This past week I just listed a newer home in Coventry which is a small subdivision located less than a block away from Sheldon Park in the Natoma Station area. The beauty of this property is it’s proximity to shopping, transportation, schools and parks.

Some people think that just because you’re located close to those services that it must be a noisy neighborhood but this is a mistaken assumption. This particular property was recently re-sided with a 50 year cement siding that virtually makes the house soundproof. The house faces the court behind so there are no neighbors yards backing up to this and all you hear is the usual street sounds of a cul-de-sac.

One of the outstanding features of this home is the layout. The main floor utilizes the space well and the upstairs has three bedrooms with one designed for an office. The backyard has enough patio to entertain and is low maintenance. It’s hard to believe but this house is a fair market sale, no short sale, no bank foreclosure…just a regular listing.  So if you’re interested please view the video and give me a call to take a tour.

To subscribe to my newsletter click on: http://www.feedburner.com/fb/a/emailverifySubmit?feedId=2571487

The tax code (Section 25C) states that the credit is available for 30% or up to $1500.00 for a lifetime limit. If you’re in the process of building this is not something you can apply towards your building costs as it is specifically intended for existing principle homes. One thing to beware of is that not all Energy-Star rated products qualify for the tax credit, so check their website before you buy. Also, it prohibits most installation costs so keep that in mind when shopping.

 Among the items included that don’t ordinarily come to mind are skylights, smart vents or whole house fans and wood burning stoves and fireplace inserts. I know what you’re thinking…wood burning stoves? In this valley? Yes, Martha, the manufacturers have vastly improved them to the point that some meet the federal requirements for efficiency and most importantly the tax credit. This is also an exception where the installation can be included so long as it is a requirement from the manufacturer to ensure safe functioning.

 So how does all this relate to short sales? Well, if you’re in the process of purchasing a short sale it might not be a bad idea to keep energy efficiency in mind when doing your inspections. For example, if you find that the home you are considering needs new windows and your budget doesn’t allow for that after closing there are loans structured specifically for that need. Rolling the costs into the loan keeps cash in your pocket and the tax credit will help at the end of the year. Lenders who specialize in home improvement loans can walk you through the process.

 One last thing to remember is to ask for the manufacturer’s certification that the item qualifies for the tax credit. The items installed must also meet the requirement that they remain in use for at least five years. For more information go to NAHB’s website at www.nahb.org/remodel

Top on the list is foundations. Talk to any concrete expert and you will learn a lot about curing times and it’s relationship to the strength of a home foundation. Living in this valley has taught me many things and one of them is that you don’t pour a foundation in the middle of July and expect it to dry property without a lot of babysitting…with a hose. Concrete needs to cure slowly so when I purchased my last house I was ecstatic that the foundation was being poured in February. Cracks in foundations are allowed to a certain degree (hairline) but when the gap gets to 1/8 inch then you start to have issues with moisture and pests. One trick is to look closely at the garage floor for separation because this is your clue into the rest of the structure.

Roofs are at the opposite end and can cause major damage to the structure if not installed correctly. A few years ago I listed a home for a client and we found that the entire parameter of the roof needed to be replaced due to incorrect installation of the original flashing. The builder had flipped the flashing upside down so instead of the rain running off the edge, it was held there and wicked back up the roof. The homeowner didn’t have a clue since she had purchased the home when it was relatively new. Roof inspectors will check for those and other issues at the time of purchase. Don’t assume because a home is new that the roofing is installed correctly or is not damaged.

Water is the most intrusive element known to man and poor drainage can cause numerous problems from mold and mildew to undermining a foundation. Homes that have a down slope are more prone to water problems but equally important are runoff and standing water issues. I once looked at a home in the bay area and had my soils engineer out to take a look. His assessment was that the foundation was sound and that the fireplace cracks were nothing to be concerned about. It was only after the fireplace had fallen off was it found out that there was an underground spring running under the home. Needless to say I was very happy to not have purchased that home.

Pest reports reveal intrusion from pests, dry rot or any other critters known to destroy real property. In certain parts of the country it is expected to have a home treated for termites, or as is customary in our area, to deal with dry rot. When my seller’s get a pest report back that has a repair bill around $1000, they might wince but that’s considered average for this area. When purchasing a home with obvious deferred maintenance it’s not a bad idea to ask to be present when the pest inspector comes. Seeing  the damage can educate you to the causes so you can do preventative maintenance.

