Team Reba Real Estate

Selling a tear down ain't so easy…

Filed under: seller advice, real estate marketing, listing agent, environmental issues, single family home, Greenwood, remodeling, financing/lending, agent advice, investment property, inspection issues, zoning, safety issues, For Buyers, financial matters, For Sellers, Uncategorized — Reba Haas @ 10:40 pm

The brother of my partner has a name for what most of us would call a “tear down”, he calls it a crash down shack. Recently, a colleague of mine referred a new client to me to handle what he said would be a residential transaction in the Greenwood neighborhood.

After seeing the house, it is a complete ”crash down shack.” There are multiple pest organisms eating away at the wood framing (wood boring beetles and moisture ants, along with former termite damage) and there are items inside the house busting through the flooring. Fixtures for sinks are missing and the gutters have a veritable garden growing in them with no downspouts visible. The smell of moisture/water damage is obvious when you walk in the front door.

In doing research, I learned that there are no banks that will provide a land loan on this parcel since the structure still exists. With the house in such bad condition, it won’t qualify for conventional financing. Now, we are stuck with either a cash or a rehab offer. Not that many of those exist right now. Rehab loans for WA State, as I have heard from Eric Aasness of Countrywide, only allow up to $50,000 in funds for updating/upgrading a property, and it is unknown if this will be enough to make this house habitable again. The concept of tearing the house down will likely cost the client about $20,000 for tear down and haul-away.

Are any of these the right things to do? Maybe not.

My suggestion was that the client look at the idea of rehabbing the property on her own, then putting it in the rental market for a while till our market starts turning around so that she can recoup her expenditures. She owns it outright and could do the work for less than others because she doesn’t have the carrying costs of a mortgage associated with the cost of rehab.

Why do I think this is the right path to take? I’d been looking into whether or not she could split the lot (zoning is SF5000) and heard from a builder’s agent that it was unlikely because of the size of the lot, which is under 6000 sqft. The lot, while in a somewhat desirable north Seattle neighborhood, sits too close to Aurora to fit most people’s idea of a great custom home or spec site.

If the owner were to put $50,000 into fixing it up and then rented it out for $900 per month, she’d be making a return on her investment of $50,000 (borrowed) as well as the increased value of the property when it sells later on.

What would you do?

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Do neighbors really make good fences?

Filed under: listing agent, agent advice, buyer's agency, buyer advice, seller advice, Snohomish County, King County, Seattle, title & escrow, financial matters, inspection issues, household tips, legal issues, investment property, For Buyers, land use, For Sellers, Uncategorized — Reba Haas @ 9:31 pm

First, let me preface this post with the fact that I am not an attorney, nor do I play one on TV or in real life. The following are comments of mine based on several client experiences.

The title of the post is a little twist on the usual saying of, “good fences make good neighbors” but from a real estate perspective it all depends on whether or not the neighbor (or you) put the fence up where it ought to be. Many people buy a house without checking the fenceline to be sure that it really is at the appropriate boundary, part of this is due, I think, to the fact that most people don’t want to pay the extra cost of a survey. In the Seattle and general King County area it is common to see pricing for a survey run around $1200-1500 so it’s certainly not what most people want to pay out of pocket on top of the cost of a new fence, which can be thousands of dollars.

Depending on the size of your fence, and style, a fence can be a pricey addition. Most people appreciate a fenced yard, and particularly those with dogs and/or children that they want to keep free from roaming.

Rarely does a fence actually go along the exact boundary line of a property. So, as a buyer of a home you have to decide if you want to pay for that survey or extended title policy where a look at the fence will bring up the details. From what I’ve seen, the title company, once a fence-line mistake has been discovered, will make that an exception of the policy coverage because the buyer is now aware of the mistake. If a fence has been in place for many years without an agreement between the seller and his/her neighbor, there is a chance that the encroachment could create a situation of what is called adverse possession. Each state has its own rules around how this works so you need to consult local attorneys and law if you need help in a situation where you think this may have occurred, or it is in the process of being done.

