February 9th 2016 (Sales Meeting)

Monthly Report On Real Estate Activity

In The Pacific Northwest Region

February 9th, 2016 Monthly Real Estate Activity Report

For



Hello

• http://lightersideofrealestate.com/real-estate-life/good-vibes/and-its-easy-to-see-why

http://lightersideofrealestate.com/real-estate-life/good-vibes/and-its-easy-to-see-why



Guest Speaker

• Licensed Drone Pilot Mike Porter





Legal Bulletin 207

NWMLS Rule 2(e) will be revised effective March 9, 2016 to allow members to input “unlisted sales” into the NWMLS database. Unlisted sales include:

• A sale where a real estate firm represents a buyer who is purchasing a “for sale by owner” (FSBO) property – where the seller is not represented by a real estate firm.



• A sale where the seller identifies a buyer and agrees in principal to sell the property to that buyer – and then enlists a real estate firm to represent the seller in that sale pursuant to a Seller Representation Agreement (Form 47).





A peek into 2016

• Moody’s Analytics predicts we will sell 6 Million homes nationally

• Laurence Yun anticipates we will close 5.3 Million in 2015

• 2015 saw the collapse of the FSBO market. In 199119% of home sales were FSBO, in 2015 only 8%, keeping in mind that 6% of total sales every year are Intra-family leaving only 2% to be true FSBO



Listreports.com

• Getting ready for a listing appointment

• Type in the address anywhere in the nation

• They will send you beautiful marketing materials including

• Property website

• Neighborhood infographic chart describes how convenient the property is to local restaurants, gym’s, cleaners, coffee shops, ATM’s and medical



• School ranking report

• Outdoor reports including dog parks, golf course etc.

• And it’s free



Mailchimp.com

• Let’s you know who is opening your email marketing campaigns

• Scrubs out the incorrect ones



Camscanner.com



Aroundme.com



Waze.com



Animoto.com



Bombbomb.com



Amopenhouse.com



Homekeepr.com



Verifyphotoid.com



Narpr.com



Keepupapp.com



Itemize.com



Crystalknows.com



Economist: The $23B Bond Downgrade Could Trigger More US Real Estate Buys

• Since 2006, the S&P has downgraded 13Chinese companies and upgraded one this year—the worst ratio in 10 years. $22.6B of offshore bonds are now one step above junk status in their ratings from the three major ratings agencies.



• Director of Georgia State University's Economic Forecasting Center Rajeev Dhawan tells us that, while the downgrading of Chinese bonds has no direct impact on the US economy, it could lead to more foreign investors using the US as their safe deposit box.

• If their bonds are downgraded, then the money that used to buy that bond will go into the secure stuff in the US.

http://therealdeal.com/2015/12/06/china-now-the-no-1-foreign-buyer-of-u-s-properties/



$199M: New Seattle medical-office building sells for record price

• What was once an empty life-science research center in Seattle has sold for $199 million, commercial real estate company CBRE (NYSE: CBG) said Thursday.

• Dallas-based Trammell Crow Co. and Washington Capital Management of Seattle sold the revamped and expanded First Hill Medical Pavilion at 1124 Columbia St

http://www.bizjournals.com/profiles/company/us/ca/los_angeles/cbre_group_inc/3325592

http://www.bizjournals.com/profiles/company/us/tx/dallas/trammell_crow_company/519123

http://www.bizjournals.com/profiles/company/us/wa/seattle/washington_capital_management/1088928



• next to Swedish Medical Center, to an unnamed institutional investor that Chicago-based Heitman and Denver-based NexCoreGroup advise.

• The sale prices works out to $884 per square foot. That's a record for a commercial office building in Seattle. The old record was set last summer with the sale of an Amazon-occupied building in South Lake Union.

http://www.bizjournals.com/profiles/company/us/wa/seattle/swedish_medical_center/1152907

http://www.bizjournals.com/seattle/blog/2015/07/amazon-occupied-building-sells-for-record-price.html



• The 225,000-square-foot First Hill building is 100percent leased to Swedish Health Services, Seattle Medical Associates, CellNetix and Theraclone.

