Just Ask Emma

Q: We have a very nice rental house that we’ve had for a few years now.

2010-04-13T10:42:00.000-07:00

We’ve always been able to get $1,500 a month for it. Our last tenant moved out in September and we haven’t had a renter since. We pay a mortgage on it and are losing both the rent we are used to getting and are now paying the full mortgage payment. We’ve had many people look at it but when we call them back they all say they’ve found something cheaper. Some have even tried to bargain us down on the rent. We really don’t want to have to lower the rent. Any suggestions?

A: Lower the rent. Rentals are not bringing in what they were a couple of years ago for the same reason that housing prices dropped. We are in a recession and all of us have taken a hit in the pocketbook as a result.

The critical thing is to get a good tenant in the house and get some cash flow. I know it seems like fifth grade math but let’s do the numbers. Let’s just say that you are paying out $1,800 per month on the mortgage, insurance and taxes. If you had rented it in October for $1,200 a month you would have had a negative cash flow of $3,600 up to the end of March after paying your mortgage payment. As it is, you’ve experienced a $10,800 short fall in that timeframe! Think about it.

You should also know that some insurance carriers will cancel your policy if they know the house has been left unoccupied. In addition, leaving a house empty can set you up for break-ins even in our relatively law abiding community.

I know it’s hard to lower the rent after having it higher for a long time but it’s better to have a good tenant in there taking care of things and paying you a reasonable rent, than having it sit empty, draining your bank account. Best of luck.

Q: I’m really excited that the prices have come down on Vashon enough that I can finally buy a home of my own.

2010-03-23T16:21:00.000-07:00

Ever since my divorce my two kids and I have been at the mercy of landlords and I’m sick of it. Plus, I can’t have pets and the kids really want a dog or cat. My question is this; how do I find a reliable lender in these uneasy financial times? They all seem to offer the same basic interest rates. I applied at my bank but they haven’t really been forthcoming with what the true cost of the loan will be and that makes me nervous.

A: You’re wise to shop around for your loan. These days it’s almost a given that an offer to purchase a home will be accompanied by a pre-approval letter from the buyers lender. It’s always best to have that all sorted out before you make an offer. Interest rates are an important part of deciding on a loan, of course, but you’re right that most lenders, banks, credit unions, and mortgage brokers offer close to the same rates.

What can be very different are your closing costs. I just had a client pre-approved with a lender for 1.5 points. That represents one and a half percent of the loan. Banks will call these points, fees, or other names but they all mean a percent of the loan. In the case of this client that would have cost him $6,375.00. Add to that his pre-paid taxes, insurance and reserves of one kind or another, plus the cost of the credit check and the appraisal, as well as miscellaneous fees the bank charges and his total cost would have been just shy of $10,000. I recommended that he check with other lenders and he found one that charged him less than half that amount. That’s a huge difference!

Find a lender who comes highly recommended and one with whom you feel comfortable sharing all of your financial information. You’ll be working closely with this person so you need to trust them.

Q: I’d like to buy a house but I’ve been told that the $8,000 buyer credit is expired.

2010-03-11T15:52:00.000-08:00

I really can’t buy a place without that. Will the government do something like that again? It would be great if they did it before the prices go up and while there are houses for sale in my price range.

A: As it happens, the first time home buyer credit was extended and you have until April 30th to get into a contract to buy a house, and you have up until July 1st to close on the sale. There is even a new provision that allows someone who has been living in the current home they own at least five years to purchase another primary residence and receive up to a $6,500 tax credit.

Also remember that if you don’t owe that much on your taxes the government sends you the difference in cash! You can apply it to 2009 taxes or 2010. There are some income limits to receive the full benefit. You must make $125,000 or less for a single person and $225,000 for those filing jointly. If you make more you get a smaller benefit.

We have an active market right now with new listings coming on the market almost daily. Several of those listings are in your price range so there is reason to hope that you could find a home that will work for you before the April 30th deadline.

I am happy to say that I have sold several homes in the last several months to first time home buyers. The $8,000 benefit was a real help in all of these cases. Because we finally have some inventory in the lower price ranges, these young families as well as many single individuals have been able to buy a home in what has been an expensive and out of reach real estate market.

If you have been on the fence about buying, have your lender figure out for you how that tax credit can help you finally own a home of your own.

Q: My husband and I bought a property last summer direct from the owner.

