The Island Guardian
Locally Owned & Operated
(360)378-4900 - PO Box 38, Friday Harbor, Wa 98250
The Island Guardian is a member of the Society of Professional Journalists
xx Home | News | Business | Environment | Lifestyles | Entertainment | Columnists | Archives | Classifieds | Nag
News
Current news
Government News
Political News
Service Organizations
Editorials
Obituaries
Guest Editorials
Business
Business
Real Estate
Environment
Environment
Weekly Nag
Weekly Nag
Letters to Editor
Letters to Editor
To Contact the Editor

Island Guardian


ARE YOU CONSIDERING SELLING YOUR PROPERTY?

2/16/19


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands
simonson@sanjuanislands.com
360-317-8668






Thinking about selling your property? You may want to consider researching, collecting and completing the items detailed below.

This is not a check list for planting flowers on your porch and painting your front door, you can go to the internet for that information. This list is to prepare sellers in San Juan County for marketing their property. The issues below are for regulatory compliance and contract performance. Attention to these issues will prove beneficial and would be worth the effort during the marketing and transaction management of your property sale.

As your agent, I will assist with the process of gathering and helping you arrange for the various services. That is what good agents do.

This list will not apply to all properties and it is not meant to be all encompassing. The topics are in alphabetical order for your convenience.

SINGLE FAMILY RESIDENCE

"As Is" Sale
Washington is a due diligence state with the buyer able to process the suitability of the property with no risk to their deposit if their contract has contingencies. Some property owners believe by writing in “as is” on the contract that they are excused from making repairs and/or disclosing information about the property and buyer recourse. The statement indicates to the buyer that the seller has no intention of making repairs but the buyer may still obtain a home or other inspection reports as they deem necessary. Disclosure and recourse are requirements and rights granted by law.

Appraisal
It is difficult in a recovering market to provide an opinion of value and an upfront appraisal may be an option, although I don’t recommend one. The report cost range will be $500-$800. Unfortunately the report can't be used by the buyer if a lender is involved. The lenders have their approved appraisers list and must be the party that orders the report. Further, due to licensing regulations, appraisers are only able to utilize closed sales as comparable. The agents are able to use pending sales and current inventory to process their opinion which takes market trends into consideration

Buyer Feasibility
It is not uncommon for the buyers to contract for a feasibility contingency that runs concurrent with the home inspection contingency. The home inspection contingency addresses the condition of the existing structures on the property and the feasibility study addresses the “what ifs”. It may be used by the buyer to confirm the cost of a remodel, to research what the home may rent for or the likelihood of obtaining a Vacation Rental By Owner (VRBO) permit and other similar items.

Some buyers are also processing soil stability and environmental studies which include mold and air quality within the buildings, at their expense. Bottom line, the feasibility contingency insures that the property is suitable and inspection results are acceptable to buyer, at their sole discretion. As a seller, you want the buyer to have the opportunity to process their due diligence and not rely on statements made by you or the agents.

Carbon Monoxide Monitors
Per national regulations all homes must have CO monitors and this language is contained in all purchase and sale agreements. The monitors can be purchased locally at ACE Hardware or Browne’s Home Center. The cost range is $25-$75 and the plug-in variety will suffice. The regulation directs you to comply with the instructions on each monitor as to installation. Basically, one CO monitor outside or near each bedroom and on each floor.

Competitive Market Analysis
To aid in your pricing decision, your agent will prepare a competitive market analysis. This document will compare your property to similar sold, pending and active properties. Ultimately, the pricing decision is yours; you may want to consider how long you want your property on the market when determining the price. Part of this decision is to price against “sold” comparable properties or to price against the “current inventory”. Lately, I have been pricing my new listings against current inventory and recommend that unless the market trends change.

Communication
If you are a highly involved seller and want to proof your ad copy, assist in the photograph arrangements and/or just control the process, then it is imperative that you let your agent know this up front. Each seller is different and communicating your preferences will suit you best.

Corner Stakes
It is very important to locate the corner stakes on the property and mark them with flag tape. The old stakes on the island can be in the shape of a coin or pipe or wood. If you are unable to find the clear evidence of property corners and property lines, a surveyor should be hired. Locating and marking the corners may discover any encroachments that may exist. A full survey will be in the range of $2000-$3500 for 4 corners and level terrain. Each missing corner is approximately $500. Buyers want to know what they are purchasing.

Easements
Make sure that if your property is granted or burdened by any type of easement, e.g., view; landscaping; access; or utility; that a proper, recorded easement exists. Verbal agreements are not valid in real estate.

Encroachments
If your neighbor’s fence or outbuilding is over the line on your property, this needs to be resolved. The remedies that the buyer, lender and title firm will be accepting of include a license, a recorded easement, boundary line modification or removal of the encroaching item or use. If you intend to remedy via a license or easement, you should hire an attorney and insure that language is included that requires the encroaching party to waive their rights to future adverse possession of the affected property. A license or easement will be in the range of $800-$1,000 subject to the complexity and whether all parties are in full agreement. If a boundary line modification is the solution, then a surveyor must be hired and that will be in range $1800-$2500.

First Right of Refusal
If your property is burdened with a first right of refusal, you must disclose this to your agent and potential buyers. Ideally the first right is recorded on your property and of public record but some are “hand shake” deals between neighbors, ex-wives/husbands, and relatives and they can get inadvertently overlooked which can be a fiasco down the road. Make sure you understand how the first right is “ripened” and the likelihood of it being acted upon by the grantee. An attorney should be engaged if the agreement is unclear.

Final Building Permit
Per the boilerplate language contained in our purchase and sale agreements, seller is required to provide buyer with a copy of their building permit with final occupancy signed off within 10 days of mutual acceptance. A copy of the permit can be obtained by emailing lisab@sanjuanco.com. If the permit final was not issued, an inspection from the San Juan County Building Department must be obtained and all work or repairs completed in order to secure the final. If the home was built prior to the existence of the Building Department, the home is grandfathered-in. If the home was illegally built without permits then a recreated set of plans and permit application must be submitted to the County. I would start by hiring a consultant for this type of project.

Forms Required to List
Be sure to request your agent to provide you with copy of the Exclusive Listing Agreement, Seller's Disclosure and all addenda so that you may review in advance at your leisure

Guest Houses/ADUs
Just because your outbuilding “walks and quacks” like a guest house, it may not be a legal guest house. Be sure to check how it was originally permitted prior to the marketing of your property. You can obtain copies of the building permits by emailing lisab@sanjuanco.com. Some structures on this island had a range/oven installed after the final studio or bunk house occupancy permits were issued. If your outbuilding was not permitted as a guest house, you must not market it as such.

Home Inspection
It is common in many markets for the property owner to obtain a home inspection prior to the marketing of their property so that they may correct any deficiencies that are reported. The report cost range is $550-$750. Unfortunately, the buyer may not use the same report unless it was ordered in their name; otherwise there is no recourse against the inspector so another report will be required.

