The modeling business—it is a beautiful thing!


I can’t speak for other parts of the world, but certainly here in the US there are as many business models as there are businesses.  In fact many businesses use models to help them sell everything from soap to soup to sex.

Sex sells almost anything

Sex sells almost anything

Usually to save money, the models will wear as little clothing as possible.

What is that you say—you mean it isn’t about saving money?  Silly me!

The fact that there are so many ways to make the same type of business “successful” means that you merely have to find a model that works for you.  Of course if you pay them, they most likely work for you, but that does not mean that the model will work.

Sound confusing?

Well of course it is—it is meant to be.  The more confusing it is, the less people will be willing to take the plunge and create their own business.

I will repeat:

You have to find a business model that works for you.

Given the quizzical look on your faces I think I see the problem.  Perhaps it is the word “model” that is getting your mind going in an “interesting” direction instead of a “correct” direction.  I don’t mean “Business Model.”  I mean “Business-model.”

Does that make it clearer?

I hope so—because now it is time to get to the point of this post.

Being a home inspector, I will use the business of being a home inspector as my example.  One inspector’s “business-model” might be to do 3 inspections a day.  To make this model work they are going to have to spend a great deal more time selling themselves.  They might even have to hire sexy models to help with the publicity.  Typically—and there are inspectors with this business-model—the ultimate goal is the bottom line—hence the “bottoms” and the “tops” and other “gimmicks” in the advertising.  This approach is no different than selling beer or cars, and everyone knows that it works.  The downside is that EVERYONE else is using this business-model as well, so newer and better gimmicks have to be found all the time.

If you want to set yourself apart from the competition, you need to create a business model that essentially eliminates the competition.

In a sense, this approach refuses to compete.  You set your own terms and the consumer can take it or leave it—pure heresy to other business-models.  For this approach to work however, there is a key ingredient that MUST be present.

You have to be selling something that someone wants.  

Of course the inspector with the models and the bling has something that everyone wants too—an inspection.  But the inspection is defined by the constraints dictated by the business-model.  For example if the buyer wants more from the inspection than what can be delivered in a time frame that allows the inspector to get to two other inspections on that same day, they are SOL.  Or they have to “settle” for the product offered.  This product usually translates to less information, less time at the inspection, less willingness to be available—before, during and after the inspection. This can set the stage for an unhappy buyer as things get missed or the buyer ends up disillusioned with the whole process because expectations were set so low.  But the inspector has collected his “Dollar-three-eighty-seven” and moved on to the next inspection.  Law suits and angry phone calls are just part of the cost of doing business.

My own business-model is geared more toward doing fewer inspections for more money.  What this buys me is time.  Time to give away to the buyer and the house, to create as much information as I possibly can.  While there is no way I can get the number of clients with this approach that other business-models can, there are enough people that want this type of service to allow my business-model to be successful.  Plus it sells itself with happy consumers.  The interesting thing is that most people will say they want this kind of service.  But when it comes down to paying for it, there are only so many people that can be convinced to spend the extra bucks.

These folks are my clients—and why I do not have to compete with anyone.  

While people not choosing better is mostly a matter of lack of information and misinformation.  The very business-models that depend on short inspections with little information transmitted, have a vested interest in promoting the idea of short cheap inspections.  I feel that things are shifting  a bit because of the Internet—people are becoming more informed.  People’s expectations of inspectors are rising—and justifiably so.

The other day I had a buyer that verbalized what I am saying perfectly.  I had done the inspection several weeks ago and we met again at the house to re-inspect the repairs that had been done.  At the end, they paid me for the re-inspection and said they wanted to thank me for all that I had done.  They said they were so glad that they had listened to their agent who had insisted they use me—even though it was going to cost them more than $100.00 more than another inspector.  Of course this was on top of the re-inspection fee as well.

This shows a couple of things.  The business-model works and so does the agent.  This agent knows for a fact that his buyer is going to be taken care of.  Why would they recommend someone cheaper—just because they were cheaper?

Why would any buyer choose an inspector because they were cheaper—just because they were cheaper?

It is due to lack of information and mis-information—-both of which the consumer might end up with when choosing the cheaper inspector.

(This post has also been published on ActiveRain)

Charles Buell, Seattle Home Inspector


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Seattle Tidelands and Waterfront Property


Before Washington became a state early pioneers like Yesler were already building on the tide lands of Elliott Bay and elsewhere around Puget Sound. Known as “tideland jumpers”, these early developers were actually building their piers and mills on the waterfront illegally. Before statehood, the federal government held all tide lands in trust for the territory.