A former neighbor of mine in Seattle had a crazy case of this and it created a long term boundary dispute between him and his neighbor for years. The ante seemed to be upped each time it came to the surface resulting eventually in a court hearing, and it is still unresolved. In some cases, the encroachment does end up causing land to be lost - as in a case of where I showed a property to a buyer client of mine in Snohomish County where the tax info showed that 5.2 acres were on site but the agent only noted 4.7-ish on the listing details. The explanation I received when I asked about the discrepancy was that an adverse possession claim had successfully taken .4 acres of land from this owner. All I could think and hope was that someone had told that homeowner to file a petition with the county to have their taxes reduced since they weren’t officially the owners of that portion of land any longer. I have no idea if that happened or not since the people weren’t my clients.

Are there lessons learned here via these few examples? I hope so, and they are numerous. If you didn’t get them the first time reading through this post, email or call me and I’ll be happy to discuss them with you.

So, be a good neighbor and happy fence building!

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How to find out if a buried oil tank is on your property

Filed under: title & escrow, listing agent, financing/lending, buyer advice, seller advice, single family home, environmental issues, agent advice, buyer's agency, legal issues, products, household tips, inspection issues, For Sellers, For Buyers, Uncategorized — Reba Haas @ 7:47 pm

One of my clients has a single family home where there is potential evidence of a prior oil tank being buried in the ground. So, the buyer asked, within the contract, to have it researched and if one was found that it be decommissioned - if it weren’t already. Many readers of this blog know that I’ve brought up this topic a couple of times before early this year.

There are several companies that do offer these kinds of services and 2 from my services page that I contacted and referred to my client to consider were the following:

Filco
13190 Stone Ave N.
Seattle, WA 98133
Office: 206-547-8347
Tacoma: 253-922-6383
www.filcoenviro.com

Fuel Tank Installation (FTI)
11536 Seola Beach Dr. SW
Seattle, WA 98136
Office: 206-244-8020
Email: info@fticompany.com
www.fticompany.com

Each firm had their own format of how they would go about doing the research but a lot of it does come investigating the site specifically for things like vents, in-fill pipes, and piping that may go into the house from a suspected tank location. Filco specifically uses a powerful magnet of sorts to do some of their locating as well as the diagnostic/investigative search.

Since it is part of the contract, we’ll need to be sure and provide documentation of the findings to escrow to satisfy conditions of the agreement too. Considering lenders want to know these kinds of details again, I wouldn’t be surprised if a copy finds its way that direction as well.

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Get on the bus to see Sound Transit's Link light rail progress…

Filed under: single family home, environmental issues, seller advice, buyer advice, Seattle, Transit, Sound Transit, King County, transportation, neighborhood info, land use, household tips, relocation, local events, inspection issues, investment property, For Sellers, For Buyers, landlord/tenant, Uncategorized — Reba Haas @ 3:26 pm

I am on the email list for Sound Transit to get updates as they complete the much anticipated Link light rail system. It should be going live in 2009 and tours are set up regularly for anyone interested in seeing the progress of the construction. Notes below come straight from the emails I receive:

Ride the Lunch Bus Take a guided tour of Link light rail construction on Sound Transit’s Lunch Bus. Tour the Link light rail initial segment followed by lunch at a local eating establishment. You are responsible for buying your own lunch. Tours depart and return at the southwest corner of 5th Ave S & S King Street in the International District. Tours depart at 11:30 a.m. sharp and return by 3 p.m. Next tours: Saturday, October 25th and Friday October 31st 2008 SODO, Beacon Hill, Rainier Valley, Tukwila and Airport To RSVP or for more information please contact Wilbert Santos at 206-398-5300 or via e-mail: linkconstruction@soundtransit.org To me, it’s a great way to look at how light rail might impact a property’s value since more and more people are becoming interested in being near to mass transit. If you have an apartment building, condo, or single family home knowing how close your property sits to this transit option as well as buses because it will be a bigger factor as the years go by. Those communities in Seattle that initially were a little put off by being placed near the above ground sections will likely see a nice build up of demand for housing near to the light rail system for these reasons. It will likely alter the literal landscape tremendously over the coming years as new development springs up around these neighborhoods. Some is already there as witnessed by the Othello Station and New Holly developments and more is coming. Are you ready for it?