Home Owner's Association
Be sure to gather information regarding your HOA including the dues amount, regularity, and what is included in the dues such as water, sewer, and/or road maintenance. Have the contact information available as escrow will need this to confirm the prorations at closing. Be sure to disclose special assessments and/or High Speed Fiber loans.

Indebtedness
You need to know your total secured indebtedness. This includes your first mortgage and any other secured instruments. Agents will compile a list of your standard closing costs and those should be added to your total indebtedness. If the net proceeds are not adequate to pay off the indebtedness, you must bring in cash to close, or research if you are qualified to process a “short sale” with the lender.

Internet Speed
Most buyers want to know what internet speed is available at your property to make sure that it is suitable. You can download a free App called SpeedTest by Ookla and run a test on your property. If you already have fiber installed, be sure to let your agent know as they will want to include that in their ad copy to market your home.

List of Excluded items
Be sure to communicate with your agent the items that are not included in the sale e.g., your favorite mirror that is attached, your mom's light fixture, etc. Make sure those exclusions end up in the actual purchase and sale agreement. Just because the information is contained on the listing in the North West Multiple Listing Service (NWMLS), that is not part of the binding contract.

Net Proceed Calculation
As part of the agent’s service to you, they will provide you with a Seller’s Net Proceed Calculation. This information will detail the costs you will incur selling your property. It will include the agent’s commission, excise tax, title and escrow fees, remote notary and recording fees. You should also consider the prorated HOA dues, special assessments and real estate taxes. Costs to upgrade and pump your septic may be applicable as well.

Owner Builder Permit Program
San Juan County is one of the few counties that allow for owner builder permits, which is not the same as owner contractor. If your home was built under the program after 1988, you are required to have the County perform a Life Safety inspection within 30 days of selling or renting the property. The cost of the inspection is only $111 and all repairs must be completed in order to obtain an acceptable final inspection.

Repairs
It is prudent to repair any dangerous items before you begin marketing your home. Potential buyers with their family and agents will be walking around your property and to avoid an accident, you should repair those loose handrails and the wet rot in your deck boards. Posting signs on any unsafe areas on your property is helpful but making the repairs prior to marketing is the best avenue.

For big ticket items such as decks, roof or siding, it may be beneficial to obtain bids for the repair. These bids also aid in the pricing of the home and your decision to either make the repair prior to marketing or hope for a cash buyer willing to assume the condition of the home. Lenders require at least a 5 year roof life expectancy and will not lend with less. Obtaining that roof certification or bids for repair will save time and delays versus waiting until you are under contract with a buyer.

Road Maintenance Agreement
Be sure to have proper, recorded road maintenance and use agreement for your access. If one is not in existence, contract with an attorney to arrange for one. The cost range will be $600-$1500 subject to the number of users and cooperation. Not all of the property owners are required to sign, just the majority. Lenders require this document. To confirm if one exists check with Chicago Title 378-2126.

Selecting an Agent
You need to decide on an agent to represent you during the marketing and transaction management phases of the sale. Bottom line, all agents and brokerage firms on the island have the same bells and whistles; it is a matter of whether the agent you are considering uses ALL of them. It shouldn’t be a decision based on pricing of the property; it should be based on compatibility. You will be working with this agent for a period of time and in some cases months, it is important that you feel you will be well represented and that the agent will provide the level of customer service that you require to be comfortable. Check out their other listings, past sales and references/reviews on Zillow.

Seller's Property Disclosure Form 17
This form will be provided to you by your agent and is a uniform instrument created by NWMLS in compliance with the State of Washington regulations. You must complete the form to the best of your knowledge but the advice is to always disclose issues even if you footnote that they have been repaired. This is a disclosure that the buyer is presented with as well as the home inspector. It is not a representation or warranty and is not incorporated into the contract however, if an issue arises after closing and the result is litigation, the form 17 will be popular. If in doubt, disclose!! Don't forget those un-permitted outbuildings, critical areas or your Pinocchio dock. The form 17 is mandatory.

Service Provider list
It is very helpful to compile a list of your current service providers to share with your future buyer. On this island each property has unique systems that must be maintained, it is amazing how long your list will be. Often buyers will contract for a system orientation from the seller as part of the purchase and sale agreement.

Septic
Your septic system must be inspected by one of the county approved inspectors. They will determine if the system needs to be pumped and whether any maintenance components will be required. The County code requires observation ports, risers and other maintenance components be installed prior to any sale. Be sure to specify when you order the inspection that it is “for the purpose of a sale” inspection versus a standard. Cost is around $200 for the inspection and $800-$1,000 for a pump out. Maintenance components will vary.

You need to have a copy of your septic “as built” to evidence that the system installation was permitted with a final inspection. You can obtain this on-line at http://www.sanjuanco.com/432/Septic-System-Permit-and-Inspection-Sear with your tax parcel number. You need to make sure that the system size is equal to the number of bedrooms you have in the house and other structures. A bedroom is defined as a room with a closet, legal sized windows and a closing door. If your septic system is only a two bedroom system and your home has three bedrooms, you need to market the home as a two bedroom. It is not uncommon in the marketing ad copy to read that the home is a two bedroom plus a den with closet.

If you determine that a permit was not obtained during the installation of your septic system, you can hire one of the licensed designers to remedy the issue. They will inspect the system, size it, locate the drain field and other components and draw up a recreation “as built” and submit that to the county. I have had those done for as low as $300 and as high as $1500, subject to the service provider finding the system components. Many items on the island are grandfathered in but health and safety issues are not; seepage pits are illegal.

Showing Instructions
Be sure to communicate the showing instructions for the home for you and your tenants; no one likes surprises. Making your decision about whether to have a lockbox and sign in advance is also helpful.

Utility Expense
Most buyers want to know what reoccurring expenses involved in ownership of your property. Having those details available will be most helpful. OPALCO will provide you with an average monthly and annual amount.

Vesting
All owners of the property must sign the legal documents required to list. If you use a power of attorney or the property is held in a Trust or LLC, those documents need to be submitted to your agent and the title firm.

Water Source Testing
Your well needs to be tested for quality which includes a bacteria test and a San Juan Short which includes testing for arsenic, barium, chlorides, sodium, electric conductivity, nitrate-N, and fluoride. The cost will be approximately $300, more for a rush.

Evidencing well quantity is also necessary. If you don't have your original well log you can obtain one from the State DOE website https://fortress.wa.gov/ecy/waterresources/map/WCLSWebMap/default.aspx The well log report indicates the depth and quantity via an air test at the time of drilling. You want to avoid the buyer being forced to complete a draw down test on your well as it can be hard on your well and to other wells nearby. If your well is at risk for salt water intrusion, the draw down will add pressure to that existing situation.

