When Home Inspections fail, it is usually because the participants didn't pursue the problem at hand to a satisfactory conclusion. No amount of money will resolve an unknown problem, as you can't determine if the amount is sufficient to cover that problem.
A recent example involves the buyer's home inspector determining that there was a higher than normal water reading inside the floor (underneath the hardwood floor) and in the wall (outside wall) of a cantilevered 1/2 bath (powder room). Now we know we have a problem, but we don't really know what that problem is.
The buyer submitted a request to have a contractor come in and make a hole in the exterior siding above the front door. Even if the seller is willing to allow this, it is not a good idea for a buyer to take on the cost and liability of making big holes in the seller's house that he may not buy once he sees what is inside that hole.
In most inspection negotiations, the contract would fail once the seller answered "no, you can't make a big hole in my house". Not many people would say yes to that. In the instant case I was the agent for the seller. I paid for a 2nd inspection, of that one issue, to see if there was any way to determine the cause, and thus the fix, without tearing the house apart. My partner Kim and I met the seller and my inspector (not the buyer's inspector) at the property. Because the higher level of moisture was not around the toilet, indicating the problem was the wax seal of the toilet (most obvious likely cause) we identified 3 or 4 possibilities. It could be the washer in the room above the 1/2 bath, as the plumbing pipes were stacked. It could be a roof vent leak, because the moisture could be coming down the wall and into the 1/2 bath floor, instead of from the floor and into the wall. It could be a leak in the window or siding in the outside wall of the half bath. Lots of "could be" and after about 30 minutes with the 2nd inspector, no clear definition of the problem.
My most excellent seller client grabbed a hammer and started making a whole in the siding covering the overhang under the toilet. (see photo below) We were dumbfounded at his response. He will forever be one of my favorite clients as he chose "let's get to the bottom of this" vs. "how can we make this problem go away".
An inspector can't make a big hole in the house to see the problem. Having the best inspector in the world isn't always going to help you know everything you need to know about the house. The buyer, the seller, the agents and the inspector (and sometimes 2 or more inspectors) are sometimes needed to get to the real and right answer.
The seller then proceeded to make a whole in the wall in the powder room next to the toilet and near the window. The seller and the inspector studied all of the wet areas under the toilet and in the wall, and still the likely cause of the problem could have been any of the above possibles except the window leaking. The area was dry closest to the window. The inspector climbed up on the roof and the seller pulled out the insulation and studied the water marks on the insulation for pattern of water flow. The roof vent was ruled out as the pattern of water on the insulation did not reach the top, and so could not have come from above. That ruled out the washer as well.
A wax seal is often an obvious answer, but this property was only 4 years old, so we were not satisfied with that conclusion for a number of reasons. The seller pulled out all of the fixtures and part of the wood floor. In the meantime the buyer via their inspector asked for a new wax seal as the remedy.
At that point the seller could have agreed, except we all knew the problem wasn't simply the wax seal. Here's the wonderful part of this inspection. The seller could have signed off on the wax seal and the contract would have proceeded to close. Instead, we (the seller's side of the fence) determined that a new wax seal would hold for a short time, as the original one did for a few years, but the REAL problem was the builder had cut the pipe to the toilet too short. If a builder doesn't allow for a hardwood floor thickness vs. a laminate floor, the pipe will be cut at the wrong height. That was the final determination of the problem, but not the end of the fix.
To understand why that is, you have to understand what "cantilever" means. There are very specific rules for cantilevered aspects of a home. Usually the cantilever is a deck, and any time you see a short deck off a second floor, you automatically expect it to be a cantilever. When the bottom of any cantilevered area gets wet and is subject to rot, that rot can travel under the floor and inside the home floor joists. A cantilever, be it a deck or a part of the home, extends the floor joists on a 2/3 to 1/3 ratio as the support of the extended portion. All too often an inspection fix for "new wax seal" for the toilet does not address the areas damaged by water while the wax seal was failing. Subfloor, joists, behind baseboards, drywall...all potential mold issues causing further continued rot and mold contamination.