2010-02-24T14:06:00.000-08:00

Because it was just raw land we didn’t really think we needed to do any kind of inspections or anything. We signed something with the seller that said we understood that the land was a “recreational property”. Now we find out that’s some sort of code for not buildable! We didn’t pay a huge amount for the land, but when we recently met with a staff person from the County, we discovered that we can’t legally even put up a yurt or any kind of structure. I’m sick about it and wonder how we can sell it.

A: Even buying raw land requires some due diligence on the part of a buyer. If you intended to build on it you probably should have made your offer contingent on finding out if it was a legally buildable lot, if there were critical area issues to consider, if there was a water share available, and if the property would “perk” for a septic system.

The seller might be culpable if he or she knew that you really thought it was buildable. That’s for an attorney to advise you on and a judge to decide. But for now, if you want to sell it, you can always approach the neighbors, who might be willing to buy it to add to the size of their property. Often I’ve been able to get two or more neighbors to go in together on a property just to create some open green space, or a play area, garden or view corridor for all of them.

If the neighbors don’t want it you should list it for sale. Just be very clear in your advertising that as far as you know, it isn’t buildable. We have a lot of small parcels on Vashon that are not currently buildable. What you paid should have been a clue to the real value of the land. I believe the old adage that if it sounds too good to be true it probably is.

Q: It’s been almost three years since you sold us our house and we’d like to ask your help in suing the seller and home inspector.

2010-02-10T15:23:00.000-08:00

After the last big rain we had several small leaks in our roof. We’ve been taking very good care of it by having it pressure washed twice a year to get the moss off. We think the roof was in much worse shape than the sellers represented in their disclosure and we also think the inspector should have noticed if there were any leaks.

A: Before you pay for an attorney there are a few things to consider. First, if you read the seller’s disclosure form closely you will notice, as I pointed out to you during your purchase, that the answers sellers give are simply to the best of their knowledge. They don’t guarantee anything. Most people don’t get up on their roof so they can’t report any problems unless they have experienced leaks. So you may not have a case against them.

Another document you should review is your inspection report. It also doesn’t guarantee anything beyond what the inspector can see on the day of the inspection. The forms most inspectors use also generally have a short timeline for complaints and three years would be too long to justify a complaint now.

The third and most important issue is that, sadly, you did not follow my advice to never, ever pressure wash your roof! Pressure washing can remove the granules that are the protective surface of the shingles. If you’ve been doing this twice a year for three years I’m surprised you have any roofing left. No matter what somebody selling this service tells you, virtually all manufacturers of roofing materials and roofers will tell you that pressure washing is very bad for shingled roofs.

The bottom line, folks, is that I believe you probably did this to yourselves. I always stress to buyers that they refrain from pressure washing and I know it’s even in the inspection report that you received when you bought the house. I’m truly sorry.

Q: I can't believe you recommended my daughter and son-in-law buy that little house you showed us last week.

2010-02-04T13:43:00.000-08:00

It's not in any of the neighborhoods that I recommended to them and it's really kind of crummy and way too small. We really want to have them live here so that they can be near us, but I don't want to see them living in a dump.

A: There seem to be several issues here. First, I would suggest that you and your husband drive around and take a look at everything available in your daughter's price range. Our prices are lower than they've been for many years and it's only been in the last six months or so that we've seen a few homes come on the market that your daughter and her husband can afford. Looking at everything available should give you a sort of "reality check" about what they can expect to find.

In addition, you should realize that the needs of a young couple just starting out will be different than those of us that have owned several homes over a lifetime. I sometimes have to remind myself that my first house was a real disaster. It was in a "marginal" neighborhood and looked awful, but it was in my price range, in a good location for my job, and was something I could fix up myself. It turned out to be a great home for me and I have many fond memories of my time there.

I would also add that if you want something better for your children you might consider giving them a gift of money to help them move up to a higher price range. It's common for parents to help their children buy their first home and there are some tax advantages to doing so. Check with your accountant.

It's hard not to want the very best for your children. But I think it's important to let them make their own decisions, hopefully with some suggestions from you and the help of a few well recommended professionals.

Q: At your recommendation, we bought a condo in Seattle some years ago so our son could live there while in college.

2010-01-12T13:55:00.000-08:00

He graduated and took a job out of state. We've decided to keep the condo and rent it out. We contracted with a property manager to handle it and that is the problem. The guy has done a really lousy job. We decided to go to another, better manager but now the first manager is dragging his feet getting us our money. He has deposits that belong to us and we've been waiting weeks and still don't have the money. What do we do? Our new manager seems reluctant to go after this other guy.

