What you need to know about the Washington State Seller Property Disclosure – Form 17

 

Washington State requires sellers of residential real property to thoroughly disclose material facts on a form called the Residential Real Property Disclosure Statement (often referred to as Form 17). Unless the buyer has expressly waived their rights, the seller must deliver this completed disclosure with 5 days after mutual acceptance.  The buyer then has a window of time to walk away with their earnest money at their discretion.

While sellers have always been required to disclose material facts, the Form 17has been required by law (RCW 64.06.020) since January 1, 1995. It has undergone ten revisions since its inception, the last of which will go into effect in January. In addition to the residential disclosure, the state added an unimproved property (land) disclosure in 2007 (RCW 64.06.015) and a commercial property disclosure in 2012 (RCW 64.06.013). The current form is 6 pages long and includes most of the typical property issues requiring disclosure with a catchall question for anything left out.

 

Is every seller required to complete this form? Are there exemptions?

The statute allows very limited exceptions RCW (64.06.010) to completing the disclosure statement. They include transfers…

  • by foreclosure or deed-in-lieu of foreclosure
  • that are gifts to a parent, spouse, domestic partner, or child
  • related to marital dissolution or dissolution of a state registered domestic partnership
  • to buyers who had a prior ownership interest in the property in the last two years
  • of an interest that is less than fee simple
  • made by the personal representative of the estate or by a trustee in bankruptcy
  • in which the buyer has expressly waived the receipt of the seller disclosure statement

However, if the answer to any of the questions in the section entitled “Environmental” would be “yes,” the buyer may not waive the receipt of the “Environmental” section of the seller disclosure statement.

 

What happens after delivery of the disclosure statement?

The buyer has three business days from receipt of the disclosure statement to cancel the agreement for the purchase of the property (unless they waived their rights to do so in writing).

This right to rescind is statutory, and the decision to revoke the offer may be made by the buyer at the buyer’s sole discretion. If the buyer elects to rescind the agreement, the buyer must deliver written notice of rescission to the seller within the three-business-day period.

Upon delivery of the written rescission notice the buyer is entitled to immediate return of all earnest money deposits and the agreement for purchase becomes void.

If the buyer does not deliver notice the disclosure statement is deemed approved and accepted by the buyer. The full provisions of this right are found in RCW (64.06.030).

 

What happens if the seller doesn’t deliver a completed disclosure?

If the seller fails or refuses to provide a disclosure statement to buyer within 5 days, the prospective buyer’s right of rescission extends until the earlier of three business days after receipt of the disclosure statement or the date the transfer has closed (unless the buyer has otherwise waived the right of rescission in writing). After closing, per RCW 64.06.040 (3) the seller’s obligation to deliver the disclosure statement and the buyer’s rights and remedies related to it terminate.

 

Some sellers are more forthcoming than others…

When sellers claim there are no issues to explain, you should be wary…very wary. In 34 years of practice, I have yet to see a perfect house. Whether a 10-million-dollar estate, a newly constructed home, or a $300,000 starter home, every house has a story and every buyer has a right to know about it so they can knowledgeably complete their due diligence.

Making full disclosure actually benefits the seller, too. By disclosing a condition, the seller shifts the burden of investigation to the buyer under Washington law. By remaining silent, a seller risks the appearance of concealment and a lawsuit.  Think of it this way: disclose an issue and if the buyer accepts it you move forward with no worries since they are barred from seeking compensation later; fail to disclose it and you could be looking over your shoulder for years.

I like to see issues disclosed on a disclosure statement. It makes me feel like the seller has been honest and transparent. When I see a “perfect” disclosure, I know the seller is either in total denial or has decided not to disclosure the little (or big) issues they know about. Most buyers expect far more disclosure from the seller than the law requires. While sellers don’t have a duty to inspect their home or look for defects, they do have a duty to disclose defects that affect the value, physical condition, or title to the property. Sellers should consider disclosure to be a form of insurance.

Instead of minimizing disclosures, a prudent seller will try to consider the property from the perspective of a buyer and then disclose what a buyer would want to know. Many of the conditions that lead to lawsuits would have been acceptable to the buyer if they had been disclosed in advance. Other conditions simply are not important enough to the buyer to fully investigate before purchasing a property. To maximize the benefit of disclosure law, sellers may want to make full disclosure of the property and neighborhood even if they have no legal duty to do so. It is usually better to be over-insured than not insured at all.

 

Buyers have duties, too…

In addition to a thorough inspection, investigating issues raised in the seller disclosure statement is one of the most important parts of due diligence in a real estate transaction. Buyers have a duty of thoroughness and inspection that should not be taken lightly.

The buyer should evaluate each disclosed item, and (especially) those items not disclosed, but easily discovered during a walk-through and inspection. If there are many items identified and not disclosed, a buyer should be concerned about other unseen issues that might also not be disclosed. A savvy buyer will investigate a home with limited disclosure more thoroughly and/or make the decision not to purchase form a seller who is seemingly not transparent with the truth.

It is also important to note that sellers typically have no duty to disclose neighborhood conditions or past events at the property, even though these may be issues of concern to the buyer. For instance, sellers usually have no legal duty to disclose the following conditions either at the property or in the neighborhood:

  • Death, murders, suicides, rapes or other crimes
  • Ongoing criminal or gang activity in the neighborhood
  • Registered sex offenders in the neighborhood (RCW 64.06.021)
  • Future development in the area
  • Political or religious activities in the area

If these or similar matters are of concern, buyer should conduct their due diligence prior to submitting an offer or include an inspection and “Neighborhood Review” contingency in the offer to allow them time to complete it as part of their purchase agreement.

 

What is the seller’s responsibility after delivery of disclosure statement?

The disclosure statute (64.06.040) states that if after delivering a completed disclosure statement, the seller learns from a source other than the buyer or others acting on the buyer’s behalf such as an inspector of additional information or an adverse change which makes any of the disclosures made inaccurate, the seller shall amend the real property transfer disclosure statement, and deliver the amendment to the buyer. The buyer then has the right to rescind the purchase agreement within three business days after receiving the amended disclosure statement.

No amendment is required if the seller takes whatever corrective action is necessary so that the accuracy of the disclosure is restored, or the adverse change is corrected, at least three business days prior to the closing date.

 

The seller disclosure statement is not a warranty

RCW 64.06.050 says the seller shall not be liable for any error, inaccuracy, or omission in the disclosure statement if the seller had no actual knowledge of the error, inaccuracy, or omission. This includes disclosures based on information provided by public agencies, or by other persons providing information within the scope of their professional license or expertise, including, but not limited to, a report or opinion delivered by a land surveyor, title company, title insurance company, structural inspector, pest inspector, licensed engineer, or contractor. This applies to the seller’s real estate broker as well.

This should give a conscientious seller the assurance that the statute provides for property disclosure only and is not a warranty of current or ongoing condition. Provided a seller discloses everything they know, or that a reasonable seller should have known, about their property, a seller should feel good in knowing they are not held liable for its condition.

 

Here are a few great online resources to add to your knowledge base:

Current local Form 17 Real Property Transfer Disclosure Statement: https://windermeremicom/files/2019/08/17_SellerDisclosureForm.pdf

The complete text of the Washington State Real Property Transfer Act: https://app.leg.wa.gov/RCW/default.aspx?cite=64.06&full=true

NOLO Article: https://www.nolo.com/legal-encyclopedia/residential-home-sellers-washington-what-the-law-requires-you-disclose.html

 

Of course, nothing tops having an experienced pro to guide you through the process. They’ve seen hundreds upon hundreds of homes and can help you identify the solid finds from the duds with gorgeous looking veneer.

