Seattle Real Estate Blog and Real Estate NewsRecently posted or modified blog postshttps://www.myseattlehomesearch.com/blog/Copyright MySeattleHomeSearch.com2024-02-05T11:47:55-07:00tag:myseattlehomesearch.com,2012-09-20:10631The ABCs of Seattle ADUsLike many cities in the US, <a href="https://www.myseattlehomesearch.com/communities/" title="Seattle real estate listings">Seattle </a>has a need for both more housing and more affordable housing. In the near future, you can expect to see an large uptick in the addition of accessory dwelling units (ADUs) within the city of Seattle as well as other urban growth areas (UGAs) throughout Washington State. Starting in 2025, new rules and relaxed legislation relating to the building of accessory dwelling units and detached accessory dwelling units (DADUs) will take effect. Seattle neighborhoods, and especially their backyards, are probably going to see a lot of changes.
<img src="https://assets.site-static.com/userfiles/562/image/A_guide_to_Seattle_ADUs.jpg" width="800" height="532" alt="A guide to Seattle ADUs" style="margin: 10px auto; vertical-align: middle; display: block;" />
So for better or worse, and whether you are in favor of them or not, this article will give you a good overview of Seattle ADUs and the changes that you can expect to see over the coming years.
What exactly is an ADU?
An accessory dwelling unit (ADU) is a self-contained residential unit that is located on the same lot but usually smaller than the existing single-family home. They allow for independent living within the same property and have their own kitchen, bathroom, living and sleeping spaces. The added living space can either be attached to the existing home in which case it is called an accessory dwelling unit (ADU) or is separate from it in which case it is referred to a detached accessory dwelling unit (DADU).
What are the different types of seattle accessory dwelling units?
There a few different types of ADUs, primarily based on where they are located on a property as shown in the graphic below courtesy of the Master Builders Association of King and Snohomish Counties:
<img src="https://assets.site-static.com/userfiles/562/image/Different_types_of_Seattle_ADUs.jpg" width="800" height="441" alt="The different types of Seattle ADUs" style="margin: 10px auto; vertical-align: middle; display: block;" />
ATTACHED accessory dwelling units (AADU) can be either directly attached to the an exterior wall of the existing home like an addition or it can be located internally by converting a basement or an attic space.
A DETACHED accessory dwelling unit (DADU) is not physically attached to the existing single family home and can either be a free standing unit that, for example, could be added to the end of the backyard or, in some cases, could be added above a garage. DADUs are sometimes referred as a backyard cottage or a carriage house.
The number of ADUs being built is rapidly increasing.
Walking around a Seattle neighborhood like <a href="https://www.myseattlehomesearch.com/ballard/" title="All about the Ballard neighborhood">Ballard</a>, you will probably notice ADUs popping up, as if appearing overnight. Well, maybe not overnight but you are not mistaken. ADUs are on the rise (pun intended), and according to the <a href="https://www.seattletimes.com/seattle-news/politics/seattle-is-now-building-more-adus-than-single-houses/" title="More ADUs than houses being built in Seattle" target="_blank">Seattle Times</a>, there are now more accessory dwelling units being built than single family homes.
Also, there has been an exponential growth in the number of permit applications for ADUs in Seattle as seen in the graph below courtesy of the Seattle Times:
<img src="https://assets.site-static.com/userfiles/562/image/Increasing_permit_applications_for_Seattle_ADUs.jpg" width="635" height="472" alt="Increase in permit applications for ADUs in Seattle" style="margin: 10px auto; vertical-align: middle; display: block;" />
What are the pros and cons of Accessory dwelling units.
Some of these will depend on which side of the proverbial real estate fence you stand.
The advantages of ADUs and DADUs:
Increase in housing supply.
Generally are more affordable compared to typical single family homes like houses and townhomes.
Allows home owners to age in place and not have to move. For example, owners can downsize in place by adding an ADU to their property, move into that ADU and then either rent out the house or sell it add to their retirement savings.
ADUs are cheaper to build than a single family home because you don't have to buy any land and for AADUs, they can usually tap into the existing plumbing, electrical and sewer systems of the existing home.
Generate income by renting out the ADU.
Allows for multi-generational living where, for example, the grandparents could live in the accessory unit and their siblings and grandkids live in the main home.
Some potential disadvantages of ADUs.
Some of your neighbors are probably not going too be happy that you are adding an ADU especially your immediate neighbors who might be concerned about loosing some of their privacy, natural light and having more people living next door.
Space limitations since they tend to be significantly smaller than a regular house so it might take some adjustment for some people.
Less privacy since you will be living in close proximity to your landlord or your extended family. You can't pretend that you're not at home anymore when someone knocks on your ADU front door!
As to whether accessory dwelling units actually increase affordability is debatable. Home prices in Puget Sound cities like Seattle, Kirkland and <a href="https://www.myseattlehomesearch.com/bellevue/" title="Homes for sale in Bellevue WA">Bellevue</a> are toward the higher end of the spectrum compared to most of the US and even though ADUs are less expensive, can they still be considered "affordable" or are <a href="https://www.myseattlehomesearch.com/blog/12-things-to-know-about-selling-your-home-to-an-investor-or-developer/" title="Selling your home to a real estate developer">real estate developers</a> just making a quick killing?
10 upcoming changes to seattle and Washington state adu requirements.
Here are some of the main changes to the the building of accessory dwelling units in Seattle and other WA urban growth areas beginning within 6 months of their implementation in January 2025. For some Washington State cities like Seattle, some of these new rules have been in place for a while. As with all changes, some people are going to openly embrace them with both arms and some people probably won't be too pleased.
ADUs will be allowed on all lots zoned single family within cities and within urban growth management zones.
Allows for 2 ADUs per lot, subject to minimum lost sizes and other factors. The added units can be any one of the following combinations: two ADUs, two DADUS or one ADU + one DADU.
There will no longer be a requirement for the owner to live in either the primary residence or one of the ADUs .
Allow ADUs of at least 1,000sf.
A more streamlined permitting process including <a href="https://aduniverse-seattlecitygis.hub.arcgis.com/pages/gallery" title="Pre-approved Seattle ADU designs" target="_blank">pre-approved DADU designs</a>.
Duplexes, triples and multi-family structures can add an ADU.
For setbacks from lot boundaries, cities may not impose stricter standards than those for the primary residence. This includes no setback needed for DADUs on lots with alleys.
Must allow addition of ADU conversions of existing structures including basements, attics and above garages, even if those existing structures violate current setback requirements.
The ADUs cannot be used as short term rentals like Airbnb's. The minimum rental period is 30 days. One aim of these new building rules changes is to increase housing supply, not even more short term homes rentals.
Allows for separate sales of individual accessory dwelling units (see requirements below).
Relaxed parking requirements including. Cities may NOT: require any off-street parking for ADUs within half a mile walking distance of a major transit hub, require more than one off-street parking space per unit on lots smaller the 6,000sf and require more than 2 off-street parking spaces per unit on lots greater than 6,000sf.
can I add an adu on my property?
The best answer is consult with a company or architect that specializes in the addition of ADUs to Seattle area homes.
Here are some things to take into consideration that can impact how many ADUs and what size ADUs you can add to your property.
The size of the lot.
The zoning.
Review the title for the property to evaluate any restrictions including home owner association CC&Rs.
The topography of the lot.
The type of soil.
Does the property have sensitive areas like streams, is in a flood zone or is located in a landslide risk area.
How easy will it be to connect the ADU to utilities and sewer? Or a septic system?
Here's a handy site where you can <a href="https://aduniverse-seattlecitygis.hub.arcgis.com/pages/feasibility" title="Check if you can add an ADU to your property" target="_blank">enter your home's address </a>and assess the feasibility of adding an ADU to your property.
Owners should also take into consideration what impact the addition of an ADU will have on the market value of the existing home since it will use up some of the backyard and reduce privacy. The ADU will definitely add to the overall value of the property but some of that will likely reduce by the value of the existing home. Consult with a Realtor or an appraiser for their opinions on this. Of course, this is probably only relevant if you wanted to sell the primary home separately from the ADU.
How much does an ADU cost to build?
For the Seattle area, on average, an ADU will cost between $300,000 and $400,000 depending on whether it's an attached or detached unit and whether the unit can tap into the utilities of the existing home. However, the price tag can go up for larger ADUs and those with higher end finishes and customizations (closer to around $600,000). That pricing will include connecting to utility services.
Built on-site ADUs versus factory-build ADUs.
You have a couple of options as to how you can add one to a property but the overall cost is about the same.
Built on-site: here the unit is built from scratch just like a regular home. First you add the foundation, and then the framing and so on.
Factory built: this only applies to DADUs. Here you would choose a design from a selection of options or you can have a customized home designed and built for you particular needs. The ADU would then be loaded onto a truck (in one piece), and delivered to your property followed by a crane lifting the home onto the newly laid foundations followed by connection to utilities. A crane can deliver the ADU over the top of an existing house and plant it into a hard to access area in your backyard.
If you order a pre-built ADU, make sure it manufactured to stand up the Pacific Northwest's infamous weather. In other words, don't order one from southern California.
Make sure to get permits when adding an ADU!
If you decide to add an ADU make sure to do it all above board because if you don’t you won’t be able to sell it as ADU. You’ll have to sell it as “bonus space” or “a detached home office”, but not an ADU and you will probably loose some of your investment. Don’t be penny wise and pound foolish and get those permits. Plus <a href="https://www.myseattlehomesearch.com/blog/what-to-know-about-permits-when-buying-a-home-in-seattle-including-a-home-inspectors-perspective/" title="Impact of unpermitted work when selling a home">buyers might be less inclined to buy</a> the property if the ADU was not permitted.
Can you add an ADU over a garage?
In theory yes, but the majority of garages in the Seattle area do not have a sufficiently sturdy foundation to take the weight of adding living space above it. Plus the slab concrete floor will be a lot thinner compared to that in a house. From an investment perspective, you might be better off just bulldozing the garage and adding a DADU. Most Seattle garages are full of Costco overspill, two lawnmowers and stuff we never use...but rarely actual cars!
Note that if your garage is sitting right on the property boundary with your neighbor, while it should legally have a feet feet of set back, you will be able add an ADU right plonk on top of that same garage foot print, even if there is no setback from the property line.
Helpful ADU resources:
<a href="https://deptofcommerce.app.box.com/s/czwdyt0dh9swq2gv7699jxuw05b97859" title="Washington State guidance on ADUs" target="_blank">Washington State Depart of Commerce guidance on ADUs.</a>
<a href="https://www.seattle.gov/sdci/permits/common-projects/accessory-dwelling-units" title="Permit requirements for a Seattle ADU" target="_blank">City of Seattle construction and permitting.</a>
<a href="https://www.aarp.org/livable-communities/housing/info-2019/accessory-dwelling-units-guide-download.html" title="AARP guide o ADUs" target="_blank">AAPR information on ADU living.</a>
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.
2024-01-29T07:00:00-07:002024-02-05T11:47:55-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:10614Can I get a mortgage after I retire?The short answer is, absolutely!
But as with anyone applying for a mortgage and <a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="Home buying process explained">buying a home</a>, you will need to meet certain lender requirements including having a good credit rating and an acceptable debt-to-income ratio. Because you are no longer working and don't have the usual two years of W2's to support your mortgage application, the lender will look at your retirement sources of income to determine if you qualify for a loan.
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Can a lender decline a mortgage application based on age?
No!
Mortgage lenders consider various factors to determine a borrower's eligibility for a home loan, but age and life expectancy are not one of them, or at least, they are not supposed to. The Equal Credit Opportunity Act prohibits discrimination based on age, in addition to race, religion, national origin, sex, and marital status.
Lenders may ask for your age on mortgage applications, as mandated by the Home Mortgage Disclosure Act (HMDA), for the sole purpose of collecting demographic information. This information is intended to remain confidential and should not be used as a basis for approving or denying the applicant.
There is no specific amount of money required to purchase a home, as lenders prioritize your ability to repay the loan over your income.
"Why would a bank give me a mortgage when I'm 68 and I'm not going to live 30 years to pay it off?
That's not important. Very few home buyers stay in the same home for 20 or 30 years and make all those monthly payments. Most buyers sell and move. The lender only cares that you can make those monthly mortgage payments and that they will get their money back when the home sells... whether you're the one selling it, or your estate selling it after you pass on to the big mortgage-free (and tax free), home in the sky.
What types of mortgages are offered to retirees?
Retirees, seniors, as well as everyone else, are subject to the same underwriting guidelines. In order to qualify for a mortgage in retirement, they must demonstrate the ability to repay by having sufficient income sources or assets.
Lenders adhere to specific guidelines related to retirement income, as set by Fannie Mae, Freddie Mac, and government-backed loan programs (FHA, VA, and USDA). Additionally, there are programs available that allow you to convert assets to income if you do not receive retirement pay from traditional sources such as pensions or Social Security.
Retirees can apply for traditional mortgages like conventional 30-year mortgages, low downpayment FHA loans as well as VA and USDA mortgages... just like younger, "regular" home buyers.
Seniors with a high net worth might consider a retirement mortgage that allows them to convert their assets to income that is used to pay back the loan each month.
Determine Your Income After Retirement.
An applicant's income is important for mortgage qualification. Lenders usually require two years of income documentation. Retirees may need to provide evidence of Social Security, pension, dividends, and interest payments instead of the traditional employee W-2s.
The first step in determining if you can afford to purchase a home is evaluating your income. If you are retired, you might have various sources of income that contribute to your overall household budget. Lenders will usually use two different methods to determine a retiree's monthly income:
Retirees with no Social Security or pension income can use the drawdown on assets method. To do this, they must be at least 59.5 years old. They can withdraw money from their retirement accounts and show it as proof of income. For example, if a retired homebuyer withdraws $5,000 from their IRA every month for at least two months, they will be considered to have a monthly income of $5,000.
To calculate income for a 30-year mortgage using the asset depletion method, start by adding up the current value of all your financial assets. Then subtract any portion of the assets you plan to use for a down payment or closing costs. Finally, divide 70% of the remaining value by 360 months (30 years).
In general, lenders like fixed and predictable income streams. A retiree's income can be variable depending on when they start drawing social security and if their income is tied to how the stock market is performing.
It never hurts setting up a meeting with your financial advisor to discuss the pros and cons of taking on a mortgage post-retirement.
What income sources do lenders consider for retirement mortgages?
Social Security is a reliable source of income in retirement. Lenders see these benefits positively because they are stable. The amount a person gets can change depending on when they claim them. If they start early, they will receive smaller monthly payments, but waiting will result in bigger amounts.
Retirement Account Distributions, like IRA or 401(k) withdrawals, have important details to consider. Required minimum distributions (RMDs) are typically based on the account holder's age. These distributions provide regular income but must be withdrawn consistently. Additionally, if the retirement accounts have stock market investments, the value can fluctuate and impact the distribution amount.
Fixed pensions are particularly stable and can provide reassurance to lenders. However, not all pensions have consistent payouts. Some pensions may fluctuate based on investments and other factors, which can raise lender concerns about their reliability.
For those with diversified portfolios, Investment Returns can be another income avenue. Regular dividends from stocks or interest payments from bonds can provide a steady cash flow. However, one-time sales of investments that lead to capital gains, while beneficial for immediate liquidity, might not be considered a consistent source by lenders.
Part-time work or consultancy provides an additional source of income for individuals looking to supplement their retirement mortgage. The difficulty lies in demonstrating the reliability of this income. But hey, you've worked enough of your life already. It's time to just enjoy the rest of your life!
Finally, rental income can enhance a retiree's financial profile, particularly if they possess one or multiple rental properties. A consistent flow of rental income can be advantageous when applying for a mortgage after retirement.
Regardless of all the above list, you will still want to make sure you have a good credit score which will impact <a href="https://merrimackvalleymarealestate.com/how-much-house-can-i-afford/" title="How much home loan can I qualify for?" target="_blank">how much home you can afford to buy.</a>
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Ideally, try and buy your next home before you retire.
Ideally, if possible, buy your next home BEFORE you retire, while you are still working and have a regular income and W2's. It should be easier to get approved for a home loan since it's likely that your working income will be higher and more consistent than your retirement income.
If you are lucky enough to have cash on hand to buy your next home, then you won't need to rely on getting a mortgage. Alternatively, if you have enough equity in your current home pay for your next home, you can either sell your current home first and then buy, or get a short-term bridging loan or home equity line of credit and buy first, then sell.
If you intend to retire near your current location, you have the option of selling your existing home and moving early into your future retirement home. If you choose to retire farther away, you may need to manage two mortgages until you are ready to move. However, you could rent out the second home until you are ready to move to help offset the mortgage payments,
Note that selling your existing home while buying your next one at the same time with little or no overlap is not an easy balancing act and the stars really need to align. For a lot more on this, <a href="https://www.myseattlehomesearch.com/blog/how-realistic-is-buying-and-selling-a-home-at-the-same-time/" title="Trying to buy and sell at the same time">please see this article</a>.
If you downsize now, you can use the equity from your current home to your advantage. Selling your current home could provide a larger down payment for a retirement property. Or if you're downsizing to a more affordable home, you might be able to pay cash and avoid a new mortgage altogether. Additionally, you may have leftover money to put towards your retirement funds from the sale of your current home or use that extra cash to improve your retirement property.
In conclusion regarding Can You Get A Mortgage After You Retire... yes you can. As with anyone applying for a mortgage, you'll just need to prove to the mortgage broker or lender that you have solid credit and sufficient monthly income to make those mortgage payments. The only difference is that retirees don't have monthly checks from an employer and have to rely on income sources such as their social security, IRA's, 401K's and other investments. So one of the long list of <a href="https://www.cincinkyrealestate.com/blog/common-real-estate-myths/" title="Real estate myths you can ignore" target="_blank">real estate myths </a>that you can cross off the list is that retired people can't get a mortgage!
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.2024-01-18T08:00:00-07:002024-01-18T08:44:52-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:13799 Critical Questions To Ask When Buying A CondoLearn the questions that will protect you when buying a condo.
The art and science of asking questions is the source of all knowledge - Thomas Berger.
Condos are a popular option with many first-time home buyers mainly because they are more affordable. They are also a good fit for homeowners looking to downsize and have someone else take care of all the maintenance hassles. Or if you want to be close to the hub of downtown life and stroll to bars, cafes and restaurants, then a condo is probably your only option.
<img src="https://assets.site-static.com/userfiles/562/image/Critical_qustions_to_ask_when_buying_a_condo.png" width="450" height="650" alt="Critical questions to ask when buying a condo" style="margin: 10px; float: left;" />There are pros and cons to buying a condo versus a house. However, <a href="https://www.myseattlehomesearch.com/seattle/condos-for-sale/" title="View all condos for sale in the Seattle area">buying a condo in Seattle</a> is not the same as buying a house. There's a whole other set of questions you need to ask when buying a condominium.
The answers to these questions will help you decide whether you should even make an offer in the first place or bail on the sale once you get all the facts.
Ideally, you want to get answers to as many of these questions BEFORE you make an offer. You want to avoid wasting your time (and the seller's) getting into a contract when there's a good chance you will bail once you have all the answers.
When it comes to buying a condominium, the problem is that it is not usually possible to get all the answers upfront. You might have to make an offer first to get all the nitty-gritty details. This applies in particular to the Resale Certificate, but more on that later.
Here's a list of the most important questions to ask when buying a condo. And make sure to ask ALL of them!
#1: What are the monthly HOA dues and what's covered?
When you buy a home, you are responsible for all your own repairs plus covering the cost of them. When you own a condo, you will be required to pay monthly Home Owner Association (HOA) dues. These monthly fees can vary a lot from one development to another and just like property taxes, they always go up over time.
You'll want to ask what you are getting for that chunk of monthly money. Usually, items like common area maintenance, earthquake insurance, and garbage will be covered but you will probably have to pay for your own electricity and water. It's a good idea to ask how much the dues usually go up each year. Part of your monthly dues also goes into a reserve fund that's used by the HOA for repairs and upgrades.
When determining how much you can afford to buy, make sure to take into account the HOA dues. Most online mortgage calculators don't include them in their calculations.
And remember, just because the dues are on the low side does not necessarily mean that's a win-win situation. <a href="https://www.myseattlehomesearch.com/blog/are-low-hoa-fees-always-a-good-thing/" title="Low HOA dues can be good and bad">Low HOA dues</a> are only good if the HOA has good financial reserves are doesn't have a history of special assessments.
#2: is there a condo special assessment?
A <a href="https://www.myseattlehomesearch.com/blog/what-are-hoa-special-assessments/" title="All about condo special assessments">condo special assessment</a> is the bane of condo owners and happy are those who don't have to endure them. Special assessments are levied on all the owners of a condo development when the HOA has insufficient funds to cover the cost of needed repairs and upgrades.
For example, say Crystal Springs Condominiums needs a new roof and the exterior is peeling and needs to be repainted. It's going to cost $100,000. However, the HOA only has $20,000 in its checking account. Well, the money has to come from somewhere and that somewhere is you, the condo owner!
The HOA will raise the required funds by either asking all the individual owners to make a one-off lump sum, a single payment, for example. $10,000 or divide that $10,000 over say 3 years with increased monthly dues. That can be difficult for many of the owners to come up with. Sometimes, it can be a lot more than $10,000.
So when you are considering making an offer on a condominium, you will want to ask the following questions:
Are there any current or upcoming special assessments?
What is the special assessment for?
Is it a one-off payment or split over a few years?
When was the last one, how much was it, and what did that cover?
If the special assessment is already in place and requires a one-off payment, then you can request that the sellers pay for it at closing from the net proceeds of the sale.
The problem is when the assessment is not in place yet and will be instigated sometime after you have taken possession of the home. You should be particularly wary of situations where the amount that each owner will have to pay has not yet been decided by the HOA. You could be in for an ugly house-warming gift!
<a href="https://www.myseattlehomesearch.com/seattle/condos-for-sale/" title="Search all Seattle condo listings"><img src="https://assets.site-static.com/userfiles/562/image/Search_ALL_Seattle_Condos_CTA.png" width="600" height="150" alt="Search all Seattle condos for sale" style="vertical-align: middle; margin: 10px;" /></a>
#3: Is the condo development FHA-approved?
Condos are a good foot in the real estate door for many first-time home buyers, many of whom rely on FHA loans. These loans are popular because they only require a buyer to have a 3.5% downpayment.
If you are relying on one of these loans you will need to ask if the condo development is approved to accept FHA loans. Some developments will be, but many will not. If you are relying on an FHA loan, your condominium options will probably be more limited compared to if you were using a conventional loan with a bigger downpayment.
For a condominium to be FHA-certified, it must meet certain <a href="https://www.madisonmortgageguys.com/fha-guidelines/" target="_blank">FHA loan requirements.</a> These include a minimum percentage of units that must be owner-occupied and a set maximum on the number of owners who are in arrears on their HOA dues.
The HOA must undergo a certification process to get FHA approval. Unfortunately, some HOA's just couldn't be bothered with the hassle of going through the process. It's a little short-sighted since they are reducing the sale-ability of their homes (assuming they would meet the FHA criteria).
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#4: Is there a rental cap?
This is an important question to ask when buying a condo. When you own a house, you can do as you please, run off to Antarctica for 2 years and rent out your home. When you buy a condo, however, you must abide by the rules and regulations of the association.
A rental cap is the maximum number of units in a condo development that be rented at any one time. All other units must be owner-occupied. For condominiums with caps, 20% is a common limit.
If the ability to be able to rent out your condo is important to you, then it is critical to inquire about the HOA's rental policy. If the condominium is already at its cap, then you will not be able to rent your unit. You will have to go on a waiting list. Last in goes to the bottom of the list.
If you suddenly need to relocate for a new job, don't have enough equity to break even if you sell, and can't rent your unit, then you are in a bit of a pickle.
Condo developments with no rental caps can be appealing but there are pros and cons. The peace of mind and flexibility of knowing you can rent your condo at any time is nice. These kinds of condos are attractive to investors who want to be able to rent out the condo. They have no intention of living there.
However, without a rental cap, a large number of the units may end up being rented and the place can start feeling more like an apartment complex rather than Happy Shiny Condominiums. No offense to renters, but they probably have less of a vested interest in the place than you, the owner, would. A lack of a rental cap can be a negative for some condo buyers who are escaping years of renting.
#5: What's the condo association's pet policy?
We love our pets, and we'll do anything for them. But pets can't speak so you'll need to talk up for them.
The last thing you want to do is get the keys to your new condo and then discover Rex and Fido are not welcome. And as for that 10-gallon piranha aquarium... time to advertise it on Craigslist!
Different condominiums will have different rules when it comes to pets. Some developments can be like zoos with little or no limits while others will have very strict rules. Some will allow zero pets, some will allow just cats and some will allow cats and dogs.
For those that do allow pets, the HOA will usually set a limit on the number of each, the size of the pets (under 50lbs for dogs is common) plus they will usually not allow certain breeds considered to be more aggressive like pit bulls.
And yes, you will always see a rule stating, "No Farm Animals". Alrighty! So no cows for you then!
So, if your Fido is 90lbs of pure slobbering lovin' and the limit for Del Boca Vista Condominiums is 50lbs, then it's time to look for someplace else. And yes, those annoying yapper, sit-on-my-lap-while-I'm-driving dogs will dominate condoland. There is no justice!
#6: Does the condo come with designated parking or any parking for that matter?
Especially in cities, parking is a precious commodity. Having your very own designated parking spot is a thing to be cherished. Driving around in circles on a rainy night looking for parking is way overrated!
Never assume that the condo comes with an allocated parking spot. Ask! Sometimes on the online listing, it will list the number of parking spots if they go with the condo.
If you need more than one parking space, ask if you can lease a second spot from an owner who's not using theirs.
In some condominiums, it might be a first come, first served setup and won't have enough parking spaces for everyone. If all the spaces are gone, will you be able to find parking nearby on the street? If you live in the middle of a bustling city like Seattle and you own a car, then you most definitely will need a designated parking space.
#7: Is there any current litigation?
When purchasing a condominium, you want to avoid ending up with one that is embroiled in some expensive, drawn-out litigation. The most common of which is when the Home Owners Association is suing the builder.
Most new construction condos come with a 10-year builder's warranty and warranties are only as good as the willingness of the builder to honor that warranty.
The classic items that will fail first are the siding, the windows, the roof, and the decks. They are exposed to the wind, rain, and elements and any shoddy construction will be quickly exposed.
So, if the builder wins the case or weasels out by declaring bankruptcy, then who's going to pay for all those critical structural fixes? Yup, it's you and the other less-than-amused owners.
Asking about any current or upcoming litigation is critical when buying a condo. Also, it's good to ask about any previous litigation and see if the issues were addressed properly.
#8: When was the last time a RESERVE Study was done?
Condo buildings, like any home, always need maintenance, repairs, and <img src="https://assets.site-static.com/userfiles/562/image/Always_ask_about_condo_special_assessments.png" width="400" height="600" alt="Condo special assessments" style="margin: 10px; float: left;" />updates. And that costs money.
So how does a Home Owners Association know if they have sufficient cash on hand to be able to take care of unexpected repairs plus have enough to address big known repairs down the road?
Answer: they hire an independent company to conduct what is known as a Reserve Study. The company goes over/audits the condo building and property with a fine-tooth comb and then writes up a large report. This is done every few years. Reports that are more than 5 years old are outdated and unreliable.
The Reserve Study report will come back with a list of all the repairs that need to be addressed NOW. It will also list all the expected repairs and upgrades that will need to be addressed over the next 5, 10, and 15 years. For example, the exterior will need painting in 4 years but the sprinkler system needs to be brought up to code ASAP.
The report will then have some scary math showing how much all of this work will cost and compare it to how much money is currently in the HOA's kitty. If there's a big discrepancy between the two numbers, then the auditor will recommend that monthly HOA dues be increased, or worse, instigate a special assessment to speed up the process.
A well-run condo association will have healthy financial reserves and be able to cover the recommended updates without having to start tapping the individual owners. A badly run association will probably be scrambling to make up the needed funds and likely have a history of one special assessment after another. These are the condominiums you want to avoid or seriously reconsider before making an offer.
#9: The condo buying catch-22: Is a copy of the Resale CERTIFICATE available before I make an offer?
Many of the answers you seek lie within a voluminous $300 PDF known as the Resale Certificate. The sellers must provide you with a copy as part of the condo purchase process.
The <a href="https://www.myseattlehomesearch.com/blog/the-resale-certificate-a-crucial-document-for-condo-buyers/" title="Why condo resale certificates are so important">Resale Certificate is a big file containing lots of information on the condo development </a>and the HOA and includes the following items (most important ones):
The Rules and Regulations
The Covenants, Conditions, and Restrictions (CC&R).
A copy of the most recent Reserve Study.
Copies of the meeting minutes (always a good source for the latest issues, infighting, and petty grievances).
A financial statement.
All the juicy information you need is usually contained within the Resale Certificate. A buyer's offer will usually be contingent on approving the contents of the wordy document and a review of the HOA.
The problem is that the certificate is sometimes only ordered by the seller once they have accepted an offer. Why? Because the seller doesn't want to spend $250+ on a document that might not be needed if no one makes an offer on their condo. Once it's ordered, it can take up to 10 days to be delivered to the buyer. It's one of those <a href="https://www.myseattlehomesearch.com/blog/buying-and-selling-a-home-and-the-joys-of-waiting-how-to-stay-sane/" target="_blank">classic waiting periods when buying a home</a>.
In the meantime, the buyer is expected to do their condo inspection while not knowing if there is something in the Resale Certificate that will kill the deal for them.
In a hot real estate market like Seattle where almost every home sells, I recommend that the seller orders the Resale Certificate BEFORE going on the market.
The certificate can then be made available to any interested buyers before they decide whether to make an offer. Plus, in a strong seller's market, a buyer will likely waive the HOA review contingency to strengthen their offer.
A note regarding co-op condominiums.
Both condos and co-ops share common features, such as separate units and shared common areas like pools, gyms, or rooftop decks. However, they vary in terms of ownership methods.
When purchasing a condo, ownership includes both the unit and a portion of the common areas. However, when purchasing a co-op, you are essentially buying a share of the entire property, granting you the right to reside in your designated unit. Co-ops can be compared to investing in the stock market, where shareholders have certain rights and influence in the co-op's management.
For the Seattle area, co-op condos make up only a small part of the market and are mainly concentrated in the<a href="https://www.myseattlehomesearch.com/capitol-hill/" title="The Capital Hill area in Seattle"> Capitol Hill neighborhood</a>. If you are interested in buying a co-op unit, part of the process will be getting interviewed by the other building owners to see if you are "compatible". Also, your financing options will be more limited since there are currently only about two lenders in the Seattle area that do mortgages for co-op condominiums. Regardless, co-ops are definitely worth considering for anyone looking to buy a condo in Seattle.
Some final thoughts on the 10 Critical Questions To Ask When Buying A Condo.
Buying a condo requires an added layer of investigation and is a lot different than buying a house. Use the list of questions above to find out early in the process if a condo will work for your particular needs.
Then more answers you can get upfront the better. Make sure your Realtor works for their commission and gets busy ferreting out the answers that will help you make the right decision. Good luck!
Here are some additional helpful condo buying resources from other real estate professionals.
<a href="http://newportbeachrealestatecafe.com/2017/11/01/benefits-of-owning-a-condo/" target="_blank">The Benefits Of Owning A Condo</a> from Sharon Paxon
<a href="http://wellingtonhometeam.com/9-shocking-facts-home-buyers-dont-know/" target="_blank">9 Shocking Facts Home Buyers Don't Know</a> from Michelle Gibson
<a href="https://www.rochesterrealestateblog.com/homeowner-associations-hoas-good-or-bad/" target="_blank">Homeowner Associations (HOA): Good Or Bad?</a> from Kyle Hiscock
<img src="https://assets.site-static.com/userfiles/562/image/Blog_bottom_bio_insert.png" width="600" height="200" alt="Contact Conor MacEvilly, Seattle Realtor" style="vertical-align: middle; margin: 10px;" />
The above article "The 9 Critical Questions to Ash When Buying a Condo " was written by Conor MacEvilly. Conor is a Realtor living in the Ballard neighborhood of Seattle. He works with both home buyers and sellers in the greater Seattle real estate market and on and on the Eastside in neighborhoods like Redmond, Bellevue, and Kirkland.
Conor can be contacted directly via his cell at 206-349-8477 or via email at conormacevilly@gmail.com. <a href="https://www.myseattlehomesearch.com/about/" target="_blank">To learn more about what makes Conor tick, click here.</a>2023-11-14T06:33:00-07:002023-11-16T09:09:47-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:1023712 things to know about selling your home to an investor or developer.Whether you <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="A guide to selling your home">list your home for sale</a> on the open market or get one of those We Pay Cash For Homes calls/mailers, what can you expect when a professional real estate investor or developer offers to buy your property?
<img src="https://assets.site-static.com/userfiles/562/image/What_to_expect_when_selling_your_home_to_an_investor_or_developer.jpg" width="800" height="450" alt="12 things to know when selling your home to an investor" style="margin: 10px auto; vertical-align: middle; display: block;" />
Regular Joe's and Josephine's who do some real estate investing on the side will still have some emotional attachment to a property but to the professional real estate developer your home and the lot it sits on is just a money-in/money-out calculation. What is the potential income it can generate or how much they can make by flipping or building on it? And that's all they care about and there's nothing wrong with that...just be ready if they come knocking on your door.
1. Different types of property investors:
There are different types of professional real estate investors. Some homeowners (traditional buyers) may own one or two other properties as longer term rental investments, but when it comes to those who do it for a living, there are four main types, based on what they do with the property.
Buy and hold: basically, buy the home, fill it with tenants and keep it as a money generating rental property.
House flippers: buy a property, do some upgrades/remodeling and sell within a few months.
Wholesale investors: buy properties at well below market value and then sell them quickly without making any upgrades or improvements to another investor at a higher price.
Real estate developers: want to either bulldoze the existing home and add either a larger single home or multiple smaller homes depending on what the local zoning codes allow. Or they might keep and remodel/expand the existing home, subdivide the lot and add a second home and sell each property separately. Or sometimes it can be a combination or remodeling the existing home and adding say a couple of accessory dwelling units (ADUs) to the lot.
2. The potential benefits of selling your home directly to a property investor or developer.
Potentially an all-cash offer. Most professional investors are not relying on getting a mortgage and will likely be tapping a line of credit from a bank. There's no lender appraisal to worry about.
Potentially a fast closing.
Can sell your home as-is and not have to do any repairs.
No Realtor commissions.
If the deal falls through and fails to close, the general public is none the wiser since the transaction was not visible to the public. When you sell your home via the conventional route your home will be listed on your local multiple listing service (MLS) and the public can see when you accept an offer. They can also see when a home comes back on the market if the buyer walked on the sale which can potentially reduce the appeal, and potential purchase price, for other home buyers.
Some questions to ask and what to expect when selling to a real estate developer or investor.
3. What do they intend to do with your property after closing: keep & rent, remodel & flip or bulldoze it? They are not obligated to tell you what their plans are.
4. It's unlikely that you will get fair market value for your home. Investors want to maximize their potential profit and minimize their expenses for whatever project they have in mind for your property. So, the question for you is: will I NET more if I sell directly to a developer <a href="https://www.myseattlehomesearch.com/blog/off-market-home-sales-what-sellers-need-to-know/" title="Pros and cons of selling your home off-market">off-market</a> compared to selling with full exposure on the open market<a href="https://www.myseattlehomesearch.com/blog/what-are-typical-closing-costs-and-expenses-when-selling-a-seattle-home/" title="Expenses when selling your home"> </a><a href="https://www.myseattlehomesearch.com/blog/what-are-typical-closing-costs-and-expenses-when-selling-a-seattle-home/" title="List of expenses when selling your home">minus the costs of selling?</a>
5. Who is actually buying your property? The buyer is frequently a limited liability company (LLC) and the actual name of the buyer might not be publicly available. Also, the sales contract may have an “and/or assigns” addon that allows the buyer to offload the sale to a different investor before closing and you have no control over who they transfer it to.<a href="https://www.myseattlehomesearch.com/blog/what-are-typical-closing-costs-and-expenses-when-selling-a-seattle-home/" title="Expenses when selling your home"></a>
How long has the investor been in business and what's their history? The buyer will probably have an LLC in their name, something like Purple Eagle Homes LLC (I made that up), that has been around for years, or it might be a new LLC that just registered the business name two weeks earlier and it has the address of your home in it, 1234 Main Street LLC.
6. Extended closings: if the buyer is a developer they will try and get as long a closing as possible and that can be 6 months or more. They will be relying on a line of credit from a bank and ideally they want to avoid paying any interest until they have their plans and permits in place and are ready to start building. Therefore, the longer they can push out that closing date the better for them. So basically, you might not be getting that "quick sale" that was mentioned in the mailer.
7. Make sure you get the maximum earnest money deposit: If you end up in an extended closing you will be locked into that deal and unable to sell to anyone else during that time. The developer could potentially bail on the purchase contract after 5 months and all you get is the <a href="https://www.madisonmortgageguys.com/earnest-money/" title="All you need to know about earnest money" target="_blank">earnest money</a>, so you need to make that it's as punitive as possible.
In Washington State and Seattle at least, the most earnest money that a seller can keep in the event that a buyer defaults on the purchase agreement is 5% of the sale price. For example, for a $1M sale, the seller should request $50,000 earnest money. The investor might only offer $10,000 which is pocket change to them. Ignore that and ask for the max!
Note that for a conventional home sale, the buyer will usually deposit their earnest money to escrow/closing agent within 3 days of mutual acceptance, but investors will only deposit their earnest after completing their feasibility study.
<img src="https://assets.site-static.com/userfiles/562/image/What_is_real_estate_feasibility_study.jpg" width="400" height="600" alt="What is a real estate feasibility study" style="margin: 10px; float: left;" />8. What is a real estate feasibility study? The developer’s offer will probably have a feasibility contingency which is similar to a regular home buyer’s inspection contingency. The feasibility clause gives the developer time to research your property to ensure that it's a good match for their plans, allows them time to crunch their financial numbers and investigate zoning, permitting and possible <a href="https://www.maxrealestateexposure.com/easements/" title="All about easements in real estate " target="_blank">easements</a>. They will probably ask for at least 2 weeks and if they don't like what they see, they are entitled to walk on the sale. Two weeks is plenty of time for a competent investor to do their due diligence so be wary of offers asking for more than that.
Don’t be surprised if the developer comes back and says...Well we found some issues and now we think it’s only worth $X (X being a lot less than Y, their original offer price). Some of them will just plain lowball you and that was their intention the whole time. They are looking for gullible and uninformed homeowners to take advantage of. And sometimes it can be for legitimate reasons like zoning restrictions, the topography of the lot or half the lot is protected wetlands.
9. The developer might ask for an extension: another not uncommon practice is asking for an extension either during or after the feasibility phase and they will say something like We need more time for getting permits etc. If this is after the feasibility phase you are under no obligation to agree to their request and if they bail, you keep the earnest money. Be wary of investors who already have an extended closing and ask for yet more time.
10. Show me the money! Make sure the investor provides you with proof that they have the funds to buy your home before you sign the contract. They should be able to provide you with a letter from a bank authorizing a line of credit, a copy of their checking account or a preapproval letter from a lender if they are relying on a mortgage.
11. The value may just be in the land. Don't take it personally. You may love your home, but a <a href="https://www.myseattlehomesearch.com/blog/what-to-consider-when-buying-land-to-build-a-home/" title="What to know when buying land to build on">developer might only love the land it sits on</a> and not be too fussed about your updated kitchen.
12. Hire a real estate attorney to review the investor offer: although yes, the homeowner will save money by not having to pay any real estate agent commissions, the average home seller is not familiar with real estate contracts and might have no idea what they are agreeing to and solely focused on the offer price. In addition, real estate investors can use non-standard forms and language that might be heavily stacked in favor of the investor. Plus hiring an attorney to review the contract can protect you from common real estate scams and ensure you are dealing with a reputable investor. Don't be penny wise and pound foolish. It's YOUR home!
To summarize 12 things to know when selling your home to a real estate investor: going this route might be a great, less hassle option for some homeowners but make sure to ask lots of questions and get some professional advice before signing that contract.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.
2023-11-06T08:00:00-07:002024-01-30T20:14:13-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9864Seattle one story homes are more affordable but cost more per square foot<a href="https://www.myseattlehomesearch.com/buyers/seattle-one-story-homes-currently-for-sale/" title="view Seattle one floor homes for sale">Seattle one-story home listings </a>are popular with many buyers. The classic rambler has just one floor and there's no flight of stairs to negotiate and usually just a couple of steps at most to the front door. All living spaces are on the same floor including the bedrooms. Seattle 1-story homes are sought after by older buyers looking to downsize and avoid steps & stairs and by buyers who just like simple one-floor layouts.
<img src="https://assets.site-static.com/userfiles/562/image/Seattle_single_story_home_prices.jpg" width="800" height="534" alt="Seattle single story home prices" style="margin: 10px auto; vertical-align: middle; display: block;" />
And yes, before we go any further, "affordable" is a relative term and Seattle is not exactly one of the more affordable cities in the US to buy a home.
How do Seattle single-story homes prices compare to other types of houses?
I compared sales data for the following three types of homes for the city of Seattle. All data was pulled from the Northwest MLS (NWMLS). Note that the data is specifically for HOUSES and excludes condos.
Seattle 1-story homes.
Seattle 1-story homes with basements.
Seattle 2-story homes.
Note that data was not available for 2-story homes with a basement which are not uncommon in Seattle including my own home, a 1932 brick Tudor.
Here's the 5-year monthly median sale price trend for all three types of homes. From the graph below it is pretty obvious that the median sale price of single-story homes in Seattle is significantly and consistently less than the other two types of houses.
<img src="https://assets.site-static.com/userfiles/562/image/Median_sale_price_trend_1-story.jpg" width="796" height="527" alt="Median sale price trend Seattle 1-story homes" style="margin: 10px auto; vertical-align: middle; display: block;" />
This data was pulled in August 2023 the median sale prices were as follows:
1-story homes: $690,000.
1-story with a basement: $900,000.
2-story homes: $910,000.
So, one-story houses in Seattle sold for about 24% less. The main reason that single-story home prices are lower is that, in general, these properties are just smaller homes with less square footage because they don't have a second story or a basement. The Seattle area does not have large, sprawling 1-story homes like other parts of the country. The majority of homes in Seattle were built prior to the 1950s and so we never got around to sprawling large one-floor homes. Plus lot sizes in Seattle are usually 5,000sf and under.
Here is the average living space (square footage) for these 3 different layouts when I looked at houses that sold in the NW Seattle area over the 3 previous months:
1-story houses: 1,140sf (35 sales).
1-story with a basement: 1,757sf (81 sales).
2-story homes: 2,130sf (41 sales).
2-story with a basement: 2,754 (75 sales).
So yes, not unexpectedly, Seattle rambler homes are significantly smaller and similar to 2-story homes, there are about 50% fewer of them listed for sale compared to houses with basements (for the NW Seattle area at least).
<a href="https://www.myseattlehomesearch.com/buyers/seattle-one-story-homes-currently-for-sale/" title="Access all Seattle one story home listings"><img src="https://assets.site-static.com/userfiles/562/image/Link_to_Seattle_listings.jpg" width="600" height="300" alt="Access to one story home listings" style="margin: 10px auto; vertical-align: middle; display: block;" /></a>
What about the price per square foot for Seattle 1-floor houses?
Although ramblers are the more affordable of the three types of layouts, they are significantly more expensive on a cost per square foot basis as shown in the graph below.
<img src="https://assets.site-static.com/userfiles/562/image/Price_per_square_foot_insert_1-story.jpg" width="800" height="535" alt="Price per square foot for Seattle 1-story homes" style="margin: 10px auto; vertical-align: middle; display: block;" />
For the same time point in August 2023 here are the price per square foot for the three different types of homes:
1-story homes: $640/square foot.
1-story with a basement: $494/square foot.
2-story homes: $557/square foot.
Ramblers is consistently higher than the other two homes. This implies that buyers are willing to pay a premium for homes with a one-story layout... and no stairs!
Do one-story homes sell for more Above ThE price compared to other Seattle houses?
This plot shows the five-year trend for the ratio of the sale price of a home to the corresponding original list price. This ratio is usually a good indicator of how competitive the market is. For example, in a strong seller's market homes will sell for significantly above the original asking price, and in a slower stronger buyer's market, it will drop below the 100% mark. So, how does that ratio look for different house layouts?
<img src="https://assets.site-static.com/userfiles/562/image/Sale_price_ratio_to_list_price_1-story.jpg" width="800" height="551" alt="The ratio of sale to list price for Seattle one story homes" style="margin: 10px auto; vertical-align: middle; display: block;" />
There's no obvious indication that Seattle 1-floor houses sell for a greater percentage of the list price compared to the other two home layouts.
To summarise regarding Seattle single-story home prices:
One-story homes in the Seattle area, although more affordable compared to two-story homes or one-story homes with basements, they are significantly more expensive on a cost-per-square-foot basis. The NW Seattle area at least had about 50% fewer one-story homes that sold compared to Seattle houses with basements so the competition for true 1-story homes with no basements homes might be a little higher.
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This article was written by <a href="https://www.myseattlehomesearch.com/about/" title="About Realtor Conor MacEvilly">Seattle and Eastside Realtor Conor MacEvilly</a> who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.2023-08-19T11:30:00-07:002023-08-19T12:04:53-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9808How are property taxes determinedI'm proud to pay taxes in the United States; the only thing is, I could be just as proud for half the money - Arthur Godfrey.
Property taxes are a crucial aspect of local government funding in the United States. They are determined based on the<a href="https://www.myseattlehomesearch.com/blog/seattle-property-tax-assessments-compared-to-corresponding-market-values/" title="Tax assessments for homes in the Seattle area"> property's assessed value</a> and the local authorities' tax rate. Assessors play a key role in calculating property value, considering factors such as market value and property type.
<img src="https://assets.site-static.com/userfiles/562/image/How_are_property_taxes_determined.jpg" width="800" height="534" alt="How are property taxes determined?" style="margin: 10px auto; vertical-align: middle; display: block;" />
Property tax rates, expressed in mill rates, vary by location and are used to calculate the final tax amount owed. <a href="https://www.maxrealestateexposure.com/tax-assessment/" title="All about tax assessments" target="_blank">Understanding property tax assessments</a> and their impact is essential for homeowners and businesses nationwide.
An overview of Property Taxes.
Property taxes play a significant role in the financial operations of local governments. Understanding how property taxes work is crucial for homeowners, businesses, and communities. We will provide an overview of these taxes, their importance for local governments, and some common terms and concepts related to property tax administration.
What are property taxes?
Property taxes are annual taxes imposed on real estate properties by local municipalities. These taxes help fund essential public services such as education, infrastructure, and emergency and recreational facilities. Property owners are responsible for paying these taxes based on the <a href="https://realtybiznews.com/how-find-propertys-assessed-value/98775128/" title="How to look up your tax assessment" target="_blank">assessed value of their properties.</a>
Importance of property taxes for local governments.
Taxes are a vital source of revenue for local governments. They provide a stable funding stream that supports essential services to residents. Property tax revenue is used to fund schools, police and fire departments, road maintenance, parks, libraries, and many other public amenities that contribute to the well-being and development of local communities.
Common terms and concepts related to property taxes.
● Assessed value: This is the value assigned to a property by a local assessor to determine the tax liability. It is usually based on the property's market value and various assessment ratios.<br />● Tax rate: Also known as the <a href="https://www.investopedia.com/terms/m/millrate.asp" title="The Mill Rate explained" target="_blank">mill rate</a>, the tax rate is the percentage at which the assessed value is multiplied to determine the final property tax amount. Local authorities set the tax rate, which can vary from one jurisdiction to another.<br />● Exemptions: Certain property owners may qualify for exemptions that reduce their tax liability. Examples include exemptions for senior citizens, disabled individuals, and properties owned by religious or charitable organizations.<br />● Appeal process: Property owners can appeal their tax assessments if they believe they are inaccurate or unfairly high. The appeal process often involves presenting evidence to support a lower assessed value.<br />● Payment options: Property taxes can typically be paid in full or in installments according to a schedule determined by the local government. Some homeowners pay their property taxes through escrow accounts managed by their mortgage lenders.
Assessing Property Value.
The value of a property plays a crucial role in determining property taxes. Assessing property value involves the assessor's expertise, who is responsible for establishing a fair and accurate value for each property within their jurisdiction.
The role of the assessor in determining property value.
Assessors are trained professionals who evaluate properties based on various factors to determine their value. They consider location, size, condition, improvements, and <a href="https://realtytimes.com/headlines/item/1047117-what-are-comparable-sales-in-real-estate" title="What is considered a comparable sale in real estate " target="_blank">comparable sales data</a>. Assessors are familiar with local real estate markets and use their knowledge to assess the value of properties fairly and consistently.
How is the assessed value of a property calculated?
A property's assessed value is typically calculated by multiplying the property's fair market value by an assessment ratio or percentage set by the state or local government. For example, if the fair market value of a property is $500,000 and the assessment ratio is 80%, the assessed value would be $400,000.
Factors that can affect the assessed value of a property.
Several factors can influence the assessed value of a property. These include changes in the property's physical condition, renovations or additions, local real estate market fluctuations, and zoning or land use regulations. Assessors consider these factors when determining the assessed value to reflect the property's worth accurately.
Property owners need to understand how assessors determine the value of their properties as it directly affects the amount of property taxes they will owe. By ensuring a fair assessment process, assessors help maintain equity in property taxation and contribute to the overall stability of local government funding.
Understanding Property Tax Rates.
Tax rates are crucial in determining the amount of taxes owed on a property. Understanding how these rates are determined is essential for property owners. We will examine the factors involved in calculating property tax rates, the difference between mill and tax rates, and how taxes are calculated based on the tax rate.
How are property tax rates determined?
Property tax rates are determined by local authorities and are based on the budget required to fund essential public services such as education, transportation, emergency services, parks, recreation, and libraries. These rates are typically expressed in 'mil' or 'mill' rates, where one mill represents one-tenth of a cent.<br />Difference between mill rates and tax rates
To understand property taxes, it's important to differentiate between mill and tax rates. Mill rates represent the portion of taxes owed on every thousand dollars of assessed property value, typically calculated as a percentage. On the other hand, tax rates are the actual rates applied to the assessed value to determine the final tax amount owed by the property owner.
