Try selling your “non-conforming” home.

by Ken Sethney, Board Member, Bainbridge Shoreline Homeowners

If your home is within 50 feet of the “ordinary high water mark”, it is legally non-conforming. If your patio or garage is close to the water, it may be legally non-conforming, too. Increased buffer widths in the Shoreline Master Program update will make even more shoreline homes non-conforming.

Last week, I was doing some research on “non-conforming” status after BI planning staff suggested that the SMP Work Group I serve on replace “non-conforming” with “pre-existing.” My wife, an executive in the title insurance industry, said matter-of-factly that traditional lenders can’t fund loans on non-conforming properties and that they will see right through the wordplay.

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Knowing that she is almost always right (doggone it), I walked into Columbia Bank and BofA the next morning and asked to speak with a lending officer. The woman at Columbia Bank said lenders can’t sell off a loan in the secondary market (think Fannie Mae and Freddie Mac) if the appraiser notes that the property is legally non-conforming. The guy at BofA didn’t have an answer.

If a legally non-conforming home can’t get financed in the primary marketplace, there are three options: the buyer must have cash, the seller can finance the loan, or the buyer can turn to the secondary market. According to Wikipedia, “Residential non-conforming loans are strictly regulated, usually with much higher rates than banks. Some states have legal limits against non-conforming loans for residential real estate.”

My point is that there’s a lot more to worry about than getting a permit to remodel, expand or rebuild a non-confirming home. Property owners need to know this. Now is the time to speak up. Elected reps need to know this. If buffers make every home one the shoreline or near a stream become legally non-conforming, their constituents will be harmed in a very real way.

Now is the time to demand that COBI define lawfully constructed homes as “conforming” in the SMP Update and in any land use regulations.

What is the cost of shoreline regulations?

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1 Response to “Try selling your “non-conforming” home.”

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1 Anon April 21, 2011 at 1:03 pm

We just received an email from a person who has made a contingent offer on our vacant lot, but won’t be able to remove the contingency and buy the lot because of the looming issue of larger vegetation buffers:

When we spoke to the City about the Gowen Place property, one of our questions concerned the proposed shoreline setback increase. Two of the planners at the City told us that the increase could occur as soon as the spring of 2012. They were unsure of the exact date or the exact rules which will eventually be put in place.

It seems like one should begin working with an architect no later than the fall of 2011 in order to obtain a building permit prior to the possible setback changes. If the setback is increased significantly, it will render the property almost unbuildable. I believe that a 900 sq. ft. footprint will be grandfathered in. That’s too small for us.

For that reason, we are unable to buy the Gowen property without selling our home first. We can’t build a new home without the funds from the sale of our present house, and would not want to purchase Gowen and have the setback changes adversely affect our plans for building there.

The 900 sq. ft. footprint would be an exception to the new rules. Since the property is 160 feet deep, a 150 foot buffer would take away all use, but since it’s unconstitutional to take away all use, the City will allow a “reasonable use exception.” Until now I didn’t know what that standard would be 1200 square feet, 1500, 1000? But, now I know what the staff will be recommending. No idea whether they would allow a 2-story house.

Bainbridge Shoreline Homeowners