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Home Forum Extra

Seattle Times business reporter Elizabeth Rhodes posts the answers to your real estate questions as they pop up during the week. Join this ongoing discussion, which also features reader reaction to real-estate articles appearing throughout The Times.

Home Forum, Seattle Times, P.O. Box 1845, Seattle, WA 98111

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December 31, 2007 12:43 PM

Financing the purchase of a foreclosed property

Posted by Elizabeth Rhodes

Q: I'd like to buy a home, to use as a rental, that's gone through foreclosure and is now owned by the bank. Is it possible to buy it using a line of credit on my primary residence? I've heard you have to pay all cash for a foreclosure property.

Continue reading this post ...

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December 30, 2007 4:33 PM

Readers comment on real-estate forecast

Posted by Elizabeth Rhodes

A number of readers have commented on Sunday's page one story headlined "Real Estate Anxiety: What's Next for 2008?"

Some readers made observations about Paul Kelly, who was featured in the story. Kelly is trying to sell his downtown Seattle condominium.

To set the record straight, Kelly is not a speculator. He bought the condo to live in, which he does.

He's selling because a recent job change includes overtime and a long commute. He's decided he'd rather live closer to work.

Kelly bought his home in April and paid $604,000. He's has priced it at $599,000 if the buyer works with him directly, or $624,000 if an agent is used.

In the latter case, he'd pay an $18,720 real-estate commission (figuring 3% to the buyer's agent) and net $605,280, or $1,280 more than he paid for the unit. He'd also have to pay excise tax and other transaction costs.

The owners before him, a young couple, bought the unit before the building was built and intended to live there. (The sale was recorded in April, when the building was completed.) In the meantime, they had 2 kids. They sold because a one-bedroom on the 17th floor no longer worked for them.

A reader named John comments:

I just read your article on the Seattle real estate market, and decided to do some research on Paul Kelly's condo that you used to illustrate the worsening Seattle market. Paul bought the condo in April of 2007 for 604k. The people he bought it from paid 545k in February of 2007.
He is asking for 10% more than it sold for in 10 months ago. Maybe that is not as good as we have become used to, but in the big picture that is a pretty good appreciation rate. Based on long term real estate history, no one should ever EXPECT to make a profit on real estate held for less than one year. I don't feel this type of anecdotal evidence validly describes the current market situation. This sounds more like speculation, (a property that is being sold for the 3rd time in less than a year). Maybe your article should be about speculators not being able to make 20% returns on homes in six months anymore.

Thanks to everyone who commented. Keep reading for more:

Continue reading this post ...

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December 28, 2007 9:46 AM

Older homeowner needs property tax break

Posted by Elizabeth Rhodes

Q: I'm trying to help my aunt (she is in her late 60s and struggling financially) find ways to economize. I've heard there may be a way for her to get a break on property taxes. Is this true?

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December 27, 2007 9:47 AM

Rats upset new owner

Posted by Elizabeth Rhodes

Q: I moved here from the Southwest last year and bought a really adorable older home. But it's turned into a nightmare because of rats in my attic. We never had rats where I came from, and just the sound of them makes me want to move out. Is it possible to reverse the sale because the sellers didn't warn me about the rats?

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December 21, 2007 5:13 AM

Dealing with apathetic condo owners

Posted by Elizabeth Rhodes

Q: My condo building is small and doesn't have professional management. It seems most owners not on the board expect the board to take care of all building-related matters.

Some have never served on the board, nor have they contributed to the maintenance of the building, even when requests for help are posted.

I realize that their lack of contribution cannot be attributed solely to laziness; some people may simply be ignorant of the fact that being a condo owner is not the same as living in an apartment building while also receiving the tax breaks of a homeowner.

Can you provide a short list of the basic responsibilities of condo ownership? Owners in my building, as well as potential condo buyers, would benefit tremendously from seeing this in black and white.

Continue reading this post ...

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December 20, 2007 12:22 PM

Selling unusual home challenges owner

Posted by Elizabeth Rhodes

Q: In attempting to sell my home, a fixer, I spoke to various Realtors. They told me that because of the home's unusual layout, very large size and the amount of space devoted to a basement/workshop area, the home's potential is hard to estimate.