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October 2008 newsletter online

Filed under: buyer's agency, financial matters, financing/lending, buyer advice, single family home, seller advice, For Sellers, For Buyers, household tips, products, inspection issues, investment property, staging, safety issues, Uncategorized — Reba Haas @ 12:52 pm

Here is a link to my “October Real Estate Update” which is our monthly newsletter for clients and friends who are interested in the local and national real estate market.This Newsletter is full of interesting and useful information that I think you will enjoy whether you are a buyer, seller, homeowner, or renter.This month’s issue includes topics such as:

“Five Key Areas to Pay Attention to When Buying a Home”;
“Deploy A Strategic Assault On Your Mortgage Application”;
“Too Much To Store and Too Little Space”;
“Finding Discounted Homes For Sale”;
“Ten Fall Maintenance Tips”;
“Understanding Your Electrical System Can Help You Spot Problem Areas”;

Plus a roundup of September real estate activity as well as much more advice and information.

I hope you enjoy this monthly newsletter. If you have any comments, please e-mail them to me. Or, if you would like to see a certain topic covered in future months, let me know that too!

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Certified Septic pumping companies for King County till end of 2008

Filed under: seller advice, buyer advice, title & escrow, environmental issues, single family home, septic, King County, listing agent, agent advice, legal issues, products, household tips, inspection issues, For Sellers, For Buyers, Uncategorized — Reba Haas @ 4:05 pm

If you have a septic system and must meet the King County requirements for cleaning, inspection and dealing with septic in general, then you’ll want to know about this website where you can access the certified OSS pumpers in the area. Company info is supplied so you don’t have to 2nd guess based only on a referral from a friend.

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I wonder how this report will push owners of commercial space to update their properties to meet “green” requirements?

Filed under: real estate marketing, listing agent, agent advice, financial matters, buyer advice, green home products, LEED, built green, environmental issues, land use, For Sellers, legal issues, property management, products, zoning, inspection issues, For Buyers, safety issues, investment property, Uncategorized — Reba Haas @ 3:58 pm

At a recent CCIM conference that I attended, one of the sessions covered the movement toward Built Green and LEED Certified commercial buildings. For WA State, we’re in a good position for many companies because the current building codes for our state already meet many of the compliance elements of the LEED certifications. The presenters stated that, on average, it only added anywhere from 3-10% to the cost of construction to go for a LEED certification and the long run prospects for increased sale or leasing of the space covered or made up for this differential.

They also made mention that a large number of companies are putting into their business plans a requirement to “go green” and part of that includes the work environment. The thought goes that if shopping for a new location, the business will gravitate to the newer, “green” building over the older non-green building.

Well, that’s all well and good, but I couldn’t help but think to myself, if all the businesses are pushing to be in new construction that meets these green or LEED standards, what will happen to the old buildings? Will they just sit vacant? Does that foretell a larger problem down the road? It’s too early to tell, but I don’t see us blowing up all the old inventory just to make room for the new “green” alternatives. That doesn’t make any sense either.

To read what others have to say about this trend and how it will affect employers and landlords over the next few years, take a look at this article I received this week from my CoStar membership (a commercial property listing site). The study that is cited says that within 3 years landlords who aren’t moving toward the sustainability movement will be getting hurt in their wallets.

This applies not only to commercial buildings that house businesses, but for those that house residential condos. The first Silver LEED certified condo building in Seattle was the 5th & Madison building. At a recent interview held by a marketing firm, hired by Vulcan, questions were asked whether or not LEED certification was important to buyers.

