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  • What is Mark to Market?

    March 19, 2009 /
    Dennis S. Pearce /

    Warning: if Accounting isn't your language of choice, your eyes may be about to glaze over. However, as with many things arcane, mark-to-market accounting  may be having a huge impact on the world we live in right now, and according to many critics, could well be one of the root causes of the current financial crisis. Mark-to-Market accounting is a reporting rule that requires financial institutions to value their current investments at today's value, even if they have no intention of selling those assets now, or anytime in the foreseeable future. As an example, if you were to consider the current value of your own 401k, which most of us are already doing with some significant trepidation, you're  likely down about 50% from the highs of 2 years ago.  However, you're able to do the calculations and realize that so long as you don't sell today, you've still got a chance to recover on the long haul. Mark to Market doesn't allow banks that option, but instead forces them to report the values on their holdings at todays value, as if they were going to sell everything today. Because banks are not allowed to lend every dime they have access…Read more

  • Life is funny; chocolate fixes everything

    March 19, 2009 /
    Dennis S. Pearce /

    Sometimes it's necessary to just purge. Collecting stuff can be such a burden, and the mental space required to keep everything 'sacred' weighs so heavily that eventually the only sane option is starting over. And yes, this can be a metaphor for many stages of life. I just went through it in a minor way this weekend, as I was forced to deal with the assorted detritus of several years worth of projects. The last one, a bunk bed for my daughter, resulted in a fine coating of wood dust on every surface of the garage, and enough wood scraps to build a small barn. My parents have been in town for several weeks now and Grandpa, being retired and a restless woodworker, was 'inspired' by his granddaughter (my 7-year old) to ply his skills in her employ. They both got what they wanted; I got another project. Namely, the disassembly of the old bed, reassembly of the new one ( 2 flights of stairs, 2x6's, and MDF panels, anyone?), and the subsequent cleanup and disposal of said debris.   Both cars are  now back in the garage (a result of  the persistent voice in my head that sounds remarkably…Read more

  • Dual Agency- Sharks that swim on the land

    March 12, 2009 /
    Dennis S. Pearce /

    "Can't you feel 'em circlin' honey? Can't you feel 'em swimmin' around? You got fins to the left, fins to the right, and you're the only bait in town." - Jimmy Buffet, 'Fins' In an economy turned topsy turvy, with which-end-is-up news coming out daily, and a seemingly endless parade of graft, corruption, greed, and new stories daily turning up parasitic relationships where there should clearly be walls of propriety, it's hard to know which way to run. As many homebuyers know, buying a home can be a baffling task- and that's assuming everything goes well. Obviously, as millions of people now know, it doesn't always end in the American Dream. With a purchase as life-altering as your first home, it's absolutely essential that you place your trust in an agent who deserves it. Unfortunately, the desire to 'get a deal' often overrides the common sense priority of 'know whom you're dealing with'. In the state of Washington, every agent is required to present to a new client, preferably at the first meeting, a pamphlet labeled, "The Law of Real Estate Agency". It is a 4 page 8.5" x 11" (double-sided) masterpiece that lays out the various options for real estate…Read more

  • Keller Williams passes RE/Max

    February 26, 2009 /
    Pickett Street Properties Team /

    In every industry, there are always little rivalries; the kind that keep managers, owners, and statisticians awake at night. When you're on the receiving end of the latest corporate dig, or you've paid your dues as the "New Kid on the Block", the ribbing can occasionally get a little personal. And of course some personalities just don't deal with defeat too well. Which is why it has been so amusing to watch the latest blogflares going up as Keller Williams announced at the annual "Family Reunion" in Austin, TX this week, that they've taken some of the air out of RE/Max's balloon. Surpassing RE/Max's national agent count ( to take the spot as the nation's 3rd largest real estate company) is especially gratifying to us here at Pickett Street, as we joined the Keller family in early 2008, after 3 years with a local RE/Max agency.  To be fair, RE/Max was very good to us, and we cherish the relationships we made there. However, we have learned that Keller's culture is more suitable to our way of business: we love the supportive, cooperative, family & community-oriented, values-based team atmosphere. Another significant piece of the business decision puzzle for us was their progressive stance…Read more

