Clark County WA Real Estate Blog

Before starting your home search, it’s a good idea to sit down with a Mortgage Officer and find out how much home you can really afford. When you meet with them, you will need:

• Home addresses for the past two years
• Your social security card
• Employment history for the last two years, including pay stubs
• If self employed, two years of tax returns
• List of all assets, including checking accounts, savings, investments
• List of other assets, including bonds, stocks, life insurance, retirement funds, jewelry, and automobiles
• List of all your debts, credit card balances, auto loans, child care, and a list of your monthly payments
• List of what real estate you own, including address, market value, outstanding balances, mortgage payments, taxes, insurance, and any rental income.

With all this information, your Mortgage Broker will determine how much home you can afford and generate a pre approval letter for your Real Estate Agent. With that in hand, when you do make an offer, it’s much stronger with a Pre Approval letter from your lender. It also reduces a lot of the stress involved in the financing of your new home. Now that you have a financial starting point, you are ready to call me and begin the search for your dream home.

April 15th is fast approaching, and with it comes confusion for many homeowners. For example:

• Is mortgage interest and property taxes deductible on your personal taxes? Yes, the mortgage interest on a second home which you use as a residence for some portion of the taxable year, is generally deductible, as are Real Estate taxes. Deductible real estate taxes include any state and local taxes you paid.
• Is interest on a Home Equity Line of Credit Loan tax deductible? Yes, you may deduct home equity debt interest if you secure the debt with your home, and pay the interest in that tax year.
• Can I deduct points paid on a mortgage? Yes, you will need to divide the points by the number of payments over the term of the loan and deduct points for a year according to the number of payments made in the year.
• If you sell your primary residence, are you responsible for capital gains? Yes, when you sell your primary residence, you can make up to $250,000 in profit if you’re a single owner, or $500,000 if you’re married, and not owe any capital gains taxes. If the home you sold is a second residence, however, you may be responsible for capital gains.
• Can I deduct energy efficient home improvements I made during the year? Yes, you can, if the improvements improve energy efficiency, and you use products and improvements that follow International Energy Conservation Code, or IECC, standards. Typical improvements that qualify are attic fans, insulation, new windows, window film, exterior doors, energy efficient hot water heaters, and high efficiency airconditioners, heating systems, and heat pumps.

As you can see, there are many real estate related deductions you may use to reduce your overall tax rate. That should take the sting out of tax day, April 15th.

When you list or sell a home with me, I make a donation to the John L Scott Foundation. The foundation was named after the founder of the company, and is dedicated to helping support children’s healthcare needs. In 2006 the foundation donated over $10,000,000 for more that 22 children’s healthcare facilities. These donations support uncompensated care, medical equipment, and family housing during medical treatment.

Some of the Washington hospitals who have benefited from the John L Scott Foundation include Central Washington Hospital, Children’s Hospital and Regional Medical Center-Seattle, Children’s Village-Yakima, Deaconess Medical Center-Spokane, Harrrison Hospital-Silverdale, Mary Bridge Children’s Hospital-Tacoma, and others.

In commemoration of John L Scott’s 75th anniversary, the Foundation also committed to several special projects, the Ronald McDonald House Teen Room, and Seattle Children’s Hospital and Regional Medical Center Play Yard.

The Ronald McDonald House was in need of a space for teens to hang out. As you can imagine, battling a serious illness is difficult on the entire family, but especially so for teens.  Thanks to the Foundation, there is now a game room complete with furniture, pool tables, video games, and more.

Seattle Children’s Hospital was considering a play area for children, and everyone worked together to develop a ‘vacation play yard’, with faux sandy beach, sandcastles, boats, basketball court, park benches, and more. This ‘vacation’ helps children feel as if they are on holiday, rather than focusing on their illness. Thanks to John L Scott agents and other donors, this project was a great success.

When you purchase a home using a John L Scott agent,  you also help comfort and support children in area hospitals and health care facilities. What a great feeling!

Mold and mildew are present in our environment, and occur naturally. When the amount of mold in our homes exceeds what is normal, we tend to take notice.

