Team Reba Real Estate

If you’re selling your home then you need to know that a required seller’s disclosure form has just been updated and is required of all sellers starting on July 22nd.  If you are either not yet under contract or about to get your listing started up with a REALTOR(R) you’ll want to pay attention.  To access the Washington State code that spells out disclosure requirements you can go to this link.  For specific details regarding this legislative action you can go here: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=5895.

Additionally, those who own raw land need to be aware that a seller’s disclosure is demanded of them as well - and this is brand new. Prior to the July 22nd change it was not required to provide a disclosure form on undeveloped land.

The major crux of the change for residential property has to do with environmental concerns that might impact a property. Even if a buyer has waived their right to receive a Form 17, if there are issues that impact the property of an environmental nature then this must still be given to the buyer.  There is much more than just this so getting familiar with the specific changes will be important and working through it with your agent will help you to pinpoint elements that will apply to you.

For landowners, you’ll need to be specific disclosing costs and/or requirements for fees associated with developing land.

If you’ve got a specific question about the new changes please feel free to leave a comment and I’ll respond accordingly.

Each year, we at Team Reba hold a clothing drive for Treehouse, a non-profit that helps to provide foster children with clothing and other supplies to help make their lives more normal.  Most people don’t realize that the State of Washington only provides about $300 per year for clothing for these kids, which barely covers much of anything; perhaps maybe a couple of new outfits each year.  If you’ve ever had any kids of your own, then you know that kids outgrow clothing and shoes pretty quickly.

We’re starting our clothing drive again at the beginning of August but I thought I’d get a jump start by putting a post here to alert all of you so you can start thinking about what you might be able to help provide.  While it would be great if we could have a large group donation to drop off we’re also happy if we’ve alerted you to the program and you drop off your donation direction or perhaps even decide to have a clothing drive of your own.

The items that get missed quite a bit by well meaning donors are the basics.  True basics such as socks, shoes, belts and underwear (including bras for young ladies).  Also needed are clothes that can fit into public schools but that keep in mind that many schools now have minimum dress codes.  Great additional  options are khakis, hoodies, simple shirts with no logos or off-color sayings. A full list of needed items can be received if you contact me directly, we’ll send you out the list we received with our clothing drive packet, or you can contact Treehouse for your own list.

Besides the annual clothing drive there are several other very worthy programs that Treehouse manages each year such as mentoring, college prep help (called Coaching to College), advocacy, and more.  Your participation with this organization will be well appreciated and may make the difference in a child’s life.

I’m personally committed to this program because as an adopted person myself, if I hadn’t had a family adopt me I would have ended up in the foster system.  Add to that the truth that nearly 50% of all kids that age out of the foster system end up homeless, well, I just can’t let that knowledge sit within me without wanting, and needing, to do something about it.  I was blessed to have a family that took me in and cared for, raised, clothed, and loved me.  Every kid should have a chance and Treehouse attempts to fill the gaps that open up in these kid’s lives.  I hope you’ll join us in working to make a difference!

What are your expectations when working with an agent on a property sale or purchase?  If your agent screwed up would you expect them to make it right with you?  And what would be acceptable in terms of how they do that?  This has been a topic of deep discussion with me and some buyers I’m working with right now.  We’ve had an outsider view of what’s been going on with the seller in a deal we’re involved in and personal responsibility has been a big part of the conversation as we try to keep the sale on track and through to closing.

Basically the listing agent missed a pretty important element of the contract that was based on a financial element of the transaction - in this case an agreement between the parties to have the seller pay up to 3% of the buyer’s closing costs. The listing agent missed this added element of the contract and it was discovered about 3 weeks into the transaction. When the seller figured it out they were, shall we say, less than happy.  For about a week now the agent has been trying to haggle to get other people to pay for the mistake which included my clients, me, and his seller.  His seller refused and the listing agent was willing only to give out somewhere between $2000 and $2600.  The amount in question was just under $8k.

After working diligently and for many, many hours over the past week (sometimes 12-14 hour days) we have what seems like an agreement between the parties to get this sale closed - albeit a week late, but we’ll take it.  I can’t go into the details just yet because we’re still under contract but I’ll follow up with this post after closing next week.

A major issue here is personal responsibility. Should the listing agent be liable to pay for the mistake?  In my opinion, yes.  A resounding YES!!!  If I had been on the other side of this transaction it’s what I would have done and that’s not a statement put on here just because I’m writing about it and the terms would be different if the situation really happened. I truly believe in personal responsibility and if I’d missed such a big item in a contract I would have put forward my mea culpa and said, “let me take care of this.”  A real estate career is not built on a single transaction. We are in a relationship business and if you can’t show that you’ll take care of someone when you make a mistake then you should seriously re-evaluate why you are working in this field.