How property taxes are calculated based on the tax rate.
Taxes are calculated by multiplying the property's assessed value by the tax rate. For example, if a property's assessed value is $600,000 and the tax rate is 2%, the property tax owed would be $12,000. It's important to note that these calculations may vary depending on local regulations, exemptions, and deductions.
Understanding property tax rates is crucial for property owners to budget their expenses and anticipate their tax obligations effectively. It's advisable to consult local tax authorities or websites for specific information regarding property tax rates in a particular area or jurisdiction.
Types of Property Taxes.
Property taxes for residential properties.
Taxes on residential properties are a primary source of revenue for local governments. These taxes are based on the property's assessed value and are typically calculated by multiplying the assessed value by the local tax rate. Homeowners should know the importance of understanding their property tax obligations and how they contribute to the local community.
Taxes for commercial properties.
Commercial properties, including office buildings, retail stores, and industrial facilities, are also subject to property taxes. Similar to residential properties, local assessors determine commercial properties' assessed value. The taxes for commercial properties are calculated using the assessed value and the applicable tax rate.
These taxes provide vital funding for local governments to support economic development, infrastructure improvements, and public services that benefit businesses and the community.
Taxes for rental properties.
Rental properties, such as apartments, duplexes, and single-family homes, are also subject to property taxes. The responsibility for paying these taxes typically falls on the property owner or landlord. Sometimes, these taxes may be passed on to tenants as part of the rental agreement.
Special assessments and additional property taxes.
Apart from the regular property taxes, some local jurisdictions may impose special assessments or additional property taxes for specific purposes. Special assessments are typically levied to fund specific projects or services that directly benefit properties within a defined area, such as street improvements or neighborhood revitalization projects.
These additional taxes may be calculated based on the property's square footage, frontage, or other relevant factors. Property owners must stay informed about any special assessments or additional taxes that may apply to their properties within their local jurisdiction.<br />● Property taxes for residential properties<br />● Property taxes for commercial properties<br />● Property taxes for rental properties<br />● Special assessments and additional property taxes
Exemptions and Deductions For Property Taxes.
When it comes to property taxes, there are various exemptions and deductions that homeowners can take advantage of. These exemptions and deductions can help reduce the overall tax burden and provide financial relief for certain groups of individuals.
Common exemptions for property taxes.
Homeowners may qualify for several common exemptions when it comes to taxes. Some of these exemptions include:<br />● Homestead exemption: Available in many states, this exemption applies to primary residences and can significantly reduce their taxes.<br />● Senior citizen exemption: Seniors of a certain age may be eligible for property tax exemptions or reductions, providing relief for those on fixed incomes.<br />● Disabled person exemption: Individuals with disabilities may qualify for tax exemptions or reductions based on their disability status.<br />● Veterans exemption: Veterans who have served in the armed forces may be eligible for tax exemptions to honor their service.
Exemptions for seniors, disabled individuals, and veterans.
In addition to the common exemptions mentioned above, there are specific exemptions available for seniors, disabled individuals, and veterans:<br />● Elderly homeowner exemption: Some states offer additional property tax exemptions for seniors above a certain age, providing further relief for elderly homeowners.<br />● Disability exemptions: Disabled individuals may qualify for exemptions based on their specific disability and income level, offering financial assistance to those in need.<br />● Veterans with disabilities exemption: Veterans with service-related disabilities may be eligible for further tax exemptions, recognizing their sacrifices for the country.
Deducting property taxes on federal income tax returns.
Taxes paid on a primary residence can be deducted from federal income tax returns. This deduction can help reduce taxable income and potentially lower overall tax liabilities for homeowners.
It's essential to note that the availability and specifics of these exemptions and deductions may vary by state and locality. Homeowners should consult with their local tax authority or a tax professional to determine their eligibility and ensure they take full advantage of applicable exemptions or deductions.
Appeal and Dispute Property Taxes.
<img src="https://assets.site-static.com/userfiles/562/image/How_to_contest_your_property_taxes.jpg" width="400" height="600" alt="How to appeal your property taxes" style="margin: 10px; float: left;" />With property taxes, homeowners and property owners can appeal their assessments if they believe they are inaccurate or unfair. Understanding the assessment appeal process is essential for those who wish to challenge their property tax assessments.
The assessment appeal process.
The assessment appeal process allows property owners to dispute their tax assessments formally. In most cases, there is a specific timeframe within which an appeal must be filed, typically within 30 to 60 days of receiving the assessment notice. It is crucial to carefully review the assessment notice to determine the deadline for filing an appeal.
Property owners can typically file an appeal with the local tax assessor's office or the designated assessment appeals board. The appeal process may involve submitting a formal written appeal application, providing supporting documentation, and possibly attending a hearing to present evidence.
Grounds for appealing property tax assessments.
Property owners can appeal their tax assessments on various grounds, including:<br />● Inaccurate property valuation: Property owners can present evidence to support a lower valuation if the property's assessed value is significantly higher than its fair market value.<br />● Errors in property description: If there are factual errors in the property description, such as incorrect square footage or number of rooms, these discrepancies can be raised during the appeal process.<br />● Incorrect application of assessment methods: Property owners can challenge the assessors' methods if they believe they were applied incorrectly or inappropriately to determine the assessed value.<br />● Comparable property evidence: Property owners can provide evidence of comparable properties in the area with lower assessments to support a lower assessed value.
Paying Property Taxes.
Options for paying property taxes.
When paying taxes, homeowners typically have a few options. The most common methods include:<br />● Payment by mail: Homeowners can pay their taxes by mail. They can send a check or money order to the designated tax office along with the payment voucher received from the local government.<br />● Online payments: Many local governments offer online payment systems, allowing homeowners to pay their taxes through a secure website conveniently. This method often accepts payment options like credit cards or electronic funds transfers.<br />● In-person payments: Homeowners can also make property tax payments at the designated tax office. They can visit the office during business hours and pay by cash, check, or money order.<br />● Escrow payments: Another option for homeowners with a mortgage is to have their taxes paid through an escrow account. This means their mortgage lender collects a portion of each mortgage payment to cover property tax and insurance payments.
Late payments and penalties.
Paying your taxes on time is crucial to avoid penalties and potential repercussions. Local governments enforce strict deadlines, and failure to submit payment by the specified due date can result in consequences. These penalties often include:<br />● Interest charges: Late payments typically incur interest charges, which can accumulate over time until the full payment is made.<br />● Penalty fees: Local governments may impose penalty fees for late payments. These fees vary by jurisdiction and are often based on a percentage of the unpaid tax amount.<br />● Legal action: In extreme cases, persistent failure to pay property taxes can lead to legal action, including the possibility of a tax lien or even foreclosure on the property.
It is important for homeowners to be aware of the specific late payment policies and penalties imposed by their local government and to make payments promptly to avoid any additional costs or legal issues.
Escrow accounts and property tax payments.
For homeowners with an escrow account, their mortgage lender typically handles payments. The lender calculates the estimated property tax due and includes it as part of the homeowner's monthly mortgage payment. The lender then takes responsibility for making the property tax payment to the local government on the homeowner's behalf.
An escrow account can provide convenience and peace of mind, as homeowners don't have to worry about managing property tax payments independently. However, it is important to review and understand the terms of the escrow agreement to ensure accuracy in payment amounts and to address any discrepancies or issues promptly.
Understanding the various payment options, avoiding late payments, and staying informed about escrow accounts can help homeowners effectively manage their property tax obligations and ensure compliance with local tax laws.
Impact of Property Taxes.
Taxes significantly impact homeowners, affecting their expenses, property values, and the funding of local services. Understanding these impacts is crucial for homeowners to make informed decisions regarding their properties and finances.
Effect of property taxes on Homeowners' expenses.
Property taxes represent a recurring expense for homeowners, which must be factored into their overall budget. Increased property tax rates directly translate into higher tax bills, potentially impacting homeowners' financial stability. Homeowners must plan and account for property tax expenses to avoid financial strain.
Relationship between property taxes and home values.
Taxes can influence the value of homes within a community. Higher property tax rates may lead to lower home values as potential buyers consider the overall expense of owning a property, including tax obligations. Conversely, well-maintained communities with sufficient funding from property taxes may experience increased property values over time.
Funding local services with property tax revenue.
As mentioned, property tax revenue is essential in funding local services. These services contribute to a community's overall quality of life, making property taxes an essential funding source for local governments. Homeowners' tax contributions directly support the maintenance and improvement of these vital services.<br />Homeowners need to stay informed about the impact of property taxes on their expenses, property values, and local services. Awareness of these factors empowers homeowners to actively participate in local tax discussions, assess their financial situation accurately, and make informed decisions regarding their homes and community.
<br />Variations in Property Taxes by State and County.
Property taxes have significant variations across states and counties throughout the United States. These differences are primarily due to variations in state-specific property tax laws and regulations and in property tax rates across different counties.
Each state has its own laws and regulations governing property taxes, which can significantly impact how property taxes are determined and assessed. For example, some states may have different assessment methods, formulas, appraisal techniques, or mechanisms for determining property values. Property owners must familiarize themselves with their state's laws and regulations to understand how their property taxes are calculated.
Counties with higher property tax rates.
Within each state, there can be notable variations in property tax rates from county to county. Certain counties may have higher property tax rates due to the specific needs and priorities of the local government, such as funding for education, infrastructure, or public services. Property owners must be aware of these variations, which can significantly impact their property tax burden. Homeowners or potential buyers should research property tax rates in different counties before deciding where to reside or invest.
Understanding differences in property tax assessments across states.
In addition to variations in tax rates, there can also be differences in the assessment methods used to determine property values across states. Some states assess properties at their fair market value, while others may base assessments on a percentage of the market value or use other valuation methods.
In conclusion, property tax variations by state and county can significantly impact the taxes property owners must pay. State-specific laws and regulations, along with variations in tax rates and assessment methods, contribute to these variations.<br />Homeowners must stay informed about their area's specific tax laws and rates and understand the assessment process to effectively manage their property tax obligations.
Final Thoughts.
Property owners can navigate the evolving landscape of property taxes by considering these factors and staying informed about potential policy changes and technological advancements.
2023-08-08T10:30:00-07:002023-08-08T11:01:14-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9637Seattle property tax assessments compared to corresponding market valuesProperty taxes are made up of your tax assessment plus other elements like voter-approved levies. However, the tax assessment portion has the biggest impact on your annual tax bill. The tax assessment is basically the taxman, i.e. the county's tax assessor, estimating the value of your home, and that number is then plugged into the formula that's used to set your property taxes for the year.
<img src="https://assets.site-static.com/userfiles/562/image/Difference_between_tax_assessed_value_and_market_value.jpg" width="800" height="534" alt="Difference between tax assessed value and market value" style="margin: 10px auto; vertical-align: middle; display: block;" />
The tax-assessed value of a home is determined by the county's Tax Assessor and is adjusted annually, usually in the upward direction. I have yet to meet a homeowner who adamantly states that their property taxes are too low and need to be increased immediately. Many homeowners believe that the assessed value of their home is too high. But in reality, is that actually the case?
For this article, I looked at <a href="https://www.myseattlehomesearch.com/communities/" title="View properties for sale in Seattle">Seattle home sales</a> and directly compared them to the corresponding tax-assessed valuation. This will give you an idea of how accurate assessed values are relative to the true market value of a home.
How is tax assessment determined for a home?
According to the Washington State Department of Revenue: State law requires that assessors appraise property at 100% of its true and fair market value in money, according to the highest and best use of the property. Fair market value, or true value, is the amount of money that a willing and unobligated buyer is willing to pay a willing and unobligated seller.
<br />The <a href="https://kingcounty.gov/depts/assessor/Common-Questions.aspx" title="All about King County property taxes" target="_blank">King County tax assessor</a> uses one of the following to determine the assessed value of your home:<br /><br />
Compares your home to similar homes that have sold in your area. Basically, it's the same as a comparative market analysis that real estate agents use to set the list price for a home and for how much it might sell for.
The Cost Approach is based on the cost of replacing an existing home with a similar structure. This method is mostly used for setting the tax assessment for new construction homes.
Allegedly, the assessor is required to do a physical, in-person inspection of your property once every 6 years but I'm not sure if that actually happens. That's a lot of homes to go take a look at and I've ner seem one standing at my front door.
So, how does the tax-assessed value compare to the true market value?
I compared the sale price of some homes in the north Seattle area with their corresponding tax-assessed value. I looked at 50 home sales that closed in the month of June 2023. I recorded the sale price and the corresponding tax-assessed value. Note that the most recently listed online tax assessments were for the year 2022. All home sales data was taken from the Northwest MLS (NWMLS).
And this is how the two values compare:
<img src="https://assets.site-static.com/userfiles/562/image/Tax_assessed_values_versus_home_sale_prices.jpg" width="790" height="490" alt="Tax assessed home value versus actual market value" style="margin: 10px auto; vertical-align: middle; display: block;" />
As you can see, there is not a perfect one-to-one correlation between what the tax assessor thinks your home is worth and what it's worth if listed for sale. Yes, as the assessed value increases, the potential sale price also goes up but just as many homes sold above as below their tax assessments.
Basically, the tax-assessed value of your home is no better an estimate of your home's true value, i.e. market value, than many online automated home evaluation tools like the famously unreliable Zestimate. As ever, <a href="https://www.myseattlehomesearch.com/blog/how-much-is-my-home-worth-exactly-what-somebody-is-willing-to-pay-for-it/" title="A home's true market value">the true value of a home</a> is how much it will sell for on the open market. The tax assessor's opinion is not perfect, just like many Realtor's market evaluations.
Looks like some owners are paying too much and some are paying too little property taxes?
Based on the above data, for the homes where the sale price was significantly above the tax-assessed value then those homeowners were probably paying less property tax than they should have been and for those sellers whose home sold for less than the tax value then maybe they were paying more taxes than they should have? As home owner, you have the right to contest and appeal your tax assessment. Here's a link for <a href="https://kingcounty.gov/independent/board-of-appeals.aspx" title="Appealing your Seattle property taxes" target="_blank">more information on that process</a>.
However, this data is based on a single year's tax assessment (2022), and over a longer time span it's hard to tell whether the same home was consistently paying more or less than they should have been had their assessment been more accurate.
Note that some listing agents will state in the marketing material for a home that it's priced below the tax-assessed value but, as the data above show, this is meaningless because the assesed value is not a reliable indicator of true market value.
The difference between appraised value, market value, and assessed value.
The appraised value of a home is the value as determined by a professional property appraiser and is usually part of the home purchase process when a buyer is getting a loan to purchase a home or when a homeowner is refinancing their home loan.
The market value of a home is what a home is worth if it is listed for sale on the open market and what it sells for.
The tax assessment value is how much the County's tax assessor thinks your home is worth
To summarize regarding how the tax-assessed home values compare to their real value: the tax assessment is basically just an estimate and is not perfect now . Some homeowners owners might be paying more taxes than they should and some might be paying less. Such is life I suppose!
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.2023-07-27T12:30:00-07:002023-07-27T13:00:54-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9748Seller disclosure statement: an important but frequently useless documentThe seller disclosure statement, also known as a seller disclosure form or Form-17 is a crucial document that sellers must complete when <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="Disclosures when selling your home">selling their home</a>. Its purpose is to provide potential buyers with information about the condition of the property and any known issues or defects.
This disclosure statement is designed to protect both parties involved in the transaction. It allows the sellers to fulfill their legal obligation to disclose any material facts that could affect the value or usability of the property. For buyers, potentially, it provides valuable information to make informed decisions about purchasing the property or not.
<img src="https://assets.site-static.com/userfiles/562/image/All_you_to_know_about_the_seller_disclosure_statement.jpg" width="800" height="534" alt="The seller disclosure statement explained" style="margin: 10px auto; vertical-align: middle; display: block;" />
However, the disclosure is only as good as the information provided by the home seller and let's say, some sellers are a lot better than others at completing the form. I tell home buyers to take the disclosure with a healthy pinch of salt. The seller disclosure statement is not a replacement for a home inspection or the buyer doing their due diligence. Buyer beware.
So, what is the seller disclosure statement?
The disclosure statement is a Federally required form that homeowners are required to fill out when they list their home for sale. The length of the form, the disclosure requirements and the number of questions that the seller must answer will depend on the disclosure laws for each state. The Washington State version has 6 pages of questions, notices, and disclaimers and covers the following:
Title/form of ownership and any legal issues.
Water and water rights.
Sewer and septic.
Structural: which covers any know defects and needed repairs plus whether the owners did any remodeling projects including permits. Includes items like water damage.
Systems and Fixtures: covers all the home's systems including HVAC and appliances.
Homeowners association / common interests: this needs to be completed if the home is part of an HOA.
Environmental: covers everything from whether the home is located in a flood zone, any hazard issues, or whether the home was ever used as a meth lab!
Lead-based paint: applies to all homes that were built prior to 1978 when they stopped adding lead to paint.
Manufactured and mobile homes.
The seller has the following answer options:
Yes
No
Don't know
Not applicable.
If the seller answers YES to a question then for some questions they are required to provide further information about that question. For example, if they answered yes to whether the basement had ever had water issues.
When does the seller have to provide a copy of the disclosure to a buyer?
The buyer must be provided with a copy of Form-17 within 3 days of having their offer accepted, i.e. mutual acceptance. However, for the Seattle real estate market at least, the disclosure is usually uploaded with the listing on the Multiple Listing Service (MLS) and the buyer's agent can download a copy before making an offer.
The buyer has 3 business days to review the document and if they don't like what they see, can terminate the sale and get their earnest money back. However, in a <a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="How to win a home in a competitive market">competitive market</a>, many buyers will review the disclosure before making an offer and in order to make their offer more competitive, will waive their right to walk on the sale based on form-17.
The limitations of the Seller Disclosure Statement.
As mentioned previously, the form is only as food as the information provided by the seller and a buyer has no way of knowing how reliable that information is.
Most homeowners don't know their own homes!
Me included! Although the seller is required to answer questions regarding items like the attic and crawl space, how often does the average owner venture into those areas? Correct, almost never.
The roof could be leaking and the crawl space might have standing water and a pest infestation but the owner has no idea and so they will comfortably answer NO to whether those areas have any known issues.
However, if the owner did a <a href="https://www.myseattlehomesearch.com/blog/pros-and-cons-of-sharing-a-seller-home-inspection-with-buyers/" title="Seller procured home inspection">pre-listing property inspection </a>before going on the market then they should be aware of all major issues and either fix them before going on the market or disclose them to potential buyers.
The honesty level of the seller.
While many sellers are highly conscientious and will do their absolute best to complete the questionnaire to the best of their ability, some owners can be a little economical with the facts.
Some disclosures are ridiculously clean with no mention of any defects but when you see the home in person, it clearly has problems that should have been disclosed, like water issues in the basement, windows that don't open, and easy-to-see cracks in the foundation. Those versions are strictly for amusement purposes only!!
Do some sellers sometimes fail to disclose major hidden issues that they are aware of? Absolutely.
Say, for example, there's a significant crack in the foundation. The owner is aware of it, doesn't include it on the disclosure but tells the listing agent about it. That listing agent is now legally required to share information about that problem with prospective buyers even if the seller doesn't want them to reveal it.
This is referred to as a latent defect and the agent cannot help conceal it. A latent defect refers to a problem with the home that is hidden and not easily found by walking around and looking at the home or inspecting the home. Mold in the walls is another good example. If the seller demands that the listing agent not divulge the hidden issue then that agent should refuse to work with the owner.
<img src="https://assets.site-static.com/userfiles/562/image/Latent_defects_and_seller_disclsoure_statements.jpg" width="800" height="534" alt="latent defects and seller disclosure statements" style="margin: 10px auto; vertical-align: middle; display: block;" />
"Don't know" is a popular answer!
Many sellers genuinely don't know the correct answer to some of the questions on the form and instead of taking the time to get the correct answer, just go for the easy don't know option. As a result, many times buyers are presented with a disclosure form that is low on details.
But kudos to those home sellers who put in the time and effort to get the information needed to fill out the questionnaire more thoroughly.
Estate sales don't require a seller disclosure.
An estate sale is where the owner of the property has died and the individual or family who inherited the home are selling it via an estate sale. Because the owner has passed, they are obviously not available to fill out the seller disclosure statement and so one is not required in this case.
Note that some sellers who own homes that they have never lived in, like an investment rental property, will argue that they don't need to provide a Form-17. Incorrect! They must fill one out just like everyone else.
The disclosure document is not a warranty.
The seller disclosure form does not impose warranty obligations on the seller. The seller is not held liable for any errors or omissions in the disclosure statement unless they had prior knowledge of them. Additionally, the disclosure statement does not automatically become part of the purchase and sale agreement, so any misstatements do not constitute a breach of contract by the seller.
In some states murders and haunted homes do not have to be disclosed.
The questions that the seller is required to answer vary from state to state. For example, in Washington State, sellers are not required to disclose whether any murders occurred in the home, if someone died in the home, or if the home is allegedly haunted. In other parts of the US, sellers will be required to divulge those details. Regardless, you might be haunted by your mortgage payments for a few years!
Hey condo owners, please start answering this question properly!
Here's one example demonstrating how unreliable the information on a completed form can be.
Question in the Title section: Are there any covenants, conditions, or restrictions recorded against the property?
Basically, is your home part of a homeowners association (HOA) with CC&Rs?
When I look at Form-17s for condo sales in the Seattle area, 80% of the time I see this one answered with a NO which is completely wrong. It's an automatic YES! Sorry, one of my pet peeves.
Although, the form is to be filled out by the seller and not by their listing agent, shouldn't the listing agent point out an obvious error on the form...just like latent defects?
The disclosure statement is NOT a replacement for a home inspection.
It's hard to know a lot of time if the seller disclosure statement is fact or fiction but either way, buyers should never hang their hat on it and use it as a reason not to do a home inspection. Spend a few hundred dollars to avoid thousands of dollars in hidden repair costs.
By doing a home inspection, <a href="https://www.myseattlehomesearch.com/blog/dont-skip-the-sewer-inspection-when-buying-a-home/" title="Sewer inspection and buying a home">including a sewer scope</a> you will discover a lot more information about the condition of the home than the owner is aware of.
A word of advice for sellers...answer ALL the questions!
When you fill out the disclosure statement make sure you answer every single question and do not leave any questions unanswered. If a particular question does not apply to your home, make sure to mark it as N/A.
Why?
Because if you leave a question unanswered, the buyer can send the form back to you to answer that question. Once you return the form to the buyer they now automatically have three more days to review the document and potentially <a href="https://www.myseattlehomesearch.com/blog/how-home-buyers-can-get-out-of-purchase-agreements/" title="Ways home buyers break purchase contracts">get out of the contract</a>.
To summarize regarding seller disclosure statements in real estate:
Sometimes they are informative and reliable but many times they are not. Home buyers should not overly rely on the information contained in a Form-17 and do their due diligence. Many sellers are unaware of issues and needed repairs that are only revealed after an inspection. Buyer beware!
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.
2023-07-24T12:15:00-07:002023-07-24T12:21:54-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9729What to consider when buying land to build a homeSo you're thinking about buying land to build a home? About three times a year, out of the blue, a <a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="How to buy a home">home buyer</a> will send me a link to a vacant land listing and ask me "what do you think about this?" They might have missed out on some homes or they are priced out of the local market and so vacant land looks a lot more affordable. Also, some homeowners want to sell their current home and finally get to build their custom dream home on a piece of land.
<img src="https://assets.site-static.com/userfiles/562/image/Buying_land_to_buy_a_home.jpg" width="800" height="534" alt="What to know about buying land to build a house" style="margin: 10px auto; vertical-align: middle; display: block;" />
However, buying land to build a home is just the first step in a long process, and the more you know upfront the better. Do your due diligence so you don't rush in and buy some land that you later regret. Factors such as location, zoning regulations, and access to amenities must be weighed. Engaging a trusted real estate agent is advisable to navigate the process. Financing options should be explored, including pre-approval and potential cash payments.
Ensuring land suitability through in-person visits and <a href="https://www.maxrealestateexposure.com/land-survey/" title="what you need to know about land surveys" target="_blank">land surveys is crucial</a>. Collaborating with architects and builders for site preparation is recommended. Understanding local zoning regulations and potential challenges is essential. We will provide insights and tips for a successful land acquisition and building process.
important things to Consider when Buying Land for Building a House.
When embarking on the journey of buying land to build a house, there are several factors that you should keep in mind to ensure a smooth and successful process.
Factors to Keep in Mind During the Land Selection Process.
During the land selection process, it is crucial to consider various factors that will impact your future home. These include:
● Location: evaluate the proximity to amenities, schools, and workplaces.
● Size and shape: determine if the land is suitable for the size and layout of your desired house.
● Topography: consider the land's slope, drainage, and any potential challenges it may pose for construction. If it's a <a href="https://www.myseattlehomesearch.com/blog/should-i-buy-a-home-on-a-steep-hill-side/" title="Adding a home on a steep slope">steeply sloped lot</a>, what percentage of it is buildable?
● Utility access: ensure essential utilities such as water, electricity, and sewage are accessible.
● Natural features: assess natural features like trees, water bodies, or scenic views that can enhance or limit your building options.
Engaging the Services of a Real Estate Agent.
Working with a qualified real estate agent specializing in land purchases can be invaluable in guiding you through the process. Their expertise and local knowledge can assist you in the following ways:
● Market insights: A real estate agent can provide information on current land prices, trends, and potential investment opportunities in the area.
● Negotiations: They can help negotiate the best terms and conditions for your land purchase, ensuring you get the most value for your investment.
● Legal guidance: Real estate agents can navigate legal matters, contracts, and paperwork associated with land acquisitions, by <a href="https://activerain.com/blogsview/5744297/is-a-real-estate-lawyer-needed-when-buying-a-house" title="What does a real estate attorney do?" target="_blank">referring a skilled lawyer for real estate.</a>
● Professional network: Agents often connect with other industry professionals, such as land surveyors, architects, and builders, who can facilitate the building process.
By engaging the services of a reliable real estate agent, you can streamline your land search, minimize risks, and make informed decisions throughout the buying process.
The Cost of Land: Understanding the Financial Aspects.
When buying land to build a house, understanding the financial aspect is crucial. We will provide insights into determining the market value of land in the area, financing options, and considering cash payments for undeveloped land.
Determining the Market Value of Land in the Area.
Before making a land purchase, it's important to determine the market value of the land in the specific area. Location, size, accessibility, and nearby amenities can impact the land's value. Consulting with local real estate agents or researching recent land sales can help assess the market value accurately.
Financing Options and Obtaining Pre-Approval.
Securing appropriate financing is a key consideration when buying land. While lenders may be more hesitant to provide loans for undeveloped land, financing options are still available. It is advisable to explore different lenders and their loan programs specifically designed for land purchases.
<a href="https://original.newsbreak.com/@massrealty-1600066/2743366959905-what-are-the-pros-and-cons-of-a-land-loan" title="All about land loans" target="_blank">Land loans are different</a> than home financing, so get yourself educated.
Obtaining pre-approval from a lender before starting the buying process can provide a clear understanding of the budget and facilitate a smoother transaction. If you plan on building your home immediately, <a href="https://realtytimes.com/headlines/item/1046924-pros-and-cons-of-construction-loans" title="What you need to know about construction loans" target="_blank">opting for a construction loan</a> would be best. You can roll the land cost and build into one mortgage with construction loans.
Considering Cash Payment for Undeveloped Land.
One option to consider when purchasing undeveloped land is paying in cash. Cash payments eliminate the need for a loan and can provide more negotiating power. Evaluating personal financial circumstances and assessing whether a cash payment is feasible is important.
Additionally, paying in cash can expedite the buying process, eliminating the need for lender approval and potential delays.
Understanding the financial aspect of buying land is essential for a successful land acquisition process. Properly determining market value, exploring financing options, and considering cash payments can help buyers make informed decisions and ensure a smoother transaction.
Evaluating Land Suitability for Construction.
When buying land to build a house, evaluating its suitability for construction is crucial. This involves several key steps to ensure that the land meets the necessary requirements and is suitable for your desired home.
Conducting In-Person Site Visits and Professional Surveys.
Before finalizing any land purchase, visiting the site in person is essential. This allows you to assess the land's topography, surroundings, and access to amenities. In addition, hiring a professional surveyor to conduct a thorough survey is vital to obtain accurate information about the property boundaries, potential easements, and any restrictions that may affect construction plans.
Collaborating with Architects and Builders for Site Preparation.
Working with experienced architects and builders is crucial during the evaluation process. They can provide valuable insights based on their expertise, helping you determine if the land suits your desired home design.
Architects can assess soil conditions, drainage, and building orientation, ensuring that the land aligns with your vision and meets structural requirements. Builders can contribute insights into on-site preparation, such as clearing, grading, and utilities. Doing so becomes more crucial when a septic system services the land. See the <a href="https://www.rismedia.com/2023/07/18/what-is-difference-between-septic-system-public-sewer/" title="Sewers and septic systems are different" target="_blank">differences between septic systems and public sewers.</a>
Securing Necessary Permits Before Closing the Deal.
Before finalizing the land purchase, it is essential to understand the permits and approvals required for construction—research local zoning regulations and building codes to ensure compliance. Engage with the relevant government authorities to secure permits for construction, including approvals for architectural plans, environmental concerns, and utility connections.
It is crucial to address any permit-related issues before closing the deal to avoid delays or complications during construction.
Understanding Local Zoning Regulations and Potential Challenges.
It is crucial to understand the local zoning regulations and potential challenges that may arise—researching zoning restrictions and local building codes and addressing issues such as road access and construction constraints is vital.
Researching Zoning Restrictions and Local Building Codes.
Before purchasing a vacant lot, it is essential to thoroughly research the area's zoning restrictions and local building codes. Each jurisdiction may have specific regulations regarding land use, setbacks, height restrictions, and even architectural style.
Understanding these restrictions will help you determine if your plans for the house align with the local guidelines.
Addressing Issues such as Road Access and Construction Constraints.
Another factor to consider is road access to the land you intend to buy. Lack of proper access can significantly impact your ability to develop the property and may lead to difficulties in obtaining necessary permits for construction. It is crucial to assess whether the land has direct access to main roads or if there are any legal or physical obstacles.
In addition, construction constraints should be carefully evaluated. Some properties may have natural features, such as steep slopes or unstable soil conditions, impacting the construction process. It is important to consult with professionals, such as engineers or geologists, to assess the feasibility of building on the land and determine any additional measures needed for a safe and successful construction process.
● Thoroughly research the zoning restrictions and local building codes for the area.
● Ensure that your plans for the house comply with these regulations.
● Assess road access to the land and any potential obstacles.
● Consult professionals to evaluate construction constraints, such as steep slopes or unstable soil conditions.
By thoroughly understanding the local zoning regulations and addressing potential challenges related to road access and construction constraints, you can make informed decisions when buying land for building a house. This will help you avoid legal issues and ensure a smooth and successful construction process.
Frequently asked questions About Buying Land to Build a House.
Here are answers to some frequently asked questions about buying land to build a house:
What are the Advantages of Buying Raw Land for Construction?
Buying raw land for construction offers several advantages. Firstly, it allows you to build a customized home that meets your needs and preferences. Secondly, raw land tends to be more affordable than purchasing an existing property. Additionally, buying land lets you choose the location, ensuring it suits your lifestyle and desires.
How Much Does Land Cost on Average for Building a Home?
The land cost for building a home can vary greatly depending on location, size, and desirability. Land prices can range from $10,000 to $100,000 per acre. However, conducting thorough market research in the area you plan to build is important, as prices fluctuate significantly based on local market conditions.
Can You Build Your Dream Home on Any Land You Buy?
While buying land provides opportunities for building your dream home, it's crucial to consider certain factors. Ensure that the land has the necessary zoning designation for residential construction and is suitable for the type of home you envision. Additionally, check for any restrictions, such as homeowner association rules or environmental regulations, that might impact your building plans.
What Role Does a Real Estate Agent Play in Land Purchases?
A real estate agent with expertise in land purchases is essential in guiding and assisting you throughout the land-buying process. They can help you find suitable properties, negotiate the purchase price, and provide valuable insights into the local market. Additionally, an agent can ensure that all necessary documents and due diligence are properly handled, protecting your interests as a buyer.
Are There Limitations on the Type of Construction Allowed on Land?
Due to local zoning restrictions and building codes, there may be limitations and regulations regarding the type of construction allowed on land. These can include constraints on building height, setback requirements, and architectural guidelines. Researching and understanding these limitations before purchasing land is essential to ensure that your construction plans align with the regulations.
Final Thoughts on Buying Land to Build on.
By considering these key factors and taking the necessary precautions, you can make informed decisions throughout the land acquisition process. Buying land to build a house is a significant investment, and thorough research and professional guidance are essential to its success. Buying land to build a home is a lot different that buying an existing home. There's a long list of critical elements to take into consideration. Make sure to do your due diligence!
2023-07-21T08:00:00-07:002023-07-21T08:52:11-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9697Don't skip the sewer inspection when buying a home.Most<a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="Home buying process"> home buyers</a> will make an offer on a home contingent on an inspection of the property or rely on a seller-provided inspection report. However, many buyers will skip doing a sewer inspection to save some money or because they were not advised to do so by their Realtor or home inspector. Standard home inspections do not include a sewer scope.
<img src="https://assets.site-static.com/userfiles/562/image/Sewer_inspection_and_buying_a_home.jpg" width="800" height="500" alt="Sewer inspections when buying a home" style="margin: 10px auto; vertical-align: middle; display: block;" />
For the sake of a few hundred dollars is it worth taking the risk on something that may potentially cost you multiple thousands of dollars after closing? <a href="https://www.myseattlehomesearch.com/blog/sewer-line-repairs-costs-and-not-getting-ripped-off/" title="All about sewer repairs and costs">Sewer repairs and replacement are not cheap</a> and can be anywhere up to $25,000. What lies beneath can eat up your savings and an ounce of prevention is worth every penny.
What Is a Sewer Line Inspection?
A sewer pipe inspection involves a thorough evaluation of the sewer lines using a specialized camera called a sewer scope. This camera is inserted into the sewer line through an access point, such as a sewer cleanout. The scope is manually pushed through the line, ideally all the way out to where the side sewer from the home connects to the main sewer line in the street.
During the inspection, the camera captures real-time video footage of the inside of the sewer line, allowing professionals to visually inspect the pipes. This footage provides valuable information about the condition of the sewer line, including any signs of damage, blockages, or tree root intrusion. If the inspector discovers issues in the sewer line including broken pipes or major blockages they will use a location device and leave a small flag on the surface where that issue is located. That way whoever does the sewer repairs knows where to start digging if necessary.
Sewer scopes are typically performed by plumbing experts. They use their expertise to analyze the inspection report and provide valuable insights into the current condition of the sewer system. However, an increasing number of home inspectors are now offering to do sewer scopes but there can be pros and cons to going this route (see below).
Ideally, there is an external clean out that the inspector can easily access to run the camera but sometimes they have to resort to removing one of the inside toilets or climbing up on the roof and going down one of the ventilation pipes. And the worst-case scenario, the sewer inspector has to go into the crawl place to get access to the sewer cleanout.
Factors that increase the risk of discovering sewer issues when buying a home.
Certain aspects of a home can increase the chances that the sewer pipe will have some issues and hence the need for doing an inspection.
The older the home, the older the sewer line, and the greater the chance the original sewer is still in place. Older lines are made up of segmented clay or concrete pipes with lots of joins that are susceptible to separation or root intrusion.
The<a href="https://www.myseattlehomesearch.com/blog/should-i-buy-a-home-on-a-steep-hill-side/" title="Homes located on steep slopes"> home sits on a steep hill</a> and the sewer line runs down a slope. The greater the slope the greater the chance for line breakage.
The property with lots of trees and big shrubs. Tree roots love water and will try to force their way into the connection joints of older sewer lines.
Slow Drainage: if water takes longer than usual to drain from sinks, bathtubs, or toilets, it may be a sign of a clogged or damaged sewer line.
Foul Odors: Unpleasant odors emerging from drains or the backyard can signify sewer line issues, such as sewer water leaks or poor ventilation.
However, any home, regardless of age and location can have potential sewer line problems. Ask your home inspector if they recommend that you do a camera scope, not your real estate agent.
How Much Does a Sewer Line Inspection Cost?
The quick answer is that for the Seattle area at least it's around $300 and will vary between $250 and about $350 but that will vary in different parts of the country. Potentially, if the sewer access point is in an odd location like a crawl space you might be charged a little extra for that inconvenience.
So what do you get for your money? You will get a written report on the condition of the sewer line plus a link to a video of the camera being run down the sewer line. And one local sewer inspector will give you two bags of popcorn so you can gather your family and watch the sewer video on a Saturday night.
What if the sewer camera can't get all the way out to the city sewer line in the street?
One limitation of sewer scopes is that if there is a blockage in the pipe the camera may not be able to get beyond that point and all the way out to the main sewer. The better the equipment the better the chance the inspector can push the camera beyond the blockage.
So if there is a major blockage in the sewer line 30 ft from the home but there's still 60 more feet out to the main sewer line in the street you'll have no idea as to whether there are additional issues beyond the first 30 feet. As to who is responsible for sewer repairs that occur under sidewalks and city streets will vary from city to city. So if the scope discovers issues in those two areas is important to ask the inspector who is liable for those repair costs because digging up sidewalks and city street is really expensive.
If there is a blockage in the line due to tree roots that are preventing the camera from getting all the way out to the main sewer line then you may have to have the blockage removed and then come back and rerun the camera. Obviously, if you're doing a home inspection as part of buying a home, the sellers would have to be responsible for unblocking since that is something you are not authorized to perform.
What if the home inspector also does sewer inspections?
It is becoming more common that some home inspectors will offer an all-in-one service where they can also inspect the sewer line for you. Obviously, this provides a nice convenience since the same individual can do both the home and sewer inspection instead of having to schedule two separate appointments.
Yes, it's convenient, but should you use that service? While the home inspector might be really good at inspecting the property that doesn't automatically mean they are also good at scoping a sewer.
One potential issue with using a home inspector is that the equipment they use may not be of the same quality as a professional sewer scope company. Higher-end equipment, including the camera head and hosing that is rigid enough to be able to get all the way out to the main sewer line costs around $16,000. Also, camera replacement is not cheap.
Home inspectors are much more likely to have, let's say, mid-range scope models that might not have the same power and ability to get all the way through the sewer line especially when there are bends and kinks in the sewer line. A home inspector is not going to buy the best equipment because it will take a lot longer for a return on their investment because it's only a side part of their business compared to a company that specializes solely in scopes.
Also, some home inspectors will be new to doing scopes and not have the experience to interpret what they see. Just because someone has a new shiny stove does not make them a great cook!
<img src="https://assets.site-static.com/userfiles/562/image/Sewer_inspections_protect_home_buyers.jpg" width="800" height="528" alt="Sewer inspections protect home buyers" style="margin: 10px auto; vertical-align: middle; display: block;" />
Should you rely on the seller's pre-listing sewer inspection report?
It is becoming increasingly common in some areas like Seattle for home sellers to pre-inspect their properties and share the inspection report with potential buyers. When I looked at Seattle data, I saw that about<a href="https://www.myseattlehomesearch.com/blog/once-rare-now-common-seller-procured-home-inspections/" title="Sharing seller home inspection reports in Seattle"> two-thirds of sellers were sharing home inspection reports</a> and 50% were sharing reports for both the property and sewer with buyers.
While I'm always hesitant to advise buyers to rely on the seller's main property section report, it's probably less of a risk when it comes to the sewer line since basically it's a camera running down the sewer line and most inspectors are going to see the same issues regardless. However, 10 different home inspectors will find 10 different things when it comes to the home itself.
As mentioned above, if the seller's inspection is unable to get all the way out to the main sewer line in the street and the buyer has no idea what lies beyond that point that translates into potentially expensive repairs. Don't assume that the sellers, upon discovering a blocked line, are going to fix that issue before listing the home for sale. It may just require a jet cleaning to remove some tree roots but not all sellers are motivated to do what's needed.
It's interesting that in multiple offer situations, buyers are usually willing to share their scope report with other potential buyers to split the cost of the inspection. However, buyers will never share their own property inspection reports with other buyers since they don't want to help the competition get the home plus there's a potential liability in sharing a home inspection report with a different buyer.
When can you safely skip doing a sewer scope?
When<a href="https://www.myseattlehomesearch.com/blog/9-critical-questions-to-ask-when-buying-a-condo/" title="How to buy a condo"> buying a condo!</a> <a href="https://www.madisonmortgageguys.com/homeowner-associations/" title="What you need to know about HOAs" target="_blank">The home owners association </a>(HOA) is responsible for any and all repairs that are outside your individual unit including the sewer pipes. And obviously, when the home is on a septic system because that's a whole different inspection process.
What about new construction homes? Although <a href="https://sdhouseguys.com/buy-new-construction-home/" title="Buying a new construction home" target="_blank">new construction homes</a> require permitting and allegedly city inspectors come out on-site and review all stages of the construction process, there is no guarantee that they did a great job on the sewer line. Also, in situations where say four townhomes are added to a lot that previously had one home, how do you know that the developer didn't run all those four homes into the same original sewer line and instead of adding individual sewer lines out to the street?
To summarize regarding doing sewer inspections when buying a home: the best advice is if you have any doubts at all, just do a scope. It will only cost you about $300 but can save you a lot of post-closing heartache when money is scarce. By getting a sewer inspection, prospective buyers can have peace of mind knowing the current condition of the sewer system. Also, if any issues are discovered,<a href="https://www.cincinkyrealestate.com/blog/category/sellers-buyers/" title="Negotiating after a property inspection " target="_blank"> </a><a href="https://www.cincinkyrealestate.com/blog/negotiating-post-inspection-repairs/" title="Negotiating after a home inspection " target="_blank">the inspection report can serve as a negotiating tool</a> or an opportunity for the sellers to rectify the problems before closing.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.2023-07-18T08:58:23-07:002023-07-31T19:12:13-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9548Don't list your home in August, wait until September!But it can be a great time to buy a home!
There are a number of reasons for not listing your home for sale in the month of August and waiting one more month until September. And historically, the market seems to agree.
<img src="https://assets.site-static.com/userfiles/562/image/Dont_list_your_home_for_sale_in_August.jpg" width="850" height="568" alt="Reasons not to sell your home in August" style="margin: 10px auto; vertical-align: middle; display: block;" />
For the Seattle area at least, the real estate market follows a repeating annual pattern of the market coming out of winter hibernation, peaking in the spring months and then dropping off over the remainder of the year...with one last hurrah in September! One part of the process when <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="How to sell a home in Seattle">selling your home</a> is picking the right time to go on the market and August might not be it.
Reasons for not listing a home for sale in August.
There are only four weeks left before the kids go back to school and the weather starts changing. People just want to enjoy the outdoors and the end of summer and not be indoors looking at homes. Even buyers who don't have kids just want to enjoy the end of summer and do some travel or just slack off.
Families with kids who we're looking to move into new neighborhoods usually focus on the spring months because they want to be in place before the new school year starts. They're not going to look for a home in August.
Buyers who have potentially missed out on multiple homes in the competitive spring months may just want to take a break from all things real estate for a while.
Historically, if you look at the last 10 years for the Seattle area the number of NEW LISTINGS coming on the market peaks around May and then drops June through August then jumps up again in September. It's extremely consistent! And after September, prices and the number of listings drop through the winter months. With the exception of 2020, for every other year, the number of new Seattle listings bottomed out in August after peaking in the spring but was then followed by a jump in new listings in September. The COVID pandemic started in the spring of 2020 and resulted in the peak market getting pushed out to the summer months.
<img src="https://assets.site-static.com/userfiles/562/image/10_year_Seattle_new_listings_trend.jpg" width="850" height="580" alt="Seattle home listings 10 year trend" style="margin: 10px auto; vertical-align: middle; display: block;" />
Although homes may still sell in August, because there will be less competition for those homes, sellers may potentially get more offers that are contingent on inspections and other contingencies compared to earlier months. In other words, they might get "less clean" offers with more hurdles to clear before closing.
Also, when you look at the number of total sales in August compared to September, allowing for 30 days to close, there were fewer home sales in August compared to September.
<img src="https://assets.site-static.com/userfiles/562/image/10_year_monthly_Seattle_homes_sales_trend.jpg" width="850" height="570" alt="10 year Seattle homes sales trend" style="margin: 10px auto; vertical-align: middle; display: block;" />
All real estate is local so what happens in the Pacific NW may not necessarily be the same places like Florida and Arizona which have totally different climates.
Buy hey, August is a great time to buy a home!
I bought my own home in the month of August and didn't have to compete with other buyers.
There tends to be less competition for homes even there though fewer new listings come on the market in August. The best homes will still have some competition but probably not to the same extent as you would see back in the springtime. Some August listings will just get1 or 2 or maybe no offers so if you're a buyer who got run over by the spring market, stay patent and wait for August... and sometimes that slowdown can kick in early in mid-July. No guarantees, but every bit helps when you're trying to buy a home.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.
2023-06-21T17:00:00-07:002023-06-22T06:50:17-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9484Once rare, now common: Seller-shared home inspection reportsAs little as 5 years ago, it was rare for a home seller to have a professional inspection of their home before going on the market AND then sharing that same report with potential home buyers as a marketing tool. But now, buyers have almost come to expect that the seller will have an inspection report available for them.
<img src="https://assets.site-static.com/userfiles/562/image/How_common_are_seller_provided_home_inspection_reports.jpg" width="800" height="534" alt="How common are seller provided home inspection reports" style="margin: 10px auto; vertical-align: middle; display: block;" />
Back in<a href="https://www.myseattlehomesearch.com/blog/pros-and-cons-of-sharing-a-seller-home-inspection-with-buyers/" title="All about seller-procures home inspections"> </a>January of 2018 when I first started seeing this practice,<a href="https://www.myseattlehomesearch.com/blog/pros-and-cons-of-sharing-a-seller-home-inspection-with-buyers/" title="All about seller provided home inspection reports"> I wrote a blog post</a> about whether home sellers should share their inspection reports with buyers and whether buyers should rely on those reports. When I published and shared the post many agents responded "Never heard of them!"
How times have changed...
For the Seattle area at least, it is now really common to see homes for sale where the seller has inspected the home before putting it on the market and is sharing what is called a seller-procured inspection report with buyers to entice more offers on the home. To get an idea of the percentage of listings that are doing this, I tapped two different data sources.
Looked through the marketing remarks of a random selection of Seattle area home sales to see which of them were sharing a copy of the seller inspection report.
Contacted three different Seattle area professional home inspectors to see what types of property inspections they had done over the prior three months.
What percentage of Seattle listings have seller-provided property inspection reports?
First, let's take the North Seattle area as an example. I looked at single-family home sales (excluding townhomes) of over $700,000 over the previous three months in early June 2023. Therefore, the data was pulled in the middle of the active spring real estate market.
Total number of sales: 136
Number of listings sharing a seller-procured inspection report: 92 (67%).
Number of listings sharing both a property inspection report and a sewer line inspection report: 69 (51%).
For this geographic area and time period at least, two-thirds of home sellers are pre-inspecting their homes before going on the market and then sharing that report with prospective buyers. Considering this was not very common just five years, that is a huge increase.
What types of inspections are professional home inspectors doing?
I contacted three Seattle area professional home inspectors and asked them what percentage of their home inspections were made up of the following types of inspections over the three previous months.
Seller-procured pre-listing inspections.
Buyers inspecting the home BEFORE making an offer (buyer pre-inspections).
Buyers doing an inspection AFTER getting their offer accepted (purchasing a home contingent on an inspection).
<br />Thanks to Steve Bryan of <a href="https://www.myhouseandyours.com/about.html" title="Steve Bryan home inspector" target="_blank">My House And Yours</a>, Erik Christenson with<a href="https://bellevue.wini.com/" title="WIN home Inspections " target="_blank"> WIN Home Inspections</a>, and Brian McDowell with <a href="https://zoomhomeinspections.com/" title="Zoom Home Inspections" target="_blank">Zoom Home Inspections</a> for providing some great info.
And here are the results (these numbers cover the Puget Sound area):
Seller pre-listing inspections: 32 to 50%
Buyer pre-offer inspections: 33 to 54%
Buyer inspections after getting an offer accepted: 14 to 16%.
Based on the above data, only about 15% of home inspectors in the greater Seattle during the months of March through May were for buyers after getting an offer accepted. The vast majority, 85%, were either seller pre-listing inspections or buyer pre-offer inspections.
Some observations and comments.
One inspector commented that 5 years ago seller-procured inspections were extremely rare and most agents would have discouraged their sellers from doing one. But obviously, that mindset has changed. Five years ago, the majority of his inspections were buyer pre-inspections trying to win the home in a hot market.
The system has kind of gone upside-down from how it was originally intended. The way the system is, for want of a better word, "supposed" to work is to protect the home buyer by allowing them to purchase a home contingent on an inspection after their offer is accepted. For all three home inspectors, buyer post-offer inspections accounted for only 14 to 16% of their business. Market forces and supply-and-demand couldn't care less about how the system was supposed to work.
In my experience working with buyers, those seller-provided reports are either good or bordering on useless and will NEVER match the amount of information that a buyer will get from doing their own inspection and following the inspector around the home. Recently, I worked with a buyer where the seller-procured report completely failed to include the fact that the home had a crawlspace. And, yes, we did our own inspection. Another inspector commented that a significant amount of his buyer pre-offer inspections are for buyers who don't trust the seller's report and want to avoid any post-closing surprises.
The above numbers will change depending on the prevailing market conditions. For example, the Seattle market cooled almost overnight back in May 2022 and within a few months, the number of listings offering inspection reports dropped significantly and then went back up again as the market improved in early 2023.
As ever, buyer beware and do your due diligence. And for sellers, to cover your butts, if you do share your pre-listing inspection report with buyers, make sure that you have them sign a disclaimer stating that the report is for disclosure and informational purposes only, is not a warranty and that the buyer is advised to do their own inspections.