• Trammell Crow and Washington Capital Management, on behalf of its clients, bought the property three years ago with plans to turn the building into a medical offices. The new owners added 65,000 square feet of office space, and a 415-stall underground parking garage, and made other improvements.

http://www.bizjournals.com/profiles/company/us/wa/seattle/swedish_health_services/3335689

http://www.bizjournals.com/profiles/company/us/wa/seattle/seattle_medical_associates/1879469



UPDATED RULES ON POST FORECLOSURE OCCUPANCY BY TENANTS IN WASHINGTON

• The legislature in Washington State acted and created a special statute for tenants. This rule allows tenants, under most situations, to remain in the rental property, for free, for 60days AFTER the trustee’s sale. That is a Washington State Law that has been in existence for most of the Recession and is still good law today. RCW 61.24.160(1).



• Be cautious! There are traps for the unwary if you or your customer becomes the owner at a Trustee’s sale! That 60 day time period does not start until you have given the tenant written notice. Many forget that and it can make for a much longer time period with the tenants remaining in the property rent free!



• There was another law on the books regarding tenants’ rights for most of the Recession.

• This was a Federal Law also in force during most of the Recession, which was far different from state law, and this Federal Law allowed many parties to remain in their rental properties throughout the term of their lease, or for 90 days even if they had no formal lease.

• That law has since expired



Silicon Refugees' will continue to flood Seattle in 2016, Zillow

economist says• Seattle home values will continue to increase

this year – as will rents – as people flock for the region's growing number of jobs and opportunities.



• That's according to Aaron Terrazas, the senior economist at Seattle online real estate company Zillow (Nasdaq: Z, ZG), who spoke during the Economic Development Council of Seattle and King County's annual forecast event on Jan. 14.

• Employment growth is shifting west, Terrazassaid, and that's driving home values up.

https://securepubads.g.doubleclick.net/pagead/adview?ai=BehPujtGfVoqYH8H8wAGM0YHwAcGEyLAIAAAAEAEgqZbaHzgAWPGni66vAmDJtreN9KTQGbIBE3d3dy5iaXpqb3VybmFscy5jb226AQlnZnBfaW1hZ2XIAQnaAcYBaHR0cDovL3d3dy5iaXpqb3VybmFscy5jb20vc2VhdHRsZS9tb3JuaW5nX2NhbGwvMjAxNi8wMS9zaWxpY29uLXJlZnVnZWVzLXdpbGwtY29udGludWUtdG8tZmxvb2Qtc2VhdHRsZS1pbi5odG1sP2FuYT1lX3NlYV9yZHVwJnM9bmV3c2xldHRlciZlZD0yMDE2LTAxLTIwJnU9azFhRW1vJTJGNFJvU1hycWsyMnBNbVFOQjZkU3omdD0xNDUzMzE0NDQwmAKcxwHAAgLgAgDqAiYvNDYzNS9iemouc2VhdHRsZS9vb3AvYmxvZy90ZWNoZmxhc2gvMfgC8tEekAPwAZgDpAOoAwHgBAGSBQsIBxABGAEgic_6GZAGAaAGINgHAA&sigh=RdC3_P1IWxU&cid=5Gi_yknHhP1qE3ZAJsJ-IQNx&adurl=https://tpc.googlesyndication.com/pagead/imgad?id=CICAgKDTg6jEmwEQARgBMgjo06JicpAkKg%26t%3D10%26cT%3Dhttp://bizjournals.com%26l%3Dhttp://www.bizjournals.com/seattle/search/results?q%3DAaron Terrazas



• While some in the region bemoan the rising rents and home prices, people from other parts of the country still see Seattle as a bargain. The Northwest has become a hot spot for "Silicon Refugees," Terrazas said, who are looking to escape the incredibly high prices in Silicon Valley and San Francisco.



• That, combined with interest from international buyers, is driving prices up. In Seattle, home values increased 5.4% year over year, and in Bellevue, they were up 6.1%. Tacoma home values increased 6% and Renton was up 5.8%.

• Still, compared to Silicon Valley, a Seattle house is a steal.



