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Keeping Your Head
Above Water…
When Selling Waterfront Real Estate
Selling
homes on waterfront is much more
complicated than selling a home in a
plat, where most of the time, what
you see is what you get. This
report is to stress the importance
of recognizing problems early on in
the marketing process to facilitate
a smooth transaction. Homes on
waterfront have issues like:
Zoning
Wetlands
Shoreline Management
Encroachments/Easements
City & County Ordinances
Growth Management
All of
these issues can be overwhelming
when it comes time to represent your
property. I can help you every step
of the way. The following is an
overview of things to think about
when putting your home on the
market.
Determining Value
Each home and lot on
waterfront has it’s own unique
properties that play a role in
determining value. Some of the
decisions affecting value are a
direct result of the Federal and
State government, sensitive areas,
wetland and wildlife regulations.
Zoning, easements and Conditions,
Covenants & Restrictions (CC&R’s)
need to be factored prior to
completing a Feasibility Study. A
knowledgeable agent will be able to
defer and refer you to the proper
source of information to help with
feasibility studies, gathering
comprehensive property information
and establishing a fair market
value.
Where to Start…
Review the Title Report
Review
your current title report. If a
copy has not been ordered, have your
agent order one or call a title
company for help in ordering one.
Once you get the report, read it and
if you have any questions, contact
the title officer who prepared it
(usually noted on the top of the
report). Be sure to ask for any
referenced attachments (often
indicated by a recording number).
This is important since there may
have been liens or documents
recorded against your property that
you may not be aware of, or that
were attached erroneously. This
will give you time to address any
problems that surface.
Conditions, Covenants & Restrictions
(CC&R’s)
Any
CC&R’s will be attached to these
documents and you should review
them, even if they do not seem
enforced. Many lots were created
prior to any of the current
restrictions and regulations were in
effect and many of them have changed
during the years. It is always good
to know what you’re dealing with and
whether “grandfather” rights apply.
For example, does your property
violate any existing codes; i.e.,
zoning violation? Is your lot
conforming? Are there any
easements, public access rights? Is
your property impacted by the
Shoreline Management Act of 1971 or
State Environmental Policy Act (SEPA)?
Are
there any setback or sensitive area
issues? For example: if you are
selling view property and much of
the view needs to be cleared, make
sure you are aware of any clearing
restrictions. Never guarantee a
view! Ask your agent how best to
represent that feature of your
property.
Encroachments/Easements
Encroachments are common on the
waterfront. Sellers and listing
agents should always disclose
encroachments, no matter how small
they are or how long they’ve been in
existence. Buyers will always
investigate encroachments to make
sure they’re not buying into a
lawsuit. Sellers should never
offer an opinion about whether
adverse possession has been
established in a particular case,
because even cases that appear
“easy” on the surface can turn into
a nightmare of litigation. Whenever
a question arises about an
encroachment or adverse possession,
you should seek advice from a
lawyer.
Factors That Add Value
With
less and less buildable waterfront,
prices are at a premium where
pre-existing conditions are:
Cleared
land close to bank or shorelines
Pre-existing structures closer than
today’s setbacks
A lot
ready to build with permits
available now.
So many
times pre-existing structures will
become valuable! However, whether
you live in the structure and are
“grandfathered” for future
remodeling - a word of caution:
Never assume! There are usually
conditions under which the
“grandfather” rule applies and one
should check with the county for
interpretations. This “grandfather”
rule could change in the future,
especially with the Endangered
Species Act having a greater impact
on regulations.
Limitations to Values
Regulations Impacting Value…
Flood
plain.
Setback
requirements.
Setbacks from “Top of the Bank”; for
example, 100’ conservancy setback
+15’ building setback
line.
Health
Department Rules and Regulations.
Drainfield and water source.
Geotech
regulations; i.e., is a high bank
stable
Drainage plans and review; i.e., how
much impervious surface can the
parcel have, where will the drainage
go, how much $$ for retention
facilities, etc.
Clearing
limits. What is the conservancy
setback and % of land that you are
allowed to clear.
