Archive for the 'Residential Real Estate' Category

New Landlord/Tenant Regulations

Over the last 18 to 24 months the Seattle City Council has passed several regulations for rental properties to ensure each unit meets a specific level of livability for tenants as well as attempting to assure potential tenants that landlords are evaluating renters equally.

In late 2014 the Rental Registration and Inspection Ordinance (RRIO) was passed to ensure rental units are safe and meet basic housing maintenance requirements.  Each unit is required to be registered with the City prior to December 31st, 2016.  There are significant fines and penalties if the unit is not registered.  Owners must have their units inspected once every 10 years by a City approved housing inspector or, an employee of the City who performs these inspections.  A landlord cannot evict a tenant if their rental property has not been previously registered with the City.

Effective January 1st, 2017, there is a “First-in-time Ordinance” (1st Come, 1st Serve) ordinance that states the landlord must offer tenancy to the first prospective occupant who meets all screening criteria established by the landlord.  Applications must be screened in chronological order to determine if the prospective applicant meets all of the minimum stated criteria and qualifications.  The criteria must be in writing.

Enacted in January of 2017, there are restrictions on the amount of the Security Deposit and Move-In Fee.  A Security Deposit cannot be larger than the first month’s rent.  The Pet Deposit cannot be larger than 25% of the first month’s rent.  The combination of the Security Deposit and Pet Deposit cannot be larger than the first month’s rent.  Move-In Fees are limited to no more than 10% of the first month’s rent.  A applicant may pay the Security Deposit and Move-In Fee in installments over the first 6 months of the rental period.

Effective on September 19th of 2016 there is now a Source of Income Protection Ordinance.  This means a landlord cannot discriminate against an applicant based upon his/her source of income.  A landlord must equally consider someone with a Section 8 housing voucher (or equivalent) with a full-time employed individual.  A landlord cannot also provide a preference for rental from an applicant working for a specific company or industry (Amazon or technology industry)

To go into effect in February of 2018, a landlord will not be able to discriminate based upon a prior criminal record.  There will be an outright ban against using an applicant’s prior criminal record to deny rental.  There may be exceptions for sexual offenses or if a landlord can provide a “Legitimate Business Reason” for such denial.

I urge you to seek the advise of a qualified landlord/tenant real estate attorney for clarifications of these rules and regulations.

If you have comments or questions about this article, please email me at smeyers@kw.com.

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“Zestimate” – I had to laugh

I listed a condominium on Lake Washington in Madison Park on Wednesday for $830,000.  Zillow gathers information on new listings in the early morning hours and posts the listing on their web-site the next day.  An agent can log onto Zillow and update incorrect information and add additional information the day following it going “Live”.

Zillow has permission to pull information from the Keller Williams Listing Service (KWLS) and other web platforms but, not the Northwest Multiple Listing Service (NWMLS).  On Thursday, when I logged onto Zillow, their “Zestimate” for the condominium was $720,000.  I made all of the corrections and added quite a bit of information that is on the NWMLS but, not available to Zillow.

The following Day, Friday, I logged back on to confirm I had all of the information correct.  Low and behold, the “Zestimate” was now $845,000, a 17% increase in less than 24 hours.  I encourage each agent to enter their information on our KWLS and then log onto Zillow the following day to make the corrections and additions.  Your seller will be very pleased to find the “Zestimate” substantially higher.

Zillow now provides agents and visitors easy access to the comparable properties uses to come up with its’ “Zestimates”.  Unfortunately, it doesn’t allow the agent to input the most comparable properties.  This is a conversation you should have with your sellers if the “Zestimate” is different from your educated Comparable Market Analysis.

If you would like a more thorough explanation of how Zillow is so far off with their estimations, please contact me and I explain it further.

Communicate with the Appraiser

This is a challenging time for appraisers to accurately pin-point the value of a property because of the escalating prices.   The Listing Agent and Selling Agent can, and should, provide information to the appraiser to assist him, or her, with their analysis.  Remember however, an appraiser can only include prior closed sales of similar homes based upon location, size, and condition of the property in their analysis.

The Listing Agent and Selling Agent should provide the appraiser with their Comparable Market Analysis (CMA) they’ve provided to the seller to establish the List Price and to the buyer to justify their Offer to Purchase Price.  If there are comparable homes that are currently Pending, and that will close prior to your transaction, the Agent(s) should provide the details of these Pending transactions to the appraiser.  There may be one or more of these transactions that will benefit the appraisers valuation of the home.