If you’re a commercial property owner, it would be wise to start looking at ways you can upgrade or update your property to meet the demand for sustainability. Heck, have you seen the recent IBM ads talking about energy consumption? Sure, the greenwashing does still have to do with money (profits), but you can be profitable and “green” too, can’t you? Doesn’t helping a company be more profitable help them decide to choose cleaner options over more negatively impacting the environment? If the message of green can go that high up the business food chain, it’s going to trickle down to the smaller players too.

And, if your property can help reduce a company’s legal liabilities for worker health issues which in turn helps productivity at the business, and provide a positive marketing message when selling or leasing the property, can it be all that bad?

You tell me… I’m open to hearing what you’re doing….

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For sellers with septic systems in King County… know your responsibilities!

Filed under: buyer advice, title & escrow, listing agent, seller advice, environmental issues, septic, single family home, agent advice, buyer's agency, inspection issues, household tips, legal issues, safety issues, For Buyers, neighborhood info, For Sellers, Uncategorized — Reba Haas @ 7:05 pm

To get all the details you need with regard to septic systems and what’s necessary for you to do when selling your home, go to this handy website set up by King County and their Wastewater Management and Public Health Services Dept. There is also a section that will provide details on how to use and care for a septic system as well.

As a seller, you have responsibilities and paperwork that is required. As a buyer, you should be prepared to look for these details during your inspection process.

Agents should be familiar with this process as well, and if you (Mr. or Ms. Agent) aren’t, then you should do a little reading too.

Most septic (aka onsite sewage) systems are found in outlying areas of Puget Sound or in County controlled areas. If you aren’t in King County then you should check with your local county government website or contact the local county office for the info you need for your area.

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What makes Condo Insurance so tricky?

Filed under: buyer's agency, financial matters, agent advice, financing/lending, condominium, buyer advice, For Buyers, safety issues, legal issues, products, household tips, inspection issues, investment property, Uncategorized — Gerald Grinter @ 3:32 pm

This is a coverage that has become near and dear to my heart as I am now a newly minted condo owner (Thank you Rebecca Haas and Eric Aasness). As an insurance agent I have always been amazed at how people would take all of this time, money and effort to buy the condo of their dreams and expect someone else to protect (i.e. the Master Policy) it. Let’s face it, the Master Policy’s the last thing you’d want to read. It’s boring and full of insurance misto-babel. Some master policies cover more than others but in a nut shell it is designed to protect the building and common areas and its purpose is to make sure the structure and common areas can and will be rebuilt in the event of a loss.

There is no coverage for your personal property such as your clothes, flat screen TV or the new sofa you just purchased. So everything from the walls in are your responsibility. Items like fixtures, cabinets or appliances maybe covered by the master policy but often are not especially if you’ve remodeled your place in any way.

This is where I, your friendly insurance agent, enter the picture and ask you if you feel safe knowing your neighbor has a candle fetish and another can’t even boil water to make tea. I believe condo insurance should be thought of the same as home insurance. All too often it has been looked at like renters insurance and considered optional and it also doesn’t help that it is not a required condition for closing your loan. Thankfully, the new construction condo I just purchased DID require proof of individual unit coverage prior to closing any sales.

To get an idea of what condo coverage costs I always recommend you start where you have your auto insurance coverage. Most companies give a discount for having more than one policy with the same company. I also think this might be the right time to review all of your insurance coverage and make sure you are maximizing discounts and coverage.

Thanks for listening to your favorite online and blogging insurance agent. Feel free to call or email me with any questions about this or any other type of coverage. I wanted to share some of my thoughts about condo coverage in the hope that it might help all of us condo owners out here. Take care and be well.

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Mortgage Fraud in WA as defined by the new law and local MLS - do you think this might qualify?