Choosing the right broker can save you thousands on your home purchase. Whether through local market knowledge and pricing analysis allowing you to make a smarter offer, recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes, or savvy contract negotiation to help you get the terms you need, having a Windermere broker on your side is an advantage you can’t afford to sacrifice.

 


 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446 mercerisland@windermere.com

© Copyright 2019. Information and statistics derived from Northwest Multiple Listing Service.


Posted on May 11, 2020 at 1:33 pm
Windermere MI | Posted in Buyer Tips, Homeowner Tips and Happenings, Seller Tips | Tagged , , , , ,

How to Buy and Sell Safely in the New Normal

 

While buying and selling real estate was recently deemed essential in Washington State, the landscape looks very different than it did before the COVID-19 outbreak. Real estate offices remain closed to the public with agents working remotely and hosting virtual client meetings.  Important safety regulations prohibit in-person open houses and limit the number of people who can tour a home or attend an inspection. Social distancing will remain at the forefront as we wait for a vaccine or treatment to become widely available.

So how do you buy or sell a home safely in this new environment? Thanks to modern technology, there is a lot we can do to help you through the process while minimizing the risk to you and the community. Here are some tips for buyers and sellers on how to do it right…

 



 

TIPS FOR BUYERS

  • Do your homework before you tour a home in person.  Take a virtual online tour, research the neighborhood and ask your agent to delve into the property and title history.  If a virtual tour isn’t available, your agent can give you a preview via FaceTime or Skype while walking through the home.
  • Get pre-qualified.  Knowing your exact budget in advance will help you save time and avoid any non-essential showings.
  • Schedule a 1-hour showing window.  When you think you’ve found “the one” and are ready to tour it in-person, have your agent book a full hour so that you are less likely to run into other buyers.  This will also allow time for each person to see the home since there is currently a limit of just 2 people in the home at once, including the agent.
  • Meet your agent at the home.  Instead of carpooling, drive separately and then wait in your car until your agent confirms that the home is empty and ready to tour.  Condos may have special rules for showings and you’ll also want to take separate elevator trips if you’re touring a high-rise.
  • Play it safe during the tour.  Wear a mask, wash/sanitize your hands when you enter and leave, limit touching of surfaces, and maintain at least 6 feet of social distance from your agent at all times.  Assume you might be recorded by the homeowner and observed by neighbors.
  • Meet virtually with your agent.  When it’s time to write an offer, your agent can use any number of video conferencing apps to share documents with you and discuss them in real time.  You can then sign and authenticate all contracts electronically via a secure service such as Authentisign.
  • Don’t skip a professional home inspection.  Due to the difficulties around seeing the home in person, it is more important than ever to make sure you know of any underlying issues it may have.  The 2-person rule still applies at inspections so your agent will likely request the seller’s permission for you to be in the home alone with the inspector while the agent waits in the car.  You’ll also need to make sure you and your inspector comply with all social distancing and safety rules.



 

TIPS FOR SELLERS

  • Give your listing agent a virtual tour.  Rather than meeting in person, utilize an app like FaceTime or Skype to virtually walk your agent through your home using your smart phone.  Hold meetings virtually whenever possible and sign documents electronically through a secure service such as Authentisign.
  • Move out first if at all possible.  This makes it practical for buyers to comfortably view your home while following the current 2-person limit for home occupancy during showings.  It also protects you from any potential exposure—especially important if you are in at at-risk age group and/or have health problems.
  • Time the market with expert advice.  Talk to an agent you can trust who follows the ins and outs of regulations from the Governor’s office and also has access to showing data and activity reports that can help you determine the best time to sell.
  • Look your best online.  Make sure your agent will coordinate truly stellar home preparation, staging and photography. Consider having a professional video tour and interactive floor plans as well.
  • Have your agent hold a virtual open house. Live-streaming a virtual tour from inside the home is a great way for your agent to reach buyers and answer their questions in real time.  Virtual open houses are also now promoted on virtually all home search websites and apps.
  • Prepare diligently for in-person showings.  Be sure that you or your agent provides hand sanitizer, single-use booties and masks along with a sign detailing the safety guidelines you would like visitors to follow while in your home.  Open interior doors and turn on lights ahead of time to minimize touching.  Disinfect high-use surfaces after each showing.

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island


Posted on May 1, 2020 at 2:40 pm
Jennifer Craven | Posted in Buyer Tips, COVID-19, Seller Tips | Tagged , , , , , , , , , , , , , , , ,

Due Diligence Pays Off Big Time When Buying a Condo

What You Need to Know Before You Buy a Condo

When you buy a condo, you are also buying into its community. You get the benefit of its many amenities, along with the restrictions of its rules, and financial responsibility for its upkeep. Most condominiums offer community features such as pools, exercise rooms, media centers, and entertaining spaces that many people could not comfortably afford to install or maintain individually.

While many single-family residential neighborhoods have homeowner’s associations and rules, few are as far reaching as those in a condominium. For example, some condos don’t allow pets of any kind, rental of units beyond a cap, or home businesses. Because each condominium sets its own covenants, rules, and regulations, it’s critical to know what they are, and if they fit your lifestyle, before you decide to purchase.

Here are a few guidelines to determine if a condominium is the right home for you.

 

What You Own

A condominium owner generally owns their individual unit (from the walls in), the right to use of limited common elements (often things like patios, balconies and storage units) and a joint (undivided) common interest in the building shell, amenities and grounds shared with the other owners in the condominium. Be careful though. Every condominium makes their own determination of what is individually, limited and commonly owned in a document called a condominium declaration. You won’t know what’s what without reading it.

In addition to condominiums, there is such a thing as a co-op or cooperative ownership. These buildings look and feel like condominiums but operate more like joint ownership. Instead of individual, limited and commonly owned amenities, a co-op owner owns a share of interest in the entire building with a long term right to use of a specific unit. There exists only a small fraction of co-ops in Washington State compared to condominiums, so we’ll focus our attention here on condos.

The condominium declaration is recorded with the county and documents the details of ownership, rights and responsibilities throughout its (often hundreds) of pages. Because it is recorded as part of the historical ownership documentation on title and defines the ownership of rights of each unit, it is extremely difficult to alter (requiring the consent of every unit owner). Declarations address the most significant and unchanging ownership aspects while leaving those items subject to change to be addressed in the condominium’s Rules and Regulations (which are much more easily changed).

The declaration is one of the many components of a Public Offering Statement (the initial new construction/conversion disclosure) or the Resale Certificate (disclosure made in every sale of the unit thereafter). This handy reference from NOLO offers a great summary on how to determine what’s what in a condominium declaration. Also see Public Offering Statements and Resale Certificates below.

 

Rules and Regulations

While the declaration sets the unchanging covenants, conditions and restrictions, the rules and regulations address a condominium’s policies and oversight that do change from time to time. Rules and regulations are set and maintained by the elected officers of the condominium’s homeowner’s association. This group of fellow owners make decisions based upon what they feel is best to maintain the spirit of the declaration, the wishes of the condo community, and the financial aspects of the budget.