Then we put our house on the market for a few months and did not get a sale, though we dropped the price significantly twice. How can I determine a reasonable price?

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December 20, 2007 11:33 AM

Capital gains after divorce

Posted by Elizabeth Rhodes

Q: My daughter recently went through a divorce. Everything they had was listed and each item was given a value with the decree declaring which items were given to her and which items went to her former husband.

One of the items going to her was their house valued at $500,000. The original purchase price was about $250,000. If she later sells the house, will the fact that she gave up items of equal value to her ex increase the home's tax-basis value for capital-gains tax purposes?

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December 14, 2007 10:25 AM

Dealing with neighbor's invading trees

Posted by Elizabeth Rhodes

Q: Our neighbor has aspen trees planted near our fence on the property line. We are constantly battling the problem of aspen shoots/suckers that come up in our flower beds, lawn, etc. I have recently found them coming up along the foundation of the house as well. Our lawn is showing damage from these, and to say the least they are a nuisance to be constantly pulling up. The trees have aphids as well. We do not want to cause problems with the neighbor, but what are our legal rights in this matter?

A: The law allows you to cut off, at the property line, any part of a neighbor's tree that trespasses onto your property. But you have no legal standing to require your neighbor to cut down the tree/s.

Thus what you're doing now is the extent of your legal rights.

However, you can certainly talk to your neighbor about this situation. Perhaps he/she is also having problems with shoots, suckers and aphids from these aspens. Maybe he'd be open to taking them down and replacing them with less invasive trees. You could sweeten the deal by chipping in some money to do so.

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December 12, 2007 6:00 AM

Relating median price to home values

Posted by Elizabeth Rhodes

Q: What bearing does the median price based on closed sales have on what is actually happening to property values?

A: Here's where Seattle-based Zillow comes in handy. Based on its proprietary mathematical model, the real-estate site estimates the value of most homes in the U.S. Not just the ones for sale, or recently sold.

Stan Humphries, Zillow's vice president of data and analytics, says home sales are a good indicator of prices in the area, at least for those homes that sell. But neighborhood values "can be quite different than median sale prices," he says.

Here's an example of how that can be.

Each month the Northwest Multiple Listing Service compiles home sales statistics. If there are enough sales, and they're spread across all price ranges, then the median sales numbers can be a decent indication of which way property values are moving. But those are big ifs.

Take for instance, October's condominium sales in MLS Area 715 - Richmond Beach/Shoreline. The MLS data showed prices there dropped an astonishing 33 percent compared to a year earlier.

But here's the kicker: that area had just two condo sales that month versus 14 the previous October -- obviously too small a sample to be reliable.

And the median price of those two condos was $161,950. Is that indicative of overall condo values in that area? Not likely. Nor is November's median sold price -- $200,500 -- any better. It also reflects just two sales.

Quarterly and annual neighborhood sales numbers are much larger and thus more likely to reflect true neighborhood values.

Like the MLS, Zillow uses median instead of average. Humphries says median -- the midpoint between the highest and lowest numbers -- "is a better indication than average" of where prices really are because it's less vulnerable to skewing.

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December 11, 2007 11:17 AM

Tips for unwed homebuyers

Posted by Elizabeth Rhodes

Q: My significant other and I are about to buy a home. I'm putting up the whole down payment, and we'll split the mortgage payments evenly. Can I have a deed of trust or mortgage drawn up and filed of record as a second position lien against this property, whereby I'm the grantor and he's the grantee, and he can pay me back his half of the down payment on a monthly basis? Would that make sense, and help protect my investment? For example, if we split up and had to sell, would this help ensure I'd at least get my down payment back?

A: Seattle attorney Dan Wershow, of Wershow & Ritter, says your plan will protect you -- up to a point. If you and your S.O. were to break up and sell your home, the escrow company handling the transaction will pay off the mortgage and you'll have a lien on the home's profit equal to what's still owed you for the down payment. That lien would get paid off, too.

(Perhaps a trickier question is whether, if your S.O. stopped paying altogether you'd want to foreclose on the lien. In doing so you'd also be foreclosing on your own home.)