Finally inadequate systems, such as wiring, plumbing, or HVAC can empty you pocket fast. When purchasing a home that has been retrofitted or remodeled find out if these systems have been updated along with the new cabinets. Permits for this type of work is required but sometimes “Tim the tool-man” decides he can do the work for less. Recently a buyer client purchased a home and as part of the negotiations demanded that the repair work be done by a certified professional and not the homeowner. Unfortunately the home inspector revealed the seller’s skill level  and it was apparent he liked Lowe’s and wasn’t so much concerned with accuracy.  Keep these tips in mind when shopping and you will prevent additional cost and much frustrations.

To subscribe to my newsletter click on: http://www.feedburner.com/fb/a/emailverifySubmit?feedId=2571487

Buyers already need the patience of Job to close a short sale which currently represents anywhere from 45-65% of all home purchases in our area. The statistics show that they take an average of 120 days to get to the negotiation stage in our area with an average closing another 30 days. Additionally, over 38% of recent home purchases were funded by FHA, which typically adds 15-30 days to close the transaction. What this adds up to is more frustration for anyone involved in the real estate market today.

For clarity, a short sale is subject to the lender approving the sale. MLS rules require that when the seller has accepted a short sale offer the listing has to be changed to a contingent status. Most real estate agents will not show contingent listings because once the seller has sent it to the bank for consideration it is essentially off the market to other buyers. The dirty little secret is that banks don’t really want to see more than one offer because they are overwhelmed with work, so agents oblige them by taking highest and best and keeping others in back up.

Adding more frustration for buyers are the new FHA requirements. News of increased down payments and higher mortgage insurance premiums doesn’t bode well for those using this type of financing.The beauty of an FHA loan is its “relaxed” standards for qualifying. The rates are typically a bit higher than a conventional loan but the credit score required is lower, making it easier for buyers to secure a loan. Since it is backed by the Federal government should the buyer default, it’s no wonder these loans soar in hard times. Recent news of FHA’s reserves nearing bottom has increased the conditions lenders are putting on buyers making it harder to secure these loans. Now is the time to strategize and take advantage of this program before congress increases the minimum down payment and interest rates.

One glimmer of hope I have experienced is the increase in Broker Price Opinion (BPO) requests from the banks and asset management companies. These opinions are used by the banks to gauge the value of a property in a given area. Once the bank determines the value of its asset, the property is then released for sale. The increase in BPO requests tells me that there are new REO’s (Real Estate Owned)  coming online within the next couple of months. This is good news for those buyers ready to purchase and even better news for brokers working hard to survive this market.

Water is the most intrusive element known to man and gutters are a wonderful invention to control it around your house. They function to keep the water from pooling at your foundation but aren’t  effective if they’re clogged with leaves and debris. I once paid to have a client’s gutters cleaned on a home she was purchasing since I knew she would never sacrafice her manicure. Pine needles are especially toxic since they leech acids which rust and gutter guards don’t completely prevent their intrusion. There are many handyman companies that will clean them but make sure whoever you hire to check out their insurance policy…it could be a very costly mistake should they not carry one.

Most people think of getting pest inspections done just prior to listing their home for sale but did you know it is recommended to get one every 5 years?  I never thought twice about getting one until I isted my 17 yr. old house for sale. Since maintenance is something I’m very attuned to I didn’t think I’d have any issues until the inspector found Borer beetles. Fortunately for me the beetles had a terrible sense of direction and made a right turn upon entering my trim board on the corner of my home. I guess it’s their natural inclination to go up, which saved me from having to tent my house.  That saved  about $6000 which is the average cost of tenting a 2 story structure.

Another critter that loves to live with you is the dreaded termite. My neighbor was sprucing up the house for the holidays and as she was wiping off the window sills noticed some holes bored through. The pest inspection found a colony of termites had infested her walls due to the Oak trees on her property. Apparently termites like to switch it up and find Doug Fir a nice diet change from Oak. Since her home was on a slab foundation she had to have holes bored into her concrete and poison injected under her foundation. The fun didn’t end with that becasue she had to wait 3 months to see if it took…which it didn’t.  After a second application had to be done she finally received a clear report . Her new carpet was not exactly the Christmas present she was hoping for.

These are just some of the horror stories I hear from clients regarding deferred maintenance. So take some extra time to tune up the exterior while taking down the decorations and save yourself some serious money this new year.

Black Friday signals the beginning of decorating to impress friends and family and this is a natural segue way for selling a home. Colorful lights and pleasant smells all create the “ideal home” which translates into open escrows and closed sales. New holiday towels spruce up the house and keep the decorating budget in check. Take advantage of the emotional connection your home offers and don’t forget the cinnamon spiced pinecones on the entrance table.

Initially, getting the house ready can create a sense of orderliness but having to leave every time someone wants to see the house grows old quickly. Holiday shoppers are serious, pre-qualified and ready to buy. Having showings at this time of year reduces the number of “tire-kicker” showings. You can also get away with restricting the showing times, as most people are more respectful for family gatherings.

