If this can be termed “tribute,” then it is a tribute to one man’s courage. To the courage that it took to overcome a broken home; to the courage that took him before he had reached the age of twenty to the battlefields of World War II; and finally to the courage it took to become a guide and inspiration to others.
Leonard’s earliest childhood was in a disrupted home. When he was eleven he was sent to the Washington Children’s Home and at thirteen was adopted by the Hudson’s. He was active in high school, taking part in school plays, boxing, and reading endlessly.
As a member of the Mt. Vernon National Guard, he was mobilized in September 1940 and was soon sent overseas to the Philippines. It was overseas in the Battle of Leyte in 1944, where Leonard Hudson lay unattended for 48 hours with shrapnel in his right shoulder. Quiet with courage, Leonard waited until the corpsmen arrived to take him home to face his greatest battle. Back home the shrapnel wound became cancer. Leonard underwent operation after operation having his right arm and shoulder amputated. You wouldn’t have known that, as Leonard didn’t talk about those things. Facing this challenge head on, he went on to attend Western Washington University on the GI Bill to become a teacher.
A husband and father with three children, Leonard continued to go to classes and work, with a will and courage trumpeted by too many and possessed by too few.
Leonard learned to do more with his left hand than most do with both hands. He built toys for children, hobby horses for his own and others, learned to type, and carried on just as he had before. It didn’t stop there. He faced each day with courage and lived to the fullest.
In his studies he wrote “I shall not be a teacher, but a guide. I shall try to show the child the wisdom of relying on himself. I will try to show how to do a thing rather than tell.” He delighted in helping eager young minds grow, and in turn they loved him because he made their paths straighter.
In April 1949, Leonard passed into immortality, leaving behind a legacy of courage and faith that will never die.
Following his passing, Leonard’s students came together in honor and formed a scholarship fund in his memory. With the archives we have today, it was hard to tell how many years that fund remained active with the college, but the sentiment is both inspiring and enduring.
I never knew my Grandpa Leonard. It pains me more that my dad never had the opportunity to get to know his father. There is no doubt that Leonard would have been proud of the person his son has become.
In honor of my family, I re-instilled the Leonard Hudson Memorial Scholarship in 2014. It is awarded to graduating high school seniors who have shown qualities of leadership and courage. That first year, I was able to start with just one award. This year, I am humbled by the opportunity to help three young adults begin the next phase of their journey.
With your support and referrals, I am able to continue giving back to our local kids through the Leonard Hudson Memorial Fund. With the help of my father, the fund has now become an official non-profit 501 (c) (3) and is engaged our local community here and now.
Memorial day may come once a year, but for me, I am routinely inspired by Leonard’s story of triumph and courage in the face of adversity. It speaks volumes when a fallen hero from 70 years ago has such an impact still.
In a world that seems to rotate faster and faster each day, take a moment to remember the sacrifices made and realign your sights and actions with the future you want to see.
Jen Hudson
“God grant that courage like yours not be lost to the world.” – G.P. February 4, 1949
The REET is the Real Estate Excise Tax. Think of it like sales tax when you sell your property.
Washington State has (2019 and prior) a flat excise tax of 1.28% across the state. In addition to this 1.28%, individual jurisdictions such as cities or counties can levy an extra 0.50%, for a total of $1.78%.
For example, almost everywhere in Snohomish, King, Skagit, or Whatcom county is a tax of 1.78% total. The exceptions here are Darrington and Skykomish, at a total of 1.53% instead. There are others throughout the state, those are just the ones we work most frequently with.
That means, if you want to sell your home, in most areas you will pay a total excise tax of 1.78% at closing to the Department of Revenue.
Right now, it does not matter if your property is worth $300,000 or $3,000,000, your excise tax is the same rate at 1.78%.
Is the REET going to change?
Yes. Starting January 1, 2020, the real estate excise tax rate across Washington State is going to change.
The good news?
Home and property owners with sales prices at $1,500,000 or below will see either no change or a reduction in this rate. Properties valued below $500,000 will see a reduction of 14% from 1.28% down to 1.10%. The properties between $500,000 and $1,500,000 will remain the same.
The bad news?
Property owners with sales prices above $1.5mil will see their taxes more than double, with rates at 2.75% for $1,500,000 – $3,000,000 and 3.0% for $3,000,000 and above.
How does the new REET work?
This new REET system is going to be a graduated or tiered structure. While the lower end of the market will benefit from these new rates, the middle stays the same, and upper end will owe more in taxes at closing.
New REET Rates for Washington State (State only, local jurisdiction is extra)
REET Price Example – $350,000:
For example, if you sold a property for $350,000 in Everett, you would pay $6,230 today (1.28% plus 0.50% = 1.78%).
If you sold that same property in 2020, your tax is now $5,600 (1.10% plus 0.50% = 1.60%), which is a $630 savings.
REET Price Example – $2,500,000:
The other end of the spectrum looks a little different. Let’s say your property is worth $2.5mil. Today, your tax is $44,500 (1.28% plus 0.50% = 1.78%).
In 2020, those same taxes will increase to $58,300 ($8,000 + $17,800 + $32,500), which is an additional $13,800 cost.