And do I, Conor MacEvilly, advise my home sellers to share pre-listing inspections? Yes but not always but definitely more than I would have 5 years ago when I wrote that blog post.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.
2023-06-07T19:00:00-07:002023-06-07T19:47:46-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9326What is a bully or pre-emptive offer in real estate?A buyer who has been beaten up by a competitive real estate market might change tactics and try making a bully offer to win a home. The buyer wants to make a pre-emptive offer to try and beat the competition for the home. There are pros and cons for both the home buyer and seller when it comes to bully offers. This article will explain bully offers, when they are used, and whether to make or accept one.
<img src="https://assets.site-static.com/userfiles/562/image/What_is_a_Bully_Offer_in_real_estate.jpg" width="1000" height="667" alt="What is a bully offer in real estate " style="margin: 10px auto; vertical-align: middle; display: block;" />
Let's start with a definition of what a bully offer is in real estate.
A bully offer, also known as a pre-emptive offer, is where a home buyer submits a strong early offer before the offer review date and that offer has a short expiration period in order to force the seller to make a quick decision on whether to accept the offer or not. The buyer is hoping to win the home ahead of other potential offers and kill off the competition for the home.
Bully offers from the home buyer's perspective.
If you are on the buyer's side of the proverbial real estate fence, then the pre-emptive offer is a strategy that might be effective in getting you a home that is likely to attract a lot of offers. When <a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="The home purchase process">buying a home</a>, you need to adapt to the prevailing market conditions.
For example, it's Wednesday and a new listing comes on the market, it's already generating a lot of buyer interest and <a href="https://www.myseattlehomesearch.com/blog/how-do-you-know-if-a-home-will-get-multiple-offers/" title="Tell tale signs a home will get multiple offers">all the signs are that it will receive multiple offers</a>. The seller has set Tuesday as the offer review day.
The buyer views the home on Thursday and loves it! If they wait until Tuesday they know they will be competing with other offers and their chances of winning the home will be dependent on the number of offers and the strength of those offers.
The buyer decides that offense is the best strategy and wants to preemptively submit a strong early offer. The buyer has seen other homes accept early offers before the review deadline, so why not give it a go?
What is considered a good bully offer?
In order for an early offer to have a chance of being accepted, it must be enticing enough for the seller to be willing to accept it, take the home off the market, and give up the option of looking at any other offers. The offer needs to match or exceed the types of offers that are winning in multiple offer situations in that particular real estate market.
If homes in a neighborhood are selling for well above the asking price and the buyer submits an early offer at the list price, is contingent on an inspection, and is requesting that the seller pay $5,000 toward the buyer's closing costs, then that offer will likely only elicit a bemused smirk from the seller at best.
A good bully offer will contain some or all of the following (depending on the prevailing local real estate market):
Is significantly above the list price.
Has the fewest number of contingencies possible.
Is not contingent on an inspection because the seller knows that the buyer can use that to get out of the sale.
The buyer has good credit, solid financing, and stable employment.
Cash offers are even better (no appraisal to worry about).
Will comfortably pass an appraisal and/or the buyer is partially or completely covering a low appraisal.
From the buyer's perspective, they need to minimize the amount of time that they give the seller to make a decision to prevent the seller from calling around trying to get better offers.
Sometimes you will see a listing go pending after only two days and assume that the seller accepted a strong early offer but then when it actually closes, you see that it sold for the list price. Some sellers get bad advice from their real estate agents and some sellers just want to be done with it and accept the first offer that comes in despite their Realtor's advice.
Can the listing agent refuse to pass an early offer to the seller?
Absolutely not! The listing agent is legally required to pass any and all offers they receive from a buyer's agent over to the seller no matter how good, bad, or ugly an offer to purchase might be.
Does the seller have to respond to a bully offer?
No. The owner is under no obligation to reply to the offer and can just let it expire and not play ball with the buyer. From a professional point of view, it would be courteous to at least acknowledge the offer and respond that the seller is not interested.
Can a bully offer backfire on a buyer?
<img src="https://assets.site-static.com/userfiles/562/image/Potential_risks_of_pre-emptive_offers_on_homes.jpg" width="400" height="600" alt="Potential risks of early offers on homes" style="margin: 10px; float: left;" />The short answer is, yes!
There are some potential disadvantages to submitting an early bully offer.
The buyer might be over-paying for the home. By submitting a preemptive offer, the buyer will likely have to come in with their <a href="https://www.myseattlehomesearch.com/blog/difference-between-the-escalation-clause-and-highest-and-best-offers/" title="What is a highest and best offer in real estate ">highest-and-best offer</a> with no escalation addendum
Say the home is listed for $500,000 and the buyer offers 10% over asking ($550,000), and the seller accepts. Had the buyer waited until the offer review date, potentially they might have been the only offer and got the home for list price. Or there was only one other offer and they only had to escalate their offer to $510,000. The buyer will never know and essentially they are paying for the luxury of being the "only" buyer
Buying the home as-is: unless the buyer rushes a pre-inspection of the home before making an offer or is <a href="https://www.myseattlehomesearch.com/blog/pros-and-cons-of-sharing-a-seller-home-inspection-with-buyers/" title="Should a home buyer rely on a seller inspection report">relying on a seller-procured inspection report,</a> then the buyer might be buying the home as is without the option of negotiating repairs. If you're rushing in an early offer you might also be forgoing an inspection of the sewer system and the septic system as well.
The buyer reveals the market value of the home: By coming in with an early offer the buyer is notifying the seller that their home will get $550,000 and that seller may start thinking.. well if I wait until the offer review date I might get even more for my home!
The seller can leverage an early offer to get a better one: the buyer submits an offer at 11:00am that expires at 6:00pm on the same day. A <a href="https://www.searchclaytonncrealestate.com/blog/the-benefits-of-working-with-a-realtor/" title="The benefits of working with a real estate agent" target="_blank">savvy listing agent</a> will use that time to notify other agents who have previously shown the home and inform them that the seller is "reviewing a strong early offer". It is not uncommon for the bully offer to be beaten by an offer that comes in later that same day. Also, this seller may come back to you and any other offers that have been submitted and say come back with your highest and best offer while trying to play all the buyers off each other to maximize the sale price.
Bully offers from the seller's perspective.
A homeowner<a href="https://sdhouseguys.com/is-it-a-good-time-to-sell-property-san-diego/" title="Sings it's good time to sell your home" target="_blank"> decides it's a good time to sell </a>but before going on the market, sellers and their agents should have a pricing and offer review strategy in place. They should discuss what to do in various scenarios such as reviewing offers on a set date or whether to accept the first good offer that comes in. Alternatively, maybe having to cut the price if no one makes an offer in the first 30 days. If the home is way overpriced you won't be getting any offers, preemptive or otherwise.
If you have set an <a href="https://www.myseattlehomesearch.com/blog/offer-review-date-what-you-need-to-know/" title="The offer review data explained">offer review day</a> to look at offers but receive an early offer before that deadline then you have to decide whether to play ball with that offer or ignore it and tell them to wait until the review date.
If you accept the early offer then that offer should be comparable to, or better, than the type of offers that are winning homes in your neighborhood. It needs to be an optimal combination of price and the highest probability of going all the way to closing without any issues. You do not want to take your home off the market for an average offer that subsequently fails when you could have received a better one had you waited.
Some sellers just want a quick sale and be done with the whole process and they're happy to accept a preemptive offer but some sellers will always be second-guessing themselves had they waited until the offer deadline and whether they would have received more money for their home.
A bully offer plays on the fear of the seller that if they don't accept the offer today then (1) that buyer may not come back with the same offer on the offer review date and (2) they may not get a better offer if they wait. In my experience, however, about 90% of buyers who submit an early offer will resubmit that offer on the review deadline.
If, for example, the seller has an offer review day of Monday and has already received four offers by Saturday, then they can have their listing agent move up the offer review deadline and let other agents know that offers are being reviewed early which would give other potential buyers a chance to submit an offer. That way the seller still gets to leverage multiple offers to get the best price possible.
At the end of the day if the seller gets a good offer that meets or exceeds their expectations and the home closes smoothly then, mission accomplished.
In summary, regarding bully, aka preemptive offers in real estate: it's a tactic used by buyers to try and beat out the competition and something that sellers have to decide whether to accept or ignore based on the strength of the offer or what they had decided in advance of going on the market. There are pros and cons for both the buyer and the seller but sometimes it's a perfect match for both of them.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.
2023-04-30T09:15:00-07:002023-05-01T08:52:30-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9294What is a listing agreement when selling your home?If you hire a Realtor when selling your home then you will be required to sign a listing agreement. As the home seller you want to ensure that the agent you hire follows certain guidelines and expectations while the agent wants to ensure that they have the legal authority to represent the seller and also make sure that they get paid for their efforts at closing.
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Using a residential listing agreement is standard practice and ensures that both parties are on the same page and know what is required of them during <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="Learn how to sell your home">the home-selling process.</a> This article describes the different types of real estate listing agreements and also some of the additional documents and forms that a seller will sign as part of a complete listing agreement. Sellers should be aware of what they're signing, the purpose of each form and what happens if they break the contract.
What is the definition of a listing agreement?
A listing agreement is a legally binding document between the seller and a real estate brokerage that outlines the terms and conditions of how the Realtor will represent the seller on the sale of their home. The agreement specifies the commission fees, the listing price, the listing period, and when the home will go on the market. A listing agreement establishes expectations and outlines the responsivities of both the home seller and the listing agent while the home is listed for sale.
The different Types of listing agreements.
There are different types of real estate listing agreements that the agent and the seller can agree to and the type of agreement will depend on the type of service the seller is looking for and the willingness of the Realtor to agree to it. However, 99% of Realtors will probably not agree to two of them.
1. Exclusive Right to Sell Listing Agreement: This type of agreement gives the listing agent exclusive rights to sell the property and entitles the agent to a commission, regardless of who sells the property.
2. Exclusive Agency Listing Agreement: This type of agreement grants the agent exclusive rights to sell the property, but the seller has the option to find their own buyer without paying the agent a commission.
3. Open Listing Agreement: This type of agreement allows the seller to list the property with multiple agents. The agent who finds a qualified buyer first is entitled to the commission.
4. Limited Service Listing Agreement: This type of agreement is commonly used by For Sale By Owner (FSBO) or off-market home sales who just need an agent to add their listing to the multiple listing service (MLS) and help them with buyer offer paperwork !! 2 links!!
What is the most common listing agreement?
The vast majority of listings will involve an exclusive right-to-sell listing agreement. Very few Realtors would agree to an open listing agreement. Would you agree to spend hours working with a seller getting their home ready for market and then potentially thousands of dollars out of pocket spent on marketing and staging, only for the seller to then sell the home with a different real estate broker?
What should a listing agreement include?
The listing agreement is actually a package of different documents. The types and number of documents will depend on the type of property being listed. For example, it is a single-family home, a condo, or vacant land. Some of these are specifically related to the agreement between the seller and the agent and some are additional docs that need to be filled out and be available to prospective buyers.
Taking the Seattle area and Washington State as an example, here are the most common documents signed by a seller when listing their home with a Realtor.
Documents specifically related to the agreement between the seller and listing firm:
The Exclusive Sale and Listing Agreement is a 2-page contract between the home seller and a real estate brokerage that authorized that firm to represent the owner in the sale of their home. The listing agreement includes the name of the Realtor who will work with the sellers, the date the home will be listed for sale and how long the agreement lasts, the commissions the listing and buyer brokers will be paid plus the responsibilities of both the listing agent and the sellers before and while the home is on the market.
The listing Input Sheet: is a 5-page document that is filled out by the sellers and lists all the various details about the property including the size of the home and property, the constriction of the home, <a href="https://www.madisonmortgageguys.com/homeowner-associations/" title="Pros and cons of HOAs" target="_blank">HOA information</a>, and how offers will be reviewed. The listing input sheet is where the listing price of the home is added. The information in this document is used to complete the online multiple listing service (MLS) listing so the information needs to be accurate.
Additional documents needed to actually list the home:
<img src="https://assets.site-static.com/userfiles/562/image/Exclusive_right_to_sell_listing_agreement.jpg" width="400" height="600" alt="The exclusive right to sell listing agreement" style="margin: 10px; float: left;" />These documents are not specifically listing the agreement form, but they are required in order to be able to sell the home and are part of the real estate contract between the seller and the buyer.
The Seller Disclosure Statement. With the exception of estate sales, every seller must fill out a 6-page questionnaire about their ownership of the home and includes items such as known defects, legal ownership, utilities, easements, and the HOA. A copy of this is provided to prospective buyers.
The Utilities Addendum lists the different utility services the home uses, a copy of which is provided to the escrow/closing agent to ensure that all the seller's bills are paid off up to the day of closing.
Lead-based paint addendum is a federally required for any homes built before 1978 that sellers answer questions related to whether they are aware of the presence or have tested for lead-based paint in the home. And yes, it reads like something the government wrote!
The FIRPTA Certificate stands for The Foreign Investment in Real Property Tax Act. Home sellers who are non-resident aliens are required to pay extra taxes on the proceeds of the sale. US residents just have to pay Federal Excise tax. This form may be submitted to the IRS.
The Legal Description is a one-page unique identifier for the property. Many homes in the US have similar addresses and so to avoid any possibility of confusion the sellers need to initial and date this page that is pulled from the Title Report. It's like a thumbprint for the home and must be included in all buyer offers.
Seller's contact information kept private: if the sellers wish to keep their contact information, including their phone number, off the MLS listing, then they can include a form for that. As the owners of homes that fail to sell discover the day their home comes off the market, they will be the most popular people in town as they get bombarded by agents who make a living chasing expired listings, aka the ambulance chasers of the residential real estate world! Also, while the home is on the market, some real estate agents have been known to contact sellers directly to try and extract useful information or even try and get them to dump their listing agent and work with them instead! Both of which can result in heavy fines for the agent.
The Resale Certificate. If the home is part of a homeowners association (HOA) the sellers will need to order a <a href="https://www.myseattlehomesearch.com/blog/the-resale-certificate-a-crucial-document-for-condo-buyers/" title="How to order a resale certificate ">copy of the Resale Certificate</a> for potential buyers to review as part of the real estate transaction. It can take up to 10 days for those documents to be assembled and delivered so it's a good idea to order them a couple of weeks before the homes goes on the market. If you wait to order one until after you get an offer, you will have to wait 10 days for delivery plus 5 more days for the buyer to review it before finding out of the buyer is going to continue with the purchase or not.
Listing agreement add-ons.
Although not regular MLS forms, sometimes the listing agent will request that the property owner sign additional documents related to marketing the property. The listing agent doesn't want to rely on verbal or email agreement with the sellers and wants to get stuff in writing so there's no "confusion". Here are some examples
Staging fees: staging homes can be expensive, anywhere between $1,500 and $6,000 and up unless you're going for <a href="https://www.myseattlehomesearch.com/blog/virtual-staging-penny-wise-pound-foolish/" title="Real versus virtual staging">cheap virtual staging</a>. Some listing agents cover the cost and sometimes they will request that the seller pays for it. Additionally, if the home fails to sell or the seller pulls the property off the market early the agent may want some insurance that they will recoup some or all of their out-of-pocket expenses. In this case, the listing agent will have the seller sign an agreement regarding staging fees and cover who pays for what in different scenarios.
Price drops: sometimes a Realtor will agree to list a property at a price that they know is <a href="https://www.myseattlehomesearch.com/blog/how-much-is-my-home-worth-exactly-what-somebody-is-willing-to-pay-for-it/" title="Hoe much is a home worth?">higher than the home is worth</a>. The agent wants to avoid ending up with a listing that is sitting on the market with their for-sale signs swinging in the wind and the seller refusing to drop the price. Some agents will have the seller sign an agreement stating that if the home does not get an offer within a certain number of days then the <a href="https://www.cincinkyrealestate.com/blog/reduce-price-home-for-sale/" title="When should you lower the listing price of a home" target="_blank">seller agrees to drop the price </a>by an agreed-to percentage,
Agent paid-for pre-listing upgrades: some listing brokers as part of their marketing will offer to pay, out of their own pockets, for some upgrades to the home before the home goes on the market. The owner agrees to reimburse the real estate agent from the proceeds of the sale at closing. And potentially get paid if the sale fails to close.
Here are some additional frequently asked questions about listing agreements.
Does a seller have to sign a listing agreement?
Yes. No sane Realtor would be willing to list your home if you're unwilling to sign a listing agreement because (1) they will never get paid and (2) it would be a legal liability for them to have access to your home without an agreement.
What happens if your home doesn't sell?
If the home fails to sell within the time period agreed to within the listing agreement then the listing expires and the seller is free to either take the home off the market, put it back on the market with the same agent, or list the home with a different Realtor.
Can a seller get out of a listing agreement?
It depends on the situation. Legally speaking when a seller signs a listing agreement they agree to give their agent a certain number of days to sell the home. If the seller decides they want to take it off the market then according to the terms of the contract they could be liable for reimbursing the agent for any expenses they incurred in marketing the home. However, if an unexpected life event occurs like a family emergency or death or an inspection reveals major issues with the home that prevents it from selling, then that case the listing agent should be open to taking the home off the market.
When do you sign the listing agreement?
In the Seattle area, for example, the listing would obviously need to be signed before the home goes on the market but it cannot be signed more than 30 days before the list date.
How long does the listing agreement usually last?
In general, it tends to be around a minimum of three months which allows time for the agent to prep the home for the market, put it on the market to elicit an offer, and then allow time for the sale to close. In a slower market, where homes are taking longer to sell the agent might request up to six months to list the property.
What's the Tail Provision in real estate?
The tail provision essentially states that if a home fails to sell while listed for sale with the agent and subsequently, after the listing period expires, a buyer who either saw the home while it was listed for sale or became aware of the property through the marketing efforts of the listing agent, purchases the property then the seller is still liable for paying the listing agent's commission. The purpose of this provision is to protect agents in the event that the seller is trying to save on paying commission fees by canceling the listing and then <a href="https://www.myseattlehomesearch.com/blog/off-market-home-sales-what-sellers-need-to-know/" title="Selling your home off market">selling the home off-market</a> to someone they know is interested in the home. The tail provision period is usually between 90 and 180 days.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.
2023-04-24T07:34:24-07:002024-01-25T07:42:08-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9228Off market home sales - what sellers need to knowSelling your home off-market is one route open to homeowners versus the more conventional on-market path of hiring a Realtor to list your property. As with most things in life, there are pros and cons of off-market home sales but they are definitely a good fit for some owners. This article explains what off-market home sales are, what they are not, how the process works plus the pros and cons of going this route.
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What are off-market home sales?
The purest definition of an off-market home sale is a home sale that is conducted in private without the knowledge of the general public. The property is not advertised for sale on public forums like the local multiple listing service (MLS) or real estate websites. The sale of the home is conducted under the radar and only becomes public knowledge after the transaction closes and the details of the sale are recorded online on the county's tax records.
<a href="https://www.myseattlehomesearch.com/blog/put-some-fizz-in-your-fsbo/" title="Tips for a successful Seattle FSBO">For Sale By Owner homes (FSBOs)</a>, should not be considered as off-market sales since today, most of these will be listed online, visible to the public and any buyer to free to make an offer on the home. In addition, many FSBO sellers end up agreeing to pay a commission to the buyer's agent.
Here's a common example of an off-market sale: as a Realtor, if often see new listings on the MLS that are obviously investor flip properties. After viewing the first 3 photos they are easy to spot, trust me, 90% of the look the same with the same unimaginative finishes. If you then look at the sales history of that home, you will see that the last time it sold, i.e. when the investor bought it, there will not be a corresponding MLS listing but the sale price and date will be recorded in the tax records. If the home had been sold with a Realtor, there would be a listing in the MLS with photos and other details.
For some off-market sales, you will see that the sale is on the multiple listing service but will be tagged as S-UL and have just one photo and only a few details about the home. This means that the home was Sold-Unlisted and was a private sale between the homeowner and a buyer that was coordinated by a real estate agent. In the Seattle area, the Realtor for this transaction can upload that sale to the NWMLS AFTER the sale has closed but not while the sale is in progress.
Examples of off-market Home Sales.
There are a number of different situations where homeowners sell their homes off-market.
Selling to a family member. For example, sometimes parents will want to <a href="https://merrimackvalleymarealestate.com/downsize-home/" title="Why some home owners want to downsize" target="_blank">downsize from the family home</a> and one of the kids wants to keep/buy the home.
Selling to a neighbor. The seller may have a good relationship with a neighbor who hears that the owner will be selling their home and the two parties come to a mutual agreement to do a private off-market sale
Selling to the tenants of your rental property. Owners of rental properties may offer the tenants the option to buy the property off-market or sometimes the tenants may hear that the landlord is thinking of selling and make an offer to buy the property.
Owners of properties with multiple tenants units: it's frequently easier to sell it off Market so that the tenants are not hassled by multiple investors coming through the property and also make sure that the property stays fully occupied while the landlord is conducting the sale. Plus the new owners get a property with tenants in place already and have an immediate cash flow.
Selling directly to an investor. If you own a home you have probably had multiple calls in the past or mailers in the mail trying to entice you to sell to a private investor. "WE PAY CASH FOR HOMES!" They promise a smooth transaction and to pay cash for your home. There are definite pros and cons to selling directly to an investor. In the plus column, you get to sell your home as-is and not have to spend time cleaning, decluttering, and doing repairs. In the cons column you might be getting a lot less for your home than it would on the open market and let's say, investors are probably a lot savvier than the average homeowner. Buying a home off-market for them can be a big win for them. Make sure you get some independent representation and advice!
<a href="https://www.myseattlehomesearch.com/blog/selling-your-house-to-an-ibuyer-better-examine-the-offer-closely/" title="What are home iBuyers">Selling to an iBuyer. </a>These were going to be the next big thing until they weren't in a hurry and you can count Zillow as one of its victims. The iBuyer idea was to buy homes directly from homeowners, hold them briefly while doing some modest updates, and then put them back on the market and hope to turn a profit. It was supposed to be a win-win for sellers making the whole process a lot smoother. Unfortunately, companies like Zillow, who ironically were looking to get market deals, way overpaid for homes, and then when the real estate market went down they we left holding the bag and that is why they are no longer in the iBuyer business. Plenty of other companies also went down the iBuyer drain.
Why We Pay Cash for Homes is Meaningless Gibberish.
A quick side note about investors who send you those mailers proclaiming that they want to <a href="https://www.maxrealestateexposure.com/buying-houses-cash-companies/" title="Review of companies who pay cash for your home" target="_blank">buy your home for cash</a>. The thing is, EVERY seller gets paid in cash at closing (net proceeds) regardless of whether the investor is using all cash to buy your home or is getting a loan. You don't get to see any of that money until the sale actually closes. It's not as if they hand you a suitcase with $500,000 in cash today and you close 30 days from now. If the buyer is genuinely using cash to purchase the home then one potential benefit is that there is no appraisal to worry about. However, it is very unlikely that the investor is paying more than the home is actually worth so the chances of a failed appraisal are probably slim.
What is the process for selling a home off-market?
The process for selling a home off-market will probably vary on the type of sale you go with.
If you use the services of a Realtor or an attorney to coordinate the transaction then the sale will probably proceed the same as a conventional MLS sale. The contract and forms will be the same standardized versions for that part of the country. However, if you are selling the home to an investor they may come in with their own specific forms that are non-conventional and potentially skewed in their favor.
You will need to decide in advance of agreeing to sell whether the sale is contingent on the buyer during an inspection of the property or whether they are agreeing to buy the home as-is.
The sale should proceed through the standard Title and Escrow process as happens in the <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="How to sell your Seattle area home">more conventional home selling process.</a>
It is critical that you get some professional advice from an attorney or a realtor and have somebody review the contract for you. Know what you are getting yourself into and the consequences of what you are signing. You want to make sure you end up with a legally binding sale and don't get screwed in the process.
What is the fair market value when selling off-market?
If you are deciding to sell your home off the MLS then it is critical to know what is the fair market value of your home. The more reliable evaluation you have of the current market value of your property the better you will be positioned to negotiate and get what the home is worth.
In general, your home is worth the price it gets on the open market with full access to all prospective buyers and buyer competition for the home.
However, when you decide to go with a private sale, you will need to decide on a price with the buyer. The seller wants to get the most possible while the buyer would want to pay the least possible.
So how do you decide on the fair market value? The best way to determine what your home is worth is to either pay a real estate agent to do a comparative market analysis (CMA) or hire a professional appraiser. The latter will cost you about $600 the cost of which can be split between the buyer and seller.
Advantages of off-market sales for homeowners
<img src="https://assets.site-static.com/userfiles/562/image/Fair_market_value_and_off_market_home_sales.jpg" width="400" height="600" alt="Fair market value and off market home sales" style="margin: 10px; float: left;" />For home sellers, there can be a number of advantages compared to going the conventional on-market route.
You don't have to fret about getting your home ready for market: when you list your home for sale on the open market you usually have to spend weeks or months cleaning, decluttering, and prepping your home so it looks its best. For off-market sales, the owner can frequently just <a href="https://springshomes.com/blog/selling-a-house-as-is-what-you-need-to-know/" title="tips for Selling your home as-is" target="_blank">sell it as-is </a>without having to go through any of that hassle.
Off-market listings won't have to deal with the stampeding public: when you sell off-market there are no public open houses on the weekend or Realtors doing private showings of your home and you have to vacate the home when someone wants to view it.
If the sale falls through it does not taint your home: when the sale of a home that is listed on the open market falls through due to a failed inspection and has to go back on the market, the home can be perceived as having issues by other potential buyers. If that happens in a private sale, nobody is any the wiser.
Save on agent commissions. In a conventional sale, both the buyer's agent and the listing agent are paid a commission from the proceeds of the sale. For an off-market home sale, the seller will probably just have to pay one agent or an attorney to coordinate the sale.
Negotiations tend to be more relaxed and less rushed. Potentially simpler face-to-face negotiations than having to go through third parties like Realtors or attorneys.
Privacy. Some sellers don't want the world to know that they are selling their homes.
Need to sell in a hurry. Some homeowners are in financial trouble and desperately need money in a hurry and are looking for a way to unload their homes for cash.
The potential disadvantage of off-market home sales for sellers
The main potential disadvantage of selling a home off-market is that the seller risks not getting what their home is actually worth. By not listing their home to the open market the property does not get the full buyer exposure of a conventional sale and cannot leverage the market to get the best return on their investment.
<a href="https://www.myseattlehomesearch.com/blog/how-much-is-my-home-worth-exactly-what-somebody-is-willing-to-pay-for-it/" title="the real market value of a home">The true market value of a home is what it will sell on the open market </a>with full access to the public and potential buyers and leveraging the market including staging and marketing and setting an offer review data to get the most for a home. Sellers might argue that they are saving money on Realtor commissions but the question should be: which one will have the higher NET proceeds... going with a private sale versus listing on the open market. Are you willing to forego say, $50,000 for the convenience of not listing your home on the open market?
For off-market properties, sellers need to remember that although they can save on Realtor commissions they still have to pay federal excise tax plus escrow and title fees.
Some real estate investors will make the sale contingent on a feasibility study. The feasibility contingency gives the investor time to research items such as the property's zoning, the types of homes they can build on the land, can the lot be subdivided and the types of permits required. Frequently these feasibility periods can be three or more months which means the home cannot be sold to another buyer during that time Also at the end of that time period, the investor might come back and say based on what they've found that they are not willing to pay the original price.
Are you market-savvy enough to know the market value of your home? Are you just sticking your address into some online automated evaluation system like the Zestimate which can be wildly unreliable? Experienced property investors will be looking to take advantage of you and get your property for as little as possible.
Frequently asked questions.
Here are some additional questions that people have about off market home sales.
What is a pocket listing?
A pocket listing is a type of off-market listing, where a property is marketed and sold without being listed on the Multiple Listing Service (MLS). Essentially, it's a home sale that is kept "in the pocket" of the real estate agent and not advertised to the general public. Pocket listings are illegal in some states including Washing State since some real estate agents may use pocket listings as a way to steer buyers toward their own clients, which could be seen as unethical.
What does temporarily off-market mean?
Sometimes the owners of a home that is listed for sale on the open market and advertised on the multiple listing service, will want to take their property off the market for a short while before reactivating the listing again. Reasons for this include wanting to enjoy the holidays in peace and quiet or taking care of repairs discovered by a buyer who walked on the sale. The listing status of the home will be tagged as Temporarily Off The Market.
What does Off-Market mean on real estate websites?
When you search for an address on many of the big real estate websites like Zillow and Reffin it will usually pull up a page with information on that property. If that home is not currently for sale it will be tagged as Off Market. This does not mean that the home is available to purchase as an off-market home sale, it just means that the home sold in the past and is not currently listed for sale. But there's nothing stopping you from trying to contact the owner to see if they are open to an off market listing.
How many homes sell off-market?
The National Association of Realtors (NAR) estimates that about 10% of all homes are sold via For Sale By Owner (FSBO), pocket listings, and off-market sales.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.2023-04-13T10:30:00-07:002023-04-13T12:14:01-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9163How to get listing photos of your home removed from the internetYou type your home address into Google and up pops multiple websites with photos of your home. Some home buyers and owners are more security and privacy-conscious than others and would prefer that the photographic details of their home are not spread all over the internet.
Being able to see photos of the home was great while they were in the process of buying the home but now that they actually own the home, they want those photos removed from the internet!
<img src="https://assets.site-static.com/userfiles/562/image/How_to_have_photo_of_your_home_removed_from_the_internet.jpg" width="800" height="532" alt="How to get photos of your home removed from the internet" style="margin: 10px auto; vertical-align: middle; display: block;" />
The reason I wrote this blog post is that several times a year I am contacted by someone who has bought a home and can see their home with all the photos on my real estate website and would like them removed. Some of them are polite and some of them can be very pushy with one even threatening to get a lawyer to sue me to remove the photos despite me explaining that I have zero control over those <a href="https://www.myseattlehomesearch.com/blog/how-to-read-between-the-lines-of-online-real-estate-listings/" title="All about online real estate listings">photos and listing details</a>. The lawyer never materialized. So now, for anyone who contacts me requesting that I remove listing photos off my website, I'll just send them a copy of this article.
Understandably, many new homeowners want their privacy and don't want the whole world to be able to go online and look at photos of the inside of their homes. Right after it's sold they might have happily shared it with all their friends but now a few months later they may want to make sure those same photos are removed from the internet.
So, can you have listing photos of your home removed from the internet?
But first, where do listing photos come from in the first place?
When a homeowner lists their home with a Realtor they will sign a listing agreement. Part of that contract says that the sellers agree to the listing agent marketing their home including taking listing photos and posting those photos to the local Multiple Listing Service (MLS).
A professional photographer (hopefully) will come to a home, take photos (or the cheap agent will take their iPhone), and right before the home goes on the market these photos will be uploaded to the MLS and then the day they go home goes on the market that listing is syndicated on to hundreds and potentially thousands of other websites.
Your local MLS is basically the source of all photos that feed out to all those other websites which include the big hitters like Redfin, Zillow, and Realtor.com plus brokerage websites like Coldwell Banker and Keller Williams. In addition, the MLS also supplies listing detail and photos for thousands of individual real estate agents websites via IDX feeds, <a href="https://www.myseattlehomesearch.com/communities/">just like this website.</a>
So now you can see why contacting a solo agent to ask them to remove listing photos from their website is a completely futile exercise because you would have to contact thousands of other websites, and more importantly, none of them can remove those photos for you anyway!
So what can you do?
What's the easiest way to get those online listing photos removed?
The best thing to do is contact the listing agent who represented the seller. They are the ones who uploaded the photos to Multiple Listing Service. That agent can then contact the MLS and request that those photos be removed.
When I spoke with the Northwest Multiple Listing Service (NWMLS) which services the Seattle area, they told me that the listing agent would need to provide a reason as to why the photos needed to be removed and confirm some details about the property.
Once the NWMLS sets the wheels in motion, the listing photos will disappear from their site at midnight and then will disappear from all the real estate sites that get their listing feeds from the MLS within 24 hours.
But there is one photo that cannot be removed...
One thing to note is that the primary photo cannot be removed and will still appear on the internet. The primary photo is usually the first photo of the home you see online and is usually of the exterior of the home.
What happens if you can't locate the listing agent, they've retired or they're no longer living?
For the Puget Sound area at least, the homeowner can contact the NWMLS and request that all but the primary photos be removed.
Considering putting a photo removal request in your contract to buy the home.
If a home buyer knows in advance that after the home closes that they will want the property photos removed then they could put that as a requirement in their offer to purchase the home. I've never personally had a buyer do that but if it's important to you, then that is one option.
<img src="https://assets.site-static.com/userfiles/562/image/Removing_online_videos_of_your_home.jpg" width="800" height="529" alt="Removing online video tours of your home" style="vertical-align: middle; margin: 10px auto; display: block;" />
What about virtual tours and videos of the home?
Personally, I think that those buyers who are concerned about privacy and security should be equally concerned with any 3D tours or video tours that were made of the home while it was listed for sale. These provide a complete look at the interior of the home including floor plans and will show a lot more detail than the photos did.
Both of these are not hosted on MLS sites. The MLS usually just has a link to the sites where those tours are hosted like the agent's own website or a custom website that was set up just for that individual listing. Listing agents will have spent money to get those tours made and I will probably want to use them in their marketing for other listings.
If you want those removed from the internet you're probably going to have to negotiate with the listing agent and they may not be legally obligated to honor your request.
Don't forget all those social media posts the listing agent may have posted about the home.
If you really want to get nitty gritty, don't forget that the listing broker may have been busy promoting the property while it was listed for sale on multiple social media platforms including uploading short videos and photos. Or they may have written a blog post on their website about the property.
The MLS probably can't help you with that one.
Removing listing photos from sites like Zillow, Redfin, and Realtor.com.
Both of these websites will allow you to go online and claim your home and request that the photos be removed. But why bother? Only focusing on these mega sites still means that 99.9% of the other websites out there are still displaying those photos although, yes, these big websites do get most of the online traffic.
Again, the best thing to do is contact the listing agent and have them request that photos be removed from the MLS and that will ensure photos are removed from ALL real estate websites.
I don't want the sale price to be made public!
I've also had homeowners asking me to remove the sale price because they didn't want people to know how much they paid for the home. Unfortunately, this is not something that can be removed from a listing and it becomes part of the county's online tax records.
In summary regarding getting listing photos of your home removed from the internet.
By contacting the listing agent you can probably get 90% of those photos off the web but it could be next to impossible to get every last one because of social media and other platforms. And as for Google StreetView and Google Earth...
Good luck!
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.2023-04-04T09:00:44-07:002023-04-05T06:43:37-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9100What is the Difference Between Median and Average Home PricesA common question from home buyers and sellers regarding the housing market is: What's the average home price?
However, many times people don't know if they're being quoted the median sale price or the average sale price or something more complicated like the <a href="https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index" title="The Case-Shiller Index" target="_blank">Case-Shiller Index </a>which uses a rolling average. However, there is a difference and there can be large differences between median and average home prices.
<img src="https://assets.site-static.com/userfiles/562/image/Difference_between_Median_and_Average_home_prices.jpg" width="800" height="534" alt="Difference between median and average home prices" style="margin: 10px auto; vertical-align: middle; display: block;" />
Each month different news sources and Multiple Listing Services (MLS) will come out with their updated monthly real estate statistics reports. It is not uncommon for the data from one source to look different from that from another and many times this can be because one is reporting average prices and the other is reporting median data.
Also, if you are going to compare sales data from one month to another make sure it's apples-to-apples and not apples-to-oranges. You need to compare median sales prices to medium sales data and not median sales prices to average prices otherwise you will end up with a skewed view of the market.
Here's an example to demonstrate the difference between median and average home prices.
Let's look at single-family home sale prices in <a href="https://www.myseattlehomesearch.com/communities/" title="Look for Seattle homes listed for sale">Seattle</a> for the month of February 2023.
The MEDIAN sale price of single-family homes was $820,000.
However, the AVERAGE sale price was $915,000 which is 11.5% higher than the median!
In this case, there is a very obvious difference between the measures of home prices.
Why the difference?
But first, in case your math is a little rusty, here's a quick refresher course:
The average sale price is the sum of all the individual home sales divided by the number of sales.
The median sale price is the price at which half the homes sold for above that price and half sold for below that price.
The median sale price is a more reliable measure since the average can be skewed by a disproportionate number of higher or lower-priced sales in a particular month whereas the median will balance those out. What's more, although the median price went up in February, the average price actually dropped.
So the next time somebody asks you, what's the typical home price? you should ask them whether they want the median or the average!2023-03-27T14:00:00-07:002023-03-27T16:07:13-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9068Which greater Seattle areas saw the largest home price drops in 2022?<img src="https://assets.site-static.com/userfiles/562/image/Seattle_area_home_price_drops_in_2022.jpg" width="300" height="300" alt="Seattle home prices dropped in 2022" style="margin: 10px; float: left;" />Greater Seattle area home prices rocketed up in early 2022 and peaked in April.
The Feds started increasing rates to try and tame increasing inflation resulting in mortgage rates going from around 3.5% to over 7% resulting in an almost overnight market slowdown. We went from a strong seller's market to a more balanced buyer-sellers market. Listing agents and sellers stopped setting <a href="https://www.myseattlehomesearch.com/blog/offer-review-date-what-you-need-to-know/" title="Real estate offer review deadline explained ">offer review deadline</a>s and many homes had to drop their prices before getting an offer and more buyers were able to buy homes <a href="https://www.myseattlehomesearch.com/blog/negotiate-home-seller-does-repairs-or-a-price-drop/" title="How to negotiate repairs on home">contingent on inspections</a>. It's amazing how the real estate market can switch on a dime!
So, let's take a look at how home prices have changed since they peaked seen in early 2022. I looked at the median sale price of single-family homes in four Puget Sound areas:
Seattle
Bellevue-Kirkland-Redmond*
Everett
Tacoma
* I combined data for these 3 higher priced cities so that there were a sufficient number of sales to generate more reliable data.
The graph below shows how the monthly median sale price of single-family homes in these areas has trended over the past 3 years and how much they have dropped from the highs seen in early 2022. All data is from the NWMLS and includes sales data up to and including February 2023.
<img src="https://assets.site-static.com/userfiles/562/image/Greater_Seattle_area_2022_home_price_drops_graph.jpg" width="850" height="572" alt="Greater Seattle area 2022 home prices decline" style="margin: 10px auto; vertical-align: middle; display: block;" />
Whereas home prices for Seattle Tacoma and Everett all drop between about 15 and 20%, prices in Bellevue/Kirkland/Redmond Area fell by twice as much, closer to 40%. The latter are higher-priced markets that tend to be impacted more when interest rates go up.
Based on February 2023 data it looks like prices are bottoming out. Also, based on looking at current PENDING SALES, multiple offers situations have returned and it's likely that home prices will go up at least a little bit over the spring months. Time will tell.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate feel free to contact me. I'm happy to help. My direct line (cell) is 206-349-8477.2023-03-24T06:30:00-07:002023-03-24T06:40:00-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:9028Limitations of home inspections when buying a home A home inspection is a crucial <a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="inspections are part of the home purchase process">part of the home-buying process</a>, providing buyers with valuable information about their prospective purchase. It protects the buyer from ending up with a money pit home or at a minimum makes them aware of any issues with the home and potentially room to negotiate with the seller.
<img src="https://assets.site-static.com/userfiles/562/image/Inspection_limitations_when_buying_a_home.jpg" width="800" height="534" alt="Home buyer inspection have limitations" style="margin: 10px auto; vertical-align: middle; display: block;" />
However, it is important to note that there are limitations associated with these inspections, and understanding them can help ensure an informed decision when purchasing a property. This article will discuss some of the most common limitations of home buyer inspections so a buyer knows what they are, and are not getting when they sign up for a property inspection.
What is A Home Inspection?
A home inspection is a visual examination of the physical structure and systems of a house, from top to bottom. It is performed by a licensed inspector who will document any issues that require repair or replacement in an inspection report. A professional home inspector works independently and dispassionately, assessing the condition of the subject property without consideration for what repairs may cost.
The purpose of a home inspection is to identify major deficiencies in the home so that buyers can make an informed decision as to whether to continue with the purchase or not. The inspector should be able to pick up on any of the <a href="https://www.myseattlehomesearch.com/blog/10-most-common-home-buyer-inspection-repairs-in-seattle/" title="Repairs found during home inspections ">most common issues found during a property inspection.</a>
The Inspection Contingency.
The <a href="https://www.madisonmortgageguys.com/home-buyer-contingencies/" title="Offer contingencies when buying a home" target="_blank">inspection contingency is part of the home buyer's written offer </a>and makes the buyer's offer contingent on completing an inspection of the home and the property it sits on.
In Washington State, the inspection addendum states that the inspection is contingent on the buyer's SUBJECTIVE SATISFACTION with the property. This means that the buyer can walk on the sale based on what they discover during the inspection. They can walk even if the home is perfect. The buyer gets their earnest money back and can continue to look for a different home. They are not required to give the seller a reason as to why they are not continuing with the sale.
The inspection has to be completed within an agreed-to number of days, however, the buyer can request additional specialized inspections such as bringing a geotech engineer, a roofing, or an electrical contractor to the home if the inspector recommends follow-up inspections.
What is usually Covered In a Home Inspection?
When a buyer books a home inspection the home inspector will usually send them a contract to sign in advance and within that contract, it will list the areas that are covered in the inspection.
Different contractors will cover different items but the main critical components should be covered by every inspector. For example, some inspectors will not test the home appliances like the washer and dryer, and stove but every home inspector is required to go in the attic and the crawl space otherwise they're not doing their job and you should not hire them.
The items covered in a home inspection will also depend on the type of home. For example, the inspection for a condo will be a lot different than that for a standalone house.
Taking the example of a house, at a minimum home inspectors should be examining the following items:
The exterior of the home including the siding, the roof, the gutters & downspouts, the foundation, any walls, and retaining walls, and the condition of the driveway.
The attic space
The crawlspace
Plumbing systems
Electrical systems
Heating and cooling systems (HVAC)
The garage area including if the doors are functional
Any pest infestations
Code violations
All the inspector's observations will be written up in the inspection report which the buyer receives within a day or two of the inspection. Good inspection reports will include photos of any issues with a home and detailed descriptions of those issues.
What's Not Covered In The Inspection?
It is important to note that home inspections do not guarantee that all major issues will be found. The scope of a home inspection typically includes assessments of the structure, systems, and components visible at the time of inspection. While this can provide insight into numerous aspects of the property’s condition, it does not provide complete coverage for all areas or uncover certain issues that may be present but remain undetected during the evaluation period.
Items that the inspector will state upfront that they do not cover:
Appliances (sometimes): some inspectors will not inspect the home's appliances including all the kitchen appliances and the washer and dryer. And some inspectors will but might charge extra for that service. The inspection contract the buyer signs should specify that upfront.
Sewer line: Home inspectors typically do not inspect the home's sewer system. Generally, this is done by a separate company that specializes in sewer scopes and is an extra charge for the buyer. Even if the home inspector does do sewer scopes, in my opinion, you are better off using a company that specializes solely in doing sewer inspections because they have a lot more experience and you will likely get better advice from them. If the home inspector does include sewer scope you will pay extra for that.
Septic systems: for homes on septic systems the home inspector will not inspect this part of the property. In general, in Washington State, the homeowner is the one who is responsible and required to have the septic system inspected before the sale closes.
Water wells: if the home's water supply comes from a well, that will have to be inspected by a specialist, not the home inspector, and is an extra fee for the buyer.
Soil and foundation issues: if the home sits on a steep slope or shows signs of structural issues in the foundation, the inspector is not qualified to give you an opinion as to the structural integrity of the home. They should recommend that you have a Geotech engineer look at the property in a separate inspection.
Many home inspectors are members of the American Association of Home Inspectors (ASHI) whose code of practice lists numerous General Exclusions that the home inspector is not required to determine: Some of these include:
The condition of systems and components that are not readily accessible.
The remaining life expectancy of systems and components including the roof.
The adequacy, effectiveness, and efficiency of systems and components such as the HVAC system.
The causes of conditions and deficiencies.
Estimates for the costs and materials to repair an issue.
The suitability of the property for specialized uses.
Advice on whether the buyer should purchase the home or walk on the sale.
Operating costs of systems and components.
Soil conditions relating to geotechnical or hydrologic specialties.
Whether items, materials, conditions, and components are subject to recall, controversy, litigation, product liability, and other adverse claims and conditions.
For a full list of ASHI's requirements, <a href="https://www.homeinspector.org/Resources/Standard-of-Practice/General-Limitations-and-Exclusions" title="ASHI exclusions" target="_blank">please click here.</a>
Having said that, many home inspectors will still provide opinions on items that theoretically they are not supposed to do because they want to help the buyers and some inspectors are super protective of the buyers.
Potential limitations during the inspection that is specific to the home being inspected.<br />
Every home is different and some homes are harder to inspect than others.
Home inspectors don't have X-Ray vision. They cannot see through walls or determine if there are any hidden problems with wiring or plumbing.
Sometimes the inspector will not be able to get access to the roof because the home is too tall or has a very steep-pitched roof which will often be the case for three-story townhomes. Some inspectors get around this using a drone with a camera but it is not as ideal as actually getting up on the roof to inspect it.
Sometimes the electrical panel can be inaccessible because the homeowner has put some walling material around it or there's just too much stuff in the garage that cannot be moved.
Access to the attic can be restricted because it's located in a closet in a bedroom that is full of the seller's possessions or has shelving in the way that cannot be removed.
For crawl spaces, although the inspector may be able to get in at the access point, many times all the plumbing and HVAC events can restrict access to other parts crawl space.
Home inspectors are not allowed to move big pieces of furniture to get access to stuff behind them.
There could potentially be mold issues in the wall which are not visible at the time of the inspection. Some home inspectors have moisture and heat sensor detectors which can hint at potential problems but are not definitive.
The <a href="https://www.myseattlehomesearch.com/blog/6-reasons-why-rain-is-your-friend-when-buying-a-home/" title="Inspections in winter versus summer">time of year can make a difference</a> on what the home inspector discovers. The buyer could purchase the home in August and then in November discovers that the basement has water issues.
The time of year can also impact whether pest infestations are detected. For example, mice and rats are more likely to be found in crawl spaces and attics during the winter months but not during the dry summer months.
The inspector may recommend additional specialized inspections:
Many times home inspectors will recommend that you have follow-up inspections by specialized contractors because the issue is outside the inspector's expertise. Also, they are covering themselves legally by not providing you with advice on an issue that they are not qualified or allowed to advise you on.
Different inspectors have different opinions and levels of competency.
<img src="https://assets.site-static.com/userfiles/562/image/Variation_in_home_inspection_reports.jpg" width="400" height="600" alt="Variation in home inspection reports" style="margin: 10px; float: left;" />Although home inspectors may be trained to the same levels of practice, they are all human and all have different opinions, personal histories, and personal biases.
Six different inspectors could inspect the same home and they would come up with six different inspection reports and opinions. A good example of this is when the seller is providing a copy of their pre-listing inspection report and the buyer still does their own inspection with their own inspector. There will be some overlap in the two reports but there will definitely be differences. For example, I recently represented a buyer who did their own inspection and their inspector found and inspected a crawl space. The settler's report didn't even mention the fact that there was a crawl space, never mind inspect it.
Some home inspectors will climb up on the roof via a ladder and others will try to impress you by releasing their drone from the ground when it would be a lot easier and more informative to just get up on the roof.
Some inspectors are just better and more experienced than others. The best ones tend to come from the construction industry where they have seen homes built from the ground up.
Some home inspectors will be chatty and educate the buyer on the home as they go through the inspection process while other inspectors will want to be left alone and only chat once they have completed the inspection.
Should You Rely On A Seller-Procured Home Inspection?
The short answer is, ideally NO.
But in reality, they can be hard to resist.
It's becoming a lot more common for sellers to inspect their home before they put it on the market and then<a href="https://www.myseattlehomesearch.com/blog/pros-and-cons-of-sharing-a-seller-home-inspection-with-buyers/" title="Should buyers rely on seller inspection reports"> share that report with potential buyers</a>. It's a marketing tactic to attract more buyers and increase the number of offers on the home.
Homebuyers should exercise caution when relying on a seller-procured home inspection. Sellers, or rather the listing agent who represents them, may be more likely to hire an inspector with whom they have a good rapport and let's say, might lean toward not making mountains out of molehills.
Also, the condition of the property might not be the same as when the seller did their inspection and new major issues could have cropped up in that time. As mentioned previously, different inspectors will have different opinions and some are more competent than others.
Therefore, it is recommended that homebuyers do their own independent professional inspection regardless of whether there has been one done for the seller. This allows them to obtain detailed information from an unbiased source so they can make informed decisions before purchasing a new home.
In summary regarding the limitations of home inspections, a home will be the biggest purchase you ever make, so for the sake of a few hundred dollars, it's not a good idea to skip the home inspection. At the same time, it is good to understand that home inspections are not infallible and have some limitations. The more information you can extract about the integrity of the home the more comfortable you will feel with continuing with the purchase... or walking away.
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This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate<a href="https://www.myseattlehomesearch.com/contact/" title="Contact form for Conor MacEvilly" data-uw-rm-brl="false"> feel free to contact me</a>. I'm happy to help. My direct line (cell) is 206-349-8477.2023-03-14T07:30:00-07:002023-03-14T08:09:22-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:8883The consequences of writing ambiguous home purchase agreements.There is no greater impediment to the advancement of knowledge than the ambiguity of words - Thomas Reid.
<img src="https://assets.site-static.com/userfiles/562/image/The_Consequences_of_Writing_Ambigous_offers_on_homes.jpg" width="800" height="534" alt="Risks of ambiguous home purchase agreements" style="margin: 10px auto; vertical-align: middle; display: block;" />
Just because the online listing says ALL APPLIANCES STAY! unless you actually ask for them when writing up your offer to buy the home don't be surprised if those same appliances are not there on closing day.
To minimize post-closing surprises and buyer disappointment, when writing up an offer on a home, the buyer and their real estate agent need to be crystal clear as to what they are asking for and what they expect from the sellers. This also extends to the other aspects of the purchase agreement and the home-buying process.