I’d love to hear other people’s comments and thoughts on this though.  Please feel free to post a comment!

Have you been considering taking out a line of credit on the built up equity in your home to buy a vacation property or perhaps your first investment property (ie. - duplex)?  Well, if you do, be sure to understand what is needed with respect to accessing that line of credit BEFORE you get to closing. Most people think that since the line of credit is with a bank that it will act like a regular bank account and allow for cashier’s checks or wire transfers to be obtained.

Well, you’d be wrong.  During my own stressful and harrowing experience back in May when I purchased a 4-plex in Wichita, KS, I learned that while a line of credit can be darn handy for household additions or remodels - those little checks pay off a lot of things! - you can’t use them the same way when you’re dealing with a banking transfer of funds.  We just had an investment client go through this too and it was helpful that I could walk him through pretty much exactly what he needed to do to get a bank manager to help him out.

Instead of going through the steps of what to do when it goes wrong let’s instead focus on what to do to prevent the problem:

1.  Be sure your line of credit is accurate about balances available.

2.  Pre-determine what you think you’ll need for down payment and closing costs at least 2 weeks prior to closing.  Your Good Faith Estimate (GFE) provided by your 1st position mortgage (if there is one) should give you a fair idea of what is needed.

Example: you’re buying a $200,000 property with an 80% 1st mortgage and the 20% will come from your LOC.  We already know that you’ll have a $40,000 down payment.  Typically, you’ll see a range of closing costs from 1.75% to maybe 3.5% but sometimes closing costs can go as high as 7% of your loan amount.  So, for this example, let’s say your lender estimated closing costs to be 3% so that would be $200,000 x .80 = $160,000 loan with 3% based on that loan amount (LOC’s won’t have a closing cost in this example if you’ve already set it up in advance of the purchase). Now we have $160,000 x .03 = $4,800.  Final tally: $40,000 + $4,800 = $44,800.

Line of credit checks ARE NOT what bank’s consider “certified funds” like a wire transfer or cashier’s check would be.  They are handled like a credit card because it is a revolving line of credit and if you write a check and put it in your bank account it will be held for up to one week (give or take) by your bank before funds can be accessed. 

3.  This is why it is VERY IMPORTANT to do this upwards of 2 WEEKS PRIOR TO CLOSING because you’ll have to wire your funds (or get a cashier’s check) to close to the escrow company at least 24 hours or more in advance of closing (WA State and KS State experience only here, check your local state for their closing guidelines).

Don’t get stuck and have to do the run around that I did in a state where I don’t live and without access to ANY of the banks I normally use.  While it’s good experience to help out clients like I did the other day, I certainly don’t recommend it.

Conversely, if you’re a seller it makes sense to  have your agent find out what the terms of the purchase will be with regard to financing to make sure there isn’t a delay at closing due to an issue like this one.

Another warm welcome goes out to the following new contributors for our real estate blog.  We focus mostly on the Seattle/Bellevue/Redmond metro area with regard to market data but occasionally you’ll see topics taken up on a broader level to provide education, understanding, and open conversation about all the areas of real estate that impact a buyer or seller. Here is a quick synopsis of the people joining us today….

Danny Tseng - co-owner and founder of First Point Financial, we met Danny about 3 years ago. His firm is defined as a mortgage brokerage, which is a little different than a direct lender. Clients can go to Danny and his team to get a view of a wide array of lending packages that may fit their specific situation. Many bilingual loan brokers are in his office so it’s also a nice option for our clients that need these types of valuable services for translation of loan documents.  Getting financing is stressful enough so having the technical terms explained in a first language is a big plus.

Mark Johnson - relocation specialist extraordinaire he has worked in the moving business for some time helping clients estimate the costs of moving across town or across the world. We met Mark last year in Spring of 2006 when he helped a client undertake a huge and complicated move to Costa Rica.  Joan is now happily residing in CR and emails me frequently to update me on her adventures there which include building a home and checking out the very exotic flora and fauna.

Jamie Kondo - escrow services don’t seem to leap to most people’s minds as an exciting area of work within the real estate industry but Jamie has seen enough bizarre deals to tell you that there is plenty to keep a person occupied and interested. Having grown up around real estate (her mom is an agent), Jamie got into the world of escrow not long after completing her schooling (her brother, Dylan, now does escrow too). She has worked her way up in the industry and is now a very well respected manager at HomeStone Escrow, her specific office being on Eastlake not far from my broker’s office. Jamie has worked with us for 4 years at the various offices where she has worked and she is a trusted and valuable resource to us at Team Reba.