If your inspector finds mold, you don’t have to panic.
Mold needs moisture to grow, and if you’ve discovered a mold problem, the first step is to find the moisture source. The key is removing the source of moisture, repairing the damage, and then drying out repaired areas quickly.  If the mold is restricted to less that 10 square feet in area, removal and repairs can usually be done without consulting professional mold remediation experts. In most cases, it can be repaired by the seller, before closing, using the following procedures:

Removing Mold
For starters, when working in an area that contains mold, make sure to wear at least an N95 dust mask.

Experts recommend removing mold from small area (less than 10 sq ft) using soapy water and a sponge, with slow wiping motions. Avoid using spray bottles or aerosol cans as these can actually disperse mold spores and create cross contamination. Don’t try to kill mold, instead remove building materials which are contaminated with mold. For example, mold feeds on the paper surface of wall board. Remove the wall board and replace with mold resistant wall board.
If mold spores have gotten into wood or OSB, consider hiring a professional mold remediation expert to remove mold, ventillate the area, and seal up wood surfaces.

Preventing Mold after you move in
What can you do…

• Inspect your roof annually for leaks. Replace missing shingles or tiles. Check flashing installed between surfaces, including chimneys, vent stacks or dormers; they are often the most common sites for leaks.
• In colder climates, make sure you have plenty of attic insulation and ventilation. This can prevent the formation of ice dams which can cause water to back up under roof shingles.
• In any climate, attic ventilation is a must. This allows for warmer air to escape and better circulation.
• Inspect plumbed rooms, such as the kitchen, laundry room and bath for leaks or signs of leakage in water supply and waste lines.
• Make sure that shower walls and floor are structurally sound, and grout and joints are well sealed and in good condition.
• Inspect toilet water supply lines for leakage, as well as base of seat for gaps and leaks.
• Inspect central air-conditioning systems annually for proper operation, drainage and to ensure there is no microbial growth in the air-handler, pan or ductwork.
• Inspect crawl spaces to ensure adequate insulation, ventilation and drainage.

For more information on mold, I recommend Paul Davis Restoration.

The whole process starts with our initial meeting.
This is your chance to decide if you are comfortable working with me, and helps me to identify what your needs and wants are.

After our initial meeting, I recommend you visit a mortgage broker, and get pre-approved for a loan.
It can be very frustrating when you find the perfect home, and then have a snag with the financing. The whole process is much less stressful when you get pre-approved. If you don’t have a relationship with a mortgage broker, I can recommend someone on my team.

After our initial meeting, and pre-approval, we begin the home search process.
I’ll set you up with a property tracker account on Johnlscott.com. That way you can search for homes on Johnlscott.com and save your favorites ( I will be alerted when you have marked a house as your favorite). I’ll search the RMLS, find properties that might work for you, and email you links to these properties. If you find any of them interesting, and want to take a look inside, we’ll make an appointment to view them. Once we find the right home, we will start discussing the offer.

Pre-Offer Research
Once you have found your new home, I’ll do a reverse CMA, to determine an approximate fair market value. I’ll call the listing agent, and discuss the house, how much interest they have seen, and seller’s motivation for selling. This will all help form the basis for your initial offer.

The Offer
I will meet you at the office, and we will discuss how we want to structure your Purchase and Sale Agreement. With a reverse CMA in hand, and my research, we can also set our negotiating strategy. We will take as much time as necessary to go over the paperwork, so that you understand what you will be signing. There will be Contingencies in your P&S Agreement, to protect your interest in the transaction and in case there are any problems with the house.

Typical Contingencies in the Offer
Title Contingency– To make sure the title is clean, and without liens.
Contingent Upon Selling Home– In case you need to sell your home first.
Home Inspection Contingency-To make sure there are no major defects in the home.
Septic Inspection Contingency-To make sure there are no problems with the septic system.
Well Inspection Contingency-To make sure there are no problems with the well.
Financing Contingency– To make sure you get your earnest money back, if you cannot get financing.

Before leaving, I will request an earnest money check, usually 1% or less of the purchase price. I will hold this check until both you and the seller have mutual agreement .

