Ok, all I can say is… take a moment to read through the top of the sign on down. It’s funny as heck as soon as you put the whole scene together but you surely don’t want your residential development to become famous just because of a really bad naming job.
So, the other day I’m posting yet another of our client listings to Zillow when I get an email telling me that I have become a Zillow All-Star. I think to myself, “what the heck is that?” So, in looking it up I find out that, according the notice posted on their site:
It’s kind of funny, really. When Zillow first came onto the scene a lot of agents saw them as a horrible new type of competition. We’ve never felt that way although we did make sure to try and understand what the online service was, and wasn’t, so that we could help educate our clients and the public on this new tool. Being that the firm is locally based, I’d like to see them do well because it helps bring jobs to our local economy and I think the services they offer are valid. There’s nothing wrong with wanting to get a bit of an idea of what your home value might be without having to get an agent involved, or to hire an appraiser. If it’s just curiosity you’re dealing with and not a sale or a refinance, then checking this site out is not a bad thing. It also helps people understand where their neighborhood values may be going too.
We’ve even gone so far as to include it in our marketing of properties when we have listings. One of the tools I like on the site is the “claim my home” because we can do that and update the information on the site if there have been changes to a house. Frequently the info that Zillow is working from is incorrect or out of date - so this is a way to make the data that is publicly available match what we’ll have in our listing packages. It’s a good tool overall since we know a large number of people look here to compare Zestimates(R) with listing prices.
What is a Zestimate(R)? Again, from the site:
“ Zestimate
The Value Range is the high and low estimated market value for which Zillow values a home. The more information, the smaller the range, and the more accurate the Zestimate. See data coverage and accuracy table “
For people who are relocating to a new area, Zillow helps an out-of-town buyer understand neighborhood price points and values with this information available once they go home after a whirlwind trip into a new town to look for a home.
Anyhow, I guess it feels good to be an “All-Star!”
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.
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.
My partner and I were walking our 3 dogs this morning and came across this golden retriever who was wandering alone in our neighborhood. If you recognize her, or might know who her owner is, please contact me. We’d like to find her regular home and are keeping her with us till we do.
A happy ending to our little story. Sadie apparently resides in Renton, albeit a couple of miles from our abode. Somehow she safely journeyed a couple of miles through town where she ended up in our neighborhood. On Wednesday she was safely returned to her owners. 
The way we were able to find her owners is that a local vet did a check for a microchip (for free) on the dog and that’s how we learned where she came from originally. Those owners had given her away but had contact with the family that they’d given her to, so they helped track down the current owners. Had the past owner not had the dog microchipped Sadie wouldn’t be back with her family. If you own a pet it is a good thing to have it chipped for situations just like this one. It also reminded me that with our recent move to this new neighborhood, we need to update all of our pet’s chip information in case we run into our own wandering pup in the future.
Buyers/Sellers - consider having your pet(s) chipped and be sure to update the info when you move!
Because I write in several online forums I have to avoid duplicating the exact material from one blog to another. For those of you that have been getting into the online forums of communication you recognize that search engine optimization only occurs when you have original content and if you cut and paste your posts from online forum to additional sites you’ll end up getting yourself blacklisted by the bots and spiders that troll the web.
So, to keep myself from getting my, what I like to think are useful articles, blacklisted, I’m putting a link to one that I just wrote for my “other site” where I write regularly - Rain City Guide. In the post I list 9+ questions that consumers can use to help in interviewing a listing agent. These questions are applicable for any real estate market no matter where you are so please feel free to use them in your own market outside of the Seattle and Washington State area!
The PMI Group, Inc is all about considering risk when it comes to the housing market and mortgages. Why? Because The PMI Group, Inc. provides “private mortgage insurance” for lenders that is the fill-in for losses if a borrower defaults on a mortgage. They care a lot about risk. When I talk to clients about the lending process we cover the idea that banks are much like insurance companies - they care about mitigating risk. So, if a borrower doesn’t have a strong down payment, like a 20% equity stake, then the lender is going to offset their risk by requiring mortgage insurance.
For a many years we saw very few loans with PMI attached because all manner of alternate loan programs and products were available. But, no more! Most of those programs have now disappeared because of last summer’s mortgage meltdown pushed to a higher frenzy level by the media.
The good news and silver lining of today’s post? The PMI Group, Inc does regular forecasts of the areas they believe to be the lowest and highest risk within the nation. Take a look at their 2008 summer forecast and you’ll see that the Seattle-Bellevue-Everett area is considered by them to be a low risk area for housing price devaluation.
This is a composite account of many cases we have worked on over the years. The names and events have been changed to avoid disclosing confidential client information.
The out of state vacation home can be a wonderful family retreat – generating years of happy memories for your family. Dennis and Margaret adore their waterfront home on Maui and own it in both their names. Sam and Betty love the desert and own a home in Tucson through their limited liability company (LLC). Robert and Alice are looking to buy a vacation home in British Columbia - close to Robert’s family.
However, things that can be so wonderful during life can cause some real headaches at death, unless you plan ahead. When Dennis or Margaret dies, it will be necessary to open a probate in Hawaii to transfer title to the survivor of them and if the survivor does not take corrective action, another probate in Hawaii will be needed at his or her death. A Probate in Hawaii often costs eight to ten times more than one in Washington. Those extra fees can be avoided by transferring title to a revocable trust.