When buying a home, verbal agreements are meaningless, everything needs to be in writing and signed off on to be legally binding. It needs to be written clearly and concisely so that there is no confusion as to what is being agreed to. Don't give the seller wiggle room to get out of honoring the contract or the opportunity to interpret it to their advantage.
Assume nothing! A small dose of paranoia helps.
Also if you end up in a legal dispute with the seller and you have a clearly written and unambiguous contract, the judge is going to have a lot easier job deciding which way to rule. But hopefully, it never comes to that.
Here are some examples of the consequences of not writing clear and concise home purchase offers.
You thought you were getting all the appliances including the freezer in the basement.
As mentioned in the introduction, the glossy flyer for the property might say that all the stainless steel appliances go with the home but if the buyer doesn't check off the boxes for each of those appliances in their offer then legally speaking the seller is totally entitled to walk away with them before closing.
The buyer needs to specify each individual appliance that they want to be included with the home. And that includes any additional appliances like the freezers in the garage or basement or the wine cooler fridge under the counter or that hot tub on the deck. Here's the section of the NWMLS form used for the <a href="https://www.myseattlehomesearch.com/" title="Seattle area homes">Seattle area </a>and Washington State home sales where the buyer indicates which appliances they want (different states will have different versions of this):
<img src="https://assets.site-static.com/userfiles/562/image/Included_items.jpg" width="800" height="66" alt="Home appliances and real estate contracts" style="margin: 10px auto; vertical-align: middle; display: block;" />
Similarly, if the listing says all the attached TVs stay, then you need to state that you want each of those TVs and specify the rooms in which they are located. In general, things that are plumbed into the home or nailed into the walls are considered part of the home and you don't specify items such as light fixtures. However, in the Seattle area at least, the hot tub is an exception and the seller is within their rights to take that with them if you don't ask for it in the contract.
When viewing homes that you are strongly considering making an offer on, write down all the appliances you want to be included. It can be hard to remember stuff when you get back home and after viewing five other properties.
A quick story for you: once I heard about a buyer who had an offer accepted on a home with a state-of-the-art, touch-screen, connected-to-the-internet refrigerator in the kitchen. They checked the box on the contract for "refrigerator". When the buyer went to the home the day after closing, yes the kitchen still had a fridge but it was the fridge that had been sitting in the garage! The hi-tech one was gone.
The buyer would probably be hard-pressed to get an attorney to prove the case that the seller didn't honor the contract since the kitchen did have a refrigerator at closing and the buyer didn't specify WHICH refrigerator. Yes, the seller pulled a fast one and probably knew they were not honoring the good intent of the contract but legally speaking, they were within the requirements of the contract.
Normally this doesn't happen but if you want to be 100% certain that you are getting what you think you are getting, especially when it comes to some specialized and expensive appliance, then maybe specify the name and brand of the appliance and its location.
Not getting the inspection repairs done as you expected.
<img src="https://assets.site-static.com/userfiles/562/image/Home_buyer_inspection_response.jpg" width="400" height="600" alt="How to write a home inspection response " style="margin: 10px; float: left;" />This is a part of the contract and home buying process where it is critically important to be crystal clear as to exactly what you are requesting from the seller.
Say the buyer does a home inspection and discovers that the roof is on its last legs, is leaking, and needs to be replaced immediately. The buyer and their Realtor write up an inspection response to the seller with the following wording:
The Seller agrees to replace the roof before closing.
The seller agrees to this and the buyer is delighted that they will be getting a new roof.
Two weeks later the buyer is driving past the home and up there on the roof is the homeowner with his buddy Bob, laying a new roof directly on top of the old one.
The buyer is flabbergasted and fuming but according to the terms of the contract, the seller is honoring the purchase agreement.
What the buyer should have done:
As part of their allowed<a href="https://www.maxrealestateexposure.com/home-inspections-buyers-sellers/" title="Inspection must knows for buyers and selelrs" target="_blank"> inspection process</a>, the agent should have advised the buyer to bring a roofing contractor to the home to get a quote on replacing the roof. With that quote in hand, a much better inspection response to the seller would have been something like this:
The Seller shall, at the seller's expense, remove the existing roof and replace it with a new 30-year roof. The roof is to be installed by ABC Roofing with a transferable warranty as detailed in the attached quote. All repairs must be completed within 5 days of closing and the Seller shall provide a copy of the paid receipt to the Buyer prior to closing.
If the seller agrees, then they have to use ABC Roofing company and the roof has to be installed as detailed in the quote. The buyer is controlling the process: the roofing contractor, the quality of the roof, and that it will be installed by a <a href="https://www.myseattlehomesearch.com/blog/why-hiring-a-licensed-bonded-and-insured-contractor-is-important/" title="The benefits of hiring licensed contractors">professional licensed contractor</a>.
If you leave it up to the seller they are going to go with the cheapest alternative that meets the terms of the contract. And who can blame them?
The home is not clean when you get the keys.
Most purchase agreements will have a section stating that the owner will clean the home before closing.
The problem is: what's the definition of CLEAN?
The buyer envisions floors so clean that they can eat their dinner off them while the seller is thinking that they just need to get their stuff out of the home and give it a quick one over with the vacuum.
The condition of the home when the buyer first views the property should be a good indication as to the condition it will likely be in a closing. If the home is <a href="https://www.myseattlehomesearch.com/blog/how-to-properly-clean-your-new-home-before-move-in/" title="Cleaning a home before moving in ">spotless and Q-Tip clean </a>at the open house and the sellers look like they take good care of the place then most likely the bars we had a really clean home a closing. But never assume that will be the case.
If the buyer wants to guarantee that they will get a clean home on closing day then they should specify in the contract that the sellers will hire professional cleaners to clean the home before closing and to provide a receipt as proof.
Seller junk you just don't want.
While it's good to get all the things you asked for you, at the same time you do not want to end up with all the junk in the garage including all those old tires plus gallons of old paint and cleaning products.
Most purchase agreements will state that the owner needs to move all their personal property from the home before closing but the buyer needs to be proactive to ensure that they actually do so.
The potential problem is: what's the definition of PERSONAL PROPERTY?
The seller will definitely agree that all their furniture, sports equipment, and power tools are personal items, but they can sometimes need a little nudge to be reminded that those old cans of paint in the garage are their personal property too. The contract verbiage seems to leave wiggle room for the seller to just leave stuff/junk and the buyer can choose to dispose of it:
<img src="https://assets.site-static.com/userfiles/562/image/Personal_proeprty.jpg" width="795" height="79" alt="Home seller is required to remove all personal property" style="margin: 10px auto; vertical-align: middle; display: block;" />
One way the buyer can avoid inheriting unwanted items is, for example, to include the following wording in the inspection response:
The Seller shall remove all personal items from the garage, the attic space under the stairs, and the backyard including all paint, cleaning products, and tires before closing.
Many sellers scramble to get out of their homes before closing and it's not uncommon that they leave buyer gifts in the garage and then it's too late to get rid of them. So, make sure to do a <a href="https://www.myseattlehomesearch.com/blog/dont-skip-the-final-walk-through-when-buying-a-home/" title="Information about pre-closing walkthroughs ">final walkthrough of the home</a> before closing to make sure the seller has taken care of these items
How to avoid ambiguous contracts:
Write clear and concise offers so that both the buyer and seller know exactly what is expected of each party.
Hire an experienced Realtor, particularly one who has good negotiation skills and knows how to write a solid purchase offer.
The buyer should read what they are signing because what you are signing has consequences. Does the language in the contract clearly convey what you are requesting? If not, don't sign it until it has been rewritten. Don't assume your agent is a contracts whiz.
Get quotes from professional contractors to control how <a href="https://www.myseattlehomesearch.com/blog/10-most-common-home-buyer-inspection-repairs-in-seattle/" title="List of common home inspection problems">post-inspection repairs</a> are done.
Yes, doing a final walkthrough is important, but if the contract was ambiguous in the first place, then the walkthrough won't save you.
In conclusion regarding the Consequences of Writing Ambigious Home Purchase Agreements: writing a clear and concise offer on a home house removes ambiguity as to what is expected from both the buyer and the seller. They protect both parties and greatly reduce the chance of any potential disputes occurring before closing. Words have consequences (and checking boxes), so be careful which ones you choose to use. So if you want to make sure you get those shiny new stainless<a href="https://frederickrealestateonline.com/are-stainless-steel-appliances-still-popular/" title="Are stainless steel appliances still all the rage" target="_blank"> steel appliances </a>at closing, you know what to do!
<img src="https://assets.site-static.com/userfiles/562/image/Screen_capture_for_zoom_photo.jpg" width="200" height="225" alt="Logo for Conor Mac Homes" style="margin: 10px; float: left;" />
This article was written by Seattle and Eastside Realtor Conor MacEvilly who has been in the business since 2008. I hope you enjoyed the post and thanks for visiting my website. If you have any questions about Puget Sounds area residential real estate<a href="https://www.myseattlehomesearch.com/contact/" title="Contact form for Conor MacEvilly"> feel free to contact me</a>. I'm happy to help. My direct line (cell) is 206-349-8477.2023-02-19T08:46:00-07:002023-02-20T15:17:54-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:883810 Most common home buyer inspection repairs in SeattleIf you are considering putting your <a href="https://www.myseattlehomesearch.com/communities/" title="Seattle real estate listings">greater Seattle area home</a> on the market or if you are a buyer out looking at homes you will want to keep an eye open for some of the most common issues and needed repairs that appear in home buyer inspection reports. Alternatively, if you're a seller and decide to do a <a href="https://www.myseattlehomesearch.com/blog/pros-and-cons-of-sharing-a-seller-home-inspection-with-buyers/" title="Doing a pre-listing home inspection">pre-listing inspection</a> you will probably encounter some of these too.
<img src="https://assets.site-static.com/userfiles/562/image/Common_home_inspection_issues_in_Seattle.jpg" width="800" height="400" alt="10 most common home inspection problems in Seattle" style="margin: 10px auto; vertical-align: middle; display: block;" />
Seattle has a lot of older homes originating from the early 1900s through the 1950s and the older the home the greater the potential for discovering problems. No home is perfect but some homes are less perfect than others. Throw in the famous Northwest climate and then you have the possibility for some interesting findings during home inspections. Never a dull moment!
1. Mold in the attic.
Attic mold is a common issue found during home inspections in the Pacific Northwest. <a href="https://www.myseattlehomesearch.com/blog/most-common-causes-of-mold-in-attics-of-nw-homes/" title="Attic mold in Seattle homes">There are several causes of attic mold</a> that essentially result from elevated levels of moisture and poor attic ventilation, resulting in moisture getting trapped in the attic and encouraging mold growth. Evidence of mold is usually visible on the underside of the plywood boards located directly above the rafters. When the mold is more extensive, it can also appear on the attic insulation.
Some roofs are just poorly installed and do not include adequate soffits and ridge vents to remove moisture and some roofs are at the end of their useful lifespan and are leaking moisture into the open attic space.
Another common source of mold in Seattle area attics is ductwork from bathroom and kitchen fans that are not connected to the exterior via the roof and instead just pump warm moist air into the attic space. As far as Mr. Mold is concerned, this is Shangrila! The simple fix is just connecting the ductwork to a roof line vent. However, make sure you hire somebody who knows what they're doing so you don't end up with a roof leak as well.
When they see mold, many home buyers will automatically think it's going to be highly toxic and unhealthy which may put them off purchasing the home. So if you are going to list your home make sure to stick your head in the attic before you stick her home on the market.
On a related note, though not related to moisture, when you're up in the attic keep an eye open for any potential mice or rat infestations. If your home has trees with branches that are close to the roofline critters can use these to get up on your roof and then try and get into your warm attic. It's a good idea to cut back those branches. Plus the roof will dry out faster and reduce moss growth.
2. Basement moisture problems.
The Seattle area has a lot of homes with basements and when originally built they were not meant to be super waterproof. Over time many homeowners have converted their basements into living spaces and some of them have left them unfinished. The Northwest gets a lot of rain compared to other parts of the country and that groundwater really wants to work its way into your basement
Basement issues range from a damp moldy smell to standing water after heavy rainfall. The foundation walls may show signs of efflorescence where water is slowly being forced through the foundation walls and evaporates on the inner surface leaving a flaky/crumbly residue.
These issues are always the worst during the rainy winter months and can be harder to discover for a buyer during the dryer summer months. That's why<a href="https://www.myseattlehomesearch.com/blog/6-reasons-why-rain-is-your-friend-when-buying-a-home/" title="Buying a home in the rainy months"> the best time of year to buy a home is during the rainy months </a>because rain will help expose a property's vulnerabilities to moisture and bad drainage.
As a seller, you might be thinking; if I just list my home In summer then my leaky basement won't be an issue. However, you're still going to have to disclose that information to a potential buyer. If your basement has moisture issues there are a number of things you can do including making sure your downspouts and gutters or diverting water away from the foundation, or adding a French drain near the foundation. For a lot more information on this, <a href="https://www.myseattlehomesearch.com/blog/wet-basement-solutions-and-prevention/" title="How to fix damp basements">read this helpful article.</a>
3. Old plumbing and electrical systems.
Because a lot of homes in Seattle are on the older side many of them still have their original plumbing and electrical systems which includes old ungrounded wiring<img src="https://assets.site-static.com/userfiles/562/image/How_to_test_your_homes_electrical_outlets.jpg" width="400" height="600" alt="How to test your home's electrical outlets" style="margin: 10px; float: right;" /> and unreliable galvanized plumbing. The latter is prone to eroding and leaking.
Some insurance companies will not provide insurance for homes that have knob-and-tube wiring because of the potential fire hazard. It's not uncommon to see knob-and-tune circuits up in the attic or if the ceiling in the basement is exposed you'll be able to see a lot of the home's electrical and plumbing lines.
Other common electrical issues in older homes include 3-pin outlets although the circuit is ungrounded plus outlets with reversed polarity. A simple $15 outlet tester from a hardware store is great for testing a home's outlets. For older homes that have had some updates the kitchen and bathrooms may have newer electrical grounded circuits whereas the living rooms and the bedrooms will have the original ungrounded circuits.
Sometimes you will see homes with really old electrical panels that have been recalled years ago because they are potential fire hazards. In those situations, the seller should replace it before going on the market because the buyer will definitely be asking for a new one. <a href="https://energytoday.biz/blog/4-outdated-and-unsafe-electrical-panels-that-could-be-hiding-in-your-home" title="Recalled electrical panels" target="_blank">Zinsco panels installed in the 1970s are one example.</a>
On a side note, just because a home has updated and modern plumbing does not mean that it's immune to leaks and other plumbing issues. It's only as good as a plumber who installed it in the first place.
4. Furnaces and water heaters that are clinging on for dear life.
The average furnace lasts for about 20 years and the average water here for about 10 years but plenty of homes will have 30-year-old furnaces and 18-year-old water heaters that are on their last legs.
The current code requires that water heaters have two seismic straps otherwise they will not pass an appraisal so make sure they are in place. Also, make sure there's a line drain line connected to the pressure release valve and ideally it drains to the exterior of the home or to an interior drain.
Even if your furnace is on the old side it's a good idea to get it serviced before you go on the market. Also, make sure to put in a new filter especially if you have pets cats and/or dogs. There's nothing worse than the home inspector opening the front panel to the furnace and seeing a filter that's been sitting there for 2 years and clogged with fur and the furnace working extra hard to push air through it. Plus it will give the buyer the impression that you don't take care of your home. The small things have a big subliminal impact on how buyers perceive your home.
5. The sewer line.
Some older Seattle homes still contain their original sewer lines made up of sections of clay pipe or concrete pipe and plenty of them are working just fine. However, the city has a lot of big trees with big roots that love trying to weave their way in between those joints to get access to water.
Most home buyers as part of their inspection contingency will run a camera down the sewer line to make sure the system is intact. <a href="https://www.myseattlehomesearch.com/blog/sewer-line-repairs-costs-and-not-getting-ripped-off/" title="All about Seattle sewer lines ">Sewer repairs can be expensive</a> and range between about $5,000 and $25,000.
6. The roof.
Just like water heaters and furnaces a lot of sellers will try and get the absolute maximum out of their roofs, sometimes way beyond their intended lifespan until it becomes a liability and is not protecting the Integrity of the home anymore.
Some sellers will try and power wash the roof to spruce it up and make it look prettier but that is not a good idea. Power washing will remove half of the remaining life left on the roof and dump it in the gutters instead. <a href="https://www.myseattlehomesearch.com/blog/why-pressure-washing-your-asphalt-shingle-roof-is-a-bad-idea/" title="How power washing damages your roof">NEVER POWER WASH YOUR ROOF</a>!
Yes, it's not cheap, but adding a new roof to a home has a major impact on both the street and buyer appeal of the home. What's more, if a roof is in poor condition, it might not pass an appraisal and the buyer may not be able to get financing for the home unless it is replaced before closing.
Chimneys poke up above the roof line and are exposed to all the elements and so are more vulnerable to aging and wear and tear over time. It is not uncommon to see chimneys with deteriorating brickwork and masonry and missing cement between the bricks. The cement crown of the chimney can be worn away and the top might be missing a spark arrestor. Poor flashing where the chimney meets the roofline can be a common source of roof leaks.
7. Wood rot.
<img src="https://assets.site-static.com/userfiles/562/image/Check_for_wood_rot_when_inspecting_Seattle_homes.jpg" width="400" height="600" alt="Checking for wood rot when inspecting a Seattle home" style="margin: 10px; float: left;" />Because of the damp Northwest climate, it is not uncommon to see parts of the exterior that have some wood rot which tends to be more common in homes that have not been maintained and painted properly. It will be most obvious at the corner of the eaves, where exterior walls meet at corners, the wood framing around windows, especially if there is no flashing above the window, and water damage where the siding is in contact with the soil.
The south-facing side of homes tends to get the worst weather in the Seattle area and it's where you're most likely to see issues. In addition, if the home has trees and bushes close to the house they can keep that part of the home in perpetual shade leading to an increased risk of mushy wood.
Wood decks are a really common area for wood rot both on the deck itself and on support posts if they are not elevated off the ground and sitting on concrete footings. Most home inspectors recommend that you don't paint your deck or you'll be painting every year for the rest of your life. Also, make sure to leave a gap between the boards so the water can drain from the flat deck surface.
8. Lack of smoke and carbon monoxide detectors.
Building code requires that every bedroom has a smoke detector and that each floor of the home has a carbon monoxide detector installed. Also, homes with missing carbon monoxide detectors will not pass an appraisal. Just go to the hardware store and buy some! You can even get detectors that detect both carbon monoxide and smoke in one!
9. Crawl spaces.
Basements are a lot more common than crawl spaces for homes in the Seattle area but for homes that do have crawl spaces, they can be a home sale deal killer. Crawl spaces are most common in one-story Rambler-type homes and in townhomes. They are more common in areas surrounding area like Shoreline and further north and Eastside areas like Bellevue and Redmond.
Most homeowners rarely, if ever, venture into their crawlspaces, and who can blame them? As a real estate agent, it's not very often I've attended a home inspection where the inspector emerges from a hole in the side of the home and declares it all looks great down there! And it's always the last place the professional home inspector inspects s part of the inspection process because they have to suit up in a hazmat suit and a mask. Crawspaces can have some costly repairs.
The 3 most common crawlspace inspection issues are:
Pest infestations: These are really common especially in the colder months when mice, rats, and other critters are looking for somewhere warm. They really appreciate that warm insulation material between the floor joists or they just make a nest on the ground using that material They can squeeze in through tiny gaps in the foundation, the crawlspaces access door, or holes in the vent screens.
In the worst-case scenario, you will need to remove (and replace) all of the insulation and vapor barrier and then have to decontaminate the soil.
Standing water: this can be a major issue and a deal killer for home sales. Homes that sit on lots with the land sloping toward the foundation are more susceptible to water pooling in their crawlspaces. It can also be an issue for homes with high water tables and homes where the downspouts are dumping water right beside the foundation.
Adding a French drain near the foundation will capture rain runoff and divert it away from the home or you may have to add a sump pump inside the crawlspace which pumps the water to the outside.
The vapor barrier is a thick black plastic that sits directly on the soil and prevents moisture from evaporating up into the house. It is not uncommon for this to be in poor condition are completely missing from large parts of the crawlspace. Of these three issues, this one is a relatively simple and affordable fix.
10. Foundation and soil issues for homes on steep slopes.
Seattle is a very hilly city and is up there with San Francisco. Neighborhoods like <a href="https://www.myseattlehomesearch.com/queen-anne/" title="The Queen Anne area ">Queen Anne</a> and <a href="https://www.myseattlehomesearch.com/magnolia/" title="The Magnolia area in Seattle">Magnolia</a> have plenty of homes sitting on steep slopes and they usually have really good views of the Puget Sound, the mountains, or downtown. All homes shift and settle over time but those on slopes are a lot more prone to larger movements that can result in significant cracks in the foundation. Always walk around outside of these homes and inspect the foundation, particularly for ones where the seller has applied some filler material to try and patch it.
The home inspector should be able to a buyer if a crack in the foundation is significant or not and whether the home warrants an additional inspection by a qualified geotech engineer. For a lot more on buying a home on a steep home, <a href="https://www.myseattlehomesearch.com/blog/should-i-buy-a-home-on-a-steep-hill-side/" title="Potential issues for homes in steep hills">please see this informative article.</a>
To summarize The 10 Most Common Problems Found During Home Inspections in Seattle: throw in the famous Pacific NW weather with a combination of the different types of homes found in Seattle and the era they were built and you will start seeing some commonly recurring issues. Nearly all of them can be fixed.
2023-02-13T10:30:00-07:002023-02-16T11:02:05-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:8809Don't Skip the Final Walk Through When Buying a HomeNot doing a final walkthrough when buying a home is like ordering a Lamborghini from a car dealership, waiting a month, and then not taking it for a test drive before paying for it and driving it off the lot!
<img src="https://assets.site-static.com/userfiles/562/image/The_final_walk_through_when_buying_a_home.jpg" width="800" height="400" alt="Final walk through when buying a home" style="vertical-align: middle; margin: 10px auto; display: block;" />
The final walk-through is a crucial step in the home-buying process that often gets overlooked. This process allows the buyer to inspect the property one last time before closing the sale and taking ownership. It's an opportunity to ensure that the condition of the home is as agreed to in the contract and that any necessary repairs or improvements have been completed. By conducting a final walk-through, buyers can avoid potential problems or surprises that could arise after the sale has closed. In this blog post, we will discuss the importance of the final walk-through and what to keep an eye open for when doing one.
You could argue that doing the home inspection is equivalent to test driving the home but that inspection might take place three or more weeks before closing. A lot can happen in that time.
What Is A Final Walkthrough?
The final walk-through is the last step in the <a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="How to buy a home">home-buying process</a> where the buyer inspects the property one final time before closing the sale. The purpose of the walk-through inspection is to ensure that the condition of the property is as agreed upon in the contract and that any agreed-upon repairs have been made. It's an opportunity for the buyer to confirm that the property is in the expected condition and ready to move in.
Despite the importance of doing a walk through it's amazing how many buyers fail to do one, or more correctly, fail to be advised by their Realtor to do one.
When can you schedule the walk through and when SHOULD you?
For the Seattle area and Washington State at least, the purchase contract states the following: The Buyer retains the right to walk through the property within 5 days of closing to verify that the Seller has maintained the property and systems/appliances as required by this paragraph.
Therefore the buyer has between 5 to zero days to go see the home before closing. But as to when you should actually go see the home might depend on the specific situation.
Was the home fully vacant when you made the offer? In these situations assuming everything had been removed from the home and the seller had moved out at the time of making the offer, in these cases you're just walking through the home to make sure everything is in good condition and still working. You probably still need to do the walk through two days before closing in case you do discover any issues that the seller would need to take care of.
Was the home occupied and full to the brim with personal items (including the garage) when you made the offer? In these situations where the seller hasn't even started to pack before the home went on the market, these are the type of sellers who might be packing up to the very last minute before closing. So it's probably better to leave the final walk-through closer to the closing date as possible to make sure they're moved everything out of the house.
Did the seller agree to <a href="https://www.myseattlehomesearch.com/blog/negotiate-home-seller-does-repairs-or-a-price-drop/" title="Ask for a price drop or seller repairs?">complete certain repairs before closing?</a> If you negotiated that the seller complete certain repairs before closing then it is advisable to go see the home earlier as described further down.
The final walkthrough checklist - 10 things to look out for.
The list of things to look out for will depend on the type of home, for example, a house versus a condo, and what the buyer and seller agreed to in the purchase agreement. Here are some
Remember that as per the sales contract, the sellers promised to deliver the property in the same condition as when the buyer made the offer (plus any agreed-upon repairs).
Is the home clean? Many home buyers assume the sellers will do a <a href="https://www.myseattlehomesearch.com/blog/how-to-properly-clean-your-new-home-before-move-in/" title="Cleaning a home before moving in">deep cleaning of the home</a> after they move out all of their stuff. Although the contract states that the sellers will clean the home, what's the definition of "clean"? Yours and theirs might be completely different. To ensure you end up with a genuinely clean home at closing you might want to specify in the contract that the sellers pay for professional cleaning before closing. Also, make sure there are no signs of pests.
Did the sellers remove all their personal property from the home and, for want of a better phrase, all their crap from the garage, that creepy stuff up in the attic, and those tires at the end of the garden? Sellers love bestowing old, half-used cans of 20-year-old paint and dodgy cleaning products to unsuspecting buyers as "housewarming gifts."
Did the sellers complete all the repairs they agreed to? (see more on this below).
Are the big systems such as the furnace, air conditioning, and water heater working OK?
Check the functionality of all kitchen appliances, including the stove, oven, dishwasher, and refrigerator. Also, check that all the light fixtures are working.
Check all plumbing fixtures, such as sinks, toilets, and showers, to make sure they are working properly. And look under all the sinks for potential leaks (more common than you might expect).
Are all the appliances that the sellers agreed to leave with the home still there? Also are they the same appliances or did the seller switch them out with cheaper and older versions? Worse still, did the sellers run off with the washer and dryer? Did they leave the garage door openers and the keys to the mailbox?
Check the exterior of the home, including the roof, gutters, and siding for any damage or issues.
Was the landscaping nice and trim when you made the offer but it's now a mini-jungle?
If the buyer agreed to purchase some of the <a href="https://www.pacificalocals.com/blog/fixtures-finishes-furniture-real-estate" title="Difference between fixtures and furniture" target="_blank">seller's furniture</a> as part of the sale, are those items still there?
Be flexible and don't nitpick small stuff like nail holes in the walls but definitely go after any bigger issues.
For agreed-to repairs, visit the home TWICE before closing.
If the sellers agreed to do certain repairs before closing then the buyer should not leave it to the last minute to do a walk through. At that stage, it will be too late to get the seller to complete the repairs or get them completed properly. The best thing to do is to specify in the contract that any repairs must be completed at least 5 days before closing and use that as a separate "repairs walkthrough" to check on those repairs.
If the repairs have not been completed or not done as specified in the contract, then there are still 4 more days for the issue to be addressed before closing. If you inspected the repairs the day before or the day of closing it would be way too late.
So basically you do a separate early walk through to review the repairs and then a general walkthrough before closing where you can check on those repairs again and the rest of the home
Who should attend the pre-closing walk through?
The buyer's real estate agent is always required to attend because they must be there for all viewings but it is also important for the buyers to attend the walkthrough since they are the ones buying the home and the ones who have to live with the consequences of missing something on the walkthrough. It only takes about 30 minutes but it's a crucial 30 minutes.
Don't rely on your agent to check out the home for you. They are not as emotionally or financially invested in the home as you are except for getting paid a commission that is.
What if the Buyer agrees to a rent-back and allows the seller to stay in the home after closing?
This is a unique situation where in <a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="What it takes to win a bidding war on a home">competitive market conditions</a> the buyer agrees to let the seller remain in the home after closing to make their offer more attractive. Essentially the buyer becomes the landlord and the seller becomes a tenant after closing. The buyer still gets to do a pre-closing examination of the property before the sale closes.
However, in this case, the home is still fully occupied with all the seller's possessions. Even though the seller will be staying in the home after closing you want to ensure that any agreed-upon repairs have been completed before the sale of the property closes not at the end of the rental period.
After closing and with the seller staying at home as a renter buyer the new owner is going to have to work out some form of an equivalent renter move-out inspection to make sure the home is in the same condition as at closing.
The best piece of ice is to avoid agreeing to a seller rent back because in the first place as they have a lot of legal risks including the seller refusing to move out at the end of the rental period.
What happens if I discover issues during the walkthrough?
<img src="https://assets.site-static.com/userfiles/562/image/The_buyer_pre-closing_walk_through.jpg" width="400" height="600" alt="Pre-closing inspection when buying a home" style="margin: 10px; float: left;" />Say you are viewing the day before closing and you discover that the furnace is not working. What can you do?
In these situations, you would contact the seller immediately to fix it before closing. I had a listing once where the furnace decided to stop working on closing day even though the furnace is only 3 years old. We rushed out a furnace technician to fix it and had it working before the 5 pm closing. Stuff happens!
Per the terms of the contract, the seller is legally responsible for fixing any appliances or systems including heating and air conditioning that break between mutual acceptance and closing. If they can't fix them, then they must replace them.
However, if the buyer discovers major issues like water in the basement or a full-scale pest infestation then they can probably request that the closing be delayed and that the seller address those issues before the sale closes. Alternatively, if both parties agree then the seller can deposit funds with escrow and that money will be used to take care of those issues after closing at the seller's expense.
Realistically, if an issue is discovered it's not always possible within the time frame to get them addressed before closing so the buyer may have to be a little flexible on those issues. It can be frustrating and soil some of the excitement of closing on a new home. You are so close to closing, do they really want to walk at that stage even if they legally could?
Can I get out of the purchase agreement based on the walk through?
It depends.
The final walkthrough is not like the inspection contingency where the buyer can get out of the contract based on their subjective satisfaction with the condition of the property. A buyer cannot<a href="https://www.myseattlehomesearch.com/blog/how-home-buyers-can-get-out-of-purchase-agreements/" title="How to break a home purchase contract"> wiggle out of the contract </a>just because there are a few extra scratches on the wall compared to when they made the offer or the home is not immaculately clean.
Obviously, if it's a major issue like fire damage, major water damage, or structural issues from a landslide then the buyer cannot be forced to buy the home and can they get out of the contract
However, it is important to consult with a real estate attorney to understand the legal implications and options available in these situations.
How to sneak in an extra and much earlier walk-through of the home: the "measuring for furniture visit".
Here's a handy tip especially for sales where the buyer has requested major repairs or the home was brim full and occupied. In these situations, you don't want to leave it right up to closing time to make sure the seller is doing what they promised and is getting their act together and getting out of the home.
So in order to get a view of the inside of the home about two weeks before closing you can ask the seller for permission to visit the home to take room measurements and see whether our existing furniture will fit or if you need to buy new stuff.
Sure, the buyer may genuinely want to measure the home so they can buy the right size furniture and curtains but also gives them an opportunity to go through the home and make sure the seller is on board with everything they promised including getting ready to get out of the home.
Frequently asked questions about the final walk-through.
Here are some answers to common questions that home buyers have about the process.
Do the sellers have to be moved out to do a walkthrough?
No. Legally the sellers have until 9:00 pm on closing day to vacate the home and sometimes they don't leave the home until closing day itself. However, they have to stay away from the home while the buyer does the walkthrough.
How long does a Walter inspection take?
You just need about 30 to 60 minutes.
Can a seller refuse the final walkthrough?
Absolutely not. It's completely within the buyer's rights to be able to do one as detailed in the contract.
Can you do a walk-through on the day of closing?
Yes, however, that will leave you very little time to address any issues that you might discover at that time. It's wiser to do it at least a day or two before closing.
Can you do a walk-through after closing?
The sale has already closed at that stage and is a futile exercise. As soon as the sale closes, you would not have any legal rights to push the seller to take care of any issues.
In summary regarding the final walk-through when buying a home:
Basically, make sure that you do one! Never assume that the home will be in the same condition as when you have your offer accepted or that the seller will complete agreed-to repairs as detailed in the contract. Don't trip at the penultimate hurdle on the way to closing.
2023-02-06T15:00:00-07:002023-03-06T18:37:33-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:8702The Resale Certificate: A Crucial Document for Condo BuyersThe resale certificate is your best friend when buying a condo. It's up there with the home inspection. It's a bit of a slog to get through, and pretty boring but it's a critical document that you need to review thoroughly as part of your home purchase due diligence. When buying a condo, it is important to be aware of all the nuances that come with buying a home that is part of a Home Owners Association (HOA).
<img src="https://assets.site-static.com/userfiles/562/image/The_Resale_Certificate_is_a_crucial_document_for_Condo_buyers.jpg" width="800" height="400" alt="The condo resale certificate explained" style="margin: 10px auto; vertical-align: middle; display: block;" />
This article will explore the importance of having a resale certificate when buying a condo, as well as the information it contains. We'll also look at the risks and potential consequences of not obtaining one, and how to actually get a copy. Finally, we'll look at the critical nuggets that buyers need to look for while reviewing the document. By the end of this article, you'll have a better understanding of why a resale certificate is essential in protecting your investment when purchasing a condo.
What is a resale certificate?
A condo resale certificate is a collection of documents that provides detailed information about a specific condo unit plus the condo development as a whole. It includes critical information such as any outstanding issues with the building, special assessments, meeting minutes, a copy of the Reserve Study, rules and regulations, and any other relevant details related to its operation, management, and financial status. The buyer requests this document during the buying process and it is put together by the Homeowners Association or the property management company. This document helps provide potential buyers with important information they need to make an informed decision on whether to purchase a particular condo or not.
Why is reviewing the condo Resale Certificate so important?
When you buy a condo you essentially just own everything from the paint on the wall inwards and the homeowner association takes care of everything else including the exterior siding, the roof, the decks, the driveway, and all that stuff.
It's critical to <a href="https://www.myseattlehomesearch.com/blog/9-critical-questions-to-ask-when-buying-a-condo/" title="List of critical items to investigate when buying a condo">determine the overall health of the condo development and association</a>, how well it is run, and whether the HOA has the financial reserves for any major repairs that are needed in the near future or will you might end up writing a big check a couple of months after moving in.
For example, you will want to learn about the financial health of the HOA. Do they have a history of<a href="https://www.myseattlehomesearch.com/learn about condominium special assessments"> </a><a href="https://www.myseattlehomesearch.com/blog/what-are-hoa-special-assessments/" title="Special assessments when buying a condo">special assessments</a> and do they have the funds to cover known upcoming repairs? Are you allowed to have a dog or a cat and are you allowed to rent your unit if you decide to go travel the world for a year? Very little of that information will be available in the listing description on the MLS and even if some of it is, you still need to confirm it independently by getting that information directly from the HOA, not from the listing agent or the seller.
It's too late after closing to look into all that stuff and you can end up with a massive dose of buyer's remorse because you didn't do your homework or due diligence. Your real estate agent should guide you through the process and make sure that you get all the required documentation to make an informed decision.
What documents does a resale certificate contain and what do they reveal about the condo development?
The resale certificate is a collection of different documents providing different information about the property. Here is a list of the most likely documents you will get when buying a condo in Seattle and Washington State and an explanation of what they cover and their importance.
The Resale Certificate, aka From-27.
This can be a little confusing. Although the whole package of documents is referred to as the resale certificate one of the individual documents within the package is also called the resale certificate, aka Form-27
This form is a summary questionnaire that is filled out by either the HOA or the Property Management Company and is signed off by the unit owner. It is one of the most important documents within the package and lists critical details related to both the specific unit the buyer is interested in purchasing and the condo development as a whole.
Some of the details covered in this form include:
Are there any current special assessments and if so, how much remains to be paid by the seller? This is one of the most important pieces of information that you will find in a resale certificate. You do not want to buy a condo and then get dumped with an expensive out-of-pocket special assessment after closing. If there is a special assessment in place at the time of making an offer you want to know if the seller will be paying off the remaining balance at closing. If not you may want to start looking elsewhere or leverage it for a big price discount.
Is the HOA involved in any current litigation?
Is the development self-managed or run by a professional property management company?
What are <a href="https://www.myseattlehomesearch.com/blog/are-low-hoa-fees-always-a-good-thing/" title="The pros and cons of low HOA dues">monthly HOA dues</a> for the unit and what's included in those dues?
Does anyone individual own more than two of the units in the building?
Are there assigned parking spaces and is the parking space deeded to the unit?
The percent owner occupancy, which means the percentage of units that are owner occupied. The remainder will be rented.
Does the condo association have a rental cap and if so, is it currently at that maximum? Some condominium developments will have no limits on the number of units that can be rented whereas others will set a limit of say 25% of units. If you are looking to buy a condo with the option to be able to rent it then being aware of any rental restrictions is critical. Also, some HOAs will have a requirement that you live in the condo for a minimum amount of time before you are allowed to rent it.
Is the condo development FHA approved? Many first-time buyers rely on lower downpayment FHA loans to get their foot in the real estate door. However, a condo association has to be FHA approved in order for a buyer to buy one of those units if relying on an FHA loan.
The HOA's Covenants, Conditions, and Restrictions (CC&Rs).
<img src="https://assets.site-static.com/userfiles/562/image/HOA_rule_and_regulations.jpg" width="400" height="600" alt="HOA rules and regulations CCRs" style="margin: 10px; float: left;" />Homeowner associations often have a set of covenants, conditions, and restrictions (CC&Rs) to govern the use and maintenance of properties within their communities. These CC&Rs are legally binding on all homeowners, outlining their rights as residents and the responsibilities of the HOA. They cover rules related to architecture, parking, landscaping, pets, rentals, occupancy limitations, and use of the property for commercial purposes. Additionally, they provide information on how the HOA functions internally such as conducting meetings and resolving disputes.
It will also explain what you can expect in the event that you break any of these rules like falling behind on your monthly does or renting your unit without getting HOA's approval. You can expect to hear from the HOA president or the management company. Knock, knock!
It is essential for buyers to read and understand the CC&Rs before purchasing a condo in order to be aware of all relevant regulations. As soon as they become a member of the association, they will be expected to adhere to all rules outlined in these documents. So if you own three dogs and love them dearly but the pet limit is just one, then this is not the condo for you.
Meeting minutes.
Well-run homeowner associations will usually have regularly recurring meetings where the HOA board of directors meets up to discuss items such as upcoming repair issues, how much money they have in their reserves and current operating expenses, which units are in arrears on their dues, and other stuff related to running a condo building. The secretary for the board will then write up a report of that meeting detailing all the topics that were discussed.
These reports can be a gold mine of information about the condo development that is not available elsewhere in the report, particularly in relation to the potential for upcoming special assessments. For example, if the meeting minutes discuss getting bids for a new roof new, new siding, and/or deck repairs then you know they're going to be big ticket expensive items. You need to ask yourself whether the association has the current funds to cover those or if there will be a special assessment.
Larger condo developments which are usually run by property management companies are more likely to have consistent monthly or quarterly meetings. However, smaller developments can be a lot more inconsistent and sometimes may just have one annual meeting so meeting minutes from those developments are not as reliable. In those cases, you need to contact the HOA directly to get up-to-date information.
A copy of the Reserve Study.
Condo associations are legally required to conduct a reserve study every few years. They pay an independent third party to come and look at the condo development and write up a report detailing all the currently needed repairs and updates that will be needed over the next 5, 10, and 20 years.
The report will compare the cost of those repairs/updates to how much cash the HOA currently has in its reserve fund. It is common to see a large gap between the recommended reserve funds and the actual amount sitting in the bank account, with only 25% of funding not being uncommon. The larger the gap between the two the greater the potential for special assessments particularly if there are big upcoming repairs that need to be addressed.
Note that for the Seattle area at least condo, buildings with 10 or fewer units are not legally required to do reserve studies and they frequently decide not to do one. In these cases, you are often taking a leap of faith because you do not have a detailed report on the overall condition of the building and the potential risk of unknown expensive repairs.
Also, self-managed communities are famous for their resistance to increasing their HOA dues because Joe in unit #8 is completely against it and is butting heads with the HOA president who lives next door in unit #7 okay. A portion of monthly HOA dues usually goes towards the rainy day reserve fund so if the HOA is not increasing their dues as needed their checking account going to shrink over time.
Many times smaller condo buildings pay for emergency repairs as needed because they don't have a healthy bank account for when the "unexpected" happens, like a new roof. It can be a case of scrambling from one emergency to the next.
Copy of the HOA's financial statement and annual budget.
These documents provide an overview of the financial standing of a Homeowners Association (HOA). They give buyers a sense of the HOA's financial health, including information on its reserve fund, any outstanding debts or assessments, the annual budget, and how much cash they currently have in their reserve account.
This information is important to consider because it can indicate how well-managed the HOA is and whether or not it will be able to cover unexpected expenses which may affect the value of the property. The statement can also give buyers an idea of what to expect in terms of HOA fees, special assessments, and overall building and community maintenance.
The building's insurance policy.
When buying a condo, it is important to review the HOA's insurance policy. This will provide information on the types of coverage, limits of liability, and deductibles in place. By understanding what is and isn't covered by the insurance policy, buyers can know what financial liabilities they may have in unexpected situations. It should be noted that the HOA master policy does not cover the contents of individual units, so condo owners must get separate condo insurance to protect their personal property.
Articles of incorporation.
The articles of incorporation, also known as a certificate of incorporation or corporate charter, is a legal document that establishes the existence of a corporation and outlines its purpose, structure, and governance. This document must be filed with the state government in order to obtain a corporate charter allowing the corporation to conduct business and enter into legal contracts. The articles of incorporation serve as the foundation for the corporation and dictate how it will be structured and run. Don't be surprised if the documents are hard-to-read photocopies of documents with fonts that haven't been popular in 50 years.
How does a buyer get a copy of the condo resale certificate?
When you are purchasing a condo in Seattle the seller must provide you with a copy of the resale package within 10 days of accepting your offer (mutual acceptance).<img src="https://assets.site-static.com/userfiles/562/image/Attorney_reviewing_Reasle_Certificate.jpg" width="400" height="600" alt="Should you hire an attorney to review a resale certificate" style="margin: 10px; float: right;" /> Sometimes, if the seller is trying to <a href="https://www.maxrealestateexposure.com/tips-for-selling-a-condo/" title="Tips for selling your condo in a hurry" target="_blank">sell a condo quickly</a>, they will already have a copy of the certificate before you make an offer but you can still make your offer contingent on reviewing it. The seller is responsible for ordering the required documents through their HOA or the property management company and paying for them. It usually takes 10 days to be delivered as a giant PDF after being ordered.
Make sure you are getting an up-to-date version of the certificate. Sometimes a condo has been sitting on the market for a few months and the certificate ordered at that time is now out of date. It's important to get a version that's got all the latest information, particularly in relation to financing and potential special assessments.
How do you review a resale certificate?
Like your life depends on it! Once you receive a copy of the resale certificate the clock starts ticking and you usually have about 5 business days to review it. You need to jump on it immediately. If you have questions about anything in the document first step is to address them to the listing agent or the buyer but many times when it comes to issues related to the whole development you will need to direct your questions to the HOA or the property management company.
Both homeowner associations and management companies can be notoriously slow to respond and it can be stressful trying to get answers before your review deadline elapses. If you don't get the answers to critical questions within that 5-day review period then request more time. And if the seller says no, you might want to consider walking on the sale.
Should you have an attorney review a resale certificate for you?
The answer is that it's completely up to you, the buyer. However, you should be aware that reviewing the resale certificate is your legal responsibility and not that of your real estate agent. A good real estate agent will also read the document and point out potential issues but they are not attorneys and are not legally responsible to digest the resale certificate for you. That onus is on the buyer's shoulders.
Hiring an attorney to review the resale certificate can be a smart decision for buyers, especially if they are not familiar with the legal and financial aspects of buying a condo. They can help to identify potential issues and risks and help buyers to understand the complex legal language and terms used in the resale certificate. It will cost you a few hundred dollars but the attorney will review the document over the phone with you so you feel safe moving forward with the purchase.
Can I get out of the purchase contract if I don't like what I see in the resale certificate?
Absolutely! Yes, you can <a href="https://www.myseattlehomesearch.com/blog/how-home-buyers-can-get-out-of-purchase-agreements/" title="How to get out of a contract to buy a condo">get out of a contract to buy a home</a>. The resale certificate is similar to the home inspection contingency. If you don't like what you see or are not getting all the information you need, you are completely free to get out of the contract and <a href="https://www.cincinkyrealestate.com/blog/earnest-money/" title="Earnest money and buying a home" target="_blank">get your earnest money back</a>. You do not have to give the seller a reason why you are not approving the certificate.
Should you buy a condo without getting a copy of the resale certificate?
The short answer is NO!
In conclusion regarding the importance of the resale certificate for condo buyers:
Don't buy a condo without getting a copy and make sure to review it thoroughly before deicing to move forward with the purchase or not. It's not the most exciting thing you will ever read and can be a bit of a slog getting through it but it can save you from making a big financial mistake. It's worth noting that requirements for the resale certificate may vary depending on the location, state, and association, so it's important to verify what exactly is required and expected when obtaining one.2023-01-23T15:00:00-07:002023-01-23T15:20:49-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:8357When is the best time to sell a home in SeattleAs part of the <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="How to sell your pacific northwest home">process for selling your Seattle home</a>, you probably want to know if the time of year you list it for sale will have a potential impact on the sale price. So what is the best time to sell a home in Seattle?
The best time to sell your home in Seattle in terms of potentially getting the most money for your property is between March and May. Seattle home prices usually follow a seasonal cycle of peaking in the spring and then dropping off through the remainder of the year. Between the years 2017 and 2022, average sale prices were between 4.5% and 20.6% higher in springtime compared to the start of the year.
The best time for any individual home seller to list their home may not coincide with these months because of life plans like waiting for the school year to finish or the need to relocate in a hurry for a new job. But in general, if you are hoping to walk away with the most money for your home, then yes, in general, March through May tend to be optimal months to sell.
Let's look at how the median sales price of NW Seattle single-family homes has varied over the past 5 years. The price trend graph below shows where the home prices peaked and where they were the lowest for each year between 2017 and 2022.
<img src="https://assets.site-static.com/userfiles/562/image/Winter_versus_spring_Seattle_home_prices.png" width="850" height="348" alt="Seattle winter versus spring home prices" style="margin: 10px; vertical-align: middle;" />
The table below compares the highest median price for each year with the corresponding lowest price at the start of the same year for Seattle homes listed for sale.
<img src="https://assets.site-static.com/userfiles/562/image/Seattle_springtime_home_prices.png" width="800" height="320" alt="Percentage increase in Seattle home prices in springtime" style="margin: 10px; vertical-align: middle;" />
Some observations on the best months to sell a Seattle home.
Based on the 5 years of data above, for the Seattle housing market, there is an annual cycle with single-family home prices peaking in the spring months and then dropping off over the fall and winter months.
Average sale prices peaked in the spring period and were between +4.5% (in 2019) and +20.6% (in 2022) higher compared to the prices at the start of the same year.
2020 was an exception and we had a "delayed spring" in the fall. COVID appeared in March, everybody stepped back for a few months and then jumped back in with prices peaking in October.
In mid-2018 the market became hyper-competitive and buyers stepped back from the market. It took 2 years for home prices to return to the mid-2018 highs and spring of 2019 "only" say a 4.5% increase compared to the start of that year. A 4.5% increase is what you expect to see in a more balanced buyers-sellers market and it is still considered a good jump, but relative to the other 4 years, it was on the low side.
Conversely, buyers will pay more for a home if they buy in the spring months. If they wait until the slower months homes should be a little more affordable but the selection of homes for sale will usually be more limited.
On the opposite side of the coin, most real estate agents agree that the worst times to sell a home in Seattle are the holiday months of November and December. Buyers are just too busy and distracted with Thanksgiving, Christmas, and other year-end holidays to focus on buying a home. Only those sellers who really need to sell their homes and can't wait until the new year will put their homes on the market at that time of year.
In the Puget Sound area, August is also a bit of an odd month too. Most buyers are taking a break from looking for homes and trying to enjoy the last few good weeks of summer. Also, families with kids will have focused on purchasing earlier in the year so they are settled into a new home before the new school year begins.
Do these numbers mean that you should ONLY list your home in the peak spring months? NO! You should just list your home based on the timeline that works best for your needs. At the same time, it's best to avoid listing over the holiday months of November and December when prices bottom out for the year.
So, to sum up regarding the best time of year to sell your home in Seattle, historically sale prices peak between March and May and then slowly drop off over the summer and winter months.2022-11-17T16:32:12-07:002022-11-18T13:54:52-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:8129The pros and cons of heat pumps and how they workHeat pumps are becoming a lot more popular as summers become warmer and places like suck-it-up-buddy Seattle that previously scoffed at needing air conditioning are now lining up to get AC installed. Instead of just installing a stand-alone air conditioner, a heat pump be a better alternative for you. Heat pumps can both heat and cool your home a lot more efficiently than old fossil fuel-burning systems.
As of July 2023, all new residential construction in Seattle will require that new homes use electric heating and heat pumps. No more natural gas heating for new construction homes. The same applies to new construction multi-family homes and commercial properties. This is in line with 90 other cities across the US adopting similar policies to either require or gently encourage people to move over to electric heating.
Heat pumps are energy-efficient devices that transfer thermal energy from one place to another. They should probably be called Heat Transfers instead of heat pumps!
<img src="https://assets.site-static.com/userfiles/562/image/Pros_and_Cons_of_Heat_Pumps_and_How_they_Work.jpg" width="800" height="534" alt="Pros and cons of heat pumps and how they work" style="margin: 10px; vertical-align: middle;" />
Early versions of heat pumps in the 1980s and 90s worked well in moderate climates but failed to deliver adequate heat in colder climates when temperatures dropped. They ended up with a bit of a reputation problem for not being much use in parts of the US with freezing winters. Today's models however can work in any and all climates, no matter the temperature.
What are heat pumps and how do they work?
The first thing to know is that heat pumps work as BOTH home heating and home cooling systems. They heat the inside of your home by pumping warm air from the outside and cool your home by moving warm air from the inside to the outside. They're dual-function heating/air conditioning systems. The unit sits on the outside of the home like an air-conditioning unit.