1st tier $500,000 of sales price x (1.10% + 0.5% = 1.6%) = $8,000
2nd tier $1,000,000 of sales price from $500k-$1.5mil x (1.28% + 0.5% = 1.78%) = $17,800
3rd tier $1,000,000 of sales price from $1.5mil-$2.5mil x (2.75% + 0.5% = 3.25%) = $32,500
Is there anything else I should know?
Keep in mind these rate changes are to the state portion of the real estate excise tax, not the local city or county jurisdiction.
If you live in a location such as Everett or Arlington where you currently pay 1.28% to the state plus 0.50% to the local jurisdiction, then you will still pay your state fee between 1.10-3.0% (in the chart above) plus the extra local percentage on top of that.
One more thing.
While a 1031 tax deferred exchange is usually a great weapon to combat your tax bill, unfortunately it won’t work here. In Washington State, the excise tax is due on the sale of your property to the state and local jurisdiction, and is not one of the taxes that can be deferred later, such as capital gains or the recapture tax on depreciation.
As Sun Tzu says “Strategy without Tactics is the slowest route to victory. Tactics without Strategy is the noise before defeat.” We excel at helping you plan and prepare, to make sure you get to the finish line in the best way possible.
For more information about local tax rates or to talk strategy, give us a call at (206) 466-4020 or send an email to info@hudsoncreg.com.
I write a lot of stuff. Sometimes good. Sometimes bad. People seem to read it, and many times they will contact me because of it.
Each week, I talk to a bunch of strangers. People that I didn’t know until that moment, but who reach out to me to help with the challenges they are having. I regularly talk with hundreds of people about some of their most intimate problems. These are not the problems you discuss with the checker at the grocery store. No, the problems I tend to discuss with strangers are usually the kind of problems that are life changing decisions.
I realize this is a unique point of view that very few people will ever have. I can’t say it is good or bad, it just is. Lately, I have begun to get concerned… about our future.
Why you ask?
Let me explain.
It used to be that the people I would talk to understood which actions they had taken to put themselves in a certain position. Maybe they didn’t like the consequences that came with their decision, but they understood and accepted how they got there. Even in bad situations, there was a level of accountability.
Now? That accountability seems to have gone out the window. I don’t understand why, but I think I’m starting to see the how. I believe there are 3 monsters who are fighting against our basic human traits, and sometimes they get the better of us. Those 3 monsters are:
Personal Accountability vs. the Herd. As people, we make decisions every single minute that will impact our lives. Those decisions can be anything from what to eat for lunch to who to give my estate to after I’m gone. No one forces us to place another order with Amazon. No one forces you to post on Facebook. No one forces you to buy a home. These are all things you decide to do for yourself and your family, because you believe it will meet a need or provide a better outcome. Take responsibility for your actions. Even if you don’t like the outcome, that doesn’t change the fact that you made the choice to get there. You can’t blame the herd mentality monster for your own decisions.
Patience vs. Automation. The automation monster is running rampant. As Amazon continues to change the face of most everything we know, we have forgotten what it is like to have to wait. I don’t mean wait for the box of unnecessary stuff to show up at the door. I mean wait for anything. Can you get a mortgage in as little as 8 days right now? Are you really going to wake up one weekend and decide to upend your life and then be packed and ready to go by the following weekend? I doubt it. Some things need time, even if they don’t take time. Read that again. When it comes to important life decisions, you need the time to consider all the implications of that choice you are making. If you are confused on making choices, please see personal accountability above for more details.
Generosity vs. Greed.Amid the “I want it now” and “It’s not my fault” lies that you tell yourself is the biggest underlying monster. That monster is named greed. Greed is tricky because it tends to hide in the shadows, but has his fingers in most everything you do, even if you don’t realize it. As our society shifts and the way we do business changes, it makes it even easier for greed get what it wants. Maybe greed wants a hamburger at a drive-thru because it’s easier than cooking at home, or sits on the couch to binge Netflix instead of shooting hoops outside, or wants to pop that extra Ibuprofen pill instead of drinking more water because its easier. Just this week, I saw offers from more than one lender for loans with “up to 110% of appraised value” for repairs and “no income, no asset” mortgage options on an investment. When used properly, these are good mortgage tools and products to have. It’s only when greed raises its ugly head that good things often turn bad. Think of it like medicine. If a little bit of something is good, a lot of it doesn’t mean it’s better. In many instances, a lot of something means an overdose and a ride in an ambulance or body bag.
The next time you find yourself making snap judgments or decisions, remember to keep it in context. Don’t let the herd automate your greedy desires. There is a solution for that. It is called you. Hold yourself accountable for what you need and act accordingly.
When you need a real human adviser to help you through your Snohomish County real estate decisions, give us a call at (206) 466-4020 or info@hudsoncreg.com. We are the closest thing to an easy button that comes with a real human experience. And, we only work with honest, down to earth, and strategic minded people.
It all starts with a simple conversation. How can we help you today?
These past few weeks, I’ve found myself at a number of community meetings. I’ve listened to a few mayors try to connect with the people and offer reassurance they are doing good things. I’ve listened to city planners, county executives, and parks officials try to explain both processes and visions. I’ve listened to homeowner associations, law enforcement, educators, and passionate neighbors talk about the best ways to keep their kids and their communities safe. And, I’ve listened to the people at each and every one of these meetings too.