Sam and Betty’s interests in their LLC will not be subject to Arizona probate, but may be subject to the Washington estate tax. Depending on the value of their estate, their heirs may unnecessarily pay state estate tax on the property. At present, Arizona does not have an estate tax so if Sam and Betty transferred title from their LLC to a revocable trust, they would still avoid the Arizona probate system and would also avoid the Washington state estate tax.
Robert and Alice need to be cautious of the Canadian tax system. Canada does not have an estate tax, but its income tax applies to many transfers that are tax-free in the U.S. For example, transfers at death are subject to income tax in Canada. Moreover, the Canadian real estate excise tax applies to a transfer by gift, which is not the case in Washington. A combination of a Canadian revocable trust and a Washington LLC will allow Robert and Alice to avoid the Canadian probate and income tax systems at their deaths.
Consult with your attorney before buying real estate outside of Washington – do not tarnish years of happy memories for your family by failing to plan properly for your vacation property.
We believe estate planning is about people; let us know if we can be
of service to you or those you care about.
For assistance, questions, comments or to be added to our mailing list, please contact Timothy C. Burkart, Garvey Schubert Barer, 1191 2nd Avenue, Suite 1800, Seattle, WA 98101-2939, tburkart@gsblaw.com, (206) 816-1467
A new series of laws are coming into effect on June 12th in Washington State and some are sure to affect the loan originators, agents, buyers and sellers. Read the full text below that came from the Washington Association of Realtors recent Friday Facts, Legal Q&A column, written by Annie Fitzsimmons.
I’m happy to see things like fraud for lying about the loan being for an owner occupied purchase when an investor is actually buying to rent the place or flip it. Team Reba has walked away from a lot of business over the past many years when we’ve heard the plans a prospective client would share with us regarding their loan strategy. I’ve actually said to several people that my business, career, and reputation isn’t worth the extra $5,000 or whatever else they’d make in interest savings. It’s actually been astounding to learn how many people didn’t even realize that doing this was mortgage fraud and a felony.
About 3-6 months ago when I was speaking with a reporter on a different topic of real estate we somehow got diverted into a discussion about this. She was shocked when I shared with her the stories I had about walking away from clients because of this issue. At the time she thought about turning that over to an investigative segment of their news office but I never heard back from her about it. Odd to see it turning up in the legislative session, but not surprising given the number of folks who did this when buying property over the past many years.
I have to say from an agent liability standpoint some of the language is a little scary because while agents are often involved in our client’s financing, there are many buyers that are reluctant to get agents involved in financing issues for fear of feeling pushed or thinking that their agent will try to oversell them if they know the full level of their buying capacity. To these buyers I say, if you don’t trust your agent on this issue, you’re with the wrong agent. These kinds of topics should be discussed up front and the buyer should feel confident that the agent is looking within a range of prices that are comfortable for the client, no matter what the actual pre-approval cap is set at.
Enjoy Annie’s article below!
Criminal Sanctions for Mortgage FraudMuch like there is no way to be a little bit pregnant, there is no lawful way to engage in just a little bit of mortgage fraud. There is no forgiveness for the “little white lie”. Pursuant to SHB 2770, it is a felony to receive a commission or any other funds paid from the proceeds of a buyer’s loan if the recipient of the commission knows that the borrower engaged in any effort to deceive or mislead the lender. Said differently, if the borrower, seller or any other person makes any misrepresentation to the lender during the lending process, that person is guilty of a felony and any person who receives any of the proceeds of the loan is equally guilty if the recipient of the proceeds had knowledge of the misrepresentation. Many may shrug this off knowing they do not engage or participate in mortgage fraud. That would be a mistake. REALTORS® must be aware of this law and the minimal involvement required to result in significant consequences. Think of all the times that you, as an agent, have been aware of any of the following things occurring in one of your transactions: the list price is increased to match the sale price; a financial issue is handled “outside of escrow”; the seller feigns a carryback intending to destroy the note or deed of trust after closing; a buyer claims to purchase owner-occupied when that is not true; an inflated value is assigned to a property by an appraiser; borrowed down payment funds are labeled as gift funds; or a borrower overstates their income or exaggerates their financial condition. While this list is not exhaustive, it represents a variety of ways that an agent could be guilty of a felony if the agent is aware of any of these circumstances in a transaction and takes a commission from the transaction. Likewise, seller will be guilty of the felony if seller is aware of the deception and accepts the sale proceeds. The felony level associated with this mortgage fraud crime is serious. Conviction under this statute would most likely result in jail time. Be aware of this new law and be diligent about policing the affairs of the transactions in which you are involved.
I’m a member of Active Rain, a national online networking site for agents, and there are all kinds of blogs that talk about staging. One in particular highlighted not so much the usual work of staging but rather the ability to identify the difference between a historical look and a dated look. It’s a good topic because I think there are times that a property owner thinks it’s just fine to leave a house in the condition it’s in because it was the original look of the home and it is appropriate for its decade or period in which it was built. I personally don’t agree.
Here is a great book (via the link) called Interior Desecrations that is a hilarious look back at some of the painful designs of the past.
If you recognize any of your home fixtures or furnishings you might want to consider an update!
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