These issues are like a cancer. You have to address the area completely, or new issues will surface long after the buyer has a potential claim against the seller, especially if the seller MERELY does what the buyer asks for.
Instead of simply adding "new wax seal", the pipe was extended to its proper height by a plumber before the new wax seal was put on. Here's the hard part. We still didn't know if it was the toilet or the siding that failed. There is no way to know without testing it and there is no way to put the wax seal on without putting the toilet back and there is no way to put the toilet back without adjusting the flange to the hardwood floor level, so the hardwood floor has to go back. The buyer is asking for their inspector to come back and look at the fix with everything open (don't put anything back into place). But there is no way to fix the problem and test it to see if it IS the problem (water stops leaking and starts drying out) without putting things back into place so you can flush the toilet repeatedly and see if any water is still leaking.
Sometimes an inspection phase will fail because the buyer is asking for the wrong thing, or something that is not possible or practical or even sensible. In the meantime the seller HAS to fix it correctly for several reasons. One, if the buyer does not close, the seller has to be assured the problem is fixed for the next buyer. Two, if the problem is fixed incorrectly, the buyer could have a problem a few years later and not know it, as the water travels in places that are not easily seen when the problem is easily fixed at the onset of water leaking.
There is no problem this big and complex without frustration from everyone, including both inspectors, both agents, the buyer and the seller. My job became managing everyone's emotional positions at each turn, while moving forward with the long process of finding and fixing this problem. You have to keep things "open" so they dry out before you close them. NOW, how the heck do we get the buyer's appraiser through so the loan process and escrow can proceed, with big holes all over the place including above your head when standing at the front door.
Truth is, while all of this was a royal pain in the butt for a long time...I loved it. I loved that we moved forward in a positive way that would really fix the problem, and not just "keep everyone happy". In fact, in most cases the process of fixing it right made no one happy, because it prolonged the inspection timeframe, it prolonged the loan timeframe, it required an extension of the close date as we had to delay the appraiser coming out until the fix was complete...but it was done well and done right. At one point we had to decide between fixing it right and maybe losing the buyer in the process, and just making the buyer and the buyer's agent happy. We chose fixing it right, and I am so proud of my seller client for making that choice. It then became my job to keep the communication level going, so that we both fixed it right and did not lose the buyer and escrow. Mountains of extra work to do it well.
The seller thanked me at the end for my perseverance, as there were many times when the buyer wanted to just walk. There were many times when the seller wanted to tell the buyer to just walk. But my job is to be the glue that holds everything together, and get the job done well without losing the participants on all sides.
I'll take a minute to thank the nuns who pretty much raised me for 12 years. In my brain they branded this saying which never shakes loose: "Anything worth doing, is worth doing WELL."
Jun. 14, 2009 - How long does it take to sell a house
For the most timely data, I'm looking at the days on market of homes that are still pending and the median number of days from the time the homes was listed until it received an acceptable offer. If your home looks good and is priced right, it still isn't likely to sell in the first week...the odds are against that happening. No impossible, but don't be dissapointed if it takes buyers awhile to look and decide.
Single Family Home in Redmond 98052 - 65 days.
Condo in Redmond 98052 - also 65 days.
Single Family Home in Kirkland 98033 - 45 days
Condo in Kirkland 98033 - 56 days
Single Family Home in Kirkland 98034 - 60 days
Condo in Kirkland 98034 - 49 days
Single Family Home in Bellevue 98007 and 98008 - 56 days
Condo in Bellevue 98007 and 98008 - 64 days
The papers are full of stories about the housing market woes, yet it seems people are still surprised when they don't get an offer the first week they go on market. Perhaps the above median timeframes will help people understand that buyers are really being careful, taking their time, and expecting a lot of value for their hard earned dollars.