• Employees who want to live near Google's Mountain View campus in California are looking at median home values of $1.034 million. Google employees looking to buy a home near the company's fast-growing Kirkland office are looking at a median home value of $533,000.

• The salary differences between jobs at the two campuses, Terrazas said, don't even come close to making up for the difference.



Quesstion

• It is becoming more the norm for sellers to want buyers to make offers that either waive the inspection or have had a pre inspection -an offer that takes the listing straight to pending upon mutual acceptance.



• Some listing brokers are having the

sellers order home inspections and

attaching them to the listing for the

use of all potential buyers, and this is

being done as a favor to save the

buyers money as well as to protect

the house from having 6 or 7 different

inspections completed in a matter of a

few days.



• My understanding is that if the seller hires an inspector, the inspection is for the use of the seller. There is no warranty for a buyer and no relationship between buyer and inspector. My inspector told me that I would be setting myself and the sellers up for a lawsuit by providing an inspection report to potential buyers and encouraging them to waive their own inspection.



• Is this true and is it legally sound to attach a pre-inspection completed by an inspector hired by the seller to the listing for the use of potential buyers?



Answer

• If the seller's/listing broker's inspector fails to find issues that form the basis of a subsequent lawsuit filed by a buyer, then undoubtedly, one of the claims in the lawsuit will be based on seller's/listing broker's selection of the particular inspector. Any such claim is likely to be filed against seller and listing broker/firm.



• Whether the claim will state that hiring of the inspector was negligent or that actual fraud was involved in the concealment of defects will depend on the facts involved in the situation.

• But, by selecting the only inspector allowed into the home and by controlling the flow of information available as to the quality and condition of seller's home,



• Seller and listing broker/firm set themselves up for this claim in a way that would not be possible in the traditional format of buyers conducting their own inspections.

Additionally, in this situation, listing broker/firm risks an additional claim from seller.



• If a lawsuit is filed by buyer against seller, based on this fact pattern, seller is likely to make a subsequent claim against listing broker/firm, based on the fact that listing broker/firm promoted this method of home inspection. In other words, seller's claim will say: if seller is liable to buyer, listing broker/firm is liable to seller.



• To defend the claim, listing broker/firm will need to be able to prove that listing broker explained the variety of available options, regarding inspections, to seller, along with the pros and cons of each option, and that seller independently selected this particular option.

• Listing broker should also be able to prove that seller selected the inspector.



• Whether this information will constitute a successful defense to seller's claim cannot be anticipated with certainty.

• There are no guarantees in litigation and no claim that cannot be won or lost. Listing broker/firm may or may not successfully defend this claim from seller but without proof along the lines described in this paragraph, listing broker will have a more difficult defense.



• There is undeniable risk to both seller and listing broker/Firm in selecting the only inspector allowed into seller's home and then limiting the information available to buyers based on that inspector's conclusions.

• Both sellers and listing firms/brokers must evaluate the risks and benefits associated with the variety of inspection options available and determine, for themselves. which option to pursue.



• If seller chooses any option other than the traditional method of buyer entering a purchase agreement and then inspecting seller's home, then listing broker/firm should have proof of seller's independent choice in selecting the option and the inspector used.

• As is always the case, when brokers counsel clients with respect to issues that affect client's legal rights and obligations, broker should advise client, in writing, to seek legal counsel.



• In addition to the other "proof" described in this answer, broker/firm should retain proof in the transaction file, that broker advised seller to seek legal counsel with respect to this issue.

• Similarly, if a firm intends to recommend this inspection option to sellers, firm should seek the advice of its own legal counsel for assistance in determining whether this practice is tolerable based on a risk assessment.

































Revolve Development Sells Yardhouse For Record Price

• Revolve Development sold the 35-unit Yardhouse at 1406 E Republican St in Capitol Hill for nearly $14M to an LLC whose manager is the Costacos family.

• At nearly $400k/unit and more than $765/SF, that's a record price for new woodframe construction in the city center, reports the Puget Sound Business Journal. Revolve bought the site in 2014 and then built Yardhouse.



Yardhouse



Cloud City: An industry – and a region – on the rise

• It's early days for the cloud industry and the Seattle area is poised to take advantage of the coming boom.

