Seattle Real Estate Property Listings and Sales » Real Estate Articles

“Good fences make good neighbors” except when they don’t

admin — Sat, 17 Dec 2011 02:24:04 +0000

“Good fences make good neighbors” is a saying that everyone has heard for many years and is mostly true, except when it isn’t. Within the last six months, we have had two clients that have had surprising problems with neighbors for houses that they are buying .

When we represent clients, both buyers and sellers, we have clients carefully review the Seller Disclosure Form, Form 17, and we stress the Neighborhood Review that is included in our Washington contract. For buyers, we recommend they review the neighborhood for sex offenders, criminal activity, commuting times and various other issues like parties, street lights or neighborhood covenants. With sellers, we recommend that they disclose any potential problems that a buyer might encounter that wouldn’t be readily obvious. Most of these issues are covered on the Form 17, the Seller Disclosure Statement, and it must be answered truthfully and completely by the seller. According to attorney Mark Schedler, withholding information about a home could be considered fraud and expose the seller to a law suit down the road.

Our buyers last week moved into their new home on Thursday night. On Friday morning, one of the neighbors next door knocked on the door and said that there was a boundary dispute that they had been discussing with the seller for three years and the neighbor wanted to know what the new owner was going to do about. What a way to get introduced to the neighborhood. What makes this situation interesting is that the neighbor didn’t have a survey, so couldn’t actually prove that there was a boundary dispute and second, the seller and the listing agent knew about the problem and didn’t disclose it to us, as the agents, or the buyer in the Form 17. Not good!

In another instance, we represented a buyer on a very high-end home a few months ago. When we put the “Sold” sign up after the inspection was negotiated, a neighbor called me and told me that there was a retaining wall belonging to the seller and it was falling down into his property. He went on to say that if it actually did fall down, the neighbor would sue the new owner. That caused a whirlwind of activity. The good news was that it was before closing, so we were able to have the seller address it by setting aside $30,000 to solve the problem.
There are other stories. The message I want you to take away from this is that the burden of disclosure is on seller. For those things that the seller doesn’t know, the burden of discovery is on the buyer. Having surprises down the road just before or just after the house sells makes a miserable time for all!

There is an art to standing out and fitting in at the same time!

admin — Tue, 01 Nov 2011 21:56:20 +0000

Everyone thinks that their home is special and IT IS.
What makes a house a home are the special things we surround ourselves with and the memories we create there. Your home is a great sources of pride and comfort, but what you do and how you live, can help determine the value of a home, either up or down, when the home is for sale. When we evaluate a home that is unique, we have the delicate conversation about standing out and fitting in at the same time. In higher-end homes, uniqueness is very common, and usually an asset, but when it crosses over the line to eccentricity, the target market gets much smaller. That translates to a longer market time and a very narrow buyer pool. In middle-to-lower priced homes, certain upgrades will make a home worth more, but don’t over improve. If you do that, you’ll likely want to recoup the costs and that will make you more expensive than other homes in the neighborhood. Your home will likely take longer to sell and it may not appraise.

We recently viewed a home that had a pool and a lot that was much larger than any other home in the neighborhood. While the pool was lovely and the grounds were fabulous, we explained that many buyers in this part of the country don’t expect pools, because of weather. While there are folks moving into our area that like pools, the $50,000 that it took to put it in would probably not generate a full $50,000 in the sale price.

Another example is a home we just viewed with an addition of a mother-in-law unit that was done by a handyman instead of a contractor. While the space was fairly well laid out, the details for doors and floors were not finished and it was not integrated well into the original home. The addition fit the homeowner’s lifestyle, but would not be easily translated to another family. In this case, the addition was a negative factor in the home and would impact the sale price negatively.

Advising buyers, we often say that you don’t want to buy the most expensive home in a neighborhood, because there isn’t much room to appreciate and it can take longer to sell. If you buy the least expensive home in a neighborhood, you may also have a problem because you won’t be fitting in with the other homes. While there are reasons for both and exceptions to both, the best solution is to buy a home that is price well in a great neighborhood that hasn’t had all the improvements done so you can reap some of those benefits and appreciate like the surrounding homes. That way if you decide to sell, your personality can shine through and the buyers will be plentiful.