The Negotiation Process
Once I have your offer in hand, I will present it to the seller, via the listing agent, along with my Reverse CMA (To support your offering price). The seller and their agent will then discuss your offer, and within three days, typically one of three things will happen:
The Seller accepts your offer as is.
If they accept your offer, we have mutual agreement, and your Purchase and Sale Agreement and earnest money check will go to the Escrow Company, and the sale moves forward.
The Seller submits a counter offer
Perhaps the seller has a different price in mind, or the removal of one of the contingencies? In this case, we will discuss the counter offer, and you have three options:
A). Accept the counter offer.
If you decide to accept the counter offer, we have mutual agreement, and your Purchase and Sale Agreement and earnest money check will go to the Escrow Company.
B). Submit a counter offer to seller.
If you decide to submit a counter offer to the seller, we will wait for the seller’s response.
C). Reject the counter offer.
If you reject the counter offer, the P&S Agreement is void.
The Seller rejects your offer.
If the seller rejects your offer or does not respond, the P&S Agreement is void.

The negotiation process will continue until there is mutual agreement, or one or both of the parties is not interested in negotiating, and rejects an offer or counter offer. If we don’t have mutual agreement, the P&S Agreement is void, and I will return your earnest money check to you, and we begin the home search again.

Mutual Agreement
Once we have mutual agreement, I submit the signed around Purchase & Sale Agreement to the Escrow Company, along with your earnest money check. We begin to address all the Contingencies in the P&S Agreement. Some of them are automatically waived.
Timelines
Title Contingency-The Title Company will initiate a Preliminary Title Search, within 3 days, to make sure seller has a clean and saleable title. This contingency is automatically waived within 5 days.

Contingent Upon Buyer Selling Home-You must list your home for sale within 5 days, and must sell your home within 45 days, or this contingency is automatically waived.
Home Inspection Contingency– I will make an appointment with an inspector of your choice within 3 days, to have the home inspected for defects. You pay for this. The same day as the inspection is performed, I will file an Inspection Notice, which will allow us to:
1) Terminate the P&S Agreement based upon the inspection.
2) Request that the seller make repairs.
3) Waive the Home Inspection Contingency.
This contingency will automatically waive after 10 days.

Septic Inspection Contingency– Seller will have the septic system inspected, and if necessary, pumped. This contingency will automatically waive after 10 days.

Well Inspection Contingency– You will have 10 days to have the well inspected .You pay for this. If your lender requires it, the Seller will have to provide a health certificate from Clark County Health Dept. This contingency will automatically waive after 10 days.

Financing Contingency– You will have 5 days to apply for a home loan, and 45 days to get loan approval. If you are unable to obtain a loan, the P&S Agreement is void, and your earnest money is returned to you.

We have mutual agreement, and all contingencies are waived.

The Escrow Process begins.
The Escrow Company is a neutral third party, which makes sure the title is clean, all the paperwork has been properly filled out, the funds are in place to complete the transaction, and the transaction has been legally recorded.

  The Home Buyer’s
Ten Commandments 

1.  Thou shall not… change jobs, become self employed or quit your job.
2. Thou shall not… buy a car, truck, or van (or you may be living in it!).
3. Thou shall not… use credit cards excessively, or pay late on accounts.
4. Thou shall not… buy furniture.
5. Thou shall not… change bank accounts.  
6. Thou shall not… co-sign for a loan for ANYONE. 
7. Thou shall not… make large cash deposits with out checking with the loan officer. 
8. Thou shall not… omit debts and liabilities from your loan application. 
9. Thou shall not… spend monies set aside for closing. 
10. Thou shall not…  originate any inquiries into your credit. 

Many homes built before 1978 have lead based paints. This topic usually comes up during the home inspection. Lead based paints are not usually a hazard, unless the paint has deteriorated, and is peeling, chipping, or cracking. 
So when is lead a hazard?
Lead can be a hazard to small children when it is present on windows and window sills. Small children are more susceptable to lead because their brains and central nervous systems are more sensitive to lead exposure.
How does lead effect children?
When small children are exposed to high levels of lead, they can suffer from:

• Damage to the brain and central nervous system
• Behavior and learning disabilities
• Slowed growth
• Hearing problems
• Headaches

How do you check your home for lead?
I recommend that you hire a certified professional inspector, who will inspect your home and identify whether or not your home contains lead,  and if so, what can be done to minimize exposure.