But a lien is not enough to really protect you, Wershow says. For that you need a written domestic partnership agreement that "talks about who is going to do what financially and what happens if they don't."

This is not the same as domestic partnership status conferred by some governments and employers, which provides medical and other benefits. Rather the partnership agreement is a private contract the two of you tailor to your own situation.

Ideally you'd write it with the help of a lawyer because there can be various legal and tax ramifications you need to know about. Otherwise the document could inadvertently harm rather than help you.

Among the things the agreement can do: address what happens to your home and other joint assets should you break up, and provide a mechanism for valuing, liquidating and distributing them.

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December 10, 2007 9:33 AM

Renter questions cost of damage repair

Posted by Elizabeth Rhodes

Q: I accidentally broke the glass cover off the hall light in my apartment. Rather than just replace the cover (it's pretty generic), my landlord replaced the entire light fixture with one I think is nicer. He's now charging me for it. Am I responsible for replacing the light or just the glass cover?

A: State law says you're responsible for returning the rental to its original condition, minus normal wear and tear. Thus you're responsible for damage. However the law doesn't spell out exactly what this means to you. Do you have to replace the light cover or the entire light?

Greg Home, a Bellevue attorney, says the he'd look at the facts of the situation.

First, what does your lease say about damage and repairs? Next, the cover may be generic, but is it easily replaceable? If the light was old it may not be, and the landlord may have had no choice but to replace the entire thing.

Finally, how expensive was the replacement light? Big-box home stores have many that are modestly priced. So even if the light cover could have been replaced, there may not be a dollar difference great enough to quibble about, Home says.

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December 6, 2007 8:00 AM

Pet rule has new condo owners in quandary

Posted by Elizabeth Rhodes

Q: After we purchased our condo, the board of directors said we couldn't have our two little dogs in residence so we haven't moved in. However the bylaws don't actually prohibit pets. They say "no dogs or cats or any other four legged pets will be allowed on the premises except with prior permission of the Board of Directors." Also, "The keeping of pets and animals of all kinds may be prohibited or restricted in any manner the Board may from time to time determine." We know a large dog (belonging to a board member) and at least two cats are in residence. How can we resolve this and keep our pets?

A: Condominium associations have several layers of governance. There's the declaration. Under it are bylaws. Generally the bylaws allow the board of directors to adopt reasonable rules and regulations. They're the last layer of governance.

What's not clear from your question is whether your board has taken that last step and actually written specific rules regarding pets. If it hasn't, and it's trying to keep your dogs out based on general language in the bylaws, then it's on soft ground says attorney Tony Rafel of the Rafel Law Group in Seattle.

But let's say there is a pets rule. The board could still be in trouble if it's enforcing it selectively or unreasonably. That other animals are in residence would suggest that might be the case.

What should you do now? If you're not sure about the status of your association's pet policy, take all of your documents to a condominium attorney for a review.

However if you're sure that your declaration doesn't prohibit pets (some do), and the board hasn't adopted rules and regulations prohibiting them, then you should move in, Rafel suggests.

"You've bought, you have the right to possess," he says. "The board could take action against you, but on what basis?"

If there isn't a rule in writing, applicable to all, then you and your pets have no problem.

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December 5, 2007 3:01 PM

A correction on condo audits.

Posted by Elizabeth Rhodes

A recent Home Forum Extra item stated incorrectly that condominium associations in this state aren't required to undertake a financial audit.

Under state law, associations with 50 or more units must have their books audited annually by a certified public accountant.

Smaller associations may waive the annual audit if at least 60 percent of the ownership votes to approve the board's decision to do so.

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December 4, 2007 4:00 PM

Downed tree causes neighbor's concerns

Posted by Elizabeth Rhodes

Q: During the big storm a 150-foot-tall tree on my neighbor's property fell onto mine. We're on the Olympic Peninsula. It whacked a couple of my trees pretty hard, then landed snug at the base of them, securing some root structure that might be critical to anchoring my trees to the hillside. I'm concerned that removing the fallen tree could harm my property. What can I do to keep my neighbor from removing it, short of buying the tree from her? I think she might want to sell it for the timber. Is there some period of time in which she needs to remove it before it's mine?