When Washington became a state in 1889 the tidelands were publicly owned but the state constitution didn’t provide any language that granted access to the saltwater for the upland property owners. During the 1889/1890 legislature the state solved this challenge by granting itself the authority to sell public tidelands thus creating a revenue stream. The sale of public tide lands by the state lasted until 1971.

In 1890 the tide lands were divided into three classes.

First Class tide lands embraced all tide lands situated within or in front of the corporate limits of any city, or within two miles on either side. Second Class tide lands were those that lay beyond two miles of any incorporated city or town where there was located valuable improvements. Third Class embraced all other tide lands. However, this first description created March 26, 1890 had no specific language that defined the outer boundary of third class tide lands.

The history of tidelands is a fascinating subject and full of controversy and litigation. In the video, Tim Daniels, CTO for The Talon Group, gives a brief conversation about purchasing Seattle waterfront property and some of the title issues you’ll want to be aware of concerning tidelands.

Watch the video in full screen HD… click the (watch it on YouTube) button.

We shot the video just off Beach Dr SW in West Seattle on June 15th, 2011… the 2nd lowest tide of the year. The morning was beautiful and the wildlife amazing. Our performers included the Talon eagle, a blue heron, a lot of crows, seagulls, crabs, a huge gooey duck, and a large starfish.

If you are curious about tidelands and the history of the Seattle waterfront, here’s a few links…

Investing in land? This is an advertisement from 1907 about the great opportunities to make more profit by investing in the Tide Lands of Seattle by R. Cooper Willis.

Paul Dorpat, a longtime respected historian in Seattle has a wonderful history of the Seattle Waterfront posted to his blog. Also check out his Seattle Now & Then: Antique Alki Swimwear. Paul has a fun, down to earth conversational writing style and his posts include lots of great old pictures and maps.

Also, here’s a Google timeline search: History of Washington State Tidelands 1880 – 2011

Posted in Real Estate, Title Insurance | 1 Comment

How to correctly shop for a mortgage


Hi all: I hope your Wednesday is treating you well!

I wanted to give all of you some tips about how to correctly shop for a mortgage. I think most of us want a painless process as we’re so busy these days. The danger is choosing the first or the lowest or best sounding deal out there.

Case in point: I had a client of mine recently who got a 30 year fixed rate of 4.75%. He’s putting 20% down and his credit is excellent. He was wondering if a better rate could be had because he had heard the advertisements for rates of closer to 4.5%. Here is what I said. Yes, lower rates could probably be had but it may either involve paying points or coming up with a higher down payment (say 40% instead of 20% which may lower the rate another notch) for example. My client’s wife’s response was she figured it had to be something. We all know this to be the case. If it sounds too good to be true, it probably is. With all of this in mind, here are some quick tips for successfully shopping for a mortgage.

1) Take the time to talk to more than one loan officer. Do it face-to-face if you can. I still hear the horror stories about loan officers overpromising and underdelivering daily. This can be avoided by meeting with them in person in many instances.

2) Your loan officer should offer you options on your mortgage, etc. Yes, most people would like a 30 year fixed mortage or something equivalent. But ask yourself this question. How long do you intend to stay in your home? I recently have done quite a few loans that are ARM’s (Adjustable Rate Mortgages) that are fixed for the first 5 or even 7 years and then adjust after that. If you don’t plan on living in your home forever, ARM’s can be an alternative. Also, I’ve seen borrowers who are very good and disciplined with their money choose ARM’s. It gives you options as ARM rates are at least 1% lower than fixed rates in most cases.

3) We all get our money from the same place. If you’re offered a no fee loan expect to pay more for that feature. We are all in business to make money. The bottom line is because of the Dodd-Frank law implemented in April of this year, your closing costs went way down.

4) Listen to the loan officer you choose. I know most of you do. If you’re asked to provide more information, please get us what we need. These days, loan files can get kind of thick. Underwriting is tougher than ever and we need to document everything. Loans are being done every day but they’re being done by loan officers who are knowledgeable.

5) Try not to take choosing a loan officer lightly. A good one can make the difference between you getting your loan closed and not. In fact, if you’re buying a place nothing happens if the loan officer can’t get the loan closed.

6) Resist the urge to jump at the first and best offer. Most of the advertising we hear is already dated and is based on the perfect loan. Choose someone instead who you can trust. Kudos are given if you choose someone local who was either referred to you or has a great reputation.