A: Property management is one of the most difficult parts of the real estate industry, and it's heavily regulated. You need to go to these regulatory agencies about your problem. There are strict time lines on how long funds can be held after they have been requested.

First, be sure this manager is licensed. Only those holding a valid Washington State real estate license, working under the supervision of a real estate brokerage firm, can legally do property management. The only exception is for an on site manager in an apartment complex.

If you believe this person has not followed the law, or has been self serving or is illegally holding or using your money, you should report his actions to the following:
Enforcement Division of the Washington State Department of Licensing (360-664-6484); Washington State Attorney General (800-551-4636); and an ethics complaint to the Seattle King County Board of Realtors (800-540-3277).

No one in the real estate industry really wants to "turn in" another agent. Most of us work every day to act in full accordance with all the rules and regulations of our business and the ethical standards of the Association of Realtors. However, one bad apple can sour things for everybody, so don't hesitate to file a complaint if this property manager has mishandled your funds or many be guilty of other questionable practices.

Q: We want to start the New Year out right and do something with our landscaping.

2009-12-29T13:42:00.000-08:00

We bought the house from you last year and it didn't have anything but a small lawn and an overgrown vegetable garden. We want to get the biggest "bang for our buck" so we thought we'd ask you for advice. You may recall that we are on a very tight budget, so we can't afford a designer or anything.

A: Almost every landscape consultant I've ever talked to and most books on landscaping say to invest first in trees. Trees and large shrubs are your foundation plants. These will need the most time to grow so you want to start your landscape with good, solid, native trees.

You can also add fast growing maples and other species that can give you some color and texture. I have a silver maple that I got as a whip from the National Arbor Society that we planted years ago. It's over 30 feet tall now. It's beautiful in every season and gives needed shade in the summer. Check out the Arbor Society and other non-profit plant organizations. They are a wonderful source of free advice.

Next add shrubs, particularly those that attract birds and butterflies. There are many good sources online for bird friendly plant ideas for our region. Shrubs may also need some time to get established but are well worth it. Add some ground cover, particularly to get rid of some of that lawn, and finally your flower beds.

It's always good to have a plan. Before you plant anything get some good landscape books at the library or bookstore, and don't try to do too much at one time.

My last bit of advice -- do the irrigation first! When you want a beautiful yard it's hard to start with digging up the place and laying down pipes, but a good irrigation system will save money, water, and your plants! You don't want to do it later when you're tired of high water bills and too many hours of watering. Happy gardening!

Q: We are getting all settled in the wonderful house you sold us a few months ago.

2009-12-05T14:58:00.000-08:00

But being a couple of "city kids" as well as first time home buyers, we don't have clue about what we should be doing to get ready for bad weather and power outages. Where do we start?

A: If you haven’t done it already, be sure to clean out your gutters. If the gutters are clogged with leaves and debris the rainwater will just flow over the gutters and down the sides of the house. That can rot out your siding. Once it freezes those gutters full of leaves form an ice dam and water will not only cascade off the roof but will wick up into the underlayment of the roofing and rot the roofing out.

Be sure you have plenty of flashlights, safe candle holders and candles and even some battery powered lanterns. This Thanksgiving most of us at the south end of the Island were out of power for about six hours. We still had a good time at my house because we had alternative heat, lots of candles and lanterns, and our turkey was already out of the oven when the lights went out. We were lucky.

It’s really important that you have your chimney cleaned. Creosote build up is one of the major causes of house fires. Be sure your furnace has been serviced and the filters cleaned or replaced. We all spend more time indoors at this time of year and need to protect the quality of our indoor air. Clean off walkways and decks so that they don’t get slick and slippery. Add non-stick strips or outdoor carpeting on decks for safety. Clean dryer vents. Have your car serviced and keep ice scrappers and extra blankets in the car.

I have a list of tips to be ready for power outages that I’m happy to share with anyone. You can pick up the list at my office or ask for it and I’ll email it to you. There’s a lot to know to be ready.

Q: It's become clear that my partner and I will not be able to afford a waterfront place here, after all.

2009-11-23T13:40:00.000-08:00

The houses in our price range are just not what we need or want. I suppose we could start looking at houses with a view, but will that even make a difference?

A: Once you eliminate the preference for waterfront in your price range, you will be looking at nicer, larger homes with a view. That also goes for the difference between inland homes that are on acreage, versus those on less than an acre. The acreage adds considerably to the market value of property. Looking at everything in your price range is probably a better way to discover for yourselves what you are willing to give up in order to have something that's more valuable and important to you.