A: When a tree falls onto your property, you have a legal right to cut it back to the property line. That's what nationally known tree expert Victor Merullo suggests you do. Then wait to see what your neighbor does.

"Unless the other party requests to take it back, it's abandoned property," says Merullo, an attorney in Ohio. And your neighbor must make that request. Otherwise coming onto your land to haul away the tree is considered trespassing.

Further, your neighbor must ask within a reasonable amount of time. What's reasonable?

There's no set amount of time, but Merullo says that in general a couple of weeks is reasonable. (Obviously the timeline would be much shorter if the tree had damaged a home, which didn't happen in your case.)

As for your neighbor wanting the tree for its lumber value, Merullo says it's not a foregone conclusion it has monetary value. "If one tree falls and other trees stand, there's some indication this tree may have been a hazardous tree."

That means it could be diseased (something an arborist could diagnose). It also means the neighbor is responsible for any damage that tree does to your property.

As cordially as possible, inform your neighbor that the tree has potentially destabilized your property, and if this is so, the neighbor could owe you.

Then tell your neighbor that in exchange for leaving the tree in place you won't ask for any damages or clean up costs, and you'll be responsible for whatever happens next.

For more about trees and storms, read my colleague Diana Wurn's story following last's years devastating storms.

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December 3, 2007 2:55 PM

Flood insurance information

Posted by Elizabeth Rhodes

With torrential rains spawning flooding throughout Western Washington, it's important to note that standard homeowners insurance policies typically do not cover flooding.

However owners whose homes are most at risk of flooding may be able to buy special coverage through the National Flood Insurance Program.

"NFIP studies show that people living in flood plains are 27 times more likely to experience a flood during their 30-year mortgage than they are to have a fire," said Karl Newman, NW Insurance Council president, in a statement.

The insurance council recommends homeowners contact their city or county government's building department to see if their home is in a flood plain.

Owners who are at risk for flooding should consider buying as much flood coverage as they can afford, the Insurance Council recommends.

Primary homes (not vacation residences) insured for at least 80 percent of their value, or the maximum allowed, get replacement cost coverage.

There's normally a 30-day waiting period from the time a policy is purchased until coverage begins.

The Insurance Council has two flood brochures available by request through its website. They are "Flood: Are You Protected From the Next Disaster?" and "Things You Should Know About Flood Insurance."

The brochures also are available by calling the council at 800-664-4942.

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December 3, 2007 11:11 AM

Who's liable when for-sale home is damaged?

Posted by Elizabeth Rhodes

Q: While my house was vacant and for-sale an intruder entered and left spots on the new beige carpet that could not be removed. The police investigation concluded that the trespasser likely entered from an unlocked patio door. The lock on the front door's lockbox installed by my Realtor indicated that half a dozen real-estate agents accessed the property between my previous visit, when there was no damage, and the visit when I found the damage. Soon after, I got an offer for $2,000 less than my asking price. (I accepted it.) I think the offer was low because of the carpet damage. Can any of the agents who were in the house and may have left the door unlocked be held liable?

A: Your dilemma is twofold, says attorney Lawrence Glosser, with the Seattle firm of Ahlers & Cressman. First you have to find out who left the door unlocked, then you have to prove it.

If you want to go to the effort, you could call each of the six agents and ask if they noticed any damage. If one did, you might surmise that the agent who was in the house just prior was the one who left a door unlocked.

But what if that agent denies it and suggests that perhaps someone had a key. Can you prove that no one else, a worker for example, could have left the door unlocked?

Further, you'd have to get the buyer to confirm the carpet's condition was the reason for the $2,000 discount -- not something else.

If you think you can prove all this, you could take the agent you think is responsible to small claims court.

"Maybe the lesson for readers is to check their insurance provisions with regard to having a vacant house and what their deductibles are," Glosser suggests.

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Recent entries

Dec 31, 07 - 12:43 PM
Financing the purchase of a foreclosed property

Dec 30, 07 - 04:33 PM
Readers comment on real-estate forecast

Dec 28, 07 - 09:46 AM
Older homeowner needs property tax break

Dec 27, 07 - 09:47 AM
Rats upset new owner

Dec 21, 07 - 05:13 AM
Dealing with apathetic condo owners







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