When the buyer is ready, the home will appear – make sure it’s yours!

admin — Fri, 16 Sep 2011 15:37:03 +0000

We have touched on selling issues before, but recent experiences demonstrate that they bear repeating.

It is always stressful to put your home on the market to sell and the journey is usually longer rather than shorter. We all live the way we want to live in our homes, because after all, our home is our castle, so to speak. In the spirit of my father, if we wanted to live differently in our homes, we would. Where the problem comes is when a seller has a “highly personalized style” that doesn’t appeal to the broader market or the seller is unwilling or unable to be flexible to the parade of buyer’s and their schedules.

As see in our recent video with Dennis Conner Getting your home ready for sale, strong statements in art or furniture can distract buyers from the real features of the house. If there is too much furniture, the home looks small. If there are strong colors on the walls in the kids room, the buyer calculates the inconvenience of painting, if the rug is an outrageous color or pattern, buyers calculate the cost of new carpet and if there are visible signs of wear and tear that aren’t address, buyers wonder about the maintenance items that they can’t see and if the house has been reasonably maintained.

The other big problem is when a home is not accessible when a buyer wants to see it. In our area, we have lots of buyers coming in for jobs. They fly in for the weekend and have to find a home. They have a limited time to complete a complex and stressful task and they usually get it accomplished with the home that meets most of their criteria. Recently, I was showing a couple for the weekend and we saw 20 houses. The first day didn’t go well, but on the second day, the first house we saw was almost perfect and we spend the rest of the day comparing every other house to it, until… Until we saw the last house. The last house was completely different, but it has two features that were on their wish list, but they didn’t think that they could find a house with both. In order to make their final decision, we wanted to go back to the first house for a second look, so that they could make a timely comparison. Imagine our surprise when the seller said it wasn’t convenient and we should try another day. I’m sure you can guess the rest of the story. We wrote on the last house and never went back to the other home.

The thing we’d like you to remember and share with everyone you know that is selling or has sold, you only need one buyer to buy the house, you just don’t know which one it will be and what will appeal to them. Be ready, willing and able to show when the buyer is ready and broaden your market appeal with more generally accepted choices so that when the buyer comes in, you’ll have the best chance to go from For Sale to Sold.

When is renting a better alternative to buying?

admin — Tue, 19 Jul 2011 16:53:04 +0000

Last year, many people wanted to rent instead of buying a home because they thought that the bottom was still falling in the real estate market.
This year, people have too many choices and they are feeling too much pressure to purchase so we’ve recommended that some of them rent first.

Here are some reasons people rent:

1)   Job transfer comes fast. We have clients that are moving here from Eastern Washington and they have dogs instead of children. They have accepted a job and are arriving in 3 weeks. When schools are not a requirement, it is often a good idea to rent in short-term corporate housing or a shorter lease so that the pressures of a new job can be lessened by not having the pressure of finding a home quickly in a higher priced market area.

2)   We’re selling our home but looking to make a big change to “Island Life.” As you know, Washington has many islands that are connected to Seattle by ferry service. Residents of Bainbridge and Vashon can commute to Seattle either by car or by walking on the ferry. While it isn’t quite like the Staten Island Ferry that I knew growing up, the Washington Ferry system is amazing. But, when you go from taking a park and ride to taking a ferry, it is better to rent and see if you like the lifestyle before you commit to buy. If you’re not happy with your decision, you have an adventure, not a costly burden.

3)   Downsizing, but can’t buy before we sell. Many clients that have been in their home for a number of years and know that they want to downsize. With so much money tied up in their current home, people can’t buy something before they sell. In this market, contingent offers are not very successful and since you usually have 45-60 days to get out, you may not find your next perfect home that quickly.

4)   Financial problems won’t allow us to buy. Over the past few years, many people have gone through some very tough financial times. Some people have gone through bankruptcy, some have sold their homes as “Short Sale” and don’t have any finances left to purchase another home. We have recommended that they rent, get their finances in order and heal their financial wounds. In a couple of years, you’ll be able to purchase again if you want.