When you need to heat your home, the system extracts and pumps warm air from the outside to the inside of your home. The majority of heat pumps will be air-source or air-to-air pumps where the system exchanges heat with the outside air as opposed to systems that draw heat from the ground (geothermal heat pumps or ground source heat pumps).
Fossil fuel-based home heating systems use to using oil, natural gas, propane, electricity, or wood to generate heat. Heat pumps are different and don't generate heat per se. They just move heat from one location to another: from outside to inside (heating mode) or from inside to outside (cooling mode). They use a compressor/refrigerant coolant system to increase or reduce the temperature of the air being transferred.
Even when it's baking hot outside, heat pumps can pull cold air to cool your home, and even when there's snow on the ground in winter it can pull heat out of the air. Yes, it does seem to defy logic that when your home is cold AND it's cold outside, a heat pump can still extract heat from the outside. Heat is a relative term and heat always wants to move to a cooler area. Let Richard the plumber guy from This Old House explain how heat pumps work. It's just a simple matter of thermodynamics... with a compressor thrown in!<br /><br />MODERN HEAT PUMPS ARE DIFFERENT: THEY HAVE INVERTERS
Today, heat pump technology is much improved and the majority use inverter technology. Traditional ACs have only two speeds—completely on or completely off, however, inverters allow a system to run continuously at variable speeds, using only as much energy as it needs to maintain a comfortable temperature. It consumes less energy, is quieter, and feels more comfortable. You can choose from electric heat pumps and gas versions.
You don’t have to fiddle with the thermostat when you leave for the day since the system will regulate itself to maintain the temperature while using very little energy. You'll actually use more energy turning the system on and off compared to just letting it run continuously.
HEAT PUMP CONFIGURATIONS / COMBINATIONS.
If you are thinking of converting to a heat pump system for your home, the way the pump is added might depend on the existing heating system in your home.
You have an existing forced air system.
A forced air system is a combination of a furnace (gas, oil, or electric) where the fan in the furnace pushes the warm air throughout the home via the ductwork system. For these homes, a heat pump works in combination with the furnace. The pump produces the heat (or cooling) and the furnace is just used to pump the warm or cool air around the home.
What if my furnace is dead?
If you want to use the existing ductwork in your home then you will need a functioning furnace. You just need the fan to work to move air through the ductwork. But if the furnace is dead, then you will need to get a replacement furnace. A cheap electric furnace will suffice.
No furnace and ductwork? Go with a mini-split system.
For homes that, say, use electric baseboard heaters or a boiler and radiators, they won't have any ductwork system in place. For these homes, if you want to convert to a heat pump you will need to go with mini-split systems.
What are ductless mini-splits?
<img src="https://assets.site-static.com/userfiles/562/image/What_are_Ductless_Mini-Splits.jpg" width="400" height="600" alt="What are ductless mini splits" style="margin: 10px; float: left;" />Mini-splits are also known as ductless heat pumps. Just like heat pumps, mini-splits can both heat and cool your home. In simple terms, they are made up of the outside compressor unit (just like a heat pump) and an interior evaporator indoor unit that sits on an inside wall about 6 inches from the ceiling. The evaporator has a blower and an air filter.
The compressor is connected to the evaporator via thin conduit lines that run on the outside of the home which carries the circulating refrigerant, a drain line, and the electrical circuit. You can connect up to 8 evaporators to a single compressor unit. The power for the inside evaporator unit is supplied via the outside compressor component so you don't need to run a new electrical circuit for every room you add a heater to. However, you will need to add an outside electrical circuit to power the compressor.
Each room will have its own evaporator unit and you can run up to 6 of them from a single compressor. The big advantage of mini-splits is that you can do zonal heating where you set the ideal temperature for each individual room or not use them at all in certain rooms if you like.
Mini-splits are very common in new construction homes, particularly for Seattle townhomes. They are also great if you are adding an extension to your home and don't want to deal with ductwork taking up usable space. If you ditch your furnace and go all in on mini-splits, you can rip out all that low-hanging ductwork in your basement that you usually bump your head on.
DO PUMPS WORK WHEN IT'S FREEZING OUTSIDE?
Yes!
Older heat pumps were a lot less efficient at heating homes when the outside temperatures plummeted. A <a href="https://www.mncee.org/cold-climate-air-source-heat-pump-field-assessment">2017 study </a>showed that today's pumps can work in temperatures as low as -13F. In places like Fargo, ND, heat pumps will have modifications that make them more efficient in sub-zero conditions.
However, when it gets really cold, the efficiency of a pump will drop to that of a high-efficiency furnace and some homes will have a heat pump/furnace combination for those freezing cold days. This is referred to as a hybrid-heat or dual-heat system.
HOW MUCH DO HEAT PUMPS COST?
A heat pump will cost you between about $4,000 and $10,000 depending on the size of the capacity, the efficiency rating, and the brand.
A geothermal system requires a lot more labor to install and could set you back between $15,000 and $35,000.
If you are adding mini-splits, you will pay about $2,000 to $4,000 per room/area.
However, the final upfront cost for your particular home will depend on a number of factors including:
The size of your home and the area that needs to be covered.
If connecting into an existing furnace/ductwork, do either of those parts need repairs, modifications, and/or upgrades?
Are you better off going with mini-splits?
Additional costs will include needed electrical work, permits, potentially a new thermostat, the concrete pad the heat pump sits on, and labor costs associated with the installation.
It's important to get a complete quote that includes ALL o these costs before deciding to convert to a heat pump system.
Considering you could replace your existing heating and HVAC system with a new one for less money, yes, adding a heat pump is relatively expensive. However, long term, by converting to heat pumps, you are doing both your wallet and the environment a favor by making the change.
Are heat pumps noisy? It depends on who you ask.
Allegedly, most modern heat pumps have an outdoor unit noise level of around 60db which is comparable to normal conversa­tion.
However, people have different opinions as to whether they are quiet or not. Since they are usually run with the windows closed, you won't hear much while you're inside your home...but it might be annoying for your neighbor who doesn't have air conditioning and sleeps with their windows open.
Recently, I was sitting on a friend's deck in Seattle and they pointed out that their neighbor had installed a heat pump. On warm nights, my friends sleep with their windows open (no AC) and the neighbor's new heat pump is whirling away just 20 feet away and they describe it as noisy. Some homes in Seattle can be pretty close to each other.
The size of the unit will also make a difference. A single mini-split should be nice and quiet but a higher capacity compressor supporting 6 interior evaporator units will be noisier. Plus some models are just "noisier" than others.
DON'T WAIT UNTIL YOUR CURRENT HEATING SYSTEM FAILS BEFORE DECIDING ON YOUR NEXT ONE. PLAN AHEAD!
If your 25-year-old gas furnace fails in the middle of winter in Chicago you are probably going to replace it with something very similar and with the first company that's available. And now you've got another fossil fuel burning system in your home for another 15 to 25 years.
If you know your current system will need replacement in near future, then take some time NOW to think about your future HVAC system before you commit to more of the same. You may want to wait until after you've received several estimates from different contractors. Don't let anyone rush you into making a rushed decision.
PROS AND CONS OF HEAT PUMPS AND MINI-SPLITS.
As with everything, there are pros and cons to converting to heat pumps.
THE PROS OF HEAT PUMPS.
Greater energy efficiency.
As far as air source systems go, they're as much as three times as energy efficient as conventional furnace systems. This is because air source systems transfer heat from one place to another rather than generating it by burning fuel. However, in really cold temps, the efficiency will be less and probably comparable to a conventional furnace because the system is using more electricity to extract heat from the cold outside air.
Heating and air-conditioning in a single unit.
Heat pumps can be used to both heat and cool your home regardless of the outside temperature. The alternative is a separate furnace and an air conditioning unit. They are the most cost-effective and efficient heating and cooling combination system for your home.
Reduced carbon emissions
Heat pumps work on electricity to transfer heat from one location to another. They are not burning fossil fuels like oil and gas to generate heat and so have a lot smaller carbon footprint.
In Seattle in the Pacific NW, most electricity is generated through clean hydropower and the city of Seattle is currently encouraging homeowners to move away from home heating systems that rely on gas and oil. In different parts of the country, electricity might be generated by burning either gas or coal so the carbon footprint benefit might not be as pronounced.
Better-quality air
If you install mini-splits, the air doesn't need to pass through long lengths of ductwork that could be full of allergens dust, and pet dander. The unit is just using the air in the room and passes through an air filter. Obviously, if you go with a hybrid system (heat pump + furnace + ductwork) you will need to get the ductwork cleaned to get the same level of clean air.
Zone heating
With mini-splits you can set different temperatures in different rooms depending on each family member's individual preferences. With a central forced-air system, all rooms are heated or cooled to the same temperature (in theory at least).
Heat pumps are modular and adapatble.
As mentioned before, a heat pump can work together with your existing furnace and ductwork or you can just add a ductless mini-split to a single room if you only want both heating and AC for a particular area of your home. You can use the same outside compressor to run both mini-splits AND tie in with the furnace if needed.
Rebates and incentives:
Many areas have incentive and rebate plans to encourage homeowners to install pumps which can help offset some of the upfront installation costs.
HEAT PUMP CONS.
They can be expensive to install.
Heat pumps and mini-splits can have high upfront costs. If are considering converting to heat pumps, make sure to get a complete quote for ALL the work and extras that will be required, not just the cost of the unit. You might be tempted to save money by getting a new version of your old HVAC system, but longer term you would probably be better off upgrading to newer and more energy-efficient technology.
Relatively short lifespans.
Heat pumps can be expected to last for about 15 years which is less than a conventional furnace which is good for about 20 years. You can probably extend the life of a heat pump to 20+ years by doing regular maintenance.
They still have a bit of a reputation problem.
Those of you who installed the less reliable versions back in the 80s and 90s and weren't too impressed will probably need some convincing to try the modern version, especially if they live in a place with sub-zero winters.
To summarize The Pros and Cons of Heat Pumps and How They Work: modern heat pumps are increasing in popularity for a reason. Although they have some added upfront costs, they have a lot of advantages over conventional HVAC systems including energy efficiency, combined heat/AC, and zonal heating control.
2022-09-26T06:29:00-07:002023-12-07T21:03:15-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:7868Do Solar Panels Increase a Home's ValueSolar panels are good for the planet and will make you feel good that you are doing something to help <a href="https://www.myseattlehomesearch.com/blog/most-popular-green-home-upgrades-that-buyers-want/" title="Green energy upgrades that home buyers want">offset your carbon footprint with a green energy upgrade</a>. They definitely add value in terms of greater energy independence but do they add any RESALE VALUE to your home? Will a home with solar panels sell for more than a similar home that does not have them?
<img src="https://assets.site-static.com/userfiles/562/image/Do_solar_panels_add_value_to_a_home.jpg" width="800" height="520" alt="Do solar panels add value to a home?" style="margin: 10px auto; vertical-align: middle; display: block;" />
For this article, I asked real estate agents and professional appraisers in a different parts of the US for their opinions on the subject.
The answer as to whether solar panel installations increase the resale value of homes appears to depend on who you ask (solar companies versus Realtors and appraisers) and which part of the country the home is located (the sunny southwest versus the cloudier Pacific northwest including Seattle). And even where there is a stated impact on resale value, the return on investment is probably significantly less than the cost of the system.
But first, which US cities have the most solar panel installations?
By <a href="https://electrek.co/2019/10/29/us-metro-areas-most-solar-panels-homes/" title="Which US cities have the most solar panels" target="_blank">scanning satellite photos for solar panels on homes</a>, a Californian company, Cape Analytics, came up with a list of "the most solar places in America". The data is from 2019.
San Diego: 10,195
San Francisco: 6,031
Riverside: 5,863
San Jose: 5,415
Los Angeles: 3,981
Phoenix: 3,644
Tampa Bay: 2,591
Denver: 1,776
Miami: 1,352
New York City: 1,190
Philadelphia: 913
Boston: 849
Washington, DC: 769
Seattle: 657
Dallas: 202
St Louis: 140
Minneapolis: 117
Houston: 110
Chicago: 75
Atlanta: 64
Detroit: 59
Cities in California tale the top spots with Phoenix in 6th and Seattle in 14th place.
Cape Analytics suggest that income and wealth had a lot to do with the list which explains why famously cloudy, but high-income Seattle has a lot more homes with solar than sunny Atlanta.
What the solar panel industry says about the impact of solar power on a home's value.
Many websites for solar panel companies tout the benefits of installing solar panels, just like how we Realtors tout the benefits of buying a home.
Companies repeatedly refer to two studies that show the benefit of solar installations on home values.
A <a href="https://emp.lbl.gov/publications/analysis-effects-residential" title="Berkley study on solar panels and home values" target="_blank">Berkley study, from 2009</a>, based on home sales in California found that solar energy systems increased a home's value by 3-4%.
A National Bureau of Economic Research (NBER) study from 2011 found that solar installations increased the value of homes by about 3.5% and was based on home sales in San Diego and California.
Using both hedonics and a repeat sales index approach we find that solar panels are capitalized at roughly a 3.5% premium. This premium is larger in communities with a greater share of college graduates and of registered Prius hybrid vehicles.
And yes, I had to look up what hedonics means.
Limitations of these studies:
Both of these studies only looked at home sales in California which, in general, has a lot sunnier climate than many parts of the US.
Californians are probably more environmentally conscious and pro-green energy than the average American.
Homes with solar power are likely more common in California.
These results were obtained back in 2009 and 201 when the real estate market was completely different and the bubble had burst so these numbers may not automatically translate to today's market or the rest of the country.
What real estate agents say about solar panels and home values:
<img src="https://assets.site-static.com/userfiles/562/image/Are_solar_panels_worth_it.jpg" width="400" height="600" alt="Are solar panel worth it in Seattle?" style="margin: 10px; float: left;" />Personally, I listed a home in North Seattle about 5 years ago with a newer $25,000 solar panel installation sitting on the roof. The seller assumed that the installation would be a major selling point in the environmentally conscious Pacific Northwest. However, once the home hit the market, buyers showed little interest in the solar panels and were much more focused on the location of the home, local schools, and the amenities in the home.
That was 5 years ago and I have my own opinions on the subject but I checked with other agents in my office for their input. The general feedback was that when working with home buyers, few if any buyers express interest in wanting a home with solar energy. In addition, when they did view homes with solar, again the buyers didn't add much weight to the fact that the home had solar panels installed.
So what about Realtors who live in sunnier parts of the country?
<a href="https://pacificalocals.com/solar-panels-2/" title="Things to know when installing solar panels" target="_blank">Vicki Moore, a Realtor based in Pacifica in California</a><a href="https://pacificalocals.com/vicki-moore/" title="Pacifica CA Realtor Vicki Moore" target="_blank"> </a>(on the coast SW of San Francisco) says: "More people are talking about them and buying them. However, the number of homes that have come up for sale with solar is not significant. It's certainly a positive for marketing. Because of the sky-high home prices we've had for so long and the few houses that have them, it would be hard to separate out the dollars for solar".
<a href="https://www.phoenixrealestateandhomes.com/" title="Phoenix Realtor John Cunningham" target="_blank">John Cunningham, a real estate agent in hot and sunny </a>Phoenix says: Solar has really taken off in Phoenix. Drive down just about any street and it seems like 1 in 4 houses have it. That’s probably exaggerated, but not by much. Yes, it increases value. There’s an addendum created by a certified appraiser that plugs in numbers to arrange at a fair and accurate value based on how productive the panels are, age of the panels, size of the system, etc."
What do appraisers say about solar panels and home values?
When you get a mortgage to purchase a home the lender will require that you pay for an appraisal to determine the market value of the property, regardless of what you might have paid for it. Professional home appraisers have their finger on the pulse as to what factors affect a home's overall value so I asked appraisers in three different states for their opinions.
Note that appraisers can only take into account solar panel installations that are owned by the seller. They cannot include leased systems when evaluating a home's market value.
Seattle appraisers:
<a href="https://anglinappraisal1.appraiserxsites.com/" title="Joe Anglin appraiser" target="_blank">Joe Anglin of Anglin Appraisal</a>, when asked if solar panels add to a home's resale value answered..."at this stage probably not. The limited inventory of homes for sale and the location are way more important factors than items like down the pecking order in terms of impact on the sale value. It's too early in the game and there are not enough Seattle homes with solar so that buyers have the option of choosing between homes with and without them. Maybe down the road when a neighborhood has at 50% solar then it will be easier to determine a difference".
<a href="https://www.vantagepa.com/" title="Henry Kieneker Seattle appraiser" target="_blank">Seattle appraiser Henry Kieneker with Vantage Point Appraisals </a>says that currently for the Puget Sound area that solar panels do not have a measurable impact on market values. There are not enough homes with solar upgrades and therefore there is a lack of comparable homes when trying to determine a home's current market value. He also mentioned that in the Seattle area, systems only sell electricity back to the grid during the relatively short summer months.
A Phoenix Appraiser
In perpetually sunny Phoenix, AZ, <a href="https://www.josephsappraisalgroup.com/" title="Phoenix AZ appraiser Jay Joseph" target="_blank">Jay Joseph with Josephs Appraisal </a>Group says approximately one in eight homes have a solar system and that number is higher in newer developments. He says that panels can add between $5,000 and $10,000 to the value of a home which depends on a number of factors:
The kilowatt output of the system/number of panels.
The age of the system.
The neighborhood the home is located in.
Note that, even for the sunny SW, a solar setup is probably going to cost a lot more than $5,000 to $10,000, so even if it increases the value of a home, the return on investment is significantly below what the system costs.
A California Appraiser.
Not all of California is sunny all the time. Some parts can be reliably sunny while just 20 miles away it will lot cooler and shrouded in clouds or coastal fog like parts of San Mateo county where <a href="https://amberrice.com/" title="CA real estate appraiser Amber Rice " target="_blank">real estate appraiser Amber Rice</a> works. She said that solar panels are becoming more and more common and around two years ago she started taking panels into consideration when evaluating homes.
Reliably sunnier areas like San Carlos will have about 1 in 4 homes with solar whereas more cloudy Pacifica and Half Moon bay will have about 1 in 9 with solar. It's becoming a requirement now for new green homes to have solar systems installed plus they are increasingly common for larger, higher-end homes.
On average she said solar installations add about $15,000 to the value of a home for areas with a higher concentration of solar installations.
THE PROS AND CONS OF ADDING SOLAR PANELS TO YOUR HOME
As with most things in life, solar installations have their pros and cons.
The pros of solar panels.
You'll feel good that you are doing something that is reducing your dependence on a larger utility company using green energy.
The system will pay for itself over time through the money you save on electricity bills and credits for selling excess energy back to the grid. The number of years to break even will depend on the cost of installation versus how much electricity it generates. Cloudy Seattle will take longer compared to perpetually sunny Phoenix. Also, the higher your local electricity rates, the faster the system will pay you back.
Many states have financial incentives and rebates to encourage homeowners to install them.
They're low maintenance.
The Cons of solar panels:
Depending on the size of the system, solar installations are not cheap and upfront costs can be between about $15,000 and $30,000.
It takes time to recoup your initial investment and the payback period is dependent on a number of different factors.
Not all homes are suited for solar panels because of the size of their roofs and the amount of light the roof gets.
Some owners will lease a system rather than buying it outright. However, a home with leased solar panels can make it more complicated when it comes to selling the home. If the panels cannot be moved, or the lease cannot be transferred to the new owner, then the seller may have to pay the remaining balance on the lease to get out of the lease agreement. Also, if a home has a leased system, appraisers are not allowed to take the solar system into consideration when assessing the value of the home.
If you are going to install panels and your roof is older you will probably need to install a new roof as well. Otherwise, a few years down the road, you will have to remove the panels, the old roof, add a new roof and then add the solar panels back again.
Solar panels have a limited lifespan.
The impact on the resale value of a home is questionable.
<a href="https://frederickrealestateonline.com/are-solar-panels-worth-the-investment-in-my-maryland-home/" title="What you need to know about adding solar panels to your home" target="_blank">Panels can reduce the curb appeal of a home</a> for some potential buyers. Also, some buyers might think to themselves "how do I take care of that thing?!" Basically, buyers' lack of familiarity with these systems and/or not having a favorable opinion of green energy might make the home less appealing to some buyers.
So what does all of this mean for your home's resale value and solar panels?
Currently, solar panels are likely to add resale value to a home in cities where panels are more common and have a sunnier climate like San Diego and Phoenix.
Currently, cities like Seattle where they are less common probably do not benefit as much, if at all. However, that may change as more homes add solar systems and appraisers can start adding value to them.
In areas where appraisers say solar adds value to homes like in California, the increase in the resale value of about $15,000 is still relatively small compared to the sale price of those homes and is probably recoupling about half of the installation costs. But as mentioned previously, many home upgrades and remodels do not give a 100% return on investment when you sell your home.
In metropolitan areas where home prices and competition are high, the cost to buy a home can diminish the impact of whether the home has solar panels or not. While panels might be a "nice-to-have" other aspects like the price of the home, the location, and schools are probably a lot more important considerations for buyers.
As with home upgrades and remodels, few generate 100% or more <a href="https://www.myseattlehomesearch.com/blog/should-i-remodel-my-home-before-selling-10-reality-check-questions/" title="Return on investment for home remodels">return on the initial investment when selling the home</a> and solar is no exception.
Solar panels add VALUE to your home regardless in that they generate green energy and pay for themselves over time. Not everything home update has to add resale value and going green has plenty of other benefits. But if it does add some market value, then that's an added plus.2022-07-27T13:33:00-07:002022-11-24T07:13:40-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:774810 signs of a shift from a Sellers to a Buyers marketThere are a number of residential real estate market indicators that signal the shift from a seller's market to a buyer's market. Some of these include falling prices, more home sales contingent on inspections, listing price drops, and more buyers walking on the sale.
<img src="https://assets.site-static.com/userfiles/562/image/10_signs_of_a_shift_from_a_home_Seller_a_Buyer_market.jpg" width="800" height="480" alt="10 signs of a market shifting from seller to home buyer market" style="margin: 10px auto; vertical-align: middle; display: block;" />
If the real estate market transitions from a strong home seller's market to a more balanced one or further to a market that favors the home buyer, here are the top 10 signs to keep an eye on and track over time.
1. Falling sale prices.
This is the most obvious one and the one that home buyers look forward to the most and the one that sellers fear the most.
Note that home prices go through an annual seasonal cycle of peaking in the spring months between March and May for the Seattle area and then dropping down to a low in December or January. This peak-to-trough can vary between 5% and 10% so for a genuine price drop for a buyer's market, that drop needs to be greater than that range.
2. More price drops while listed for sale.
You will see more listing cutting their prices when they fail to get any offers at the initial listing price. Many sellers will be slow to transition out of a seller's market mindset and want to list their homes at previously hot market prices.
However, <a href="https://www.myseattlehomesearch.com/blog/how-much-is-my-home-worth-exactly-what-somebody-is-willing-to-pay-for-it/" title="The market decides how much your home is worth">the open market dictates what a home is worth</a>. Realistic sellers will usually drop the list price after 2 to 3 weeks of coming on the market if the home fails to sell in that timeframe.
3. Fewer sales going straight to pending with more contingent on inspections.
In a hot seller's market, many buyers will do a pre-inspection of the home before submitting an offer and are willing to buy the home as-is to make their offer more competitive. In those situations, the listing status of the home would be listed as PENDING if the seller accepted an offer like that.
However, in transitioning to a buyer's market, more buyers will not be willing to do that anymore and will make their offers contingent on doing an inspection of the home AFTER mutual acceptance. This allows buyers to retain their <a href="https://www.myseattlehomesearch.com/blog/how-home-buyers-can-get-out-of-purchase-agreements/" title="Breaking a contract to buy a home">number one way of getting out of the contract</a> by walking on the sale if they don't like what they see during the inspection or if they simply change their minds and get cold feet. It also allows buyers to negotiate for a price drop or repairs.
The status of these homes will be listed as PENDING INSPECTION (PI). At the peak of the hot Seattle seller's market, about 90% or more of sales went straight to Pending.
4. Fewer listings with offer review dates.
As a home market cools down and sellers become less confident of their home getting an early offer it's likely that fewer listings will set an <a href="https://www.myseattlehomesearch.com/blog/offer-review-date-what-you-need-to-know/" title="Homes with offer review dates">offer review date</a>. In a hot market, sellers are almost guaranteed to get offers in their first week and many sellers in Seattle set a specific date to look at submitted offers to increase buyer competition and leverage one offer against another to maximize the potential sale price.
In a buyer's market, you will see a shift to fewer homes with review dates and more listings stating Offers Reviewed Upon Receipt.
5. Homes taking longer to sell.
One of the <a href="https://www.maxrealestateexposure.com/buyers-sellers-market/" title="Difference between a home buyers and sellers market" target="_blank">differences between a seller's and a buyer's market</a> is that as the market slows, the best homes that are priced and marketed properly will still sell quickly. However, more and more homes will take longer to sell and the average for the market as a whole will start to increase.
6. Listing inventory should increase.
<img src="https://assets.site-static.com/userfiles/562/image/More_home_inspectuons_AFTER_mutual_acceptabce_not_BEFORE.jpg" width="400" height="600" alt="Not waiving the home inspection is a buyers market" style="margin: 10px; float: left;" />As homes take longer to sell and as new listings come on the market, the total number of homes for sale should start to grow. This will reduce competition between buyers for homes which prevents prices from being driven upward.
Some sellers may decide to wait and see what the market does but due to life changes like moving for a new job, there will always be plenty of owners who have to sell their homes regardless of prevailing market conditions.
Housing inventory is often measured in months of supply. For example, when there are 2 months of supply, that means that if no new homes came on the market, after 2 months there would be no homes for sale.
The general consensus is that a 6-months supply indicates a balanced sellers-buyers market. However, that doesn't work for all areas of the US, and for a city like Seattle a 3-month supply is probably more representative of a balanced market and anything over that is a buyer's market.
7. The ratio of the sale price to the original sale price will drop.
When the market is booming and homes are selling for well above the list price, the ratio of the final sale price to the original sale price will spike significantly above 100%. It's a measure of home much, on average, buyers are paying above the list price for homes and how competitive the market is.
This indicator will start dropping steeply as the market cools and likely start hovering around 100% or even a little below that baseline as homes sell for close to list price or below the original listing price.
Note that if a home drops its sale price by say 5% and then sells at the lower price the ratio of the sale price to the ORIGINAL list price is 95%, not 100%. If the market flips to a strong buyer's market you can expect the market average for this ratio to be below 100%. <a href="https://www.madisonmortgageguys.com/identify-overpriced-homes/" title="How to tell if a home is over-priced" target="_blank">Over-priced homes</a> in particular are likely to sit on the market and end up selling for less than the original asking price.
8. More offers with the full spectrum of contingencies.
When home buyers have more market leverage and there's less competition for homes, it makes it a lot easier for them to submit offers that provide them the most protection in the home purchase process.
In a hot market, buyers frequently have to consider <a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="Making offers in a competitive real estate market">waiving offer contingencies </a>that are intended to protect them from buying a lemon. In a cooling market a lot fewer buyers will be willing to waive the property inspection, the title review, be willing to cover a low appraisal either partially or completely, and definitely not release their earner money early to the sellers.
You know, the way home sales are theoretically supposed to work!
9. More "Back on the market listings" (buyers walking on the sale).
With more buyers getting offers accepted that are contingent on an inspection, they have the opportunity after conducting the inspection to either (1) negotiate repairs, (2) negotiate a price drop, or (3) just walk on the sale and get their earnest money back.
If the sellers are not willing to negotiate and the buyers walk, the status of the listing will be updated to Back On The Market indicating to all other buyers that the first buyer walked on the sale. That home might, or might not, come back on the market with a price drop.
10. More sales contingent on the sale of the buyer's own home.
A contingent offer is one where the seller accepts an offer that is contingent on the buyer closing on the sale of their own home before they can close on the seller's home. It's a mini sales chain.
These can be complicated transactions and during a hot market, you had about as much chance of seeing a contingent sale as spotting a Sasquatch on a unicycle.
There is zero incentive for a home seller in a hot market to accept one of these offers when they are almost guaranteed to get a less risky conventional offer. However, as the shifts to the buyer's side, more sellers whose homes might be sitting on the market will be open to contingent offers.
In summary regarding the 10 Signs of a Shift From a Seller's to a Buyer's Market:
When a real estate market starts moving from the sellers being in control to either a more balanced market or one where buyers are in the driver's seat, there are a number of different market indicators that will help demonstrate that transition. Stay tuned!2022-07-05T11:12:00-07:002022-07-05T17:28:04-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:7720Seattle house prices versus the number of bedrooms Unless you are downsizing to a smaller home, most buyers want to get as much space and as many bedrooms as their budget will allow for, particularly buyers with growing families.
So, how much are those extra bedrooms going to cost you when buying a <a href="https://www.myseattlehomesearch.com/seattle/houses-for-sale/" title="Seattle houses currently for sale">Seattle house</a>?
<img src="https://assets.site-static.com/userfiles/562/image/Seattle_house_prices_versus_number_of_bedrooms.jpg" width="800" height="550" alt="Seattle house prices based on number of bedrooms" style="margin: 10px auto; vertical-align: middle; display: block;" />
I crunched the data for Seattle single-family homes, specifically houses (excluding townhomes), and looked at the correlation between the sale price and the number of bedrooms. I focused on NW Seattle for the 3 month period between mid-April and mid-June in 2022. Note that this spanned a very strong seller's market before increasing interest rates started to cool the market.
The NW Seattle area covers <a href="https://www.myseattlehomesearch.com/wallingford/" title="House listings in Wallingford Seattle">Wallingford</a>, through Ballard up to the <a href="https://www.myseattlehomesearch.com/blue-ridge-north-beach/" title="House listings in North Beach">North Beach</a> and Broadview neighborhoods. These sale statistics look at houses with 2, 3, 4, and 5 or more bedrooms.
The table below shows the following data for Seattle house sales:
The median sale price in relation to the number of bedrooms.
The average size of homes per number of bedrooms.
The average price per square foot.
How much, on average, you would have to pay for an additional bedroom.
The number of houses with 2, 3, 4 and 5 of more bedrooms.
<img src="https://assets.site-static.com/userfiles/562/image/Number_of_bedrooms_versus_sale_price_Seattle_houses.png" width="821" height="141" alt="Number of bedrooms versus sale price for Seattle houses" style="margin: 10px auto; vertical-align: middle; display: block;" />
Graph showing how the sale price of NW Seattle houses varies with the number of bedrooms.
<img src="https://assets.site-static.com/userfiles/562/image/Graph_Seattle_sale_price_and_number_of_bedrooms.jpg" width="767" height="404" alt="Graph of Seattle house prices and number of bedrooms" style="margin: 10px auto; vertical-align: middle; display: block;" />
Graph showing how NW Seattle home sizes vary with the number of bedrooms.
<img src="https://assets.site-static.com/userfiles/562/image/Graph_Seattle_home_size_and_number_of_bedrooms.jpg" width="765" height="391" alt="Graph of Seattle house size versus number of bedrooms" style="margin: 10px auto; vertical-align: middle; display: block;" />
Some observations on the effect of the number of bedrooms on Seattle house prices.
Not unexpectedly, houses with more bedrooms sell for more, with median sale prices ranging from $900,000 for 2-bedroom homes up to $1,565,000 for houses with 5 or more bedrooms.
Likewise, the average size of the homes increases from 1,321sf for 2-bedroom homes up to 2,930sf for houses with 5 or more bedrooms.
Homes with just 2 bedrooms were the more expensive in terms of price per square foot at $681/sf whereas homes with 3 or more bedrooms ranged between $534 and $583/sf.
On average, moving up to a home with an additional bedroom added a significant amount to the price tag.
Going from a 2 to a 3-bedroom home costs $212,000 more.
Going from a 3 to a 4-bedroom home costs $290,000 more.
Going from a 4 to a 5 or more bedroom house increased the price by $162,000.
Not shown in the data table, but 3-bedroom house sales were the most common making up 45% of sales, followed by 4-bedroom at 25%, 2-bedroom at 18% while houses with 5 or more bedrooms made up just 12% of the market.
Before you look at the data and say to yourself...I have a 4-bedroom house so my home should be worth around $1.4M, remember that these are median prices and some homes will sell well above that price and some well below. There are a lot of other factors that determine the sale price of a home beside the number of bedrooms plus there is a lot of overlap in sale prices for each category. For example, one of the 2-bedroom homes sold for $1,650,000!
Will adding an extra bedroom increase the value of my home?
Based on the data above, on average, homes with an extra bedroom sell for more. So, does that mean that if you add another bedroom to your home, the value will automatically jump up to the next price level?
The short answer is that not all bedrooms are created equally!
Here are some factors that can affect the value of adding a new bedroom:
Is it a legit, conforming bedroom? For tax and appraisal purposes to be able to state that a home has, say 4 bedrooms, then all 4 of them must have (1) a built-in closet and (2) egress, i.e. a window escape route that is large enough to exit the home in the event of a fire.
Note that a lot of homes in Seattle have finished basements with bedrooms and many of them are non-conforming because they don't have adequate egress. To fully comply with egress codes requires increasing the size of the basement bedroom window plus <a href="https://www.squareone.ca/resource-centres/getting-to-know-your-home/window-wells" title="What is a window well" target="_blank">adding an exterior window well.</a>
The size of the bedroom. Do you need a shoe-horn to squeeze a bed into the room or is it a new primary bedroom with an ensuite bathroom? If you do a major model including an extension you need to be aware of the potential<a href="https://www.myseattlehomesearch.com/blog/should-i-remodel-my-home-before-selling-10-reality-check-questions/" title="return on investment for a home remodel"> return on your investment</a>.
Are you adding the bedroom to the existing space in the home or is it part of a new extension to the home?
The location of the bedroom. For example, are you adding the bedroom to a previously unfinished basement versus the main floor or upstairs. Appraisers will give less weight to basement bedrooms.
The number of bedrooms in relation to the size of the home. If you are trying to wedge in a 4th bedroom in a 1,300sf home then those bedrooms are all probably going to be on the small side and you might be better off with 3 decent-sized bedrooms instead?
For homes that are on septic systems, you need to be aware of the number of bedrooms that the system is approved for. Let's take the example of a home that when originally built where the septic was approved for a 3-bedroom home. If you add a 4th bedroom, when it comes time to sell, you could only advertise it as a 3-bedroom house with a bonus room, not as a 4-bedroom home. To sell as a 4-bedroom house, you would have to upgrade the septic system which might cost more than adding that bedroom!
In summary, regarding how the number of bedrooms affects the sale price of Seattle houses, on average, a house with more bedrooms will cost you significantly more but not all bedrooms are equal. 2022-06-22T14:16:00-07:002022-06-22T15:40:55-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:7602Pros and Cons of Buying a Lake House<img src="https://assets.site-static.com/userfiles/562/image/Pros_and_Cons_of_Buying_a_Lake_House_in_Seattle_3.jpg" width="400" height="600" alt="Pros and Cons of Buying a Lake House in Seattle" title="Pros and Cons of Buying a Lake House in Seattle" style="margin: 11px; float: right;" />
Lakefront living in the Seattle area is a dream come true for many. To make sure you find the ideal property for you, take the time to consider the pros and cons of this type of home. We are ready to walk with you every step of the way to find your dream lake house.
There are several lakes around Seattle such as Lake Union, Green Lake and Lake Washington on the Eastside.
Benefits of Owning a Lake House
1. It is a reliably wise investment
Buying lakefront property has been a <a href="https://www.myseattlehomesearch.com/blog/your-home-might-be-less-of-an-asset-than-youre-led-to-believe/">good investment</a> for decades, and will continue to be one based on the inherently limited number of them. There are only so many lake houses on any given lake, meaning owning one puts you in an advantageous position should you decide to sell.
Whether you plan to keep the lake house in the family for generations, or simply want to invest in a lakefront property for a time, buying a house on the lake is an investment you can count on.
<img src="https://assets.site-static.com/userfiles/562/image/Pros_and_Cons_of_Buying_a_Lake_House_in_Seattle.jpg" width="900" height="600" alt="Pros and Cons of Buying a Lake House in Seattle" title="Pros and Cons of Buying a Lake House in Seattle" style="margin: 11px;" />
2. Home will feel like a vacation
If you purchase a lake house to relocate to as your primary residence, you will benefit from living in a <a href="https://www.westocrealestate.com/blog/guide-to-financing-a-vacation-rental/" target="_blank">vacation-like environment</a> all the time. The relaxation and quality of life it brings will be worth every bit of effort.
Many owners of lake houses find that they love entertaining and staying active even more than before because of the beautiful location. Enjoy all the benefits of vacation during your everyday life as a lake house owner.
3. Your hobbies are right outside your door
When you live on the lake, enjoying your favorite hobbies is easy. Fishing, bird watching, water sports, and swimming are all available just steps outside your backdoor.
Considerations when Owning a Lake House
We won't call them drawbacks or cons because we believe owning a lake house is an excellent choice, but there are some things to keep in mind and be both financially and mentally prepared to manage.
<img src="https://assets.site-static.com/userfiles/562/image/Pros_and_Cons_of_Buying_a_Lake_House_in_Seattle_2.jpg" width="900" height="600" alt="Pros and Cons of Buying a Lake House in Seattle" title="Pros and Cons of Buying a Lake House in Seattle" style="margin: 11px;" />
1. Lake houses require extra care
<a href="https://www.housesincalgary.ca/lake-communities/" target="_blank">Lake houses</a> are subjected to the elements in a way many other homes are not. This means wear-and-tear that will require additional maintenance and potential repair over the life of the home. Humidity from the water and sand, dirt, and moisture tracked in from the lake are all likely to degrade some of the building material over time.
Be prepared to pay careful attention to the condition of your roof, decking material, windows, floors, and more to keep your lake house in good condition.
2. Insurance costs may be higher than your current home
Due to the increased risk of the floor, and other potential natural disasters, <a href="https://www.knieperteam.com/blog/what-is-hoa-insurance/" target="_blank">homeowners insurance</a> for a lakefront home tends to be higher than other properties. To make a well-informed decision, get a few insurance quotes for lake houses as you are looking at them to get an idea of the cost you can anticipate.
3. You may have boats of strangers in your backyard
Living in a lake house means both more privacy and potentially less privacy. How so? Well, having a lake in your backyard means never having to worry about neighbors living behind you. Your view of the lake, and it's peaceful ambiance, are guaranteed to stay, unlike a view of a field from another property. However, you may find that people end up in your backyard from time to time, not realizing they are on private property. This can be easily remedied by posting signs or limiting access to your property, but it is something to keep in mind.
To begin the search for your lake house, <a href="https://www.myseattlehomesearch.com/contact/">contact our office</a> any time. I would love to offer more personal tips to buying a lake home in the Seattle area.
Search Seattle Area Waterfront Homes2022-05-30T12:27:00-07:002022-05-30T12:48:10-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:7426How to Properly Clean Your New Home Before Move-in<img src="https://assets.site-static.com/userfiles/562/image/How_to_Properly_Clean_Your_New_Home_Before_Move-in.jpg" width="1000" height="1500" alt="How to Properly Clean Your New Home Before Move-in" title="How to Properly Clean Your New Home Before Move-in" style="margin: 11px;" />
Moving into a new home can be exciting, but if you have allergies, pets, or other special considerations, you will want to make sure your home is spotless before move-in. Sellers usually clean the house before showing, but you may want to go the extra mile by improving air quality and doing your own deep clean. Statistics <a href="https://www.healthline.com/health/allergies/statistics" target="_blank">show</a> that over half of those surveyed in the U.S. had a reaction to one or more allergens. Cleaning air filters, clearing mold, and removing harsh chemicals can help reduce these reactions. Here are some tips on cleaning your new home before you move in.
Improve the Air Quality
Most people are familiar with the air purifiers you can buy at big box stores or online, but installing a whole-house system is one of the most effective solutions to poor <a href="https://www.health.harvard.edu/staying-healthy/easy-ways-you-can-improve-indoor-air-quality" target="_blank">air quality</a>. Not only will a system like this make it easier for you and your family to breathe, but it will add tremendous value to your home should you decide to sell it later. Older homes often have more allergens than new ones, so this can be especially helpful if you've chosen to buy one. Vacuuming is another way to help by sucking up any <a href="https://www.metroeastallergist.com/the-5-most-common-allergens/" target="_blank">allergens</a>, pet hair, and dust that is sitting on the floor or embedded in the carpet.
Related: <a href="https://www.myseattlehomesearch.com/blog/how-realistic-is-buying-and-selling-a-home-at-the-same-time/">How Realistic is Buying and Selling at the Same Time?</a>
Wash Away Harsh Chemicals
You never know what previous owners used to clean the home, and you don't want to breathe in toxic bleach every time you take a shower. Fortunately, there are many green brands that make healthier cleaning options. For the most control, try making your own household cleaners with recipes on the internet. Many of these use very common items like white vinegar and baking soda. If you love a fresh scent when cleaning, you can add essential oils to your liking.
Wear a Mask When Cleaning
When cleaning your new home, it’s always a good idea to protect yourself by wearing a mask, especially when cleaning a basement, attic, or storage area. These areas often contain large amounts of dust, debris, and allergens that you <a href="https://www.zenbusiness.com/blog/why-you-need-to-wear-a-face-mask-while-cleaning/" target="_blank">won’t want to inhale</a>.
Keep Pets in Mind
Pets can have reactions to some plants, pest spray, and other chemicals, so it's vital to assess the house's safety for pets before moving them in. If you want to <a href="https://www.petful.com/misc/dog-proof-your-home/" target="_blank">pet-proof</a> your home office, you can cover electrical outlets and make sure to avoid using cleaners that will irritate your dog or cat. Here is a <a href="https://news.yahoo.com/pet-safe-household-cleaning-products-155547941.html?guccounter=1&guce_referrer=aHR0cHM6Ly9kdWNrZHVja2dvLmNvbS8&guce_referrer_sig=AQAAALNiFc_msRTLjoyToIXX7JLlXT5pLh9FzI4E0sEw36mJEinG8DNIAU1qMhVbmnw2qbXXGxGMmC6i-D-GhgoZtQLOXErsdt8DvMu_4CXcYbtOWz07T7UhDF0QMa_XlhxkElsEx3qUKpnX8ryVfkBDXwYebCfGwoSjmx2d8cfz6363">list</a> of some ingredients that can be harmful.
Do a Deep Clean
If you really want to make sure the house is in top shape before moving in, you'll want to clean from the ceiling to the floor. Start with fans, vents, corners, and lights, then move downward. Clean the walls delicately with a soft sponge and water or a diluted cleaning solution. Then, scrub the baseboards before sweeping and mopping the floors.
For bathrooms, make sure you clean the grout, toilets, sinks, and tubs before use. You don't have to use bleach to kill mildew and mold. You can put baking soda on 1-inch <a href="https://costacleaning.org/tips-on-how-to-clean-grout/" target="_blank">sponge cubes</a>, put them over the moldy areas, spray them with vinegar and water and wait for them to do their magic.
The tips above can help you get your house ready for move-in and keep you and your family safe. If you have allergies, remember to check on getting rid of any specific allergens that could be irritating to you or your pets. It's much easier to do a deep clean when the house is still empty than after you've moved in all of your belongings.
More: <a href="https://www.myseattlehomesearch.com/blog/the-3-critical-ps-when-selling-your-home-everything-else-is-just-cherries-on-top/">The 3 critical P's when selling your home. Everything else is just cherries on top</a>
Ready to purchase a Seattle-area home? Trust <a href="https://www.myseattlehomesearch.com/about/">Conor Mac Homes</a> to find you the perfect accommodations! Call (206) 349-8477 to schedule an appointment.
Need to Move? Browse Some of the Top Seattle Neighborhoods Below2022-05-19T11:23:00-07:002022-05-19T11:36:20-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:7366Should I Remodel My Home Before Selling? 10 Reality Check QuestionsMany sellers will ask if they should remodel their home before selling or just sell as-is. If the home is renovated then it will sell for more money. Right?
While a remodel should increase the sales price when <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="How to sell a home">selling your home</a>, the question is whether you will get more money back than you put into the remodel? Will your net sale price and return on your investment be any better compared to just selling it as-is or doing needed repairs?
<img src="https://assets.site-static.com/userfiles/562/image/Should_I_remodel_my_home_before_selling.jpg" width="800" height="400" alt="Should I remodel my home before selling?" style="margin: 10px auto; vertical-align: middle; display: block;" />
This article lists the questions every home seller should consider before jumping on the phone to hire that remodel contractor. Also looks at data for the potential ROI for different interior and exterior renovations.
But first, what's the difference between remodeled, renovated, updated, and selling as-is?
Realtors are infamous for fluffy euphemisms when describing the condition of their listings. Let's take the kitchen as an example to demonstrate what certain terms actually mean,
Studs-out remodel: this is where you literally stip everything out including the walls, leaving exposed wall studs, remove the old wiring and plumbing, throw out all the old cabinets, and rip up the floors. And then basically replace everything. This is more of the domain of property investors and flippers and fixer-upper homes.
Remodel or Renovate: this is a step down from a studs-out remodel, but in the case of a kitchen, all the existing cupboards, appliances, lighting fixtures, and floors would end up in a dumpster and be replaced with all new finishes.
Updated: this one gets used a lot by real estate agents and can mean anything from just changing out the countertop or adding new cupboard handles and a light fixture.
"Recently updated" and/or "newer": where the time period can mean anything from 10 years (newer roof) or 3 years (recently painted). When a home hasn't had any recent major updates, listings agents will be frantically grasping at stuff that they can highlight.
Selling As-Is: when a seller says they are <a href="https://www.maxrealestateexposure.com/selling-home-as-is/" title="Advice on selling a home as-is" target="_blank">selling a home as-is</a>, this means that they want to sell their home in its current condition without doing any repairs and that they are not willing to negotiate on doing repairs after they accept an offer on the home. The reality might be otherwise and just because the seller specifies AS-IS on the listing, will not prevent a buyer from negotiating for repairs or a price reduction. Some sellers will get quotes from contractors before listing so prospective buyers have an idea of how much the repairs will cost.
OK, it's time to ask yourself some questions and determine whether you should renovate your home before selling it.
Do you have the time to do a remodel before listing your home?
If you want to list your home for the peak spring market months and it's already January, realistically are you going to be able to get a few contractor quotes, pick one, get them scheduled and get the work completed by March?
Even if you could lock down a contractor, whatever timeline they quote you, just add 50% to that.
Do you have the money to pay for the renovation?
A big kitchen renovation or bathroom remodel is not cheap and getting more expensive with supply chain issues. Most owners will underestimate how much a real remodel will cost and contractors are not willing to get paid after the home sells. So, do you have the cash in hand to cover the costs or would you need to take out a home equity line of credit, HELOC, or another<a href="https://springshomes.com/blog/8-alternatives-to-home-improvement-loans-you-need-to-know/" title="Alternative home improvement loans" target="_blank"> home improvement loan</a>?
Also, more than likely, your final bill is going to be higher than the quote you get on day one due to unforeseen issues once the work starts or you change your mind as to what finishes you want.
Can you actually find a (competent) contractor?
In a booming economy, it can really difficult to find a contractor, especially if you need one in a hurry. It's currently gold-rush time for contractors and the good ones are booked out for months already. Also, many contractors just want the bigger juicer jobs and might turn their noses up at a $50,000 job.
The risk is going with a cheaper, "I can start next week" company and end up paying in more ways than one. Choose carefully before you <a href="https://www.myseattlehomesearch.com/blog/why-hiring-a-licensed-bonded-and-insured-contractor-is-important/" title="How to hire a good contractor">hire a contractor.</a>
If you are hoping to do the work yourself with the help of your best friend "just buy me a few beers and we're good" Joe, will the quality of the work be good enough to enhance the appeal and value of the home? Buyers are really good at picking up on badly done and <a href="https://www.myseattlehomesearch.com/blog/what-to-know-about-permits-when-buying-a-home-in-seattle-including-a-home-inspectors-perspective/" title="Homes with unpermitted remodels">unpermitted seller DIY projects</a>.
Do you inhale HGTV?
<img src="https://assets.site-static.com/userfiles/562/image/Should_you_remodel_or_just_sell_your_home_as-is.jpg" width="400" height="600" alt="Renovate or sell your home as is?" style="margin: 10px; float: left;" />Yes, it can be entertaining, and seeing people weeping looking at their freshly remodeled homes is, umm, just fantastic. However, these shows give the impression that remodeling projects are fun, can be done in 30 minutes, and are relatively affordable. The reality, however, is a long way from that.
Likewise, when you see homes in your area that were purchased by investors, remodeled, and flipped in 4 months, and generating big profits, the temptation is to think you can do the same.
The big difference is that the professional property flipper can do those remodels for about half the cost you will pay a contractor plus complete the work in half the time. They have dedicated teams of plumbers, electricians, and carpenters that they can call on plus pay less for materials than you will.
Their focus is to get the work done ASAP so they can list the home and extract their profit. When you hire a contractor they will probably be juggling a few different projects at the same time.
Does your home need critical repairs?
While a brand new deck will appeal to buyers, there's no point in adding one if your roof is leaking and needs to be replaced. Updates and remodels will help sell your home, but critical repairs will scupper your home sale.
Does your home have any of the following issues:
An old roof that needs replacing.
An <a href="https://www.myseattlehomesearch.com/blog/most-common-causes-of-mold-in-attics-of-nw-homes/" title="Causes of mold in attics">attic with mold and moisture issues </a>or a pest infestation.
A crawlspace with standing water and a pest infestation
Foundation issues suck as significant cracks and settling.
A sewer line with blockage issues or an old failing septic system
Siding that needs replacing
Water getting into the basement.
A leaking water heater or a furnace on its last legs.
If you answered yes to any of those, you would be better off fixing them before listing rather than adding a new kitchen. It's the lipstick on a pig scenario! Fixing a damp basement is not as sexy as a new bathroom, but fixing that basement might be the difference in determining whether your home sells or not. It's a good idea to proactively avoid the <a href="https://www.rochesterrealestateblog.com/biggest-home-inspection-mistakes-to-avoid/" title="Repairs that kill home sales" target="_blank">most common home inspection issues </a>when selling your home.