Did you know that January is the biggest transfer month of the year? Transferring employees use the holidays to shop for their new home and feel pressured to find a home by the end of the year.  Additionally, as Dec. 31 draws closer buyers want to have some time for family so make the extra effort to finish inspections quickly. Not only do you have a pool of committed buyers but they start to panic knowing they have to close by yearend so tend to be more agreeable.

Investors are another group of buyers that focus on quick closes at the end of the year. I had one client who didn’t want to face his CPA until he closed escrow and with the limited time frame was willing to soften on some of his demands. These serious buyers do not have enough time to start their search over so are more willing to negotiate.

Many sellers hold off listing their property until the spring due to family obligations and entertaining. This means less competition during the winter months, therefore less for a buyer to choose from. So take advantage of the slow down and showcase your home with your favorite holiday décor, you might be pleasantly surprised by how convenient it is to sell during the holidays.

Some economists think we’re bumping along looking for a place to land and others fear we’re in for another down hill ride. One thing is certain; it’s a good time to buy a home. The trick is knowing what a deal looks like and writing an aggressive offer. Real estate has certain break points that are obvious to those of us who look at houses all day…not so much for the novice. Each tier offers a certain level of ”deals” to be had and I’ll attempt to define the differences so you can recognize the trends.

For obvious reasons price determines the location but within each area there are grades of desirability. The homes that are typically the lowest priced are bank-owned (REO). They can be damaged and stripped of appliances or have half-completed projects and are usually priced at the bottom of the neighborhood price scale. The banks usually respond quickly but don’t do much in the way of repairs. They can be good deals in the lower priced neighborhoods but when it comes to the better zip codes you’ll find the competition stiff.

Coming in at a close second are the fixers, which by definition need work to some degree. The nice part about buying a fixer is that there are loans (FHA 203) specifically designed to include the repairs and offers the potential owner their choice regarding those repairs. So if the house needs new carpet, the buyer gets to choose the color and style. Again location, location, location since these homes are much sought after by contractors who have lots of time to work on them.

Next is the much-dreaded short sale. Depending on the skill of the listing agent, these homes can be a great deal but you have to have the patience of a saint. Buyers need to be clear about the waiting period for short sales. Each bank has a different process and some manufacture delays by the methods they demand for submission of offers. Currently I have a short sale that requires submitting the entire package via snail mail, not very efficient given today’s technology. These properties are deliberately priced low to attract offers quickly to get the process going. Of course, the bank will send out their appraisers to determine value but if priced right you will find they will accept a solid offer to avoid foreclosing.

The last tier is the forced sale due to some misfortune and the fair market sale, which represent about 25% of the current market. Varying value structures but all are based on the assumption that within a given radius each home would be of equal value given the same degree of interior upgrades, lot size and age of bldg. The bottom line is that every sale that takes place in that neighborhood affects the next sale good or bad, so the deal you buy today might not be the last one found in your neighborhood.

High school was a great learning experience for me because I learned how to trust my gut. High school is the first time you get to choose which  teachers you have for each class. I soon found  those that I enjoyed I learned a lot from, and those I endured didn’t learn much from. By my senior year walking out of a class after the first day and heading to the counseling center to re-schedule wasn’t a big deal. I wasn’t intimidated and didn’t make excuses…if I didn’t like a teacher on the first day, it wasn’t going to get any better.

Searching for a real estate agent is similar to finding a good teacher. You want to find someone who will teach you the ropes and who you can trust to give you good information. After all, a home purchase is statistically the biggest purchase you will ever make. This video makes a humorous point about intimidation when it comes to real estate agents but unfortunately some agents still use these tactics…Click here to view the embedded video.Professionals Teach -

My attitude has always been to get the information to my clients in order for them to make an intelligent decision. The Realtors Code of Ethics requires that I offer my clients the utmost in service, and intimidation shouldn’t be part of the package. If you feel uneasy or that your requests are not being heard, find another agent who will take the time necessary to help you find your home. Referrals are a good start but don’t stop there. Interview at least three agents and get an idea of their approach. Some agents don’t work weekends, and others only work business hours, so if you want to go shopping after work, or need to list your house after dinner, you’re out of luck.

One of my clients purchased a house from me a few years ago, sight unseen. He worked for the government and had only one week to find a home. The market was hot and my client put in three offers before he left to go back to his job but none of them panned out. He had used up all his vacation time and decided to trust me to find him a home. He said he felt he could trust me because while we were previewing homes he heard me comment on everything he was concerned about. If the house was located on a busy street, I commented on that. If the house had a smaller than average master bedroom, then I commented on that. I didn’t ignore the obvious, nor did I pressure him into making a decision…I simply gave him the information and let him decide. He found he could trust my information and that enabled him to find a home that he eventually re-sold at a tidy profit.