If you had to purchase water at any time during the year, be sure to complete Paragraph 2 section A-4 on the seller's property disclosure accordingly. Don't be on the wrong side of a water quantity issue.

Wells - Shared
You want to be sure that you have a proper, recorded well agreement for all parties using the well which includes a maintenance provision. Wells with three or more properties being served require additional language, restrictions and County approval. If no agreement exists, I would contact an attorney. The costs will be in the range of $600-$1000 subject to the number of participants.

Wetlands
You need to determine if you have wetlands on the property so that you can disclose to the buyer their existence. You can determine this by using the County site http://sjcgis.maps.arcgis.com/home/index.html. Search by tax parcel number then add map contents and mark critical areas including wetlands. If the program maps possible wetlands on your property, they will have an impact on any future owner that intends to remodel or construct an outbuilding as setbacks may be imposed. If the wetland is a high value type, a delineation and survey may be required prior to any construction on the site to determine the setbacks. Cost to delineate is in the range of $3,000-$6,000.

WATERFRONT HOME

Archeological Sensitive Areas
If you are on the waterfront it is quite possible that your property contains archeologically sensitive materials such as Indian Midden. You need to disclose this to any prospective buyer as they may plan to disturb the soil in the future through a remodel or landscaping, the presence of Midden will have a huge impact on their costs. If archeological sensitive materials are found on the property, no soil disturbance can occur without the presence of an archeologist standing by. They will monitor and audit all materials. If something is found that they determine is valuable, the job will be suspended until further research can be conducted and contact made with the State and Tribes. Not only waterfront property may be impacted by this regulation; properties across the street may be in the 500 foot buffer area of an actual site of sensitive material. Properties located near cemeteries are subject to this regulation as well.

To find out if you have archeological sensitive areas on your property, you need to complete the Critical Areas and Archeological Review form and submit it to: dcd@sanjuanco.com. The County’s response will confirm if the site is located within critical areas or within the buffer areas. Should your property be in an area or buffer and the buyer intends to disturb the soil, the buyer will need an archeological study processed on the property prior to closing. The cost of the report is in the range of $2,000-$6,000 subject to size of parcel, terrain and whether sensitive materials are found.

Flood Insurance
If you live on the waterfront your home may be located in a designated flood zone. You may have existing flood insurance if you are in a flood plain and used an institutional lender. In order for a future buyer to obtain flood insurance, you will need a flood elevation certification even if you were insured in the past without one. This document is required by all flood insurance firms as it confirms if the improvements on the property are above the flood plain and determines the type and amount of coverage that the lender will require. If the buyer is not using an institutional lender, they may elect to waive flood insurance. The cost of the flood elevation certificate from a surveyor is in the range of $2,200-2,500. The time frame to process a flood elevation certificate is around 2 weeks.

Flood Insurance Waivers
If you are in a flood plain and flood insurance is required, you may also obtain a Letter of Map Amendment (LOMA) which allows you to remove a portion of your property out of the flood plain and cancel your flood insurance if it proves to the lender that the improvements are above the flood plain and at less risk. Surveyors estimate that about 90% of San Juan County waterfront properties are eligible for a LOMA. Flood insurance is very expensive as the government no longer subsidizes the FEMA program due to major losses throughout the country. To obtain a LOMA a surveyor must be hired and the cost is around $2,200-$2,500 which includes the flood elevation certificate. The time frame to process a LOMA is at least 2-3 weeks.

Docks
You should obtain evidence of your dock permit from the SJC building department. If your dock was constructed prior to the department's existence you are grandfathered-in. If you own a shared dock, be sure that you have a proper, recorded dock use and maintenance agreement. If you need one, an attorney can draw one in the range of $600-$1,000

Dock Disclosure
Be sure to disclose if your dock was permitted and if the extension was a Pinocchio or legal. At some time in the future, the county may decide to enforce compliance with the dock permits and you want to be on the right side of that issue as it relates to the disclosure.

UNIMPROVED LAND

Power
If the most logical building site is a long distance from a transformer, it would be beneficial to contact OPALCO and determine the distance and what they will require to hook up the proposed property. Once their specifications are determined, a bid can be obtained from an excavating contractor. The amount of this improvement is important as it aids in determining your sales price plus the transaction is not delayed waiting for the buyer to process the information while under contract.

Residential Pre Application
If your property is on the waterfront or contains wetlands, the only way for a buyer to confirm where they can build, the location of the “no touch zones”, what trees can be removed and the allowed location of their utilities and outbuildings is to obtain a RPA. Most buyers will want this processed prior to a closing and will request a longer than normal escrow period. The cost range for the buyer is $800-$1500 and various consultants on the island process these. These are not binding so regulation changes void the approval. The only way to bind the County’s approval for proposed construction is to have a fully completed application for a permit on file; the safest way is to have the building permit in hand.

Now that the update to the Shoreline Management Program (SMP) is in effect and future changes are not expected for 5-7 years, it may be beneficial for sellers to obtain a RPA for the purpose of marketing their property.

Septic Perc, Design and Permit
If the parcel offers a defined building site, then it may be beneficial for you to obtain a septic perc, design and permit in advance to aid in the marketing. The cost is $1,750-$2,200 and the permit is valid for 4 years. If you don’t obtain one upfront, then the buyer will have to process one as part of their contingencies.

Access to the Building Site
If you want your parcel to sell in a timely manner, installing a trail or driveway for the agents and buyers to access the building site is very important.

Water source
If your property is located within a plat with a community water system it would be good to confirm the amount of the water hook fee and monthly base fees.

If your property is on a shared well, be sure that a proper, recorded well use and maintenance agreement exists.

The days are long gone where a buyer will purchase an unimproved parcel without the well being installed and seller being able to evidence quality and quantity. All lenders require a water source be determined and buyers are just not willing to take the risks.

Conclusion:
If this list of potential issues is overwhelming, take a deep breath and contact a good agent such as myself. I use my experience to assist property owners regularly with all of these issues and help you process everything as painlessly as possible.

If you read this entire article, thank you. I apologize for the length but there are no shortcuts in real estate.




SAN JUAN ISLAND REAL ESTATE MARKET SUMMARY

1/8/19


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands
simonson@sanjuanislands.com
360-317-8668






In reviewing the year-end results for 2018, the sales dollar volume for the real estate market in San Juan County per the Northwest Multiple Listing Service was $305,674,278 which reflects a tiny increase in volume of 1.5% over 2017 when the volume was $300,622,909. The percentage of growth this year was pretty flat which was evidenced in all preceding quarter end numbers. The County closed an average of 45 transactions per month which is 9% below last year.

