# Listing Square Footage — How hard can it be?

Back in middle school, one of my favorite math classes was geometry.  Calculating the volume of cylinders, figuring out the angles of oblique triangles…now that was living!  Best of all, it seemed like math that maybe I might really use someday.

Fortunately in this business there’s lot of opportunity to practice.  Whether we’re helping a client to analyze a land development, or figuring out the volume of topsoil needed to resod a yard, or simply figuring the square footage of a house, we get to use some of that old fashioned geometry in the process.

It turns out that the square footage thing, though, just isn’t that simple.  It’s been talked about before (like here, and here), but today we were listing a new townhome, and as I evaluated the active comparables, I found that what should be a “standard,

# Free Flushes?

Our development company has been a certified Built Green builder for several years, and we’re always trying to find economically feasible ways to add “green” features to our new construction.  “Economically feasible” to me means that while we’re willing to pay more to build in a more sustainable fashion, we’d like to be able to recover most of those extra costs in higher resale prices, or shorter market times.

So when I read about a “greywater recycling” unit, I thought we should try it.  Here’s our first installation, in a stand-along townhome in Crown Hill — North Ballard:

This octopus-looking thing takes water from our two showers (the black pipe) and puts it into this 50 gallon tank.  There is a water supply that fills the tank if the level gets too low.  The city inspector scratched his head at this — first time he’d seen it — as did our plumber.  But now that we’ve gone through it once, hopefully the next ones will be easier to install.

You can see the level of “grey” water in the picture, at about the 20 gallon level.  This water is pumped back into the toilets to use for flushing.  Flushing constitutes nearly 40% of domestic water usage, so in theory, this will reduce your water (and sewer) bills considerably.  And it’s just “light grey” shower water, which if you avoid shaving, toothbrushing, and any other debris-generating activities (not to get too graphic), should be 98% pure domestic water and a little bit of ivory soap and shampoo.  The feedback that I’ve seen from consumers is that they don’t notice that they’re flushing with anything different than normal “clean” water.  So when you do flush, it’s with water that would have gone down the drain after its first use, but you’re giving it a second life.

The cost, all in, is about \$4500 (it would be much more expensive to plumb into an existing house).  This particular townhome is about 1750′, and is priced at \$450,000 — not priced any higher than it would have been without this system, but our hope is that this is a feature that will set this unit apart from the competition.  We wouldn’t be able to justify this in a \$300,000 townhome (not just b/c of the price point, but the \$300k unit wouldn’t have enough physical garage space to fit the tank), but we’re putting them into about a dozen other units right now in Seattle.

There are lots of green things that just can’t work in our spec houses — \$40,000 solar arrays, for one.  But this system gives a lot of bang for the buck, and I think our buyers will really like it.

# Townhome concerns…

A prior post talks about shared driveways in old Seattle neighborhoods and another post within the post talks about parking issues with townhomes. I’m waiting for the first lawsuits and haggling to start over these townhomes in the Seattle area that are “zero-lot line”. While I show them to clients as house and condo alternatives I do point out the issues with not having a home owner’s association with reserves. What happens in several years when the whole building needs painting or a new roof and only you have saved money for a rainy day and your other neighbor spends like there’s no tomorrow so he/she has no savings to help pay?

Who’s responsible if a leak starts on your neighbor’s section of the roof but the water travels and penetrates into the structure on your side?

What are the appropriate measures to take to handle complaints such as the parking issue? If there is an easement for each property owner to all the other owners and the easement states that blocking the shared space is not allowed to whom does the aggrieved party complain and what is the possible restitution to that person if the offending party doesn’t quit blocking the shared space?

Another scenario: What if your neighbor decides to paint their part of the building bright purple? Or perhaps they never paint at all and bring down the resale value of your home when you try to sell?

While these types of housing have been decent middle ground options for home buyers that can’t afford some of the single family homes, particularly new construction in the city, and provide an alternative to condo living there are some serious questions and concerns that most buyers haven’t considered. I’m just waiting for the rash of lawsuits that will likely happen when these properties are around their 10th and 20th years of age and they’re in need of major upkeep. My guess is that aggrieved neighbor will sue offending neighbor but maybe there will be a different kind of backlash. Anyone out there in RCG-land got any ideas or thoughts on the subject?

