There are many Sequim real estate traps for the unwary.  I’ve been writing about traps for the unwary buyer for over a decade.  As a real estate lawyer I saw so many good people get caught by Sequim real estate traps for the unwary that I have made it a point in my writings to help buyers avoid those nightmares.  Believe me, life will go so much smoother when you don’t get caught unexpectedly in a stressful conflict with a seller or a neighbor.  One of the most profound secrets to a successful life is simply avoiding major mistakes.  And so it is when you are buying your Sequim retirement home.  Avoid major Sequim real estate traps for the unwary, and your transition and retirement will be a much happier experience.

Sequim Real Estate Traps for the Unwary

Traps are dangers we don’t recognize initially, or we misjudge what appears to be something it is not.  Perhaps these images will make the point better than giving 100 specific real estate examples.  Which line in this image is longer–the upper line or the lower line?

You are correct if you said they are the same length.  Sure looks like the upper line is longer, doesn’t it?  It really is true that things are not always as they seem.  That is true in real estate, too.  If you’ve spent time looking at listings online in our Sequim MLS, and if you arrived in Sequim to look at some of those homes, you know that what you thought you were going to see was not necessarily what you did see.  Listings are often not real good representations of a home for sale.  Buyers tell me that.  Buyers tell me the photos often don’t match what they see when they view a home.  The water views are often not at all as represented in photos.

Sequim Real Estate Traps for the Unwary – The Misperceived

Collecting information from a seller, from the title company and the auditor’s office, and from the county and state agencies for water and septic issues can be a challenge.  None of those parties are watching out for your best interests.  Hopefully your buyer’s agent is watching out for your interests, but again that depends on his or her experience level.  There are traps everywhere for a buyer.  Ignorance of a danger is a trap itself.

Sequim Real Estate Traps for the Unwary – Subtle Chicanery

Wouldn’t you say the inner narrow rectangle is lighter in color on one end and darker at the other end?  Sure looks like it.  At least that’s what our eyes and brain tells us.  But I copied that section and pasted it here.  It’s the same color all the way across.

Negotiating the price and dealing with counteroffers and amendments is full of Sequim traps for the unwary.  You can’t be too careful these days, and when your shopping for a home in Sequim, I hope you’ll find the articles on this blog helpful in avoiding the traps.  You’ll be a lot happier if you do avoid Sequim real estate traps for the unwary.

Possibly Related Posts:

• Avoid Boundary Line Disputes When You Buy Property
• Real Estate and Peace in the Neighborhood
• What Should I Know About Buying My Mother’s House?
• Sequim and Port Angeles Traps for the Unwary
• Real Estate, Estate Planning, and Asset Protection

Sequim boundary line disputes between neighbors are far too common. Here is a short audio by a Sequim real estate attorney (ret.) on boundary line issues and avoiding them when you buy property in Sequim or Port Angeles.

This is another in the series Traps for the Unwary by Chuck Marunde, J.D.

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• Real Estate and Peace in the Neighborhood
• What Should I Know About Buying My Mother’s House?
• Sequim and Port Angeles Traps for the Unwary
• Real Estate, Estate Planning, and Asset Protection

Real Estate and Peace in the Neighborhood was originally published in a real estate magazine just before the Holidays in 2007 two years ago.  With all of the chaos and stress across the country and with the theme of Thanksgiving being with families and friends and being thankful, and with the theme of peace during the Christmas Holidays, it seemed appropriate to republish this article, although here I’ve decided to create an audio version for your listening pleasure.

Keeping the Peace in the Neighborhood:

Peace in the Neighborhood

My your Holidays be blessed with peace in the neighborhood.

Possibly Related Posts:

• Sequim Real Estate Traps for the Unwary
• Avoid Boundary Line Disputes When You Buy Property
• What Should I Know About Buying My Mother’s House?
• Sequim and Port Angeles Traps for the Unwary
• Real Estate, Estate Planning, and Asset Protection

Question From John.   I’m seriously thinking about buying my mother’s house.   She has almost paid off her mortgage, doesn’t need the square footage and acreage of this house, and it’s an ideal house for me and my family.   She is willing to take monthly payments from us and that will save us having to try to qualify for a loan.   But what kinds of things do I not know that could mess me up?

Answer.   John, I think you are wise asking this question.   It’s the questions we don’t ask that can create nightmares later, and for many people a lot of stress and writing blank checks to lawyers.   There are a few things I would say you want to think about before you close the deal.

First, if I understand, your mother would sell you the house and move into her own small place or apartment.   If that is not the case, and she is staying in the house, you need to talk about the relationship issues of living with a parent.   That can get complicated very fast.

