I spent this morning at a class on title and escrow. To illustrate the value of title insurance, Lisa Umbelino from CW Title offered this attention-getting case study:
A homeowner has huge windows facing the neighbor’s backyard. Shortly after she moves in, the neighbor builds a deck in said yard, and begins using it for hot-tubbing in the nude. The homeowner looks into building a fence. In the process, she discovers that the neighbor’s deck encroaches upon her lot by 5 feet. She mentions this to the neighbor, who ignores her. She then calls her title insurance company, who persuades the neighbor to modify the deck rather than face a lawsuit.
You might not realize that title insurance protects homeowners against any future encroachments that may arise, but it’s true! And the protection lasts as long as the homeowners OR their heirs hold title.
That’s what it feels like, thanks to Windermere’s relationship with Demco Law Firm. Most real estate transactions go smoothly, but when issues arise, consequences can be dire and Demco is always amazingly quick to respond.
Earlier this week Lars Neste from Demco stopped by our office to talk about legal hot topics affecting real estate buyers and sellers. At the top of his list was wire fraud. Example: A crook hacks into an escrow company’s email system. He contacts buyers for a soon-to-be-completed transaction and tells them there’s been a change in wiring instructions. The buyers send $275K to a fraudulent Wells Fargo account. The following day, they hear from the real escrow people and panic ensues. The unsympathetic seller threatens to call off the deal.
In this case, Demco was able to help all parties obtain a reasonable resolution. The escrow company stepped in to provide interim funds and much of the stolen money was ultimately recovered. But the takeaway was, NEVER wire funds to ANYONE based only on email instructions. Call the real recipient to verify the account info. Also, be very suspicious of changes in wiring instructions.
Lars also brought up risks associated with direct email communication. Example: A seller emails the buyer’s agent directly, promising offhand to pay for certain repairs. He later regrets his generous offer and wants to renegotiate. Lars thought the buyer might have legal grounds for saying no, because what, really, is the difference between expressing consent via email versus putting your electronic signature on a document? The two actions very clearly show the same intent.
However, if it was the seller’s Realtor who told the other party that the seller might be willing to consider whatever repairs, the seller would NOT have been on the hook. The moral of the story was, buyers and sellers should be very cautious of direct communication with the other party or their agents, lest they incur legal obligations without careful consideration.
We also discussed the fine points of customizing escalation clauses and debated the value of offering low appraisal coverage when a buyer has already waived his financing contingency, but those stories will have to wait until another time.
Did you grow up in a house? I didn’t. I spent my childhood in Taipei, where everyone I knew lived in highrise apartments. Throughout my days in Chicago and DC, I continued to be an apartment dweller.
My first house was an impulse purchase. For the same price as a small DC condo, I could have 2 bedrooms, a basement and a yard? Sold! The day I moved in, my new neighbors pointed out that my gutters were overflowing. I wasn’t sure what they meant.
But over the next few months, I learned to use power tools and got comfortable with climbing extension ladders. I took a woodworking class and a plumbing/electrical repair workshop. I built a catio! My cats thought this was a fine thing.
I made many, many trips to Harbor Freight. If you’ve never been, their closest store is in Georgetown and I’d love to take you there – especially if you’re thinking of making the leap from apartment to single family home. It’s a wonderland of tools that you had no idea you needed – and some that are totally awesome and surprisingly durable. My chop saw, for instance, cost $99 back in 2009. It still works perfectly.
I used to work at a magical place called Everyone’s Internet. The company was based in Houston; I lived in DC. I visited once every few weeks but refused to move closer because… Houston?
The heat! The traffic! The time it takes to get anywhere! The very same conditions you’ve experienced during this week’s heat wave and Seafair traffic!
More seriously, though, I was saddened to see this Zillow Research article comparing homelessness here versus there. Zillow’s statistical model showed that in Seattle, a 5% increase in average rents would add 258 to the homeless population. In Houston, the same percentage rent increase would put 120 out on the streets.
According to Marilyn Brown, President and CEO of the Coalition for the Homeless in Houston, “by 2020, we will have fixed the system such that no one who enters homelessness need be without permanent housing for longer than 30 days. We’re in Texas. We put a man on the moon, so we figured we could put them all into housing.”
Which reminds me of this Seattle Times report back in June about home ownership among black families. In 1970, 49% of King County households headed by a black person owned their homes. Nowadays, it’s down to 28% — versus 71% in Houston and 60% in DC.