In sum, I wish you well as you shop for your mortgage. One great thing about our country is we have the ability to choose. But we all need to choose wisely. Otherwise, it could be a trip to hell and back! Thanks for reading. If you need further information please contact me!

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The Greening of America


Over the years I have often said that if I owned my own planet that things on”The Planet Charles” would look different in some ways than they do on “The Planet Earth.”

How Green are we?

How Green are we?

One of the things that would be different, is that there would be NO vented crawl spaces (Actually if I thought about it hard enough, and took into account other parts of the world, there “might” be exceptions—–I just can’t think of any right now).


Think about how a crawl space works.

It is the space under your house with a dirt floor covered (hopefully) with a ground cover (vapor retarder).  The cool thing about Planet Earth is that the ground temperature (if you protect it from hot and cold) stays pretty much the same temperature year round—-45 to 50 degrees Fahrenheit.

In current construction, what is the standard practice?

We insulate the house floor, cutting the house off from that constant ground temperature.  We then vent that space so that the space then can “communicate” with whatever temperature it is outside.

As an example:  In Syracuse NY, the temperatures range from 30 degrees below zero in the Winter to 110 degrees in the Summer.  What this means is that in the Summer (with a floor that is insulated) one has to cool the house from 110 degrees down to whatever you can stand inside (with “cooling” even a 15 degree difference can be enough to feel comfortable).

In the Winter, one must heat the home from minus 30 degrees to plus 70 degrees—–a 100 degree temperature change.  Now if we insulate the perimeter of the foundation instead of filling it full of holes (vents); and, we forget about insulating the floor and allow the interior of the home to “communicate” with the crawl space instead of the crawl space communicating with the outdoors——the temperature differentials become radically different—-and so does the impact on your wallet.

In fact, on the “cooling” side, much of the time, the crawl space year-round-temperature will be enough to provide some cooling for a well insulated house.

On the “heating” side, we will only need to heat the house from 45 degrees to 70 degrees—-a 25 degree differential instead of 100 degrees.

This approach is so simple and so basic that it seems to have eluded the oil companies (they have no vested interest in conservation) and the US Government—-for the most part (they also have no vested interest in conservation), even though the knowledge to build this way has been around since at least the early 50’s.

It is not that there is a problem with creating homes that take very little energy to run, it is that there is no political will to do so.

The existing corporations (vested heavily in consuming fossil fuels) just raise the prices of whatever they produce as we use less.

In a very real sense

Going Gr$$n

is “un-American.”

Obviously we need a change in the definition of what it means to be an “American.”

***

Charles Buell, Seattle Home Inspector

Posted in Home Inspections, Uncategorized | Tagged , , | 6 Comments

Purchasing an REO? The Bargain and Sale Deed


Following up on a previous post about title transfers by deed type, I was looking at residential transactions in King, Pierce, and Snohomish counties from last year (2010) and comparing them to the first quarter of 2011. I was curious to see if I could find a trend.

Over the past couple of years we’ve seen a lot of distressed property sales and foreclosures. More homes than ever have been sold at trustee’s sales, auctions, and purchased from banks. In each of these situations different deeds are used to convey title and each does the job a little different. The post generated several questions about why and when different deed types are used, so over the next several weeks I’ll periodically take a look at individual deeds and their use.

Example…
You’re buying an REO (real estate owned) property from the bank. The property is being conveyed to you using a bargain and sale deed. What is a bargain and sale deed?

Let’s take a look at a scenario and one of the most common deeds used for REO sales in the State of Washington…

(Note the language)…

BARGAIN AND SALE DEED

THE GRANTOR(S) (ABC Bank or assigns)

for and in consideration of ($10 and other good and valuable consideration)

in hand paid, bargains, sells, and conveys to (you)

the following described real estate,

Lot 1, Block 1, Happy Homes Acre Tracts as per plat recorded in Volume 998 of plats, pages 519 through 521, situated in the County of  King, State of Washington:

 (Deed samples used in these examples are from the Washington State Bar Association. You can view and download blank real estate forms at: wsba.org)

A Bargain and Sale Deed warrants only ownership and the right to convey. Notice in the above highlight “in hand paid, bargains, sells, and conveys to”
the term “warrants” is not there.

Why? Because the lender’s lien-hold interest in the property was conveyed via a trustee’s deed and this deed only conveyed the interest in the property that the lender had according to the terms in the deed of trust.  The conveyance language on the trustee’s deed is grant and convey, without warranty.