Despite the new plans, future goals, and impressive growth… after hearing from nearly every area of Snohomish County, I was both a little pleased and saddened at each stop. Why? Because so many people have turned into Space Aliens. Let me explain.
You know how in the movies, there is the space ship full of aliens who manages to land in the middle of a large crowd? After the initial frenzy, the audience gathers around as the king alien appears and basically says “let’s all work together, but with my rules”.
Then the humans say “Hey wait, you just landed here. How can you tell us what to do?” And chaos ensues.
Whether we are talking about leaders of countries, municipalities, organizations, or households, it’s been pretty perplexing lately. Even downright confusing and troublesome at times. In my opinion, they should all go sit in timeout.
At each meeting, all I heard was “I’m afraid. Don’t ask me questions. Do it my way.” Whether it was the heads of households, or the heads of state, they both had their fair share of stage time in the complaints and frustrations category… yet didn’t get many points in the understanding and solutions section of the test.
With all of this “what’s in it for me?” crud, where did the problem solvers go? You know, the people who had to think through an issue and look at the facts and options in order to find a solution. A solution that worked for many, not for one. And a solution that included a bigger picture, not just now. I’m sorry, but you can’t ask Siri or Alexa for a quick answer here. That algorithm is flawed.
After listening (truly listening) to all sides of each situation, I kept hearing the same thing over and over. People wanted to protect their values.
The thing about values, is that it starts with expectations. “Values” on their own, just aren’t a thing. Expectations are. (You can read that again if you need.) I don’t know how you can walk into a conversation with someone and then dictate a solution, unless you understand where they are coming from first, what their expectations are, and then address it directly. That’s negotiation 101.
I don’t care if you are red, blue, green, purple, or rainbows with your expectations. The next time you walk into a setting with other human beings, put a little more focus on the “being”. Drop your iPhone. Look someone in the eye. And, have a real honest conversation.
That’s what we do. We are amazing at helping people sort out their real estate questions. And, we’ve done it hundreds of times. It requires a lot of thought and exploration in order to find a solution together that makes sense. Different people have different needs.
We don’t take our role lightly, and you shouldn’t either. In order to “add value”, it means we need to ask questions and understand your expectations before we can develop a solution that matters. It’s not hard, but it requires discussion. After all, I can’t just tell you where to live or invest, but I can help you find something that makes sense for your family.
To add value to your future, that the others have forgotten how to do, give us a call at (206) 466-4020 or info@HudsonCREG.com. Thanks for reading. Remember, don’t be a Space Alien. We sure aren’t.
What did you miss? Here are the highlights from March 7, 2019.
What was this “Kick Off Event” again?
Kickoff Event on March 7, 2019 at the Everett Golf & Country Club. Photo by Jen Hudson.
Every year, we work with our Windermere office to put together an informational and fun evening filled with quality speakers, a few appetizers, and a lot of really good people at the Everett Golf and Country Club.
Sounds good. Who was there?
In addition to the roughly 150 valued clients and colleagues, we had a great line-up of presentations with Gary Cohn, the Superintendent for Everett Public Schools; Cassie Franklin, City of Everett Mayor; and Matthew Gardner, Windermere’s Chief Economist and one of the few economists who can brings a sense of humor to statistics.
Interesting. Who was the opening act?
Gary Cohn kicked off the evening with a focus on kids. He discussed some basic facts and figures to start. Did you know that there are approximately 20,500 students in Everett public schools, with a projected growth of over 9% or another 1,858 students by 2026? He addressed the income disparity in some of our local communities, emphasized how poverty is the single biggest factor that affects children, and noted that unfortunately almost 40% of our students are impacted.
Despite some initially startling numbers, there were many good points. First, graduation rates. The 4-year graduation rate from Everett schools is currently at 95.7% (oh yeah!), up from 81.7% in just 2009! And, he talked at length about how after you adjust for poverty, Everett schools test above the trend line on everything from test scores to life preparedness.
Those numbers are surprisingly good, but where are all those extra students going to go?
The new Tambark Creek Elementary School, on track to open this year in fall 2019. Currently, there are 17 Elementary Schools, 5 Middle Schools, and 4 High Schools. The addition of Tambark Creek brings the district to a total of 27 schools over 39 square miles.
How do we prepare our kids to become future leaders?
Career Pathways. In 2013, Everett Schools became a K-12 STEM District. Rather than limiting curriculum to the typical Science Technology Engineering and Math, they took it a step further. After completing basic high school requirements, students have the opportunity to enter a career pathway and gain the academic, technical, and workplace knowledge and skills. This will allow them to transfer seamlessly into their next level of schooling, pursue graduate programs, or transition to the workforce.
What about Everett?
After 14 years, the city of Everett welcomed their new Mayor Cassie Franklin in 2018, who is also the first woman elected to the office. This change allowed the city to rethink some of their old practices and take a fresh look at how they spend and invest resources and how to partner with more community organizations and the public for support and feedback. Over the past 12 months, the results have spoken for themselves. The city’s budget is not only balanced for 2019, but also achieved $5.6mil in ongoing savings through technology investments, changes to programs, and staff reductions.