• When Microsoft and Amazon reported quarterly earnings on Thursday, the Puget Sound region’s two largest technology companies touted prospects in the cloud.

http://www.bizjournals.com/profiles/company/us/wa/redmond/microsoft_corporation/1087001

http://www.bizjournals.com/profiles/company/us/wa/seattle/amazoncom_inc/1086633



• The Redmond company’s CEO Satya Nadellasaid Microsoft’s potential for growth in cloud computing– an industry still in its infancy –was unprecedented.

• The enterprise cloud opportunity is massive —larger than any market we have ever participated in,” he said on a conference call Thursday.

http://www.bizjournals.com/seattle/search/results?q=Satya Nadella



• Seattle is uniquely poised to become a leader in the cloud industry, expected to reach $127 billion in the next several years. Both Microsoft and Amazon, the world’s biggest cloud providers, are on track to bring in more than $7 billion in cloud revenue each this year – a staggering amount for a nascent industry.



Economic indicator of the week: 26% of Washington households own boats

• There was a big jump in new boat sales last year, and now more than one quarter of all Washington households own boats.

• That's a good sign the economy is strong.

• When the tide rises, though, so do the boats. New recreational boat sales were up 23.7% in Washington state last year, a huge jump compared to the national increase of only 6.8%.



• Things are still not back to pre-recession levels, but they're getting there.

• Now there are 242,000 registered boats in Washington and for every dollar spent on the boats themselves, recreational boaters contribute 41 cents to the economy.



Swan story: Turning a Bellevue garage into a 21-story apartment tower



QUESTION• Buyer has a Form 22B Home Sale Contingency and a

Form 22A Financing Contingency for a VA loan.

• Seller sent buyer a bump notice and in response, buyer waived the Form 22B, Home Sale Contingency. Buyer has not yet sold buyer's home.

• In an effort to close the purchase of seller's home without having sold buyer's home, buyer switched loan types to a Conventional loan.

• Must buyer obtain seller's permission prior to switching loan types?



Answer• No. If buyer still had a Financing Contingency, buyer

would have to obtain seller's permission prior to switching loan types in order to preserve the benefit of the Financing Contingency.

• However, when buyer waived the Form 22B Home Sale Contingency, buyer also, automatically, waived every additional contingency benefitting buyer. Buyer has already waived the Financing Contingency.



• Thus, there is no requirement or incentive for buyer to seek or obtain seller's permission prior to switching loan types. At this point, buyer must do any and everything buyer can do to close the transaction. Buyer's contractual obligation, following waiver of the Home Sale Contingency, is to close the transaction thirty days later.



Tax Increase for Sales Exceeding $1 million

• The Foreign Investment in Real Property Tax Act ("FIRPTA") provides that the disposition of a U.S. real property interest by a foreign person for the purposes of U.S. income taxation is subject to income tax withholding. Under FIRPTA, the buyer is responsible for determining if the seller is a foreign person for the purposes of U.S. income taxation and if the buyer fails to do so, the buyer could be liable for the tax.



• FIRPTA withholding is imposed at a rate of 10% on the amount realized from the sale (i.e. the purchase price). Changes to FIRPTA, effective February 17, 2016, increase the amount of the tax to 15% for sales where the amount realized from the sale (i.e. the purchase price) exceeds $1 million. The change applies to closings that occur after February 16, 2016.





Who can tell me what the biggest fines are for

• Rule 2C Pre marketing listing prior to uploading to the NWMLS

• Rule 190 Advertising another members listing with out permission



South Lake Union Towers Could Bring 1,200 Condos To Market

Vancouver, BC-based Onni

Group of Cos is mulling condos for

the first phase of its massive South Lake Union development, rather

than rental units. The development would include two 41-story towerswith a total of 1,197 units on the northwest…



In Seattle, buying a home beats renting in less than two years

• Home buyers in the Puget Sound region “break even” on a home purchase in 1.9 years.