Jun. 14, 2009 - Pottery Barn Paint Color for Bathroom
Popular Sherwin Williams Pottery Barn paint colors. Blues are back!
Bathroom paint color:
Create upscale themes like the one below, without the expense of designer tiles, with paint! Same look and feel, and easier to change your mind a few years later.
aqua = water = bathroom
The four Pottery Barn paint colors above, from left to right are Cool Aqua,Aqua Sky, Aquamarine Blue and Babylonian Aqua. When I last wrote about Pottery Barn Paint Colors, many people wrote indicating that they weren't good at picking the right color tone.
Just take a picture of a bathroom you like from the internet, like the one above, and line up the possible matching colors under or around the photo as I have done above. If you still have trouble matching, bring the picture with the color swatches that the get from MyPerfectColor to friends, or even strangers at the coffee shop. People will love to help you pick.
In this case Aquamarine Blue is the right color tone, but you don't want to paint a small room too dark, or it will close in on you and don't, don't ,DO NOT paint the ceiling the same color as the walls.
When you order the paint you can choose it darker, but not lighter. The smaller the room the lighter you want to go. If you don't want a white ceiling, put a little bit of the wall paint into white paint. It will look more like the walls are reflecting in the ceiling than a colored ceiling.
In this case, none of the lighter paint colors are the same tone as that bathroom or Aquamarine Blue, so have the have the store make the color lighter for you first, so you have the formula in case you need more. Save some in a glass jar for touch ups over the years before adding white to do the ceiling.
Change your colors often. It's a lot cheaper than buying a new house :)
Jun. 13, 2009 - True Pendings, Short Sales, etc...
I just finished a post on Rain City Guide as a beginning point (since 6/1/09) of tracking failure rate of Pendings. More detail in that post.
Here I am looking at the same data for North King County vs. South King County. You should find that definition in previous Tracking the Market and/or Sunday Night Stat posts in these links.
North King County:
Pendings since 6/1/09:
197 median price $499,000 - median ppsf - $237 (pending prices are always asking prices)
Of those 197, only 19 are marked as short sales with a median price of $471,500 and median price per square foot of $169 (large homes)
Huge variance in mppsf for short sales vs "normal" sales. An indication that the short sales in this category are not enough to drag down prices on the non short sales, overall.
Pending Back Up Requested"
136 with a median price of $403,500 and a median price per square foot is $201 (not big houses) and at least and likely more than 71 are short sales with a median price of $355,000 and a median price per square foot of $177. Looks like the pendings asking for backup are looking for higher offers than the one in escrow, hence the lower prices. They accepted a "lowball" but are hoping for a higher competing offer for a higher expectancy of lienholder approval.
Closed in the last 30 days - 611:
600 *not marked as short sales - median price $445,000, mppsf - $227
ONLY 11 of those 611 closings were short sales with a median price of $410,000 and a mppsf of $179
I was hoping to be able to separate "bank-owned" properties, but that is not a designated field. We'll have to use the median price per square foot variance as a gude.
South King County:
Pendings since 6/1/09:
152 median price $349,475 (excluding short sales and bank owned properties) mppsf $179
Only showing 5 distressed pendings but the numbers are WOW $199,000 mppsf $124 - let's go straight to closed in 30.
Closed in the last 30 days
Noted as distressed = 11 - Sale Price $211,000 - mppsf $120 (selling for over asking prices)
104 $348,750 mppsf $174 not noted as distressed.
At the moment I'm studing the availability of data and relationship to decide how to track numbers going into the future as indentification of bank owned and short sales is improved.
*required disclosure Stats not compiled, verified or posted by NWMLS
Seattle and Eastside homes of this type are most often called Split Entry homes (not to be confused with split level homes). In a split "level" home, the bedrooms are not on the same floor as the kitchen, as they are in a bi-level or split entry home. It's basically a rambler or ranch home, with a basement that is partially and sometimes entirely above ground.
