"Agents:
If you have a listing where the property is hooked up to septic, but sewer is now available then the following rule applies for FHA/Va financing: The connection must be made to a public water/sewer system or a community water/sewer system, if connection costs to the public or community system are reasonable. Reasonable is defined by 3% or less of the estimated value of the property. If the connection costs exceed 3%, then the existing on-site systems will be acceptable provided they are functioning properly and meet the requirements of the local health department.
On Coventional loans, there is no requirement to hook up to the community sewer system."
Thanks to a contact of ours at Golf Savings Bank for sending out this notice.
We received this message regarding properties on septic being REQUIRED to connect to local sewer systems, if a system is available. There are certain areas of King, Snohomish, and Pierce County where this may affect your sale. I can think offhand of areas in or near Kirkland's Rose Hill, Bridle Trails, and Juanita neighborhoods that would likely fit this description and requirement - see notes below for more info.
So, why is this requirement a big deal? A few reasons...
1. Hooking up to sewer usually means higher fees for the homeowner because there is a connection fee.
2. Besides the initial fee, King County has a 15 year assessment worth a few thousand bucks for any new home connecting to the Metro sewer system. It would need to be researched to confirm if the 15 year fee applies, but I'm guessing it would be. I'll check with Michelle Britt the gal that works at King County in this department and report back later with a confirmation.
3. Sewage fees typically run much higher in cost than septic, plus they are ongoing monthly utility fees while septic has most of its costs associated with occasional inspections, pumping, and repairs. If you're not a heavy water user, and especially if you have a gravity system rather than a pump system in your septic design then it's pretty low cost overall.
Other considerations...
1. If you're a seller who is house rich and cash poor - this could mean anyone in financial hardship, going through a costly divorce, or elderly on fixed incomes, you may not have the money to make the connection.
2. That may mean that a buyer has to take on this risk in a transaction which may be unlikely unless they feel they're getting a "deal" on the home itself (ie, lower sale price).
3. If you need to try and sell quickly because of a job change (or loss), or you didn't know about this in advance of trying to sell and move out of area, it could derail or complicate your plans because of the time needed to get it completed.
When you think about the fact that home sales aren't always done because of good circumstances, having this be a requirement when selling can make it a hardship on some. The fact that FHA is a strong percentage of the loans being financed today means it will also affect some sales negatively. Anyone with less than 20% down is currently getting directed toward FHA loans, and VA loans are picking up with more and more people going to, and coming back from, military action overseas.
Finally, when you think of 3% as property value - consider the housing prices we have here in the Seattle/Bellevue metro area. Just in those Kirkland neighborhoods alone these are the sales stats on 184 properties that met septic and sewer available notation in the NWMLS since January 2007 using the following parameters:
Property Type Residential City Kirkland
Statuses Active, Contingent, Pending BU Requested (2/21/2009 or after) , Pending Inspection (2/21/2009 or after) , Pending (2/21/2009 or after) , Sold (1/1/2007 or after)
Sewer Sewer Available OR Septic
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If 3% is the "reasonable" test for requiring the change, then the cost be upwards of $20,000 based on the average sale price and a seller would be required to pay for it. Ouch!
If you are a seller who will be impacted by this lending requirement, then be sure to discuss it with your agent and do your homework in advance of going on market. FHA max JUMBO loan guidelines have $567,500 as their top loan value so if you're priced under $709,375 this could apply to you.
I'm working on a couple of newer contracts for some clients who are buying new construction within the City of Seattle limits. Each of these properties/clients is reaping the benefit of a credit program that Golf Savings has been extending to several builder projects where their parent company, Sterling Savings Bank, was the originator of the construction loans.
If you're looking for a new construction home in Seattle, it would be worth finding out if this builder has access to this program. It had been running since March with little activity, but the summer months have ramped up sales since June so the program was only recently extended for sales closing with a deadline of September 30th. We've been able to include this credit along with some other builder concessions and it's making for some pretty sweet deals for our Team Reba clients. We've been working with Matt Johnson at Golf Savings so it might be worth contacting him to find out how many builders this program covers.
So, what are you waiting for!?!?
The other day we met with a new client who's just about ready to go on market with their condo unit on Petrovitsky just past 140th. They're finishing up some final work around the unit so we anticipate it will be on by end of the month or Labor Day weekend.
Unit is a top floor with vaulted ceilings in the living room, great room concept from the kitchen. All appliances are staying, including the 1-yr old washer/dryer combo. Storage unit and assigned parking, along with a cabana/pool, etc.
If you're looking for a condo under $200k in the Renton area, this may be for you. Robin will be our lead on this one, but you can contact any of us at Team Reba if you're interested in learning more about the property.
We are a growing team of real estate professionals called Team Reba, working under RE/MAX Metro Eastside in the Seattle/Bellevue metro area. At this time we are looking for a licensed assistant to work with us to maintain and improve client satisfaction, provide client updates, marketing and communication. We use a multitude of social media tools but we also utilize tried and tested marketing concepts. Client satisfaction is focus #1 for us.
There are 3 licensees in the team currently and we already work with a transaction coordinator out of our RE/MAX office on a per transaction basis so we don't need someone to open title and escrow for us. Our business covers both residential and commercial/investment client needs in a 3-county area (King, Snohomish, Pierce). We engage in traditional residential transactions as well as working a lot of short sale and are building our REO business. Our commercial work has been heavy in MFH, mixed use, redevelopment and some leasing work.
Skills needed for the job are a positive outlook, ability to work in a fast-paced busy environment with multiple priority projects, good communication skills (verbal, written, phone), creativity, fast learner and a sense of humor.
If you are afraid of writing, don't like calling people unless you have 100% of all the details, or are more worried about how you look than getting the job done... do me and you a favor and don't contact us.
If, however, you want a challenging and rewarding environment where your work will make the difference in your income potential, please send me your resume.
Position is based in a home office environment with pets. If you have allergies to cats or dogs, then this job won't work for you. If you love animals, we can make it work. Heck, if you have a dog you want to bring to work with you, we're cool with that too. Office hours for the position typically are starting at 9 or 10am, ending around 5pm - if you're right for the job, we can discuss it.
So, my partner, Michael, and I took a few days this week to go and spend time at Lake Chelan with a friend whose family has had a "cabin" here for many decades. We were touring around the lake tonight and last night noticiing that there are a larger than usual number of houses available for sale here. Anyone know from the local area if there are any distressed sales out this way? We're all a little curious. Some huge houses have signs on them.
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