How does your home compare to recent sales in your neighborhood?
If most of the homes in your neighborhood have similar kitchens and bathrooms, pumping a bunch of money and time into renovating your home is probably not worth it.
For example, in the <a href="https://www.myseattlehomesearch.com/olympic-manor/" title="Homes in Olympic Manor">Olympic Manor area in Seattle</a> which is a post-WWII time capsule, loads of homes still have really old kitchens and pink tile bathrooms and that's how they're listed for sale. And they still sell like hot cakes for well over $1M.
What if most of the homes in your neighborhood are a lot more updated than yours, then you have to decide whether to do some remodeling or just list it as-is and price it accordingly.
Don't you want to enjoy that remodel a little yourself before selling?
<a href="https://tenor.com/view/sweet-cindys-kitchen-having-fun-chef-drumming-gif-16791114">Sweet Cindys Kitchen Having Fun GIF</a>from <a href="https://tenor.com/search/sweet+cindys+kitchen-gifs">Sweet Cindys Kitchen GIFs</a>
If you do remodel that ensuite bathroom with heated floors and a jetted tub or add that basement family room right before you go on the market, then the only one to get to enjoy them will be the new owner.
Personally, I think, if you do decide to do a renovation, it is a lot better to do it a few years in advance of selling, say 5 years. That way you can allow yourself plenty of time to decide on a design, screen contractors, and get the work completed... and then you can have a few years of enjoying your home before selling.
That remodel will still be fresh after 5 years and attract buyers' eyes. Unless of course, you went for some crazy short-lived trend you saw on Houzz after a could of glasses of wine.
What's the real estate market doing?
In a hot market, almost all homes will sell and that includes newly updated homes, the dated ones, and yes, even homes that have a list of needed repairs that the new owner will have to pay to fix post-closing.
In a buyer's market where homes are selling more slowly and there are more ones for sale than buyers, then the condition of the home can have a big impact on whether it sells or not. If your home has expensive needed repairs like a pest-infested crawlspace with standing water, it is likely to just sit on the market.
In a slower housing market, it is definitely a wise decision to take care of needed repairs before listing your home for sale. If you don't be prepared not to sell or just get low ball offers all day.
As to whether you should invest thousands of dollars to finish your basement to add more living space in a slow market is debatable. If it's a good renovation, it will make your home more appealing to potential buyers but the question again comes back to what your potential ROI will be, particularly in a slow market.
And speaking of which...
The most important question: what's your potential return on investment?
If you decide to get out your checkbook and go for a significant remodel like adding a new kitchen or renovating a bathroom, then you need to be aware of the potential return on the money you pump into your home. What's your ROI?
The basic question becomes which of these two scenarios gives you the greater net profit at closing:
(1) Sell your home as-is or do needed repairs?
or
(2) Remodel (money) + Time + Stress?
Let's look at the latest numbers from the National Association of Realtors (NAR) 2022 Remodeling Impact Report. You can download a PDF of the report by <a href="https://www.nar.realtor/research-and-statistics/research-reports/remodeling-impact" title="NAR Remodeling Impact Report">visiting the NAR site</a>.
Here are the results for interior remodeling projects:
<img src="https://assets.site-static.com/userfiles/562/image/ROI_for_interior_projects.png" width="800" height="483" alt="2022 data return on investment for interior remodels" style="margin: 10px auto; vertical-align: middle; display: block;" />
The only 2 interior projects that gave a net positive return on investment were refinishing existing wood floors or adding new floors.
However, for the most common remodels, kitchen and bathroom renovations failed to recoup a lot of the money poured into them.
A complete kitchen remodel has a 75% ROI.
A bathroom renovation has a 71% ROI
Adding a new bathroom has a 63% ROI.
All of these are expensive projects and definitely enhance the appeal of your home (if done properly), but based on this national study, none of them are recovering anywhere near all their costs.
And here are the results for the ROI for exterior renovations:
<img src="https://assets.site-static.com/userfiles/562/image/ROI_for_exterior_projects.png" width="800" height="458" alt="Return on investment data for exterior renovations" style="margin: 10px auto; vertical-align: middle; display: block;" />
For exterior projects, both adding a new roof and a new garage door recouped all the costs.
However, other projects had a lot lower return on investments:
New vinyl or wood windows have a 63% ROI
Fiber cement siding has a 86% ROI
A new steel front door has a 63% ROI.
For both interior and interior projects, the return on investment will vary for different parts of the country and based on the local real estate market conditions.
So, what should I focus on?
The main objective when selling your home is trying to get the most money possible and just as importantly, making sure it actually sells in the first place.
For homes that have needed repairs, particularly critical repairs, the best course of action is to fix those items before going on the market. Known issues such as old leaking roofs, infested crawl spaces, dying furnaces, and damp basements are all worth addressing. If you don't fix them you will be required to disclose those issues to buyers.
Although you may not get every penny back doing these repairs, not doing them can potentially prevent your home from selling or just ending up sitting on the market followed by price drops. Both adding a new roof (100%) and new siding (86%) have really good ROI and massively improve the structural integrity, and saleability of your home.
Also, focus on small projects that can have a subliminal impact on how buyers perceive your home like improving your curb appeal, a fresh coat of paint, refinishing the hardwood floors, or a few new light fixtures.
If you do want to remodel, there's no need to splash out on the latest and greatest, most expensive finishes. Mid-range appliances will do just fine!
And if you are determined to do major renovations, then do it a few years before selling so you get to enjoy it too before passing it to the new owner. That studs out remodel kitchen will still be new in five years.
To summarize regarding, Should I remodel my home before selling, do your homework, crunch the numbers, and weigh that against the money, time, and stress required to get the work completed. What is the return on your investment? 2022-05-09T14:22:00-07:002023-03-07T08:49:06-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:7353Questions to Ask When Selling a Mortgaged HouseThe majority of people buy their home using a mortgage and eventually, those owners want to know about selling a mortgaged house.
If you are selling a mortgaged house you will need to take into consideration the type of loan you have, how much equity you have in the home, and if you have any additional loans like a home equity line of credit (HELOC). If you owe more than your mortgage (negative equity), you might not be able to sell your property.
<img src="https://assets.site-static.com/userfiles/562/image/Selling_a_mortgaged_house.jpg" width="800" height="500" alt="Selling a mortgaged house" style="margin: 10px auto; vertical-align: middle; display: block;" />
This article will answer many of the questions homeowners have about <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="Steps to selling a home">selling a home</a> that has a mortgage or additional active loans in place.
Can You Sell A Home With A Mortgage?
The short answer is, yes, absolutely! You are completely free to sell your home before paying off your mortgage. Most home buyers get a 30-year mortgage and very few of those buyers stay in the home for a full thirty years. Therefore it is really common for homes listed for sale to have an active mortgage in place.
When you sell your home the outstanding balance on your mortgage will be paid off from the proceeds of the sale and the remainder is your equity in the property that you will receive in cash after closing.
However, whether you can sell your home will depend on whether you have any equity in your home.
What is equity in your home?
Equity is your financial stake in the property you own. It's the dollar amount you earn on your home when you sell it, after paying off your mortgage and deducting other selling-related expenses.
Say your home is worth $800,000 and the current balance on your mortgage is $400,000 then you have approximately $400,000 in equity in your home.
However, when you decide to sell your home and list it on the market, there will be <a href="https://www.myseattlehomesearch.com/blog/what-are-typical-closing-costs-and-expenses-when-selling-a-seattle-home/" title="Costs when selling your home">additional fees and closing costs</a> that will need to be subtracted from the proceeds of the sale at closing. These include title and exfrow fees, Realtor commissions, and potentially capital gains tax.
How much Do you have left on your mortgage?
If you are thinking of selling your home then it is a good idea to find out how much is remaining on your mortgage. You will need to take this into consideration when determining how much equity you have in your home and how much you will walk away with a closing. Payoff refers to the total amount of money that must be paid off in order for a mortgage to become fully satisfied.
Contact your mortgage lender and ask them for a copy of a payoff quote well in advance of listing your home. And don't forget any secondary loans like a HELOC as well. I'm often surprised when I meet sellers and they fail to mention or remember that besides their primary home loan, they also have a second mortgage on their property. The second loan will be listed on the title report for their home. Both of these loans need to be taken into consideration when determining the payoff amount.
Besides your outstanding mortgage balance, your payoff quote will show the interest that’ll be paid off between the date the payoff estimate was created and the expiration of the estimated payoff date. If you still have a mortgage insurance policy associated with the loan, then you'll need to pay that off too.
Do you have additional loans and liens to pay off?
Besides your primary mortgage, you also need to remember that you may have an active home equity line of credit (HELOC) when you tapped the equity to remodel the bathroom and kitchen. Also potentially there might be a lien on your property. For example, you failed to pay the contractor who put that new roof on your home and they put a lien on your property to make sure they get paid. All of those would have to be paid off when you sell your home.
What are my Net Proceeds? Show me the money!
<img src="https://assets.site-static.com/userfiles/562/image/Net_proceeds_when_selling_a_home.jpg" width="400" height="600" alt="Net proceeds when selling a mortgaged house" style="margin: 10px; float: left;" />When selling a mortgaged home, every owner wants to know how much money they will walk away with at closing after paying off their mortgage.
Home sellers should ask their listing agent to estimate their net proceeds from the sale. Net proceeds are basically the sale price of the home - (loans + selling costs and fees).
Before listing your home, right at the very start of the process, you want to do a net proceeds calculation to see if you will actually walk away with a net profit.
The initial net proceeds calculation is just an estimation and the actual amount you walk away with at closing will depend on the final sale price of your home. When you get closer to closing day, escrow will give you an exact number.
What happens to your mortgage when you sell your home?
Assuming you have sufficient equity in your home, and when you sell it the proceeds from the sale want to pay off your mortgage. Any remaining funds would go to you. If you have a second loan like a HELOC, then the primary mortgage gets paid off first, and then the secondary mortgage.
Basically, after closing and after those loans have been paid off from the proceeds of the sale then those mortgages don't exist anymore and you are free to move on with your life. It's as simple as that and you have no further obligation to those lenders.
What happens to my equity when I sell my house?
As mentioned earlier, the equity in your home is what you get for the home for selling it minus all the expenses including paying off your mortgage. When you close on the sale and after all the various expenses have been paid off then the remaining funds will be wired to your bank account within a day or two of closing.
The closing agent will ensure that those funds go to you directly to you and you can sleep soundly knowing that nobody's going to run off with your money.
Does my mortgage have an early pre-payment penalty?
One thing to be aware of, particularly if you bought a home fairly recently, is to check if your loan has a prepayment penalty. Some loans will have a condition that if you sell the home within a few years of closing that you are then liable to pay a penalty to the lender.
The penalty fee is a way for lenders to encourage borrowers to repay their loans over a longer period of time, which means they can charge them more interest. The penalty will apply if the owner refinances the loan or sells the home.
Both the way the penalty fee is applied and how much that fee is will depend on the loan and the individual lender. The fee might be a certain number of months of interest payments, a percentage of the remaining balance, or maybe a preset specific dollar amount.
Can I sell my home if I have Negative Equity?
If you have negative equity, you owe more on your home than its worth. This is sometimes called being underwater on your home.
The real estate market may have dropped and now your home is worth less than it used to be or you extracted too much equity via lines of credit and now your total loans are more than the market value of your property.
If you are in this situation, you have three options:
Wait to sell until you have positive net equity
Bring cash to closing to cover the gap between the mortgage loan and your current equity.
Sell your home via a short sale. The latter can be a complicated process, you will need to get permission from your lender plus it will have a major negative impact on your credit rating.
Can you sell a home with a Reverse Mortgage?
A reverse mortgage allows homeowners to convert their home’s equity into a lien, allowing them to receive monthly payments.
But yes, homeowners with reverse mortgages are completely free to sell their homes. You still own the home, the title to the home, and can do with it as you please. However, if you do decide to sell then you need to make sure sufficient equity to cover the balance of the loan.
What if there's a special assessment for my home?
Although not a loan per se, if your Home Owners Association (HOA) has a <a href="https://www.myseattlehomesearch.com/blog/what-are-hoa-special-assessments/" title="Special assessments and selling your home">current or upcoming special assessment</a> for your home, then that will probably need to be paid off at closing unless you can find a buyer willing to inherit it.
These assessments can be very expensive and potentially either eat up a large portion of any equity you have in a home or worse, lead to net negative equity, and need to cover the difference in cash at closing.
Do I have to notify my lender that I am selling the home?
Not critical, but it doesn't hurt to do so.
As part of the sale and closing process, escrow, aka the closing agent, will contact your lender(s) to ask for a payoff statement. On closing day, escrow will make sure to extract that payoff amount from the proceeds of the sale and pay off the remaining balance of your mortgage.
Likewise, escrow will pay off any additional loans such as a HELOC. If you forget that you have additional loans, don't worry, they will all be listed on the title report for your property. There is no escape!
So, even if you don't personally notify your lender that you are selling, the escrow team will alert them.
To summarize regarding selling a mortgaged house: having a mortgage does not limit your ability to sell your home and you are free to sell whenever you want. However, you do need to confirm that you have sufficient equity to pay off any loans on the home, including any secondary loans plus the closing costs, and fees associated with selling a home.
2022-05-02T11:40:00-07:002022-05-02T13:02:40-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:7311What is Per Diem Interest?<img src="https://assets.site-static.com/userfiles/562/image/What_is_Per_Diem_Interest.jpg" width="1640" height="924" alt="What is Per Diem Interest" title="What is Per Diem Interest" style="margin: 11px;" />
Per diem interest is the amount of interest you pay each day for your mortgage between signing papers and your first payment. (The word Diem is actually Latin and it means day.) It is a good thing to know this information to help you be aware of interest costs from the day you close and sign paperwork to the day you start making regular monthly payments.
When you signed the paperwork and officially close on your mortgage loan your first official monthly payment is not due until the following first day of the month. If you close on the fifth of the month you will have a longer time between the close of your loan and your expected first monthly payment as compared to closing on the 27th of the month.
How Per Diem Interest Works
In most cases, the timing of closing on a <a href="https://www.myseattlehomesearch.com/buyers/">home purchase</a> does not neatly happen on the first of the month. This means your official first day of homeownership on the property will not add up to a complete month. The lender still needs to charge you something for borrowing money to become the owner of the home. This is when a per-day charge comes in as a solution. These charges are collected as prepaid charges due at the time of closing.
A Breakdown Numbers Example of Per Diem Charges
If you are borrowing $400,000 to purchase a home with an interest rate of 5% and you sign the official closing papers five days before the end of the month you will need to pay per diem charges for those five days before the next month starts.
To arrive at the number, you owe for a daily charge, your total loan amount is multiplied by the interest rate to get a daily interest number. Using the numbers above that would be 400,000x0.05 and then divided by 365. This results in a total of $56.79 this is then multiplied by the number of per diem days until the beginning of the next in the case of our example it is five. $56.79 x 5 is $237.95.
Do These Charges Differ Depending Upon the Lender?
Lenders do have differing policies when it comes to their per diem charge practices. Most lenders ask a borrower to pay these charges in one overall payment at the close of the home sale before your monthly payments take place.
Some lenders will allow a borrower to add this cost into the first monthly <a href="https://www.myseattlehomesearch.com/buyers/mortgage-calculator/">mortgage payment</a>. It is a good idea to make sure you know that per diem charges are a part of your loan and how each lender will expect you to pay them. In many cases, this will require extra cash on the home buyers’ part at the close of the home sale.
Per diem costs can play a significant role in the amount of cash you are expected to bring to the closing table to officially take ownership of your new home. It is always wise to know and be aware of what to expect with closing costs so you are not surprised right before you are scheduled to sign your closing documents.
Additional Information
<a href="https://www.myseattlehomesearch.com/blog/what-percentage-of-seattle-area-homes-sell-for-cash/">What percentage of Seattle area homes sell for cash?</a>
<a href="https://www.myseattlehomesearch.com/blog/how-realistic-is-buying-and-selling-a-home-at-the-same-time/">How Realistic is Buying and Selling a Home at the Same Time?</a>
<a href="https://www.myseattlehomesearch.com/blog/what-are-my-closing-costs-when-buying-a-home/">What are my closing costs when buying a home?</a>
<a href="https://www.migginsrealestate.com/blog/10-common-items-often-missed-in-a-home-inspection/" target="_blank">10 Common Mistakes Found on Home Inspections</a>
2022-04-20T11:27:00-07:002022-04-20T11:37:09-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6872What percentage of Seattle area homes sell for cash?In the competitive Seattle area real estate market many buyers who get outbid on homes will suspect that they are losing out to cash buyers. Sometimes that is actually the case. However, in reality, how many Seattle area homes actually end up selling to all-cash offers?
Let's look at the numbers.
I looked at the sales of houses, townhomes, and condos in Seattle and the eastside cities of Bellevue, Redmond, and Bothell. In mid-March 2022, I looked at house sales over the previous 90 days and the prior 180 days for condos. Condos sales make up a smaller portion of the market so you need to look at a bigger time window to get more reliable data. All sales were extracted from the NWMLS data.
Note that townhomes only make up a significant part of the market in Seattle so I'm only providing data for the city of Seattle for these types of homes.
Below is a map showing the percentage of houses and condos that sold for cash in four different Puget Sound cities.
<img src="https://assets.site-static.com/userfiles/562/image/Percentage_of_Seattle_area_homes_selling_for_cash.jpg" width="800" height="978" alt="How many Seattle area homes sell for cash?" style="margin: 10px auto; vertical-align: middle; display: block;" />
And here's the same data in a table format:
<img src="https://assets.site-static.com/userfiles/562/image/How_many_Seattle_area_homes_sell_for_cash.jpg" width="601" height="383" alt="How many Seattle houses and condos sell for cash?" style="margin: 10px auto; vertical-align: middle; display: block;" />
So, what do the results show?
In the spring of 2022, for Seattle, Bellevue, and Redmond between 20% and 23% of HOUSES sold for cash, so homebuyers in those cities have about a one in five chance of being beaten by an all-cash competing offer. For Bothell houses, however, only about 1 in 20 (5%) are bought with cash.
Fewer condos sell for cash, with Seattle, Redmond, and Bothell having between 10 and 16% but 27% of Bellevue condos were bought without lender financing.
For townhomes in Seattle, 6.7% are bought with cash (not showing in the table).
So overall, although there is a significant percentage of all-cash homebuyers in the Seattle area, the vast majority of homes are purchased using a mortgage. So yes, buyers can be forgiven for being a little paranoid about cash-wielding competitors but they shouldn't lie awake all night worrying about it.
In general, Seattle home sellers, like all sellers, love cash offers because the is no lender appraisal that might scupper the deal, plus all-cash transactions can close more quickly.
However, cash offers are not always the best offers and<a href="https://www.myseattlehomesearch.com/blog/when-selling-your-home-the-highest-offer-is-not-always-the-best-offer/" title="Cash offers are not always the best offers"> savvy sellers will look at the whole offer package</a> before picking the best offer on their homes. Plus in the current market, many buyers who are relying on a mortgage will <a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="How to win a home bidding war">waive their financing completely including the appraisal</a> so that their offers are "almost" as good as a cash-only buyer.
Good luck out there!2022-03-21T19:02:00-07:002022-04-15T06:26:15-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6796Sewer line repairs, costs and not getting ripped offSh*t happens!
Sewer line repair and replacement are not something you think about on a regular basis until your toilet starts spewing raw sewage all over your floors. I know, lovely!
Spending a bunch of money on getting your sewer line repaired is not as fun as getting your bathroom updated. It's not as if you're going to have a party inviting your friends over to see your new sewer line. Unfortunately, ignoring your home's sewer can lead to big problems down the road - including expensive repairs or a complete replacement.
<img src="https://assets.site-static.com/userfiles/562/image/Sewer_line_repairs_replacenent_and_costs.jpg" width="800" height="450" alt="Sewer line repairs replacement and costs" style="margin: 10px; vertical-align: middle;" />
So, let's learn all about the joys of sewer pipes, the common causes of broken sewers, the types of fixes, and how not to get screwed when it comes time to getting needed repairs done.
Homes with increased risk of sewer line issues.
Certain types of homes will have an increased risk of having broken sewer line issues. All homes are susceptible to having sewer problems but these homes have a greater risk.
Older home with a side sewer made up of concrete or clay sections connected together. The joints where these individual sections meet make it easier for the pipe to separate and also make for a lot easier access for roots to get into the sewer line.
Modern sewer lines are continuous PVC pipe with no joints. Having said that, there are plenty of really old homes with really old lines that are still working just fine today. It ain't broke don't replace it.
The property has lots of trees and shrubs, particularly if they are located along the path of the line from the home to the street
The<a href="https://www.myseattlehomesearch.com/blog/should-i-buy-a-home-on-a-steep-hill-side/" title="Buying a home located on a steep slope"> home sits on a sloped property</a> and the sewer line runs down the slope. The greater the incline the greater the chance for sewer pipe can separate or break.
If your home shares a section of common pipe with your neighbor before it reaches the main line in the street it can double the volume of waste going through the line and raise the potential for failure and backups.
Note that a newer home can have sewer issues if the pipe was never installed properly in the first place or it's a new home that replaced an old one but didn't update the sewer system.
<br />Signs that your sewer pipe might need repairs.
If you are experiencing any of the following problems, you may have a sewer line problem
Gurgling noises coming from your drains.
Sewer odors in your home.
Slow drains in your sinks, tubs, and toilets. If one or more drain pipes are draining more slowly than usual this can be an early indication of a drain problem. If multiple drains are affected at the same time, it's more likely that the problem is in the sewer pipe. If water is backing into the toilet or other drains when another drain is used this can also indicate that there is a potential blockage in the main sewer line.
If your line runs under your yard parts of your lawn might be super green because it's being fertilized by a sewer leak. Plus your yard might have sewer odors.
However, with the exception of the last one, these symptoms will not differential whether you have a simple blockage or a major repair is needed. Since your main floor or basement are the closest to the main sewer line those are the areas that are likely to back up first when your sewer line is having issues.
An indirect route to discovering your system needs repair is when you list your home for sale. Some sellers will <a href="https://www.myseattlehomesearch.com/blog/pros-and-cons-of-sharing-a-seller-home-inspection-with-buyers/" title="Seller home inspection report">do a pre-listing home inspection</a> including a sewer scope. They may have previously been oblivious to any needed repairs and now they have to decide to just declare the issue to potential buyers or repair the line before going on the market.
Likewise, home buyers will do a sewer scope and if they discover any problems, they will be asking the sellers to address them before closing. Unless it's a <a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="How to compete for homes in a hot market">very competitive real estate market</a> and the buyers are forced to absorb those costs to make the offer more competitive.
<br />What are the types of repairs needed for side sewers?
<img src="https://assets.site-static.com/userfiles/562/image/Broken_sewer_line_common_causes.jpg" width="400" height="500" alt="Common causes of broken sewer lines" style="margin: 10px; float: left;" />There are a number of different types of sewer issues. Some need to be fixed right away and some you can live with or at least "band-aid it" to expand extend the pipe.
A plumbing company will do a sewer inspection by running a camera (sewer scope) down your sewer line and making a video so that you can see the problems that lie beneath.
Tree roots:
This is a very common issue, particularly in Northwest areas like Seattle where we have a lot of big trees. Tree problem tends to occur more in older systems where the line is made up of segmented concrete or clay pipes.
Tree roots are always looking for water and nutrients. They squeeze in between gaps in the pipe and eventually end up blocking the pipe and cracking the pipe. A small amount of roots is okay but when it starts blocking 50% or more than you are very likely to have a major backup in your home.
If you know roots are an issue in your line, then about every two years have your sewer lines jet cleaned which is a high-pressure water hose with a small blade attached to it. This will cost you between about $800 and $1,200. Also, twice a year put some Root-X blue crystals down your toilet which will reduce root intrusion.
Cracks, fractures, and holes:
All those these might not individually make the pipe non-functional but if they are sufficiently large they may be an indication that the sewer pipe is on the verge of collapsing in the relatively near future.
Offset joints:
For homes with lines made up of sections of clay or cement pipes connected via joints, these joints start disconnecting and not aligning up properly.
If the offset joints are exposed and the soil around the pipe has washed away, there may be an empty space between the pipes. This space can be very unstable and may eventually lead to sinkholes. Alternatively, these gaps can become filled with debris which ends up blocking the pipe.
Collapsed sewer line:
This one is pretty obvious. The sewer line is collapsed in on itself and completely blocked the flow of any sewage to the main sewer line. This is a non-negotiable repair that needs to be taken care of immediately. Time to rent a Honey Bucket!
sewer lines repair and replacement methods.
(...when it's more than a simple blockage)
Most invasive.
Sewer line replacement: a trench is dug along the entire length of the pipe that needs to be fixed, the old pipe is removed, and then replaced with a new section of pipe.
The major downside of this method is that it requires a lot more invasive digging which adds to the cost particularly if you need to open up a concern slab in your basement or driveway.
<br />Less invasive methods: pipe lining and pipe bursting.
In recent years, two less invasive methods have become popular which require adding just one or two smaller access points allowing the contractor to replace just a specific section or, if needed, the whole line all the way out to the street. These methods are referred to as trenchless sewer line repair.
Pipe lining method: If the damage to the line is relatively small, an inflatable tube that is covered with epoxy is inserted into the line. The tube is expanded so it pushes up against the sides of the pipe and then left in place until the epoxy hardens. The tube is then removed.
Pipe bursting method: when the damage to the line is too big for pipe lining system, another trenchless method called pipe bursting is used. The plumbing contractor pulls a cone-shaped bit through the pipe destroying the old pipe while at the same time laying a new pipe right behind the cone head.
However, if your side sewer line has extensive damage and is beyond repair, then you will have to resort to the old-fashioned method of digging a larger trench and replace the damaged sections.
Note that "trenchless" is a bit of a misnomer. The contractor might have to dig an access hole through your favorite rose bed or your basement slab floor.
<br />Factors that affect Sewer Repair Costs
There are a number of factors that can affect your final bill. All the more reason that you should shop around and get at least three quotes. Different companies will suggest different fixes probably based on their personal preferences and the methods they specialize in.
How much of the pipe has to be replaced the longer the section the more you pay.
How deep is the pipe broken located? More digging the contract just has to do the more you and pay.
Where is the brake located? This can have a huge impact on the final cost of the repairs. Ideally, the issue is located in easily accessible place that is just covered with soil.
If the repair is located under the concrete slab in your basement is going to Ives extra costs including digging out the concrete and pouring new concrete and the job is completed. Likewise, if the break is located under your concrete driveway, you will have the added expense of repairing the driveway after the line has been fixed.
The most expensive repairs are those that involve breaks in the pipe near the city sewer line in the street where you have to dig up the street to get access to the break. These repairs can be very expensive.
The type of repair you have done will also affect the price. For example, pipe bursting trenchless repair versus digging up a big trench on replacing the broken section.
Total costs can vary anything from a couple of thousand dollars all the way up to $30,000 depending on the scope of the work. Again it is critical to shop around and get at least three quotes. It's possible you may not need a big repair or the company is just trying to scare you into an expensive repair.
Responsibility for sewer repairs and who pays?
Is it the homeowner and/or the city? The answer may depend on which city you live in and local regulations.
In some areas, the homeowner is only responsible for the section of sewer pipe from their home out to the sidewalk.
However, in <a href="https://www.seattle.gov/utilities/your-services/sewer-and-drainage/side-sewers/defects-and-issues" title="Who is responsible for fixing sewer lines in Seattle?" target="_blank">Seattle for example</a>, the homeowner is responsible for the pipe all the way from the home out to where the side sewer connects with the main city sewer line in the street. So if the break is under the sidewalk and/or the street it can get really expensive. However, if the break is located right at the connection between the home's line and the main sewer line then the city is responsible for that connection.
<img src="https://assets.site-static.com/userfiles/562/image/Seattle_sewer_line_repair_responsibility.png" width="602" height="416" alt="Seattle sewer repair and replacement" style="margin: 10px auto; display: block;" />
An added conundrum can be where a home shares a common section of pipe with a neighboring home and the break is in that shared pipe. Now you weren't going to have to convince your neighbor to share the cost of repairing the line. Unless they are actively having issues themselves they might not be too keen on cooperating. Sometimes a pipe issue is only discovered when one owner puts their home on the market and the buyer discovers the issue during a sewer inspection.
<br />Does homeowners insurance cover sewer lines?
Most homeowners insurance policies don't cover sewer line damage caused by normal events unless you purchase an additional endorsement to your policy.
That being said, if the line happens to be located on your property and the damage happens suddenly and accidentally, it's more likely that your insurance company will help pay for the repair costs. Talk with your insurance provider.
And finally, how not to get screwed...my story
A couple of years ago the toilet in my basement backed up despite valiant attempts with a toilet plunger. So I called a sewer company recommended by a friend.
I own a 1932 home in Seattle with the original sewer line made up of sections of clay pipe. And yes, I have lots of tall trees like a lot of homes in the Pacific Northwest.
The sewer guru came out, run a camera down the pipe and immediately proclaimed that my sewer line needed to be replaced for the tidy sum of $25,000.
I watched them while they were running the scam, er I mean the camera, forgetting to mention that I'm a Realtor and that I've seen in dozens and dozens of these inspections in the past. I could tell from looking at the video footage that all that was needed was to remove some roots and that they were trying to scare me into getting a whole new line.
But just to make sure, I got a second opinion from another company that I use for many home buyer sewer scopes. They don't do any repairs, just inspection and so do not have not a bias towards trying to drum up some business.
They confirmed that there was nothing wrong with my sewer line and all it needed was a good jet cleaning to get the roots out of the system and to give it a clean every 2 or 3 years. The inspection cost me $300, a lot less than the $25,000 the fear mongers tried to get me to spend.
So the moral of the story is if a sewer line contractor tells you you need major repairs, get a second opinion from a company that only does inspections. Also, make sure to get THREE different quotes. Also, make sure you are only using <a href="https://www.myseattlehomesearch.com/blog/why-hiring-a-licensed-bonded-and-insured-contractor-is-important/" title="How to make sure your contractor is licensed and insured">contractors who are licensed and insured.</a>
One quick note about sewer line cameras. Sometimes the camera will not be able to get beyond a blockage in the line. So sometimes you don't know what lies beyond the blockage and if there are additional issues in the line that remain hidden. The blockage needs to be removed first before the camera can be run all the way out to the main city sewer in the street.
So, to summarize, sewer line repairs and replacement are not fun and usually expensive but at the same time don't stick your head in the sand hoping that they will never happen. And when they do, make sure to get a few quotes so you know you're not getting ripped off.2022-03-15T05:38:00-07:002022-11-21T19:42:23-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6755How Realistic is Buying and Selling a Home at the Same Time?The short answer is...not very!
The reality: you are probably going to have to buy first, then sell. Or sell first, then buy.
<img src="https://assets.site-static.com/userfiles/562/image/Buying_and_selling_a_home_at_the_same_time.jpg" width="800" height="450" alt="How to buy and sell a home at the same time" style="margin: 10px auto; vertical-align: middle; display: block;" />
What does buying and selling a home at the SAME TIME mean? In the ideal scenario, you would close on the sale of your current home, use the proceeds from that sale toward your next home, and close on the two sales within a day or two of each other. You would only have to move or hire a moving company once. However, very few sellers ever achieve that level of timing perfection.
Every home seller would like to seamlessly transition from their existing home into their new home with as little overlap and stress as possible.
When <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="How to sell you Seattle home">selling your Seattle home</a> in a strong seller's market, a lot of homeowners are wary of selling because they know that although it's easy to sell their own home, soon after closing they will be battling it out with all the other buyers competing for a limited inventory of homes. One minute you're King of the Castle and the next you're in a scene from Fight Club.
In the Seattle area, the majority of homes that are listed for sale are vacant when they hit the market which means the sellers have already moved on to their next location.
The advantages of (trying to) buy and sell at the same time.
You get to smoothly transition from your old home
You potentially avoid having to carry two separate mortgages plus an additional short-term loan (depending on your finances).
You will only have to move once. If you can line up the closing dates of your existing and new home within a couple of days of each other, then you only need that moving company (or your buddies) one time.
Avoid having to pay and deal with the hassle of moving your possessions into storage while you find your next home.
It removes a huge amount of stress worrying about where you are going to live next.
If you buy first, you can do any needed repairs, updates, or remodeling in your new home before moving in. You get to avoid the chaos usually associated with living in the middle of remodeling hell.
<br />If possible, the best route is to buy first, then sell.
Depending on your financial situation, the best way to go is to buy a new home first, move in, and then put your old home on the market.
This allows you time to be fussy as to which home you buy rather than being forced into buying a home that you may not particularly love if you're trying to buy and sell at the same time.
Buying a home first removes the major stress of "where are we going to move to next once we sell our home?"
You can move out of your old home, throw the keys to your real estate agent and let them take care of everything.
You are probably thinking what if we buy a home first and then fail to sell our first home? Obviously, some of that will depend on the prevailing market conditions but a home that is<a href="https://www.myseattlehomesearch.com/blog/the-3-critical-ps-when-selling-your-home-everything-else-is-just-cherries-on-top/" title="Critical things to do to ensure your home sells"> prepared properly, marketed properly, and most importantly, priced properly</a> will sell in any market regardless of the prevailing market conditions. Make sure to hire a competent Realtor who knows your local market and has a proven history of successful listing sales.
<br />Selling first and then buying your next home.
Not all homeowners have the financial means to buy their next home before selling their current house so they are going to have to sell first, move out, and then buy the next one.
For owners in this situation their main concern is going to be where they are going to live and how long will it take to buy a new home? They may have to move twice and find some short-term or potential longer-term accommodation depending on what the local market is doing.
On the upside, these sellers avoid having to pay two mortgages or a bridging loan and have all the proceeds from the sale of their initial home sitting in their bank account ready to go. Then again, you could argue that living in a rental property for a while is a short-term "mortgage".
If you are relocating to a whole new area maybe you could just rent for a year get to know that area really well and spend the time to find your ideal next home. Too many people buy their next home based on some whimsical impression of an area they barely know and then end up with buyer's remorse.
WHAT ABOUT BUYING A HOME CONTINGENT ON THE SALE OF MY CURRENT HOME?
<img src="https://assets.site-static.com/userfiles/562/image/Brigding_the_gap_when_buying_and_selling_a_home_at_the_same_time.jpg" width="500" height="750" alt="The gap when buying and selling a home at the same time" style="margin: 10px; float: left;" />Buying a home contingent on the sale of your own home means that the owner of the home you are buying agrees to sell to you conditioned on you being able to sell your current home.
The seller is taking a risk accepting a contingency sale because there are no guarantees that you will sell your home. The further you are along the process of selling your own home, the better the chance that they might accept your offer. The pecking order is as follows: pending/scheduled to close > pending appraisal > pending inspection > just listed > not even on the market yet.
In a hot market very few sellers will be willing to accept a contingent offer and why would they? Sellers want a guarantee that their home is going to close just like you when you list your own home. Making an offer contingent on the sale of your home is going to make your offer the least competitive even if you are offering more money than other buyers.
In a strong seller's market, contingent offers that actually get accepted are just plain rare. It is very likely that the only sellers who are willing to accept one are for the homes that nobody else wants and are sitting on the market. They're probably the homes that you don't want either. Even in a balanced buyer market, most sellers will not entertain these kinds of offers.
Even if you are successful in getting a contingent offer accepted you risk the potential of being bumped by a non-contingent offer. The seller retains the right to accept a better offer from a different buyer and can force you to waive the contingent component of your offer. Agreeing to do so can be risky as you are now agreeing to buy the home no matter what happens with the sale of your own home.
Buying a home contingent on the sale of your own home is a complicated process with lots of potential hurdles to navigate. Plus it's a non-starter in a competitive residential real estate market.
Financing the gap between your old and new home when buying first.
If you have sufficient cash and/or Amazon/Microsoft/Facebook/latest Unicorn stock that you can sell, then you might be able to purchase your next home with 100% cash. If not, you will need a short-term loan. It is critical to speak with a lender or mortgage broker BEFORE trying to buy your next home so you know in advance what type of loans and how much you can qualify for.
Depending on your finances, if you are buying and then selling and reliant on an interim loan for the new home then you could potentially end up carrying three loans for a short period of time:
The mortgage on your current home.
The mortgage on your new home.
The short-term loan to cover the gap between the two.
If your new home is significantly more affordable than your old home, then you might have enough equity in your home to not need a mortgage for the new home. You would just pay off the short-term loan from the proceeds of the sale of your home.
Bridging Loans.
A bridging loan, as the name suggests, helps you bridge the financial gap between buying your next home and selling your current home. These are short-term loans that allow you to borrow up to 80% of the current VALUE (not equity) of your current property. You would use this money to put toward the downpayment and closing costs of your new home or potentially pay for the home in full.
Although you can borrow up to 80% of the value of your home (based on an appraisal), any current liens on the home must be deducted first.
For example, say your current home is worth $750,000 and your mortgage balance is $300,000, then you would have $450,000 to use to purchase your next home. So if your next home is more than $450,000, then you'll also need a mortgage in addition to the bridging loan.
Since this is a short-term loan, the lender needs to make some money in a hurry and will charge a significantly higher interest rate compared to a conventional mortgage. These loans are usually for a maximum of 6 or 12 months with a balloon payment at the end.
One major limitation of going this route is that your home needs to be already listed for sale before you can qualify for a bridge loan. So basically you are reliant on the perfect new homecoming on the market in the week you list your own home and hope that you can close on the new home before your own home closes.
You would need to be able to qualify for carrying your current mortgage, the bridging loan, and the mortgage to buy your new home all at the same time.
Overall, bridging loans are not worth the hassle!
<br />Home Equity Line of Credit...a more flexible option?
A home equity line of credit, or HELOC for short, allows you to tap into the EQUITY you have in your home to use for the downpayment and closing costs for your new home. Again this is a short-term loan for which you pay a higher interest rate.
You will need to plan well in advance of listing your home because it can take up to 40 days to get approved for these loans.
The major advantage of a HELOC versus a bridging loan is that your current home does not have to be already on the to qualify for a loan. You can buy your next home, close on it using the HELOC and then list your old home.
<img src="https://assets.site-static.com/userfiles/562/image/Advice_on_buying_and_selling_a_home_at_the_same_time.jpg" width="800" height="450" alt="Advice on selling and buying your home at the same time" style="margin: 10px auto; vertical-align: middle; display: block;" />
When selling first, where are you going to live after selling?
If you are planning to sell first, purchase later, then you need to plan in advance as to where you're going to live after closing. This can be a very stressful part of the process.
Rent-back: you can try and buy yourself some time by asking the buyer of your home if they are willing to give you a rent-back. This is where you get to stay in "your" home after closing and become a tenant in the home that you used to own. The buyer becomes your landlord. This gives you some additional time to either move into a rental or try and look for a home to purchase.
In a competitive market where buyers are desperate to get homes, some will be willing to grant the sellers a rent back and may even allow you to stay in the home for free for a couple of months. However, even if a buyer is willing to grant your wish, there was no guarantee that you will find your next home during that time.
Short-term rental: If you had an offer accepted on a new home before your old home will close then you are probably going to need some temporary housing. You can either do an Airbnb for a couple of weeks or do some sofa-surfing with your friends or family.
You will probably have to put all your stuff into short-term storage waiting to close on the new home. You could use something like pods which will put your possessions into movable containers will stick them in storage and then deliver them to your new home when you're ready to move in.
Longer-term rental: sometimes it's just better to get a longer-term lease and give yourself plenty of time to find your next home. This is particularly true if you are relocating to an area that you are not overly familiar with. Spend some time getting to know your new location first and then buy.
To summarize, trying to perfectly time the sale of your current home and purchasing your next home is not an easy endeavor. It is very likely that you will either have to buy first and then sell, or sell and the buy. Plan well in advance no matter which route you decide to go and have a plan-B in place just in case.
Here are some additional resources that you may find helpful.
<a href="https://www.madisonmortgageguys.com/moving-hacks/" title="Tips and Tricks When moving to a new home" target="_blank">27 Tips and Tricks When Moving Homes</a> from Luke Skar has lots of advice including saving money on packing materials, how to get rid of stuff you just don't need anymore and protecting valuables.
<a href="https://www.maxrealestateexposure.com/buying-home-selling-existing-property/" title="How to sell your home before buying your next home" target="_blank">How to Buy Your Next Home Before Selling Yor Current One</a> from Bill Gassett looks at the pros and cons, including the risks, of buying your next home before selling your current one.
<a href="https://frederickrealestateonline.com/getting-home-ready-market/" title="How to get your home ready to list for sale" target="_blank">How to Get Your Home Ready to List For Sale</a> from Karen Highland including preparing both the interior and exterior of the home, which updates are worth doing, and pricing your home properly.
2022-02-28T15:11:00-07:002022-04-20T11:19:44-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6779What to Know About Living in Seattle's BroadmoorThe upscale and elite<a href="https://www.myseattlehomesearch.com/broadmoor/"> Broadmoor neighborhood of Seattle</a> is an exclusive 85-acre gated residential community alongside a 115-acre golf course.<img src="https://assets.site-static.com/userfiles/562/image/What_to_Broadmoor.jpg" width="300" height="500" alt="What to Know About Living in Seattle's Broadmoor" title="What to Know About Living in Seattle's Broadmoor" style="float: right; margin: 11px;" />
The boundaries of Broadmoor are the Washington Park Arboretum on the west, 37th Avenue E. on the east, E. Madison Street on the south, which is near the Washington Park neighborhood, and Union Bay Marshland to the north. These unique boundaries of natural landscapes add to the quiet seclusion of this picturesque neighborhood.
<a href="https://broadmoorgolfclub.com/" target="_blank">Broadmoor Golf Club</a>
For the avid golfer, living next to a gorgeous course like Broadmoor Golf Club is worth the price. This private club was established in 1924 and opened for play in 1927. With views of Lake Washington and the University of Washington, it is breathtaking and beautifully maintained for its patrons. It has a venue for wedding receptions, cocktail parties, banquets and other social events.
<img src="https://assets.site-static.com/userfiles/562/image/What_to_Know_About_Living_in_Seattles_Broadmoor.jpg" width="420" height="237" alt="What to Know About Living in Seattle's Broadmoor" title="What to Know About Living in Seattle's Broadmoor" style="float: left; margin: 13px;" />Broadmoor was rated 29th in the <a href="https://www.top100golfcourses.com/golf-course/broadmoor-golf-club" target="_blank">Top 100 Golf Courses</a> and has hosted the Seattle Open, U.S. Girls' Junior, U.S. Women's Amateur, and the U.S. Senior Women's Amateur. It is loved for its welcoming clubhouse, mature trees lining exceptional greens and fairways, and changes of elevation.
Broadmoor Real Estate
Starting at $3,150,000 is a three-bedroom, four-and-a-half-bathroom home with 4,820 square feet of living space. This brick home features beautiful trees and landscaping, soaring two-story beamed ceilings, leaded windows, and a fireplace with a pine mantle. It has been elegantly remodeled and kept its architectural appeal from its original build in 1936.
Some homes like this mid-century modern was built in 1950, is offered at $5,495,000. It is a single-family home with breathtaking views of the tenth fairway. With five bedrooms and six-and-a-half-bathrooms, this home boasts 5,650 square feet of living space, which includes a brick exterior, open floor plan, slab marble counters, and a main floor bedroom suite.
The last home as an example is currently offered in Broadmoor has an asking price of $6,850,000. This meticulously crafted home includes four bedrooms, four-and-a-half-bathrooms, and 5,972 square feet of living space. With a golf course view, inset cabinets, and hardware hand-selected from Paris, this home has many unique details that make it a standout.<img src="https://assets.site-static.com/userfiles/562/image/What_to_Know_About_Living_in_Seattles_Broadmoor_2.jpg" width="410" height="231" alt="What to Know About Living in Seattle's Broadmoor" title="What to Know About Living in Seattle's Broadmoor" style="float: right; margin: 11px;" />
Nearby Attractions
Enjoy an Art, Music or Food Festival at <a href="https://seattlecenter.com/" target="_blank">The Seattle Center</a>,
Attend a Seattle Mariners Major League Baseball Game at <a href="https://www.seattleattractions.com/seattle-attractions/t-mobile-park/" target="_blank">Safeco Field,</a>
Right next door sits the beautiful <a href="https://botanicgardens.uw.edu/washington-park-arboretum/" title="Washington Park Arboretum in Seattle" target="_blank">Washington Park Arboretum</a> with winding trails through stunning flowers and trees.
Enjoy a relaxing dinner cruise of the harbor or locks by <a href="https://www.seattleattractions.com/seattle-attractions/argosy-cruises/" target="_blank">Argosy Cruises</a>,
Walk through the <a href="https://www.seattleattractions.com/seattle-attractions/chihuly-garden-and-glass/" target="_blank">Chihuly Garden and Glass Museum</a> to see the beautiful glass creations and glassblowing demonstrations,
Stroll along the <a href="https://en.wikipedia.org/wiki/Lake_Washington" title="Lake Washington Seattle" target="_blank">shores of nearby Lake Washington </a>with open views
For more information on homes in the Broadmoor neighborhood or other areas in or around Seattle, contact us at <a href="https://www.myseattlehomesearch.com/broadmoor/">My Seattle Home Search</a>.
Check out the Latest in Broadmoor Real Estate2022-02-28T14:02:00-07:002022-04-01T14:45:34-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6750Relocating to Beacon HillConsidering a move to Seattle? Discover Beacon Hill<img src="https://assets.site-static.com/userfiles/562/image/3730755925_0e4a985ed0_w.jpg" width="400" height="300" alt="Discover Beacon Hill" title="Discover Beacon Hill" style="float: right; margin: 11px;" />
The<a href="https://www.myseattlehomesearch.com/beacon-hill/"> Beacon Hill neighborhood</a> is located in southeast Seattle, Washington. It is a hill and neighborhood situated between I-5 on the west, Ranier Avenue South, Cheasty Boulevard South and Martin Luther King Junior Way South on the east, Interstate 90 on the north and the Seattle city boundary on the south. It is a very diverse neighborhood.
Jefferson Park is a 52.4-acre public park and golf course on Beacon Hill. It includes <a href="http://premiergc.com/-jefferson-park-golf-course" target="_blank">Jefferson Park Golf Course</a>, <a href="http://www.seattle.gov/parks/find/centers/jefferson-community-center" target="_blank">Jefferson Community Center</a> and <a href="https://seattlebowls.org/" target="_blank">Jefferson Lawn Bowling</a>. It is also a great place for hiking, tennis, and kid-friendly playground equipment.
Beacon Hill housed a U.S. Marine Hospital, later called <a href="https://www.pacificmedicalcenters.org/where-we-are/beacon-hill/" target="_blank">Pacific Medical Center</a>, which was built in the 1930s.
Beacon Hill views
One of the many reasons Beacon Hill is loved by its residents is the beautiful views from the hill. On a clear day, residents can see <a href="https://www.myseattlehomesearch.com/downtown-seattle/">downtown Seattle</a>, Mount Ranier, Elliot Bay, and the Olympic Mountains.
With homes built in the early 1900s, the northern part of the hill offers a piece of history, including Craftsman-style bungalows, Seattle box houses, and a Foursquare style. Newer homes and subdivisions have been developed on the southern side.
<img src="https://assets.site-static.com/userfiles/562/image/23683378808_a7c64b3b7f_w.jpg" width="400" height="275" alt="Relocating to Beacon Hill | Consider This Seattle Neighborhood" title="Relocating to Beacon Hill | Consider This Seattle Neighborhood" style="float: left; margin: 15px;" />The Beacon Hill Real Estate Market
There are 18,295 residents in North Beacon Hill and the majority of people rent their homes. Homes typically range from $400K to over $2 million with an average rent of around $1500. (at the time of this post) There is a wide variety of homes offered for sale, including townhomes and condominiums, as well as single-family homes.
Excellent Public Schools
Beacon Hill students attend these highly-rated public schools.
Garfield High School is rated #17 for best public high schools in Washington.
Washington Middle School is rated #57 for best public middle schools in Washington.
Cascadia Elementary School is rated #79 for best public elementary schools in Washington.
Thurgood Elementary School is rated #122 for best public elementary schools in Washington.
Thornton Creek School serves students from Pre-K through 5th grade and is rated #130 for best public elementary schools in Washington.
<a href="https://www.myseattlehomesearch.com/schools/beacon-hill-elementary/">Search all homes for sale in the Beacon Hill Elementary area</a>
The source of this rating information is <a href="https://www.niche.com/k12/search/best-public-schools/n/north-beacon-hill-seattle-wa/">Niche</a>. Their ratings include the schools' teacher rating, academics rating and diversity rating.
Local Employment Opportunities
<a href="https://www.boeing.com/" target="_blank">Boeing</a>: The world's largest aerospace company, specializing in building and selling airplanes, rockets, satellites, and telecommunications equipment.
<a href="https://www.microsoft.com/en-us/?ql=3" target="_blank">Microsoft</a>: This worldwide technology corporation produces computer software, electronics, personal computers and other various services.
<a href="https://www.starbucks.com/" target="_blank">Starbucks</a>: This world-renowned coffee retailer is known for their quality coffee beans, coffee houses, and specialty drinks.
<a href="https://hiring.amazon.com/#/" target="_blank">Amazon</a>: The technology giant is a multi-national company focusing on e-commerce, digital streaming, cloud storage and artificial intelligence.
<a href="https://www.nordstrom.com/browse/about" target="_blank">Nordstrom</a>: This fashion retailer sells clothes, shoes and accessories online and in nearly 350 Nordstom and Nordstrom Rack retail stores.
For more information about your Seattle home search, see listings on <a href="https://www.myseattlehomesearch.com/beacon-hill/">www.MySeattleHomeSearch.com.</a>
Check out the Newest Listings in Beacon Hill<br /><br />Image by <a href="https://www.flickr.com/photos/viriyincy/" class="owner-name truncate" title="Go to Oran Viriyincy's photostream" data-track="attributionNameClick" id="yui_3_16_0_1_1645553570560_49798">Oran Viriyincy</a> <br /><a href="https://www.flickr.com/photos/seattlemunicipalarchives/" class="owner-name truncate" title="Go to Seattle Municipal Archives's photostream" data-track="attributionNameClick" id="yui_3_16_0_1_1645553570560_65458">Seattle Municipal Archives</a>
2022-02-22T11:00:00-07:002022-02-22T11:15:13-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6723Discovering Ballard WashingtonIf you are considering a move to or around the<a href="https://www.myseattlehomesearch.com/"> Seattle, Washington</a> area, you will want to see what the charming community of Ballard has to offer.