I've been surprised many times when clients end up falling in love with a house or property that is very different from what they said they wanted. Most people really don't know what they want. They have some ideas, but those are often ideas formed by the things they don't like about their current home, or a list of preferences they've read about somewhere.

It's also common for people to want something that is just like their parent's home, or anything but their parent's homes. Sometimes their ideas of what will work for them are actually formed by what friends or family members tell them they should want. It's always worth the effort to examine those priorities you've set for yourselves to see how many of those wants and needs are really your own.

I'd like to suggest that we just look at everything in your price range. As we get into the winter months there will be a smaller and smaller inventory to choose from so it's good to see everything that's out there before you narrow your search. The most important thing for you is to become a part of our wonderful community and enjoy a slower paced, more rural lifestyle. That can happen in any house.

Q: I'm getting fed up with going out with my wife looking at houses to buy.

2009-11-04T15:52:00.000-08:00

First she said she wouldn't consider anything that didn't have a view. When we realized that there are almost no decent houses in our price range that have a view, she switched to only wanting something on acreage. Frankly, I don't know what we'd do with a lot of land.

She doesn't like the places we can afford that are on a few acres, so I just don't know what to do. I really want to get something before the prices start back up and we can't afford anything here.

A: Hang in there. This is a common problem. We all start out wanting the moon and end up settling, happily, for a decent home we can afford. Especially on Vashon, which has a very small real estate market, it's almost impossible to find exactly what you want.

As you've heard me say to her, it's best to look at everything in your price range to get a better idea of what options you have. I call it a reality check. Even for those who have an unlimited price range, the choices are few. We just don't have that much turnover of property on the Island. That's a good thing for the community, but a frustrating thing for those trying to find a home here.

Maybe coming out on a nice day and looking at everything we have available in your price range will give her a more realistic view of the market. I am always surprised to discover that people often chose a place that was the complete opposite of what they told me they wanted.

You also might consider the possibility of renting here first. That way you can become a part of the Vashon community and continue to look for a place to buy. Even in a slow economy the best homes sell more quickly. If you're already living on the island I can notify you the minute a new listing comes up and you can see it that day.

Q. The house next door has been empty and on the market for almost a year now.

2009-10-27T12:50:00.000-07:00

We really hate having an empty house in the neighborhood. We haven’t ever had anyone break into a house in our area, but empty houses do attract problems and it just doesn’t look good. It really is a great neighborhood.

A: It’s nice that you’re watching out for that house. Yes, it’s been on the market a long time. It needs a price drop but I don’t think that’s been the problem. The price has been dropped a couple of times already. What’s needed is some time and care from the listing agent. Our best listing agents stage houses that are vacant. They regularly check up on them and make sure the house is kept clean and the yard is maintained.

In the case of this house the listing agent doesn’t seem to be concerned about the property. The weeds are growing, the house is dirty and since all of the drapes are drawn, it always looks dark inside. That look won’t sell a house. The photos should be updated to show the home in different seasons. A photo with fall leaves when its spring or snow when it’s summer is a giveaway that the house has been on the market awhile.

I’ll admit that when staging first came to Vashon I was among those who ridiculed the “Bellevue” look of it. Now I’m a believer. Well staged homes sell faster and for more money than homes that are simply vacant. Vacant homes feel abandoned when you walk in to them and if they are also dirty and dark, there is little chance that they will sell until the price is really lower than it should have to be.

On the other side of that coin, homes that are overstuffed with the seller’s furnishings and messy don’t show well either. I always recommend that when you decide to sell your home, you start packing and storing everything you don’t need for daily living. You’re going to be moving anyway, so cut the clutter.

Q: We did as you suggested and interviewed several potential listing agents, the one we really like is insisting that we get a pre-inspection done.

2009-10-06T11:21:00.000-07:00

She said that way we can fix what’s wrong and have everything in good shape. We really don’t want to spend the money to do that if the buyer is going to do it anyway. Do you think it’s really a big deal?

A: I agree with that listing agent. There are three really good reasons to do the inspection before you put the house on the market. The first is that you do, indeed, find out what needs repair. Fixing obvious flaws will make the house show better and will give buyers the confidence that the house has been well maintained.

A second reason is that you will be able to disclose any major problems up front in the seller’s disclosure that you have to fill out. Better to disclose major defects and deal with the problem than have the buyer believe you are hiding something.

The third reason is that having a copy of that inspection for buyers to see, probably laying out on a table, is a great way to show your honesty and willingness to fix what’s wrong and disclose any defects.

