Seattle Housing Buzz

The Seattle PI reported on the growing trend of having a pre-offer inspection, or preinspection as it’s commonly referred to.

Inspectors and real-estate agents say that — at least for desirable homes in Seattle’s more sought-after neighborhoods — purchase offers “subject to inspection” may become as outmoded as offers contingent on the sale of another house. Instead, would-be buyers are paying for inspections before making a bid on the house as is, or forgoing inspections altogether.

Whether to have a preinspection is really dependent on the market. As the market soften and competition for in-city homes loosen, the value of a preinspection diminishes.

Seattle, though, is comprised of a number of micro-markets - there are differences, for example, between Queen Anne or Westwood, Wallingford vs Crown Hill, or Ballard and Lake City. Homes in neighborhoods surrounding the city core (Queen Anne, Capitol Hill, Ballard, Fremont, Wallingford, Green Lake, et al) are still in demand by buyers, not only for their proximity to the city center but also due to the style of homes found in these established neighbhorhoods, and in some cases, affordability.

It is beneficial, though not a necessity, for buyers to consider preinpection in the hotter micro-markets. It certainly helps from a competitive standpoint, as a preinspected buyer will likely present a stronger offer without having a post-offer inspection contingency. Also, in the close-in neighborhoods, the homes are predominately older, possibly hiding surprises. Conversely, in cooler micro-markets, it might not be a consideration at all.

PSE mentions they will raise natural gas prices by about 10% as of October 1…just in time for Fall.

Seattle is finally keeping up with the Jones’ with a plan to implement a city-wide wi-fi system, by 2015. At least it’s a step in the right direction, but far behind the coffee houses and Tullys which provide free access.

Spotlight on Queen Anne:

Single-family houses and condominiums in the area that includes Queen Anne had a median price of $483,000 in June, up 13.7 percent over the past year, according to the Northwest Multiple Listing Service.

A friend of my regularly rents art work from the Seattle Art Museum, and it seems home sellers and stagers are too:

Museum officials say they’ve seen a spike in their art-rental business thanks in part to home stagers, who redecorate houses in hopes of boosting sales prices and increasing the odds of selling.

The Farm Bureau sponsored property-rights initiative I-933 is going at it alone:

powerful allies from 1995 either are sitting on the fence, decided to remain neutral or have embraced Initiative 933 only half-heartedly

First Methodist Church on 5th Avenue gets a reprive:

Church leaders have turned their focus to another local developer, Nitze-Stagen, which would build a thinner tower leaving room for the 1910 church featuring a red-tiled dome, brick walls and stained glass.

Another ornate church on Capitol Hill is getting a new life as upscale condominium homes.

The one month long concrete strike has ended as workers accepted a deal providing a $3.95/hr raise over three years. Stalled civic and private projects (e.g. Domaine, Mosler Lofts) can now get going again.

But, was it all for nought? The longevity of the strike that is, since the $3.95 was on the table for several weeks. Eighty-eight workers holding hostage numerous projects county-wide eventually settled for what they were originally offered. Yet, they probably cost the city and builders thousands if not hundreds of thousands more.

On my Seattle Condos and Lofts blog I added a new article about a couple of construction quagmires impacting condos in the downtown area - the cement strike that’s now a month long causing sites to ground to a halt, and the impact of the viaduct decision which could close the downtown portion Highway 99 for 3-6 years rerouting traffic through the downtown street grid.

NOTE: Since this post was originally written, many of the forms have since been revised. The information contained below may no longer be accurate.

This Summer the NWMLS revised a number of the forms commonly used in the purchase and sale of residential property (single family homes, condos & townhomes). Listed below is a synopsis of those changes. Whether you’re a seller or a buyer, it’s important to understand how these changes can affect you. This article only highlights the changes and is not meant to convey & explain the complete set of revisions.

Seller Disclosure Statement (Form 17)
Revision of farming disclosure. In the previous update the form incorporated a question where the seller had to indicate whether there was a “farm” within a one mile radius of the property. There was ambiguity as to what consistuted a farm, thus potentially creating undue exposure on part of the seller. The current revision simply states that the property may lie in close proximity to a farm. It no longer requires to Seller to actively acknowledge the existence of a farm.

Residential Purchase & Sale Agreement (Form 21)

Possession Date:

• Eliminated a possession option on the contract allowing for possession to occur after closing. Contracts now default to possession at closing, though other alternatives may be agreed to. A possession date may fall on a weekend or holiday.

