Tag Archives: property

When is it appropriate to use environmentalism to stop developments?

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Editor’s note: Today, I’d like to welcome Jon Ribary as the newest contributor to RCG. With one of our other contributors, Eileen, he owns LTD Properties in Seattle. When I first started blogging, Jon was an early follower of RCG and began developing an online mapping tool around the first time I started gHomes. Jon’s take on real estate is from a slightly different perspective in that, first and foremost, he is a developer of land as oppose to an agent. In a constant effort to explore new areas of real estate, I look forward to seeing where Jon takes us!

A recent article from the Snohomish County’s Herald Newspaper got me thinking about the fine line between “preserving the environment” and NIMBYism (Not in my back yard!). I find that rather than really caring about preserving the environment, people use environmentalism as a hammer to slow down or stop projects that will “ruin” their view or preserve some favorite local property from being developed.

In the case of the Lake Stickney, the county says that the proposed development meets all applicable environmental laws, and yet one local, Chris Lloyd says “This is all about salmon habitat.” I’m not convinced.

To bring it to a personal level, if the house I live in has a sweeping view of the sound. Between me and my view was a 1940s rambler that just sold. The buyer, a builder who is planning to demo the house to build a 3 story home that would block my view. Do I have a right to stop that development, just to save my view, or is it an individual’s (or company’s) right to do what they wish on the property as long as they are abiding by development standards? If I wanted to keep the property from being developed, is my only right to buy the property to ensure it is not changed (or negotiate a view easement)?

If environmentalist’s #1 goal is to make sure projects are being developed properly, then I am on board. With land use and building codes where they are today, my past experiences tells me the proper precautions are being taken. If the opposition are anti-development and are using this tactic as a way to slow down or trump the development of the land, then I think environmentalism is simply being used as a ‘Trojan Horse’ to stop developments…

Seattle Street of Dreams – 2006

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Robbie, Stephanie, Harrison and I went to the Street of Dreams together yesterday. What I enjoyed most, was their company. What Harrison (age 3 1/2) enjoyed most, was the school bus ride from and to the car. His first ride on a school bus.

The house I liked best, though not everything about it, was of course the highest priced one at $5,500,000, but I’d want it moved somewhere else with a view. Because I am a “view person”, not everyone is, I came home and liked my own house better than any of them.

Trends, products, styles, features…a run down. I guess I’m “jaded” by having seen lots and lots and lots of houses all over the country, because I didn’t see anything I liked, at least not that I liked in that setting. House number 6, which is purportedly “sold” was the best of the batch, all things considered. Best lot, house that seemed appropriate to the lot and setting, house that seemed appropriate for the area. But I’d like to “live in it” for a week or two like a timeshare. I’d want to move it to the bottom of a ski resort and timeshare it out for two weeks at a time unless I could afford it as one of many homes as a “getaway” house. But then I’m a City Girl who can’t be rustically oriented for more than two weeks at a time. I get hives.

Lots of too much dark, caves, caverns, pitch black theater rooms, stone inside the house, even a clay tile roof inside the house. Lots of too much “old” as in new made to look “old”. Coming from Philadelphia, I know what old looks like, and that’s not it. Two of the homes had a very dark “wood” floor that was supposed to look like the floors of an historic home. Not. Wide plank…yes, dark, yes, waves in each and every plank…not. Someone said it looked like it was made out of plastic.

Every house had a “butler pantry”, I think, and I was evaluating them all. One was totally off as if the designer didn’t know what a butler pantry really was all about. A butler pantry, copied from historic homes which were likely homes patterned from England, is that small galley between the dining room and kitchen with counters and cabinets on either side. It originally did not have a sink, as any water used by the butler would have been the “soda water” type in a bottle to freshen and make new drinks for the guests. For a “butler pantry” to be “true”, the butler should be able to stand in it and see the whole dining room table from it. He watches and quietly comes out as needed to fill a wine glass, freshen a drink or refill the string bean bowl as it gets low. The vantage point should be such that the guests do not really see him most of the time. So the one butler pantry that had only one side and standing there gave the butler a view of the backyard? I don’t think so.