The buyers may have their own inspection but because you had one first, you know what to expect and, hopefully, have repaired anything they will find. The inspection period can be very stressful for both buyer and seller. Negotiating work orders and repairs can add to that stress and slow down the transaction.

Why not deal with all that before you put the house on the market? I would also recommend that you have the house professionally cleaned inside and out until it sparkles. It is absolutely worth money in your pocket to do so. A bright, clean house that looks well maintained will sell much faster and for more money than one that’s dirty, tired looking or in need of obvious repair. It’s a little more work for you now, but you’ll be smiling all the way to the bank!

Q: We’re first time homebuyers and have been looking for a house over the summer.

2009-09-16T16:04:00.001-07:00

There are several homes in our price range, but we can’t make up our minds. I know the $8,000 federal tax credit expires soon but I keep hearing that it will be extended. Do you know anything about that?
A: We are all hearing that it might be extended but not from reliable sources. It’s more a hope than a plan at this point and I don’t think you should just wait and see. That $8,000 can make the difference between getting you into a house or not. Don’t miss this opportunity!
Your purchase must close before December 1st or you lose that $8,000. Some folks are still confused and don’t realize that if you don’t owe $8,000 in taxes you will actually get the remainder in cash! That’s too good a deal to ignore.
There is another thing that you should consider. We have historically low prices on our most modestly priced homes right now. For many buyers this is the first time in many years that we’ve had an inventory of homes that they can afford. That’s not likely to last.
Since there are several homes that you are attracted to, you should get an offer in on one of them soon, so that you can close before that December 1 deadline.
Here are a couple of ways to help you make the decision. First, is the old adage; location, location, location. It should be a location that works best for your family and also offers good resale potential. A busy, noisy street is always less desirable than a quiet one, for instance.
Next, choose the home that’s in the best condition. Buying a fixer is tempting, but you should probably do that only when you have the time, money and experience to handle it.
It’s better to buy a house that’s a little bit ugly but in good structural condition, than one that’s cute but needs lots of expensive work done. Ugly is easier and cheaper to fix.

Q: We’ve been looking at houses for a few months and I am so amazed at how many of them turn out to be nothing like the photos on the Internet.

2009-09-02T10:03:00.000-07:00

A few are actually nicer in person than the crummy photos online, and a few are about what I expected. But some of them are just plain misrepresented. I’ve seen these glamour shots of a breathtaking view that’s really only visible from across the street, not from the house, and pictures of huge yards that turn out to be tiny. I’ve even seen photos of these great back yards but the photos don’t show that the front of the house is 20 feet from a busy road. How can agents get away with that?

A: It’s often hard to draw the line between what the industry calls “puffing” or making something look a little better than it is, and misrepresentation. Most of us in the industry tolerate a certain amount of “puffing” since we know it’s the listing agent’s job to try to make the property appealing.

What often happens, however, is that when potential buyers see the property, they not only lose interest in the house when it doesn’t look like what they expected, but they lose respect for the agent who listed the house and even the one showing it to them. In a worst case scenario they lose confidence in all real estate professionals.

There are actually a few places currently on the market where “creative photography” has probably gone far enough to be called misrepresentation. A beautiful view that’s only visible from the top of the roof is not a view. A small yard shot with a fisheye lens to look expansive is a false picture.
While I sympathize with listing agents who are trying to help a seller who has a less than attractive property, I try to make sure that my clients get the real picture. There is a buyer out there for every property if it is well priced and every property has some good features that can be emphasized.

Q: We’ve been out with a couple of different agents looking at houses over the last few weeks.

2009-08-18T14:56:00.000-07:00

They each have showed us different things. Do agents have favorites or what? We look on the internet sites but it’s hard to really know if we would like places until we see them.

A: First, you should decide who you’d like to work with on a long term basis and make a commitment to that agent or broker. It’s common for visitors and tourists to want to just window shop houses and that can be a real waste of an agents time, so if they’re not too busy they may do a quick tour of homes that are easy to show and nearby.

You should do an interview with several agents and select the one you feel you can work with best. Once you’ve selected that agent you should have a long conversation with that person so that they know what type of property you are most interested in. That can narrow the search. You should also get pre-approved with a lender as soon as possible so that you and the agent know your realistic price range. Remember that the price range isn’t just how much you can borrow, but also how much you’re comfortable spending on a mortgage each month.