12-30-19_volume_comparison (27k image)

12-30-18_san_juan_island_inventory (18k image)

Total volume on San Juan Island in 2018 was $126,419,356 as compared to $147,981,053 in 2017. The decrease was 14.5%. Of all the islands, Orcas performed the best with a volume increase of 13% but with a transaction decrease of 7%. The top 3 production agents in 2018 in the County, all work on Orcas and rocked their year.

Inventory levels on San Juan Island are very similar to last year at this time. The notable difference is in the amount of escrow transactions which reflects a 48% decrease.

Inventory did have an impact on our sales volume this year in some categories. The inventory for affordably priced homes is very low. Currently, a buyer needs to spend at least $375,000 to purchase a single family dwelling that isn’t a remodel. There are some condominium listings slightly under $300,000.

The lowest water view home is priced at $559,000 with the lowest waterfront cabin at $460,000, but it has tidal conditions. The non- tidal waterfront homes start around $700,000 and the majority of those that are under $1m, typically need updating.

The lowest priced lot is around $80,000 but it would be considered a challenging build. Lots that offer a water view start around $150,000 and the waterfront lots start at $250,000. A level sunny medium bank waterfront lot would be around $350,000.

I understand that numerous builders in the private sector are positioning to construct affordable housing and rental units in 2019. I know of 27 homes that will be starting around $250,000 each with the pre-sales starting by spring. These homes are located within town limits and are 2 bedroom, 2 bath and offer 965 square feet. This group of homes alone should create opportunities for first time home buyers and seniors for affordable housing.

12-31-18_closing_recap_by_price (18k image)

There are many positive statistics regarding the market trends in our County and I have provided the details below.

Highlights of our market:


  • The median home price for a 12 month period ending December 2018 for the County and San Juan Island reflect increases of 6% and 1%, respectively. The median is a typical market price where half of the homes sold for more and half sold for less.

    Increases in median prices indicate our market is headed in the right direction but it is not a measurement of price appreciation. The actual computation of appreciation or depreciation would include analyzing a number of properties that were sold in 2017 and again in 2018. Due to how small of a market we are, it is difficult to have a reliable number of similar properties that transact in a two year period. Bottom line, we are too small of a market to quote an appreciation figure.

  • The Average days on market number (DOM) for homes in the County and on San Juan Island was 185 and 143, respectively. In all categories of our properties and prices, the days on market has decreased since 2016. The DOM varies on the price range.

  • Waterfront home sales represented 34.4% of our total dollar volume for the County and 27.5%% for San Juan Island. These percentages are typical for a healthy market in the Islands and very similar to last year although San Juan Island’s percentage was a decrease from last year. The average waterfront home price for the County and San Juan Island was $1,253,006 and $1,241,675, respectively.

  • During the year, sellers negotiated on average 5.0% off the list price at the time of sale for homes in the County and 3.7% for San Juan Island. This is down slightly from year-end 2017. This percentage varies based on the price range.

  • Sellers negotiated on average 6.6% off the list price at the time of sale for land in the County and 5.8% on San Juan Island. This percentage of negotiation has reduced by almost 50% from year-end 2017. Again, this percentage varies based on the price range.

  • The number of sales in excess of $1,000,000 for the County and on San Juan Island was 62 and 26, respectively. The numbers reflect an increase in the number of transactions for the County but a decrease for San Juan Island.

  • Inventory is similar to last year same time for San Juan in most all categories of listings. One should note that I am using year-end figures and many agents set their listing expiration date for 12-31 so the decrease in inventory is also impacted by the expired listings. Year-after-year it is the same situation, therefore still apples to apples.

  • Absorption has been strong in almost every category. Based on the current inventory levels and number of closed sales in 2018 for San Juan Island, we have 4.7 months of supply for homes under $1M and a 8 month supply for homes listed above $1M. The supply for homes listed under $400,000 is less than 2 months as we only have 7 listings in that pricing category. Six months is considered a balanced market. The calculation for months of inventory is just a point in time and any changes in inventory render the calculation incorrect.


Showcase of Listings: The Coldwell Banker San Juan Islands Showcase of Listings deadline this year is March 31, 2019. If you are considering selling your property this year, this is an excellent publication to be included in. The showcase is a handout at our Friday Harbor and Roche Harbor offices as well as on the ferry system.




GENERAL COSTS TO BUY, SELL OR BUILD

1/3/19


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands
simonson@sanjuanislands.com
360-317-8668






Cost of construction, selling and buying real estate in the islands has continued to increase based the requirements to meet the current regulations and overall material and service cost increases. One could say that it costs more and takes longer to comply with the various regulations that govern the real estate and related construction industries.

Based on the medium home price of $525,000 during the last 12 months, a buyer will spend an average of $10,725 in closing costs; that includes their half of escrow, title insurance for their lender, recording fees, 1% land bank tax, ½% affordable housing and home inspection fee but it doesn’t include the prorated taxes, insurance and homeowners dues or loan closing costs or well water testing. The buyer will pay monthly $2,545 based on a $105,000 or 20% down payment, 4.5% interest and a 30 year loan. The monthly payment includes principal, interest, insurance and taxes. Generally, our tax rate is $8.03 per $1,000 of assessment.

A buyer would need to make around $108,000 annually or $9,000 per month to qualify with a top ratio of 28% in order to purchase a $525,000 home. The San Juan County annual Median Income is $58,029.

To purchase a $350,000 home, a buyer would need to make around $72,000 per year assuming the same loan constants cited above.

The seller will spend on average $44,500 based on the median home price. This doesn’t include any repairs that may be necessary as part of the contract or the seller’s prorated items; it is merely closing costs, septic inspection and a tank pump.

In the current market, a buyer can still purchase a home for less than the cost of new construction and in some cases, under the home’s replacement costs, however this is changing.

The ability to purchase a home below the cost of new construction is diminishing as our housing inventory is being absorbed and the result is less selection. We are experiencing upward pressure on our prices and buyers are starting to seriously consider custom construction as the best alternative. The advantage of custom construction is a buyer is able to have built the exact home they had in mind and it will be ready for occupancy in about 1-1.5 years, more time may be needed if size and complexity are above average. The design and architectural process typically takes 1-3 months, permits take 2.5-3 months, and the actual construction will take 6-12 months.

Below is a detailed list of typical rates and fees that as a REALTOR we note in the industry when we are managing a transaction from listing or selling a property through the closing. Most real estate transactions require several of these service providers during the contract period.

The list is not meant to be all inclusive nor relied upon; it is merely for general information purposes. In most cases, I provided the actual cost or the floor of the price range but have not included sales tax. As in the case of any project, you can always spend more money.

General Costs
January 2019


LIVING HERE: Priceless

This list of prices may be startling to some but it is the reality of living in our islands. Some of the General Contractors struggle to process competitive bids as there are so many variables and unknowns to each project. One of the largest issues is that our labor in the construction and related industries has, in some cases, become transient. If a framer can’t find an affordable rental he/she will relocate to a city that not only offers a good wage but has rental housing available.