John Lasswell of Lasswell Home Inspection - we’ve been pleased to work with, and gotten to know, John over the last 3 years. He’s saved many a client from a brush with a bad home or investment purchase and he’s also helped us - via his great inspection reports - save a lot of money for our clients in inspection negotiations.  We appreciate his candor, professionalism, and ability to be on top of his industry both professionally and technically.  He won us over immediately with his use of digital photography embedded in his reports and on top of it he’s just a really great guy. :)  We’re happy to say that we’ve become friends with John and his wife - and they both play volleyball so that’s a BIG plus in my book since I play a lot too and we’ve all played together before.

Again, WELCOME, and we hope all of you who read our blog enjoy the posts!!!!

The anecdotal evidence is out there when we have relocating singles, couples and families contacting us for help in finding a short term rental to stay in as they come to the Emerald City for a new job, school, or otherwise. Some of these folks are also looking for a 1-year lease because they believe they’ll want to get to know the area for a while and then purchase. Most of the time when we ask what the maximum rent is that they’ll pay we get an amount that makes us wince a little bit and think, “you won’t get the size place you want for that much around here.” That’s mostly due to relocaters not yet having done the full research of the difference in cost of living from where they are coming from to the Seattle and surrounding market.  You can find online resources such as Bankrate.com and Moving.com. There are lots more if you do a search online using search terms like “cost of living comparison for cities”.

Sure, they may have visited on vacation before, but back then they weren’t checking out housing prices for either buying or renting. You can see the article where Seattle ranks in the top 10 nationally for rent increases here. 

I had a similar experience when I moved here back at the end of 1989. My boyfriend at the time and I moved from Wichita, KS to Renton where we’d lived in a nice little one-story post-war 2 bedroom, 1 bath house. Since he had an engineer’s salary at Boeing we were hoping that when we got to Seattle we would buy a place within a year or so.  Sad for us though that we moved at a time when Seattle was going through a boom year in real estate that blew that idea out of the water after we started house hunting.  I was just starting my career at the time and was managing a small family owned chain of children’s furniture stores (where I cut my teeth on “staging” with all the furniture merchandising we had to do).  It took another 5 years before I was in a position to buy a house here and by that time I had a new boyfriend and was on a new career path that covered sales into manufacturing and technology firms.

If you’re considering relocating to our area you might start with research related to your new job. You can find data on salary ranges for various professions at Salary.com.  There is also a city comparison for cost of living here as well. 

If you want to learn more about the Seattle/Bellevue metro area we also recommend you go to our Team Reba site and check out relocation page. You can order our relocation packet which will provide you with an overview map of the area and we also provide a guide that gives information about the majority of cities and even individual neighborhoods in the Puget Sound area. This booklet is completed each in conjunction with local Chamber of Commerce organizations and the local REALTOR(R) organization (Seattle King County Association of REALTORS(R)). Included are city demographics, school info, medical facility details, business climate info and more.

Sexual predators. Nobody likes to talk about them, really, and no one wants to live near a known sex offender. But ,how do you know if you do or don’t?  Most, if not all, states have a registry search for sex offenders so having access to online databases is a first line of defense. For Washington you can go to this link.  You have to accept the terms of use of the site before you can get access so I’m sending you to the access page.

Since many states only provide Level 3 offender info you frequently will need to go to your local police or law enforcement to gain access to information on registered Level 2 and Level 1 offenders.

What is the difference between levels?  Typically it has to do with the type of sexual assault and the potential for recidivism (likelihood to repeat offend). 

If you’re buying a house is the Seller required to let you know if a sex offender lives nearby?  Well, no.  The State of Washington requires all sellers to fill out a Seller’s Disclosure Statement, which to real estate agents supplying these to their clients is also known as Form 17.  In 2006 the form was updated to reflect a new and specific clause about this issue.  If you go to the link you can scroll down and read it near the end of the disclosure form language.

I bring this topic up because it does rear itself in real estate transactions.  Just the other day I had some clients cancel a transaction on what was a very nice house because I pointed out this research requirement to them and when they did a search they found several sex offendes within a few blocks of the house and one of them lived about 5 houses away. This was a little too close for comfort for them, and I totally understand. 

As a board member and speaker for the non-profit FEAR Project, the clients didn’t need to explain to me why this made them uncomfortable. Megan’s Law is likely the major factor for this specific clause being introduced to the disclosure statement.  With the recent news of the abduction of Zina Linnik ending sadly with her body being found outside of the Tacoma area where she lived, it is certainly weighing on any parent’s mind that when looking for a new home you will want to choose a safe, or as safe as possible, home for the family.

We’ll be adding more writers to this blog over the coming weeks but for now I want to highlight two new contributors and my co-author.  First, we’ll start with Michael Lindekugel who is co-author and also my business partner in Team Reba.