Typical rules and regulations address things like pet policies, leases and short-term (Airbnb type) rentals, late fees, parking, noise, move-in/move-out expectations, business uses, guests, use of common areas (pools, clubhouses, etc.), and safety guidelines (storage of flammable materials, maintenance of smoke detectors, replacement of water heaters, etc.).

Rules and regulations are amendable by board vote and are often updated annually or every other year. Often the board can grant an exception or acknowledge an approval on a case-by-case basis. For example, a condo’s rules may state that no units beyond a specified percentage may be leased. Or they may say birds or exotic animals are allowed only if approved by the board. A savvy landlord or bird owner would seek approval prior to committing to the purchase of a condo in those scenarios.

While rules and regulations can at times be frustrating, they are also critical in maintaining the value of a condominium. Take rental caps as an example. Most lenders will not lend mortgage funds in a condominium with a low owner occupancy ratio, caused by excessive rentals or vacancies, due to the increased risk in their investment. If a condo does not have a rental cap and a high percentage of unit owners decide to lease their units, all condo owners in that condominium may lose the ability for their future prospective buyers to obtain financing until the owner occupancy ratio increases. Historically, condominiums that must sell for all cash or be seller-financed have a much more limited pool of available buyers and therefor can lose a significant amount of their value. See more on Mortgage Financing below.

Rules also ensure the quiet enjoyment (or entrepreneurial opportunities) of and for its residents. Perhaps you want the comfort and privacy of a condo that does not allow home businesses or short term (Airbnb type) rentals. Or maybe instead you want a work-live studio with a street-facing entry that encourages them. Either way, you’ll have many choices out there if you know what to look for.

 

Dues and Assessments

A condominium has two options for securing funds for maintenance and association expenses. The primary source of funding is through the monthly assessment (often called HOA dues). Monthly assessments should cover all annual operating expenses (utilities, janitorial, groundskeeping, management, etc..) and fund the reserve account (a savings account future repairs and improvements). More on that below.

Because each condominium is different, it’s important to clearly understand what the monthly dues pay to get the full picture of its amenities and expenses. Do they include water, sewer, and garbage or are those billed separately? Some include use of amenities and others require a separate fee for access to the exercise room and pool. Make sure you are comparing apples to apples when looking at one building vs. another. Not having to separately pay certain included utilities can make one condominium with higher dues comparable to another with lower dues that do not include utilities.

How monthly assessments are calculated for each unit is spelled out in the declaration as a percentage of the whole. It is often based on the square footage of the unit but can be based on other weighted elements instead. The percentage assigned to each unit is unchanging, although the overall budget changes at least annually, thereby changing the cost of each unit’s monthly assessment accordingly.

The reserve account requirements are often dictated by something called a reserve study. A reserve study incorporates an inspection of current elements and structures coupled with an evaluation of the anticipated cost to maintain them. For example, it might show the roof is ten years old and is estimated to require replacement in 15 years at a cost of $280,000. This, along with the cost of each other element, is added to a timeline to show the expected financial outlay in each upcoming year. This allows the condo’s board to plan future monthly assessments to meet the upcoming needs outlined in the reserve study. Just like in a home, failure to plan ahead can lead to a future shortfall.

Not every condominium can afford to pay for a reserve study, but most have at some point. In the absence of a current reserve study, a smart buyer should ensure their inspection includes an evaluation of a representative sample of the common elements and structures (this costs more but is well worth the expense) to ascertain whether they feel the reserve account will fund the needed upcoming repairs and improvements. See Don’t skimp on the inspection below.

When a condominium fails to meet its reserve requirement for needed repairs, it often utilizes its second funding option called a special assessment. A special assessment is applied using the same percentages of ownership as the monthly assessment. It can be a single or recurring lump sum, a surcharge in addition to the monthly assessment, or a combination of both. Lenders tend to favor surcharges over lump sum special assessments because they are more easily financially managed by the average condominium owner.

While a special assessment can occur at any time due to an unanticipated need for repairs (just like in a home), most often the need for one can be predicted based upon a noticeable funding shortfall between upcoming capital expenses and the reserve funds available to cover them.

 

Mortgage Financing

Because of the nature of their ownership, condominiums require special approval to secure mortgage financing. This approval involves underwriter evaluation of the Public Offering Statement or Resale Certificate, owner occupancy and commercial use ratios, monthly and special assessments, building insurance, and HOA governance (among many other things).

You can search HUD (FHA) approved condominiums online. Generally, conventional lenders follow similar requirements, so this is a good place to start. In addition to approval of an entire condominium project, it is possible to obtain approval for a single unit. This is especially helpful with smaller condominium projects that do not want to incur the time and cost of obtaining approval for the entire building(s). Your individual lender can verify the ability to obtain mortgage financing for a particular condominium.

The National Association of Realtors offers many condominium resources online. Recently, the U.S. Department of Housing and Urban Development (HUD) released new rules on project approval for single-family condominiums insured by the Federal Housing Administration (FHA). These changes ease restrictions on FHA financing for condominiums, thus enabling more first-time buyers, older adults, and low to moderate-income families to achieve the dream of homeownership.

 

Washington State Condominium Law

Washington State has three separate condominium laws that govern condos based upon the year the condominium declaration was recorded.

Condominiums built after July 1, 2018 are subject to the Washington Uniform Common Interest Ownership Act.

Condos built January 1, 1990 through July 1, 2018 are subject to the Washington Condominium Act.

Condos built prior to 1990 are subject to the Horizontal Property Regimes Act.

While each has its own nuances, all include provisions to protect buyers by requiring full disclosure of all information related to the individual ownership of each condominium.

One of the biggest changes brought about with the Washington Uniform Common Interest Ownership Act is condo liability reform, which reduces some of the unreasonable liability builders once faced and allows for more new condo construction while still protecting condominium buyers.

 

Public Offering Statements and Resale Certificates

Based on what we’ve shared about condominium ownership so far, it’s easy to see that there’s much more to owning a condo than appears at first glance. To ensure each new condominium owner knows as much as possible about their future purchase, the Washington State Condominium Law sets forth disclosure guidelines for new construction and resale of condominiums.

The Public Offering Statement is delivered to prospective purchasers in all new construction or condominium conversion sales. Condominiums developed after July 1, 2018 are subject to the Washington Uniform Common Interest Ownership Act regulations (RCW 64.90.610). Condominiums developed before that time were subject to the Washington Condominium Act (RCW 64.34.410). The statement includes important information for buyers such as the survey map and plans, the articles of incorporation of the association, bylaws of the association, rules and regulations (if any), current or proposed budget for the association, the balance sheet of the association (current within ninety days if assessments have been collected for ninety days or more), the association’s current reserve study (if any), and the inspection and repair report or reports prepared in accordance with the requirements of RCW 64.55.090.

Under this law, the buyer has a right to cancel their purchase contract for seven days after the completed Public Offering Statement document is delivered.

Resale Certificates are required each time a condominium unit is sold thereafter.

Condominiums declarations recorded after July 1, 2018 are subject to the Washington Uniform Common Interest Ownership Act (RCW 64.90.640) while those recorded prior to that date are subject to the Washington Condominium Act (RCW 64.34.425).

Though worded slightly differently, both forms of Resale Certificate address similar items the law deems important for prospective buyers to know. The Washington Uniform Common Interest Ownership Act Resale Certificate adds three specific disclosures related to the presence of a reserve study; age restrictions; and use, occupancy or lease restrictions. Those items would also be documented in the condominium declaration of condos subject to the Washington Condominium Act but would require a specific search.