So to bring it all together trust your gut. If the agent seems to be something other than what they appear, you’ll probably find proof to support your intuition once you get to know them, so don’t waste your time. Secondly, make sure they listen to you. If you say you only want to see single story homes and they show you two stories, then realize they are not looking out for your best interests. And finally, if you feel pressured into a purchase and don’t feel you have enough information don’t be afraid to ask for more. If the agent counters with more pressure then you know he is only looking to make a sale. Remember this is a decision that you only make about once every seven years, so enjoy the process. A good agent removes the pressure and intimidation from the process…they don’t create it.

To subscribe to my newsletter click on: http://www.feedburner.com/fb/a/emailverifySubmit?feedId=2571487

In this last market it wasn’t unusual for buyers to tell me they were qualified for a home that was well beyond what they could comfortably afford. My next question was geared towards getting them to think realistically about those monthly payments and was something along the line of, “So you can afford to eat every other day?”  We all know how that shook out and are now facing unprecedented challenges in our economy.

This brings up the idea of housing affordability and reminded me of the movie Back to the Future. Word on the street is the banking industry is starting to revert to the old 28/36 rule when qualifying consumers for home loans. This tried and true method allows up to 28% of your income to be spent towards housing and caps all debt at 36% to include the PITI, insurance, car payments, credit card debt, etc. Given some statistics showing that up to 12% of all Americans spend up to half their gross income on housing costs it’s no wonder the banks are tightening their belts.

Financial advisers all agree that you need to outline your life style and figure out your living expenses prior to shopping for a home. The magical thinking of re-financing out of a too high housing loan into a more affordable traditional 30 year fixed has back-fired and caused a lot of pain. So do the hard work of sitting down and itemizing every necessary expense vs. those that vary from month to month. Should finances get cut you can eliminate that expense and apply the funds towards your mortgage.

Down payments, taxes and reserves are the main elements lenders look at when determining how much house you can afford to purchase. Traditionally 20% down showed the banks you had skin in the game and they rewarded consumers with preferred rates and no additional mortgage insurance. FHA and VA offers buyers the ability to get into home ownership without the big down payment but with the added expense of mortgage insurance. These costs are fixed and most new homeowners set up an impound account to collect these funds on a monthly basis. When the tax bill or homeowner insurance bill comes due the funds are ready to be dispersed from the impound account making the process painless.

Home ownership is the American dream and after we get through the nightmare created by the creative financing of the past six year perhaps we will embrace the fundamentals we were taught with higher regard. Being house poor isn’t much fun but living beyond your means creates stress so don’t disrespect the numbers. If you would like to know the difference between your rent vs what you could purchase let me know. Now is a perfect time to buy with interest rates AND prices down so let me know if it’s time to go shopping.

To subscribe to my newsletter click on: http://www.feedburner.com/fb/a/emailverifySubmit?feedId=2571487

They looked a little uncomfortable and then said rather sheepishly yes, “and you know what he advised us to do?” “You see,” the wife said, “we just got married and we haven’t finished up the paperwork yet so I still have my maiden name. I already own a house that I bought while in college…my parents helped me. The lender suggested that my husband buy a house in his name, even though we’re married, but not tell the bank so he could take advantage of the $8000 tax credit.”

Did I see red lights flashing or what? Loan fraud by any other name is still loan fraud!

First time buyers are vulnerable to whatever the lender tells them and the temptation to commit loan fraud is apparently alive and well. Just remember that if the lender finds out that you have committed fraud they WILL foreclose and take back your home so when shopping for a lender or real estate agent make sure you check their integrity credential.

Another scenario to be wary of is when a property is being flipped by a seller without every recording the sale. Here’s how it works. Seller A is in dire straits and needs to sell his home. Mr.Realtor lists the home for sale and conveniently has a buyer who is also an investor. He encourages the seller to sell the property to his investor but continues to advertise your home for sale.

Buyer Bob comes along and and writes an offer higher than what Seller A is selling the home to the investor for. That difference is not disclosed to him and the lender isn’t aware of it either. So who benefits here? Does the seller…no…because he doesn’t get a dime from a short sale. Does buyer Bob…no…because he is paying top dollar. The investor and the realtor make bank because the spread covers the double commission for the agent and give the investor a great return for tying his money up for a couple of months.  Non-disclosure is risky business and not worth the trouble it causes.

Real estate agents can offer referrals but if they are working with lenders like this one their advice is just as toxic. They might lose their license to sell real estate but YOU will lose your HOME if loan fraud is committed. Working with ethical people will never hurt you. You won’t have to deceive anyone and can be assured they have your back.