About Ballard<img src="https://assets.site-static.com/userfiles/562/image/amazing-spring-sunset-over-the-puget-sound-ballard-washington_t20_0xAV8e.jpg" width="450" height="398" alt="Discovering Ballard Washington" title="Discovering Ballard Washington" style="float: right; margin: 11px;" />
What was once a small fishing community in the northwest area of Seattle has grown into a stylish city hot spot for trendy restaurants, bars, coffee shops, live music venues and a wide array of shopping.
<a href="https://www.myseattlehomesearch.com/ballard/">Ballard </a>weather is often rainy and cloudy through the fall and winter months. Known for its rainfall, the Seattle area averages about 38 inches of rain per year. However, snow is minimal, with an average of just five inches per year.
The spring and summer months are mild in the Pacific Northwest. It is rare to have summer temperatures above 90 degrees and the average in July is right around 76 degrees.
The <a href="https://www.myseattlehomesearch.com/seattle-neighborhood-guide/ballard-seattle/">Ballard neighborhood</a> official boundaries are Crown Hill to the north, Lake Washington Ship Canal to the south, Green Wood, Phinney Ridge and Fremont to the east and Puget Sound's Shilshole Bay to the west.
Home buying<img src="https://assets.site-static.com/userfiles/562/image/ballard_washington_discover.jpg" width="400" height="335" alt="Discover Ballard" style="float: right; margin: 11px;" />
With a dense suburban feel, this neighborhood has grown into a flourishing space for residents to embrace historic homes, as well as new and updated homes.
With an average home price of $866,000, homes are listed and sold quickly in the Ballard area. On average, homes sell within a week of being listed making it a rather competitive market. The area is highly desired because of the employment opportunities offered locally, highly rated public schools and the natural beauty of the Pacific Northwest.
At any given time there are roughly 10-20 listings in Ballard but it also depends on the supply and demand and the current market so these figures can change often. Homes range from a one-bedroom, one-bathroom condominium with 869 square feet to a beautifully updated duplex, built in 1924, with 2,460 square feet. Be sure to check with new listings for more accurate numbers.
Unique restaurants
<a href="https://getyourhotcakes.com/" target="_blank">Hot Cakes</a>: A dessert restaurant on historic Ballard Avenue, serving coffee, desserts, pastries and lunch. Whether you're looking for molten cakes, cookies and ice cream, coffee or a boozy milkshake, this specialty dessert bar is sure to please.
<a href="https://www.portagebaycafe.com/" target="_blank">Portage Bay Cafe</a>: This breakfast and lunch eatery features local, organic foods in a vibrant, warehouse type space with funky, trendy and fun decor.
Shopping Opportunities
<a href="https://shopbaleen.com/pages/our-story" target="_blank">Baleen</a>: An affordable family-run jewelry shop, specializing in quality, handmade jewelry.
<a href="https://www.ballyhooseattle.com/pages/about-us" target="_blank">Ballyhoo Curiosity Shop</a>: Located in the historic district of Ballard, this unique shop is a mix between a natural history museum and antique shop. It offers an array of unique and unusual gifts and artifacts, from fossils to wood carvings to jewelry and more.
<a href="https://shophorseshoe.com/" target="_blank">Horseshoe</a>: This small business boutique is a fun clothing store that offers women's clothing, gifts and jewelry by local artists.
Outdoor Recreation
<a href="http://www.seattle.gov/parks/find/parks/golden-gardens-park" target="_blank">Golden Gardens Park</a>: Located along the beach of the Puget Sound, this park features breathtaking views of the water and the Olympic Mountains. There are two wetlands, a short loop trail and restored beach, as well as areas to hike through forest trails, play on sandy beaches, and fish from the pier or boat launch.
<a href="https://ballardlocks.org/" target="_blank">Ballard Locks</a>: This Seattle tourist attraction is free to visit and fun to experience as the locks at the end of Salmon Bay raise and lower water levels to allow boat traffic to traverse through, without mixing fresh lake water and the saltwater from the Puget Sound, while also supporting the local habitat through the fish ladder.
For more information on your Seattle move, or to assist with neighborhood selection, please contact us at <a href="https://www.myseattlehomesearch.com/contact/">My Seattle Home Search</a>.
Start Your Ballard Search Here<br /><br />Photo Credit https://www.twenty20.com/photos/9e04f643-0bd8-4309-90df-51d1271e50da/?utm_t20_channel=bl2022-02-15T08:08:00-07:002022-02-17T11:31:26-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6696Difference between the escalation clause and highest-and-best offers When trying to buy a home in a<a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="Competing with multiple offers on a home"> multiple offer situation</a>, you already know you will have to compete and come in with a strong offer. It is very unlikely that you are going to get the home for the list price. There are a number of ways to structure your offer to improve your chances of winning the bidding war and that includes whether to come in with your highest and best offer or whether to use an escalation clause.
<img src="https://assets.site-static.com/userfiles/562/image/Highest_and_Best_offers_and_escalation_clauses.jpg" width="600" height="900" alt="The difference between highest and best offer and escalation clause" style="margin: 10px auto; vertical-align: middle; display: block;" />
How you structure your offer may depend on the number of competing offers and will also depend on what is common practice for your local real estate market. For the Seattle area, for example, in a hot market, about 80% of buyers will use an escalation addendum.
So, what exactly do the highest and best offer and the escalation clauses mean, how do you use them, and what are the potential pros and cons of going either of these routes?
What does Highest And Best Offer mean?
In real estate, the highest and best offer means that the buyer is making their absolute best offer on a home. This includes the maximum price they are willing to pay combined with the contingencies they are willing to remove from their offer. Essentially the buyer is saying "This is everything I have, and this is the full extent I'm willing to go to buy the home". It's like going all-in in poker!
On the plus, if the buyer misses out on a home, then they can at least feel good that they didn't lose because they weren't willing to go up a little higher. The buyer went to their maximum and still get still didn't get the home there's not much they can do about that.
The main downside of submitting your absolute best offer is that you may potentially pay way more above the next competing offer when they didn't need to. You might be second-guessing yourself as to whether you overpaid for the home. The seller is under no obligation to share with you how much the competing offers were.
If a buyer ends up being the only offer, and they came in with their highest and best offer then they have potentially overpaid for the home if they went well above the list price. An escalation addendum would have protected a buyer from the situation.
The highest and best offer is like going all-in in poker, except you don't lose any money if you don't win the home...
<a href="https://tenor.com/view/all-in-poker-chips-gif-14780212">All In Poker GIF</a>from <a href="https://tenor.com/search/all+in-gifs">All In GIFs</a>
Reasons Sellers use a Highest and Best Offer Strategy.
After speaking with their real estate agent, there are a few reasons why a seller may decide to go with the highest and best offer strategy. The sellers are telling potential buyers up front that they must submit their best offers and not use an escalation addendum.
Note that the homeowner's decision may be based on the personal bias of their Realtor and how they like to conduct their business. People don't sell homes very often, so they are going to be relying on advice from their listing agent and certain listing agents like to do things their way. However, it should always be the seller's decision as to how to handle offers on their home.
One advantage of this strategy is that reduces the amount of back-and-forth negotiation with multiple different offers. If buyers are willing to submit their highest and best offer, then there it increases the chances of a clear winner that stands out from the others. The sellers will feel like they should speed up the offer review process.
By requesting "best offers only", the sellers will feel like they can weed out the tire-kicker buyers who are not going to make strong offers.
A drawback of going this route is that it could scare away some potential buyers who might think the home will go for well over the asking price whereas previously they may have made an offer on the home.
<br />What is an escalation clause in real estate and how does it work?
The escalation clause, aka escalation addendum, is part of an offer on a home that protects the buyer from overpaying for a home while at the same time keeping their offer competitive in multiple offer situations. The clause states that if the seller receives a competing offer that is higher than the buyer's offer then the buyer will match and beat the other offer by a stated amount of money up to a set maximum price ceiling.
Here's an example of how an escalation clause works:
Say there are two buyers, Bob and Andy competing for a home listed for $500,000.
Bob is offering $500,000 and is willing to escalate all the way to $550,00 in increments of $5,000.
Andy is offering $520,000 and is willing to go up to $535,000 in $3,000 increments.
All other things being equal, who gets the home?
Bob has his offer accepted for $540,000 = $535,000 (Andy's escalator max) + $5,000 (Bob's escalator increase).
Bob gets the home without having to pay the $550,000 he was willing to go to. With the highest and best offer, he would have paid $10,000 more for the home.
Note that the maximum in Andy's escalator ($535,000) is used as the starting point to raise Bob's offer and is not based on Andy's starting price of $520,000.
If the seller leverages the escalation clause to increase a buyer's purchase price, then the seller must provide the buyer with a full, unredacted copy of the competing offer. This protects the buyer from the seller just making up and pretending that they have a higher offer.
Note that if you know that you are the only offer or making an offer on a home that has been sitting on the market then there is no point using an escalation addendum since you are not competing for the property.
<br />The pros and cons of the escalation addendum.
Advantages of using an escalator.
The main benefit of using an escalation addendum when <a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="the home purchase process">buying a home</a> is that it prevents them from overpaying for a home in bidding wars. With an escalator, the buyer only has to pay one increment above the next best offer and may not have to go all the way to their maximum budget for the home.
Sometimes a home that is expected to get many offers only ends up getting one offer. In this situation, a buyer with an escalation clause in their offer would get the home for the advertised list price. The seller won't be happy but the buyer sure will be!
The great thing about the escalation addendum is that the buyer who does win the home knows that they only had to pay a set amount above the next highest offer. They are not second-guessing themselves as to whether they paid a huge amount above the next best offer. However, they may still have to pay well over the list price to purchase the home but won't feel as manipulated.
Potential disadvantages of using an escalation clause.
I tell buyers in a competitive market that if they do include an escalation addendum in their offer then be prepared to the pay maximum price that's listed in the escalator. When there are multiple offers it is more likely that there will be another offer that can escalate you up to your max price so be prepared to end up there. Do not put in a maximum price that you are either not willing to pay or cannot afford.
By including the escalator in your offer, you are essentially giving up the opportunity to negotiate the price with the seller. You can still negotiate other parts of the contract but not the price since the escalation will automatically set the sale price based on the competing offer. When an offer doesn't include an escalation addendum the buyer and seller are free to haggle back and forth on the sale price.
Agents often say that a buyer is revealing their cards by using an escalation addendum because it shows their upper price limit. Personally, I don't agree with that because the owner can only get you up there if they have another offer to leverage you all the way up.
And if the home seller tries this tactic...
<img src="https://assets.site-static.com/userfiles/562/image/Waiving_the_escalation_clause.jpg" width="800" height="267" alt="Waiving the escalation addendum when buying a home" style="margin: 10px auto; vertical-align: middle; display: block;" />
Buyers need to remember that just because they are escalating above everybody else does not automatically guarantee that they will get the home. Savvy sellers are looking at the complete offer and not just the escalation price. How good is your financing and appraisal contingency, how big is your down payment, and what other criteria do you have in your offer? <a href="https://www.myseattlehomesearch.com/blog/when-selling-your-home-the-highest-offer-is-not-always-the-best-offer/" title="The best offer might be the highest price">The best offer is not necessarily the one that goes the highest.</a>
Also, sellers will be aware of super-high offers and the risk of the home not passing an appraisal. Unless the buyer is coming in with 100% cash or waiving their financing, then the owner will be wary of not passing an appraisal and not getting to closing.
Seller's Offer Instructions says: "Highest and best offers only, no escalation offers please!"
Sometimes the seller and their listing agent will try and control the type of offers that are made on the home. They will post an offers instruction list of the things that buyers should include, (and exclude), in their offers to give them the best chance of getting the home.
Does that mean you as a buyer have to adhere to those suggestions? Absolutely not. You are totally free to submit whatever offer you want regardless of what the seller is requesting.
Could using an escalator in this situation hurt your offer? Potentially, yes but it could also prevent you from overpaying for the home.
However, if you submit an offer that has an escalation maximum price that is $10,000 above the best "conforming" offer then the seller will probably have a change of heart and be more than happy to work with you. Money talks!
<img src="https://assets.site-static.com/userfiles/562/image/Highest_and_best_offer_versus_escalation_addendum.jpg" width="900" height="506" alt="Use an escalation addendum or a highest and best offer" style="margin: 10px auto; vertical-align: middle; display: block;" />
The seller tells the top offers: "Come back with your highest and best offer, remove your escalation".
Sometimes in multiple offers situations, the seller may come back to the top three or four offers and say, "OK, you are one of the top offers. I'm giving the top 3 offers the opportunity to come back with their highest and best offers but do not include an escalation addendum".
And why would they do that? It usually means that they have one offer that is way above the other offers, but they are unable to escalate that offer up to their stated maximum price because the seller doesn't have another offer that is close to the top offer. A high escalator is useless to the seller if they can't escalate the offer up to the maximum.
The seller really wants that maximum (potential) price from the top escalator. The seller is hoping that that top offer will remove the escalation addendum and offer their maximum price as stated in the escalation clause.
If a buyer is in the situation, should they come back with their highest and best offer and remove the escalation? I usually tell buyers to ignore the seller and to keep their offer us is. Politely inform the seller that you are more than happy to remove the escalation addendum if they show you proof of the competing offer. Of course, it all depends on badly the buyers really want that home and their fear of missing out on the property.
Does the strategy always work for sellers? No! Lots of times the highest offer will not come back with their initial upper price. Buyers do not want to feel like they are being manipulated and way overpaying for the home. If you squeeze some buyers too much, you will lose them.
To summarize the difference between submitting your highest and best offer versus using an escalation clause: there are pros and cons to each, but the escalator provides the buyer greater protection from overpaying for a home. However, local real estate practices will usually dictate the prevailing types of offers that win homes in a competitive market.
Here are some additional resources for home buyers.
<a href="https://pacificalocals.com/3-ways-to-better-your-chances-of-getting-your-dream-home/" title="How to improves your changes of getting your ideal home" target="_blank">Strategies to Improve Your Chances of Getting Your Ideal Home</a> from Vicki Moore including understanding the nuances of local real estate and the importance of getting good buyer representation.
<a href="https://greatcoloradohomes.com/blog/how-to-get-your-real-estate-offer-accepted-in-a-sellers-market.html" title="How to win a bidding war on a home" target="_blank">18 Ways to Beat the Competition When Buying a Home</a> from Andrew Fortune provides a long list of ways to improve a buyer's chances of winning a home in a hot market.
<a href="https://newportbeachrealestatecafe.com/2021/04/27/escalation-clause/" title="Tips when using escalation clauses" target="_blank">5 Things to Know About Escalation Clauses</a> from Sharon Paxon provides advice on when and how to use an escalator and that sometimes you may need to get some real estate attorney advice, 2022-02-07T09:00:00-07:002023-03-06T18:47:38-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6618Wet Basement Solutions and PreventionIf you own a home with a basement, the arrival of the rainy season can fill you with dread wondering if this year you will end up with a wet basement (again).
Wet basements can either be a moderate nuisance if you don't use that space for much or a catastrophe if you've just spent tens of thousands remodeling it into living space. Even if you don't use your basement, long-term water issues can cause structural damage to your home.
<img src="https://assets.site-static.com/userfiles/562/image/Wet_basement_solutions_and_prevention.jpg" width="900" height="506" alt="Wet basement solution and prevention" title="Picture of a wet basement" style="margin: 10px; vertical-align: middle;" />
There are many causes of wet basements including cracks in the foundation, leaking windows and doors, cracks in the floor, failing siding, land sloping toward the foundation, plus bad gutters and downspouts. Fortunately, there are solutions for each of these.
Seattle has a lot of older homes and many of them have basements with varying degrees of waterproofing. The Pacific NW also gets a lot of rain which is more than happy to expose your home's weaknesses. In fact, I tell buyers that <a href="https://www.myseattlehomesearch.com/blog/6-reasons-why-rain-is-your-friend-when-buying-a-home/" title="Rain is good when buying a home">winter is the best time to buy a home</a> because rain will expose a home's moisture issues that remain hidden, or at least, a lot harder to find, in the summer months.
This article specifically looks at issues resulting from water getting in from the outside as opposed to moisture vapor from for example badly vented clothes dryers and poor ventilation occurring inside the home.
Signs that your home has a wet basement.
Sometimes your nose will tell you (musty smell), sometimes your eyes (wet walls and floors), and sometimes your bare feet (damp carpet) will be your first indication that you have an excess moisture problem. If you have had water issues in the past, then a moldy smell will probably be the first sign that it's back as moisture reactivates old mold.
If your basement is unfinished or still has an exposed foundation (usually poured concrete), check for the following signs: (if not you might have to open up the walls for a good look).
Obvious cracks in the foundation with moisture around the cracks.
Water stains on the walls: these can come from leaking windows, moisture getting in at the junction of the siding and the foundation, or water getting in higher up behind the home's siding, tricking down to the top of the foundation wall, and then trickling down the inside of the foundation.
Can you see any efflorescence? This is a chalky white salt residue resulting from moisture slowly migrating through your porous concrete foundation. The water dissolves calcium salts within the concrete which then evaporates on the inside surface of your basement walls. Compared to active water leaks, this is more of a glacial process and it can be hard to tell if it's from old waterproofing issues or is an ongoing, current problem.
Patches of mold growth: besides your nose telling you there might be mold, can you see any? When humidity levels start getting above 65% it creates the perfect environment for mold growth. Mold can be a major health concern so controlling it is important. Control the moisture and you can control the mold. Note that mold growth can result from poor internal ventilation and high humidity levels and is not always due to external water issues.
Leaking window frames: These can fail over time and start rotting. The interior wood framing may show signs of rot and water stains plus there will be water streaks on the foundation wall below the window.
Damp floors can indicate water coming up through the slab or where the slab meets the foundation walls. It's easier to see if the basement is unfinished, otherwise, you might need to pull up the floor covering.
Wet basement solutions.
The solution will depend on what is causing the water intrusion, so determining where the water is coming from is the critical first step. There's no point in spending money on the wrong fix. In addition, make sure to <a href="https://www.myseattlehomesearch.com/blog/why-hiring-a-licensed-bonded-and-insured-contractor-is-important/" title="Hire the right contractor the first time">hire licensed contractors who know what they are doing.</a>
Gutters and downspouts.
<img src="https://assets.site-static.com/userfiles/562/image/Bad_gutters_and_downspouts_and_wet_basements.jpg" width="400" height="600" alt="Failing gutters and downspouts can cause wet basements" title="Photos of gutters and downspouts" style="margin: 10px; float: left;" />Many a damp basement is caused by inadequate gutters and downspouts whose function is to capture rainwater off the roof. One inch of rain can dump 1,250 gallons of water onto a 2,000 square foot home. Your home needs to be able to divert all that water away from your home, particularly the foundation.
Bad gutters and downspouts are probably the most common cause of damp basements and I see it all the time when I'm looking at homes with buyers or attending home inspections. Fortunately, it is also the easiest and least expensive fix.
For gutters:
This may sound a little obvious, but does your home have any missing gutters (or downspouts)?
Make sure they are not full of leaves and other debris otherwise they will just overflow when it rains. Where the gutter connects to the downpour tends to get blocked.
Are they solidly connected to the home and not detached from the facia board? Gutters need to sit right under the roof to catch the rainwater.
For downspouts:
The downspout can also get plugged up with leaves and other debris. Run a garden hose down the downspout to flush out any blocked material and free it up.
The most common issue (and easiest fix) is that the bottom of the gutter is not connected to anything and just dumps rainwater right beside the foundation. All that water needs to be diverted away from the home.
If the bottom of the drain pipe is connected to a "storm drain", is that drain actually working or just plugged up with decades of muck? Run a garden hose into the drain and see if it drains or just overflows. Note that for older Seattle homes, storm drains just drain into sewer lines.
Those small little splash pads that are about 2 ft long are completely useless, especially when the property is sloping toward the foundation. That water will just pool beside the home.
<br />Adding a French drain.
Assuming your gutters and downspouts are functioning probably the next most important prevention method is to install a French drain around the perimeter of your home or at least on the sides of the home that get the most water. In the Seattle area most of the bad weather comes from the south and this side of the home tends to be the most vulnerable to water intrusion.
A French drain is a simple wet basement solution and an effective way to capture rainwater and divert it away from your home. It basically consists of a perforated PVC pipe buried beside your home's foundation that drains water under gravity to a low point on your property.
French drains are not particularly expensive and it's also a job that you could do yourself if you are okay with some manual labor and digging. Just watch a few YouTube videos and it should tell you all you need to know.
The most important thing is to allow for at least a quarter-inch slope per foot to make sure the water drains away to the low spot. The cost of paying a contractor to install a drain is between $4,000 to $8,000 depending on the length of the drain and if they need to get through the concrete slab.
During the Gulf War, I won't if people were calling them Freedom Drains?
When your property slopes toward your foundation...
If the land your home sits on slopes towards your home, after a downpour, all that groundwater is going to race downhill toward your foundation trying to force its way into your basement.
You have two options. First, you can hire a landscaper to regrade your property so it doesn't slope toward your home. If your whole property is on a slope this may not be a feasible solution.
The alternative is just to add a French drain (see above) where water tends to pool on your property and run the drain to the low point in your property. At the end of the day, you are just better off getting a French drain around the foundation of your home
Add a Rain Garden or Cisterns.
<img src="https://assets.site-static.com/userfiles/562/image/Seattle_Rain_Wise_program_info.png" width="450" height="578" alt="Seattle Rain Wise program" style="margin: 10px; float: left;" />A rain garden is a system where <a href="https://kingcounty.gov/services/environment/wastewater/cso/rainwise.aspx" title="Seattle Rain Wise Program information" target="_blank">all </a>the rainwater falling on your roof is captured and diverted away from the home and emptied into specially designed and highly absorbent landscaping.
For certain neighborhoods in Seattle, if your home meets certain requirements, the city will pay for some or all of the installation. You can also get a cistern to capture all that rain and use it for watering your garden.
I had one installed in my Ballard home about 10 years ago and I didn't pay a penny. And it looks a lot better than the sad collection of red lava stones that used to sit there!
For more information, visit the <a href="https://kingcounty.gov/services/environment/wastewater/cso/rainwise.aspx" title="Information on Seattle's Rain Wise program" target="_blank">Rain Wise Program</a>. So, why would the city pay for these? Because it helps prevent sewer systems from getting overwhelmed after big storms and reduces pollution of Puget Sound waters.
Even if the city is not willing to pay for one, it's still worth considering adding a rain garden as a way of protecting your home from rainwater. Plus they improve your home's curb appeal and help protest the Puget Sound.
Notes that a rain garden will not take care of groundwater issues. It just captures all the rain hitting your roof and bypasses the need for storm drains.
<br />Adding Interior footer drains
If you have water getting into your basement at the junction of the concrete floor and the foundation wall, you might want to consider adding an interior footing drainage system. This is essentially the same as a French drain but runs around the interior perimeter of your basement.
Installation of a footer drainage system will cost between about $8,000 and $15,00 depending on the size of your basement.
Note that these drains will not fix problems with water getting into the home via the foundation's walls. That needs to be addressed separately
Seal the foundation and repair foundation cracks.
Although a French drain will capture a lot of the surface water, if your foundation has cracks or allows water to permeate under hydrostatic pressure, then you'll need to take additional steps and add exterior waterproofing. Concrete is a porous material by nature and some foundations are more porous than others.
A contractor will dig all the soil away, down to the<img src="https://assets.site-static.com/userfiles/562/image/Dimpled_membrane_drainage_mat_on_foundation_of_a_new_home.jpg" width="300" height="225" alt="Dimpled membrane drainage mat waterproofing home foundation" style="margin: 10px; float: right;" /> bottom of the foundation. They will then seal the exterior foundation wall with rolled-on waterproof material. A dimpled membrane (drainage mat) is then added which allows any water to wick away from the walls.
If you are going to go this route, and haven't added one already, you should add a French drain while that area is opened.
Fixing the building envelope is not a cheap fix but if you are having water seeping through your foundation due to cracks or porous concrete then it's something you have to take care of sooner or later. The cost to do this treatment is approximately $10,000, make sure you use a contractor with a good reputation ask for references and make sure that they provide a dry basement warranty for their work.
<br />Adding a sump pump.
For homes with a high water table or underground springs, adding a sump pump might be a good idea. These pumps are installed at the lowest point in the basement. The pump sits below the surface of your basement floor in a pit the size of a medium garbage can.
After heavy rains, when the water table rises, the pump will activate and start expelling water to the outside of the home preventing it from getting into your basement. It will only activate when it is triggered by a float and the pit partially fills with water. In other words, the pump only runs when actually needed.
It is critical to have a battery backup for a sump pump in case your power goes. And when does power go out? During storms when there's lots of rain!
Let Tom from This Old House show you how it works...<br /><br />
WATER INTRUSION THROUGH FAILING SIDING, ESPECIALLY BRICK EXTERIORS.
If water can get in behind your home's siding and has no way of getting back out, that water can potentially drip all the way down to the top of the foundation wall in the basement and then trickle down into your basement living area.
In the Seattle area, the most common homes with brick-and-mortar exteriors are Tudors and ramblers (ranch). Over time, micro-cracks can form in the bricks themselves and between the mortar and the brick. Rain combined with wind can be push water behind the brickwork, particularly on the south-facing side which gets the brunt of the Seattle storms.
<img src="https://assets.site-static.com/userfiles/562/image/Failing_siding_and_wet_basements.jpg" width="700" height="520" alt="Failing siding on homes and wet basements" title="Photo of bricks and mortar siding Tudor home" style="margin: 10px; vertical-align: middle;" />
For brick homes with water issues, the most common fix is tuck-pointing. A masonry contractor will remove about an inch of the existing mortar joints (cement) between the bricks and then replace it with fresh mortar.
A good tuck-pointing will last 30 years or more. The cost will depend on the number of walls but is going to run you between $10,000 and $30,000.
The worst-case scenario is that the outer brick layer will have to be dismantled and rebuilt. The brick exterior is anchored to the interior wood stud framing via small straps. In old homes, these straps can fail over time and you will start to see bulging and settling in the brickwork if you look along the length of the exterior.
In this case, even if you tuck point the wall, new cracks will appear over time and allow water in as the wall slowly moves and settles. Long term, it is better to just bite the bullet and have the wall rebuilt which will guarantee you decades of peace of mind. And yes, this is definitely not a cheap solution and will cost between $20,000 and $30,000 or more potentially more depending on the size of the job.
Leaky windows and doors.
Basement doors and windows are other sources of water intrusion. If the basement has a door to the outside it is not uncommon for the water to get in under the door if there is no drain immediately outside, or the drain is plugged up.
Old windows and window frames can become leaky over time especially on the side of the home that gets all the rain and wind during storms.
The good news is that relatively speaking, these are usually not expensive fixes and it might just be a case of adding new caulking around the windows and unplugging the drain outside the door. Plus it's really easy to tell if they are leaking because they're accessible and easy to see.
A DEHUMIDIFIER ONLY TREATS THE SYMPTOMS OF A WET BASEMENT.
You're probably thinking, why don't I just get a dehumidifier which will remove the excess moisture and humidity from my basement. However, this is only treating the symptom and not the causes. Plus dehumidifiers won't do much when water is flowing through your basement.
If your humidifier is plugged in 24 hours a day then you have an obvious moisture issue. You are basically sticking your head in the sand hoping it will go away. It's the equivalent of spraying some Fabreze to take care of that moldy smell.
Here are some additional useful resources on wet basements and basements in general.
<a href="https://www.cincinkyrealestate.com/blog/causes-of-foundation-problems/" title="Things that can damage your home's foundation" target="_blank">Potential Causes of Foundation Damage</a> from Paul Sian who looks at the different causes of this issue and whether your insurance policy will cover needed repairs.
<a href="https://www.destinpropertyexpert.com/blog/dangers-of-mold-and-problems-selling-house/" title="Mold id not good when trying to sell your home" target="_blank">How Mold Can Impact the Sale of Your Home</a> from Danny Margagliano who looks at the causes of mold in homes and what impact it can have when you try to sell a home with mold.
<a href="https://www.maxrealestateexposure.com/finished-basement-add-value-to-home/" title="How much value does a finished basement add to your home?" target="_blank">Will Updating Your Basement Add Value to Your Home?</a> Bill Gassett looks at the different types of basement remodel layouts and what impact they will have on the overall value of your home.
<a href="https://www.madisonmortgageguys.com/fix-selling-house/" title="Things to repair when selling your home" target="_blank">Things to Repair Before Selling Your Home</a><a href="https://www.madisonmortgageguys.com/fix-selling-house/" title="Repairs to focus on when selling your home." target="_blank"> </a>from Luke Skar so you can avoid a failed buyer's inspection. These include the home's drainage system and foundation. 2022-01-24T09:22:00-07:002022-01-24T15:27:56-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6307How home buyers can get out of purchase agreementsA contract is only as good as the people signing it! - Jeffrey Fry.
Home buyers can, and often do, change their minds about a home after their offer is accepted. It can be a simple case of getting cold feet or discovering some issues with the home while doing their due diligence. And now they want to get out of the purchase agreement.
<img src="https://assets.site-static.com/userfiles/562/image/How_buyers_can_get_out_of_a_contract_to_buy_a_home.jpg" width="800" height="450" alt="How buyers can get out of a contract to buy a home" style="margin: 10px; vertical-align: middle;" />
There are a number of ways a buyer can get out of a contract to purchase a home. Buyers can walk based on contingencies that are part of the real estate contract such as a failed property inspection or an HOA review. However, when there are no contract clauses that the buyer can leverage, then walking on the sale and forfeiting their earnest money is the last resort, but financially, the most painful option.
The more contingencies a buyer has in their accepted offer the more exit strategies they will have. Conversely, in <a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="Competing with multiple offers">multiple offer situations</a> where the buyer has to waive many of the usual protective contingencies in order to win the home, they will have few, if any, ways of wiggling out of the contract
For home buyers, this article will provide information on how they might be able to get out of a contract. For home sellers, it will help them look at offers differently and help them select the best one in multiple offer situations. After all,<a href="https://www.myseattlehomesearch.com/blog/when-selling-your-home-the-highest-offer-is-not-always-the-best-offer/" title="The highest priced offer is not necessarily the best one"> the highest offer is not always the best offer</a>.
First off, what is a real estate contract to buy a home?
An agreement to purchase a home is a signed contract between the buyer and the seller that contains specific contingencies, aka clauses, detailing the conditions under which the home will be purchased. These contingencies include (ideally), the buyer's right to inspect the property to their personal satisfaction and buying the home only if they can get approved for a mortgage and pass an appraisal.
A purchase contract will the full complement of common contingencies provide the home buyer will maximum protection and the most ways of breaking the contract.
A note regarding earnest money: part of the <a href="https://greatcoloradohomes.com/blog/first-time-home-buyer-tips-how-to-buy-your-first-house.html" title="How to buy your first home" target="_blank">home buying process</a> requires that when a buyer has an offer accepted on a home they deposit a predetermined amount of cash to the closing agent/escrow company within a few days after mutual acceptance.
This money is considered a good faith deposit by the purchaser and they are serious about buying the home. It also means that they are willing to forfeit that money in the event that they break the contract when they do not have the right to do so. If the sale proceeds all the way to closing, the earnest money deposit will go toward the downpayment and closing costs.
<br />How buyers can cancel a purchase agreement using sale contingencies.
Contingencies are home buyers' best friends. From the buyer's perspective, the more the merrier. Some contingencies give the buyer an automatic out while others allow the buyer to get out of the agreement if they cannot reach an agreement with the seller.
Breaking the contract based on the inspection contingency.
<img src="https://assets.site-static.com/userfiles/562/image/Using_the_inspection_contingency_to_get_out_of_a_home_buyer_contract.jpg" width="400" height="600" alt="Breaking a home purchase contract based on the inspection contingency" style="margin: 10px; float: left;" />The inspection addendum gives the buyer the right to inspect the home and property after mutual acceptance.
As part of the <a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="The path to buying a home in Seattle">home purchase process</a>, the buyer has a set amount of time to complete the inspection and respond to the owner. If for any reason whatsoever, including <a href="https://www.myseattlehomesearch.com/blog/10-potential-home-buyer-cold-feet-warning-signs/" title="When how buyers get cold feet">just getting cold feet</a>, the buyer changes their mind and doesn't want to buy the home anymore, they are completely within their rights, to end the contract, walk and get their earnest money back.
Frustratingly for the seller, the buyers are NOT required to provide a reason as to why they are walking on the sale. For the Seattle area at least, the inspection addendum states the following: This agreement is conditioned on BUYER'S SUBJECTIVE SATISFACTION with inspections of the property...
It's the main reason why sellers love offers that do not have an inspection clause.
Also, if the buyer asks for a price drop or repairs but the sellers are not willing to negotiate, then the buyer can break the agreement.
Important: Make sure you pay close attention to the dates specified in the contract. The buyer's ability to walk based on the inspection contingency or other contingencies has a set period of time as detailed in the offer. If the buyer does not respond to the sellers within that contingency period, then the buyer forfeits their right to break the contract using that particular contingency.
Getting out of a purchase agreement due to a failed appraisal or financing contingency.
If the buyer is relying on getting approved for a mortgage to purchase the home, then the lender will require an appraisal of the market value of the property. If the appraised value is below the agreed-to purchase price and the seller refuses to drop the sales price to the appraised value, then the buyer can walk on the sale and get their earnest money back.
Also, if for some reason the buyer fails to get approved for a home loan by the lender then they can get out of the contract and keep their earnest money. However, these days, getting pre-approved for a loan has strict guidelines and the vast majority of buyers who are pre-approved will also get approved for a mortgage once they find a home (assuming it passes appraisal).
Losing their job would prevent a buyer from getting approved. Likewise, doing something dumb like buying a new car between mutual and closing and dinging their credit score could result in the buyer being denied a loan.
Note that in this case, a buyer who is desperately seeking a way to get out of the contract will be hoping that the appraisal fails. The financing contingency and appraisal contingency are not something they have actual control over, unlike the inspection contingency.
The HOA contingency exit strategy.
If the home is overseen by a Home Owners Association (HOA) then the buyer's contract will have an HOA review clause. The buyer will be given a copy of the <a href="https://www.myseattlehomesearch.com/blog/the-resale-certificate-a-crucial-document-for-condo-buyers/" title="The resale certificate and getting out of a purchase contract">Resale Certificate</a> to review which contains all the HOA's rules and regulations, CC&Rs, financial statements, meeting minutes, a copy of the latest Reserve Study, and other information.
If the buyer sees something that they don't like, for example, <a href="https://www.myseattlehomesearch.com/blog/what-are-hoa-special-assessments/" title="What to know about special assessments">an upcoming special assessment for $20,000</a>, then the buyer is within their rights to walk on contract. Just like the inspection contingency, the buyer does not have to provide a reason for walking on the purchase.
The inspection addendum and the HOA review contingency are the Get Out of Jail Free cards of the home purchase process. Feared by sellers, loved by buyers!
Backing out of the sale based on the Title contingency.
Real estate contracts are usually contingent on the buyer reviewing the Title Report for the home. This report is compiled by the Title Company... the one you pay a chunk of money to for title insurance as part of your closing costs.
The buyer has to be provided with a marketable title at closing. In other words, a clean title that is free of liens and any other red flags that might limit the buyer's use of that property.
If the report does contain title issues like unpaid taxes or liens, then the seller has the right to pay those off at closing. The buyer does not have the right to walk on the sale before closing.
However, if for example, the title search discovers that that city will be taking the front 10 feet of the front yard for a road-widening project or discovers that the fence is encroaching 5 feet onto the neighbor's property, then the buyer has the right to pull their offer and go find another home.
Getting out of a purchase agreement with NO contingencies.
If the buyer is desperate to get out of the real estate transaction and all<img src="https://assets.site-static.com/userfiles/562/image/Forfeiting_earnest_money_to_break_a_home_purchase_agreement.jpg" width="500" height="750" alt="Breaking a home purchase agreement and loosing earnest money" style="margin: 10px; float: right;" /> the contingency times have expired or they had very few, if any of the common contingencies in the first place, then there is really only one option. Walking on the sale and being willing to lose their earnest money.
The earnest money now becomes liquidated damages to compensate the seller for taking their home off the market and potentially missing out on better offers. The seller now has to go back on the market and potential buyers will be questioning what happened and whether the home has some "issues".
In Washington State at least, the most earnest money a seller can keep as liquidated damages is 5% of the sale price, even if the buyer had deposited 10% earnest money. Sellers will push for the buyer to deposit as much earnest money as possible so that the buyer will think twice about walking on the sale right before closing.
This exit path can be very expensive, particularly for buyers who scrimped and saved for a downpayment and can barely qualify for a home loan.
The best advice regarding how to get out of a real estate purchase contract.
If you are unsure about making an offer in the first place, then step back and don't make an offer. Buyers always feel a mixture of excitement and anxiety when making an offer on a home but if it's 90% anxiety and only a little excitement, it's likely you will be looking to get out of the purchase if your offer gets accepted.
Prevent buyer's remorse by just moving on and looking for a better match for your needs. If your Realtor is any good and they have your best interests at heart, they should steer you in the right direction. There will always be more homes around the corner.
It's good to put yourself in the seller's shoes and be considerate of their situation. They are trying to sell their home and trying to ensure they get a good offer that will go all the way to closing so that they can get on with the next phase of their life.
If you are in love with the home, then absolutely, make an offer but include as many buyer contingencies as you can to protect against potential issues that you are not unaware of at the time of submitting the offer. Or, if possible, do as much due diligence as possible BEFORE submitting an offer like doing a pre-inspection of the home if waiving the inspection clause.
And if you are having to compete with multiple other offers for the home, then know your limits and be really careful as to which contingencies you are willing to omit from your offer. The last thing you want to do is to have to walk with no contingencies and forfeit your earnest money because the home is a complete and utter lemon.
<img src="https://assets.site-static.com/userfiles/562/image/Logo-contact_for_end_of_blog_posts.png" width="600" height="200" alt="About the author" style="margin: 10px; vertical-align: middle;" />
2021-11-15T07:22:00-07:002023-03-06T18:54:53-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6213Home prices in the wealthiest Puget Sound zip codesIncome data from the 2019 census median was recently released and provides the median income for each zip code. I thought it would be interesting to compare median home prices in the highest income areas for the Seattle and the Eastside areas.
<img src="https://assets.site-static.com/userfiles/562/image/Home_prices_in_the_wealthiest_Puget_Sound_zip_codes.jpg" width="800" height="534" alt="Home prices in he highest income Puget Sound zip codes" style="margin: 10px; vertical-align: middle;" />
The main population densities in the Puget Sound area are in the city of Seattle and in the Eastside cities of Bellevue, Redmond, and Kirkland. These cities comprise the majority of the top 50 income zip codes for the Puget Sound area.
I selected the top 6 zip codes for Seattle, the top 6 on the Eastside, and for comparison purposes, the 6 lowest median income zip codes from that list of 50.
For sale price data I used the 3-month rolling average value for all residential properties combined (houses, townhomes, and condos), as of the end of October 2021.
Home prices in the top 6 Puget Sound zip codes based on median income.
Zipcode - City - Ranking
Median household income
Medina sale price
98039 - Medina #1
$212,337 15
$3,900,000
98074 - Sammamish #2
$188,900
$1,350,000
98075 - Sammamish #3
$178,697
$1,640,000
98077 - Woodinville #4
$166,400
$1,337,500
98040 - Mercer Island #5
$147,566
$2,225,000
98053 - Redmond #6
$145,453
$1,285,000
Home prices in the top Seattle zip codes based on median income.
Zipcode - Seattle neighborhood - Ranking
Median household income
Medina sale price
98177 - Broadview to Richmond Beach #16
$123,672
$1,047,000
98116 - Alki Beach area in West Seattle #19
$121,208
$835,000
98112 - Madison Park #21
$118,305
$1,240,000
98117 - Ballard / Loyal Heights #25
$116,871
$903,000
98121 - Belltown #26
$115,323
$603,000
98199 - Magnolia #27
$114,551
$1,087,500
Home prices in the zip codes ranked 45 to 50 based on median income.
Zipcode - Area - Ranking
Median household income
Medina sale price
98107 - Ballard and Frelard #45
$100,178
$785,000
98290 - Snohomish / Three Lakes #46
$99,171
$750,000
98335 - Gig Harbor #47
$98,584
$790,000
98422 - NE Tacoma incl Dash Point #48
$98,360
$640,000
98011 - Bothell #49
$98,268
$865,000
98119 - Queen Anne #50
$96,768
$937,500
Some observations on the wealthiest Puget Sound zip codes and home prices.
All the highest income zips codes are east of Seattle: as listed in the first table above, Medina, Sammamish, Woodinville, Mercer Island, and Redmond fill the top 6 spots. The highest income Seattle zip is <a href="https://www.myseattlehomesearch.com/zip-code/98177/" title="Homes for sale in zip code 98177">98177</a> which covers the Blue Ridge-Broadview-The Highlands-Richmond Beach areas overlooking the Puget Sound and the Salish Sea. That zip is only ranked #16 and half of that is north of N 145th Street (the northern boundary of the city of Seattle).
Medina: not unexpectedly, Medina, home of Bill Gates and other local notables, has both the highest income and home sale prices. Because it's a smaller area with fewer sales than most zip codes, the median sale price can vary a lot. For example, in May the median sale price was $5,925,000 when there were only 10 sales and in October it was $3,900,000 (17 sales). With such a low number of sales, the average sale price can fluctuate wildly from month to month.
Sammamish: the much sought-after city of <a href="https://www.myseattlehomesearch.com/sammamish/" title="Homes for sale in Sammamish">Sammamish</a> has 2 of the top 3 highest-income zip codes and is a really competitive neighborhood to buy into. It was voted as the <a href="https://www.msn.com/en-us/money/realestate/sammamish-named-america-s-best-small-city/ar-AAPNOYV" title="Sammamish best small town in America" target="_blank">best small town in America for 2021</a>. Median homes prices are between $1.3M and $1.6M.
Queen Anne: If <a href="https://www.myseattlehomesearch.com/seattle-neighborhood-guide/queen-anne-seattle/" title="All about the Queen Anne neighborhood.">Queen Anne</a> is considered a "fancy Seattle neighborhood", why is the median income the lowest on the list? While the median income might be the lowest, its median home price would easily fit in the top 6 Seattle zip codes. Then again a "lowest" income of $97,000 would be considered a bucket of money in other parts of the country.
<a href="https://www.myseattlehomesearch.com/belltown/" title="Homes for sale in Belltown Seattle">Belltown in Seattle</a> right next to downtown has the 5th highest Seattle median income but average home prices are "only" $603,000. Why? Because almost all homes are condos, not houses.
So overall, homes prices do have some correlation with the median income for each zip code but not when the area has a high percentage of condos.
<img src="https://assets.site-static.com/userfiles/562/image/Logo-contact_for_end_of_blog_posts.png" width="600" height="200" style="margin: 10px; vertical-align: middle;" />2021-10-25T05:04:00-07:002021-10-25T19:48:48-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6169Most common causes of mold in attics of NW homesWith the exception of summer, the Seattle and Puget Sound area have a climate with plenty of rain and high relative humidity. This type of climate makes it difficult to keep attic sheeting dry in your attic. Mold growth requires a source of moisture. So in order to prevent mold growth in your attic, you need to control the moisture.
<img src="https://assets.site-static.com/userfiles/562/image/Causes_of_mold_in_attics_of_northwest_area_homes.jpg" width="800" height="533" alt="Causes of mold in attics of northwest area homes" style="margin: 10px; vertical-align: middle;" />
Here are some of the most common reasons for mold in your home's attic.
Mold due to inadequate ventilation.
The first and most common cause of <a href="https://thatmoldlady.com/blog/mold-exposure/" title="Mold and health risks in Seattle" target="_blank">mold growth </a>in an attic is inadequate venting. Venting is the most important way to keep moisture levels normal and prevent mold growth. The type and amount of venting need to be strong enough to keep the attic dry by preventing condensation.
The lack of adequate venting could have been the fault of the builder. Builders are not all venting experts and keep in mind that a builder only has 7 years of liability. So if you don’t identify the problem in the first 7 years, the builder is not liable in any way. Also, the building code for attic venting may work in most of the country but not necessarily in our northwest climate.
If your builder did not vent the attic properly, you may not find out until it’s too late if you don’t either look in your attic or have it inspected by a professional. I have spoken to countless homeowners who had no idea about the attic mold issue until it was too late to get the builder to fix it. On the rare occasion, I have been paid for making attic repairs by the builder.
Mold growth resulting from changes made to the home.
Another way that can lead to inadequate venting is any changes that are made during the life of the house. One change that can modify the venting is installing a composition roof where there was previously a cedar shake roof. The shake roof tends to allow the attic to breathe but when you install new sheeting and a composition roof, the roofer will have to provide more venting to allow for adequate airflow and moisture control.
Another big change that can damage proper venting is adding a ridge vent without adding the appropriate amount of intake venting. Ridge vents are typically more powerful than standard roof vents so if you increase the exhaust venting, you need to increase the intake venting in order to maintain a balance which is how passive venting works.
Mold in attics caused by large trees near the home.
The NW is famous for its huge native trees and lots of homes have big trees growing right next to them. The shade from these trees on the roof, especially on the south or west side of the house will increase the risks of mold growing in your attic.
When you reduce the sunshine on your roof, you can make the attic colder and more susceptible to condensation.
Improper ductwork.
If the ductwork from either kitchen or bathroom fans is not properly installed, it can lead to the perfect condition for mold growth in your attic.
The current building code requires any interior fan to either be properly ducted through a wall or through the attic. In the case of attic ductwork, this would be a 3, 4, or 6-inch duct (think of this as a tube or hose) that connects to the fan and then the other end connects to a flapper vent that is installed into the roof itself. That way, when you turn the fan on, the moist air will be blown right out to the outside.
Sometimes these ducts get disconnected from either the fan or the flapper vent and need to be reconnected. All that warm, moist air is now getting dumped into the attic space and provides conditions for mold growth.
A rather serious problem that can cause mold growth is when the dryer vent ductwork gets disconnected in the attic. Given how much moisture comes out of a dryer, this can cause quite a mess. There will be a lot of lint in the attic but also quite a lot of moisture so the mold growth<br />can be quite aggressive and extensive. Luckily most dryers are vented through a wall but with the popularity of upstairs laundry rooms, ducting through the attic is becoming more common.
Finally, the least common but perhaps most problematic cause of mold growth in attics is a broken B-vent. These vents B-vents are the ductwork from your furnace that goes through the attic and<br />terminates with a cap to keep the rain out and allow the warm moist air to escape.
The furnace generates a lot of moisture and on a rare occasion that B-vent can either rupture because of poor quality or just get rusted through. If something like this happens, a lot of moisture gets into the attic and of course, can lead to aggressive mold growth.
Is the observed attic mold due to a current or past issue?
A homeowner may want to know if the moisture issue is a current one or a past issue. If you are inspecting the attic during the wet months (approximately October through April) you can use a moisture meter to check the moisture level. Any reading above 16% is a problem because 17% is about where mold starts to grow on wood. However, the mold should be removed regardless of whether it's caused by an old or current issue.
If you pay for attic mold removal and the mold comes back, the moisture issue hasn’t been resolved. If you remove it and it doesn’t come back, your problem is solved. Hire a company that offers is a 10-year warranty. This will put the liability to resolve any future moisture-related issues on the company.
The bottom line with attic mold issues is that you need to find a company that has extensive experience inspecting attics, identifying moisture-causing problems, and can make all the necessary repairs in order to ensure the mold issue does not come back.
This article was written by <a href="https://thatmoldlady.com/" title="Mold removal Seattle and Mold Solutions" target="_blank">Peter Kakoczky with Seattle company Mold Solutions NW.</a> He has seen it all when inspecting over 4,000 Puget Sound area attics. His company focuses on both mold removal and improving ventilation so that the mold doesn't come back again.
2021-10-14T06:22:00-07:002023-06-26T15:47:45-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6167What are HOA Special Assessments?When you own a condo or a home that is part of a Home Owners Association (HOA), you are always living with the possibility of a special assessment which can potentially run into tens of thousands of dollars. Assessments can either leave a significant dent in your checking account or can be financially crippling for a homeowner. They are anything but special!
<br />What is a Special Assessment in Real Estate?
In real estate, a special assessment is a fee levied by the Home Owners Association (HOA) on all the owners when there are insufficient funds in the HOA's reserve funds to cover the cost of upcoming repairs like siding and window replacement. Special assessments can either be paid in one lump sum by each owner or can be split over monthly payments which are in addition to the owner's regular monthly HOA dues.
What's the difference between monthly HOA fees and special assessments?
<img src="https://assets.site-static.com/userfiles/562/image/What_is_an_HOA_special_assessment.jpg" width="400" height="600" alt="What is an HOA special assessment" style="float: left; margin: 10px;" />When you own a home that is part of a Home Owners Association you are required to pay <a href="https://www.myseattlehomesearch.com/blog/are-low-hoa-fees-always-a-good-thing/" title="All about condo HOA dues">monthly HOA dues. </a>For example, for Seattle condos, the HOA fees will usually cover water, sewer and garbage, common area maintenance, building insurance, and sometimes, earthquake insurance. The owners pay their own electricity bill and insurance for the contents of their unit.
A portion of those monthly dues is used for the HOA's costs of the day-to-day running of the condo development. The remainder goes into maintaining or building up the HOA's reserve fund so what, in theory at least, when a new roof is needed or an unexpected major repairs like failing siding needs to be fixed, there are sufficient funds available to address those issues.
Special assessments occur when expensive repairs or upgrades are needed but there are insufficient funds in the HOA's reserve account. Anytime I drive by a condo development that is surrounded by scaffolding I wonder to myself whether the HOA had the needed money squirreled away or are all those owners writing big checks to cover those expensive repairs?