• The “Breakeven Horizon” study, published by Seattle online real estate company Zillow(Nasdaq: Z, ZG), found that home buyers across the country break even on a home purchase in less than two years in 70% of housing markets.

http://www.bizjournals.com/profiles/company/us/wa/seattle/zillow_group_inc/3275221



• Zillow credits the short time frame to low interest rates, rising home values and rising rent.

• The average rent for an apartment in Seattle is $1,931 per month.

• Dallas has the shortest break even point, at 1.3 years. Washington, D.C., has the longest, at 4.5 years.



Lack of inventory “a game changer” for home buyers

• Depleted inventory is contributing to “overwhelming” traffic at open houses, shifts in strategies for both buyers and sellers, and escalating prices, according to officials with the Northwest Multiple Listing Service.

• The lack of inventory in almost every county is, “without question, a 2016 game changer.”

• Traffic at open houses as sometimes simply overwhelming.



• The latest figures show a drop of nearly 28%in the number of active listings in the MLS database compared to a year ago.

• Members added 6,670 new listings during the month across 23 counties in the MLS service area. That’s down nearly 4.6% from twelve months ago. At month end, members reported 12,357 active listings, which compares to 17,082 at the end of January 2015.



• Measured another way, there is just under 2.5months of inventory which compares to 3.8months the MLS reported for January 2015.

• Supply was especially tight in King County, at 1.4 months of inventory, and Snohomish County, with just under 1.6 months.



• Condo inventory (excluding single family homes) fell sharply, from 1,793 active listings a year ago to last month’s total of 1,145 at month end, a plunge of 36%. In King County, the inventory of condos dropped 42%.

• For the area overall, there is just 1.7 months of condo inventory, with Snohomish County reporting the tightest supply (1.1 months) followed by King County (1.2 months).



• The inventory shortage took a toll on last month’s sales. The number of pending sales (mutually accepted offers) fell about 5.3%area-wide during January, although half the counties in the report tallied increases compared to a year ago. The 5.3% drop marked the first negative change in year-over-year comparisons since April 2014.



• Member brokers reported 7,253 pending sales last month, down from 7,658 for the same month a year ago. Despite January’s downturn, industry leaders remain upbeat.

• Only three other Januarys since 2000 had more homes go under contract in the four-county region area of King, Snohomish, Pierce and Kitsap counties.



• This, in the face of stock market scares, shows the viability of real estate as the better investment for both homeowners and investors

• Sales are down nearly 15% compared to last January because inventory is down more than 31%. Demand is still really strong based on multiple offers and high-volume open house traffic



• The Greater Seattle area housing market remains out of equilibrium. Sales will continue to suffer at the current pace of transactions without adding new inventory.

• At the same time, prices will continue to appreciate and could outperform our expectations if inventory levels and mortgage rates remain at current levels.



• A strong fourth quarter in 2015 is reflected in January’s closed sales of single family homes and condos (combined), which rose 11.6%from a year ago. Members reported 4,985completed transactions; a year ago, they tallied 4,467 closings.

• The year-over-year median price on these sales increased 7.5%, rising from $279,000 to $300,000.

• Ten counties reported double-digit gains.



• Single family home prices (excluding condos) jumped 7.6% from a year ago for the area overall.

• For the four-county Puget Sound region, the median price for a single family home rose 12%, from $325,000 a year ago to last month’s figure of $363,975. Snohomish County reported the largest increase at 16.6%



• A comparison of prices by county shows King County tops the chart with a median sales price of $490,970, up 11.2% from a year ago.

• Condo prices spiked 16.3% from a year ago, rising from $219,900 to $255,750.

• Rapidly rising prices and low inventory are worrisome, according to some brokers.



• Doing a recent search of homes for sale in Bellevue with asking prices between $500,000 and $800,000. That search yielded only about a dozen properties in the database, a result that is “staggering” and well below the norm.







Introducing

NEW TOOLS



Michael Patterson Kenton Becker





January Stats 2016

• 11 closed sales $2,889,645 in sales

• $68,981.00 in gross commission

• 3 new listings 2 pending or sold



Top Executives January 2016

• Dana Yang

• Kate Pedersen

• Team Stickney

• June Molina & Boe Avila



Wants And Needs