Filed under: financing/lending, agent advice, buyer's agency, listing agent, buyer advice, single family home, seller advice, financial matters, land use, inspection issues, household tips, legal issues, investment property, safety issues, For Sellers, For Buyers, Uncategorized — Reba Haas @ 11:28 am

So, recently I have had a client interested in a house that has a major problem with an attached garage and den - added after the original house was built. The problem with the garage and den is that it is impacted by a steep slope that has eroded part of the foundation beneath it and it is slowly beginning to slide down the hill. A geotech engineer’s report is included with the seller’s disclosure statement that spells out all the problems with this site and gives the engineer’s recommendations which include removing this portion of the structure completely.

Now, let’s take a look at what is the most likely scenario for a buyer wanting to purchase this house and the financing they might need to procure - if they don’t have all cash to buy it. My personal opinion is that since the garage and den are recommended for demolition and either rebuilding or just plain extinction that it is encumbent on the new borrower to give all this detail to a lender. Chances are, in today’s more risk averse lending climate, the building would qualify only for a construction or a rehab loan (perhaps the FHA 203(k) program) with the lender being given a detailed list of the problems and the plans for reconstruction - typically a timeline for completion is necessary for these and are limited to 6 months to 1 year.

My interested buyers currently have only looked at conventional loan packages so I directed them to inquire from their lender about these other options. I also emailed the listing agent to ask him if he had a lender that was aware of the problems and if they perhaps had a loan package that might suffice for purchase of the property.

Here is his reply with details of individuals/firms redacted:

Greetings,

I spoke with my lender, XXXXXX, at XXXXXX XXXXXXXX and she talked with

her underwriter who told her that as long as the appraiser didn’t mention

it, the lender would not be concerned about it.

We should have the cities approval on the new permit for the garage in the

next week or so if your clients are interested in building the new garage.

My clients have lived with it as it is since 1994 with no problems.

Let me know your thoughts.

This same agent told me that his clients had never lived in the property and that it had been a rental the entire time they owned it. So, yeah, I’ll bet they never had any problems with it.

Now, let’s take a look at the language that just came out from the NWMLS regarding the new law enacted in June 2008.

“Under some circumstances, omitting information about the property may be considered mortgage fraud. House Bill 2770, which became effective June 12, 2008, makes mortgage fraud a class B felony, punishable by confinement not to exceed ten years, or by a fine in an amount not to exceed $20,000, or by both confinement and a fine. Mortgage fraud has always been illegal, but the new law makes it clear that Washington lawmakers are increasing their efforts to punish those who perpetuate fraud.

What is considered mortgage fraud under House Bill 2770?

Section 9 of House Bill 2770 states that it is unlawful for any person, in connection with obtaining a residential mortgage loan to directly or indirectly: (1) defraud or materially mislead any lender or borrower; (2) knowingly make any misstatement, misrepresentation, or omission during the mortgage lending process knowing that it may be relied upon by a mortgage lender or borrower; or (3) use or facilitate the use of any misstatement, misrepresentation, or omission during the mortgage lending process with the intent that it be relied upon by a mortgage lender or borrower.

Section 10 of House Bill 2770 provides that any person who knowingly violates section 9 or who knowingly aids and abets in the violation of section 9 is guilty of a class B felony. ”

I don’t know about you - but I think that this might qualify if everyone just hopes that the appraiser misses the problem. Anyone else got a comment on what they think of the situation? I’ve told my clients to run, not walk, away from this one.

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November 18, 2008

Selling a tear down ain't so easy…

Do neighbors really make good fences?

November 3, 2008

How to find out if a buried oil tank is on your property

October 1, 2008

Get on the bus to see Sound Transit's Link light rail progress…

October 2008 newsletter online

September 26, 2008

Certified Septic pumping companies for King County till end of 2008

September 24, 2008

I wonder how this report will push owners of commercial space to update their properties to meet “green” requirements?

August 7, 2008

For sellers with septic systems in King County… know your responsibilities!

August 1, 2008

What makes Condo Insurance so tricky?

Mortgage Fraud in WA as defined by the new law and local MLS - do you think this might qualify?