# Beginning the Home Buying Process – Part 2

[photopress:MacCommercial.jpg,full,alignright] The next step in the Home Buying Process is determining how much home you can afford and how much you actually want to spend. When buying your very first property, it is important to note that while a lender may tell you that you can afford a property priced at \$350,000, lenders do not actually qualify you based on sale price. It has become common practice for the ease of agents and buyers to quote a sale price. But the actual process qualifies you for a monthly payment that includes Principal + Interest + Taxes + Insurance/HOA Dues.

This is VERY important because a Townhome with very high monthly dues can be more expensive, even though it has a lower price, than a Single Family attached townhome.

There are four townhomes on my desk. Let’s look at these as a real life, current example. Let’s calculate the monthly payment based on 20% down and an interest rate of 6.25%. 20% down is clearly not the norm for a first time homebuyer, but the way to finance the amount of loan on the 20% top portion, varies greatly from one individual to the next. So we are eliminating that factor to make the point that taxes and homeowner dues, can impact the price at which you can purchase, even though your “lender letter” says you qualify at \$350,000.

1. Price \$315,000 – Taxes \$1,559 a year – Dues \$310 a month (Condo Townhome)

2. Price \$359,000 – Taxes \$2,986 a year – Dues \$282 a month (Condo Townhome)

3. Price \$365,000 – Taxes \$2,064 a year – Dues \$239 a month (Condo Townhome)

4. Price \$375,000 – Taxes \$2,460 a year – Dues \$75 a month (SFR Townhome)

1. Payment \$1,550 + \$130 taxes + \$310 dues = Total Payment of \$1,990

2. Payment of \$,1765 + \$250 taxes + 280 dues = Total Payment of \$2,295

3. Payment of \$1,800 + \$170 taxes + \$240 dues = Total Payment of \$2,210

4. Payment of \$1,850 + \$205 taxes + \$75 dues = Total Payment of \$2,130

The homes in price order do not follow suit with regard to monthly payment order. The second lowest price has the highest monthly payment.

If the lender qualified you at a purchase price of \$350,000 with 20% down at 6.25% using \$200 as estimated dues and \$200 as estimated taxes, that would translate into qualifying you at a payment of \$2,125. Using the real life examples above, you would actually qualify better for the townhome priced at \$375,000 than the one priced at \$359,000, even though the lender said your max affordability was \$350,000.

When you and your agent walk off with a lender letter at \$350,000 and buy a townhome or condo at \$350,000, but the lender used \$200 a month for taxes and the real taxes are \$300 a month, and the lender used \$200 for monthly dues, but the real dues are \$325…the sale can fail on financing issues. Many owners and agents get very angry when the financing fails, but it really falls upon the agent to know the estimate of taxes and dues used by the lender, so they can adjust on a case by case basis before submitting an offer.

Moral of the story is, when a lender hands you a letter saying “you qualify at a purchase price of \$350,000”, make sure you know the interest rate, downpayment, taxes and ins./hoa dues the lender used to come up with that number. Then you can adjust, if you are liking a townhome with dues of \$425 a month!

We all know that one complex in Bellevue that has high dues and more “Sale Fail Releases” than any other complex in the Seattle area. Now you know why that is happening.

# Queen Anne Condos

Isn’t that photo Awesome! I just got an email announcing the Broker’s Open on Tuesday, September 19th from 12 to 2, but I have an appointment here on the Eastside at 1:30.

First Public Open will be September 23rd and September 24th from 11 a.m. to 6 p.m. An amazing array of styles from studios to townhomes and amazing array of prices to go with.

[photopress:Queen_Anne_HS.jpg,full,alignleft]

More info at www.queenannehigh.com Very cool site. You can visit each floor and scroll around the different units and floor plans. The studios start in the “low” \$300,000s. They say “townhomes” start in the mid \$700,000s. Not sure how you fit a townhome into a High School. Lots of floor plans and prices in between. I think there are 139 units altogether on five floors, plus a furnished rooftop deck with amazing views.

One of only 37 buildings in Seattle on the National Register of Historic Places. Should be worth the trip! I’ll have to catch it at one of the Public Opens.

Queen Anne High School was built in 1909 and the historic photos on the site are well worth visiting. This is a public service announcement, and not an advertisement of a Coldwell Banker listing 🙂