If the HOA needs a big injection of cash, it will usually get a loan from a bank and then pay it off over time via the monthly assessment payments collected from the individual owners.
How to find out if a property has Special Assessments when buying a home.
Plus what are some red flags that hint at the possibility of future assessments?
When considering buying a home that is part of an HOA, particularly condos, you need to do your homework and investigate the risk level of getting dumped with a special assessment. Just because there is currently no assessment does not mean that the HOA doesn't have a history of imposing assessments or that one is just around the corner.
So how do you protect yourself from, or at least minimize the risk, of buying a home that could be a special assessment hell? Here are some tips.
<br />Read the Resale Certificate as if your life depends on it!
When you buy a condo in Seattle, the seller must provide you with a copy of the <a href="https://www.myseattlehomesearch.com/blog/the-resale-certificate-a-crucial-document-for-condo-buyers/" title="How to review a condo resale certificate">Resale Certificate</a> for you to review as part of your due diligence. Sometimes a copy of the Resale Certificate is available to review before you make an offer. However, many sellers will wait until they have an accepted offer before order the certificate.
Sometimes it's a good idea to hire a real estate attorney to review the resale cert for you. Your real estate agent is not an expert at interpreting these documents so don't rely on them exclusively.
Within that stack of PDF's you will find certain documents that will help you investigate your probability of getting lumped with a future assessment...or have to inherit a current one.
The Resale Certificate Summary document: This is a summary document that specifically states if there is currently a special assessment in place how much it is for.
The Reserve Study report: for the Seattle area, any condo development with 10 or more units are required, every few years, to hire an independent audit company to assess the overall condition of the development. The company will go visit the property and write up a report detailing all the repairs and upgrades that need to be done now, or within the next 3, 5, 10, and 20 years.
The report will then compare the total of all those costs against how much the HOA currently has in their reserve account. In my experience, the majority of HOAs only have 20% or less of the required emergency funds.
When the HOA gets those reports, they can either stick their heads in the sand, continue with inadequately low HOA dues, and "hope for the best". Or they can take action and raise their monthly dues to boost their reserves. The lower the HOA reserves relative to projected repairs, the greater the risk of special assessments.
<img src="https://assets.site-static.com/userfiles/562/image/Who_pays_the_special_assessment_at_closing.jpg" width="800" height="450" alt="Who pays the special assessment at closing" style="margin: 10px; vertical-align: middle;" />
The Meeting minutes: homeowner associations are supposed to hold monthly meetings to discuss the running of the development and any issues including expensive repairs and financing. Although there might not be a current special assessment, the meeting minutes might reveal the potential of one on the horizon.
However, many HOAs are not very well run and seldom have meetings. Some might just have an annual meeting and any notes might be 11 months old.
Financial statement + the overall condition of the property: in the Resale Certificate there will be a copy of the latest banking statement showing how much funds the HOA has set aside to address both known and unexpected repairs.
Now go walk around the property, both inside and out to observe the overall condition of the place. If the paint is peeling, the roof looks old, the driveways are cracked and there are other signs of deferred maintenance but the reserve fund is low, then you are pretty much guaranteed a special assessment.
The Seller Disclosure Statement: home sellers are required to fill out a 6-page questionnaire detailing their ownership of the home. The form specifically asks if there is are any current or pending special assessments. Some property owners fail to check the YES box when they should, so don't rely on this form too much.
Just talk with other owners! For some finger on the pulse and up-to-date information just walk around the development and chat with the people who live there. Most of them will be happy to talk about the place and any gripes that they might have, including any information on special assessments and what the history of assessment there is like. If you can find a long-term owner, all the better.
Special assessments are generally not "advertized" in online listings. You need to ask!
Listing agents know that any mention of a special assessment in the fluffy listing description of a home will be an instant turn-off for most buyers. That's why they tend to "forget" to mention that fact upfront. They want you to fall in love with the home first and then maybe you'll overlook the elephant in the room.
There's a section for listings that is only visible to Realtors on the MLS (multiple listing service) and usually, the listing agent will mention the existence of an assessment in there. But plenty of times they don't. Buyer beware, do not rely on the information on online listings for a full picture of the financial health of an HOA. <a href="https://www.myseattlehomesearch.com/blog/9-critical-questions-to-ask-when-buying-a-condo/" title="Questions to ask when buying a condo">Do your due diligence and ask lots of critical questions. </a>
<a href="https://tenor.com/view/snl-saturday-night-live-church-lady-enid-strict-isnt-that-special-gif-4268880">Well Isn'T That Special? GIF</a>from <a href="https://tenor.com/search/snl-gifs">Snl GIFs</a>
who pays the special assessment, the home buyer or the seller?
There are a number of ways this can go and many times it will depend on how much equity the owner has in the property and how motivated they are to sell.
If the seller has a healthy amount of equity, they will usually be willing to pay off the assessment from the proceeds of the sale at closing, especially if the remaining amount is on the smaller side.
If the seller is only close to breaking even on the sale of their home, then they will want the buyer the take over the monthly payments of the assessment after they get the keys to the home. Whether the buyer is willing to do so will depend on how large that cost is and how badly they want that home.
Trying to sell a home with a current or upcoming special assessment is never easy if the owner is not willing to pay it off at closing. Buyers have plenty of other options to choose from.
Also, If the home has a special assessment and the seller is not willing to pay out off, the buyer's lender might not be willing to give the buyer a loan for the home.
How common are Special assessments?
Speaking specifically for the Seattle area condo market, in my experience special assessments are very common. At some stage over the life of the condo development, there is a good probability that there will have been at least one levied on the unit owners unless it's a recently built community.
The most common big-ticket items tend to be the replacement of failed siding, windows, and decks plus adding a new roof. As a buyer, if you can find a condo that has had all of these items recently updated AND already paid off, they can be a really good purchase. Why? Because it will probably be another 20 plus years before those expensive upgrades need to be redone. Maybe longer.
Will builder warranties and property insurance protest against special assessments?
Probably not!
Builder warranties only cover the building for a few years after initial construction. Even if the issue happens during the warranty period, you'll need to keep your fingers crossed that the builder is still in business or doesn't declare bankruptcy to avoid paying for those expensive repairs. If they did shoddy work on your building they probably did the same on other housing developments.
Insurance companies love to say that they are here for you and that you are in good hands. Until you file a claim that is. It is not uncommon to see HOAs trying to sue their insurance providers to get their claims paid. This can drag on for years with no guarantee of any success. In the meantime, those essential repairs are not being addressed.
To summarize in regards to What is an HOA Special Assessment, basically, it's something you should be very aware of when considering buying a home that is part of a homeowners association. Make sure to do your full due diligence and research to minimize your risk of buying a home prone to expensive assessments.
<img src="https://assets.site-static.com/userfiles/562/image/Logo-contact_for_end_of_blog_posts.png" width="600" height="200" alt="Real estate blogger and Realtor Conor MacEvilly" style="vertical-align: middle;" />
Here are some additional useful resources on the subject:
<a href="https://merrimackvalleymarealestate.com/questions-before-buying-condo/" title="Ask questions when buying a condo" target="_blank">Questions to Ask Before Buying a Condo</a> from Kevin Vitali.
<a href="https://www.madisonmortgageguys.com/homeowner-associations/" title="The pros and cons of HOAs" target="_blank">What are the Pros and Cons of Home Owner Associations?</a> from Luke Skar at Madison Mortgage Guys.
<a href="https://newportbeachrealestatecafe.com/2021/01/28/homeowners-association-rules/" title="HOA rules you need to know" target="_blank">Essential HOA Rules You Should be Aware Of</a> from Sharon Paxon.
<a href="https://www.cincinkyrealestate.com/blog/property-disclosure/" title="How to review a property disclosure form" target="_blank">What to Look Out For on the Property Disclosure Form</a> from Paul Sian.
2021-10-12T05:22:00-07:002023-01-24T07:50:04-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:6105What to know about permits when buying a home in Seattle - including a home inspector's perspectiveMany home remodeling projects and upgrades require that the owners get the necessary permits but not all upgrades require permits. However, even when permits are required, many homeowners have the work done without getting them.
<img src="https://assets.site-static.com/userfiles/562/image/What_to_know_about_permits_when_buying_a_home.jpg" width="900" height="506" alt="What to know about permits when buying a home" style="margin: 10px; vertical-align: middle;" />
Potential buyers will always feel more comfortable buying a home if they know permits were obtained for the completed work. Then again, as a Realtor, in my experience, most buyers tend to get so enamored with a home that they rarely even ask about permits in the first place. Might be more of a case that most buyers are not aware that permits are required for some projects.
So the question is: when buying a Seattle home, should you be concerned about whether permits were obtained by the property owner for that remodel and those upgrades?
The answer is that it depends on the particular job and how the work was completed. Just because a permit was not pulled for the work does not mean that the work was not done properly or to code. Likewise, just because the seller got a permit does not mean that the work was done to perfection.
In this article, I provide an overview of permits in relation to both the seller's and buyer's sides of the fence. This article also has some advice from an experienced Seattle home inspector as to what's actually important when it comes to permits, particularly for the home buyer.
First of all, what is a building permit?
A building or remodeling permit is an official authorization issued by a local government agency that allows the homeowner or their contractor to do a construction or remodeling project. The purpose of the permit is to ensure that both the project plans and the completion of the work comply with local standards and building code requirements. These codes are intended to ensure the safety of the current homeowner and whoever buys the home.
The likelihood of whether permits are obtained for a particular job will depend on whether the <a href="https://www.myseattlehomesearch.com/blog/why-hiring-a-licensed-bonded-and-insured-contractor-is-important/" title="The importance of using a licensed and insured contractor">contractor is licensed, bonded, and insured</a> or not.
How can the home buyer find out if permits were obtained?
To find out if a remodeling project obtained the proper permits or not, the buyer will need to get copies of any permits, if they exist that is. So how do you get copies?
Ask the seller: the seller is required to fill out a Seller Disclosure Statement in which the seller answers a bunch of questions bout their ownership of the home. Some of those questions relate to any remodeling and upgrades and whether permits were obtained for that work.
Some sellers will be super-efficient and have copies of the necessary permits available to buyers while an amazingly high percentage of sellers will check the "Don't Know" box on the seller disclosure questionnaire.
Search the city records: homebuyers can just search through their city's online records to see if the home they are interested in pulled any permits in the past. For example, for homes in the Seattle area, buyers can search by entering the address on the<a href="https://kingcounty.gov/services/gis/Maps/parcel-viewer.aspx" title="King County parcel viewer" target="_blank"> King County Parcel Viewer</a> site and clicking on Property Report and then Property Detail. Any permits pulled for that property will be listed at the bottom.
Note however that many permits are not available due to age or filing issues. Some of that is due to digitizing records with many jurisdictions not having the funds to enter previous permits and only have online accessible records for those permits that were issued since taking their systems online.
Will your insurance company protect you if the work was not permitted?
It's three months after the buyer closed on their lovely new home and then the first big rainstorm of the year arrives... and the roof over the addition to the home is leaking and has damaged the ceilings, walls, and wood floors.
The buyer calls their insurance company.
After a few questions, the insurance guy at the other end of the line asks if the addition to the home was done by a licensed contractor who pulled permits for the work?
If the answer is a "no", then the new homeowner might be in for a big post-closing expensive "gift" from the previous owner. The insurance policy is probably not going to cover those needed repairs.
Similarly, if an unpermitted/uninspected new electrical panel causes fire damage to the home, your hazard insurance policy will probably not cover that either.
FOR SELLERS: CAN UNPERMITTED WORK AFFECT THE SALE OF A HOME?
<img src="https://assets.site-static.com/userfiles/562/image/Do_insurance_companies_cover_unpermitted_work.jpg" width="400" height="600" alt="Do insurance companies cover unpermitted work?" style="margin: 10px; float: left;" />Do homebuyers care if work is unpermitted or not?
The short answer is that it depends on the prevailing real estate market at the time and on the type of work that was done. Buyers competing for your home in a <a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="Competing with multiple offers for a home"> multiple offer situation</a> will be different than a home sitting on the market in a recession.
If it was a major remodel such as adding an extension, a dormer, or converting the garage into living space, then yes, most buyers would be very wary of buying the home if the work was unpermitted.
If not done properly and to current building code requirements, then the buyer could be inheriting years of leaks and dodgy workmanship. Plus, if the city finds out about it, the new owner might be required to remove the unpermitted structure or spend thousands of dollars bringing it up to code.
In a hot real estate market, buyers who are desperate for a home will overlook a lot of imperfections in a home and knowingly buy a home with work that was done without permits.
Buyers should be aware that although they might be personally willing to overlook unpermitted remodels, down the road when it comes time to sell the home and the market is not as hot, will other buyers be as willing to overlook that same unpermitted work?
Sometimes, when sellers list their home on the market it will catch the eye of the city inspector who notices the unpermitted addition and the extra square footage. A few years ago, in the Shoreline neighborhood (just north of Seattle), I personally saw two homes listed for sale in the same week with a notice from the city slapped on the front door stating that the homes could be not be sold because of unpermitted work. Maybe the city inspector was having a bad week or just more time on their hands than usual.
<br />A Seattle home inspector's advice on permits when buying a home.
I asked Steve Bryan of <a href="https://www.myhouseandyours.com/about.html" title="Steve Bryan Seattle home inspector" target="_blank">MyHouseAndYours.com</a>, a Seattle home inspector since 1991 and involved with Seattle construction for over 45 years, for his advice as to what is actually important for buyers when considering homes and permits.
Here are Steve's two cents on the subject.
When it comes to permits, the older the home, the more unpermitted work I tend to find. I have always thought that well over half the work I see has not been permitted.
<br />1. The quality of the workmanship is more important.
It’s not the permit, it’s the workmanship! If the work has been done professionally and is safe, I don’t get overly worked up about most projects. Most code requirements are safety-related, like deck railings and structural fasteners, stairs, and venting.
If all work has been done with a good understanding of how things work, like the drainpipe venting, the proper outlet wiring, and the ceilings aren’t sagging where the wall used to be, then I don’t see big problems, regardless of whether plumbing permits and electric permits were pulled or not. But if dad and Uncle Joe did the work and hadn’t a clue what they were doing, no permit was ever going to make a difference.
2. What kind of work requires permits?
Technically, all plumbing and electrical work need permits, unless you’re just changing out faucets, switches, light fixtures, and outlets. Electrical panels always need a permit and you usually need to have Seattle City Light replace the meter seal. So as soon as you run any new wire or new pipe, then permits are needed.
All structural work and additions also require permits, like removing that load-bearing wall between the kitchen and dining room or taking out some of the basement posts to create a usable space.
If it can be referred to as maintenance work, like replacing decayed/rotted sill plates or sub-flooring at that leaking toilet, then no permit is required. But most jurisdictions want deck permits due to the amount of non-conformity to setbacks and newer safety and structural requirements.
Sewer line work requires permits as well as a specialty contractors license, but I think you get a foot or two outside of the foundation with just a plumbers license.
3. Over-the-counter permits.
There is a whole class of “over-the-counter permits” that are required and typically include items like a new furnace, water heater, small electrical upgrades, oil tank retirement, new roofs, security alarm systems, etc. This helps the city make sure licensed contractors are performing the work and collect funds. It also helps them keep track of the type of work being done to local homes. Over-the-counter permits typically don't require site inspections.
Most of the work that gets “flagged” by a city inspector for lack of a permit, is called in by a neighbor. So no longer do we see additions getting added on-the-quiet since there’s always someone in every neighborhood ready to report suspicious remodeling activities.
However, it's not too unusual in the Seattle area to see the old enclosed back porch becoming part of the kitchen, which for 1940's homes and before still occurs frequently without a permit. Kitchen and bath remodels are rarely permitted.
4. Can the City come after the new home for unpermitted work done by the seller?
Rarely as far as I’m aware. I’ve only heard of stories and have never, in over 45 years In Seattle construction, actually had any first-hand knowledge of this happening. Usually, they don’t pursue after a property has changed hands. Possibly if there’s a real egregious infraction.
Every time I’ve heard of a permit official following up on a non-permitted project from a previous owner, they’ve documented it with no consequences to the new owner and provided advice regarding safety corrections.
5. And, just because the seller got a permit doesn't mean...
I regularly tell clients that some of the very best work I’ve seen done has not had a permit and some of the worst has been permitted, so the proof is in the pudding, or should I say in the workmanship.
Here are some additional sources of information on the topic of buying a home and what you need to know about permits.
<a href="https://www.realestatemortgageblog.com/home-buyers/avoid-buyers-remorse/" title="Steps to avoiding home buyer's remorse" target="_blank">How To Avoid Home Buyer's Remorse</a> from Luke Skar provides advice on how not to wake up the day after closing in a home that is too small for you, you don't like the neighborhood and your checking account is empty.
<a href="https://www.maxrealestateexposure.com/unpermitted-work-buying-selling-home/" title="Unpermitted work when buying or selling a home" target="_blank">Dealing with Unpermitted Work When Buying or Selling a Home</a> from Bill Gassett. This article provides advice to both home sellers and their potential buyers on the risks and drawbacks involved in selling/buying a home that has unpermitted work.
<a href="https://lakelandfloridaliving.com/buying/the-pros-and-cons-of-buying-a-fixer-upper/" title="What to know about when buying a fixer upper home" target="_blank">The Pros and Cons of Buying a Fixer-Upper Home</a> from Petra Norris. Speaking of permits, you're likely to need some of them if you decide to go this home-buying route. The article has advice on the reality of buying these types of homes.
<a href="https://springshomes.com/blog/a-guide-for-young-adults-preparing-to-purchase-their-first-home/" title="Home buying advice for young adults" target="_blank">A Home Buying Guide for Young Adults</a> from Joe Boylan. These kinds of buyers are more likely to be competing for homes at the lower end of the market. This article has advice about planning for the longer term and planning for some home renovations (and maybe even some permits!).
<img src="https://assets.site-static.com/userfiles/562/image/Logo-contact_for_end_of_blog_posts.png" width="600" height="200" alt="Conor MacEvilly " style="vertical-align: middle;" />2021-09-28T07:16:00-07:002021-09-29T11:26:00-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:4921What are my closing costs when buying a home?Congratulations, you have scrimped and saved enough for a downpayment on a home. But before you leap into purchasing one, you need to be aware of the closing costs when buying a home. Sit down (or Zoom) with your real estate agent or mortgage broker to understand ALL of the costs associated with purchasing a property.
The financial aspect of the<a href="https://www.myseattlehomesearch.com/buyers/steps-to-buying-a-home-in-seattle/" title="Steps involved in buying a house"> home purchase process</a> can be a little confusing for many buyers. It can feel like money is flying out of your pockets and bank account in all directions. And to be honest, money will actually be flying out of your pockets in all directions.
What are closing costs on a house?
Closing costs are fees and expenses you pay when you purchase a home that is in addition to your downpayment. For a median-priced Seattle single-family home of $780,000 (as of January 2021), with a 20% downpayment ($624,000 loan), the buyer's closing costs will include a $700 appraisal fee, $1,500 for Title Insurance, $1,200 Escrow company fee, a $1,240 loan origination fee plus pre-paid items.
<img src="https://assets.site-static.com/userfiles/562/image/Closing_costs_when_buying_a_home.jpg" width="800" height="1200" alt="Closing costs when buying a home" style="margin: 10px; vertical-align: middle;" />
Obviously, Seattle is a higher-priced market than many parts of the US and the closing process and fees will vary from state to state, but this article will give you an overview of what you can expect. Adjust accordingly for your local price range.
When buying a home, you will need funds to cover the following:
The downpayment: the amount of money you are putting down on the home. You borrow the rest by getting a mortgage.
Fees and costs associated with getting the loan and closing the sale which includes the loan origination fee, the appraisal, the credit report, and a flood report.
Third-party fees for Title Insurance and the Escrow Company service.
Pre-paid items are expenses that you have to pay upfront at closing for items like property taxes and insurance that you will be paying on a regular basis as a homeowner.
Other expenses like paying for a property inspection and moving costs.
Who pays closing costs?
Both the home buyer and the seller will pay closing costs, however, they will be different for each party. The main difference between the two sides is that buyers will usually be relying on getting a mortgage to buy the home and so will have loan-related fees.
The sellers on the other hand may have to pay some taxes on any profit they make on the sale of their home. Here's another guide that specifically looks at the <a href="https://www.myseattlehomesearch.com/blog/what-are-typical-closing-costs-and-expenses-when-selling-a-seattle-home/" title="Closing costs when selling your home">costs and expenses when selling your home</a>.
What is included in closing costs for a buyer?
There are a number of different costs and fees but these are the most common/largest ones.
Loan origination fee.
A fee charged by a lender to cover certain processing expenses in connection with getting a loan. The fee is usually a percentage of the amount being borrowed. For Washington State at least, the loan fee is the same regardless of the size of the loan.
Note that there is a difference between getting a home loan through your <a href="https://www.myseattlehomesearch.com/blog/should-i-go-with-a-mortgage-broker-or-a-bank/" title="Using a mortgage broker versus a lender when buying a home">bank versus using a mortgage broker.</a> The bank has a set portfolio of loan products whereas a mortgage broker can shop around and pick the best mortgage from hundreds of different lenders.
It is advisable to shop and round to compare not just interest rates but how much each lender will be charging you in fees to get that loan.
Mortgage points:
The buyer has the option of paying points to reduce their interest rate. This is sometimes called buying down the rate. Each point the borrower buys costs 1 percent of the mortgage amount.
The rate reduction you actually get for one point will vary from day to day. Somedays a point will reduce the mortgage rate by 1/4th and another day by just one 1/8th. It all depends on what the loan market is doing at that particular time.
Is paying points worth it? First of all, points are not cheap. For example, buying down the rate by one point (usually 0.25%) on a $624,000 loan would cost you S6,240 at closing. Secondly, it will take about 5 years before the buyer sees the benefit of the reduced interest rate.
Appraisal fee:
As part of the mortgage approval process, the lender will want to ensure the home is worth the sale price agreed to by the buyer and seller. The lender wants to know that in the event that the buyer stops making monthly mortgage payments, the lender will be able to repossess the home, sell it and get their money back.
An appraiser is an independent 3rd party who visits the home and writes up an appraisal report detailing the current market value of the home. For the Seattle area, an appraisal will cost between $400 and $1,000 or more, depending on the type and size of the home; condo, single-family home, multi-family, or waterfront homes for example.
Escrow Fees:
The escrow company is an independent/neutral 3rd party that coordinates the closing of the transaction between the buyer and the seller. On closing day they make sure that the title to the property is transferred from the seller to the buyer and that the buyer's downpayment and loan safely go to the seller's side.
The size of the escrow fee is based on the sale price. For a Seattle median-priced home the escrow fee will be around $1,250.
Title insurance fees:
If you get a mortgage to purchase a property, the lender will require a loan policy of title insurance. This protects the lender's interest in your property until your loan is paid off or refinanced. Also, an owner's title insurance policy insures the buyer's rights to the property after closing. You only pay for this policy once but the coverage lasts as long as you own your home.
The fee is based on the loan amount. For the home in this example, the buyer can expect to pay around $1,200.
Note that title and escrow fees are referred to as settlement costs.
What are Pre-Paids when buying a home?
As the name suggests, pre-paids are expenses that you have to pay upfront, in advance at closing for items that you will be paying on a regular basis as a homeowner. The lender will require that the buyer deposits advance payments at closing that will cover the first few weeks, months, or first year of ownership.
The lender wants to make certain that the home is adequately insured and that property taxes are paid on time. Some of these pre-paids are added to the buyer's escrow account (see below).
<img src="https://assets.site-static.com/userfiles/562/image/Pre-paids_and_closing_costs_when_buying_a_home.jpg" width="800" height="450" alt="Prepaid fees and closing costs when buying a home" style="margin: 10px; vertical-align: middle;" />
As mentioned earlier, the funds the buyer brings to closing for pre-paid items do not go to the lender. Those funds go into the buyer's own escrow account that will be used to pay future property taxes and insurance. Consider them as your initial escrow payment at closing.
Here are some possible pre-paid costs that a buyer will encounter. The number of months of pre-paids will depend on the loan, the type of property being purchased, and the time of year you are closing.
Pre-paid hazard insurance, aka homeowner's insurance: The lender will usually require the buyer to pre-pay homeowners insurance upfront at closing to ensure their investment is protected. The buyers may have to pay a full year's coverage directly to the insurance company at closing plus an additional 1 to 3 months into an escrow account.
Prepaid property taxes: the lender will require that the buyer prepay property taxes and that amount will depend on the month of closing. Taxes are paid twice per year in April and October so if you close in April, you will need to pay 6 months of prepaid property taxes at closing. For areas with higher property taxes, that can be a chunk of change. For this Seattle example, the buyer would need about $4,500 to cover prepaid taxes.
Pre-paid HOA dues: if you a buying a property that is part of a Home Owners Association (HOA) like a condo or townhome, and there are <a href="https://www.myseattlehomesearch.com/blog/are-low-hoa-fees-always-a-good-thing/" title="About HOA monthly dues">monthly HOA dues</a>, the HOA will require that you pre-pay a certain number of months of dues in advance.
Per diem is pro-rated mortgage interest that will be charged based on the day you close on the property. If, for example, you close on the 20th of March you will have about 11 days of interest due at closing and your first payment would be May 1st. You must have a minimum of 30 days between your funding date and the 1st mortgage payment date.
What is an Escrow Account?
If your downpayment on the home will be less than 20%, the lender will require you to pay private mortgage insurance. The lender will also require that the buyer maintains an escrow account to ensure that the home's property taxes and insurance gets paid on time and is kept up to date.
The escrow account is a pool of money that buyers pre-pay into each month and from which the lender draws twice a year to pay property taxes and hazard insurance....to protect their investment.
When you have an escrow account your monthly mortgage payment will include the following:
Principal (P)
Interest (I)
Taxes (T)
Insurance (I)
Which together make PITI. I know, PITI me!
<img src="https://assets.site-static.com/userfiles/562/image/Loan_estimate_and_closing_disclosures.jpg" width="400" height="600" alt="Loan estimates and closing disclosures when buying a home" style="float: left; margin: 10px;" />And if you are buying a condo or a home that is part of a homeowners association (HOA), your monthly payment will be PITI + HOA. However, you will pay the monthly HOA dues directly yourself, they do not come out of the escrow account.
Buyers using a downpayment of 20% or more are not required to maintain an escrow account. However, the lender may offer a slightly lower interest rate if such buyers agree to maintain an escrow account.
Not that an escrow account is different from the escrow company that coordinates the closing of the home sale. The escrow account lives on after closing but the latter disappears.
Can closing costs be included in the loan?
You cannot roll those costs into your loan unless it is a Government loan. But remember, say you are getting a 30 years loan, for example, then you would be paying interest on those loan costs for 30 years.
Can the seller pay the buyer's closing fees?
Yes, the buyer can negotiate with the seller to have certain costs paid but are limited to allowable closing costs and pre-paids. If the downpayment is less than 10%, the seller can contribute 3% to allowable closing costs, up to 6% when the downpayment is 10 -25%, and 9% for loans with 25% or more down.
What about closing costs for cash buyers?
Since cash buyers are not relying on a loan to buy the home, they will have a lot fewer closing fees. Basically, these buyers only pay Title and Escrow fees.
Request a Loan Estimate so you can see estimated closing costs.
When you are either getting pre-approved for a home loan before making an offer or applying for a mortgage once you have an offer accepted, your lender will give a document called a Loan Estimate.
This document is really important and will give you a clearly stated picture of all the closing costs associated with getting the loan and losing on the home. It also lists the interest rate, your monthly payment, your prepaid items, plus the terms of the loan.
A few before your escrow signing appointment and closing the lender will send you a Closing Disclosure which is essentially an updated Loan Estimate. There should be a close agreement between these two documents. Read them as if your life depended on it
Here's a link to a handy <a href="https://www.mortgagecalculator.org/calcs/closing-costs.php" title="Mortgage calculator" target="_blank">Closing Costs Calculator</a> where you can plug in your numbers and get an idea of your closing costs.
Advice from a Mortgage Broker.
I asked a local <a href="http://www.cfsmortgage.com/liz/" title="Seattle mortgage broker">Seattle mortgage broker, Liz Fudacz</a>, what advice she would have for homebuyers when it comes to closing fees.
1. Be prepared not only to pay a downpayment and closing costs but also taxes and insurance. In some cases, as many as 8 months of taxes need to be collected, plus 14 months of Homeowner’s Insurance. Additionally, in many cases, the bank/lender will want you to have at least 2 months of your full new housing payment in the bank after closing.
2. It is important to have your funds ready and accessible. It makes things much easier if your funds are in one account. If you need to move them from another account(s), be prepared to show the source of those funds, including bank statements from the other account(s) and proof of the transfer.
Any deposit that is more than 50% of your monthly income will need to be sourced. For example; If you make $10,000/month and you have a recent deposit of $5025, you will have to prove where those funds originated. Be sure the funds are in an account that is easy to access. Some banks will not wire funds and it can take weeks for them to send a check to you.
Here are some additional home buyer resources for closing costs:
<a href="https://www.cincinkyrealestate.com/blog/how-to-avoid-closing-cost-sticker-shock/" target="_blank">How To Avoid Sticker Shock on Closing Day</a> from Paul Sian advises home buyers on ways to reduce their closing costs like using an FHA or VA loan and having the seller pay some of their closing costs.
<a href="https://www.pacificalocals.com/2021/01/20/1827/3-ways-to-better-your-chances-of-getting-your-dream-home-when-you-write-an-offer-how-to-vet-a-buyer-who-makes-an-offer-on-your-home/" target="_blank">How to Improve Your Chances of Getting That Home</a> from Vicki Moore where she offers solid advice on improving your chances of getting your offer on a home accepted.
<a href="https://www.rochesterrealestateblog.com/top-mortgage-myths/" target="_blank">Common Home Loan Misconceptions</a> from Kyle Hiscock is an excellent article looking at many of the confusions buyers have when it comes to getting a mortgage and whether they can qualify for one.
<a href="https://www.maxrealestateexposure.com/how-to-get-rid-of-private-mortgage-insurance/" target="_blank">What Is PMI And How To Get Rid Of It</a> from Bill Gassett provides a detailed explanation of what exactly PMI is and how you can go about getting rid of this dreaded aspect of home loans.
<img src="https://assets.site-static.com/userfiles/562/image/Logo-contact_for_end_of_blog_posts.png" width="600" height="200" alt="Conor MacEvilly author and blogger" style="margin: 10px; vertical-align: middle;" />2021-02-24T20:22:00-07:002023-03-06T18:59:21-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:4777Offer review date - what you need to know.In a strong home sellers market like Seattle, where the inventory is low and there are too many buyers competing for too few homes, the majority of homes that are listed for sale will set an offer review deadline.
In real estate, the offer review date is the day and time that the seller has selected to review any and all buyer offers that are submitted on their home. Interested buyers must submit their offer by the stated deadline. However, the seller still retains the right to accept an early offer and is not obligated to honor the offer review date.
<img src="https://assets.site-static.com/userfiles/562/image/Pros_and_cons_of_using_an_offer_review_date.jpg" width="450" height="675" alt="Offer review date what you need to know" style="float: left; margin: 10px;" />It is important for both home buyers and when <a href="https://www.myseattlehomesearch.com/sellers/steps-to-selling-a-home-in-seattle/" title="Steps to selling your WA home">selling your home </a>to understand precisely what an offer review date means and the pros and cons of the seller setting one.
The two main ways home sellers decide to review offers.
Listing practices will vary around the country, but in the Seattle area at least, when a home is listed for sale and the listing information is uploaded into the Multiple Listing Service (MLS) by their agent, the sellers can check one of two boxes:
The seller will review offers upon receipt.
The seller will review offers on Offer Review Date (may review/accept sooner).
Listings That Review offers Upon Receipt.
When the sellers tag their listing with the seller will review offers upon receipt, the implication is that they will accept the first good offer that meets their expectations.
In a competitive market, when the seller does not set an offer review date, it usually means that they are not expecting multiple offers on the home. That could be for a number of reasons including the fact that they know they are pushing the price (despite their own agent's advice) or the home has some aspects that might reduce buyer appeal like a noisy location or the home has an odd layout
For homes with no offer review deadlines, an interested buyer can jump in and make an offer whenever they want. If it's the only offer and one that the seller likes, then the seller is likely to accept the offer
However, buyers should be aware that if the home unexpectedly starts getting a lot of interest and early offers, the seller might turn around and decide to set an offer review deadline after all to increase competition for the home and to try and drive up the sales price. And that usually gets buyers riled up and feeling manipulated.
Even if the seller hasn't set an offer review deadline, as soon they get that one offer, the listing agent might start calling all the other agents who have shown the home previously to try and leverage the offer for a better one. Don't take it personally, the listing agent is just doing their job trying to get as much as possible for the seller.
Homes listed with an offer review date.
In Seattle's seller's market, about 9 out of 10 listings that come on the market will set an offer review deadline. The home will usually come on the market in the middle of the week and the offer review deadline will be set for the following Tuesday or Wednesday, sometimes sooner.
The idea behind this timeline is to give buyers and their agents enough time to see the home and decide if they want to make an offer. For a properly priced home, setting an offer deadline usually results in increased competition for the home and a higher number of offers. This then forces buyers into deciding which contingencies they are willing to waive in order to win the bidding war.
Also, by allowing a set period of time between coming on the market and reviewing offers, the seller is hoping that the most interested buyers will do a pre-inspection of the home, waive<a href="https://www.myseattlehomesearch.com/blog/negotiate-home-seller-does-repairs-or-a-price-drop/" title="The inspection contingency and negotiating repairs"> the inspection contingency</a> in their offer and buy the home as-is. Sellers love offers without an inspection addendum because the buyer is giving up their number one way of getting out of the sale and walking with their earnest money.
In competitive real estate markets, things can get a little irrational and desperate buyers will start <a href="https://www.myseattlehomesearch.com/blog/5-potentially-risky-home-buyer-offers-in-multiple-offer-situations/" title="Risky offers in multiple offer situations">making riskier and risker offers </a>to win the home. Know your limits and when to step back and just wait for the next batch of new listings.
The pros and cons of setting an offer review date - from the seller's perspective.
The advantages of an offer review deadline:
Setting a review date usually generates increased buyer competition for the home, resulting in more offers while driving the sales price up.
Generates offers with fewer contingencies, aka cleaner offers. Some buyers will pre-inspect the home and waive the inspection contingency while others will go a step further either by partially or fully waiving the appraisal and other contingencies.
The seller gets to control the period of time between when the home goes on the market and when offers will be reviews and then focus on packing, moving, and getting ready to close.
The seller retains the right to accept an early offer and does not have to honor the offer review date. Note that some listing will expressly state: the seller will honor the offer review date. In those situations, the seller usually does abide by that promise because karma is a...
If a motivated buyer tries to make an early offer they know that it will have to be a really strong one with less than the full complement of contingencies. The offer will probably be a lot stronger than the equivalent one submitted for the offers will be reviewed upon receipt option.
<img src="https://assets.site-static.com/userfiles/562/image/Offers_review_dates_do_not_guaranttee_multiple_offers_on_a_home.jpg" width="800" height="400" alt="Offer review dates when selling your home" style="margin: 10px; vertical-align: middle;" />
Some potential disadvantages of using an offer review date:
Just because a seller sets a day and time to review offers, it does not mean that the listing is guaranteed to get multiple offers or even one offer. Even in a hot market, the home still has to be priced and marketed properly. Buyers are very savvy these days and are armed with apps and statistics and recognize over-priced homes and lemons when they walk into one.
Buyers who have missed out on a couple of homes after paying for a pre-inspection to improve their offers will quickly tire of offer deadlines and may decide to just sit this one out. And those buyers might have made really good offers.
If there are other nearby listings that have set the same day to review offers, then buyers will be forced to decide as to which home to make an offer on, probably resulting in fewer offers on each home.
Some buyers may not be willing to wait until the offer date and the inevitable bidding frenzy and just decide to go after a home with no offer review date. However, in a strong seller's market, nearly all listings will have offer review dates.
If the seller accepts an early too-good-to-say-no-to-offer, they will be risking the ire of a lot of other buyers and their agents. The listing agent will be making a lot of humble pie phone calls. At a minimum, the listing agent should contact all the Realtors who have shown the home already to notify them that the seller is considering accepting an early offer and give those buyers a chance to submit a quick offer. Again, however, the seller is under no obligation to do this. But they should because they might get an even better offer.
Experienced agents and their buyers will usually wait until the last couple of hours before the deadline to submit their offers. The buyer's agent wants to try and get as much information as possible on the competition before submitting their offer. So basically, the listing agent and their seller might have to deal with a tsunami of offers just before the deadline expires. But that's more of an inconvenience rather than a disadvantage.
To summarize in regards to Offer Review Dates- What you Need to Know: there are both pros and cons to using this strategy when selling a home. In a hot seller's market, it does tend to generate higher and better offers by increasing buyer competition. However, just because you set an offer deadline does not guarantee that you will get lots of offers or any offers for that matter. You still have to market your home properly, and that includes getting the listing price right.
Here are some additional resources that home sellers will find useful:
<a href="https://merrimackvalleymarealestate.com/sell-my-house/" title="Home selling myths" target="_blank">Myths That Should Be Ignored When Selling Your Home </a>from Kevin Vitali.
<a href="https://www.madisonmortgageguys.com/things-not-to-do-when-you-sell-home/" title="What not to do when selling your home" target="_blank">Things you SHOULDN'T Do When Selling Your Home</a> from Luke Skar.
<a href="https://www.springshomes.com/blog/how-does-a-realtor-get-paid-anyway/" title="Who pays the real estate agent?" target="_blank">Who Pays the Realtor?</a> from Joe Boylan
<a href="https://www.destinpropertyexpert.com/blog/5-tips-to-sell-your-house-faster/" target="_blank">Tips For Selling Your Home Faster </a>from Danny Margagliano.2021-02-01T10:53:00-07:002023-08-03T04:07:41-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:4533What to do after inheriting a houseKnowing exactly what happens when you inherit a house and dealing with the tough financial and emotional decisions on what to do with it can be difficult. This has left many people wondering what their first steps should be. Real estate is not always straightforward, especially when considering an inherited property.
<img src="https://assets.site-static.com/userfiles/562/image/What_to_do_after_inheriting_a_house.jpg" width="800" height="533" alt="What to do after inheriting a house" style="margin: 10px; vertical-align: middle;" />
When you’re done reading, you’ll understand the tax implications, as well as the financial and legal responsibilities that come with inheriting a house.
Legal and Financial Responsibilities.
First thing’s first – you must consider the legal and financial responsibilities, which include debt obligations. Tax liabilities, including capital gains or federal estate taxes, are typically involved with inheriting a house. Also, you have to consider what you want to do with the house – move in it or rent it out. Perhaps you want to get rid of it and are looking for <a href="https://brotherlyloveproperties.com/sell-my-house-fast-philadelphia/" target="_blank">the fastest way to sell a house.</a>
These three factors are tied together, and for many people, deciding what to do with the house is based on the legal and financial responsibilities that come with owning it, which then impacts how you’re going to be taxed on it.
Taxes when inheriting a home.
If you inherit a house, you’re probably wondering whether you’re responsible for paying taxes. The answer to that is – it depends. There’s no federal inheritance tax, but some states have an inheritance tax. Luckily, for most people, inheriting a house won’t trigger a tax liability. When you inherit the house, the IRS will establish a fair market value (FMV), providing a new basis for the house. This is also known as a step-up basis. The new valuation will influence future taxes should you decide to sell the house.
Capital Gains when inheriting a house.
Capital gains are another type of tax that you have to consider. Capital gains relate to the profit generated by an asset. The step-up basis makes it so you’re only subjected to these taxes if you decide to sell the house. You’ll have to pay taxes on the difference between the established FMV at the time of inheritance and the price you’re selling the house for.
The financial and legal responsibilities when you inherit a house can vary based on a few different factors, including existing debt obligations (mortgage), the condition of the property, costs of ongoing maintenance, and whether there are multiple heirs.
Debt Obligations.
<img src="https://assets.site-static.com/userfiles/562/image/Will_I_have_to_pay_taxes_if_I_inherit_a_home.jpg" width="400" height="600" alt="Will I have to pay taxes if I inherit a home" style="margin: 10px; float: left;" />If the house has existing debt obligations, it’s important to figure out the type of obligation and whether it’s assumable or due on sale. Most debt obligations can be assumed, meaning you can make overpayments and pay the mortgage according to the original loan terms. However, reverse mortgages, for example, state that the unpaid balance is due when the mortgage passes, meaning you’ll have to sell the house to settle the debt.
House Condition.
The condition of the house will often play a role in what you decide to do with it. If the property is poorly maintained, it may require time and expensive repairs. Renovating it can be a huge commitment. In a hot real estate market, you can often sell an inherited house as-is without doing any repairs. This can not only save you time, but also money that you would rather have to put into renovations upfront.
<a href="https://brotherlyloveproperties.com/" target="_blank">Companies that buy houses for cash </a>often purchase property as-is. Regardless of the condition of the house you inherited, there may be buyers interested in taking it off your hands as it stands.
If time is not an issue and you plan to sell your inherited house, a good strategy to maximize your sale price is to sell it on the market. Do your best to find an experienced realtor or agent in your market, and ask them what is the most effective way to sell the house. They may say that you can still sell it as is, and they will handle marketing it and attracting buyers.
Depending on the property and neighborhood, the majority of the buyer pool may be owner-occupant buyers. In this case, sometimes it makes more sense to fix up the house before selling it. Renovations can range from simple, cosmetic repairs to larger interior renovations. Either way, it is best to first determine your timeline and how much money you want to put in your pocket when selling your inherited property.
Remember, if you plan to do repairs before selling the house, you’ll also be responsible for insuring the property, paying taxes on it, and maintaining it during that time. If all of this sounds like too much of a burden, you might want to consider selling the home as-is.
Shared Ownership and inheriting a home
If you have to share ownership of the house with family members or siblings, a whole new world of problems may arise. Sharing ownership means sharing opinions and needs as to what is to be done with the house. You may prefer to sell the house for cash right now, while the other co-owners may prefer to rent it for steady, long-term income.
Another part-owner may even want to move into it. The number of people sharing ownership of the inherited house and how they interact with one another can play a huge role in what’s done with it. <br />To ensure that everyone is on the same page, communication is key. Here are a few key questions to answer before taking action on your inherited house:
● Do all of the owners and co-owners know that they now have ownership in the house?<br />● Do they want to rent it out, live in it, or sell it? <br />● How much time can each co-owner devote to each potential process? <br />● Which decision makes the most financial sense? <br />● Would anyone regret going in the direction that we plan to choose?
Owning anything with others, especially real estate, comes with challenges. Do your best to squash any potential disagreements that can come up later on by discussing them upfront. By reviewing the tips and advice above, you will have a better idea of what to do after inheriting a house.
So in summary, inheriting a home comes with different options as to what to do with the home but you also need to be aware of your potential legal and financial obligations. Every case is unique.
This article was written by Alex Capozzolo, owner of Brotherly Love Real Estate in the great city of Philidelphia. 2020-12-03T07:22:00-07:002020-12-03T07:47:29-07:00Conor MacEvillytag:myseattlehomesearch.com,2012-09-20:2313Christmas tree lots in Ballard Seattle for 2020Where can I buy a (real) Christmas tree in the Ballard area?
There’s no experience quite like cutting your own live Christmas tree out of your neighbor’s yard. ― Dan Florence, Zombies Love Pizza
<img src="https://assets.site-static.com/userfiles/562/image/Christmas_tree_lots_in_Ballard_Seattle_2020.jpg" width="400" height="250" alt="Where can I buy a Christmas tree in Ballard Seattle" style="margin: 10px; float: left;" />Or, failing that...
...if you live in the<a href="https://www.myseattlehomesearch.com/seattle-neighborhood-guide/ballard-seattle/"> Ballard neighborhood</a> and want to get yourself a tree for the holidays, here's a handy list, a map, and details of all the local Christmas tree lots in Ballard.
Whether you buy "the perfect" tree the day after Thanksgiving or a "that's all there was left" tree slightly intoxicated on Christmas eve, there are plenty of Christmas tree lots in the area. Also, whether you want to call it a Christmas Tree or a Holiday Tree, I'll leave that up to you. Just have fun regardless.
Top Banana.
Located right next to Ballard's legendary Top Banana fruit and veggie store, this lot always has a friendly, cheerful crew but the site can be a bit of a squeeze. If you need a really tall tree, this is the place to go.
Address: 6501 15th Ave NW, Seattle 98117.
Phone: 206-783-7786.
Hours: 9 am to 9 pm.
Starts selling trees on November 20th.
Years at this location: Forever!
Types of trees sold: Nobel, Douglas, Grant, Frazier, and Nordmann fir.
Where do you get your trees? Shelton and Chehalis.
SWANSON'S NURSERY.
Local institution Swansons Nursery, where gardening enthusiasts openly salivate for most of the year, also sells Christmas trees. They guarantee any plants they sell will survive or you can return them, but I'm guessing that doesn't apply to their Christmas trees.
You will probably pay a little more for a tree at Swansons compared to the seasonal pop-up lots. However, you can't beat the setting and the ambiance.. cool light displays, a big snowy scene train set, a cozy cafe, and lots of other goodies to ogle at and try to resist buying. Alas, no reindeer this year because of COVID, but they will be back next year.
Address: 9701 15th Ave NW, Seattle, WA 98117.
Phone: 206-782-2543.
Website: <a href="https://www.swansonsnursery.com/">https://www.swansonsnursery.com/</a>
Hours: 9am to 8pm November 27th to December 13th and then 9am to 6pm up to Christmas. Open from 9am to 3pm on Christmas eve.
Types of trees sold: Burton Blue, Noble Fir, Nordmann Fir, and Fraiser Fir. Trees are available in three different densities - Alpine, Forest Edge, and Town Square. Real fancy!
Most popular selling tree? "Probably the Nordmann fir".
St. Alphonsus Middle School and the 77-Scouts and Crew 100G.
This is the 64th year that the Scouts have been selling trees in Ballard. This year the 77-Scouts (boys) will be joined by Crew 100G (girls). Proceeds from the sale go to various scout activities plus a portion goes to local charities.
Located just to the north of Ballard Market in the schoolyard of St. Alphonsus. Do your grocery shopping and then pick up a tree. It's a nice big lot so you can get a good 360-degree look at the trees before picking "the one". Note that this lot is closed Monday through Wednesday.
Address: 15th Avenue NW between NW 57th Street & NW 58th Street.
Website: http://troop100seattle.com/tree-lot-2/.
Starts selling trees: Friday, November 27th (until all the trees are gone).
Hours: Saturday and Sunday from 9am to 9pm, Thursday and Friday 2pm to 8pm, closed Monday through Wednesday.
Types of trees sold: Nobel Fir, Nordmann Fir, Douglas Fir, and their allegedly famous "Charlie Brown" trees.
When you find the perfect tree...
<a href="https://tenor.com/view/despicable-me-minions-christmas-happy-holidays-goofy-gif-3577662">Party Minion-style GIF</a> from <a href="https://tenor.com/search/despicableme-gifs">Despicableme GIFs</a>
Donna's Trees.
Hit a bucket of golf balls at the driving range or play a quick 9 holes at Interbay Golf Center and then pick up a tree in the parking lot.
Address: 2501 15th Ave W, Seattle 98119
Phone: 206-307-2023.
Website: <a href="http://www.donnastrees.com/">http://www.donnastrees.com/</a><a href="https://www.swansonsnursery.com/"><br /></a>
From November 21st through December 23rd.
Hours: 9am to 8pm.
Types of trees sold: Noble fir, Nordmann fir, Douglas fir, Grand fir, Fraser fir, and Alpine fir.
Curry Family Christmas Trees.
Wedged into an appropriately wedged-shaped lot at 3rd Ave NW and Holman Road opposite QFC, this is another small lot but gets the job done. They always seem to order too many trees and have a bunch left on Christmas Eve.
Address: 8728 Holman Road NW, Seattle 98107.
Phone: 206-719-2583.
Hours: 9am to 8pm.
Types of trees sold: Noble fir, Nordmann fir, Douglas fir, Grand fir, Fraser fir, and Alpine fir.
Other, less "festive" spots to buy a Christmas tree in Ballard.
And if you just want a tree and be done with it and are not into agonizing over which one to pick like normal people, try the various supermarkets. Fred Myers has a decent selection in its garden centers or check out Ballard Market and Safeway for more moderately proportioned species (i.e. small trees).
Here's an alternative... get a permit and go cut one yourself in the mountains!
<img src="https://assets.site-static.com/userfiles/562/image/Christmas_tree_permits_Seattle_cut_your_on_tree.jpg" width="800" height="424" alt="How to get a permit to cut a Christmas tree in Seattle" style="margin: 10px auto; vertical-align: middle; display: block;" />
If you want to make a day of it, walk in the snow, and save a bunch of money (minus the cost of gas), then consider getting a permit and a bow saw. Then get your snow boots on and off you go. This is not the same as going to a tree farm with tractor rides and peppermint cocoa and crowds.
For just $10 you can cut a tree up to 15 feet tall in the beautiful silence of a snowy forest. It may not be perfectly shaped like the ones you can buy elsewhere (courtesy of some chainsaw trimming), but it will probably smell really good. It will definitely be better than Charlie Brown's tree! You don't have to drive too far from Seattle and can get one near the North Bend area.
For more information on cutting your own tree and how to get a permit, <a href="https://www.fs.usda.gov/detail/mbs/passes-permits/forestproducts/?cid=fseprd602862" title="How to get a Christmas tree permit in Seattle" target="_blank">click here.</a>
Have fun and Happy Christmas/Holidays!
This post was written by Conor MacEvilly, a Ballard Realtor since 2008 and a dedicated Christmas tree fan!
<img src="https://assets.site-static.com/userfiles/562/image/Blog_bottom_bio_insert.png" width="600" height="200" style="margin: 10px auto; vertical-align: middle; display: block;" />
2020-11-19T15:32:00-07:002023-06-29T07:22:31-07:00Conor MacEvilly