The Resale Certificate is prepared by the condominium’s authorized officer or agent. This is typically the management company or a member of the board if the association is self-managed. They are permitted to charge a preparation fee to the seller under the law. The Resale Certificate is signed by the authorized association member as true and accurate, under penalty of perjury, at the time it was prepared. For condos subject to the Washington Condominium Act the Resale Certificate must also be signed by the unit owner to be considered delivered to the buyer.

Under both condominium acts, the buyer has a right to cancel their purchase contract for five days after the completed Resale Certificate is delivered.

Copies of the NWMLS Common Interest Community (RCW 64.90) Resale Certificate and the Condominium Resale Certificate are linked here for reference, although each condominium management company typically uses their own format to deliver the required documentation.

 

Don’t Skimp on the Inspection

Not every inspector is an expert on condos. It’s a good idea to ask any prospective inspector about their experience and training specific to condominiums. Ideally, you’ll want an inspector who will evaluate the common elements of the building and grounds in addition to the unit. This is important since you will be jointly responsible for their cost and upkeep.

Think of it this way: you probably wouldn’t pay for a house inspection of only the interior of a home and ignore the exterior, roof and basement. It does cost more to have a full condo and building inspection, and the pool of inspectors who conduct them is more limited, but it’s your best insurance policy when buying into a condominium.

Consider asking the management company about the age of the sewer line and how it is maintained. Scoping the sewer line may or may not be an option, depending on the HOA’s policies, but asking the questions will give you a better understanding of the situation. Older buildings or those with significant mature tree roots around them pose the greatest risk of a compromised sewer line.

Lastly, don’t forget to take the time to personally walk the grounds and common areas for yourself. Are things maintained or do they look tired and run down? Do ask the management company about anything that concerns you.

 

Final Thoughts

By thoroughly completing your due diligence, including actually reading the Public Offering Statement or Resale Certificate in its entirety, you can mitigate much of the uncertainty associated with buying a condo. This includes scanning meeting minutes for current issues, carefully reviewing the operating budget and reserve account financials to see if they appear to account for inflation and future repairs, and verifying the declaration, rules and regulations are a good fit for you.

While you can hire an accountant to review the financials or a condo attorney to review the Public Offering Statement or Resale Certificate, you shouldn’t rely solely on their interpretation. It is worth the hours it might take to review the documents yourself. Every condominium is unique and only you know what details are important to you.

Condominiums offer tremendous opportunities for many homeowners looking for anything from low-maintenance lifestyles and affordable housing options, to interim or second homes. Investing a little more time up front will go a long way toward ensuring you find the right condominium for you.

As you begin this process, know that choosing the right broker will help you navigate your condo purchase and save you headaches down the road. Their local market knowledge and pricing analysis will allow you to make a smarter offer. They’ll provide recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes. And, they’ll negotiate any issues that arise to your satisfaction. Having a Windermere broker on your side is one advantage you can’t afford to sacrifice.

 

Resources

Washington State Community Associations Institute (CAI): This group of condominium, cooperative and homeowners’ associations and other organizations provides educational forums about association-related issues.

 

About the author: Julie Barrows has advised clients and brokers on condominiums over her three-decade real estate career. She has owned three condominiums personally in which she served as President. She has also served as Treasurer and attended many CAI training courses on condominium association management.

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island


Posted on March 20, 2020 at 11:02 am
Julie Barrows | Posted in Buyer Tips | Tagged , , , , , , , , , ,

Assessing the Real Cost of a Fixer

What's the Real Cost of a Fixer?

 

It can be very compelling to find a home in a neighborhood you like that is bargain priced. But how do you know if it will be a good investment? The only certainty in a fixer project is that there will be a substantial amount of uncertainty and risk. There can be significant rewards too, which is why the call of a fixer is so loud for opportunistic buyers.

Here are a few guidelines to determine how much how much to offer and whether a fixer is the right house for you.

 

Step 1: Determine the initial scope of work

Make a list of the most obvious items to be addressed. Decide which items are within your skill set to accomplish yourself and which ones need to be contracted out. Spend some time calling contractors and researching each item to get a ballpark idea of the cost to complete—either the raw materials expense to DIY or the contractor’s price to do it for you. Calculate in an additional 20% for unexpected issues and cost overruns. Add these to a spreadsheet along with the time each project should take. Keep in mind this is an initial evaluation intended to be done before you invest too much time and money into negotiation or inspections.

It’s well worth spending a few minutes talking to the city or county building department to verify which work requires a permit and what the cost and process is before proceeding. Don’t forget to calculate in the cost of obtaining permits for electrical, plumbing, major remodel, or structural changes into your total budget. Getting permits can be time-consuming but doing work without a permit will ultimately create bigger problems when you go to sell because lenders and buyers will want verification the work was permitted and completed properly.

 

Step 2: Do a reality check

Do you have the readily available cash or an approved line of credit to fund this project plus any cost overruns? Do you have the skills and patience to manage or complete the renovation work? Are you able to fit the work itself or the oversight of contractors into your current life schedule without compromising your life values? Will the time and money you invest be worth it in the end product? Are you willing to live in a construction zone while work is being completed?

Don’t skip this step! The answer to these questions will be different for everyone. Some people take on a project because it pencils out without fully evaluating what the impact on their lifestyle will be. A savvy fixer buyer will go in with full awareness of what they are taking on and the project will be much smoother as a result.

 

Step 3: Determine your offer price and strategy (and max purchase price)  

This is where your broker can be an invaluable resource. They can assess a home’s as-is market value and also its potential finished value. Calculating in the costs you identified in step one—including the 20% for unexpected issues and cost overruns—will give you an idea of your max purchase price. Don’t forget to consider expenses like the cost of living elsewhere during renovations, the inconvenience of living through a remodel, and the value of your time invested.

From there, your broker can evaluate market activity and present options for offer strategies, including an initial offer price. Your offer should always include an inspection and sewer scope or septic contingency unless you’ve completed them before making an offer. Here are additional contingencies you may want to include to protect you in your purchase.

 

Step 4: Don’t skimp on the inspection

Assuming you’ve decided that you and your pocketbook are up for the challenge, the next step is to hire the best inspector you can find to make a thorough assessment of the home. If there is obvious deferred maintenance you can see, there are likely to also be many other issues you can’t see. A good inspector will identify those and provide insight into the overall structural condition of the home. Well-built homes with “good bones” make much better rehab projects than homes of mediocre quality.

Don’t forget to scope the sewer line or evaluate the septic system. Both are potentially big-ticket items that don’t add any visible value to your finished product. If you are in an area that may have had oil heating at one time, also confirm there are no underground oil tanks remaining.

If major structural issues are identified or there are indications of problems that cannot be fully investigated, think seriously about proceeding without getting permission to have a structural engineer or general contractor investigate further.

 

Final thoughts

By thoroughly completing your due diligence, you can mitigate much of the risk associated with purchasing a fixer. Having remodeling skills or connections to outstanding contractors is critical. Lastly, if this is your first-time renovating a home, purchasing a home that is simply tired and dated rather than having significant deferred maintenance or structural issues will help you keep your project in the black.

Still have questions? Contact one of our knowledgeable brokers for assistance with how to purchase or determine the value of a potential fixer.

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island


Posted on March 17, 2020 at 8:00 am
Jennifer Craven | Posted in Buyer Tips | Tagged , , , , , , , ,

Should I Rent or Buy a Home?