What are the top issues for the city moving forward?
Quality of life. Mayor Franklin wants to see Everett as a place that is walkable, livable, and safe. This past year was a focus on youth gang and gun violence with prevention and intervention programs, the city’s first ever Gang Response Unit, and a firearm safety campaign which all contributed to a 40% reduction in gang-related offenses.
Another area of public focus is homelessness and addiction. Recently, Everett has partnered with Cocoon House, HopeWorks, and the Safe Streets Housing and by 2020 will have completed 170 new supportive housing units in three new projects. They have introduced Treatment Without Delay to help combat the opioid crisis. And, the partnership with Bridgeways is allowing individuals to connect with new employment opportunities. While Everett’s challenges mirror many other communities, they are ahead of the curve when it comes to seeing results and finding solutions through their unique partnership programs and approaches.
Everett’s Mayor Cassie Franklin
Economic Vitality. Mayor Franklin has a vision that people who work in Everett also have the opportunity to live in Everett, that businesses of all sizes feel connected and supported to the City government, and that Everett is a leader in regional economic development.
Everett is, of course, proud to be home to the world’s aerospace leader, Boeing, who recently achieved a new record of 806 planes delivered in 2018. Aerospace and Manufacturing wouldn’t happen without a close connection to the Port of Everett. The Port has had one of their busiest years as well, with plans for the biggest capital project in the Port’s history and the largest maritime construction project on the West Coast today: The South Terminal Modernization project.
Waterfront – West Side. Construction has begun on 266 new housing units at the Port’s Waterfront Place with a planned grand opening in 2020. With 86% of the units already spoken for, there is a lot of excitement at the Waterfront. Hotel Indigo is also planned to open this summer, which should double the capacity of lodging on the Waterfront.
Waterfront talk isn’t complete without mentioning Naval Station Everett. While 2018 saw some changes, Everett has been a Navy town since 1994 and shall remain a key partner with the City moving forward.
Riverfront – East Side. Polygon has sold nearly 320 single family homes and townhomes, with over 1,000 more in works. The Riverfront construction is poised to take off soon for development on a new commercial center later this year that includes plans for a movie theater, grocery store, retail and restaurants.
In addition to these major projects, the Port’s Riverside Business Park is also under construction, which should bring approximately 800 new jobs to Everett that will be alongside the existing Northwest Aerospace Technologies and newer FedEx Freight facility.
Another important industry in our area is health care. In Everett, Providence Regional Medical Center is one of our largest employers and continues to expand in the region. Other industry leaders, such as the Everett Clinic, Kaiser Permanente and Seattle Children’s Hospital have been opening new clinics and bringing in additional jobs as well.
The vitality of Everett comes from both businesses and residents. In the downtown sectors, we are seeing our businesses stay for longer periods of time, expand to new locations, and attract new business partners. One of those newer additions is Funko, who have added 175 new jobs over the past 2 years. Imagine Children’s Museum is an amazing asset to the community with major expansion plans this year as well. The Angel of the Winds Arena saw ticket sales increase in 2018 with an incredible and diverse line-up for 2019 including the Seattle Storm, the Backstreet Boys, and more. And, there are many new additions to our restaurant scene and downtown retailers.
Courtesy www.PortofEverett.com
Transportation and Mobility. Economic development needs a strong transportation network.
We are fortunate to have Sound Transit, Community Transit, and Everett Transit all serving our community. This year, the city will begin planning for 2 light rail stations for southwest Everett. They will also begin replacement of the westbound US 2 trestle to address the current choke points with the State. It’s estimated that by 2022, Everett will have a total of 18 electric buses on the road that will save an estimated 10,000 gallons of diesel each year.
Downtown Rucker is in the process of becoming a more pedestrian friendly corridor, along with a current parking study that may help relieve some of the challenges, as well as a pedestrian bridge connecting Everett Community College to the Washington State University (WSU) Everett campus. 2019 will see improved bus stops on Broadway, and new amenities such as shelters, benches, and bike racks. On the other side, Grand Avenue Park Bridge will open in 2020 bringing a new connection to the waterfront.
After seeing great results from the Business Improvement Area (BIA) around the downtown corridor, there will be a new BIA around Everett Station. There is substantial potential growth here and an understanding that the Metro area will continue to be the hub for and attract further development and future growth.
Commercial Air. One of the biggest topics locally has been Paine Field. Commercial air is a game-changer for Everett. With a lodge-like design, 18 flights daily through Alaska Airlines, and additional flights from United Airlines beginning March 31, 2019, Paine Field has put Everett on a whole new map!
This year in 2019, Everett will continue to build their alliances with Snohomish County, Tulalip Tribes, and the Port, as well as all the other major sectors and businesses of all sizes in the area.
Courtesy Everett Public Schools
Education and Workforce Development. In addition to the notes from Superintendent Gary Cohn, the local school districts have encouraged students to take dual-credit classes, earning both high school and college credits, and have seen an impressive increase of 876 percent more enrollments!