Below please find a link to a Construction Cost Guesstimator program. It allows you to estimate what it might cost you to build on San Juan Island. This program was developed by one of my very bright and techy clients that has allowed me and my other clients to use it.
https://sanjuanislandslifestyle.com/guesstimatorMAS.html

If you have any questions regarding our real estate market, please be sure to contact me. If you would like a list of the service providers including land use consultants that I recommend, please email me.




REAL ESTATE MARKET AND YOUR TAX ASSESSMENT

10/19/18


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands
simonson@sanjuanislands.com
360-317-8668






All of us Island property owners received our tax assessment notices from the County recently. As real estate agents we have been fielding many questions about the statements and new assessments. As you may recall, the State has mandated that our Assessor’s office convert to an annual assessment update cycle versus the cyclical system we were on for years. The current values are for a one year period only and will be adjusted the next year. The current process is much more stable and refined and is a more accurate system than we have had in the past.

As agents, we have often seen properties sell above their tax assessments the majority of the last 20 years with the exception of 2008-2012. Most of the variance was due to the 3 year lag time that accompanied the previous cyclical schedule our assessor used.

For example, during the recession, properties were selling at or below the assessor's values. However, back in 2006, many of the same type properties sold in an average range of 125%-150% over their tax assessments. These average percentages varied based on the type of property but generally that was the trend. Since 2014, due to market recovery, most homes are again selling above their tax assessment. Due to annual re-valuations and the assessor’s appraisal method, we may not have as extreme variances in the future.

Reviewing the tax assessment as compared to the actual sales price for high-end homes is not reliable as they are very difficult to appraise due to custom features. The assessor relies on indications of value from market sales, and when there are not enough sales to determine the value of custom features, it is difficult to find an accurate standard of value for assessment purposes.

I do have to admit, as an agent, that issuing an opinion of value for a home in excess of $2.5M can be challenging; the owner typically builds a very custom home with elaborate description of materials. Even licensed appraisers find it a challenge and some contact agents for more details. Again, there are fewer sales of similar homes in that end of our market so there are not as many comparable properties to review.

As always, it is much easier to be accurate when you have ample data to use.

The Purpose of the Assessments:

Many property owners are chatting about their new assessments. Most of the confusion around the issuance of new tax assessments stems from the purpose and process of the tax assessment. The assessor is required to value properties for tax purposes at true and fair market value. The valuation assigned by a REALTOR for the purpose of marketing or the value assigned by an appraiser for the purpose of lending, estate planning or probate purposes, will most likely be a different amount. The process to the valuation is different for each therefore, the results will vary. Generally, the differences in the process are described below:

Appraiser and Agents:

Both appraisers and agents conduct an interior inspection then identifies at least 3 or more truly comparable sales that are recently closed that they either physically inspect or at minimum view via photographs in the Northwest Multiple Listing Service. Ideally closed sales should be less than 90 days old. They spend much more time on the property determining the desirability based on the features and amenities. They also rely upon a cost approach but a depreciation figure is deducted based on the age of the home and its condition. They will analyze the income approach if applicable. They base the value of docks at market.

Due to the size of our market, finding truly comparable property sales in our County has always been the challenge. A real estate agent even differs from an appraiser as we can actually use “Pending” transactions as comparable sales. We also greatly consider the current level of similar inventory and absorption rate in the category to assist in pricing a property for the current market for our clients. Pricing against inventory versus closed sales is common in a positive trending market with low inventory.

Assessor’s Office:

The assessor’s office performs appraisals for purposes of ad valorem taxation. This is part of the process for how we provide funding to all local government services, including schools, libraries, ports, fire districts, the hospital district, emergency medical services, cemeteries, state schools, parks, roads, sheriff and government.

Appraisers that work in the assessor’s office generally use information gathered from site visits without the benefit of an interior inspection. The characteristics of the home and land are considered and compared on a “mass appraisal” basis to all other properties countywide, with statistical analysis of properties grouped by similar market influences and characteristics. The “mass appraisal” method provides more equal distribution of property taxes among property owners within the jurisdiction through standardization and improved consistency in the work of appraisers.

It is impossible with the size of our County, and the size of our assessor’s staff to physically inspect every property on an annual basis. The properties are valued every year and the assessor’s appraiser physically inspect one-sixth of the county properties each year. There will always be a lag for adjustments just to the statement dates. The recently received assessment adjustment was based on closed sales in 2017 and only a portion of 2018. After reviewing and validating those sales, they use approved appraisal practices to determine the percentage of increase or decrease in value in neighborhoods of similar properties.

As the assessor’s office performs this process on an annual basis, the historic variances will not be as extreme. If properties are actually selling above or below assessed values due to market conditions, those sales will be the basis for a statistical update the following year.

The assessor’s office is required to assess at market value but with the constraints of limited access cited above, the task is quite different as compared to an agent or appraiser. The assessor is not allowed to be a member of the Northwest Multiple Listing Service and use their database but they do use the various brokerage firm’s real estate websites to view details and interior photographs which is allowed by the Uniform Standards of Professional Appraisal Practices.

The variance between the tax assessment and the values produced by appraisers and agents is expected, as the process defines it.

Private Appraisers outside of the assessor’s office do not rely upon the tax assessed value as an approach to their valuation at all. The uniform reports don’t even request the appraiser to provide the assessment information. The appraisers never compare value conclusions with the assessor’s office therefore they are not influenced by the assessments. Their assignment is to provide market value to the lender or client, not the tax assessed value.

It is also important to note that appraisers can and do provide opinions of value as of any given date; the assessor’s office is required to value property as of January 1 of each year so the aging of the assessor’s information will always be an issue, especially in an active market.

Agents are not licensed appraisers and there is no regulation surrounding how they calculate a property’s value; there is no uniform calculation. Some agents use the assessed values as a benchmark only. Some agents don’t rely on the tax assessed value at all and don’t let it influence their recommendation for pricing because they know the assessor doesn’t necessarily have access to the interior of the improvements. Regardless of what an agent recommends, the ultimate pricing decision is made by the seller.

REALTORs must, however, comply with Article 1- Duties to Clients and Customers of the REALTOR Code of Ethics which obligates REALTORs to provide an honest opinion of market value.

Agents are not licensed to provide opinions of value for any other purposes than buying or selling real estate. If you need estate planning, value opinion for tax value appeal or for a legal proceeding such as a divorce, only a licensed appraiser may be of assistance.

Buyers of course, are looking for the best price possible and will use the tax assessments when it favors them. As agents, we are able to explain to the buyers the differences in the process and how the value amount may vary.

Websites such as Zillow, Redfin and Trulia rely upon the various County Assessor’s information and valuations to process their own calculation. Their values may be reliable in Metropolitan areas where subdivisions of very similar homes are bought and sold on a regular basis, but the website’s calculation of value performs poorly in small, low volume, custom construction markets such as San Juan County. Again, as agents, we are able to explain to buyers that the website calculators are not reliable in our County.