Computation of time:

• Clarifies that time is expressed in days, not hours. In respects to the contract, 24 hours does not equal 1 day. Time starts by counting the next day. Time periods end at 9:00PM unless otherwise specified.
• If a specific date is entered, that date will apply even if it’s a weekend or holiday.
• For time periods of 5 days or less, business days are counted. For more than 5 days, calendar days apply.
• If the last day falls on a weekend or holiday, it is not counted, except for the Possession Date.

Legal Description:

• A legal description must be attached as an Exhibit at the time of the offer for the contract to be valid. If not attached, the contract is considered illusory and not binding.

Assignment:

• The Purchase and Sale contract prohibits assignment to another party without written consent of the seller. However, at the time of offer, the parties may include “and/or assigns” on the first page of the agreement.

Financing Addendum (Form 22A)

• Buyers must disclose type of loan they are obtaining including whether the loan is a Second or Bridge.
• Clarifies that the downpayment is in addition to all sources of financing.
• The Contingency runs from Mutual Acceptance or Satisfaction of Form 22B.
• Buyer must either waive or provide a letter of loan commitment within 30 days; obligation to provide the letter is automatic. Unless waived, the Contingency remains active.
• If the Buyer does not provide the loan commitment letter, the Seller may provide a 3-day termination notice or allow the deal to continue.

Buyers Home Contigency Addendum (Form 22B)
The revisions clarify that:

• Sellers must accept the bump offer before giving the bump notice.
• Satisfaction is something much different than waiver and with different ramifications
• By waiving Form 22B, Buyer waives all other contingencies including Financing and Home Inspection

Inspection Addendum (Form 35)
Previously, the NWMLS supported two differently Home Inspection Addendums. The former Form 35A allowed for the Buyer to back out of the contract simply by disapproving the Inspection report. The former Form 35B allowed the Seller the opportunity to make repairs on items which the Buyer disapproved of. Both, Forms 35A and 35B, have been discontinued and replaced with Form 35.

• The new Form 35 closely resembles the former Form 35A, providing the Buyers the right of termination by disapproving, albeit subjectively, the Inspection report. This allows the buyer to essentially walk away from the deal.
• The Buyer has 10 days to inspect and may (1) approve and waive the contingency, (2) disapprove and terminate the contract, (3) request additional inspections or (4) propose modifications. If the Buyer does nothing, the contingency is automatically waived.
• Removed provisions for Deferred Deposit of Earnest Money and the Neighborhood Review (now separate form).

It’s not surprising as many have been anticipating a rise in foreclosures, but now it’s upon us. King5, reported that foreclosures are up 30% over the past year. And, for “most of them suffering the loss of their home, there are several investors waiting in the wings to buy them up.”

The Seattle area, despite our record hot temperatures, seems to be cooling on the housing front. Within Seattle, inventory continues to go up resulting in a 20% increase over the previous year. Additionally, Seattle saw a 12.11% decrease in pendings and a 15.55% decrease in closed sales compared to July 2005. Even with these stats, however, there are still instances of multiple offers.

Though on a positive note prices continue to rise with a 14.6% increase in median sale price from a year ago. While that appreciation may be great for current homeowners, it continues to put homeownership further out of reach for those who currently rent, especially in the first-time buyer price ranges. Within King County only 7% of the single family homes available in July were under $300,000, while 15% were over $1 million.

For the complete July Market Update, please visit the NWMLS’ public website at www.NWRealestate.com.

Today’s Seattle Times Real Estate section’s feature article is titled “Real Estate: Sellers, buyers should make sure they’re comfortable with the agent.” The gist of the article is to impart on readers the need to evaluate and choose their agents carefully:

Many people have heard a horror story about a bad real-estate agent: a young agent who butchers a deal because of poor negotiating skills; an agent who lies to prospective buyers about a home’s leaky roof; or one who pressures clients into buying a home they can’t afford.

Bad agents may be few and far between, but prospective buyers and sellers should take steps to ensure that they get one of the good agents and one they feel comfortable working with.

Membership in the National Association of Realtors has jumped 44 percent since 2003, from 876,195 to 1.26 million, the Washington, D.C.-based group said.

That means there are a lot of fairly new agents and even more reason to be picky, said D’Ann Jackson, president of the Seattle-King County Association of Realtors

Of course the part that was of particular interest:

Seattle-area John L. Scott agent Ben Kakimoto, who volunteers at the Seattle Animal Shelter at Interbay, donates a portion of his commission to the Seattle Animal Shelter or to a charity of his clients’ choice.