The Mukilteo School District includes Sno-Isle TECH, and gives students the opportunity to earn high school credits while gaining hands-on experience. Everett Career Link is a summer internship program that provides real-world experience for high school students at businesses in their own backyard! These programs see participation from a variety of businesses, including Providence and Kaiser Permanente as some of the most recent to enroll.
Aviation Maintenance Technician School at Everett Community College has opened for evening and afternoon classes to help meet the increasing demand for skilled technicians. The Lab @ Everett opened last fall and has wide spread support from businesses and education communities, including power players like Amazon and Microsoft.
Wow. That’s a lot of information on Everett. What’s the take away?
Everett and our surrounding community will look very different in just a few years, and for many good reasons. We have already seen advancements with increased activity, investment, and improvements to infrastructure. Combine these advancements with nearly 300 acres of parks and green spaces to explore and a beautiful natural setting featuring both the Waterfront along the west side and the Riverfront along the east side, and you’ve got a winning combination for many years to come.
We believe you should be informed before you make decisions about your future. After all, Everett is just one city and we didn’t even get to the economics part of the story yet. There are still casino & mall expansions, improved roadways, new highways, and a whole new manufacturing industrial center in works, just to name a few projects in works in Snohomish County. Stay tuned as we update you on progress.
For more information about the developments in the area or to see how your real estate is positioned with these opportunities, reach out to us at (206) 466-4020 or info@HudsonCREG.com. You’ll be glad you did.
Jen Hudson & Duane Petzoldt
Left-to-Right: Daniel Volkert with Real Property Management, Duane Petzoldt with Windermere RE/M2, Greg Love with Windermere RE/M2, Chris Bodin with Guild Mortgage, Kevin Black with Anderson & Black Insurance
Please don’t misinterpret this post. I really like Monkeys. This one is a Vervet monkey.
Recently, I was talking with a friend. I thought it was going to be a quick conversation. The water cooler kind. I thought we might touch the surface of the problem, but then brush it off and move to the next task at hand. I was wrong.
Instead, it turned into a moment of full disclosure. The raw, heartfelt kind. As I listened to my friend go on about their issue, I felt like I was on the other side of a glass wall just watching the events unfold. It was heartbreaking, but not because of the story being told. It was heartbreaking because of the way they were telling it. My friend was clearly listening to their monkey and was fully absorbed by it.
You know about your Monkey, right? Your monkey is the little voice that comes out when things get tough. It sits there on your shoulder and starts whispering in your ear. Your monkey doesn’t whisper “sweet nothings”. No, your Monkey feeds you lines of garbage. Things like “You were a fool to do that.” “What are you thinking?” “You’ll never be able to succeed.” “People will laugh at you.” The feelings that follow your Monkey’s sermon are really where you’ll start to spiral. Your Monkey brings insecurity, doubt, self-hate, depression. I know I’ve fallen victim to my Monkey. I know that you have too. We all must battle our little bastard Monkeys on occasion so that our Angels can sing.
After listening to my friend tell their story, dancing on a ledge between tears of grief, full blown anger, and denial, all I could say was “bull*%!$”.
Now, I didn’t mean for it to come out so abruptly. I meant it with my most honest intentions. In the blink of an eye, my Better Angel threw the entire conversation off balance. Looking back, it was probably the best thing that could have happened. The last thing my friend needed was coddling or someone to make them feel better. What my friend needed in that moment was someone to wake them up to the reality they couldn’t see.
I have known my friend for many years and have seen their better side. The side that is strong, smart, fearless, loving, and knows how to be a leader. But their little bastard Monkey was clouding their vision, and had been for a while.
My Better Angel knew that. Without thinking, my Angel put it all out on the table. It was a confident gesture of love and understanding. It wasn’t arrogant. And I wasn’t agreeing with all the bad things going on. While those terrible thoughts might have felt real to my friend, they needed someone to wake them up from the daze. A simple hand up to get back on the right path. My Angel knew that instinctively, and immediately you could see the change start to happen.
We can all get trapped by our Monkeys. Maybe it’s uncertainty as the world moves faster, frustration with a loved one, lacking confidence in a job, depression from your own struggles, fear of losing someone, or anxiety of not being good enough. I have been there. And, so have you.
If you’re at a point in your life where you aren’t sure which direction to go, try to figure out which voice is your Monkey and which is your Angel. When it is uncertainty about whether you should buy or sell, or take over the world, or run and hide… maybe we can help. Our business is selling real estate, but it’s really about making sure your future is in order. Sometimes, you just need help tuning out the noise.
If you’re having trouble putting a muzzle on your little bastard Monkey, then give us a call. The market is what the market is. Buying. Selling. Investing. Stop just reading headlines and stumbling around in the dark. It’s always a good time when you know what to look for. Knowing the real facts and helping people make informed decisions is something we have been doing for our clients for the last 15 years. We can help you too.
Today, you should plan for tomorrow. Call us at (206) 466-4020 or info@hudsoncreg.com.
Cheers!
Jen Hudson
P.S. This post is inspired by one of my favorite real estate instructors, Joe Still, CCIM.
P.P.S. I really do like Monkeys, but the furry kinds not the ones noted here.
