Seattle considers measure to protect homeowners from predatory offers

Seattle Mayor Bruce Harrell is pushing new legislation to curb predatory home-buying offers.

Many homeowners in Seattle receive letters from people offering to buy their houses. Sometimes, the deals are fair. Other times, they’re predatory. The mayor wants to make the bad deals harder to pull off.

Imagine an elderly homeowner who bought her home decades ago for $100,000. She has no plans to sell her house, but then a buyer sends a letter — or knocks on the door — offering half a million dollars, if she signs away the house right now.

She looks over at the unpaid bills on the kitchen counter. In that moment, that offer might seem like a good deal. But it’s not, if the land under her home is actually worth twice that.

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The mayor’s plan would give homeowners in her position new rights. These include:

• The right to an independent appraisal, paid for by the prospective buyer.
• The right to information about how to make that appraisal happen.
• A 10-day grace period to back out of a bad deal.
• A clearly stated right for a victim of predatory home buying to sue.
• The city would also gain the right to charge violators fines of up to $10,000.

At a Seattle City Council Housing Committee meeting Wednesday, Councilmember Rob Saka asked if the fines were high enough.

“How are we confident it’s sufficient to provide a deterrent effect for repeat and flagrant violators?” Saka asked.

The mayor’s office answered (in a nutshell): We think it is, but we’ll get back to you.

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Washington state already has a similar law, but Seattle’s proposed version would be stricter. Now the City Council will mull over the idea.

Speaking for the mayor's office at Wednesday's committee meeting, Deputy Policy Director Christa Valles suggested the regulations were necessary to discourage displacement of residents following updates to the city's comprehensive plan, which governs the location and amount of housing allowed to be built in Seattle.

Scarcity of housing and land is the primary driver of high housing costs in the city, along with high labor and material costs.

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Seattle builders are poised to begin a new round of housing construction, following zoning reforms at the state and city level. But experts say that activity probably won't start until interest rates come down, making construction loans cheaper.

Right now, apartment vacancy rates in Seattle are higher than normal, but Valles said that won't last.