Should You Rent or Buy?

 

It’s important to remember that the purchase or rental of a home is a lifestyle choice as much as it is an investment. It is not just a commodity to negotiate, but also the place you’ll come home to each day and make your own. Yes, it is important to buy wisely and stay within your means. It is equally as important to do what is right for you and your lifestyle now. If you know you’ll be staying in the same place for years to come, you have much more latitude than you would if you might need to relocate in the next couple of years.

As you evaluate your options, you’ll want to consider things like initial out-of-pocket expenses, monthly expenses, maintenance and upkeep costs, tax deductions, and appreciation.

Initial out-of-pocket expenses.

In a home purchase, this is the down payment & closing costs. Depending on the loan program and purchaser’s credit rating, a typical down payment is 5-20% of the purchase price with closing costs (loan, title and escrow fees) adding another 2-3% on top of that. Putting 20% or more down allows you to avoid the added cost of mortgage insurance. If you need to put less down, you can remove the mortgage insurance later when you have 20% or more in equity.

In a rental, this is typically first month’s rent plus security deposit.

BUY:  A $500,000 home with 10% down would cost $65,000 ($50,000 down and $15,000 in closing costs) in initial out-of-pocket expenses.

RENT: A $3,000 per month rental might cost $6,000 (first month’s rent and security deposit).

 

Monthly expenses.

In a home purchase, this is the mortgage payment (including property taxes, homeowner’s insurance and any mortgage insurance). In a rental, this is typically just the rent.

BUY:  A $500,000 home with 10% down works out to a $2,084 base mortgage payment on a 30-year fixed mortgage. Add around $500 in property taxes, $50 in homeowner’s insurance and $290 in mortgage insurance (if applicable) for a total of $2924 per month.

RENT: $3,000 per month.

One important consideration is that the base monthly payment in a purchase of a 30-year fixed mortgage does not increase (although the property taxes and homeowner’s insurance will). Rent will likely increase each year to keep pace with inflation. Over time, the amount paid in rent each month will typically become significantly more than the amount of a mortgage payment.

 

Maintenance and upkeep.

In a home purchase, you are responsible for everything from the roof to the foundation, plus the land, utilities and sewer lines. In a condo, you are individually responsible for the interior of your unit and collectively responsible for the entire structure and grounds. The cost of maintenance depends on the age of the home or condo, how well it was built and maintained, and its exposure to the elements. In a rental, the landlord pays for maintenance and upkeep.

BUY:  Plan for 1-2% of the home’s value per year in typical maintenance plus the cost of major components (roof, furnace/AC, paint, flooring, appliances, decks, etc.) based on their life span. These items are easily researchable via inspectors, contractor bids and even google searches.

RENT: Landlord pays for maintenance and upkeep.

 

Appreciation.

In a home purchase, your investment is leveraged. That means you gain appreciation based on the entire value of your home, not just the amount you put down. That’s like earning interest on $500,000 even though you only deposited $65,000 in the bank.

BUY:  A 4% appreciation rate is a good average to benchmark. Assuming a 4% rate of appreciation per year, our $500,000 home would gain $108,000 in value over five years.

RENT: The landlord gains the appreciation.

 

The bottom line.

There’s a lot more to consider than just the monthly outgo. A homeowner can maximize their investment by purchasing in a highly desirable area and completing timely maintenance and upgrades or they can waste away their equity by purchasing in a declining or over-built area and allowing their home to fall in disrepair.

Only you know you. Are you up for the pleasure, independence, headache, and heartache of owning your own home? Or would you prefer the comfort and ease of renting someone else’s home with no strings attached, even if it costs more over time? Building wealth through homeownership is an incredible opportunity—but it’s only worth it if you enjoy the ride.

Looking back at the numbers, here’s how a 5-year analysis might pencil out:

BUY:  Your $500,000 home costs about $65,000 in initial out-of-pocket expenses, about $180,000 in monthly payments, and $40,000 in maintenance and upkeep over 5 years for a grand total of $285,000. In our scenario, this is offset by $108,000 in appreciation for an estimated net cost of $177,000 over five years.

RENT: An initial $3,000 per month rental would cost $194,988 in rent payments over 5 years assuming a 4% rent increase each year (a good long-range, though very conservative, benchmark, given the double digit rent increases over the past several years).

So, there you have it. The decision to opt for home ownership is a lot more than a quick judgement call. To do it right, you have to consider all of its aspects—financial, emotional, and even physical and spiritual—and weigh those against your long-range goals and plans. By taking the time to do a thorough analysis of the numbers and an assessment of yourself, you’ll make the best decisions possible and avoid costly mistakes.

Still have questions? Contact one of our knowledgeable brokers for assistance with how to determine your best sale price based on both the average and median price trends.

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island


Posted on March 10, 2020 at 8:00 am
Jennifer Craven | Posted in Buyer Tips |

2020 Home Trends

2020 Interior Design Trends: 5 Takeaways to Refresh Your Home

 

With 2020 now in full swing, we’re seeing some clear shifts in how homes are being designed and decorated.  Most notable for our area is the Modern Farmhouse trend with its juxtapositions of old & new, light & dark, and clean & rustic.  Softer grey and lagom neutrals are here to stay, but are now being contrasted with deep hues and warm metals.  Organic materials such as natural wood and potted plants are also gaining prominence.  Here are some key trends to consider as you refresh or renovate…

 

#1: High Contrast Hues


Deep blue is the “it” color in home decor, with Pantone’s “Classic Blue” and Sherwin-Williams’ “Naval” each taking color of the year honors.  Navy accent walls are gaining popularity in smaller spaces such as foyers, dining rooms and powder rooms.  Black is also back as an accent set against white in kitchens, living rooms and bathrooms.  High-contrast graphics are making an appearance on wallpaper and bathroom tile.


 

#2: Vintage Meets Modern


Whether it’s antique artwork, floral wallpaper or vintage tile, old world charm is making a comeback…with a twist.  This time around we’re seeing vintage framed art, patterns, woods and statement pieces being incorporated into modern spaces with clean lines.  The Modern Farmhouse epitomizes this trend with its clean new take on the old.


 

#3: The Non-White Kitchen


The all-white kitchen is making room for grey and painted cabinets to take the stage.  For the daring, “color pop” cabinets in deep blue, black or even red have been cropping up in the modern kitchen.  Kitchens that do have white cabinets are being spiced up with decorative tile floors and backsplashes, along with darker wood shelving and contrasting light fixtures.


 

#4: Comfy and Cozy


Soft shearling, rustic leathers and fluffy textured mohairs are gradually replacing the luxe velvet we saw in years past.  High performance outdoor-style fabrics have also gotten an upgrade and are appearing indoors on upholstered dining room chairs and couches.  Cushy wing-backed dining benches and chairs are another notable trend, part of an emphasis on making dining rooms less formal and more comfortable.  Another fun trend?  Curved sofas for the dining room and kitchen.


 

#5: Warm & Earthy Accents


Matte brass continues its popularity in fixtures and frames, often mixed with silver metals.  We’re seeing an infusion of aged wood accents, patina, rustic leathers and earthenware softening the clean lines of today’s minimalism.  Potted plants are also popping up on shelves and in windows with olive trees usurping fig trees as a favorite statement piece.


 

Need an instant home update?  Try adding throw pillows, blankets or artwork in hues from Pantone’s Spring/Summer 2020 color palette.