Let me translate the title for our younger crowd… #RaiseTheBar… of your financial fitness, that is.
We recently posted an article about Humans versus Robots. If you missed it, you can read it here.
Following this, we received a very kind note from our good friend and longtime lender, Tom Lasswell.
Tom was gracious enough to expand on our story and pointed out some things that bare repeating.
“I appreciated reading your most recent report…. Technology and how that is impacting Real Estate and Lending…
Too many financial disciplines are needed to work together for an individual or family to even have a basic strategy, let alone a great one. With so many variables for any individual or family, many of the attorneys, financial advisors, CPAs, and Bankers don’t even understand how their service area impacts another, and vice versa.”
Based on a recent report published by CNBC (and released by Bankrate), only 39% of Americans could cover an unexpected $1000 emergency from their own funds. In case you are doing the math, that translates to 61% of Americans do not have enough cash or money in the bank to pay a $1000 emergency.
That. Is. Scary. Especially when most emergencies cost a lot more than $1000… at least from what I have seen.
He continues with “the industries have dumbed down their disciplines to compete. Yet what I see today is Sales people Selling and Telling, when they should be Caring and Consulting. Many do not have the education and expertise to truly guide their clients in the best manner possible.”
Is it in anyone’s best interest for us to sit back and ignore the problems that these automated and “streamlined” systems are creating? I don’t think so. Where has common sense gone?
Tom states “there are approximately 216 combinations of residential mortgage and insurance strategies.”
That is a lot of combinations for a single mortgage or insurance or financial advisor to understand. But, isn’t that their job? Shouldn’t you be able to have a qualified professional discuss the pros and cons with you personally based on your unique situation? Yes, it takes work to understand all those details and be able to educate someone on them. But…. That is what I thought a professional was!
With this ongoing shift in our world to a more automated and “intuitive” system, we need to be careful. If most loan advisors do not really understand how rates work, then how can you expect them to guide the technology company to create a program that works in their client’s best interest?
Next time you run into a “professional”… or professional hack, that is… ask them what is the difference between a stock and a bond? Or, the difference between an annuity or life insurance policy? How about the difference between a will and a trust? Careful though, all of these questions will also require you to then ask your CPAs how all the tax implications work. I hope you have a good CPA too!
Tom warns us that we need to be aware of entire industries that are trying so hard to compete on price, that they have overlooked value completely. If you are working with a professional who lacks the understanding behind their industry and service, then maybe you should keep searching for a real professional instead. If you have questions, the answer should NEVER be “let’s not discuss too many options, as that elicits too many questions and crates too many headaches for our company.” Of course, they don’t state that directly… but you get the feeling a lot of times that is what they want to say, right?
When you need a real professional for your lending needs, you should give our friend Tom Lasswell with New American Funding a call at (206) 817-5532. He’s been in the business for 35 years and knows more than just a thing or two.
And, when you want a team of professionals who truly understand the real estate market and all the related and moving components, you can reach us directly any day except Sunday.
Your life decisions shouldn’t be made by a robot, and certainly not a robot that is still in the beta phase. Let’s all come together and force these companies to raise the bar when it comes to their automated technology and how they train the people who are supposed to be helping you.
How Technology Needs A Better Approach For Sustainable Success.
Let’s talk about the elephant in the room. You know, the one where robots take over the jobs of humans. Today, let’s talk about the jobs in real estate and lending.
Or, to be more specific, the disruption that is forcing changes across the industry.
Hold on, that sounds technical.
It is, but not really. Let’s use common sense.
Disruption: A radical change in an industry or business strategy, especially involving the introduction of a new product or service that creates a new market.
Disruption is also known as “forget about the old way of doing things, it no longer exists”. This new way involves something faster and automated, which typically means cheaper. But remember, as everyone races to the bottom with their giant Amazon companies, the floor doesn’t stop at zero. There are negative numbers too, meaning many companies are losing money with the hope that one day they grab enough low-paying customers to compensate for the overhead.
Do you want another scary realization? The next time you sign up for something that is “free”… if you aren’t the paying customer, then that means you are the product being sold. Yup. Welcome to technology.
Editors Note: We don’t sell your name or data, even though this is free. Thanks for reading. Cheers!
Both the real estate and lending industry have been ripe for disruption for decades. We’ve talked about it for years, but it is happening before our eyes. Today.
In a lot of ways, I’m super excited about the new innovations that are coming to light. In other ways, it scares the bejesus out of me for the consumers who just don’t know any better and don’t enough know enough to ask.
Before we dive into what robots and artificial intelligence are doing, let’s look at where companies are heading with their business models.
There have been countless news stories and opinion columnists citing statistics and reports on start-ups poised to shake things up. Admittedly, the numbers are impressive. Investor funding runs well into nine figures for the two largest direct homebuyers, Opendoor ($320 million) and OfferPad ($260 million).
As entrepreneurs and investors have continued to gravitate towards the various opportunities offered within real estate, the Real Estate Tech ecosystem has grown in both size and scope. Since 2012, Real Estate Tech companies have received over $6 billion in funding, with companies raising $2.6 billion in venture capital in 2016 alone, a substantial increase from the $1.9 billion reported in 2015. With over 100 real estate focused startups receiving early stage funding in 2016 and later stage tech enabled real estate companies like Compass (raised $450 million in early December 2017) and Redfin ($138 million IPO in July 2017) raising substantial amounts of capital, the sector has undoubtedly piqued the interest of consumers, investors, and industry players alike. Not to mention Zillow.
