Ahead of the curve, fact-based blog with editorial style views on the current status and future of Kirkland, WA real estate. Written from the POV of an experienced Realtor working in the trenches of every day real estate in Kirkland.
Kirkland, WA-
If you’re a new buyer or you’re looking for a long-term investment, this could be a good time to buy a condo in the Kirkland area. Just use caution and our tips for screening title and the home owners association finding the smartest buy.
Right now communities such as Esplanade in Kirkland, Serenity in Bothell, and others are not financeable through FHA, which is the bulk of the first home home buyers and condo buyers today. This is mainly due to unstable HOA’s, low reserves, and pending lawsuits. An unfinanceable condo or one tied up in litigation will drop in value significantly sometimes simply because it’s no longer a viable option financing-wise for most buyers. Some units are being sold for cash only at very low prices. Some for as much as 40% less than what they sold for just 4 years ago. If you can hold on while they get themselves sorted out and you are a cash buyer, you may be able to strategically walk away with a great investment. But you have to be informed and careful.
Sue, a on-site liason to the property management company for Sundance Glen, a 55 and older condo community in Redmond that is in current good standing, was an insurance representative for 20 years. With an eye for detail and property management, she is working with the WA State Condo Association Board to require new condo owners to take amandatory class on what living in and owning a condo is actually like. She says that sometimes people don’t think through how entwined they will be with the communty and the consequnces of not being involved on the HOA. She believes this would eliminate misgivings and make buyers are realistic before they get too far down the buying road, thus preventing future headaches for them and their neighbors.
Depending on your needs, your financial picture and your location, the current condo market woes in our area could make for good bargain hunting. If you’re crazy about a place and you expect to stay put for some time, shop away. Just keep the following tips in mind so you don’t mistake a money pit for the deal of the century:
Look for hidden debts. If you’re buying a distressed property, whether in a “short sale” (when the seller owes the bank more than the house is worth) or a foreclosure, find out if you’ll inherit liens or debts attached to the property — unpaid homeowners association fees or assessments . Have your agent specify in the purchase and sale agreement that all liens and assessments are to be paid in full by the seller or absolved at closing. And then verify in the short sale approval paperwork, if any, that all liens have been accounted for and will be paid off. Order a title report and see firsthand all debts against the property.
Look for trouble. Have your agent obtain a copy of the resale certificate for the condo. The resale certificate will include a copy of the updated Reserve Study. The Reserve Study Amendment of The Washington Condominium Association requires condominium HOA’s to have independent studies done annually which recommend what amount of dues the association should collect in order to have “healthy” reserves in their bank account considering upcoming maintenance. Keep in mind the Reserve Study makes recommendations but the HOA is not required to enforce them. Go a step further make sure that the HOA’s actions actually reflect the recommendations in the study. Also get the homeowners association board’s minutes for the last two or three years — the more information the better. It’s good to see what the people who love there are saying and any ideas that are being tossed around. Also get any audited financial statements, if available. Look at the “assessments receivable” to see how much it is still owed in homeowner fees each year. If that amount increases from year to year, the association is having difficulty collecting dues.
The resale certificate will also disclose any pending or future assessments that the homeowner will have to pay. Also be sure to look at the reserve study for the “life expectancy” of parts of the condo structure to deduce what might be coming up in the future. For example, the resale cert may not show any pending assessments, but if you can tell that the roofs only have 3 years left of life expectancy and the reserves in the HOA bank are low, you can expect that the owners (you) will likely be assessed for that expense in the next few years.
Make sure the community fits your lifestyle. Get a copy of the association’s bylaws or CC&Rs (covenants, conditions and restrictions) found on title or in the resale certificate to see what the HOA expects of you and provides for you. Even if it’s big as the Yellow Pages, take the time to understand them. Get a lawyer to interpret what you don’t understand.
If you have pet make sure they allow pets. If you want to bring your hot tub with you, research what it would take to get approval for that. What utilities are included in your dues? Can you hang planters on your fence? Do they allow you to rent the unit out if needed in the future?
Talk to the managers. Although property managers can’t discuss individual homeowners’ finances, they can discuss association business. A reluctance to share could cue you to a bad situation. Ask:
Give new developments with HOA’s fierce scrutiny. The lowest prices right now are in brand-new communities still owned by desperate developers stuck with lots of unsold units. You might score a screaming deal. Or you might get stuck holding the bag for the unsold units’ fees when the developer goes bankrupt. Your safest bet is an older, established association with a good financial track record and committed HOA board. Young HOA’s may also have low reserves but that’s ok in the beginning – as long as they have a plan for future success.
Questions or comments for Jennifer? Want to know more about Kirkland real estate?
Email her at jen@tecrealestate.com or visit her website www.livekirklandwa.com
Jennifer Nilssen Today, as an agent specializing in the Kirkland market, Jennifer couldn't ask for a better job. "It’s a great feeling to live and work in an area with so many incredible real estate opportunities." Jennifer was the top producing agent for EQ real estate from 2003-2005 and moved to TEC Real Estate and Homes in 2006 where she is a continued top producer. She is a member of NAR, SCKAR, WAR, the Young Professionals Network and is a designated Realtor and Certified Negotiation Expert.
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