Reasonable use permit or variances
that may be required in the future,
due to size, sensitive areas,
whether there is a house on it or
not.
Again,
never assume! Just because there is
a pre-existing house on your
property doesn’t automatically mean
it’s an asset. If the house is
dated or it’s design functionally
obsolete and due for a remodel, it
will depend on how feasible or
workable it is to change, add or
completely remove the structure.
How
Do I Evaluate Waterfront?
Comparing waterfront is always like
comparing apples and oranges. No
two lots are ever the same!! Here
are some basic factors directly
affecting desirability and value:
Location: What side of the lake,
what city, proximity to freeways,
noise factors, etc.
Beaches: Type of beach - what kind
of beach does it have? Sandy,
rocky, muddy?
Width
access – is it level with the house,
does it have a bulkhead?
Exposure
– sunny or shady what periods of
day? Open vs. protected cove
Condition – clean water? Lillypads,
millfoils, solid bottom or sandy
bottom, subject to erosion?
Structures – dock and it’s
condition, boatlift, canopies
Shared
access – how many parties?
Banks:
High or low? Stability? Type and
condition of bulkhead?
Views:
Mountain views, how much water view,
etc.?
Topography of the Land: Flat vs
sloped and severity of the slope.
Other
water features: Streams, wetlands,
drainage ditches.
Zoning:
Subdividing possibilities. Building
new dwellings and remodeling
restrictions. Shoreline setbacks.
Lot
configuration: Width, length,
irregular shape, etc. Conforming vs
nonconforming.
Utilities: Existing and/or
availability of such; i.e., septic
vs sewer, well vs public gas vs
electric; high speed cable access,
etc.
Privacy
and noise issues.
Neighborhood: Consistency of
waterfront parcels.
Access
to Lot: Steep driveway or level
access. Shared or private?
Boat and
seaplane restrictions.
General: Wildlife, pollution,
aesthetics, noise, ecology, and
general public interest.
Public
right issues, currently in process;
i.e., converting railroad
right-of-ways to public trail
systems.
Price
per foot: When evaluating
waterfront properties, one has to be
very careful when quoting prices per
front foot. It usually is not
the best way to compare value since
individual properties vary
drastically in size, shape,
location and access.
Price per square foot is comparable
and often the front foot is factored
in. Reasons for this is because
larger homes can be built on a lot
with more sq. footage or could be
subdivided or zoning may differ with
lots that have the same front foot
but different square foot size.
Zoning
One
should have and expect to decipher
the zoning, such as an architect or
the County Building department.
When representing a property it is
important to beware of all the
possible retractions and or
requirements needed for the highest
and best use of the property like:
Some areas have string line
requirements
Dock
requirements
Height restrictions
Architectural restrictions
Planting and clearing restrictions
Drainage requirements
New law coming forth from the
Endangered Species Act
How does the municipality decipher
the high water mark?
Will there be soil samples required?
Public right issues
Is there
an existing survey of the property
and was there an extended title
issued when you purchased the
property? An extended title will
ensure around any encroachments or
easement issues that are common
disputes on narrow lots of
waterfront. In order to be issued
an extended title, one must have a
survey.
If value
is difficult to establish, have an
appraisal performed by someone who
is experienced in the area and
especially with waterfront. See
references:
Alan
Pope & Associates, Inc. in Redmond
(425-882-0608) or
http://www.alanpope.com
Shapiro
& Assocs. Environmental Consultants
(206-624-9190)
Chicago
Title Insurance Company
(206-628-5666).
Final Consideration
Finally,
know how many buyers are in the
market place at one time. Keep
abreast of the inventory and rate of
sale. Know if the market is rising
or falling or stable. Remember,
it’s ultimately the “buyer’s”
perception of the property which
determines the value of the
property.
For
further information and essential
tips on how to get your home sold
quickly, see Ruth’s 29 essential
steps to getting your home sold. I
hope this information will be
helpful; however, it is not all
inclusive, so I would be pleased to
discuss your plans and concerns or
to help you establish value and
discuss marketing strategies for
selling your waterfront property.
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