Seattle needs to do better, don’t you think?
According to this report by ATTOM Data, homeowners near a Trader Joe’s have seen an average 2012-2017 home price appreciation of 67%, compared to 52% near a Whole Foods and 51% near an ALDI. (In case you’re wondering, the closest ALDI is in Bakersville, CA.)
Inman (sorry, paywall) points out that Zillow did a similar 1997-2014 study showing that homes near Trader Joe’s and Whole Foods appreciated twice as quickly (148% and 140%) as the national average (71%) during this time:
Before either a Whole Foods or Trader Joe’s location opens its doors, homes near the soon-to-be-opened store appreciated at the same pace or slower than the typical home in that city. Once these locations open, this relationship changes. Homes near either store begin to appreciate faster than the average home in the city.
Whole Foods and Trader Joe’s are not simply piggybacking off already hot neighborhoods. Rather, it appears both chains are either incredibly smart about finding neighborhoods on the verge of gentrifying, or the opening of either location positively impacts home values.
I think it’s not either or, but both. I saw it first hand in DC. A Whole Foods came to my once crime-ridden neighborhood (Logan Circle) and wham! Property values nearby took off and that store immediately became one of Whole Food’s busiest DC locations. So, considering the rapid rate of gentrification that we’ve already seen in South Seattle, don’t we deserve some consideration from Trader Joe’s?
After hosting a Ballard open house and scoping out several others over the past couple of weeks, I wondered if the neighborhood might be losing some of its luster.
Back when my old house was on the market last July, open houses seemed to packed with super eager out of towners and recent transplants. Almost all of my visitors last Sunday were nearby apartment and condo dwellers who didn’t emanate that sense of “must buy now” urgency.
Out of curiosity, I did a quick comparison of existing single family homes near my old house that were put on the market between June 1 and July 31 of 2016, versus 2017. I excluded off-market sales as well as new construction homes and focused on the area bounded by 85th Street, 15th Avenue, 65th Street and 24th Avenue NW.
At first glance, market conditions seem similar:
One interesting thing I noticed was, more sellers have been paying for pre-inspections and offering the information to potential buyers: 8 this year, versus 4 last year. As a result, 8 buyers demanded inspection contingencies in their purchase and sale agreements last year, versus only 1 this year.
That’s huge! Inspection contingencies give buyers the option to bail out and often lead to negotiations for sellers to perform or pay for various repairs. Removing this contingency lifts a huge cloud of uncertainty for sellers, especially in cases where there is only one interested buyer.
The question is, have seller-provided inspections become more prevalent because it’s a smart practice? Or are sellers compelled to take this extra step because they are feeling less confident about buyer interest? We may have a clearer picture once more of this summer’s sales close. I’ll keep you posted!
In preparation for hosting this lovely Ballard home’s open house tomorrow, I made a 3D tour for visitors to pass along to friends and family who aren’t able to stop by.
I’ve made about a dozen Matterport 3D tours by now. The process seems tedious: scan, move camera, repeat. But after spending an hour or two seeing the home from dozens of vantage points, I always feel like I’ve gained a deep appreciation for the lives that have been lived – and will be lived – within (and just beyond) its walls.
What I love most about this home is its backyard, which you can access through the kitchen door. Matterport cameras aren’t designed for outdoor use, so the path out there might feel strange and trippy. But once you’re standing on the patio, how can you not imagine sizzling steaks on the grill, chilled wine on the table, children playing on the fort…
I’ll be there from 11am-2pm. Come check it out!
My neighbor Bart gave me this tiny plum tree. Not only that, he brought over peat moss, fertilizer and his rototiller and spent half the morning planting it for me.
Bart has also mowed my lawn since the day I moved in.
My old neighbors in Ballard were just as kind. For 7 years, Ed shared his home cooking with me several times a week. Barbara taught me how to knit. Sharon and Chris have taken me out for every birthday since we met, even after I moved away.
You’ve no doubt heard of the dreaded “Seattle Freeze”. But you know, most of these fabulous folks have lived in the area for decades. And all I did to get these friendships started was smile across the driveway.
So if you’re a newcomer who doesn’t feel like Seattle has given you the warmest welcome, try smiling at the neighbors. (If they don’t smile back, give me a call and let’s find you some new ones.) You might end up with a baby plum tree! And when it starts growing buckets of plums, bring them to my old neighbor Kristina. She’ll bring you back the best plum preserve you’ve ever had.