Thursday, February 08, 2018

Q: My friend just did what’s called “flipping” of a house he bought here about a year ago.

He’s going to make a big profit and we wondered what you thought of this and if you think we should try it?  I have a little money set aside and I see fixers coming on the market from time to time. 

A:  Flipping a house has been around for a very long time.  You buy a fixer and do a quickie remodel to make it look nice and then sell it for a profit.  What’s important to understand is that this is very similar to the children’s game of musical chairs.  It’s all good until you are left with no chair.  It can be a huge gamble. No one can really predict what the market will do in the future.  It’s best not to try it unless you can afford to lose the money.

In a tight market like we have now, with very few homes to sell and lots of buyers, getting a fixer with the thought of fixing it up to sell would seem to be a great idea.  But we have had some recent sales of such property that did not work out that well for the seller.  It’s possible to run into King County requirements that cost more than you’ve budgeted for.  Since most of the Island is on septic systems, having to update or repair the septic can add substantially to the cost. Also keep in mind that you will have to buy for cash since lenders usually don’t loan on fixers. 

Those of us in real estate have seen the glitzy kitchens, bamboo floors, granite counter tops, etc. many times.  They’ve started to look alike.  The most important thing to remember when fixing up a house is that there will probably be an appraiser looking at it for a future buyer and they’ve seen all that stuff before too. You want to be sure the house is structurally in good shape and that you fix the real problems, not just put “lipstick on a pig.”

Tuesday, January 23, 2018

Q: This isn’t a question.

I just want to warn others.  My wife and I are dealing with my dad’s house, trying to get it ready to sell.  He died a few weeks ago and now we have the job of sorting through his stuff and trying to get rid of things. I can’t believe all the junk he accumulated. Even though we have an estate dealer taking the big stuff that’s sellable, we’re left with tons of useless things that no one wants.  Please, encourage people to get rid of their junk while they are still living. I loved my dad, but this is so stressful.

A:  I’ve had several people come in recently to talk about getting their parents home ready to sell.  The parents have passed away or are in an assisted living situation.  Every one of these adult children appeared stressed, confused and totally overwhelmed with the burden of dealing with their parent’s stuff.

There’s much talk these days about downsizing. Unfortunately, very few people really do this with their belongings. They may move into a smaller home or condo, but they often bring a lot of stuff that gets packed into the garage or a storage unit. We always think that there’ll be a time when we want to go back over old letters, photos, school yearbooks, etc. But I think it rarely happens. Many people keep family “heirlooms” for their children or grandchildren but most young people today don’t want the family china, grandad’s rocking chair or old photos. Not to mention dead cars, broken appliances or useless collectables.

It’s important to have a frank conversation with your elderly parents about what you may want to have after they die.  It’s equally important for your parents to understand that someday you’ll be stuck sorting through those boxes and shelves of stuff in their garage. It’s a painful conversation but if parents are willing to be realistic and understand the burden they are leaving for their children, it can save everyone so much stress and anxiety. Plus it will give you the time to simply grieve your loss.

Tuesday, January 09, 2018

Q: Mom passed away last year, and my brother and I have decided to keep her house and rent it for a few years.

Our kids are still young and it makes sense to sell the house when they reach college age and use that money for college tuition. We don’t know anything about renting and have heard horror stories about property being trashed or renters that don’t pay. Where do we start?

A: First, I would download the State of Washington landlord tenant law as well as the same information from King County. There are specific rules you must follow and certain responsibilities you have as a landlord. You can also share this list with any future tenant so that they understand their duties and responsibilities. Next, go through the house with a home inspector so that you know what needs repair or replacement and do that before putting the rental on the market. That could save you a great deal more expense if something goes wrong later. You will need to do a walk-through with any tenant so that you both know, in writing, where every scratch and dent or problem exists before they move in. That way when they leave you can be sure it’s in as good a shape as when they moved in, other than normal wear and tear.


You can hire a property manager to screen tenants for you or you can arrange to do that yourself. Be sure to get references from former landlords. Credit checks are important, but the most important thing is that they paid their rent in full and on time every month. You should also plan on doing a walk-through of the property from time to time, after giving the tenant proper notice of course, to make sure things are working well.


One hint I should add is that you should screen everyone, even friends or relatives of friends. The worst horror stories I’ve heard are from folks who let someone move in to “help out a friend” and didn’t really check them out. They regretted that later.

Tuesday, January 02, 2018

Q: Prices have just gone through the roof here on Vashon in the last year or two.

Is that just my imagination?  Do you think it's another bubble?  I'm worried that my son, who is currently serving in the Navy, won't be able to buy a home here by the time he gets ready.

A:  From all that the "experts" tell us, there is no bubble as far as Puget Sound real estate is concerned.  Perhaps if all the tech-related industries left at once, which seems highly unlikely, there could be a downturn.  In addition to our growing commercial sector, extreme weather in the rest of the country (fires, floods, hurricanes, etc.) is bringing "climate refugees" here.

