Out-House Loses Grand-Fathered Status at Time of Sale

Out-House Loses Grand-Fathered Status at Time of Sale

   This week I met with some homeowners that have a seasonal cabin on Green Lake with a grand-fathered out-house. Like many homeowners they thought they could sell it as a cabin with an out-house, but that isn’t the case. When they sell, they lose their grand-fathered status and they must meet the Chisago County Sewage Treatment System Standards.

 This particular lot is not deep enough for a septic system with a drain field, so their option is a tank, which may need to be pumped frequently, depending on their usage. They can keep the out-house and put a septic tank under it and connect the well water to the out-house, but then they would need to install a second tank for the house if they want water going to the kitchen. The other option is to not have water going to the house and pump water from the well and carry it into the house.

 This cabin is in excellent condition so it doesn’t make sense to tear it down, and in my opinion, the best option would be to eliminate the out-house and convert the cabin to a year-round home with a bath and full kitchen with one septic system. Either way it will be expensive, but the future value will be better as a year-round home.

 I have another client purchasing a home on Rush Lake where the 20-year-old septic system failed the compliance inspection and the seller has opted for a septic box instead of a septic mound because the box takes up less space and it is less expensive. The treated cedar box will sit in the front yard and will be approximately 5’ high x 12’ wide x 28’ long. Luckily this is a wide lot so it won’t be directly in front of the house. This system will cost the seller about $13,500.

The Chisago County Sanitarian is extremely helpful and knowledgeable regarding sewage treatment systems. One of my clients was lucky enough to receive grant money earlier this year for a mound replacement.

 If you are thinking about selling in the near future, get your septic system inspection scheduled the next time you have your tanks pumped and keep your compliance certificate. Septic systems are not normally inspected in the winter as the ground needs to be thawed, spring road restrictions cause delays, and contractors are extremely busy trying to catch up in late spring and early summer.

 An experienced real estate agent can answer questions about required inspections, and can help you plan your next move.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Insurance Claim Was a Problem

Insurance Claim Was a Problem

 One of my clients filed an insurance claim for hail damage, at the recommendation of a contractor, and it turned out to be a big problem when they decided to sell their home. The claim was filed, the contractor disappeared, and the owners forgot about the claim. A month later my clients received a check from their insurance company for $10,000, which they didn’t cash.

 A few months later they called me to sell their home. The sellers completed the Seller’s Property Disclosure Statement, which asks if any insurance claims have been filed, if there has been compensation for a claim, and if the repairs were made. They answered appropriately.

 A few days later the sellers accepted a purchase agreement and the buyer’s inspector estimated the hail damage repairs to be under $1000. The buyer got a second opinion from a contractor who estimated the repairs to be $1700. The sellers agreed to pass the $10,000, that they received from the insurance company, to the buyer in the form of price reduction and the buyer would make the repairs after closing.

 The buyer applied for homeowner’s insurance, and his agent told him that the roof claim was on record and the buyer would not be able to file any future hail damage claims until the roof was replaced. This concerned the buyer and he asked the sellers to have the roof replaced.

 The sellers contacted their insurance company and found out they didn’t have replacement coverage, but rather actual cash value coverage, because the roof was over 10 years old. The sellers requested a copy of the insurance company’s estimate, and it showed the replacement cost was $23,000 and after depreciation, and the deductible, the payout was $10,000.

 Replacing the roof wasn’t an option for the sellers as they didn’t have $13,000 to add to the $10,000 they received. The buyer and seller agreed to split the difference in the form a price reduction and the buyer accepted the roof as is. Filing this claim without understanding their policy cost the sellers more money than if they never filed the claim in the first place.

 Actual cash value for roofs over 10 years old is now common practice with many insurance companies. It is important to understand your homeowner’s insurance policy before you file a claim, and work with an experienced Real Estate Agent to ensure a successful closing, even when problems arise.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

The Many Phases of Selling Your Home

The Many Phases of Selling Your Home

   Most sellers think that once they have agreed on a price with the buyers and the purchase agreement is signed, that they have a “done deal”. It would be nice if it was that easy, but there are many more steps to get to closing. Most homes are sold with contingencies and if financing is one of them, the closing date is normally scheduled 45-60 days from the acceptance of the purchase agreement. If it is a cash sale it can close as soon as 2 weeks from acceptance.

 The next step is to deal with the many different types of inspection contingencies. The buyers usually hire a home inspector. The sellers may be required to have a well and/or septic system inspection. If the property is a condominium or townhome, association documents will need to be given to the buyers for a 10-day review period. If the purchase is for land or lakeshore, a survey, soil tests, or plan approval may be required. All of these contingencies give the buyers an opportunity to cancel the purchase agreement or renegotiate the price or terms.

 Once the buyer’s inspection contingency has been removed, the lender hires an appraiser to verify the value is equal to or greater than the purchase price. If the home doesn’t appraise for the purchase price, the buyers may have the opportunity to cancel or renegotiate the price or terms of the purchase agreement.

 Even though the sellers receive a pre-approval letter from the buyer’s lender with the purchase agreement, the loan is subject to underwriting approval. Underwriting will review the buyer’s financial information, employment, appraisal, required inspection results, etc. before issuing a “clear to close”.

 The title company verifies clear title and works with the seller to correct any issues, then prepares the settlement statement required for closing. Once the settlement statement is approved by all parties; which is usually a week before closing, we are fairly confident that the sale will close.

 The buyers walk through the property right before closing to confirm any required repairs are complete and the property is in the same condition as when they wrote the purchase agreement. If everything looks good, all parties head to closing, sign the documents, the buyers bring their down payment, the lender wires the additional funds, the sellers get paid, the buyers get the keys and property is transferred to the new owners.

 An experienced real estate agent will monitor and negotiate all of the phases of your real estate transaction to ensure a successful closing.

Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to ckempenich@cbburnet.com. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.

Welcome to Kempenich Team Blog and News

Welcome to Kempenich Team Blog and News

Welcome to KempenichTeam.com Blog and News page.  This blog contains a variety of articles, news and information that will help you sell or buy your next property. The Kempenich Team can work with you to sell or buy your home. They are seasoned experienced real estate agents for Coldwell Banker Burnet. For immediate assistance Call or Text Cheryl at 612-735-0553.