Looking at a Sequim foreclosure?  Thinking about making an offer on a Sequim foreclosure?  Think again, unless you have months to fool around and are prepared for a lot of nonsense from the bank and their asset manager.  In some markets, like Las Vegas and Phoenix, the foreclosure market is much more organized, and asset managers have been forced to get a quick education on how to facilitate sales.  Not so in Sequim.

Sequim Foreclosure Disasters

Here we are almost in April.  Last November I wrote an offer for a client on a Sequim foreclosure now owned by Union Bank.  What a nightmare of four months that became for my client.  What could go wrong you ask?  I’ll give you with the short version of a buyer who tried to buy a Sequim foreclosure.

Sequim Foreclosure Negotiating Nightmare

The subject property (a Sequim foreclosure) was listed, and my client wanted to make a full price offer ($179,000), but the listing was terminated within a week of being posted.  We were told that the asset manager wanted to get the properties formally appraised before they would be re-listed.  I had a good idea of what the fair market value of this home was, and my guess was about $200,000, plus or minus.  My client asked me to write an offer at $185,000 for this unfinished home, and we submitted that offer.  It was rejected with no counteroffer.  We were told the asset manager wanted to get an independent appraisal.  That should take about 3 days, but it took weeks.  We were then told the bank wanted to hire a contractor and finish the home even though my client was willing to do that.  My clients asked me, “what do we have to do to buy this home?”  I could not get an answer from the listing agent who could not get an answer from the asset manager who probably could not get an answer from Union Bank.  We could get no counteroffer at any price.  This went on for weeks.

After harassing the nice listing agent for weeks about this Sequim foreclosure, we finally got the asset manager to make a counteroffer, which they did at $235,000.  I asked the listing agent how the asset manager came up with that number.  The answer was they picked a number they thought would be much higher than any appraisal.  (If I were texting, I would type, “OMG!”)  At this point I began to wonder if there was any adult supervision at Union Bank.  Read the rest of this entry »

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What about private septic systems and private wells?  A client recently asked me a very good question that comes up regularly for buyers from outside the Sequim area.

Question:  “How much trouble is it to own properties served by private septic system and wells?  We’re used to having city water and sewer and would, of course, prefer to continue with that. However, my husband really wants a larger lot and most of those are outside the city utility service area.”

Answer:  Private septic systems have both advantages and disadvantages compared to public sewer systems.  I have a private septic system myself and have had in several other homes.  I also attend private septic system inspections regularly for my clients, and I’ve reviewed many septic reports and interviewed septic system designers and inspectors.  The simple answer is that a private septic system is probably just as good as a public sewer system.  A public system requires that you pay the city or the PUD (public utility district) a monthly fee, and that fee has a tendency to keep increasing.  You don’t pay yourself anything to use your own septic system.  But there’s more to consider.

Private Septic Systems Cost

If you’re building a home, installing a septic system can cost you anywhere from a few thousand to $18,000 for an expensive mound system.  But if you amortize that over the life of your home (20 to 40 years), it’s reasonable when compared to paying to be on a public system.  Now here’s an interesting scenario.  If you build a home in the city limits of Sequim, you will pay roughly $20,000 to $24,000 for city permits, which includes your sewer connection fee.  That’s extremely expensive.  In that case, building a home with a private septic would be less expensive, and building permits are a fraction of that in the county outside the Sequim city limits.  But if you buy an existing home within the city of Sequim that has a private septic, you basically get that septic system free, because it adds virtually no appraisal value to the property.  It probably should, but it doesn’t.  That’s a little like buying a home on 3 acres or 5 acres.  The price does not increase for the additional 2 acres by much at all.

If you own your own septic, you will be responsible for the maintenance, and there is now a county requirement that you file an annual certification.  I wrote an earlier article about how that works at Septic Regulations.  And here’s another article about septic inspections when you purchase a home in the Sequim or Port Angeles area.

Private Septic Systems Cost

Conclusion:  The new private septic systems are designed and built to far exceed minimum standards, and can last for 40 plus years.  The actual maintenance is almost non-existent.  I would suggest that a private septic system is equivalent to being on a public septic system, all other things balancing out.  In other words, there is no great advantage to one over the other.  [There are some exceptions, but that's another article.]