Michael’s take in this blog will mostly be focused toward the investor or commercial side of things since he acts as the financial analyst in our organization. His background is in finance and accounting prior to becoming a licensed real estate agent working in our team. Expect to see details about finance, economic factors that impact real estate, property investments, and other scintillating topics such as Internal Rate of Return (IRR) and how to factor it.

Also joining us is Gerald Grinter of G2 Insurance.  Gerald knows about all kinds of insurance topics as this is his life’s work - at least for now. He’s also got an interesting background in other fields and he also speaks several languages. Covering both residential, commercial and other business insurance is his game and he’ll cover the field for you in topics that provide insight into these products that help “cover your assets”.

Rounding out today’s additions is Eric Aasness of Countrywide. Yes, he’s a residential lender but don’t let the label fool you. Eric has an extensive background in lending but he is also well versed in economics. We’ve been working with Eric for 4 years now as one of the 3 lenders we refer often, he’s been a tremendous asset to our team and to our clients. Residential lending typically covers 1 - 4 unit dwellings so if you’re considering a single family home up to a 4-plex, he’s your guy.  He’s also got a kick butt sidekick, Allison Potter.  If you work with Eric you’ll likely also get to meet her and together they are a great team.

You’ve decided to buy a house and things are going along swimmingly. You’ve made application for financing and you’ve found yourself a great agent (hopefully ME!) :).  Showings of properties are going okay but you still haven’t found that “one” that you expect to fall in love with.  Suddenly, a house shows up that meets all of your checklist, or at least more than any other, and it’s pretty with a yard you can see yourself hanging out in on a Saturday with family or friends.

The agent is writing up your offer and the question comes up - how would you like me to put your name on the contract?  “What?” you think.  Do I really have to think that hard about it?  Well, no, not if you understand the typical process of real estate but most people don’t deal with real estate on a regular basis. One of the reasons this blog exists is to cover practical matters that apply to the transactions you may find yourself in when buying or selling real estate.

But, back to the name game…  there are a lot of scenarios where it makes sense to really analyze how you’ll be putting your name into all of the various documents that are associated with real estate transactions.  Let’s cover the basics of what you may need your name to be on in a purchase but there are certainly more than these 3 at your signing appointment:

1.  loan documents - this is the trigger for all other documents and if your other forms don’t match this one it can tie up closing till it’s fixed. Most people fill these out with their first and last name - sometimes with a middle initial and sometimes without. If you have a Jr. or number (II, III) after your name you might want that on it or perhaps not. According to lenders I’ve discussed this with you can go sans the Jr. as long as you fill out another document along the way that gives all other names you may be known by, including the one with Jr. tagged on.  That’s right, thank Dad for making you a Jr. all the way till adulthood. Some people want to limit the amount of detail for privacy purposes (to be more generic, I assume) since the purchase of a home becomes public record.

2. title - This document must be the same as your loan documents. Title companies don’t care so much about how your name is noted but some title and escrow firms will want the forms to reflect the same name as what is on your driver’s license - which is the most common form of identification shown at a closing. However, if your signature line is the same on your loan documents and ID it is usually okay.  All of the title and escrow folks I interviewed about this subject agreed that the title must match the loan documents or they’ll flag it as a problem to be cleared up by closing.

Another area of title that comes up is if you have a common name. We have noticed about 25% of the transactions we deal with will have a person with a common name and there is typically a “confidential information form” that the title company will ask to be prepared and sent in prior to closing to make sure there are no items of record against the person involved in the transaction. Sometimes those outstanding actions affect the buyer or seller, but not always. Items that might be included in this search are liens, outstanding judgments, unpaid child support payments, etc.

3.   purchase and sale agreement for real estate - this document should have your name in the same format as your loan documents. At Team Reba we ask clients up front what they want as the name on their contract.  We are finding more and more that what they give us may not always be what they give their lender so we end up having to make corrections sometimes in mid-stream of a contract period. If you’re ever involved in a difficult transaction, believe me, you don’t want “just one more thing” to irritate the other party if you don’t have to, or give them a reason or opening to haggle or hassle.

Wine Tasting Thursday, July 19th 6pm-9pm Come take a quick trip to France with us as we taste wines from the Loire Valley.  The cost is only $5.00 and the appetizers are on us!!  Bring a friend or come meet your neighbors at the Phinney Market.                                                             Beer Tasting Saturday, July 21st 6pm-9pmJoin us this Saturday evening for a Summer Ales beer tasting at the Phinney Market.  We’ll be serving our famous brats for $5.00, so bring your friends and have a great time!!

We frequent the Phinney Market since we live not too far away. They have done a great job since opening up a few years ago in working toward building a nice little community atmosphere in their store. Another great thing they do is to have take out boxes for the Woodland Park Zoo concerts on Wednesday nights during the summer. More can be found viewing their online calendar.