Bottom line, we should all be pleased that our assessor’s office appraises as fairly as possible and uses the methods advised by the Department of Revenue and defined by statute. The tax assessment appeal process is straight forward which allows property owners to present their petitions themselves. Further we historically have had the lowest levy rate in the state.

If your value assessment is adjusted downward your tax statement may not have a correlated downward adjustment. Each tax district submits a budget for its expenses as constrained by state law. The total of the amount requested is divided by the total assessed value of each district. This results in a levy rate for each district. Your taxes are a composite of the levy rates for each district in which your property resides multiplied by your current assessed value, divided by 1,000.

If all properties increased or decreased by approximately the same percentage, you would likely see very little change in your tax statement regardless of the increase or decrease in your value. This complies with Washington State laws that were formed for the sole purpose of insuring that local government can rely upon a predictable amount of revenue each year so they could process a balanced budget. If the tax revenue had large fluctuations the result would be chaos for the local government services.

Another factor to keep in mind when considering your tax bill is the number of acres and percentage of total acres in San Juan County that are either exempt or pay a reduced amount due to being in a special use program. The taxes that would have been paid by these properties are shifted to the taxpayers based on public policy decisions by the State and County legislature.

If you are upset about your assessed value increasing, ask yourself ”would you sell it at that value?”

As in the case of all my really long, boring articles, this article is for informational purposes and is not intended to be inclusive of all components of the assessing and appraising process.




SAN JUAN ISLAND REAL ESTATE MARKET SUMMARY

10/12/18


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands
simonson@sanjuanislands.com
360-317-8668






The third quarter results for San Juan Island and the County were consistent with the first and second quarter results. Per the NWMLS, the dollar volume year-to-date on San Juan Island was $99,156,746 with a total of 181 transactions. This reflects a 12.5% decrease in the dollar volume and a 21.5% decrease in the number of transactions. For San Juan County, the total dollar volume was $218,491,175 with a total of 392 transactions. The County had a slight gain of 1/2% in dollar volume and a decrease of 11.6% in number of transactions. I assume we will end up 2018 very similar to 2017 if we continue with the same level of activity we have been processing this last 60 days. Further, the inventory levels may have an impact on our volume in some of the pricing categories.

TransactionRecapReport

Historically we have had similar percentages of ups and downs since the recession so I would still consider this a steady market which is comforting. Lawrence Yun, the National Association of Realtors Chief Economist, has indicated that nationally, the job creation has a positive impact but the interest rate increases are negative. Based on this, he forecasts nationally a 2% decrease in volume for 2018 but a 2% increase in 2019.

Our island doesn’t have a direct impact from job creation but there will be an impact from interest rate increases. As the high-end buyers in our market are less likely to be dependent upon institutional lenders, the rate increases will impact the buyers for our lowest priced homes the most.

The high-end buyer recognizes us a steady market and that confidence is reflected in the number of sales and associated volume. Year-to-date on San Juan, we have closed 23 sales in excess of $1M each as compared to the 21 last year for the same period. The County is enjoying an increase level of activity in the high-end segment. Year-to-date, the County has had 43 sales in the category as compared to the 33 in 2017 for the same period. The activity level in the County reflects an increase of 30%. As mentioned above, San Juan had 23 and Orcas had 11 high-end sales year-to-date.

High-end sales provide upward movement in our median home price. This is not a calculation of appreciation but it is a trend.  

The most contributing factors in the consistency of our market were the median home prices, days on market and percentage of seller negotiating. For the preceding 12 month period ending 9-30-2018, our median home price for listed homes on San Juan Island was $525,000 as compared to $450,000 for the 12 month period ending 9-30-2017. The average home prices for the same periods were $704,776 and $680,583 for 2018 and 2017, respectively.

Year-to-date, the average days on market for listed homes, condominiums and manufactured homes was 145 for San Juan Island as compared to 195 days and 290 for the same period in 2017 and 2016, respectively.

DaysOnMarket2018 (33k image)

The sellers of all price categories of homes, condominiums and manufactured homes negotiated on average 4.6% off their list price at closing. The sellers of homes that closed in excess of $1m each, negotiated on average 5.4%. The highest negotiation occurred in the range of $801,000 to $1M. This has always been a tough pricing category; too high for most islanders and this category doesn’t offer as many waterfront homes which is the typical choice of a newcomer.

PercentSellVsList2018 (36k image)

Year-to-date, the days on market for land remains high at 395 along with a 5.8% average negotiation. It is an improvement over the same period in 2017 when the average days on market was 551 and the average negotiation was 7.1%.

Shorter days on market, tighter level of seller negotiation and increasing median prices all point to a steady real estate market.

As of October 1, 2018, we have a total of 221 property listings on San Juan in the NWMLS, with 43 of those properties in escrow. This is compared to 250 listing with 48 in escrow same time last year. This reflects a 12% decrease year over year. These totals include all types of property. When you are preparing to show property, the inventory feels much lower, we are typically only showing 3-4 properties to the client now as compared to 6-8 in the past. This decrease may have also changed due to internet pre-screening. Clients have reduced their choices as they have eliminated many properties prior to their arrival. Hence, the importance of decent photographs on the websites!!!

We have had several multiple offers as of recent, but it is not the norm. Most multiple offers stem from a new origination but at times are a result of the property “growing” into its pricing and becoming more desirable as compared to the competition.

All of the trends are in the right direction; our real estate market is healthy.




ALMOST EVERYTHING YOU WANT TO KNOW ABOUT SEPTIC SYSTEMS

9/25/18


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands
simonson@sanjuanislands.com
360-317-8668






As a Real Estate Agent, we are constantly learning and then sharing our knowledge with our clients. We must even expand our knowledge into some related industries that are not comfortable to discuss with a client, such as septic systems and their functions. The real estate industry isn’t just cars and contracts; it includes other really interesting stuff as well.

SEPTIC DESIGN AND INSTALLATION. The process starts off with unimproved land. A property owner or buyer must find out where on their site they should install the system and what type of system will be required by State regulations. There are various types of system options to select from. The latest technology includes systems that are considered mini sewage processing plants. Those manufactures claim that the effluent is nearly potable by the time it is pumped to the drain field. I am not convinced to that level but my opinion is based on the “ick factor” not science.

The system selection process includes hiring a licensed on-site designer who will complete a site and soil analysis and submit a design to the County for their approval and permit. The permits have a validity period of four years and the cost is around $1,250-$1,500 but add $500 if a backhoe is needed for the holes. A full list of approved designers is available via the link shown below.
https://fortress.wa.gov/dol/dolprod/bpdLicenseQuery/lqsSearchResults.aspx

If the parcel is under a Purchase Agreement, the design and permit process is typically done by the buyer as part of the Feasibility Contingency, which is processed prior to closing.