So now when the bank sells this property they will likely use the bargain and sale deed because of the way they hold title to the property. In layman’s terms you could say, the lender didn’t purchase the property, it was deeded to them as a condition of a broken promise made in the contract.

Therefore, the bank didn’t come into title with  guarantees and the previous owner may have created other encumbrances. Now the bank is conveying title to you and they are not making any other warranties (or promises).

The typical deed for residential resale it the  Statutory Warranty Deed. It states as a matter of public record that when a seller conveys title to the purchaser they  warrant (and promise) to the buyer that they are the sole and true legal owner with the right to sell and the property is free from encumbrances.

The Bargain and Sale Deed again “in hand paid, bargains, sells, and conveys” without the promise “free from encumbrances.”

Should you be concerned? There are some risks, but if you pick a good team of experts to guide you through the process you’ll do just fine. You’ll want council from a real estate broker with REO experience. Remember, in most cases the home has been vacant for awhile and it’s going to be sold in an “as is” condition. If you’re not paying cash and will need financing, start talking to a lender now and find out what programs they have for financing REO properties and what requirements you’ll need to meet.

Bargain & Sale Deed

The preliminary title report will uncover any issues or concerns of public record that need to be addressed or looked into further. Just make sure you review the title report and if you have questions talk to the title officer. They’ll do a risk analysis and tell you upfront what’s insurable or not.

Often the title insurance policy issued in REO sales is what’s known as a ‘standard policy’. But if the purchaser intends to reside on the property and the purchaser is a natural person and not a legal entity, i.e., LLC or corporation, and the property is not new construction, the title company may be able to issue the Homeowner’s Policy.

For more information about title insurance coverage and the differences between the Standard Policy and the Homeowner’s policy, check out: What are general exceptions on a title report.

Also, the Washington State Bar Association website is a great resource and all of their approved forms are available for free here: Forms Approved by the Limited Practice Board for Use by LPOs

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Financing a condo. that is in litigation


Hello all: I hope you’re having a great day and have big weekend plans.

I wanted to share with you an experience I recently had. I recently was approached by a couple who wanted to buy a downtown Seattle condo. The condo. complex had sued the developer which made it more difficult. In fact, I couldn’t do the loan for that reason. In the Seattle area, there are a number of newer projects where there is currently litigation.

Even though I couldn’t do the loan doesn’t mean there aren’t loans for a unit that is part of a project involved in a lawsuit. The bank that could do the loan sells directly to Fannie Mae so they could avoid the investor overlays. A bank who directly services the loan may also be an option.

Although I was disappointed that I couldn’t do the loan as my relationship with my borrowers was strong, I learned something. Here is what I suggest. One, find out if the complex currently is part of a lawsuit. This isn’t a deal breaker but it means most mortgage companies won’t touch it. Ignore anyone who says they can do it. In our case, we couldn’t because of our new compensation plan implemented in April of this year in addition to the fact we don’t sell directly to Fannie Mae. I would bet most mortgage companies would be constricted as well.

If you can avoid condo. complexes with current litigation all the better. I realize it’s attractive to buy that downtown high-rise condo. at a deep discount. It’s just not as easy as it seems. I hope this has been helpful. Have a great day!

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You Get What You Paid For


A recent email from a friend of mine from the other Washington, prompted me to write this blog.

My friend, Lisa, lives in the beautiful suburbs of Washington D.C. She has a beautiful home with an amazing garden. A few months ago, she decided to downsize and  sell her home. I helped her to locate a RESA-Pro home stager in her area and was confident that she will be in great hands.

Her email, however, told a different story. Lisa decided to go with another home stager, who advertised on Craig’s List. She promised Lisa that she would do a great job and for a fraction of the price of the home stager that I recommended her. The lower price enticed Lisa, since she was selling her home at a loss.

Apparently, on the day of staging, one of  the home stager’s team members hit and broke the dining room chandlier, which was one of a kind, and damaged the Brazilian wood floor. What’s worse, my friend found out that the home stager didn’t have any business insurance.

This whole fiasco could have been prevented, if Lisa had asked the right questions such as, “are you an insured and liscensed company?” Accidents such as this can happen with any home staging company, but only a real professional and insured home stager can clean up messes like this one.

Therefore, before you hire a home stager, find out if they are insured. All of the RESA-Pro home stagers have been in the business for over five years, and are required to have business insurance.  This is a good place to START your search.

If you think it is expensive to hire a professional home stager, try hiring an unprofessional one. After all, you get what you paid for.

Posted in Real Estate, Staging | Tagged , , , | 8 Comments