, I am quite certain the writing is on the wall and next week we will be hearing the title President Obama.  Not to get all political on you, but let’s face it, McCain has run the poorest presidential campaign most of us have seen in our lifetimes.  And to state the obvious, Obama is the darling of the press, although he has less experience than any presidential candidate in U.S. history.  It’s going to be a devastating loss to Republicans, and Democrats are about to take full control of the nation’s agenda not just for two presidential terms, but for an entire generation.  Mark my words Joe Biden.

We have finally reached the tipping point in America, and conservatism lost.  Despite all the passionate talk by conservatives about how they will continue to fight the good fight, and despite Republican strategist Ed Rollins’ claim that “We will be back,” the truth is, in my bold opinion, the nation has finally reached the point of no-return, the tipping point, and we will never go back to what we were.

What does all this mean for the real estate market, the stock market, and the economy?  Nothing and everything.  It means nothing, because despite the debate about what will happen to the stock market and the nation’s health depending upon who wins, the day after every election it is always business as usual.  The stock market does not care who gets elected, at least on the surface.

On the other hand, who is elected means everything in the long term.  Big and small businesses will adjust accordingly, and there are many variables.  Obama and his policies scare the daylight out of businessmen, and behind the scenes there will be much ado about everything.  The real estate business is in such a state of chaos that it probably doesn’t matter what federal policies come down the pike.  It will take a year and a half to two years before there is a semblance of order in the real estate market for sellers.

Meanwhile, it remains a buyer’s market, and the election will not change that.

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Port Angeles, Washington is 15 miles from Sequim, a popular retirement community.  Port Angeles is surrounded by the incredible beauty of the Northern Olympic Peninsula, the Olympic National Park, and the Strait of Juan de Fuca.

We’re away from the nightmare traffic of the I-5 and I-405 corridors of the Seattle and Tacoma metropolitan areas.  Since Port Angeles is on the northern Olympic Peninsula about a two and a half hour drive from Sea-Tac International Airport, it is a peaceful country setting.  Being on the Peninsula, we get less traffic, because we don’t get people passing through on their way from one place to another.

We have the beautiful Olympic Mountains and the Olympic National Park with old growth trees in a natural and protected environment.  We have the Strait of Juan de Fuca, the Port of Port Angeles, the Port Angeles Boat Marine, and water views galore.

We have more recreational activities than almost anywhere in the country, biking, jogging, hiking, surfing, boating, sky diving, mountain climbing, fishing, golfing, incredible motorcycle roads around the Peninsula, restaurants you won’t forget, and the list goes on.

We have more volunteers in various community activities than I’ve ever seen anywhere I’ve lived.  I was invited as an attorney to talk to a group a while back, and I was introduced to a few people, including a retired rocket scientist (yes, they really exist), a retired CEO of a large California company, a retired Army General, and a wealthy inventor, all of whom were great conversationalist.  That was just one little luncheon.

There are so many activities, groups, and associations for retired people, I won’t take the space here to write about them, but you’ll find everything from gardening to building experimental planes.

Retirees are happy to find land here where they can build their dream homes.  Right now Port Angeles has a large inventory of lots for sale.  Of course, the market has slowed down everywhere, and because a number of developers started their projects here several years ago, buyers now have a great selection of lots available, and at reasonable prices.  There are water view lots, mountain view lots, high bluff water frontage, gated communities, private acreage surrounded by trees, open farmland for sale, ranch property for sale, and let’s face it–this is a buyer’s market.

I am seeing a very significant percentage of our buyers coming from California and Arizona, and all the way from New Jersey and Florida.  Many are professionals who know exactly what they want.  As between Sequim and Port Angeles, the better value for buyers is undoubtedly in Port Angeles.

Port Angeles is a great place to retire.  No doubt about it.  Use my websites and blogs to read more about Sequim and Port Angeles.   See SequimPortAngeles.com.

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Are buyers of homes and land in Port Angeles on hold?  Are they not buying?  What are they going to do in the months ahead?  I will tell you what I am seeing, although I cannot reveal my sources, because of my “patented” and confidential business secrets that I certainly do not want to share with my competition.  (In this market, I need to sustain every advantage.)