Another aspect of the Feasibility Study is to confirm that the property is not located in an archeological sensitive area such as Indian Midden or near a cemetery. If the property does contain sensitive materials, you need to know where they are located. To confirm this information you need to contact San Juan County at 360-370-7585 and fill out their Critical Area and Archaeological Review form, they will email you a response in a very timely manner. Being located in an archeological sensitive area will add thousands to the cost of installing a septic system as reports must be filed and an archeologist must be present during installation.

All new systems are required to have a reserve drain field area in the event the first drain field fails. This can be difficult on smaller lots that have other restrictions such as being on the shoreline. Further, some lots are unbuildable due to inability to install a septic system; they become buffer or recreation lots. Their value is typically 50% of market.

The system is installed by an excavation firm licensed for installation. The service provider should be screened based on the type of system to be installed. Asking your designer for a reference is a good plan. The cost to install a new system will vary based on the type, size, and conditions of the site; the range is $20,000-$45,000, with the typical being $22,000-$30,000. It is prudent to photograph the site during the installation process so that you have documentation on the component locations; this makes servicing in the future easier. A list of installers is available via the County website.

The size of your system should be based on your future home building plans; i.e., the number of bedrooms in the plans should match the size of your system. Years back, some property owners felt that the systems were over engineered; hence the practice of building a 3 bedroom home with a 2 bedroom septic system presented itself. The result of this faulty logic is notable when a property owner decides to sell and markets the home. Real Estate Agents are only able to advertise the maximum number of bedrooms per the septic permit, not the floor plan. These rules impose creative marketing remarks such as “home offers 2 bedrooms and a den with a closet”. This lack of detail impairs the marketing of the home. Of course, if you have a 7 bedroom system and a 3 bedroom house, the marketing remarks remain at 3 bedrooms but you are able to brag about the larger system.

If you want to check the size of your system, you can find a copy of your permit at the County site that is shown via the link below. If your system is older, and the permit fails to disclose the number of bedrooms in the text, you can usually rely on the permit number. The last numeric digit of the permit number represents the size the system was installed for, i.e., Permit Number 2004-052-R3 is a 3 bedroom system.

http://www.sanjuanco.com/432/Septic-System-Permit-and-Inspection-Sear

INSPECTIONS. The County is mandated by the State to enforce the monitoring and regular inspections of septic systems. The frequency of the inspection is based on the type of system you have and varies from annually to every 3 years. The County does this by mailing out post cards that suggest it may be time for your septic to be inspected and pumped if necessary. Most property owners promptly file the post card in the “to do” pile which often doesn’t get “to done”.

When a property owner lists their home for sale, they are advised by their Coldwell Banker San Juan Islands agent that pursuant to SJC ordinance 8.16.160, a septic inspection is required and a pump may be necessary. A seller must evidence the compliance of their system to a buyer as part of the purchase contract. The evidence consists of a copy of the report completed by the inspector and a copy of the receipt for upgrades, repairs and pumping, if applicable. The purchase contract requires that the evidence must be less than 12 months old, however; if a lender is involved, the evidence may need to be less than 90 days.

An inspection is also necessary should a property owner apply for a remodeling permit. The cost of an inspection is in the range of $95-$300 and will vary subject to the type of system that is being inspected.

Further, if you are listing your property for sale and your system is older, the inspection results may require you to upgrade the maintenance components to become compliant. Required updates may include: access risers on tank and pump chamber, access risers on distribution box, observation ports, and clean-outs on laterals, audible alarms and effluent filters. Cost to upgrade your system is in the range of $600-$3,000, subject to the amount of work.

Cost to pump your tank is in the range of $1000-$1200, subject to size of tank. As you may be aware, the content of your tank is disposed of off island which has a direct impact on the cost to pump. The inspectors do not recommend a pump-out until the accumulated solids reach a determined threshold, which may range from 25% to 40% of the working depth of the tank, in most tanks that equates to 16 inches. Ultimately, unless a third party is involved, such as a lender, the decision to pump-out is at the homeowner’s discretion. When the levels reach the threshold, a pump-out is highly recommended as part of proper operation and maintenance.

Generally, most systems installed after year 2000 have the required maintenance components. The two most commonly used inspectors/pumpers are Ted Leiker 622-6338 and Craig Starr 378-8060. Both of these service providers can also install the maintenance components if needed. If the upgrades require a backhoe, then additional excavation contractors are hired. The complete list of licensed wastewater inspectors is available via the County website.

INFORMATION SOURCE. The County now has a great website for searching septic inspections and permits by tax parcel number. The site is very convenient for agents to use when representing clients as all historic inspections and permits are filed on the site and therefore accessible throughout the day.
http://www.sanjuanco.com/432/Septic-System-Permit-and-Inspection-Sear

DO-IT-YOURSELF INSPECTIONS. If you want to thoroughly understand how your system functions, you too can become a septic inspector for your own system. Do-it-yourself inspections are not allowed on the fully self-contained units such as the Advantech systems. Those must be inspected by one of the licensed designers on an annual basis due to the high level of technology. However, the Whitewater system may be self-inspected, if the property owner has taken the County class and been approved by the local Whitewater representative.

It is recommended that you do not conduct a self-inspection if you are processing it for the purpose of a sale on your property. That final inspection should be left up to the professionals due to the liability associated with do-it-yourself inspections and purchase contracts. Further, the County will not accept homeowner inspections for those inspections done as part of a real estate transaction.

If you desire to conduct your own inspections, classes are taught regularly at the County. You can contact the Health Department at 378-4474 to reserve your place in the class.

SYSTEM FAILURE. If your system fails, you will typically be granted a repair permit. Failed septic systems cause great damage to our environment so the repair permit process is regularly expedited. Systems fail for a variety of reasons; a few of the most common include surface damage, roots, lack of maintenance, and the worst is toilet paper and grease.

We can’t consider all aspects of a septic system without a riveting discussion about toilet paper. I know that TV ads claim that “Brand X” is great for your bum but it is a major problem for your septic system. Any of the soft cushy brands may fill up your tank. The thin types that break down easier may cause problems for your drain field. One expert was quoted to say “you should select a brand like Goldie Locks, not too thick and not too thin”. One should note that it is less expensive to pump out a tank than it is to repair a drain field.

Other preventive measures include using your garbage disposal sparingly, (if at all) use environmental safe bleach and cleaning products, don’t flush or rinse your paint equipment into the system; even water based paints are a problem. Don’t let a leaky toilet or faucet saturate your system. Protect your drain field from groundwater with a curtain drain that diverts the water. Don’t plant deep rooted shrubs or trees on or near the drain field or tank. Just like a boat, don’t flush anything not eaten first. Don’t pump unless needed.

