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Meritage Review Part 1: What did I buy and why?

By March 19, 2007

Meritage

In order to break up the work of writing about my Meritage unit I’m going to do it in parts:

  • Part 1: What did I buy and why?
  • Part 2: Photos
  • Part 3: Defects/annoyances with the unit
  • Part 4: Renovations I want to perform
  • Part 5: Why I tried to fire and then sue my real estate agent

Why I bought it

When I moved to Seattle three years ago it was my intent to buy a place but I was shocked to find out how much real estate cost here compared to Canada (where I grew up and went to school.) So you understand my frame of reference, while in university I owned an 1800 square foot, six bedroom lodging house in Waterloo, Ontario that I purchased for $205,000. It produced about $2,400/month of revenue. I couldn’t believe that I couldn’t buy a place here that I could rent and have the rent cover the mortgage. And so I thought the market, three years ago, was horrendously over priced. In hindsight it was a mistake not to buy something then since real estate appreciated much more quickly here then it did in Waterloo, Ontario. Oh well.

A year ago I realized that the market did not seem to care that the purchase to rent ratio was out of whack and I started to shop around. Wanting to purchase something close to where I lived was a priority and over the last two years I had watched the houses at 124 Bellevue Ave E get torn down and then the site prepped. When the sign went up advertising the Meritage I called up Javila. Unfortunately she quickly dashed my hopes of being able to buy an unfinished unit which is what I really wanted. Apparently the developer might entertain the idea if I was paying cash. I was not. I later learned that while I couldn’t build out the unit I could pick from one of three color schemes! (Most cars come in at least five colors*.)

Closer to the first day of sales I started thinking about unit types and pricing. I originally thought I wanted a studio because they were much cheaper (my budget based on what I was paying in monthly rent was originally $200,000) but my dad, an architect, convinced me a studio was a bad idea. Since my apartment had a killer view I also wanted a killer view and I bought as high up the building as seemed reasonable. They didn’t have sample view shots when I signed the PSA so I really got lucky that I have a good view while my neighbor in #503 does not.

On February 22nd I showed up just as the sales center opened and was the second or third person to grab a unit. I then spent that weekend going and looking at all the sales centers in Seattle to see what else was out there (funny that I didn’t do that first :) ). Seeing that the price at Meritage was reasonable and so not having any regrets I did not cancel my purchase and sale. In hindsight, I should have spent a bit more, got a scooter, and bought a unit at Mosler lofts. It’s more my style but I didn’t like the location.

In hindsight I spent very little time looking at comps and inventory levels. When reserving a unit at Trace I agonized over the numbers and when talking to the people at Trace it is likely I spent more time crunching the numbers then they did (!).

Since the Meritage was not my ‘style’, I’m much more a modernist who enjoys large open spaces, then someone happy with 3 strip hardwood and 9′ ceilings, I continued to shop around for both new construction and old construction. For a long time I looked for an older unit in need of renovating but nothing has been a good candidate over the year I’ve waited for Meritage. On the other hand the projects at South Lake Union and 12th and Madison have caught my eye and it is likely I will sell Meritage very soon to move into either Trace Lofts or Rollin Street. Time will tell.

Alrighty, enough chit chat, what did I buy?

Description of purchase

  • Unit 504, west facing, 747 square feet, no upgrades (upgrades offered), 1 parking spot, no storage
  • Purchase and sale signed February 22nd, 2006 with a 5% deposit
  • Reason for purchase: Fall back in case I couldn’t find something better. If nothing else I knew it’s view and location would be good.
  • Price paid: $345,000 ($475/SqFt)
  • Appraised at: $380,000. Appraisal notes:
    • Under housing trends: Condo shortage
    • Estimated that 4 units rented
    • Comp’d against two units at The Press ($535/SqFt and $567/SqFt), one at The Braeburn ($440/SqFt) and the one above mine ($551/SqFt)
  • Loan: 5% down then a Conf ARM LIBR 5/1 525 F&E10yIO (translation: interest only) at 6% on $276,000 and then $51,120.30 borrowed at 7.9% for the remainder.
  • Home owner association dues: $265/month
  • First move in date scheduled for February 18th
  • Actually moved in March 6th
  • Elevator break downs requiring a reset of the elevator while moving: 1

Developer supplied floor plan

(click to enlarge)

Renderings done by KH

(click to enlarge)

If you have Sketchup installed you can download unit 504 and walk through it. I’m sure if you ask nicely (and pay) KH will render units for you if you’re interested.

Why did you buy?

Why did you buy your unit? Let us know in the forums.

*I have no idea what the average number of colors cars are available in but my point that I’ll beat dead until I have my way is that a $12,000 car is more customizable than even a $800,000 condo.