Stephanie noticed this and it was a riot. In one house there is a fish tank inside the shower. Cool, but…the other side of the fish tank built into the wall was not in the master bedroom, it was in the hallway! I went into the shower and did a little dance as Stephanie stayed in the hallway to see if she could see me moving about. All of the people in the house were laughing and talking about how the kids in the “West Wing” could sneak down the hall and watch Mommy and Daddy in the two headed shower through the fish tank.

Moral of the story is NEVER go to The Steet of Dreams with a Real Estate Agent. They look at what’s wrong…not what’s right, at least this one does. Mostly the homes were not “true to themselves” mixing modern smack against historic replica features. That new sink that looks like a laundry tub (modern) next to an island with an Early American spindle table leg built into the corner. The pantry with relatively cheapo looking shelves, with a crystal chandelier hanging in the middle of the pantry. Better to hire a carpenter to build the shelves in, if you are planning to hang a crystal chandelier up between the Frosted Flakes and the Pop Tarts.

So Robbie and family got a taste of what looking at homes with Ardell is like. They look at what’s right, I look for what’s wrong. Robbie kept wanting me to give an opinion of value and projected days on market…but that’s something I do after I get home from showing property, as it is a “data” driven function, not a WAG 🙂

Legal Description, Revisited

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Way back in January, I authored a post on the legal description of property. People say that blogging generates business, and they’re right. I recently picked up a new case because an agent read that post and referred his client to me. This new case illustrates the complexity of the legal description issue (which I address below), as well as the dangers associated with relying on an agent — or the internet — for legal advice (a topic I will address in another post later this week).

My original post discussed the general principle that a legal description must be included in a contract for the sale of real property in order for that contract to be valid. The point of the post was to encourage buyers and sellers to include the legal description in the contract from its inception so that there was an unequivocally binding contract upon mutual acceptance. Thus, I did not discuss the exceptions to the general rule. In fact, there are several, one of which is frequently applicable given the format of the widely used NWMLS forms.

A contract for the purchase and sale of land need not contain a legal description if it references another document that contains such a description. Bingham v. Sherfey, 38 Wn.2d 886, 889 (1951). This rule is well established. See, e.g., Sunreal, Inc. v. Pong’s Corp., Inc., 2003 WL 21500730 (Div. 1 2003) (quoting Bingham). In the Bingham case, the contract at issue did not contain an adequate legal description. However, it did contain the tax parcel number for the lot at issue. The Court held that the tax assessor in the particular county presumably performed the assessor’s statutory duty and included a legal description for the property in the tax records. Bingham, 38 Wn.2d at 889. Thus, the Court found that reference to the applicable public record (i.e. the property tax records maintained by the county) “furnishes the legal description of the real property involved with sufficient definiteness and certainty” such that the contract was valid. Id.

The NWMLS form contract contains a space to insert the tax parcel number for the property at issue. Thus, even if the contract does not contain a legal description, it very well might contain a tax parcel number. If it does, then the contract probably falls within the exception created by Bingham, and the contract is binding despite the absence of a legal description.

Admittedly, one could make a counterargument. In Key Design, Inc. v. Moser, 138 Wn.2d 875 (1999), the Supreme Court reaffirmed the legal description rule first announced in Martin v. Siegel, 35 Wn.2d 223 (1949). Key Design, Inc., 138 Wn.2d at 881-84. Quoting Martin, the Court held that “every contract or agreement involving a sale or conveyance of platted real property must contain . . . the description of such property for the correct lot number(s), block number, city, county, and state.” Id. at 881. Thus, in light of this language, one could argue that a tax parcel number is insufficient. However, Martin was decided two years prior to Bingham. Moreover, the Court in Bingham specifically noted that its holding was consistent with Martin. Bingham, 38 Wn.2d at 889. Thus, a court is unlikely to apply a bright line rule to the legal description requirement. Rather, a court will probably enforce a contract that contains the property’s tax parcel number.