  • Top 3 Reasons why $ 8000 tax credit is better

    February 15, 2009 /
    Jesse D. Moore /

    The National Association of REALTORS (NAR) have to be glad that this week is over. It had to be tortuous - thinking on Tuesday that Congress was on it’s way to approving a $15,000 tax credit for those that bought a home in 2009 - then watching the House of Representative strike it completely from the Economic Stimulus package on Wednesday. The NAR's response to the unexpected change was measured, saying only that nothing was yet decided, and that changes would be made before President Obama signed the bill into law. The week ended with a narrow passage of the Economic Stimulus Package on Friday, and (together now, with a sigh of relief) the NAR's efforts were rewarded with an honorary mention in the American Recovery and Reinvestment Act. I preface with all of that to say this: THANK GOD! Not because I think that the measure will be a salvation to the industry, but because their are several reasons why the act passed yesterday is better than the $7,500 tax credit passed last year and the $15,000 tax credit initially supported by the NAR. Here are the top three reasons why: (1) The same benefit for all that use…Read more

  • Why We Do What We Do

    February 11, 2009 /
    Dennis S. Pearce /

    Tonight saw the end of a purchase transaction that is at once a cautionary tale, and a laser bright light in the darkness of a struggling economy. To really tell the story, we have to go all the way back to August 26th,  2008, when the offer on this short sale home was written. That's right - six months from writing an offer until closing! Knowing we were writing on a short sale, there was an explicit understanding that we were on the extended timeframe plan. As the seller's lienholder was Countrywide (who takes longer than any lien holder to even look at an offer), we even knew to expect the unexpected. However, saying that and experiencing it are frequently two very different things. Due to the fact that our clients had some very specific needs, including active young children and an unpredictable work schedule, it was decided early on that Jesse and I would work in tandem on this one. One of the benefits of partnering in this business is the ability to share the load, and we have found it adds a dimension to the relationships we develop that we both cherish. There were several twists and turns…Read more

  • Washington State shorts sellers: an obvious problem with short sales, excise tax & Washington State’s position

    January 11, 2009 /
    Jesse D. Moore /

    UPDATE: If you're looking for information on the short sale process in regards to real estate transactions in Washington State, you might want to read "The Anatomy of a Short Sale" instead. The post below is a response to a policy from the Washington State Department of Revenue on short sales that has since changed. To tell this story effectively, I'm going to have to explain a few things - assuming that not all of you are up on the real estate vernacular of the day. Excise tax: In the sale of real estate, Washington State charges a tax in the amount of 1.78% of the home's value (to be paid by the seller). One would think that the easiest way to determine value on a property that recently sold would be to...I don't know...maybe...look at the sales price?!?! But we'll get to that in a minute. Short sale:I would think that most of you would be familiar with this term, but in talking with friends and clients, I think that many are unclear of its true meaning. A "short sale" is different from a foreclosure or pre-foreclosure sale, in that the seller may be absolutely current on all of their…Read more

  • Reverse Mortgage Psychology

    December 17, 2008 /
    Dennis S. Pearce /

    Remember when interest rates were bouncing around the 6-7% mark, and homes were flying off the shelves? And remember how buyers in that wild market would forgo inspections, write offers on the hoods of their cars, and painstakingly draft impassioned letters of introduction to sellers, pleading for clemency in the life-sentence of homelessness the market was imposing on them? We've all watched the steady deflation of the confidence that accompanied those times, to be replaced by the looming grey cloud of indecision and angst. However, the reality is that rates have fluctuated less than 3 points in the past 8 years (2000-2007)- all the way back as far as 2000, when we reached a high that year of 8.52%, right around the time the DotBombs were imploding, and the country was talking recession. The lowest we've seen since then was June of 2003, when rates briefly bottomed at 5.23%. Throughout the next 4 years, the lowest point was a short stop at 5.45% in March of 2004. The remainder of that timespan was spent hovering between the high 5's, to the high 6's. On the surface of it, there are a few obvious reasons for the mental shift; the subprime collapse, Wall Street's subsequent malaise, an…Read more