Other information to provide the appraiser include; any Seller concessions to the Buyer, the school district the home is in, the proximity to the County line (ie. King vs. Snohomish), the owner occupancy if it’s a condominium building.  Inquire of the appraiser if there is any other information they need.

An appraiser does not need information contained in the Inspection Report or Form 35R (Inspection Response).

If you have comments or questions about this article, please email me at smeyers@kw.com.

If you would like to read other real estate articles I’ve written and published on-line, go to http://www.ourseattlehome.com/my-articles/

Win in a Multiple Offer Situation

In this competitive real estate market with low inventory and buyers willing to remove some of the contingencies in their Offers there are a number of things that the buyer, and their broker, should do to increase their chances of winning.  The objective is to present to the seller with an Offer that allows the buyer the fewest possible ways for the buyer to terminate the Purchase and Sale Agreement and retain their earnest money deposit and, have the seller execute the initial Offer without requesting any changes.

Your broker should be in communication with the broker representing the seller to build rapport and gather the information to write an Offer that stands above all other Offers.  Their effective communication will give the buyer the greatest chance of winning in a multiple offer situation.

The Offer to Purchase should be completed to benefit the seller with everything properly completed including;

a.)The sellers’ choice of title and escrow companies

b.)The perfect closing date for the seller

c.)The earnest money deposit should be as high as possible.

d.)Shorten the time of the Closing Date on the transaction.

e.)Include an escalation clause the seller cannot refuse.  Escalate between $5,000 and $10,000 above all other Offers and, if there’s an All-Cash Offer, include language that doubles the escalation.

f.) Start the Offer to Purchase price above the list price.

g.)The lender should call the listing agent to assure him/her the buyer has been properly qualified

h.)Include a letter from the buyer to the seller.

i.)Consider paying all of the Title and Escrow charges for the seller.

The contingencies the buyer should consider waiving with their initial Offer to Purchase should include;

1.)Inspection Contingency – Perform a pre-inspection of the property with a qualified inspector to become comfortable waiving any additional inspections.  You may also consider a sewer inspection.

2.)Financing Contingency – The buyer should provide enough information to their lender to be fully underwritten for a loan without consideration of the appraisal of the property.  An addendum can be attached requiring permission to have an appraisal inspection.  The buyer will then come to Closing with the difference between the purchase price and the mortgage provided by the lender

3.)Appraisal Contingency – The Offer to Purchase with a financing contingency should include a Form 22AD (additional down payment) stating the buyer agrees to pay a specified dollar amount above a low appraisal if, the appraisal comes in lower than the purchase price.

4.) Resale Certificate – If this is a condominium, review the Resale Certificate and supporting documents with an attorney and if acceptable, waive the Resale Certificate.

5.)Title Contingency – The buyer and their broker can conference call with the title officer prior to submitting their Offer to review the preliminary title documents.

6.)Seller Disclosure Statement – The buyer and broker should review the Disclosure Statement in detail to identify items that may need further investigation.  If none, waive it.

7.)Paragraph W of the Offer to Purchase – Compare the information published on the MLS and additional documents to what you’ve learned during the pre-inspection.  If everything is similar, waive paragraph W.

Another thing that has enticed sellers to accept an Offer is the release earnest money to seller as non-refundable within 24 – 48 hours of reaching mutual acceptance.

Submit the Offer via email with a well written recap of the Offer within the email message and as the first page of the Offer.  Make sure the Offer is well written and all of the pages are in correct order.

If you have comments or questions about this article, please email me at smeyers@kw.com.

If you would like to read other real estate articles I’ve written, go to my web site at www.ourseattlehome.com and click on the “Articles I’ve Written” tab.

Steve Meyers is a Managing Broker at Keller Williams Realty in Seattle, Washington.  He can be reached at (206) 972-3328 or smeyers@kw.com.

Off-Market Transactions

by Steve Meyers

June 23, 2017

Real estate brokers occasionally receive a request from sellers or buyers to simply “write-up” the transfer of real property on our state approved real estate forms.  This can occur between family members, friends and acquaintances, landlords and tenants, for-sale-by-owners, etc.  Unfortunately, simply “writing-up” the transaction on those forms is against Washington State Rules and Regulations and State Supreme Court Rulings.  This can expose the broker, and agency, to significant liability.  Additionally, the agencies Errors and Omissions Insurance may not cover the defense of, or judgement against, the broker or agency. This is considered the unauthorized practice of law.