We are experiencing a lower rate of appreciation now of 3-5% per year. In Washington, it costs just under 10% to sell your home with commission, excise tax, title and escrow and there are always a few things that need to be done before and after you get a contract. If you buy the wrong home and need to sell in less than 5 years, you may need to bring money to the closing table – and that’s no fun!

We love to sell homes, but we don’t want to sell you a home when the timing isn’t right. We tell all our clients, “we want you to buy the kind of home that if you call us in a couple of years and want to sell, it won’t be a problem. Renting is a great option and we’d be glad to help you there too when we can.

Sale Price-To Be or Not To Be-Ask the Appraiser

admin — Tue, 14 Jun 2011 23:02:50 +0000

When we speak to clients about listing their homes for sale, the list price is usually a number they have already decided on. Most people live in their homes comfortable and with a few minor changes, it will show beautifully. We always recommend taking away personal items, they can distract the buyer. We also recommend taking out any unnecessary furniture because it will make a room look bigger and that is usually better. Breakables should be packed away and valuables should be hidden from the view of strangers.

With those things done, the house goes on the market and if we price it right, we will get an offer quickly and with some negotiation, come to a mutually acceptable selling price. Then comes the appraisal. With some luck and a good appraiser, the story goes on well from here. What we are finding though is that the lenders are very cautious and can make things difficult for both the buyer and the seller.

The current lending environment, from our perspective, is difficult when we represent the seller as well as representing the buyer. We caution sellers that if we price it above the current market levels, we might lose in the long run. If the house doesn’t appraise, the seller will likely have to meet that price, or close to it because another appraiser will come to the same price. The seller has lost because the home is off the market, then it goes back on the market and unless there is another sale or two in the area, the appraised value won’t change

When a home doesn’t appraise, there are three paths of action:

the buyer can put down more earnest money, to lessen the risk of the lender
the seller can lower the selling price to meet the appraisal
the deal can be terminated

So if you want more from your home than the market will bear, you can wait until the market catches up, find a cash buyer that doesn’t want an appraisal or you can sell it for what the market forces dictate it to be.

How low can we go? Buyers new negotiating strategy

admin — Wed, 20 Apr 2011 20:09:58 +0000

How low can we go? Buyers new negotiating strategy

Almost no one is making an offer at the asking price these days for homes that have been on the market a while, but making an insulting low offer is not usually the best way to get a home you are interested in. The real estate market is dynamic, but perceptions are slow to change and the news media isn’t helping. The inventory of available homes for sale in our area is low, compared to two years ago. Here in our market, we had almost eight months of inventory in October of 2008. At the end of March, 2011, there is less than two months of inventory available to buy. Because of the media attention, buyers think that they are in the driver’s seat and a seller is lucky to have them make an offer. Buyers are looking at homes outside of their price range and hoping that desperate sellers will accept. Writing offers that are 15-20% below that asking price is usually just an exercise that doesn’t do anything but set up an adversarial relationship with the sellers and the agents.

News flash: quick full-price offers and multiple offers are back on desirable homes that are priced to sell. Not too low and not too high, just desirable floor plans, updated houses, at the right price. We just had a listing that sold in 3 days with a full price offer. Another agent in our office had multiple offers on a home in 3 days and it went for more than the asking price. In both cases, the buyers had lost out on other homes because they were not as fast as other buyers to get their offers in for consideration.

Don’t get me wrong, things are not back to the 2005 and 2006 frenzy here, but there are buyers with financing that need to buy a house and don’t want to wait forever! If the object of putting your house on the market is to get it sold, price it competitively, make it accessible and with the right marketing, it will sell and you won’t have to go through the frustration of dealing with insultingly low offers.

To Pre-Inspect or Not to Pre-Inspect – That is the question.

admin — Tue, 22 Mar 2011 16:47:00 +0000

Sellers often ask: Should I do a pre-inspection on my home before I put it on the market?