First, the obvious.  Sales have slowed down dramatically, but they have everywhere.  But homes are still selling here, just not as many.  Here is a chart of June Home Sales in Sequim and Port Angeles in each year since 2000:

Second, the not-so-obvious.  Many people who have put their buying decisions on hold are still looking, and they are scouring the market for what they intend to buy when they are ready.  Of course, part of being ready to buy may involve any of several hurdles.  For example, many are waiting for their markets to pick up, so they can sell their homes in California, Arizona, Oregon, Texas, or wherevery they live.  Some are waiting for that magic retirement date, when they plan to move to Sequim or Port Angeles.  For others, there is another trigger, such as a job transfer, and so on.

These buyers are still out there, actively looking at the market, but have simply put their action to purchase on hold for now.  This demand exists, it’s just below the radar.  It is pent-up demand, meaning that when their key event happens (retirement, sale of their home, etc.), they will be making a decision to purchase here, and they will know exactly what they intend to purchase.  I do have hard data for these conclusions, but I need to keep this data confidential.

What I cannot tell you with precision is when this will happen.  But it will happen.

[Source of data:  Olympic Listing Service]

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The Sequim Real Estate Blog and Port Angeles Real Estate Blog take a new step today with a major upgrade to our blogging platform, and for one purpose:  so you can find us easier and navigate quickly to precisely what you are looking for.

Chuck Marunde, J.D. is please to announce as Broker/Owner of Sequim and Port Angeles Real estate, LLC, that the company continues to be on the cutting edge of providing the best Internet services to clients and the public.

No one has the massive Internet presence that we have built.  We reach more people, potential buyers, in California, Arizona, Texas, Oregon, Montana, the Seattle area, and all the way to Florida and Massachusetts than any other broker in all of Clallam County.  Period.  This is why buyers find us, and it is also why sellers want to work with us to list their properties for sale. Today’s market is all about connecting with buyers.  That’s what we do.

Chuck can be reached by email at chuckmarunde.com or at his cell phone, (360) 775-5424.  We love what we do, and so do our clients.

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Just about every property owner in the world believes that their property is worth more than the current market will bear. It is a given just about every time a real estate professional or an appraiser determines a range of value. There are risks attached if the seller prices their property over the current market value. The two greatest risks that can affect a seller are:

• The Property may never sell
• The Seller will not get top dollar

If the owner intends to sell the property and attempt to get “top dollar” there are dangers to intentionally overpricing the property. The dangers included but are not limited to the following.

• The home may not meet lender qualifications. It must appraise for the buyer to get a loan.
• It will take longer to sell. It will be on the market too long and become “shopworn.”
• The property will have fewer showings limiting the market. Buyers, as well as agents, are wary of overpriced homes.
• The seller may receive very low offers. Don’t wait for them because they are rare and often insulting.
• The property will help sell the competition. The buyers will compare it against another property they are intending to purchase.
• The sellers have to weigh the “holding costs” during the longer marketing time.
• Once an agent sees an overpriced listing, they never go back. Agents don’t want to show properties that are overpriced.
• Sellers end up selling for less than what they would sell for if the property was priced right initially.
• Overpriced listings attract the wrong buyers. Buyers have certain images of homes in that price range based on what they have seen.
• The sale price reflects motivation and sellers are competing with sellers that HAVE to sell.
• Sellers look greedy by asking more than the competition.
• If the seller were a buyer, he wouldn’t buy an overpriced house. Just put the shoes on the other feet.
• About 40% of properties sell in the first 30 days if they are priced competitively regardless of the market conditions.
• The impact from lowering the price is minimal and often overlooked. Therefore, it is highly recommended to list at a competitive price initially.

This article courtesy of 425Realty.com.

Also on this blog see:
Overpricing Your Home Can Be Costly, and
Port Angeles and Sequim Real Estate Listings

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Are you buying or selling real estate in Port Angeles or Sequim? If you are, who is your transaction coordinator? A transaction coordinator is extremely important, perhaps one of the most important people in your entire transaction. This is the person who coordinates everything about your transaction from the minute a Purchase and Sale Agreement is signed by buyer and seller. Top producing Realtors have a full time transaction coordinator, and there are some Realtors who do their own, but there is much much more to being a transaction coordinator than just baking a pie (although that would be pretty hard for me).