Every purchase and sale agreement should include a legal description so that there is no issue. However, if you are going to dispute the validity of a contract on this basis, you need to be aware of the exeptions to the general rule. As I will discuss further in my next post, you should always consult an attorney — directly, not by reference to a blog — before reaching a conclusion about the validity of a contract.

Please note that this post is not legal advice. You should consult an attorney for specific legal counsel.

Going, Going…GONE!

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[photopress:gavel.jpg,full,alignright]A few days ago a property came on market just after noon at 12:48:39. The property was emailed to me through the mls, so I saw it fairly quickly after it was listed. I emailed it to a client of mine, even though it was not in the area he requested, but it was in the price range.

I don’t know why I sent it to him, except that I knew it was an exceptional property in an exceptional location and priced to sell. There are hundreds of properties on market in his price range, but this one caught my attention. This one above all others. Sometimes I wonder how we can just instinctively know that as we are emailed listings, while we are in the midst of doing other things. Now there’s a REALLY good one.

The property was apparently viewed, an offer received and accepted and the property changed from ACTIVE to STI by 9:58:46 the same evening. No, my client didn’t see it or buy it. But he did change his instructions to me and asked that I, rather than following his instructions, send him anything in his price range that I felt was not only appropriate to his needs, but a good property. Sometimes just knowing “how to pick ’em” is what sets you apart.

I do see some weaknesses in the marketplace. In fact, I don’t like most or many properties that are for sale. But we are, as always, waiting like cats to pounce on the next good one coming out the gate.

Floor Area Ratios – Bulk and Volume

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I attended a meeting this week regarding proposed changes to the current FAR in my neighborhood in Kirkland.  I thought I’d report on Kirkland specifically on my blog, but raise the BIG question here.  Should neighbors and local governments be able to dictate, beyond height and setbacks, how “big” your home can be?[photopress:bigger_house.jpg,thumb,alignright]

Is the “argument” really about size?  Or is it about “style”.  It seems that people complain more about homes with a flat roof made of smooth stucco, than they do about homes with pitched roofs.  If everyone in town hates the house you want to build, should that matter?  Is this argument really about trying to dictate “taste”.  When an old house is torn down, the new one built in its place can’t be expected to look anything like the one that was there, can it?

[photopress:big_house.jpg,thumb,alignright]

The reason more houses are being built with a flat roof, rather than a pitched roof, is because of the height restrictions.  Here the height can’t exceed 25 feet.  If you have a point at the top, that point counts as your 25 feet, so you lose a lot of square footage at the top vs. building your second floor up to 25 feet with a flat roof. 

FAR is not so much about the size of the house, as it is the size of the house relative to the lot size.  If the building code has a restriction of 50% FAR, then the maximum size of a house on a 5,000 square foot lot is 2,500 square feet.  Unlike real estate agent and appraiser criteria, building code square footage can include the attached garage, but often does not include the “air space” of a two story room with no floor at the second level.  “Volume” related complaints suggest that this “air space” should be included in the square footage as if it had a floor.[photopress:small_house.jpg,thumb,alignright]

I will stick to the specifics of the actual Kirkland meeting on my blog, but here in RCG, I thought we could talk more about the issue generally.  Used to be as long as you adhered to the height restriction and setback rules, all was A-OK.  Now people want to dictate and prevent “monoliths” and homes that just don’t seem to “fit” into the type of town “we” want to be. 

The fur does tend to fly at these meetings.  Anyone have any opinions on this topic?  Some of the questions raised are “Why do so many new homes have such small yards?”  Should we really be able to tell people whether or not they MUST have a “yard”?  Whatever became of one story houses? and “What’s going to happen if my neighbors sell?” Should we let people do whatever they want with the land that they own, or should neighbors and local governments have some say in the matter?

Weigh in your opinion.  Inquiring minds want to know how people feel about this topic.

The Legal Description of Property

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(This post is authored by Craig Blackmon, an attorney in Seattle whose practice focuses on residential real estate — see his web page or his blog for more information. Please note that this post is not legal advice. You should consult an attorney for specific legal counsel.)