 


 

Find a Home with Windermere Real Estate

 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446

mercerisland@windermere.com

© Copyright 2020, Windermere Real Estate / Mercer Island


Posted on March 4, 2020 at 1:42 pm
Jennifer Craven | Posted in Buyer Tips, Homeowner Tips and Happenings | Tagged , , , , , , , , ,

Flip or Flop? Is That Gorgeous Makeover All It’s Cracked Up to Be?

Is That Flip a Flop? How To Find Out Before You Buy

 

It seems like the perfect combo of fantastic location and newly renovated home. But is it really? The concept of renovating a tired home for profit (flipping) is a business model that is often naturally averse to the future buyer’s interests. The lower the costs, the higher the profit. And, the lower the costs, the lower the sale price—which means more buyer demand.

This isn’t always the case. Some flips are done very well with a higher aesthetic and higher matching sale price. Unfortunately, this is often the exception to the norm. A very good local inspector shared that he’s done thousands of inspections of flipped homes and maybe a few dozen of them were well done.

The allure of a flip is clear—a move-in ready home in an established neighborhood where you can literally unpack and live without needing to address the typical laundry list of to-dos that often comes part and parcel with an older home. It’s when those gleaming new veneer surfaces give way to subpar work beneath that the problems arise.

So, how do you protect yourself if you happen to fall in love with a flipped home? This list below is a great place to start.

 

Must Do’s When Considering the Purchase of a Flip…

  • Verify the seller (flipper) is a licensed contractor as required by state law (RCW 18.27) (you can research them using the state’s L&I Contractor Database and Corporation Search tools)
  • Verify all necessary permits with filed and finalized with the city (you can look up who to contact using this handy link to Building & Permit Resources)
  • Google the contractor to see if anyone has shared reviews, good or bad
  • Ask for references and a list of other flips completed by this contractor and then drive by and call to find out how the product has stood up over time
  • Visit the city or county who has jurisdiction over building permits and ask questions about your potential home and about the contractor who did the work (you’ll often find out more info directly than you can otherwise)
  • Hire the best inspector you can find and alert them that the home is a flip before they begin their inspection so they can look more closely for indications of shortcuts and subpar work that might be covered with gorgeous veneer
  • Talk to neighbors about the project to find out what they know about issues with the original home or work that was completed (bonus: you get to meet the neighbors!)

It’s most time and cost-effective to go through this list in order when possible. The bottom line is that a little more research now can save you countless hours, headaches and expenses down the road. Quality, professional flippers will welcome your questions and the opportunity to differentiate themselves from less reputable contractors.

In addition to this specific research, don’t forget to evaluate all the typical aspects of your potential new home and neighborhood. We’ve compiled links to research tools from schools and geological hazards to market reports and census data.

While you’re there, you can also look up neighborhood info, including crime reporting, local government resources, parks and recreation, and school boundaries.

Of course, nothing tops having an experienced broker to guide you through the process. They’ve seen hundreds upon hundreds of homes and can help you identify the solid finds from the duds with gorgeous looking veneer.

Choosing the right broker can save you thousands on your home purchase. Whether through local market knowledge and pricing analysis allowing you to make a smarter offer, recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes, or savvy contract negotiation to help you get the terms you need, having a Windermere broker on your side is one advantage you can’t afford to sacrifice.

 


 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446 mercerisland@windermere.com

© Copyright 2019. 


Posted on November 9, 2019 at 10:50 am
Windermere MI | Posted in Buyer Tips | Tagged , , , , , ,

Seller Property Disclosure: What You Need to Know Before You Buy

Seller Disclosures: Because there's no such thing as a flawless house

 

So, you just made an offer on your dream home and are now lying awake at night wondering… “What if there’s a big problem with the house that I missed?” Well, it may help to know that Washington State requires sellers of residential real property to thoroughly disclose material facts on a form called the Residential Real Property Disclosure Statement (often referred to as Form 17). Unless the buyer has expressly waived their rights, the seller must deliver this completed disclosure with 5 days after mutual acceptance.  The buyer then has a window of time to walk away with their earnest money at their discretion.

While sellers have always been required to disclose material facts, the Form 17has been required by law (RCW 64.06.020) since January 1, 1995. It has undergone ten revisions since its inception, the last of which will go into effect in January. In addition to the residential disclosure, the state added an unimproved property (land) disclosure in 2007 (RCW 64.06.015) and a commercial property disclosure in 2012 (RCW 64.06.013). The current form is 6 pages long and includes most of the typical property issues requiring disclosure with a catchall question for anything left out.

 

Is every seller required to complete this form? Are there exemptions?

The statute allows very limited exceptions RCW (64.06.010) to completing the disclosure statement. They include transfers…

  • by foreclosure or deed-in-lieu of foreclosure
  • that are gifts to a parent, spouse, domestic partner, or child
  • related to marital dissolution or dissolution of a state registered domestic partnership
  • to buyers who had a prior ownership interest in the property in the last two years
  • of an interest that is less than fee simple
  • made by the personal representative of the estate or by a trustee in bankruptcy
  • in which the buyer has expressly waived the receipt of the seller disclosure statement

However, if the answer to any of the questions in the section entitled “Environmental” would be “yes,” the buyer may not waive the receipt of the “Environmental” section of the seller disclosure statement.

 

What happens after delivery of the disclosure statement?

The buyer has three business days from receipt of the disclosure statement to cancel the agreement for the purchase of the property (unless they waived their rights to do so in writing).

This right to rescind is statutory, and the decision to revoke the offer may be made by the buyer at the buyer’s sole discretion. If the buyer elects to rescind the agreement, the buyer must deliver written notice of rescission to the seller within the three-business-day period.

Upon delivery of the written rescission notice the buyer is entitled to immediate return of all earnest money deposits and the agreement for purchase becomes void.

If the buyer does not deliver notice the disclosure statement is deemed approved and accepted by the buyer. The full provisions of this right are found in RCW (64.06.030).

 

What happens if the seller doesn’t deliver a completed disclosure?

If the seller fails or refuses to provide a disclosure statement to buyer within 5 days, the prospective buyer’s right of rescission extends until the earlier of three business days after receipt of the disclosure statement or the date the transfer has closed (unless the buyer has otherwise waived the right of rescission in writing). After closing, per RCW 64.06.040 (3) the seller’s obligation to deliver the disclosure statement and the buyer’s rights and remedies related to it terminate.

 

Some sellers are more forthcoming than others…

When sellers claim there are no issues to explain, you should be wary…very wary. In 34 years of practice, I have yet to see a perfect house. Whether a 10-million-dollar estate, a newly constructed home, or a $300,000 starter home, every house has a story and every buyer has a right to know about it so they can knowledgeably complete their due diligence.

Making full disclosure actually benefits the seller, too. By disclosing a condition, the seller shifts the burden of investigation to the buyer under Washington law. By remaining silent, a seller risks the appearance of concealment and a lawsuit.  Think of it this way: disclose an issue and if the buyer accepts it you move forward with no worries since they are barred from seeking compensation later; fail to disclose it and you could be looking over your shoulder for years.

I like to see issues disclosed on a disclosure statement. It makes me feel like the seller has been honest and transparent. When I see a “perfect” disclosure, I know the seller is either in total denial or has decided not to disclosure the little (or big) issues they know about. Most buyers expect far more disclosure from the seller than the law requires. While sellers don’t have a duty to inspect their home or look for defects, they do have a duty to disclose defects that affect the value, physical condition, or title to the property. Sellers should consider disclosure to be a form of insurance.