1. The Purchase and Sale Agreement must be reviewed for legal sufficiency, with signatures by all parties on the title, and in Washington (because we are a community property state) by all spouses even if not on title.
2. Initials must be on the bottom of every page of the agreement marked for a signature, and each edit or change must be initialed and dated by all parties.
3. All attachments must actually be attached, i.e. the legal description, and it must be incorporated by reference (and best if also initialed).
4. All amendments and addendums must be properly attached and incorporated and signed.
5. Legal disclosures must be signed and distributed to the proper parties, and certain docs must be acknowledged and returned by key deadlines.
6. Contingencies and feasibility items must be calendared and handled at the right time.
7. Third party involvement, such as lenders, inspectors, contractors, escrow and title companies, building departments or other government agencies, must be diplomatically encouraged and monitored to do their job at the right time.
8. Continuing documentation must be accomplished, which often means waiver docs or extensions or other amendments.
9. Status of transaction information must be entered into the MLS, and multiple MLS’s for some of us.
10. Review of all third party documents for compliance with the client’s terms in the agreements, and for timeliness.
11. A transaction coordinator must be well organized, good with technology, software, database management, composing letters, good with time management, diplomatic with people, good on the telephone, experienced with all legal documents and requirements, and AND MUCH MORE.

Your transaction coordinator does all this. Missing or ignoring one or more of these items could kill your transaction! Seriously. Is your transaction coordinator good? P.S. Don’t assume your real estate agent is good at all these things. Ask. In other words, interview a Realtor before you hire him or her.

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Legal Documents
Homes and Land

If you are selling a home or land in Port Angeles or in Sequim, getting the right legal documents and disclosures required under the law (and there are many) and drafting clear and unambiguous language is no small challenge.

Legal Requirements Are Complex and There Are Many

You’ll need a good Purchase & Sale Agreement, Contingency Addendums (financing, inspection, etc.), legal descriptions (legally “sufficient”), disclosures required under Federal and State law (lead paint, environmental, Form 17 with brand new requirements effective June 22, 2007 and possibly Form 17C), and you’ll need to handle all the “little” issues that come up between the signed agreement and closing. Any one of these “little” issues can kill the transaction.

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I compiled this data from the Olympic Multiple Listing Service for the time period July of 1999 through July of 2007. It shows the number of residential properties sold each year in both Sequim and Port Angeles. It’s interesting to see the pattern. Sequim has outsold Port Angeles consistently, and the trend of properties sold in both cities is consistent. Of course, 2005 had the highest number of residential properties sold, and we’ve been seeing a cooling offer period now, which is visible in the 2006 and 2007 bars.

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A buyer has so many options these days to search for and buy real estate.

1. Internet, this is the number one search source, 84% of buyers start here.
2. Magazines (mostly paid advertising in real estate magazines)
3. Cable TV (and satellite)
4. Newspapers (and the all classified papers)
5. Infomercials
6. Bank & Mortgage Company ads, refinance for zero closing costs
7. Direct Mail
8. Free trips to spend a few days at the new resort that is part of the new “ultra complex” offering golf, boating, green space, hunting, hiking, club house, shopping…spend three days viewing your new lifestyle. Watch out here. You could end up paying a hefty premium.
9. Flat rate realty services
10. Menu Real estate services, pick how much or how little service you want and advertising after the initial ad that is optional too, and pay first
11. MLS, searches for FSBO’s, Realtors, Brokers, Auctions
12. IDX search sites
13. Vacant land, these are listed
14. Investment properties, listed in multiple formats
15. Residential, private sights and multiple formats too.
16. Commercial, more selective and less public because the audience is not as big.
17. Buyer’s Agents and then the certified Buyer’s Broker
18. No money down…the old land contract with a new name, but pay a lot of interest
19. Rent to own (somebody makes a huge profit here, and it’s not you)
20. Money back at close to buy furniture or that new car to put in the garage.
21. The traditional Realtor and brokerage

This is just a few options. I could fill the page with hybrids. With all of this, clearly the rule is caveat emptor, or buyer beware. Just as these many sources give a buyer many more options, a buyer has that many more ways to end up getting conned or paying to much for a property, or even worse, getting in big legal trouble.

Another case for retaining the services of a professional Realtor?

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Some more photos of downtown Port Angeles and the Port of Port Angeles by yours truly. I’ve posted these pics on my Port Angeles Photos.

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Since Sequim and Port Angeles are neighboring cities only 15 miles apart, anyone seriously considering buying a home or land here will want to do some due diligence in deciding where to buy and live. Port Angeles is about 6 times as large, has a large port to International waters, and offers close access to the Olympic National Park and more. Sequim is a well organized city with many new housing developments, and Sequim has a “rain shadow” of sorts. Prices are higher in Sequim for a comparable property. There is a great golf course in between. There’s a lot to consider. You can search properties on my web site to compare properties and prices.

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