The goal is to not kill off nature’s bacteria. There are numerous additives marketed for septic systems which according to some experts are a waste of money.
All newer systems that have a pump also have an alarm that lets you know immediately if your system is unhappy 24-7.

REMODEL. If you desire to enlarge the size of your system, it is a fairly easy project as long as the soil conditions support the expansion. Further, if your system is non-conforming due to location or age, it will be possible to repair should the need arise, but you may not be able to grow the size as that will increase the non-conformity, unless a different location on the site is available that will meet current code requirements.

I know that reading an article about septic systems and their functions isn’t the best entertainment but it is important that property owners and buyers understand the importance of the systems. Unless you live in town or at the Roche Harbor Resort; you are served by an on-site sewage system.




New Vacation Rental Permit Requirements

8/18/18


IG-Merri_Ann_Simonson-3 (21k image)Written by Merri Ann Simonson
Coldwell Banker San Juan Islands
simonson@sanjuanislands.com
360-317-8668






I have reviewed the County’s new Vacation Rental Permit requirements and I found them most reasonable, I think they did a good job.

As a REALTOR, working in the field, I only noted two areas that may be difficult for some property owners to adapt to.

1. Management plan on file at the County and with neighbors within 300 feet. The management plan must contain contact information of owners and a local representative if the owner lives off island. This person shall respond to emergencies and complaints, hence the neighbors within 300 feet having a copy of the plan. In most cases, the professional property managers will be this contact person and will develop the management plan and code of conduct for the property. If someone is a self-managed VRBO they will need to create these items and submit them to the county.

This part of the regulation may reduce the number of self-managed homes, unless one lives on island, as it will be difficult to find a relative or acquaintance willing to be on call 24 hours a day and be able to explain to a frantic guest how to turn off the septic high water alarm at 2:00 am. This part of the regulations highly suggests that a professional property manager be hired by the property owner which in our market will run around 30-35%. Using a professional is a good thing; however, some property owners may not welcome the expense to their vacation rental business.

2. I am also wondering how the buyer of a vacation rental home will be advised that they must submit their certification of compliance and updated management plan within 90 days of their purchase. I am not sure if the county will be monitoring the excise tax desk and sending out letters or whether it is up to the REALTOR, if one is used, to disclose this requirement to someone new to the island. Hopefully the fines for a violation of this portion of the regulation will be lenient in case their REALTOR overlooks the disclosure.

It may be that the Brokerage offices amend the San Juan County General Addendum to add this disclosure to aid the County.

As I mentioned above, the rest of the changes are prudent, reasonable and protect the consumer and island communities. I offer a reader’s digest version of the changes below:


  • One vacation rental is allowed on a property, either in the principal residence or an accessory dwelling unit. Detached accessory dwelling units constructed after June 29, 2007 are not allowed to be vacation rentals.

  • Occupancy is changed from three persons per bedroom to two, plus three guests. Guest is defined as person over the age of 2. The number of bedrooms is dictated from the septic permit, not what is actually built on site or what appears to be a den with closet.

  • The definition of ”unreasonable disturbance to area residents” includes trespassing, noise, speeding and off-site parking issues.

  • Solid waste must be removed every two weeks and that it is to be stored securely while on site. Visitors to the island do not recognize the damage and mess that a raccoon can cause.

  • Educate the guests about water conservation, outdoor burning and burn bans. The details must be in the owner’s rules of conduct and posted.

  • On-site parking adequate for 1 vehicle per bedroom.

  • No food service. That is allowed only if the owner has a B&B permit.

  • Allows for a small sign to aid in location identification. Address must be clearly visible.

  • B&O tax and licenses are required. The property management plan must include the UBI numbers. If the County determines that a property owner is operating an illegal rental, their option includes turning this person into the State of Washington along with local fines.

  • Management Plan on file with the County and neighbors within 300 feet. Local representative on call 24 hours a day.

  • Property boundaries must be marked and a map provided if there is access to the shoreline. Guests must be provided a copy plus the boundary maps are posted on site. The address must be visible from the street and contained in the rules of Conduct. Visitors are told not to trespass.

  • Vacation Rental Permit number and UBI numbers be included in all ads. This regulation change will aid in determining if the rental is legal by our compliance officers.

  • New owners of Vacation Rental permitted properties must submit their certification of compliance with permit conditions within 90 days of a sale or transfer of the property.

  • Permit holders must annually certify compliance with their permit conditions and fire and life safety requirements including CO and smoke alarms and post the certification on site for all guests to read. Fire extinguishers must be located in all the proper areas and serviced annually.

  • New permits will expire in 2 years unless a certification of compliance is submitted each year. This provision would not apply to permits vested or approved prior to the effective date of the ordinance.

  • The monetary penalty for operating or advertising an unpermitted vacation rental is $2,300 on the date the notice of violation is issued and $100.00 each consecutive day of operation thereafter. Ouch, these fines should insure compliance.


Bottom line: Owners must be licensed, pay their taxes and be permitted by San Juan County. They must have a management plan, local representation, rules of conduct including water conservation and certify annually that they are in compliance with permit conditions and safety issues. The compliance is effective December 31, 2018. It all makes total sense, as the property owner is running a business that serves the public.

Standard town water regulations still apply, if you are hooked up to town water, no vacation rental would be allowed unless the zoning is commercial. This is applicable to town limits as well as subdivisions nearby.

Several plats have voted in a change to their CC&Rs which prohibit vacation rentals so it is important to make sure there are no plat restrictions prior to applying with the county for your vacation rental permit.

The application fee is either $1000 for a provisional use permit or $2300 for a conditional use permit depending on what the land use code requires for the land use designation for the County. If you hire a professional land use consultant, that is usually another $700-$1000.

The county has a great checklist for the annual certification and an outline of compliance details.

I believe the country moved swiftly to address the concerns over vacation rentals. These changes are far better than a moratorium that could have been placed while they ponder the issues for a few years as some other counties chose to do.

As in all of my articles, this article is for informational purposes only and isn’t intended to reflect all of the components of the code. If you have questions about the code you should contact San Juan County at 360-378-2116 or email dcd@sanjuanco.com.




Lifestyles
Lifetstyles
Entertainment
Entertainment
Columnists
John Evans
Greg Hertel
Mary Kalbert
Ron Keeshan
Gordy Petersen
Janice Peterson
Bruce Sallan
Teresa Smith
Terra Tamai
Amy Wynn
Classifieds
Classifieds
Helpful Links
Helpful Links
RSS Feed

Let the newspaper come to you with Real Simple Syndication

RSS Version


Web design by
The Computer Place

© 2008 The Island Guardian, Inc
All Rights Reserved.


Powered By Greymatter

To learn about this newspaper
or
how to place a free ad
or
to become contributor
click below:
About
The Island Guardian

or email:
publisher@
islandguardian.com