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.

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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.

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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.

One of my favorite things to do is cook and one of the first rules is to make sure you watch the heat source so it doesn’t burn the food. It seems to me that  real estate is similar in nature and our market has been on a slow simmer all summer long but appears to be heating up according to all the economic reports. This is also evidenced by the multiple offers I’ve experienced and heard about, not only below  the $300,000 range but in the properties priced up to $700,000 as well. So how do you ensure that you get the property when you know there are multiple offers on the table (even though it is a short sale) and you still have to wait for a bank approval?

Glad you asked! Savvy agents are now requiring that the buyers deposit their earnest money checks with the escrow company upon acceptance of the offer by the sellers. This does not mean that the bank has approved the short sale but only gives some reassurance to the sellers that the buyers won’t walk away from the deal half way through the transaction.  This issue has been brewing for some time and it’s starting to cause listing agents to change their counsel so rule number one is expect to put cash  in escrow.

It’s not unusual for buyers in this market to write multiple offers but they must let that be known to all parties involved. There is no rule against writing multiple offers and when that happens it’s best to include some verbiage on the offer. This has been happening quite a bit lately and the result is that buyers are not acting responsibly when cancelling contracts. Sloppy buyer’s agents are NOT taking the lead here and the result is a lot of frustration in the real estate community.  So rule number two is cancel all previous purchase contracts and let the listing agents know in writing!

This market has allowed a record number of new buyers into the market by way of low prices and government backed loans which typically do not require a lot of money down (zero down for VA).  Brokers caution sellers against anything that could jeopardize the sale of the home and low down offers are at the top of the list. If  listing brokers advise against accepting offers without money being deposited we could see many buyers unable to purchase due to their lack of cash flow. Locking out buyers in this market is not a particularly happy thought so respect the sellers and alert them to any changes that will effect the sale, you don’t want to contribute to a negative backlash. So rule number three is to communicate any changes to the seller’s in writing.

I would like to express my caution to buyers (and their agents) who are indifferent to real estate procedure and their impact on this market. As we have seen the fall out of the wildly loose lending practices by way of stricter lending policies I suspect we will also see real estate brokers revert to stricter standards regarding buyer’s offers.  Additionally, since a lot of the newbie agents who got into real estate  at the height of the market are now gone we can be assured the established agents will once again cut the path to protect consumers. Most of what I have blogged here is standared operating procedure but unfortunately not practiced by some agents. I hope that those previously unable to buy a home will respect the process and get to enjoy their slice of the American dream.

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Buyer-broker representation in the purchase of a home is one of the smartest things you can do for yourself.  One of my pet peeves is finding out, after the fact, that someone  purchased a home from the listing agent because they thought they would get a better deal. My question is who got the best deal? 

First, let me explain what I mean by a  buyer-broker. According to California real estate code we, who sell real estate, are required to explain who we represent in any given transaction. This is called an agency disclosure. So, if you hire me to list your house, my job is to bring buyers and I am a listing agent. If you hire me to help you find a house, my job is to show you homes that meet your criteria and I represent the buyer as his agent.

A buyer-broker agreement  adds to the usual agency duties and requires that I work exclusively for the buyer to find a property that meets his criteria. For example, if I see a home that is For Sale by Owner (FSBO) then I need to contact that owner and ask them if I can show my client the home. If the seller says they will not pay a commission to me then I am still bound to show my buyer. Typically the buyer-broker agreement outlines the compensation to the agent. In most cases the buyers agent is paid from the proceeds of the sale, but technically the buyer is responsible for the commission.

So back to my pet peeve. If you call me  about a property that I have listed and you tell me you have an agent, I am required to respect that relationship. Failure to abide by that simple rule results in well over 50% of the complaints received by our board of Realtors.  The problem arises when the listing agent alludes that he can get the buyer a better deal for the house by dismissing his agent. Actually, the California Association of Realtors (CAR) boiler plate listing agreement shows the amount of commission to be offered to the selling (buyer’s) agent. So,  if the broker doesn’t have to split the commission he gets to keep the whole amount. Do you think that motivates the listing agent to find a buyer who isn’t represented? As Sarah Palin says….you betcha!

This happened in once instance when I was representing a buyer a few years ago. My buyer  had a budget that she could not exceed and the market was still going crazy. In the heat of the moment she walked into an open house, told the agent (who also happened to be the owner) that she had a buyer’s agent. He persuaded her to cancel the contract she had with me on another house.  He then said he would reduce the price of the home to the amount she told him she was budgeted for.