You might also talk to your agent about the many limitations we have here. You know you like Vashon and want to move here but you need to know about the challenges with ferry commuting, King County’s critical areas ordinance, problems with landslide hazard areas, water and septic issues, etc. Knowing these things will help empower you to make better decisions.

Buying a home is a serious and expensive undertaking. The relationship you have with your real estate professional is critical to making that buying process go smoothly. Choosing someone you can trust, who is knowledgeable and experienced is important. Finding an agent who will do the research and go that extra mile will create a good, trusting relationship that means you’ll end up with a positive outcome.

Q: We've been having trouble with agents who are showing our house.

2009-08-06T14:18:00.000-07:00

Even though we have a sign asking them to remove their shoes they and their clients often don't. They also leave lights on. What can we do to remedy this situation?

A: Some would say that in our down economy and slower real estate market you should simply be grateful you're getting showings. There are homes on the market that have had only one showing a month for over six months! However, I want to take your question seriously so let me explain things from the prospective of those of us showing property to prospective buyers.

The shoe issue comes up a lot. It's common here for people to remove their shoes before entering a home. That's unheard of in many other parts of the country. Many people feel very uncomfortable doing it and for some, it's very difficult. Except for the winter when they could be bringing in a lot of wet mud into a house, I try to cut them a little slack, although I always ask them to remove their shoes.

Buyers can show up in shoes that are difficult to untie or they wear special orthotic shoes and can't walk well without them. It's also hard to deal with children who may need help getting shoes off and on. Some homes provide booties for people to slip over their shoes but there's no guarantee that folks will use them.

I try to go back through a house and turn lights off, but sometimes a client will go back for a second look at a room and leave the lights on. It's also possible that the house is too dark. Most agents will go through a house ahead of their clients and turn lights on in dark rooms. You might consider leaving the lights on when you expect a showing. A dark house is almost always less desirable for most buyers. Just remember that a well priced, open and sunny home that welcomes potential buyers will sell, even in our current market.

Q: We moved here for some peace and quiet.

2009-07-22T15:51:00.000-07:00

Now a neighbor has chickens and the rooster is driving me nuts! He crows all the time, not just at the "crack of dawn". Is it legal to have roosters here? We're on acreage but it doesn't seem to make a difference.

A: Well, you probably are asking the wrong person since I have chickens and that includes a vocal rooster, Mr. Tom. Chickens, including roosters are allowed on Vashon Island in all but a few neighborhoods that have restrictions against livestock. Those neighborhoods are those few on the Island where houses are on city sized lots and folks are very close to their neighbors.

Part of the reason that certain sounds may be a problem for you, is that unlike the city, we don't have much in the way of ambient noise, sometimes called "white" noise. White noise includes things like the constant drone of traffic from heavily traveled roads and freeways. It also includes the hum of large electrical transmission lines as well as the noise of thousands of people talking. Throw in sirens, large trucks, televisions, lawn mowers and other machines in dense areas and you have a real racket.

Living in an area without that ambient noise means you can clearly here everything around you. You can hear bicyclists talking to each other as they drive by, a weed wacker miles away, the train whistle in Tacoma and the songs of birds. Between these sounds you hear nothing. That's part of why most of us live here.

What I suggest is that you quickly learn a method called "re-framing". You re-frame an experience in your mind to change how you perceive the experience. For example, each time the neighbor's rooster crows, imagine the sound of a police siren on top of a street full of talking people on top of the roar of a freeway. Sort of puts it in perspective, don't you think?

Q: I've talked to several real estate agents on Vashon and figured maybe I could finally get the straight scoop from you.

2009-07-08T13:32:00.000-07:00

None of these other agents will take me seriously. I've written up a couple of offers and these agents aren't even trying to make a good case for me to the seller. I figure in these hard times sellers would be thrilled to get any kind of offer.

A: As an exclusive buyer representative, I generally encourage people to make an offer under asking price. It's hard to arrive at market value when it's such a moving target, but I analyze the comparables and judge the value based on the desirability of the location, condition of the house, style and other factors. In some cases, even in our down market, something is so desirable that it still goes for asking price.
Of course, if it's over-priced or has been on the market a long time, it always makes sense to offer less. However, reviewing the information you sent me, I see that you made very low offers. One was on a very desirable home in a great neighborhood that has since sold for the asking price. The other was such a low offer that it wouldn't have covered the seller's mortgage and closing costs.
We do occasionally have what is called a "short sale" where the seller actually comes up short at closing and has to pay the remainder owed or negotiate with the lender to take less. If the lender won't take less, the seller will have to come up with the difference at closing, end up still owing the debt after the sale, or reject the offer.
In the case of the offer you made, it's possible that the sellers had enough resources to wait for a better offer to come along. Being a smart shopper and taking advantage of our current market is good, but we haven't dropped in value as much as other areas and you're probably not going to get the extreme bargain you expect here.