Second, if she is carrying the contract, I recommend that you do everything just as formally as you would as though you were total strangers.   In fact, the closer you are, the more important it is that you take care of all the legal issues and the contracts very professionally and above board.   Having a dispute later with a family member or a friend can destroy the relationship for the rest of your lives.   That would be a disaster.

Third, use a deed of trust and promissory note and a third-party escrow company to collect your money and disburse it to your mother.   This will also help alleviate any disputes over how much you’ve paid, how much has been amortized and what portion has been applied to interest and what portion to principal.   This is one of the major problem areas, so don’t pass on this idea.

Fourth, be sure you have included all the details of your transaction in your final contract.   In other words, if you are paying your mother over 30 years just like a bank loan, great, but if you are going to cash her out in five years, be sure to come to grips with that.   Five years goes by so fast, and while most people think a balloon payment is no big deal, I could tell you stories of how many people could not make their balloon payment.   As someone once said, “Balloon payments are for clowns.”

Fifth, I recommend you have a provision in your agreement that if you sell your home, your buyer must pay your mother off entirely.   Don’t put your mother in the position of being forced to be in a contractual relationship with someone other than you, someone she does not know and doesn’t trust.

Sixth, and lastly, be sure you pay your mother the maket rate of interest, which as of this writing is 4.5% on a fixed 30-year loan.   That could increase quickly, but the point is if your mother gets paid less than the fair market interest rate, the IRS will want to tax her on the difference, which is a gift tax.   While she also can make an annual gift to her children, the whole thing can get complicated and messy for your mother.

Good luck, and be sure to take care of your mother above your own interests.

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Real Estate Traps for the Unwary
By Real Estate Attorney Chuck E. Marunde, J.D. (Ret.)
Port Angeles, Washington, and Sunny Sequim, Washington

Trap for the Unwary #1: The Trespassing Fence
Trap for the Unwary #2: The Trespassing Driveway
Trap for the Unwary #3: Timber Trespass
Trap for the Unwary #4: The Good Samaritan
Trap for the Unwary #5: Encroaching Branches
Trap the the Unwary #6: Road Maintenance
Trap for the Unwary #7: View Easements
Trap for the Unwary #8: Speed Bumps
Trap for the Unwary #9: Private Well on Vacant Land
Trap for the Unwary #10: Shared Wells
Trap for the Unwary #11: Well Circles
Trap for the Unwary #12: Buying Vacant Land

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Traps for the Unwary Millionaire

Over the the past 25 years, I’ve had many incredible clients as an attorney and Realtor, and some of those clients became millionaires buying, selling, and developing real estate. Several were home builders and are now worth ten to fifty million dollars net. A few lost everything once and earned it all back. I admire successful people. All of these people had some things in common: an intense drive to succeed, tenacity and perseverance, creativity, and each of them took massive action to get where they are now.

There is one other thing most of them also have in common. Think of it as another Trap for the Unwary. Eight out of ten have done almost no estate planning to avoid probate and taxes, and they have done virtually nothing to shield their personal wealth from business liabilities. In this litigation fertile culture we live in, deep pockets are great targets for potential plaintiffs and their attorneys. A large portfolio of real estate is the ideal treasure chest, since it cannot quickly be liquidated and converted to a safe haven.

May I suggest a wise course of action? First, find a professional who really understands business entities, business development and business succession, estate planning, trust planning, capital gains taxes, insurance devices, securities, real estate, and asset protection. Do not assume your average financial adviser or average attorney understands these subjects in depth. Most do not. I strongly recommend you do not let an inexperienced planner experiment with your life’s work. I could talk for hours on this subject, but I won’t.

Second, get a good plan and implement that plan. And find a professional who is both competent and trustworthy. When you find that person, keep them for life. You will make more money even after paying their fees than you ever could taking short cuts.

To read some of my articles, see one of my sites at: http://freerealestatelaw.com/assetprotection/ and
for a review of the types of trusts that can revolutionize your planning, take a look at: http://freerealestatelaw.com/assetprotection/TypesofTrusts.html and
for a discussion of asset protection, see: http://freerealestatelaw.com/assetprotection/assetprotect.html.

Best regards,

Possibly Related Posts:

• Sequim Real Estate Traps for the Unwary
• Avoid Boundary Line Disputes When You Buy Property
• Real Estate and Peace in the Neighborhood
• What Should I Know About Buying My Mother’s House?
• Sequim and Port Angeles Traps for the Unwary