What are these companies doing that makes investors so excited they are willing to pump in hundreds of millions of dollars into them? They are creating mega-tech one-stop-shop companies that are meant to take over your life.
First up, let us look at Rocket Mortgage.
I’m sure you have heard of Rocket Mortgage by now. Rocket Mortgage is owned by Quicken Loans, and had it’s coming out party during the 2016 Super Bowl Ads. According to housing wire, Quicken Loans was #1 in 2017 by transaction volume and looks to be heading to the number #1 spot for 2018 as well. Quicken did have true innovation when it comes to Rocket Mortgage, and they were rewarded with the top spot in the country for lenders by both the highest number of transactions and largest volume of mortgages.
(Full disclosure: I’m not a Quicken Loan fan, but I can still respect some of the technology they have created and implemented into their company.)
So, what did Quicken Loans do that is different than many lenders? A couple things.
Ease of Use. They turned what used to be a cumbersome process of applying for a mortgage to a thing you can do from your phone in your own time, saving consumers a lot of the hassle. They took a process that would typically take 30-60 days and crunched it down to roughly 10 days by automating most of the process into an algorithm. I think they say something about approving (or denying) your loan in as little as 8 minutes. The appraisals delay the process to 10 days, since those are still are done by humans.
Centralized Data.They linked almost everything you do online into a single portal to help speed the process. Forget the days of having to comb through paper bank statements and email those to your lender or drop them off. Quicken links their portal into your bank directly to access your bank statements, current available funds, and even history of deposits. Some employers now verify your employment status through their app, and no longer require people to talk with managers. It’s not 100% online, but it is sure close to it, and probably will be in the very near future.
One-Stop-Shop.The Quicken Loans family looks a lot like it’s trying to be the Amazon of lending. Did you know, Quicken owns approximately 81 other companies (not including their additional “partnerships”) with everything from Financial Services, Financial Tech Companies, Online Technology Companies, Home Furnishings, Investment Services, Architect Services, Accounting, Billing & Receivables, Website & Design, Gaming, Hotels, Casinos, Home Flipping and Renovations, Online Schools, Security Services, Property Management, Real Estate Sales, Multiple Venture Capital Firms, Self Driving Cars, and countless companies all aimed at online technology, web presence, and improving efficiency for business.
Hey, that’s just one company. You can’t use one company as an example of where the whole industry is heading!
That’s true.
Let’s look at the nation’s number two lender. LoanDepot. LoanDepot launched mello Home earlier this year, which is a service that connects buyer clients to their agents. Sounds like another “one stop shop” approach, like Amazon. And, it is. I won’t make you sit through the list twice, but it’s pretty much the same thing with a variety of separate companies all brought together under one roof.
What about number 3, 4, 5, etc? Yup. They are all attempting to create a one-stop-shop for services with the hope of having you spend less time shopping services between companies and more time just writing them one big fat check instead of a bunch of small ones.
Ok, so what about robots and artificial intelligence taking over human jobs? Should traditional brokerages feel threatened? Maybe. But, probably not.
While these technological advances are meant to eliminate the human element, humans are still necessary in a lot of ways. Elon Musk (PayPal, Space-X, Tesla, SolarCity, and The Boring Company) will tell you that humans are underrated and that he brought people back into Tesla to help smooth the process and speed things back up in his production line. His robots got too unwieldy and slowed things down!
So if robots alone are too cumbersome and humans alone are too slow, what is the answer?
A human-machine symbiosis. That is what we should be talking about. Creating robots to enhance human services, not to replace them.
I’m sure you have heard the opinion that real estate agents and lenders will soon be replaced by technology. However, I tend to think that the agent-centric model has staying power, though it will look a bit different in the future.
In my opinion, the new technology (whether you mean software, applications, block-chain, robots, etc) should work to accelerate the closing process and smooth out some of the hurdles. Loans could become faster. Property information may be easier to find. Title issues could be quicker to address or monitor. But at the end of the day, it still involves people.
While this massive collection of data and introduction of search portals has increased the amount of information available and speed to get to it, it has not provided anyone with the context necessary to make a decision. Media company models focus on optimizing for page-views and clicks, yet fail to support crucial channels of information exchange between agents and clients. This is proven by the increased demand for agents over the last two decades even with the introduction of platforms such as Trulia and Zillow.
Why do I think that real estate and lending professionals will remain essential?
Simply because humans are better at some things than robots.
For example:
EMOTIONS. First, buying a home is typically the largest financial transaction in a person’s life. It is highly emotional, and occurs infrequently. Consumers want practical, cultural, and emotional guidance as they navigate this decision. Why can I stand here and say without a doubt that people want guidance in this area, despite the available online information? Because we have already created a new industry of “consultants” for online services. For example, you hire a person to manage your SEO, a person creates the content for social media, and you can even hire a consultant to improve your odds with online dating! Seems a little backwards with the “online”, doesn’t it? This is want people want, so I’ll take it as a glimmer of hope.