The legal description — it’s just an address, right? Unfortunately, it’s significantly more complicated than that, and it’s important to know the difference if you’re trying to create a binding contract.

In England more than 300 years ago, Parliament passed the Statute for Prevention of Frauds and Perjuries, which required that certain contracts be written and signed before they would be enforced by the courts. Thus, one was prevented from committing fraud and perjury by falsely convincing a court that there was an enforceable oral contract. In other words, absent a written and signed agreement, there would be no enforceable contract, regardless of whether the parties actually created an oral contract. Today, attorneys and other legal scholars refer to the legal principle first enunciated by that English law as the “statute of frauds.”

Our legal system in this country is largely based on the system in England. Thus, all states have adopted in one form or another laws that reflect the statute of frauds. Here in Washington, certain statutes relate specifically to the conveyance of real property. Per RCW 64.04.010 and RCW 64.04.020, every conveyance of real property must be in writing, and it must be signed and acknowledged by the party to be bound (i.e. the party selling or otherwise conveying the property).

The courts have also adopted the statute of frauds and repeatedly found (over many, many years) that a contract for the conveyance of land must contain a description of the land sufficiently definite to locate it without relying on other evidence. See Tenco, Inc. v. Manning, 59 Wn.2d 479, 485(1962); Green v. Escene, 108 Wn.App. 1045 (2001) (not reported). Indeed, in a case decided nearly 60 years ago, the State Supreme Court specifically rejected the contention that a property’s address was a description sufficiently definite to satisfy the statute of frauds. Martin v. Seigel, 35 Wn.2d 223, 229 (1949). Fifty years later, in 1999, the Court reaffirmed this rule, despite its unusual strictness. Key Design, Inc. v. Moser, 138 Wash.2d 875, 882-83 (1999).

Therefore, when drafting a purchase and sale agreement, it is imperative to include the legal description and not just the property’s address — which, of course, begs the question: what is a legal description? In most instances, the legal description is based on the lot, block and subdivision of the property. Here is a typical legal description for a home in Seattle: “Lot 15, Block 21, Gilman Park Addition, according to the plat thereof recorded in Volume 3 of Plats, Page 40, Records of King County, Washington.” Where the home was not built as part of a subdivision, the legal description may reference a government survey or use “metes and bounds,” a method of describing the property with reference to landmarks, angles, and distances. To obtain a legal description, you can turn to the preliminary title commitment or a previous deed of the property (which is usually available online at the King County Recorder’s Office.

And if you don’t include a legal description? The purchase and sale agreement is not a binding contract, and either the buyer or the seller can walk away without any consequences. The MLS form purchase and sale agreement widely used in Seattle includes language indicating that the legal description can be included after creation of the contract by the buyer’s agent, the seller’s agent, or the escrow agent. If your purchase and sale agreement includes such language, then the legal description can be added at a later date to create a binding contract. However, until the legal description is included, there is no contract, and either party can walk away. Therefore, it behooves any serious buyer or seller to include the legal description from the contract’s inception.

Seek a Qualified Mortgage Consultant to Ensure the Best Results

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Taking the step into home ownership is one of the most important financial decisions a person will make in their lifetime. There are many factors to consider when embarking on this venture. Literally hundreds of loan programs are available, and it is important to find the one that best fits your personal long-term goals.

First and foremost, you must have a mortgage consultant in your corner that is willing to take the time to know what your long-term goals are. Communication is the key factor here.

Curious prospective home buyers sometimes turn to Internet-based services just to see what current interest rates are. But a faceless web site will not take the prospect’s future financial planning into consideration or guide the potential borrower through the many nuances of the loan process. When shopping for a home loan, be wary of web-based services that offer programs to reel prospects in with attractive rates that are based upon unrealistic time frames.


If a lender is offering a terrific rate based on a 10-day lock-in period, it is unlikely that the potential home owner would actually be able to find their dream home, get through the negotiation process and win approval from a lender within such a short period of time. This is called short-pricing, and when it comes time to close the transaction, the rate that was originally offered is simply no longer available. As a result, the unfortunate prospect is bulldozed into a loan program with a higher interest rate.