Do you think she was represented well?  The owner/seller wanted out in a big way and exploited her ignorance. We see this a lot in hard markets such as now with investors buying and flipping properties as fast as possible.  As if this wasn’t unethical enough, after the escrow closed she  finally read her paperwork and found various things wrong or misrepresented. She called me to see if I could offer her counsel. The saddest part was that because this real estate agent was not a member of our local board, and only joined the MLS, there was nothing the board could do to help this consumer.

The lesson is two-fold. One, make sure you understand your agency relationship and if you want single representation (no dual agency) then tell your agent. Buyer broker agreements require that you will  be responsible for paying your agents commission. IF you default on your agreement and do what my client did, then not only do you risk owing the commission, but you open yourself up to unethical agents. It’s funny how more green on the table causes failure to highlight items easily missed on reports or disclosures.

And two, hire a Realtor…this is a trademarked designation to be used only for agents who are members of the local, state and national boards of realtor’s. IF they do something unethical you have some recourse and can make their work life very difficult until they resolve your complaint. I’ve always maintained that you can’t teach ethics…people either have them and live by them or they don’t. One thing I do know and that is, that nothing stands in the way of what unethical people think they deserve.

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As promised I would scour the landscape to find the best deal happening in Folsom CA this week and I’ve found a wonderful home listed in the coveted Briggs Ranch subdivision. This 3bedroom 2 bath was built in 1988 and is just under 1300 sqft. It has a 2 car garage and is approximately 1/6 of an acre. 

Briggs Ranch is well known for it’s grammar school, proximity to Folsom Lake and mature landscaping. Additionally the fact that there are no Mello Roos fees or HOA’s keeps people who live there from selling and moving on. In fact, there are a number of neighbors who have bought and sold within this subdivision and the investor properties are few. This subdivision hosts many activities from July 4th parades to placing Christmas luminaries throughout the entire subdivision.

This home was posted on the MLS on June 12th and has a few offers in negotiations which is not unusual considering the $259,900 price tag.  Although higher in price the location is what adds value given the excellent condition and favorable location but is still a deal at $204 per sq.ft. Because it is a short sale there is still a possiblity of landing this deal given the fickleness of today’s buyer.

Folsom currently has just under a 4 month supply of inventory with a median price at $355,000. The average price per sq.ft. is $178.00 but you have to remember that this is an average of all the homes sold in May 2009.  If interested in conducting your own search just log on to my MLS search and let me help you get started finding your deal.

For related articles:

http://folsomlakehomes.com/2008/11/09/thanksgiving-day-race-in-folsom-ca/

http://folsomlakehomes.com/2008/10/29/folsom-soccer-membership-exceeds-3000/

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The band will play, the dignitaries will give their speeches and then the people will for one time only be able to walk along the new bridge in Folsom CA this Saturday, March 28th, and see the American River under their feet. There hasn’t been this much excitement in Folsom since the Natomas Crossing was finished in 1999.

There is a group of people forming the Human Chain of Gratitude on Saturday to encourage others to have an attitude of gratitude despite what this economy is doing.  I plan on riding my bike across the bridge and joining those grateful souls for a toast and enjoy this one time event.

Another event coming up is the community garage sale in Lembi Park this May 2nd. My office will pick up donated items to be sold with the proceeds going to the Folsom City Zoo. If you would like to donate any gently used items please email me or call my office at 916-984-8778

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Since the Dam road closed in 2003 the people of Folsom have had to endure over 18000 cars traveling through the downtown streets not to mention the impact  on the residents and small businesses in the historic district.  The sad truth is that although more people were detoured through that part of town there has not been an increase in business revenue simply because people are passing through.  

The declining economy notwithstanding it seems that some businesses have managed to survive and a few have thrived. Chicago Fire, my favorite pizza place, has expanded despite the lack of parking in the historic district and Scarlet’s next door seems especially busy on weekends. Does this mean that once the new bridge opens that we’ll see a reverse in downtown traffic or will it bring more people to that part of town knowing they won’t have to deal with the additional traffic? Inquiring minds want to know….

Good news for first time home buyers in California. As part of the state budget you can now get up to $10,000 credit or 5% of the purchase price of an owner occupied newly constructed home. This applies only to “have never been occupied” properties. This is a tax credit that is good only from March 1, 2009 to March 1, 2010. There isn’t any information regarding down payments or loan caps but a tax credit works like cash in your account at tax time so those of you who were on the fence it’s time to go shopping.

Currently there is a tax credit up to $8000 for first time homeowners which will expire at the end of 2009 which is an expansion of last year’s tax credit of $7500 with some changes. I don’t know if the credit will be retroactive to last year’s purchases but since tax season is upon us I’m sure more information regarding exactly how this plays out will start to surface.

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