Like many questions, the answer is “it depends.” There are two schools of thought and in the end, it is up to the seller, but we do have a recommendation.

A pre-inspection is done by a professional inspector, hired by the seller and in theory, that inspector will look at and find everything the buyer’s inspector will look for and comment on. The seller would then fix everything that the inspector points out and a copy of the report would be left for the buyer so that they can see what the seller has fixed, showing that the seller is conscientious about maintaining the home. That’s the idea, but the reality is sometimes very different.

Home inspectors are generalists and often, former contractors. Since the housing downturn, some of the weaker home inspectors dropped out because they weren’t getting enough business. Others, including contractors and handymen, not in the business, that didn’t have enough work, bought into a home inspection franchise and thought that it would be a good place to apply their skills and generate income. They got a name, the proper paperwork and watched some videos on what to do in an organized manner, how to write up potential problems and advise clients on the condition of the house. The problem with this part of the story is that these kinds of inspectors often don’t have the experience and breadth of knowledge that is required to know what is normal, acceptable, or beyond their scope of experience.

Home inspection is a serious part of the home buying process. When the market was red hot, buyers bought homes without inspections so that they wouldn’t miss out on “a hot deal.” Now, a buyer wouldn’t dream of purchasing a home without an inspection. The purpose of an inspection is to look for structural and safety issues in a home. We have been through a couple of bad inspections recently, both representing the buyer and the seller where the inspection almost killed the deal because the inspector commented on things he didn’t have all the facts on and where he was just wrong. One inspector said that the chimney on a gas fireplace was not to code, but he was wrong. Another inspector said that knob and tube wiring was bad and caused the buyers to pay $250 for an additional inspections and the electrician said it was fine. Another inspector said that a brand new roof was incorrectly installed and it turned out that the buyer didn’t like the roof and wanted a metal roof. Another inspector said that the decorative stone in the front of the house was incorrectly installed and the manufacturer came out and inspected it and said it was perfect. I have many more stories.

So, as the seller, a pre-inspection might make you feel better knowing what you should address, but the buyer’s inspector might come up with other things that are important to him and incorrect. Selling is going to cost you time, money and energy. Why fix something that may be important to you, but isn’t important to the buyer but other things are. Doing a pre-inspection has some risks, like everything else, but it is the seller’s decision.

If It Bleeds, It Leads, even if it’s WRONG!

admin — Mon, 14 Feb 2011 23:32:45 +0000

Zillow and their automated evaluations, Zestimates, were big news on Tuesday, February 8, 2011, after the front page article in the Seattle Times that said that one-third of the homes in the Seattle area were valued less than the mortgage amount.

The news media covered the story all day and into the night. One big problem, the statement was WRONG! A correction (one-third of the homes with mortgages are valued less than the mortgage amount) was published the next day in the very small correction area, but no news channels covered the correction and we don’t believe that the correction is still accurate.

At first glance, those of us in the business knew that something was very wrong. We know that Zillow is less reliable in this area because of the way their system is designed. Zillow relies on county records, which are slow to update here and there are so many neighborhoods that are not homogeneous. Neighborhoods in Kirkland, Medina, Clyde Hill, and Bellevue are just a few of the neighborhoods on the Eastside that are “eclectic.” There are old houses next to new houses, renovated houses next to original homes and everything in between, not to mention that sales of homes are not recorded with all of the details that might affect price.

Every prospective client we speak to, whether buyer or seller, has already checked Zillow. Buyers like it because it tells them that the house they want is worth far less than the list price. Sellers are offended because Zillow doesn’t take into account that their house is better than the one that sold down the street for more. Relocating buyers think that our market might be worse than where they came from.

If you purchased your home in the last four years and you had to put it on the market today, you may very well come out with less money then you had when you started. It costs about 8.5-9% to sell a home here, with commissions, closing costs and excise tax. If you purchased your home in the last 10 years and you didn’t take out the equity, you would most likely still be ahead of the game. Approximately one-third of the homes here are free and clear. The rest of the homes weren’t all purchased in the last four years, so those are likely still in safe territory.