It is highly unlikely that a qualified loan originator whose business is based upon referrals will use unscrupulous tactics such as this to get new customers in the door!

Once you have found a mortgage consultant that you feel comfortable working with, lay your goals out on the table because it will have a tremendous impact on choosing a loan program that meets your specific needs. One of the most important factors to consider is how long you wish to borrow the money for. For example, if you know you will only be in the home for five years, it wouldn’t make sense to opt for a 30-year loan program or pay points up front to secure a lower interest rate. You would not be in the home long enough to benefit from such action.

Your mortgage consultant should be able to narrow down a selection of programs based on the information that you have provided, and present you with an easy-to-read spreadsheet that clearly defines viable options for your interest rate and amortization schedule, monthly payment and any potential savings you may realize by paying points up front.

Moreover, a reputable loan originator will not hesitate to share this information with your tax consultant or financial planner so they may offer additional feedback on your behalf.

Home ownership imparts a rewarding vehicle for building wealth and a strong financial future. The mortgage consultant that you choose should be there not only when your loan closes, but should also provide you with ongoing service to assist you in managing that debt over time.

Baby Boomers Retire

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Reverse Mortgages Gain Popularity

“Baby Boomers,” people born between 1946−1964, will begin to retire in large numbers. As a result, the demographic shock of a shrinking labor force and its effect on Social Security, Medicare, and other government programs. By 2030, about 20% of the American population is expected to be 65 or older, according to the Social Security Advisory Board (SSAB).

With rising costs of living and a dwindling budget to accommodate the elderly and disabled, we will see increased usage of the reverse mortgage. This loan allows equity to be taken out of the home to meet day−to−day expenses, and was designed in the late 1980s to help those who owned property, but lacked sufficient income to live on. However, there are benefits and disadvantages to be known before going into this type of loan. In most loan scenarios a home will go into foreclosure if payment is not made. If payments are made, the debt decreases and equity increases. The opposite holds true for a reverse
mortgage; equity is taken out of the home to sustain the family, causing debt to increase while equity decreases. There is an exception − if the actual value of the home increases, less equity will be lost overall.


Most reverse mortgages are set up so there is no monthly payment as long as the owner or co−owner(s) resides in the home. There are no minimum income requirements, and the money can be used for any purpose. Equity disbursed from this type of loan is tax−free. Depending on the type of plan, reverse mortgages will usually allow the owner to retain the title to the property until they have lived in a different residence for 12 months, sell the property, die, or the end of the loan term is reached.

On the flip side, reverse mortgages can be more costly than a normal equity loan. Interest is added to the principal balance each month, and the amount of interest owed is compounded over time. The interest will not be tax deductible until the loan is paid off, in part or in full. Also, since the reverse mortgage uses equity in the property, this constitutes a loss of assets one could pass on to heirs.

The Federal Trade Commission warns of abuse with this type of loan, as they have received reports of predatory lenders taking advantage of the elderly. It is best for the individual interested in a reverse mortgage to research and obtain counsel from reputable sources.* HUD does not recommend consulting an estate planning service to obtain a referral to a lender. HUD provides this information free to the public. Even if the home was not originally an FHA loan, the reverse mortgage can be federally secured.

*Visit the HUD page on this subject at http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm, consult AARP (American Association of Retired Persons) at http://www.aarp.org, and the National Center for Home Equity Conversion at http://www.reverse.org.

How Does Mass Transit Affect Property Values?

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I’ve been at a couple of gatherings lately with Microsoft employees and other tech folk who have some money to invest and are considering investing in real estate. I’ve recommended that they consider buying along future transit lines like the green line (monorail) or the lightrail route. (If they’re feeling adventurous, I also mention the southlake union streetcar.) In making these recommendations, I’ve been operating under the assumption that additional mass transit will increase nearby property values. But rather than live by assumptions, I decided to do a little research on the subject.