Temporary Solutions
If you  suspect that your home contains lead, and cannot afford to hire an inspector, you can take the following steps to minimize potential exposure:

• Clean floors, window frames, and sills using a general purpose cleaner mixed with water
• Thoroughly rinse sponges or mop heads after cleaning floors, window frames, and sills
• Wash children’s hands frequently
• Keep children from chewing on window sills or other painted surfaces
• Repaint deteriorated paint surfaces

These steps are all temporary, and I suggest that if your home tests positive for leaded paint, that you consider a more permanent solution, using a certified lead abatement contractor.  They may remove, seal, or enclose the leaded paints, and will know how to do this work safely-without exposing you or your family to lead dust.

Ocasionally, after an inspection, the topic of radon gas will come up.
Here is a brief overview:

Where does Radon come from?
Radon comes from rock and soil containing radium and uranium-which were deposited in WA and OR during the last ice age. 

How can I tell if I have Radon?
Radon is an odorless, colorless, tasteless radioactive gas that is released into the crawlspace or basement of homes. When inhaled, over time, radon can cause lung cancer. In Clark County,  it is not uncommon for homes to test positive for radon gas. The only way to be sure, is to buy a radon gas test (at most hardware and home improvement stores) and follow the directions on the kit.

What if your home tests positive?
You may want to contact an expert in Radon mitigation. There are many methods to reduce radon gas levels, but one of the more common methods is called ASD (Active Soil Depressurization). Using suction pipes and an inline fan, radon is intercepted and vented outside. Installation of a residential ASD system typically costs $800-$3,000.

Where can you find more info on Radon Gas?
There is a great deal of information about radon at the US Environment Protection Agency.  You can also contact a local Environmental Company, Ecotech to find out how they can help reduce Radon levels in your home.

Some background:
Anytime a home is listed with John L Scott, it comes with a complementary AHS home warranty during the listing period. When I write offers for buyers, I usually try to include an AHS warranty, paid by the seller, for my buyers.

What’s so great about a home warranty?
Peace of mind. After going through the process of buying a new home, the last thing you need is a dishwasher breaking down the week you move in. What are the chances of that happening? Pretty good, actually. In the first year after you move in, there is a 68% chance that something will break down and need repair, and the average homeowner spends $900 for that repair.

How does it work?
After the home closes, during the first year, whenever a covered system or appliance breaks down, you call for service. You pay a $55.00 service fee, and the rest is covered by AHS. Sometimes, I even have coupons, and that service fee is waived. The repairman will repair the appliance if possible. If it can’t be repaired, it will be replaced.

What’s Covered?
Plumbing leaks in water lines and drain lines
Mainline drain and sewer stoppages
Water heater, Instant Hot Water Dispensers
Electrical Systems, Telephone Wiring
Dishwashers, Garbage Disposals, Microwaves, Ranges, and Trash Compactors
Central Vac Systems, Doorbells, Garage Door Openers, and Ceiling Fans

Optional Upgrades Available
Air Conditioning, Swimming Pool and or Spa, Washer/Drier, Refridgerator, Septic System, or Well Pump

So as you can see, a home warranty can really give you peace of mind.
If you own rental property, it’s even better. What landlord wants to get called on a Sunday morning with a call from a tenant complaining about the kitchen sink being plugged?

Agency refers to Agency Law. 
That means that when I work with a buyer or seller, there is an agency relationship established, and I have certain duties or responsibilities due to this relationship.
As a buyer’s agent…
I have a duty to exercise reasonable skill and care,  deal fairly and in good faith, to present all written offers, to disclose all existing facts,  to maintain confidentiality,  and to account for all money and property received.

As a seller’s agent…
I have a duty to be loyal to the seller, to disclose any conflicts of interest, to refrain from giving advise outside my areas of expertise, to maintain confidentiality, and to make a good faith effort to find buyers for their property.

An agency relationship continues until a property is sold or bought or a listing agreement expires. Even then, I still have an obligation to maintain confidentiality.

That’s it in a nutshell.