A newer one, which we don't see too often, would likely look like this:
My favorite that you can find in this area, but don't see too often has this window configuration in the living room:
The standard version that you see most often in the Seattle Area looks like this one that my clients recently bought for $300,000 in Bothell King County in the Northshore School District. It was a bank owned property that previously sold for $465,000. If it were not a bank owned property, it likely would have sold for about $360,000.
The top floor plan is pretty standard and usually all of the interior living space walls are easily modified, as the supports for the structure are rarely contained in those walls.
The floor plan above is the main floor plan and the house is pretty much a full rectangle, so that the basement square footage is often pretty close to identical to the main floor. They usually have 3 bedrooms up as shown. Many have a master bath, that is usually a shower bath, basically behind the hall bath and accessed from the master bedroom which would be larger than the size of the bedroom shown above.
There are usually two fireplaces, one on the outside living room wall and one on that same wall below, making a nice family room, often with sliding glass doors out to the yard. The kitchen often has a counter that makes the kitchen a U-shape, and separates the dining room from the kitchen. Some prefer to make it one big kitchen with no wall, and with kitchen flooring extending into the dining room.
This floor plan above shows the master bath option, but most often there is a shower stall there and not a tub as shown. The tub is only in the hall bath. This version also shows the kitchen with a counter between the dining room and kitchen, which is more often the way I see it.
You should never try to price this style of home using a price per square foot method. If you do, only use the main floor footprint, as the basement doesn't value out the same. Make sure you know the main floor footprint from the tax records before studying the "comps".
Pay particular attention to the main floor footprint as they generally vary from just over 1,000 square feet to about 1,300 square feet. Remember, that difference is often doubled, as the basement area is also larger. The home in the last photo that sold for $300,000 did have the extra master bath, and was 1,300 square feet on the main floor. One of the larger ones. Some have one bath with two doors, one from the hall and a separate door into the bath from the master bedroom. Most of the variations on the main floor have to do with the bathroom.
The one I note as my favorite with the big glass window is often much larger and pricier. I had clients who bought one in early 2008 (a short sale) in Tam O'Shanter near the Lake in Bellevue that was over 1,750 square feet on the main level.
A lot of people don't like them at first sight, but they clearly offer you the most house for the least price. Men tend to like them more than women because of the big garage and tons of basement space in addition to the family room. They almost always have a nice big yard, and there should be a deck behind the dining room and kitchen, with sliding glass doors and steps down to the yard. This way you can access the yard from the family room, or from the upper living space.
It's a great "starter" home in this market, because you are not likely to grow out of it, and can usually have a 4th bedroom on the lower level in addition to the family room and garage. If the lot is large enough, you can even amplify the living space by finishing the garage and building a separate detached garage or carport to the side.
A great home that often meets the needs of most any growing family. Also makes a lot of sense for people who work from home, as the basement area usually has room for an office, if that room is not used for a 4th bedroom. The lower level often has the laundry area at the bottom of the steps under the kitchen plumbing, and a 3/4 or full bath on the basement level behind the laundry area.
So the larger ones are easily 4 bedrooms, 2 3/4 baths, a living and family room both with fireplaces, plus a two car garage. A LOT of house for the money.
May. 25, 2009 - Difference in Home Value from Peak to Present
In the previous post, I was showing the % change in pricing. In the graph below you can see the current actual median price for a split entry home in these areas today, based on recent closed sales. Basically the same house has a different price, depending on where you buy it. You can pay more or less than these prices, as these are the median sold prices, meaning half the people may have paid more and half the people may have paid less, on average.
In the next post I will describe this home style in detail.
Below are the prices for this same home style back in the summer of 2007 when prices peaked for the most part. Since different areas peaked at different times, I used the medain price for April through July or so in 2007.
required disclosure Stats are not compiled, verified or posted by NWMLS
May. 25, 2009 - King County % change in Home Values
As a result of all of the posts written yesterday below, and the ones I have done the math for but have yet to write above this post, I've come up with an approximate formula for Home PrIce Changes in portions King County. When calculating by School District, I can't do Seattle, because all of Seattle is the same school district. So this method is of no value.
