Short plat land sale

For several years our neighbor (to the west) has been thinking about changing his house, either expanding it by adding a second story or by tearing it down and building a larger house in its place. Then last year he and his wife drove by a house on a golf course in Federal Way and decided that's where they wanted to live.

Our neighbor is also a builder, and he decided that he would turn his property around by building a larger house. The existing house is pretty small (1 bedroom/1 bath/850 square feet) but the property is large for our block (12,850 square feet). He then decided what he really wanted to do is to split the lot and sell two houses. That's been done with a couple different lots a block away, but not on ours.

The zoning for the next block over require a minimum of about 5,000 square feet for a lot, but on our block it's 7,200, so that would explain why there are multiple split lots over there. Doing the math, our neighbor doesn't have enough land to split his lot into two, but could swing it if he had about 1,500 square feet more.

This is where we come into the picture. Our neighbor proposed that he purchase the part of our land which contains our driveway (which coincidentally happens to be about 1,500 square feet) and then give us a permanent easement to use the driveway. For the most part things wouldn't change for us except we'd be paying property taxes on a smaller lot than before.

We asked several people for their input the answers were all over the map. Our real estate agent quoted a pretty high figure and said she probably wouldn't even do it for that, since it would reduce the future value of the house. Our friend Jim Stacey (from the PRESS real estate service) thought it sounded intriguing and thought that for the right price it could be a fine thing to do. The city planner with whom we spoke when we made sure there were no issues from a code perspective essentially said we should take the money and run.

After consulting with a real estate lawyer, we decided it was worthwhile to move ahead and we chose a price based on a percentage of our assessed land value (which was well before prices started dropping). Before we submitted our counter offer to our neighbor is when we went to the city, and right away the planner was able to point out to us that there would be a problem with the curb cuts; our neighbor wanted to have a driveway to the two new houses right next to our driveway, but the city doesn't allow two driveways that close together on the same property. We let our neighbor know, and he came up with new plans which put the driveway on the other side of the property. Once all that looked good, we submitted our counter offer and eventually had a contract worked out.

The proposal to divide the two pieces of property into three was submitted to the city, and before too long our driveway sported one of those big notices which asks for comments. It's been several months, but we haven't heard anything yet, so we're sitting tight, waiting for whether the city approves the proposal and if so, for the contract to be completed.

We've learned quite a bit about Seattle real estate during this process, and have been making sure our landscaping plans would still be fine if several trees were cut down (they currently provide lots of shade and privacy on the west side of our property). For now we've been avoiding doing much on that side of the house until we see just which trees get removed.