Instead of minimizing disclosures, a prudent seller will try to consider the property from the perspective of a buyer and then disclose what a buyer would want to know. Many of the conditions that lead to lawsuits would have been acceptable to the buyer if they had been disclosed in advance. Other conditions simply are not important enough to the buyer to fully investigate before purchasing a property. To maximize the benefit of disclosure law, sellers may want to make full disclosure of the property and neighborhood even if they have no legal duty to do so. It is usually better to be over-insured than not insured at all.

 

Buyers have duties, too…

In addition to a thorough inspection, investigating issues raised in the seller disclosure statement is one of the most important parts of due diligence in a real estate transaction. Buyers have a duty of thoroughness and inspection that should not be taken lightly.

The buyer should evaluate each disclosed item, and (especially) those items not disclosed, but easily discovered during a walk-through and inspection. If there are many items identified and not disclosed, a buyer should be concerned about other unseen issues that might also not be disclosed. A savvy buyer will investigate a home with limited disclosure more thoroughly and/or make the decision not to purchase form a seller who is seemingly not transparent with the truth.

It is also important to note that sellers typically have no duty to disclose neighborhood conditions or past events at the property, even though these may be issues of concern to the buyer. For instance, sellers usually have no legal duty to disclose the following conditions either at the property or in the neighborhood:

  • Death, murders, suicides, rapes or other crimes
  • Ongoing criminal or gang activity in the neighborhood
  • Registered sex offenders in the neighborhood (RCW 64.06.021)
  • Future development in the area
  • Political or religious activities in the area

If these or similar matters are of concern, buyer should conduct their due diligence prior to submitting an offer or include an inspection and “Neighborhood Review” contingency in the offer to allow them time to complete it as part of their purchase agreement.

 

What is the seller’s responsibility after delivery of disclosure statement?

The disclosure statute (64.06.040) states that if after delivering a completed disclosure statement, the seller learns from a source other than the buyer or others acting on the buyer’s behalf such as an inspector of additional information or an adverse change which makes any of the disclosures made inaccurate, the seller shall amend the real property transfer disclosure statement, and deliver the amendment to the buyer. The buyer then has the right to rescind the purchase agreement within three business days after receiving the amended disclosure statement.

No amendment is required if the seller takes whatever corrective action is necessary so that the accuracy of the disclosure is restored, or the adverse change is corrected, at least three business days prior to the closing date.

 

The seller disclosure statement is not a warranty

RCW 64.06.050 says the seller shall not be liable for any error, inaccuracy, or omission in the disclosure statement if the seller had no actual knowledge of the error, inaccuracy, or omission. This includes disclosures based on information provided by public agencies, or by other persons providing information within the scope of their professional license or expertise, including, but not limited to, a report or opinion delivered by a land surveyor, title company, title insurance company, structural inspector, pest inspector, licensed engineer, or contractor. This applies to the seller’s real estate broker as well.

This should give a conscientious seller the assurance that the statute provides for property disclosure only and is not a warranty of current or ongoing condition. Provided a seller discloses everything they know, or that a reasonable seller should have known, about their property, a seller should feel good in knowing they are not held liable for its condition.

 

Here are a few great online resources to add to your knowledge base:

Current local Form 17 Real Property Transfer Disclosure Statement: https://windermeremicom/files/2019/08/17_SellerDisclosureForm.pdf

The complete text of the Washington State Real Property Transfer Act: https://app.leg.wa.gov/RCW/default.aspx?cite=64.06&full=true

NOLO Article: https://www.nolo.com/legal-encyclopedia/residential-home-sellers-washington-what-the-law-requires-you-disclose.html

 

Of course, nothing tops having an experienced pro to guide you through the process. They’ve seen hundreds upon hundreds of homes and can help you identify the solid finds from the duds with gorgeous looking veneer.

Choosing the right broker can save you thousands on your home purchase. Whether through local market knowledge and pricing analysis allowing you to make a smarter offer, recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes, or savvy contract negotiation to help you get the terms you need, having a Windermere broker on your side is an advantage you can’t afford to sacrifice.

 


 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446 mercerisland@windermere.com

© Copyright 2019. Information and statistics derived from Northwest Multiple Listing Service.


Posted on October 3, 2019 at 6:00 pm
Windermere MI | Posted in Buyer Tips | Tagged , , , , ,

Key Buyer Protections You May Need for Your Home Purchase

How Can You Protect Yourself When You Buy?

 

When purchasing a home, there are a number of protections—called contingency clauses—that you can write into your contract to allow you to back out of the sale for specific reasons.  For instance, if your inspection reveals major problems with the home that the seller can’t or won’t fix, your loan financing falls through, you find out the HOA rules or neighborhood weren’t what you were expecting, etc. The sheer quantity of available contingencies is dizzying. Our list includes 26 provisions alone on preprinted forms, not including any specific requests your broker might negotiate in.

Clearly, not all contingencies are used in a typical transaction and many make your offer less competitive. Still, we think it’s critical for you to understand the legal implications and trade-offs of each contingency so you can make the smartest decisions possible.

Financial

We’ll start with contingencies that relate to financing. Except in extremely competitive situations or non-financeable home sales (think dilapidated homes, major structural issues, or land-value sales), a financing contingency is relatively commonplace. It generally protects you in the event you can’t secure a loan (provided you follow the agreed upon protocol). It includes an appraisal contingency to protect you in the event the lender feels the homes is worth less than you agreed to pay for it.

If you have an existing home that needs to close before you can complete your home purchase, there are two standard contingencies available to you. The first, Buyer’s Sale of Property Contingency, is used when you have not yet secured a buyer for your current home. It sets time periods to both actively list your home for sale and to secure a buyer contract. It ties the closing of your new home to the closing of your current one, and because of this, sets very specific protocols for accepting an offer. It has a bump provision that allows the seller to accept a non-contingent offer if you don’t remove your contingency within a predetermined time frame.

The second contingency, Buyer Pending Sale of Property Contingency, is used when you have already secured a buyer for your home and are awaiting its closing. Because your home is already under contract it is far less controlling than the Sale of Property Contingency, but it protects you if your first sale falls through.

Less common financial contingencies include a standalone appraisal contingency available for cash transactions, a seller-financing attorney review, and a contingency related to homeowner’s insurance availability.

Home and Property Condition

In highly competitive situations a buyer may need to conduct their due diligence before making an offer. In most other scenarios, though, the buyer has countless opportunities to investigate a potential property and walk away or renegotiate if it doesn’t measure up to expectations.

The inspection contingency includes the ability to evaluate the structural, mechanical, and general condition of the structure(s), compliance with building and zoning codes, an environmental or hazardous materials inspection, a pest inspection, and a Geotech or soils and stability inspection. In addition, it includes the option to allow a sewer system inspection or a neighborhood review and permits an inspection to determine the presence or non-presence of oil storage tanks on the property.

Specific separate contingencies allow for evaluation and review of documentation related to wells and septic systems, assessment the presence of lead-based paint, or review of lease agreements for components like propane tanks, security systems, and satellite dishes, etc.

There is an option to make the sale contingent upon seller providing a home warranty or require cleaning and personal property removal prior to buyer taking possession.

Buyers wanting to determine if a home or property is suitable for their intended use (think building, remodeling, platting or development) would incorporate a feasibility contingency into their offer. Buyers of vacant land might include the Land and Acreage Development and Use addendum that incorporates both disclosures and contingencies.

