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Visiting an Open House? Here are Some Helpful Hints.

by Connie Yoshimura

Last weekend was the Spring Preview of Homes and hundreds of potential buyers turned out to see what Anchorage’s builders are creating in 2018. I started my real estate career by working open houses and I still do four or five a month because it helps me better understand the housing needs of buyers. I teach classes for new realtors on how to do opens but it occurred to me last weekend that visitors may also need some helpful hints in order to benefit more by attending. Most hosts have material on the home and community that is probably not available through the local MLS or Zillow so don’t hesitate to stock up on the information that is provided. You’ve taken time out of your personal schedule to visit the open so make the most of it. Walk the rooms. Maybe more than once. And don’t be afraid to ask questions. Spec homes are in short supply but most builders will have provided plans for future builds that may better suit your needs so ask what else is being planned by the builder or what new lots may be opening up.

Some visitors walk in and out of a home in less than five minutes. I think they’re afraid they’re going to be bombarded by the realtor. You do not need to sign a guest book. You do not need to give your name or your contact information unless you want to. Most realtors hosting are there to help buyers and although they are knowledgeable about the home they are sitting in, most do not represent the seller so they are there to assist buyers. If you want to know what the realtor’s relationship is to the property, just ask. You may take photos of the home and some visitors do FaceTime with an absent family member or friend.  

If you visit an open house and are interested in the home, take time to walk the lot. Yes, its muddy out there right now but it’s a good idea to understand the side yard setbacks and how big the backyard actually is. Almost all new homes are built with a four foot crawl space so don’t hesitate to open the door and step down.  

Some open houses will have information available about how the home can be financed. That information is generic and although accurate may not be applicable to your particular financial situation. The best source for qualifying for a mortgage is a mortgage originator. In today’s market, all offers should be accompanied by a 90% letter. If you’re seriously shopping for a new home, do get pre-qualified before seriously looking for a home. 

Today’s visitors have almostalways seen the property online before they come to an open. Like the celebrities on magazine covers, home photos can be deceiving and are sometimes Photoshopped or taken with wide angle lens to make the rooms look larger. If you’re interested in the home, visit the neighborhood during off hours. Time how long it takes you to go from work to home during rush hour. See what’s happening in the neighborhood on a Saturday morning. Are homeowners getting their yards ready for summer? 

Buyers need to educate themselves about the market and one way to do that is to visit homes that are below and above your designated purchase point. Open houses are a better way to get that knowledge about the market than online. Try not to reject a home online due to the poor quality of photos or because it doesn’t check all your boxes of wants and needs.

More Info on Homeowners Associations and Insurance

by Connie Yoshimura

Homeowners’ Associations come in all shapes and sizes from single family communities to stacked condos but they all have one thing in common and that is they are governed by a Board of Directors. The board has the ability to change the number of pets an owner is allowed to have; fine owners for lack of dues payments; supervise tree cutting and in general make life pleasant or miserable for the residents it governs. More importantly, the board, with the assistance of an association manager, establishes budgets and reserves so that the association, which is a non-profit corporation or LLC, has adequate funds to manage its financial responsibilities to its owners.

One aspect of financial management is adequate insurance. Homeowners need to understand what is covered under the various insurance policies available. The declaration will clearly state who or what entity is responsible for road maintenance and replacement, water and sewer pipes and the building structures. For example, in a site condo association, the building insurance is the responsibility of the unit owner because the unit is enveloped in an air space so that it functions, for insurance purposes, like a single family home and also reduces monthly dues. The HO-6 policy covers personal belongings or, in other words, anything that is not a fixture. Just turn the unit upside down and shake it. Anything that falls to the floor should be covered. Again, that portion of the policy is similar to a homeowner’s policy for a fee simple home. However, if you have upgraded your appliances because you couldn’t live without a Viking five burner stove or even upgraded the pad under your carpeting, you need to tell the insurance agent or otherwise they will assume a builder grade and you could end up under insured.

You should also ask your insurance agent for a special assessment rider which covers any special assessments that may be assessed against the unit. The policy limit for that is usually $2,000 with a deductible of some amount. However, it is a real savings to the unit owner, particularly if you are buying into an older condo development which may or may not have adequate reserves for painting and roof repairs, two of the most common special assessments. Any condo buyer should not only examine the association’s budget and reserve amounts but they should also read the last six months of minutes from the board meetings where they will discuss any potential pending assessments. For many buyers, condo living where someone else manages the physical structure, grounds and pays the utility bills is a welcome respite from the hassle of every day life. However, it gets complicated if the board becomes power hungry and overly rigid in its demands. The board’s primary responsibility should be sound financial management. Overly restrictive actions and lack of financial stability can ultimately have a negative effect on property values.

Test Your Market Knowledge

by Connie Yoshimura

 

In 1998 a Certificate of On-Site Systems Approval (COSA) became required for all title transfers (except between spouses) of single family on-site wastewater disposal systems and for wells. This twenty year old process continues to be rigorously enforced by the MOA to protect the health and well -being of its citizens who elect to live in a home not serviced by public water and sewer. In order for a COSA, the acronym used in the industry, to be issued the following guidelines must be met:

 

1. An absorption field adequacy test has been performed within the last two years or the absorption field has been constructed within the last two years

2. The septic tank has been pumped within the previous year

3. The well has been flow tested within the last two years

4. The arsenic water sample results are less than one year old

5. The nitrate and bacteria water sampling results for private and Class C wells are less than 90 days old

 

A COSA is valid for two years from the date of the absorption field adequacy test or date of construction as long as the nitrate and bacteria water sampling results are less than 90 days old. Some additional requirements for septic tanks include no depression over any septic or holding tank. There must be at least one 4-inch diameter cleanout on each tank, and the cleanout must have an air tight cap. Septic tanks installed after 1980 must have two cleanouts. There should also be no evidence of heavy equipment movement over the absorption field. There may not be any driveways, parking areas or vehicle storage areas extending over or across any absorption field unless the engineer provides documentation that insures the integrity of the system.

 

Anchorage’s hillside is a popular move-up area. Last year 241 Anchorage homes sold with well and septic systems which were mostly on the hillside. Add Eagle River and that number jumps to 336.  Sometimes, there are unexpected surprises and costs. For example, an older home originally built with an unfinished lower level and then completed at a later time with additional bedrooms, a seller may find that the original septic was only designed for three beds, not the four or five that now exists, even though it appears to have been adequately working for their family and lifestyle.    

 

So how much does getting an approved COSA cost? The MOA inspection fee is $600. The permit fee to install a new tank is $250 and the cost for a design by an engineer is usually $700. Once the design and permit are obtained, the MOA requires three bids for the new tank, installation, top soil and seeding. Bids can vary anywhere from $10,000 to $30,000 depending upon the design. During the winter time, construction does not have to take place and a conditional COSA can be issued by the MOA once they have approved all of the above requirements. However, to sell a home requiring a new septic system an escrow will need to be established that amounts to one and a half times the cost of the highest bid. For more information, go to the Community Development Department on the MOA website.    

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Contact Information

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Dwell Realty
561 E. 36th Ave., Suite 200
Anchorage AK 99503
907-646-3600