You're correct that our prices have skyrocketed.  Looking at homes sold in 2017 that had sold even just a few years before, we see a price difference in many of them as high as 40 to 60% increase in just a couple of years.  Our  challenge on Vashon is that we have such a tiny inventory of homes for sale in any given time.  There are a sizable number of homes that have stayed in one family through three generations on Vashon.  The demand is very high, and the supply is very low.  that has driven our price increases even when it wasn't such a hot market.

As for buying a home here for your son, all I can recommend is that he save like mad, keep his credit score high, and stay in touch with what's happening in real estate.  I was thrilled to get a family into a lovely home just weeks ago using a VA loan.  For many years these have been scorned by the real estate community because they implied that the buyers couldn't really afford a house without down payment assistance and that the loan process would be harder and take twice as long as a normal transaction.  Happily, that's not true.  My clients were able to save their money for other expenses, the veteran was able to use his benefits and we closed in record time.

Monday, December 04, 2017

Q: My son and daughter-in-law met with you a week ago and you encouraged them not to buy the house they were looking at.

They’ve been trying to buy on Vashon for a long time now and the last thing they need is to be talked out of something. We want to have them here, close to us, and now you’re chasing them away. What’s wrong with you?

A: There are probably many things “wrong" with me but I can’t let folks, especially young families, buy on slopes when the property is in a major slide area. They can buy that house, it just won’t be with me.

I encourage everyone to learn to navigate the IMap on King County’s website. You must work with it to find out what you want since it’s not intuitive. But you can find out if there are wetlands, landslide hazard, erosion hazard, history of slides, and map the topography using the tools on that site. You can find out who bought the property last and what they paid for it. You can get the square footage, the amount being paid for taxes, and a great deal of information if you have the patience to learn to use that County site.

The property your son was looking at is not only in a landslide hazard area, but there have been active slides on that road in recent history. I’m always surprised that folks who have lived here for years have forgotten the closed roads, homes that slide, red tagged homes from earth movement, etc. that have occurred over the last 20 years or less.

Your son and daughter-in-law are in a low-price range. We have almost no inventory now, and for lower priced homes it’s even less. If you really want to help them find a home, why not gift them some money to add to their down payment? It’s tax free to gift them funds and then they would have a few more options to consider. It’s common these days for parents to help children or for children to help aging parents.

Tuesday, November 07, 2017

Q: I saw the recent article in the Beachcomber about sea level rise and the possibility that some waterfront homes will be underwater or flooded in the future.

I think that should be disclosed when a waterfront owner puts their house on the market.  I think that would be ethical.  Isn’t that true?

A:  The seller’s disclosure has been crafted to speak specifically to the current and past issues in that specific house on that specific property only.  The attorneys who write these forms specifically exclude what could be called global issues.  We don’t ask the seller to disclose the fact, for instance, that we live in an area of active earthquakes.  Rather the form asks if this house has had earthquake damage.

It would be impossible for a seller to even know all there is to know about climate change, future weather predictions, and the potential for flooding in the future.  That’s why the form only deals with the present and past of that specific property.  Many of our low bank waterfront homes already experience flooding at high tide in the winter months.  That, of course, must be disclosed if it happens to the seller’s house.  But future things are unknown to the seller and to all of us, really, so it would be impossible for them to deal with that on the disclosure.

We live in a state with active volcanos, regular earthquakes, and heavy metal in soils in most parts of the state. In addition, the Puget Sound is sort of ground zero for any enemy attack due to our many military installations. We are an area of landslides and erosion hazards as well as potential contamination from radioactive waste disposal sites and old factories filled with hazardous waste.  No seller should be required to talk about all of that.  That would be impossible to quantify.

The good news is that we live in an incredibly beautiful area with generally mild weather patterns and in a state that requires sellers to disclose all they know about their own property.  I think that’s really good.

Thursday, October 12, 2017

Q: We recently bought a rental property here on Vashon Island and have been interviewing people as potential tenants.

Some of these folks are aggressive and start telling us that we can’t discriminate against them because they have kids.  I know we can’t discriminate based on many things, but we really don’t want to rent to people with children.  Children are just too hard on the house and property.  We hope to retire to that home in a few years and want to keep it nice.  We thought you might know what the rules are.

A:  It’s easy to go online and read the landlord tenant laws of Washington State and King County.  There is, indeed, a stipulation that you cannot discriminate due to “familial status.”  That means families with children or a renter who is pregnant and about to have a child.  If there is sufficient space in the home for a family, and I believe yours in a three-bedroom house, then you can’t refuse to rent to a family with children.

It can be discouraging to be faced with repairs from damage caused by tenants.  But each tenant is different.  Years ago, when we did property management on Vashon we had plenty of families with children that kept the homes they rented clean and tidy.  Having a rental has some risks as does renting a house.  Both sides have things to gain or lose.

What makes the most sense is to be sure that you share the rules of the landlord tenant regulations with your renters.  They have legal obligation which includes keeping a property clean, and in good order.  They must get rid of garbage and keep the property in reasonably good condition.  You have the right to visit the property at least quarterly, always notifying your tenants first of course, just to see how things are going.  It’s a good idea to check the smoke alarms, chimneys if there is a wood stove, plumbing to check for leaks, etc.  This is a service to the tenants as well as keeping the house in decent shape.