  • Risk & Reward

    December 11, 2008 /
    Dennis S. Pearce /

    As 2008 winds to a close, I feel compelled to do a little reflection and projection. From a Real Estate perspective, it has been a challenging year. Historically, we've not seen such froth in the economy as a whole as we've witnessed in the past 12 months, since the Great Depression.  This hyperbole has become a staple for 6 o'clock news reports; in fact, if there has been any consistent theme to sum up the year, I'd think a heading along the lines of "Great Depression: the Sequel", would encapsulate the general media mood, and the extent of most reporting on the subject. However, there are a few key points that have gotten lost in the rush to spill red ink on the headlines. Just this past week, I finally saw a new piece in the PI that touched on the opportunities this market presents for first-time buyers. Another point that's frequently forgotten in all the talk of recession is the amazing fact that we've never seen the unique set of factors currently in place: low interest rates paired with a buyer's market. Recession typically is accompanied by high interest rates- the last big one in the eighties saw rates over 18%! We're looking at a realistic…Read more

  • Jesse Moore & Lisa Bender: 5-Star Real Estate Agents indeed!

    December 10, 2008 /
    Dennis S. Pearce /

    We think a lot of ourselves here at Pickett Street, but it's always nice when others validate it in the form of an award or designation! It's with great pleasure that I announce that two members of the Pickett Street team have been selected by Seattle Magazine as 5-Star Real Estate Agents, Best in Client Satisfaction for 2008. My business partner, Jesse D. Moore, and our fellow associate, Lisa Bender, have both been selected among this year's honorees. What exactly does this mean? Seattle Magazine says it best: Experts say that at least 90 percent of homebuyers rely on real estate agents for advice and guidance. But with more than 14,000 Seattle residents holding real estate licenses, how do you find someone who knows the market, represents your interests and operates with an emphasis on integrity and service? Seattle magazine can help. For the fifth year, the magazine has formed a partnership with Crescendo Business Services, an independent research firm, to find out which real estate agents have most consistently wowed their clients. This past May, Crescendo surveyed by mail and phone, 29,000 Seattle area residents who had recently purchased homes. An additional 250 surveys were sent to mortgage and…Read more

  • Fear and Trembling; Madison Ave vs. Wall St./Main Street

    October 21, 2008 /
    Dennis S. Pearce /

    Are we living in unprecedented times of unsettling uncertainty? How have you been sleeping? How are your nerves? How's your portfolio? Talked to your broker lately? Are you too busy running for cover to worry about the future? In times like we've been told these are, it's far too easy to get caught up in the 'lemming tide', and allow emotions to rule the day.  And, truth be told, as a member of an industry that is on the front page of multiple publications on a daily basis, and on the tongues of every breathing adult, it would be easy to succumb. There are days when I shake my head after a look at my latest 401k statement, and think it might be time to start investing in a bunker somewhere in Idaho. However, one small detail seems to get lost in all this: Fear is an emotion. It's not a reflection of reality, it has no place in financial decision making, but is simply a conditioned response to input. In caveman days, fear was the appropriate response to the toothy feline crouched on your path. With a few minor exceptions, we have evolved. Or at least we like to think we have.…Read more

  • A Stake in the Game

    October 14, 2008 /
    Dennis S. Pearce /

    Speculation. It makes the world go 'round. The financial world, in particular. It's the bedrock of gambling, the essence of markets, and a human trait we just can't seem to shake. If the possibility of multiple outcomes exists, for any given activity, there will be at least two people willing to stake odds. An industry unto itself, gambling is the life's blood of many municipalities who rely on the ironically predictable nature of people to take a chance. 'Win some, lose some' is the fatalistic mantra of the veteran. Recent weeks have seen more of the downside of this reality than most are comfortable with. Especially those who had become accustomed to winning. Receiving the latest Mutual Fund statement is a painful reminder that stocks are, in fact,  institutionalized gambling. When it's your retirement, it really hurts. When it's your home, well, that's personal. In reality, it's called 'investing' specifically because there's 'Risk'. If there wasn't risk, it would be a sure thing, and everybody knows there's no percentage in that. No percentage, no return. We all have to develop a personal comfort level with risk; Some climb mountains, others daytrade, and still others buy homes. Some do all three.…Read more