Q: We bought our house about two years ago and knew when we bought it that there was some doubt about the boundary lines.

2009-06-24T12:45:00.000-07:00

We didn't really want to spend the money on a survey and the seller didn't either so we just let it go. Now the house next door has sold and the new owners are cutting down bushes and trees we think are on our property. We talked to them and they seemed friendly, but said they want to get rid of the trees because they really want more sunlight. Now we're suddenly very exposed on that side of the house with those trees and shrubs gone. We don't want a big fight, so what can we do?

A: I would say a survey is the first step. You can't defend a border until you know where it is. Talk to these people again and ask that they refrain from cutting down any more trees until you both know whose property they are on. I think I would offer to pay for the survey since asking them to pay half might antagonize them. Keeping things friendly is important.
Once the survey is done, and if the trees were on your property, you might want to consult with an attorney. An attorney might counsel you to ask for restitution for the lost trees and shrubs if it turns out that they were on your side. However, it's up to you to decide how far you want to take this issue. Perhaps the neighbors will feel badly enough that they will offer to plant new trees, build a fence or otherwise try to make up for the loss to you.
If it turns out that the trees and shrubs were on their side of the property line I suggest you invest in some nice, fast growing trees or shrubs that you can plant on your side of the boundary to restore some of your lost privacy. Or you could fence in a courtyard closer to your house which will shield you from the neighbor's house.

Q: We want to buy a home this year but my husband says he wants to wait until the economy really hits bottom.

2009-06-11T09:53:00.000-07:00

That way we will get the best deal. In the meantime, we’re paying rent and I think that’s just wasting money. I want that money to go toward a home of our own. What do you think?

A: First, of course, is the simple fact that no one knows when we’ve hit bottom until we aren’t there anymore. Once prices start to stabilize or even start upward, it’s too late. I’ve always believed that the best time to buy is when you want a home.

We all learned, sadly and dramatically, what trying to outsmart the market will get you. If the stock market crash, the banking melt down, and the real estate disaster have taught us anything, it should be that we can’t really predict the future. We can only try to learn from the past.

The real estate market is actually changing for the better at this very moment. The news out at the end of May indicated that pending sales of homes in the US had risen three months in a row and that in April, sales jumped 6.7% the highest leap in eight years. That report, from the National Association of Realtors, also stated that in several states, bidding wars were becoming common on foreclosures as speculators and first time home buyers flood the market to find bargains.

The $8,000 tax credit for first time home buyers has also helped to turn the real estate market around. Many banks are now allowing these funds to be used as part of the down payment and closing costs. According to investment analysts, looking state by state at many economic indicators, the recession will end in Washington state by the fourth quarter of this year.

Even if these predictions don’t come true, it’s a ray of sunshine to those hoping for better days. With our inventory at an all time high and prices reduced dramatically I would say this is a great time to buy.

Q: How important is the Form 17, Seller's Disclosure Statement?

2009-06-04T11:08:00.000-07:00

Our listing agent has asked us to fill it out so she can put it online with our listing and we want to wait until we get a buyer.

A: I agree with your agent the the Form 17 (a form put out by the multiple listing service that sellers are required to fill out) is very important. Not having it available for potential buyers is a serious mistake. It may lead buyers to wonder what the seller is hiding when the form isn't available. Having the form online shows buyers that you are willing to disclose what you know about your property up front.

You should go over it carefully and be sure you know what you want to say before you fill it out. I see these forms all the time with answers crossed out and other answers checked. That's a red flag to potential buyers. They often ask if I think you lied, changed your mind, or just didn't know anything.

You should also remember that some answers require explanation. You can add a sheet of paper with comments on it to explain any answers that require it. A good example that I saw recently was, "Has the roof ever leaked?" The sellers marked, "I don't know." The first reaction my client, who was interested in the house, had was, "Of course they should know if the roof has leaked. What are they hiding?"

I think that question is not well-worded and that the seller probably meant that he wouldn't know if the roof ever leaked in the past, before he owned it. It would have helped to explain his answer by adding language that the roof hadn't leaked during his ownership.