Built into the standard local purchase and sale agreement is an Information Verification Period that gives the buyer 10 days (unless modified) to verify statements made by the seller of listing firm related to the property.

Title

In Washington State, the buyer most commonly receives a deed at the time they purchase a property. That deed is subject to financial liens and encumbrances, restrictions, and physical encroachments. A standard title review contingency allows the buyer the opportunity to review these items and object to any they cannot live with. A buyer has the option to complete a survey of the property boundaries and purchase extended title insurance if desired. Surveys are exceedingly expensive and most typically completed on valuable parcels of land such as waterfront and commercial property.

Community and Homeowners Association

Many communities have homeowner’s associations that govern rights and responsibilities within a community. A homeowners’ association review contingency requires the seller to deliver documents and meeting minutes to buyer that are then subject to buyer’s approval.

Condominiums and Common Interest Communities are also regulated by statute and have specific requirements for review and approval of budgets, documents and meeting minutes like traditional contingencies. Although governed by statute, it’s important for buyers to ensure they receive and review the resale certificate or public offering statement within the allotted time frame to avoid an automatic waiver.

Perhaps you are making an offer in a community or neighborhood you know nothing about and don’t have enough time to check it out. A neighborhood review contingency allows you to do things like research crime statistics, talk with neighbors, explore traffic patterns, and check the noise level (nothing like finding out about that incessantly barking dog after closing). This is something that ideally you do before writing your offer to make it as strong as possible, but it’s nice to know its available in a pinch.

Leases

When buying a property subject to an existing lease that will continue after closing, a lease review contingency will require the seller to deliver a copy of the lease along with books, records and other agreements and provide for your review and approval within a specified time frame.

Attorney Review

Finally, an attorney review contingency will allow you a defined time period with which to have your attorney review and approve specific provisions or the entire purchase contract.

 

No two homes, buyers, or sellers are the same. Every offer you write should be tailored to the specific situation. Nothing tops having an experienced broker to guide you through the process. This is what we do every day. Together, we’ll create the best strategy for you.

Choosing the right broker can save you thousands on your home purchase. Whether through local market knowledge and pricing analysis allowing you to make a smarter offer, recommendations and resources to thoroughly conduct your due diligence and avoid costly mistakes, or savvy contract negotiation to help you get the terms you need, having a Windermere broker on your side is one advantage you can’t afford to sacrifice.

 


 

Find a Home | Sell Your Home | Property Research

Neighborhoods | Market Reports | Our Team

We earn the trust and loyalty of our brokers and clients by doing real estate exceptionally well. The leader in our market, we deliver client-focused service in an authentic, collaborative and transparent manner and with the unmatched knowledge and expertise that comes from decades of experience.

2737 77th Ave SE, Mercer Island, WA 98040 | (206) 232-0446 mercerisland@windermere.com

© Copyright 2019. Information and statistics derived from Northwest Multiple Listing Service.


Posted on September 20, 2019 at 4:11 pm
Windermere MI | Posted in Buyer Tips | Tagged , , , , , , , , , , , , , , ,

Planning for the Life Expectancy of Your Home

Planning Ahead: The Life Expectancy of Your Home's Components

 

Nothing in life lasts forever – and the same can be said for your home. From the roof to the furnace, every component of your home has a lifespan, so it’s a good idea to know approximately how many years of service you can expect from them. This information can help when buying or selling your home, budgeting for improvements, and deciding between repairing or replacing when problems arise.

 

According to a National Association of Home Builders (NAHB) study, the average life expectancy of some home components has decreased over the past few decades.  (This might explain why you’re on your third washing machine while Grandma still has the same indestructible model you remember from childhood.) But the good news is the lifespan of many other items has actually increased in recent years.

 

Here’s a look at the average life spans of some common home components (courtesy of NAHB).

 

APPLIANCES. Of all home components, appliances have the widest variation in life spans. These are averages for all brands and models and may represent the point which replacing is more cost-effective than repairing. Among major appliances, gas ranges have the longest life expectancy, at about 15 years. Electric ranges, standard-size refrigerators, and clothes dryers last about 13 years, while garbage disposals grind away for about 10 years. Dishwashers, microwave ovens, and mini-refrigerators can all be expected to last about nine years. For furnaces, expect a lifespan of about 15 years for electric, 18 for gas, and 20 for oil-burning models. Central air-conditioning systems generally beat the heat for 10 to 15 years.

 

KITCHEN & BATH. Countertops of wood, tile, and natural stone will last a lifetime, while cultured marble will last about 20 years. The lifespan of laminate countertops depends greatly on the use and can be 20 years or longer. Kitchen faucets generally last about 15 years.  An enamel-coated steel sink will last five to 10 years; stainless will last at least 30 years; and slate, granite, soapstone, and copper should endure 100 years or longer. Toilets, on average, can serve at least 50 years (parts such as the wax ring, flush assembly, and seat will likely need replacing), and bathroom faucets tend to last about 20 years.

 

FLOORING. Natural flooring materials provide longevity as well as beauty: Wood, marble, slate, and granite should all last 100 years or longer, and tile, 74 to 100 years. Laminate products will survive 15 to 25 years, linoleum about 25 years, and vinyl should endure for about 50 years. Carpet will last eight to 10 years on average, depending on use and maintenance.

 

SIDING, ROOFING, WINDOWS & DECKS. Brick siding normally lasts 100 years or longer, aluminum siding about 80 years, and stucco about 25 years. The lifespan of wood siding varies dramatically – anywhere from 10 to 100 years – depending on the climate and level of maintenance. For roofs, slate or tile will last about 50 years, wood shingles can endure 25 to 30 years, the metal will last about 25 years, and asphalts got you covered for about 20 years. Unclad wood windows will last 30 years or longer, aluminum will last 15 to 20 years, and vinyl windows should keep their seals for 15 to 20 years. Cedar decks average 15-25 years if properly cleaned and treated, while high quality composite decks should easily last 30 years with minimal maintenance.

 

Of course, none of these averages matter if you have a roof that was improperly installed or a dishwasher that was a lemon right off the assembly line. In these cases, early replacement may be the best choice. Conversely, many household components will last longer than you need them to, as we often replace fully functional items for cosmetic reasons, out of a desire for more modern features, or as a part of a quest to be more energy efficient.

 

Are extended warranties warranted?

Extended warranties, also known as service contracts or service agreements, are sold for all types of household items, from appliances to electronics. They cover service calls and repairs for a specified time beyond the manufacturer’s standard warranty. Essentially, warranty providers (manufacturers, retailers, and outside companies) are betting that a product will be problem-free in the first years of operation, while the consumer who purchases a warranty is betting against reliability.

 

Warranty providers make a lot of money on extended warranties, and Consumers Union, which publishes Consumer Reports, advises against purchasing them.  You will have to consider whether the cost is worth it to you; for some, it brings a much-needed peace of mind when making such a large purchase. Also, consider if it the cost outweighs the value of the item; in some cases, it may be less expensive to just replace a broken appliance than pay for insurance or a warranty.

 


 

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© Copyright 2019. Information and statistics derived from Northwest Multiple Listing Service.


Posted on August 30, 2019 at 2:59 pm
Windermere MI | Posted in Buyer Tips, Homeowner Tips and Happenings | Tagged , , , , , , , , , , , , , , , , , , , ,