QUALITY OF CARE.Second, real estate agents and lenders perform many functions which software can only partially eliminate. Certain tasks should and will be automated, such as scheduling and paperwork. We recently had a lender in Washington State who had their loan documents signed with a notary through a video-conference session. But, technology doesn’t allow for coordinating with all the other parties, staying up on local policy changes, politics, etc. The dirty word of “closing” a sale still requires a human touch because it requires you to consider all the options around the property aspects, your lifestyle choices, and your desires for the future.
Hyper-Geographic Expertise. Third, as much as we may not want to admit, agents remain the most cost-effective method for sellers to find buyers. Hyper-geographic expertise allows agents to offer buyers a smooth process to closing and access in a private real estate marketplace. You are still dealing with people’s homes and businesses. While automated brokerages seem elegant and low-touch, when you factor in the human pieces and the various conversion points necessary to help a person buy a home (marketing, filtering real buyers from the tire kickers, protecting clients from being taken advantage of by vultures, and mid-escrow re-negotiations when something goes wrong, etc.), these programmed platforms are far less efficient and likely lead to failure when left on their own. Although humans are not scalable, they are a fundamentally cheap mode of customer acquisition and the best assurance your transaction makes it to closing.
Relationships. Finally, real estate may be about properties, but it is ultimately an industry that centers around people. Technology can support those relationships, but it will not replace them.
Given these observations, I believe that a successful real estate platform will augment agents with data and tools to accelerate their business and serve their clients better.
Some areas where I hope to see great improvements are:
Embrace Technology: Whether it’s new ways to streamline transactions (DocuSign, zipLogix, virtual notaries, etc.) or better ways to market properties (virtual staging, virtual tours, etc), there are countless ways to make the customer interaction more seamless.
Targeted marketing: Most real estate marketing takes the form of untargeted spray and pray tactics. This is true even with Facebook ads (don’t get me started!). What we aim for enables intelligent, personalized agent-to-agent marketing by matching a buyer’s demand with available inventory, or matching it with potential inventory through something like Zillow’s Make Me Move concept.
Property pricing: At present, there is no way to “guarantee” what a property is worth. Zillow doesn’t have the answer either and will pay you one million dollars to help them figure it out. Pricing is both art and science and requires a lot of personal analysis, local knowledge, and old-fashioned boots on the ground approach, day-in and day-out, in order to be competent in the game of ever-changing market values.
Streamlined Process: There is still a lot of manual labor involved with buying a property. Lenders, such as Quicken Loans, realized this and have tried to streamline as much as they can with their app. Maybe one day, the process will be streamlined across the board and all you need to do is schedule the closing date and then automatically your utilities, loan, insurance, and more are all pro-rated and magically accounts are opened and closed as needed. That day might be closer than we think.
Changing Ideals: With Wi-Fi capabilities and/or cell-phone coverage almost everywhere (even a wi-fi hotspot in my truck!) people are no longer tied to an office. You can browse properties or sign contracts with the swipe of your finger while sitting at a Little League game or out on the beach.
While the technology to find data or accomplish transactions has improved, the basis for decision making or in-depth understanding about the process has not progressed forward, and in many ways I feel it is taking leaps backwards. Maybe there will be a change in direction and people will begin to expect a higher level of competency with all this technology we are creating. The data is there. We just need to teach people how to use it!
Moving forward, let’s focus on integrating humans and robots, not replacing humans with robots.
If we are going to see any real advances in real estate technology, it will be to improve the agents or lenders ability to educate their clients by interpreting and telling stories with data. Buyers and Sellers will want someone who can tell narratives about past work in a neighborhood, draw attention to unusual features of a property, and help frame the price of a new home in terms of financial and demographic trends. Real estate agents and lenders with sophisticated tools will likely perform these functions better than automated brokerages for decades to come, but it takes work. Don’t forget that on the other side of that post is a real live person. Be nice.
In the words of Elon Musk (ok, it was a tweet), “Humans Are Underrated”. Finding applications that help humans become more efficient is a better bet than creating applications to replace humans completely. In real estate and lending, there will always be a demand for humans who are experts in their field and provide consumers with more meaningful experiences.
Need help getting started? We are happy to point you in the right direction with data that can be trusted and help you make connections with the people you need to know.
At each meeting, all I heard was “I’m afraid. Don’t ask me questions. Do it my way.” Whether it was the heads of households, or the heads of state, they both had their fair share of stage time in the complaints and frustrations category… yet didn’t get many points in the understanding and solutions section of the test.
Career Pathways. In 2013, Everett Schools became a K-12 STEM District. Rather than limiting curriculum to the typical Science Technology Engineering and Math, they took it a step further. After completing basic high school requirements, students have the opportunity to enter a career pathway and gain the academic, technical, and workplace knowledge and skills. This will allow them to transfer seamlessly into their next level of schooling, pursue graduate programs, or transition to the workforce.
That. Is. Scary. Especially when most emergencies cost a lot more than $1000… at least from what I have seen.
Before we dive into what robots and artificial intelligence are doing, let’s look at where companies are heading with their business models.