But I can compare the School District results to King County as a whole. As you will see in the posts after this one, I have segregated a certain style of home that is fairly uniform from place to place. This gives us a % change for a similar product in different places.
This method puts:
Lake Washington School District down 16% from peak
Bellevue School District down 19% from peak
Issaquah School District down 22% from peak
Northshore, Renton and Federal Way School Districts down 25% from peak
King County as a whole down 28%
This method excludes new construction for the most part, as this style of home is rarely built in recent history. Consequently the % change in value is higher than numbers you might see that include new construction. It also excludes the added value of view considerations. It also excludes any pressure from the high end market priced over $800,000 by coincidence vs. design.
In some areas new construction pulls the median prices up, in some areas high end is suffering the most...consequently this analysis is in many cases the great equalizer of data sample.
Required disclosure Stats are not compiled, verified or posted by NWMLS
May. 24, 2009 - King County Home prices peak and beyond
Let me explain this graph a bit, as I was looking for some specific trending into that is set up in the previous 3 or 4 posts about Median Home Prices by School District. One, I was looking for peak prices and each area peaked as to price at a different time. Since the question of current price as a relation to peak is relevant in many discussions about home prices, it's important to know when the area peaked,.
For those who didn't read the previous posts before getting to this one, parameters are no lake or mountain views and homes sold for less than a million dollars arranged by school district, but only to the extent that school district is in King County.
The beginning is December of 2006 through October of 2007. The next number "PYOY08" is the price a year from peak for each area. So for Bellevue School district that number is July of 08 to compare with the peak of July of 07. For Federal Way that peaked in March of 07, it's March of 08. For those that peaked in June, it's June. Wherever the one year point fell from peak, that's where the value is struck YOY one year after peak.
At the end I struck the median of Jan and Feb of 2009 and April and May of 2009. So where you see an increase in the previous posts for May of 2009, and don't see the same result here that is because I combined April and May closings to date. None of the May stats are for the whole month of May closings, obviously, because it is not yet the end of May. So to get a larger sample, I included all of April with May.
As usual, the final post on all of this work that I have been doing, will appear in Sunday Night Stats on Rain City Guide. Though I may have another here that shows each area's % change from peak to now and from 3/2005 to now from the first group of data and the high and low point. Those may appear in charts vs. graphs so you can more readily see the actual Median Price Per Square Foot numbers.
required disclosure Data is not compiled, verified or posted by NWMLS
May. 24, 2009 - Home Values by School District recent 6 months
King County Home Prices by School District. In the graph below, I am sorting out the data from the end of the graph two posts below this one. Parameters are homes without view priced under a million dollars and the numbers are median price per square foot.
This graph shows a median upturn in May of 2009 for Lake Washington, Northshore and Renton school districts. I have another graph coming up that tells more of the story, but for those wondering, Federal Way recent downturn does appear to be about a lot of bank owned properties that went through a foreclosure. Issaquah and Bellevue, not. Virtually none, really. The downtown there is more about screaming deals from builders or from people who have owned a long time and had a lot of equity in their homes. Remember, these are School Districts, so Issaquah is really a lot of Sammamish here in the May numbers. Parts of Bellevue as a City are in Lake Washington as a School District, so it is important to note that these are School District vs. City classifications.
I have a new graph showing where these numbers are from the peak of each area, that I find more interesting, so I will end this post here with the graph.
required disclosure Stats are not compiled, verified or posted by NWMLS
ARDELL
DellaLoggia
On Seattle Real Estate including Kirkland, Bellevue, Redmond, Green Lake and most areas around Lake Washington North of Downtown Seattle.
Phone: 206-910-1000 - Mailto:Ardell@RainCityGuide.com
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