Financing Transit Systems Through Value Capture does a great job summarizing how transit can affect property values:

Proximity to transit can affect property values in three somewhat different ways, one negative and two positive.

First, being located very close to a transit station or along a transit line tends to have negative effects, due to noise and air pollution from trains, and increased automobile traffic from users. These nuisance may reduce residential property values very close to a transit station or rail line.

Second, it gives one location a relative advantage over other locations, attracting residential and commercial development that would otherwise occur elsewhere in the region. This is an economic transfer.

Third, transit can also increase overall productivity by reducing total transportation costs (including costs to consumers, businesses and governments) for vehicles, parking and roads and providing a catalyst for more clustered development patterns that provide economies of agglomeration, which can reduce the costs of providing public services and increase productivity due to improved accessibility and network effects (Coffey and Shearmur, 1997). Although these productivity benefits are difficult to quantify, they can be large: just a few percentage increase in property values, a few percentage reduction in automobile and parking costs, or few percentage increase in business productivity in a community can total hundreds of millions of dollars.

The cited report operates under the assumption that mass transit not only increases property values, but that it increases them to a point where the projects could pay for themselves if only the increased property values could be “captured” through some type of taxing mechanism. This argument is one that has been around since at least the 70s, and while the argument is interesting, I’m began my research wanting to test the basic assumption that mass transit even adds value to nearby properties.

Actual Data
Probably the most comprehensive study I could find on the subject was a study by PB (a transportation consulting firm) called: The Effect of Rail Transit on Property Values. It is loaded with case studies for both residential and commercial properties, and in general, the data is clear that a property values near a rail station are much greater than those farther away. The report gives lots of data showing that property values in Washington DC, Atlanta, San Francisco, New York, Boston, Los Angeles, Philadelphia, Santa Clara County, Portland, and San Diego all increased near transit stations. (Note that many of the results are phrased “price decrease by $XXX for every XX feet further from station.’ This is just another way of saying that prices increase near the station.) While two cities (Sacramento and San Jose) showed either no effect or a decrease in home values near the transit stations, the report found that (at least in San Jose), the property along the rail corridors were historically poorer (long before the current lightrail was added) than other parts of San Jose.

The results from a study of property values around BART in the San Francisco Bay Area are pretty conclusive:

Table 1: Single Family Homes

Distance from BART CBD/Urban Suburban
(feet) (per unit) (per unit)
0 to 500 $48,960 $9,140
500 to 1000 $14,040 $7,930
1000 to 1500 $8,640 $3,040
2000 to 2500 $5.760 $5,500

Assuming this data holds for Seattle, then residents should expect to see substantial increases in property values after the mass transit is built assuming that this price increase is not already factored into the existing property values. Note that almost all of Seattle is “urban” by the study’s definition. (On a personal note, I recently purchased a home in Ballad near the proposed green line and am thrilled by the prospect that Seattlites will be essentially subsidizing my property values should the monorail ever be built!)

While, I started off thinking that additional mass transit would add to property values, I had a hard time finding any evidence to the contrary (research bias?). Nearly every article I found on-line gushed about how mass transit was increasing nearby property values:

In conclusion, after a few hours of research, I’m more convinced than ever that mass transit increases property values.

Does this mean that mass transit is always a good idea? Probably not… There are plenty of good arguments for not wanting mass transit such as increased noise, increased traffic, increased parking congestion, etc. However, if you are interested in making a good investment in the Seattle area, finding a home/apartment/commercial building near a future transit line seems like a great way to increase the likelihood that your investment will pay off in the long run.

Do you want more information? I’ve created an on-line bookmark of related articles at del.icio.us. I’ll continue to update add articles to this link as I come across them!

In addition, I’ve just received an email from Seattle Monorail staff that they will be sending me a report (hard copy) that I requested titled The New Seattle Monorail’s Potential Effect on Property Values (Seattle Monorail Project, August 24, 2002). (I have no idea why they don’t have an electronic version..). If there are any gems of information out of that report, I’ll update this posting.