New Seattle proposal targets unsolicited, lowball home offers

(The Center Square) – A new proposal from Seattle Mayor Bruce Harrell would create regulations targeting predatory homebuying practices in the city.

Council Bill 121039 would require potential homebuyers to disclose rights to the current homeowners, including how to access fair market value of the property and their rights to appraisal.

Harrell’s proposal would allow the city to fine any person or business that does not comply with the new regulations. According to a presentation to the Seattle Housing & Human Service Committee on Wednesday, violations may result in penalties ranging from $7,500 for a first violation to $10,000 for second and subsequent violations.

Seattle homeowners would be allowed to cancel a purchase contract within 10 business days after signing, or after receiving an appraisal.

Harrell’s proposal targets unsolicited offers for homes not currently on the market, which is common for low-income homeowners or the elderly. Predatory homebuyers offer these vulnerable property owners cash for lower than what they would otherwise receive on the open market.

“Homeowners – especially seniors, low-income families, and those in historically marginalized communities – deserve to stay in their homes without being targeted by deceptive or aggressive buyers,” Harrell said in a statement.

The legislation stems from an executive order issued by Harrell last January directing city departments to find ways to improve anti-displacement programs that totaled over $40 million last year. The city’s comprehensive plan has been updated with elevated concerns about displacement, with predatory home-buying practices being listed as a major contributor.

The executive order tasks the Seattle Department of Finance & Administrative Services with developing legislation to regulate businesses or individuals who make unsolicited offers on homes.

The legislation was created to closely align with State House Bill 1081, which establishes consumer protections for homeowners at a state level. However, the city’s proposal imposes higher fines, provides more notice to property owners of their legal protections, and provides them more time to cancel the purchase contract.

Council Bill121039 currently sits in the Housing & Human Service Committee for recommendation before moving to the full city council at a later date.