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Just Ask Emma
Emma Amiad answers questions from customers and island residents on a weekly basis. Check online or in the Vashon Beachcomber to catch Emma's latest answers. Also feel free to contact Emma directly via email to ask her a question of your own.

Tuesday, April 13, 2010

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

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.

Tuesday, March 23, 2010

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

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.

Thursday, March 11, 2010

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

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.

Wednesday, February 24, 2010

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

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.

Wednesday, February 10, 2010

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.

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.

Thursday, February 04, 2010

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

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.

Tuesday, January 12, 2010

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

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.


Emma Amiad
  • Q: We have a very nice rental house that we’ve ha...
  • Q: I’m really excited that the prices have come d...
  • Q: I’d like to buy a house but I’ve been told tha...
  • Q: My husband and I bought a property last summer...
  • Q: It’s been almost three years since you sold us...
  • Q: I can't believe you recommended my daughter an...
  • Q: At your recommendation, we bought a condo in S...
  • Q: We want to start the New Year out right and do...
  • Q: We are getting all settled in the wonderful ho...
  • Q: It's become clear that my partner and I will n...
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