If you have any particular questions regarding the valuation of your home or one that you are considering buying, let us know. We can give you a valuation that is closer to reality.

If it seems to good to be true…

admin — Thu, 16 Dec 2010 19:26:34 +0000

If it seems too good to be true, it probably isn’t….

This year has been crazy year in real estate, what could go wrong went wrong at one end of the year or the other. Never before have we been called upon to manage so many little and big emergencies before, during and after homes are purchased.

I want to tell you about Tracy and her nerve racking adventure to buy a new home. Like most buyers, she had to sell her home first. Once she made the decision to sell, Tracy was determined to find her next home. House hunting commenced quickly and Tracy found a couple of houses that would fit the bill. Unfortunately, her home didn’t sell, and didn’t sell, and didn’t sell. Finally, the magic day arrived and she accepted an offer from the perfect buyer on her beautiful home. Days after, Tracy found the perfect home to buy and all seemed to be on track for Tracy to host Thanksgiving in her new home… or not.

Where this story gets complicated is the buyer of Tracy’s home, Mary was selling her home and needed those funds to purchase Tracy’s home. This is fairly common but what made Mary such a good buyer was that she would be paying cash for Tracy’s home. Wonderful! No financing worries because the buyer of that home was paying cash also. Almost too good to be true and it was. If you can keep this straight, we have three buyers , three sellers and each is depending on the other for everything to go forward, but two of these deals were for cash and that was supposed to make it easy.

What we didn’t know until later was that Mary decided to sell her home on her own, without an agent. The nice buyer that said would pay cash for her home and he could close in 30 days. Mary, not knowing how to check, just believed the nice buyer and the day before closing, the buyer didn’t have the cash. Since he didn’t have the cash, Mary didn’t have the cash to buy Tracy’s home and Tracy didn’t have the funds to buy the home she wanted and that seller, who was in her late 80’s had moved out without her house selling.

The good news is that Tracy was able to buy her home, the bad news is that it was three and a half weeks late and it cost more money. The interest rates had increased over that time so Tracy’s loan costs were higher, she had to reschedule the movers three times and the real estate agents had to do way too much paperwork to keep changing the contract dates because it got delayed and delayed. So instead of Tracy having a wonderful Thanksgiving in her new home, she moved in the day before Thanksgiving. All’s well that ends well though, Tracy didn’t have all those dishes to do Thanksgiving night.

Should I have my house on the market during the holidays?

admin — Wed, 01 Dec 2010 18:46:38 +0000

Every November we get asked the same questions: “Should I put my house on the market now or just wait until February?”

Every November we have the same answer: “ November can be a great time to sell because the buyers in the market are motivated and the inventory is limited.”

Under normal circumstances, selling your home is inconvenient. You must keep it show ready every time you leave in the morning and you must be ready to take a walk when a buyer wants to view your home at night or on the weekends. When the holidays arrive, many sellers don’t want to be inconvenienced with these pressures, so off the market it comes. That leaves the desperate sellers and the vacant houses for buyers to choose from. Not too appealing for the buyer that is being transferred and needs to start a new job at the beginning of the year. Remember, buyers that are out looking at this time of the year are motivated. Who wants to go out in cold, rain, snow and the dark to look at houses, if they don’t have to.

One advantage of keeping your house on the market is that decorations can make it feel really homey and that is a big plus on the buyer’s emotional buying meter. Thanksgiving cornucopia, pumpkins, holiday wreaths and the aroma of pine or cinnamon can all evoke a very positive feeling for the buyer that your home would be the best place for them to create new holiday memories.

That being said, I have seen some people that went over the top and drove buyers away. The houses that had 10 snowmen, music and Santa with a full set of reindeer on the roof can be very off putting on a buyer. Family rooms can look really small if there is a big tree in the corner and all the furniture is pushed aside to accommodate it. A faint aroma of pine and mulled cider is good, but one person’s aroma can be a bad smell to others.

So, go ahead and put your house on the market. Decorate tastefully and bring a sense of ‘specialness’ to your home. You will stand out far above the rest of the homes available and buyers will pick your home to purchase and start their New Year!