Only as a continuation of providing “significant or substantial real estate services” to the seller or a buyer can a broker complete the proper forms for the transfer of real property.  “Significant or substantial real estate services” are not clearly defined by the State.  I encourage you to perform several of these services, at a minimum;

  • Prepare a thorough Comparable Market Analysis (CMA) and deliver it to the buyer and/or seller.
  • Encourage and document your recommendation to have a full Home Inspection of the real property. If there is a full Home Inspection, work closely with the buyer and seller to resolve any issues that may be identified.
  • Work with the seller and the Title Company to resolve any issues that come up with the transfer of the title. Conference call with the seller and the Title Officer.
  • On behalf of the seller, confirm with the buyers’ lender that the buyer has been properly pre-approved for the loan.
  • Provide a Net Sale Proceeds Worksheet to the seller and the buyer.
  • Properly complete the NWMLS Form 47 – Seller Representation Agreement (No Marketing – Sale to Identified Buyer).

As the broker involved, you should provide as many services as possible to the seller and/or the buyer to protect yourself and the agency from future liability.

If you have comments or questions about this article, please email me at smeyers@kw.com.

If you would like to read other real estate articles I’ve written, go to my web site at www.ourseattlehome.com and click on the “Articles I’ve Written” tab.

Seller Disclosure Statement

by Steve Meyers

My 29th, 2017

The Seller Disclosure Statement is a document required to be transmitted to buyers in every real estate transaction in the State of Washington, except if a court appoints an executor of an estate, who has no knowledge of the property.

The seller must answer every question on the Seller Disclosure Statement correctly.  If any question is left blank, the document is not complete and the contract is voidable by the buyer up until the Closing of the transaction and, the earnest money may be returned to the buyer.  The seller must not only answer every question but, some of the answers may require detailed explanation of their response.

The Listing Agent is required to review the Seller Disclosure Statement in detail.  The Listing Agent should assure that every question is answered properly.  Questions that need additional comments should be attached to the Seller Disclosure Statement.  If you, as the Listing Agent, knows an answer to be incorrect, you should ask the seller to make the correction.  If the seller refuses, you can allow the document to be released but, you’re required by Washington State Statutes to communicate your concerns to each buyer as soon as possible regarding that issue if it may be a “Material Fact” or “Material Defect” of the property.  “Material Facts” and “Material Defects” are defined in the RCW’s (Revised Codes of Washington).

Disclaimer:  I’m not an attorney or accountant.  I advise you to seek the advice of an attorney and/or an accountant to review and evaluate the Seller Disclosure Statement and provide you with their professional opinion.

If you have any comments or questions about this article, please email me at smeyers@kw.com.

Steve Meyers is a Managing Broker at Keller Williams Real Estate in Seattle, Washington.  He can be reached at (206) 972-3328 or smeyers@kw.com.

Escalation Clauses

by Steve Meyers

March 29th, 2017

In this market where buyers are waiving inspections, presenting Offers without financing contingencies and, signing-off on their review of the Re-Sale Certificates without questions (condominiums), we’re also seeing “Escalation Clauses” that increase their Offers far above the List Price.  I attended a presentation of four of the top residential real estate attorneys last week where they unanimously disliked the “Escalation Clause” because it is fraught with potential for errors and miscalculations. There suggestions were to seek the highest and best Offer from the top two buyers based upon the “Escalation Clauses” but, then cross-off the “Escalation Clause” from the Offer and write-in the agreed upon purchase price on line 6 of Form 21 – Residential Real Estate Purchase and Sale Agreement and, have all parties initial the new purchase price.

The attorneys are seeing more and more disputes with the “Escalation Clauses” and recommend eliminating the Form from the Offer to Purchase, if possible.  A couple of suggestions were to present the “Escalation Clause” from the secondary buyer to the agent for the primary buyer to substantiate the higher price for them to submit / change the existing Offer.  Either cross-off the “Escalation Clause” on the front of Form 21 or Form 28 and then insert the new price with initials by all parties.  An alternative would be to submit a Form 34 with the appropriate language or, the Form 36 – Counter Offer.  However, any changes to the initial Offer to Purchase would be considered a Counter-Offer and would allow that buyer to not proceed with their initial Offer to Purchase.

If you have any comments or questions about this article, please email me at smeyers@kw.com.

Steve Meyers is a Managing Broker at Keller Williams Real Estate in Seattle, Washington.  He can be reached at (206) 972-3328 or smeyers@kw.com.



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