I saw another Form 17 today that had dozens of answers crossed out and other answers inserted. That would give a buyer pause. Did the seller not know his own mind, or was he just sloppy? Many buyers would think that he reconsidered his answers to hide defects.

So, yes, I think it is a very important document.

Q: I'm confused about this new $8,000 first time homebuyer's deal.

2009-05-27T09:11:00.000-07:00

I owned a home five years ago but don't own one now. Can I still qualify? Where do I sign up to get the money?

A: You are considered a first time home buyer if you haven't owned a home in the past three years, so you should qualify. You don't get the $8,000 in cash. What you get is a tax credit. When you file your taxes for this year you get to deduct up to $8,000 off the top! However, if you owe less than $8,000 in taxes, the government will send you a check for the difference. So if you owe only $5,000 in income taxes the government will send you a check for $3,000!

There is an income limit of $75,000 gross income for a single person and $150,000 for a couple, but you can still get a partial credit if your income is up to $95,000 for a single person or $170,000 for a couple.

This is not a loan and doesn't have to be paid back like some programs in the past. That means that you are basically getting a gift of up to $8,000 for buying a home. You must, however, close before December 1, 2009, to take advantage of this program. If you are building a home you may still qualify but you have to occupy the home before the December 1st deadline.

This program, combined with incredibly low interest rates, gives a great boost to first time home buyers. Prices have pretty much stabilized in our region but they are still affordable and offer those who have not owned a home in the past three years a really great opportunity for home ownership.

For more details go to the IRS web site and type in: first time home buyer to credit, or try www.federalhousingtaxcredit.com. This is really too good an opportunity to pass up, in my opinion.

Q: I’ve been a renter for the last 10 years because I just don’t see the value in home ownership

2009-05-04T13:26:00.000-07:00

when prices can be as volatile as we’ve been seeing in the last year. Plus, I don’t want to be tied down. In my business I could be transferred anytime. I assume you disagree.

A: Well I can’t speak to your fear of being tied down, but I can argue that your thinking is flawed about the value of home ownership. Let me give you an example. This is a real client of mine. I pulled him out of my files at random. Let’s call him Jack.

Jack bought a nice rambler on a large lot with a bit of a view in 1999. He paid $257,000 for it. Like all real estate on Vashon it went up in value every year. By this year, ten years later, King County has his home valued at $557,000. The home has more than doubled in value. Even with the decline of 10% in property values we saw on Vashon last year, he would still make a tidy profit if he were to sell.

Just as valuable is the tax savings he would have had each year he owned it. He was making about $50,000 a year when he bought the property and his wages went up about 3.5% every year since, so he now makes approximately $70,000 a year.

Using a spreadsheet to figure his tax saving--based on deducting his mortgage interest and property taxes every year--he would have saved over $43,000.00 in real money over the ten years! That’s money he could spend in other ways instead of giving it to the IRS. That’s impressive.

I probably haven’t convinced you, but if I have you should know that this is a great time to buy on Vashon. Interest rates are at an all time low, the government is offering an $8,000 buyer bonus this year, and real estate prices are stable. If you had your saving in the stock market, I would guess you didn’t come out half as well as Jack did.

Q: I had my house on the market for a while but decided to wait a year so that I could get my price.

2009-04-13T09:42:00.001-07:00

We already moved so the house is empty. Friends are telling us we should rent it out but I don’t want it trashed. What do you think?

A: There are a couple of issues here. The first is the issue of renting out your house. Unless you don’t really worry about money at all, you’re throwing away a lot of it by having your house sit empty. There are mortgage payments, utilities, insurance and taxes to pay, plus the cost in time and/or money to keep up the yard. Renting would get you some money to cover those costs.

If you do a proper job of screening tenants you won’t have your place “trashed”. Trust one of the property management firms on the Island to find good, responsible tenants and that shouldn’t be a worry.

The other issue is holding on to your house to “get your price”. I’ve said many times before that the price is set by what a buyer is willing to pay. You can hold out all you like but if your expectations are too high, you’ll put a lot more money into the house with little hope of recovering it.

The real estate market here on Vashon is really not bad. Sales of homes actually went up 14% in the first quarter of 2009 over the first quarter of 2008. The average price of those homes did drop, but only by about 10%. That’s well below what most markets have experienced.

It almost seems that we have only two kinds of property on the market: homes that sell in a few days or weeks, and those that have been sitting for months or even years. It’s all about price. The well priced properties have been selling quickly, some even with multiple offers.

If you don’t want to price your house to sell now, then getting a renter in there to help offset your negative cash flow would be good.