You also ask about private wells.  I prefer a private well to a public water system.  You are in total control of your own water, the purity of your water, and not subject to increasing water fees.  A health expert once told me, “Don’t drink public water without clorination, but whatever you do don’t drink water with chlorine.”  Public health standards can actually be dangerous to your health.  (Consider the dangerous drugs the FDA approves.)  A private well has almost no maintenance, because pumps last for so many years, sometimes decades.  And your electric bill to run a pump is almost nothing.  I’ve written several articles about private wells and here are two:  Are Private Wells Safe, Private Well Inspections.

Private Septic Systems Pros

My recommendation is that you find the ideal home and the ideal location with the acreage you desire, and whether the property is served by a private well and a septic system or a public utility system is probably of little concern when you examine all the advantages and disadvantages.  Private septic systems and private wells are perfectly fine in the Sequim and Port Angeles area.

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This articles answers the question, “How to make an offer on a home?” on the specific issue of price.  There are several scenarios that can play out, so I’ll address the three most common scenarios, and this will help you plan your strategy even before you make an offer.

How to Make an Offer on a Home First

Scenario 1 on How to Make an Offer on a Home:  You have your buyer’s agent write an offer on a Sequim home.  Your buyer’s agent will help you put together the right documents and addendums for you.  There are about 100 documents in the State of Washington for buying and selling real estate, so you’ve got to get it right.  Once you have the right documents, you’ll submit the offer.  Here’s the normal procedure.  You give the seller X days to accept, reject, or counter your offer.  Once you have the offer back, you respond appropriately.  As I’ve written in other articles, negotiating effectively takes more than a decade of full time experience from the school of hard knocks.  Trust me, you do not want an inexperienced agent negotiating a half million dollar transaction with your money.  This is not a garage sale. Barring any unusual circumstances, once you’ve reached mutual acceptance on the price and terms, the due diligence and inspection period kicks in.  [For more on handling the inspections and completing your due diligence prior to closing, see Home Inspections.]

How to Make an Offer on a Home with Competition

Scenario 2 on How to Make an Offer on a Home:  How to make make an offer on a home is not a small question.  But sometimes events require a different strategy.  Suppose that you are not the only one making an offer on a home?  Believe it or not, a home can be on the market for months with no activity, and suddenly (even in a recession) there will be two or three offers on the same day or within a couple of days.  In an area like Sequim where retirees tend to think similarly (and want similar floor plans), this happens far more often than you might think at the peak of the buying season.  In fact, it just happened this week, so this is no exaggeration.  In this scenario, the competition among buyers changes the negotiating strategy.  How the strategy changes will depend on a number of specific variables, but beware that your buyer’s agent needs to know exactly what to do and when to do it.  This is not a time for your agent to cut his teeth with your money and your dream home.  [You can imagine why dual agency is such a conflict of interest.]

Scenario 3 on How to Make an Offer on a Home:  How to make an offer on a home depends on another important variable–who the seller is.  If the seller is an individual, there’s a standard practice and negotiating strategy that is most effective for that particular home and it’s history.  If the seller is a bank and the listing price requires a short sale, there is another standard practice and procedure and another negotiating strategy.  If the seller is a bank and the property was foreclosed, you’re making an offer on an REO and the documentation and the negotiating strategy are different than either of the first two.

How to Make an Offer on a Home in Sequim

There is a lot to effectively searching for and finding the ideal retirement home.  You know this already from the many hours you’ve been spending online looking for your ideal Sequim home.  Once you’ve filtered that list and viewed many homes and narrowed that list down to “the one,” the strategy you implement to make an offer and negotiate the best possible price and terms is no small matter.  You get one opportunity to do this right when you move to Sequim.  Make sure that you and your agent work together to thoroughly answer the questions about how to make an offer on a home.

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Looking at Sequim homes is a lot of fun, and that’s what I did today with clients.  We also looked at some homes in Port Angeles and Port Townsend recently to compare floor plans and prices.  We do have some wonderful homes for sale here, and we have an amazing variety of architectural styles.  Sequim homes also have quite a variety of water views and mountain views and valley views.

Looking at Sequim Homes for Fun

Sequim Homes – Variety is Good

It is rare that buyers will find the perfect home.  There probably is no such thing as the “perfect home.”  Rarely will you find a home that includes every item on your checklist, but you will find homes that have perhaps 9 out of 10 of your most important features.  That is why I often refer to the “ideal home.”  Recently my clients and I have viewed some incredible homes.  One was incredible in terms of quality and a wonderful floor plan.  It was obviously a bachelor pad, but what a beautiful home it is.  On the downside, it was not the ideal lot and location, and it was priced very high.  Another home was nearly perfect, but the master bedroom was on the second floor.  The vast majority of retirees prefer the master bedroom on the main floor.  Another home has a stunning water view, but the driveway was very narrow and steep.  And then there was this gorgeous log home in the photo above.  Very beautiful, but there was highway noise and the lot was not as good as some other properties.

Sequim Homes and Sequim Prices

Of course, you can’t talk about Sequim homes if your shopping without comparing prices.  If you look at a lot of homes online and then in person, you will get very good at recognizing when a home is overpriced or reasonably priced.  My clients have gotten very good at recognizing value, and in some cases, I think they understand the fair market value even better than the owners or the listing agents.  Today was another great day in Paradise.  I enjoy looking at Sequim homes with clients. 

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Are Sequim homes for sale overpriced?  Some are overpriced, but many are extraordinary deals.  I spent a couple of days showing out of town clients homes, and we had a great time.  Looking at homes is always fun for me, and helping clients find the perfect home is exciting.  Three of the homes on our list recently sold.  Two of the remaining homes are at the top of the list, and these two are reasonably priced,  but three of the other Sequim homes for sale are grossly overpriced . . . by any standard.

Sequim Homes for Sale Overpriced

One overpriced home is about 2,000 square feet, was built about 30 years ago, has been remodeled to some degree, but many things are old and original.  There are some add-ons.  Closet doors are the cheapest and get hung up.  Some carpet is old.  There are 2.5 acres, but nothing special.  In my opinion, this home should be listed for sale at about $285,000.  How much is it listed for sale in the MLS?  $440,000.   Another home we looked at is listed at about $475,000, but both my clients and I strongly felt it should be about $350,000, or less.  Thesse homes are dramatic examples of Sequim homes for sale that are grossly overpriced.  There aren’t many like these that are so overpriced, but these are in my humble opinion.

Sequim Homes for Sale Extraordinary Deals

On the other hand, we looked at two homes that are extraordinary homes, and are reasonably priced.  Imagine a beautiful home in a private setting on several acres.  Add a water view.  Add peace and quiet.  Add custom quality construction.  Add all the features you want in a retirement home.

Sequim Homes for Sale – How to Price Your Home

When your looking at Sequim homes for sale in the MLS online, you can do a lot of valuable comparing, but it won’t be complete.  When you come to Sequim to look at your small list of filtered homes, you will complete your comparisons, and you will begin to have a sense of what homes are reasonably priced and which ones are overpriced, and which homes are grossly overpriced.  You don’t have to be a Realtor, and you don’t have to be an appraiser.  Look at enough Sequim homes for sale and you’ll know.

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Foreclosure help is available, although in the Sequim area we have very few foreclosures compared to everywhere else around the country.  A lawsuit by Washington State Attorney General Rob McKenna clearly lays out the arguments for consumers, and if you’d like to see what those arguments are in the actual complaint, go to Foreclosure Help.  Consumers definitely got ripped off by the mortgage and banking industry, and while a recent $25 billion settlement with the banks is a good thing, millions of Americans will never be made whole.

Foreclosure Help in Washington

Foreclosure Help

Unfortunately, for the vast majority of homeowners who had their homes foreclosed, or who are going through a foreclosure right now, foreclosure help comes too little too late.  I don’t know anyone who has received relief and who has been made whole from a wrongful foreclosure, nor do I know anyone who knows anyone who was made whole.  The hullabaloo is probably more of a politician’s heyday to get attention than it is really to help individuals.  If you click on the image above, you’ll be taken to the Washington Attorney General’s website where you’ll find more information on possible help and resolutions.

Foreclosure Help – More Articles on this Blog

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