Real Estate and Real Life in the Wine Country

Have you read a California purchase agreement lately? Probably not, come to think of it, when a home owner decides to sell his house, part of the homework might be to ask your realtor for a sample contract, just to familiarize your self with the important stuff. Buyers should do the same. This agreement is a legally binding agreement once signed but all parties involved.

About 99% of buyers will make an offer with what we call contingencies… what was that? Yes, I call it the ‘buts’. I’d like to buy the house but: I need a mortgage and the house needs to qualify, I want to make sure the house doesn’t have serious flaws, I want to make sure I really want to live in that neighborhood, I want to….

The list if reasons can be different for everyone. Some of you might say, wait a second, you cannot have an endless list of ‘buts’. Basically the main ones are: Financing, Inspections and Title.

Financing: the house needs to appraise and the bank needs to agree.

Inspections: buyer can do any and all inspection as to satisfy himself as to the condition of the property. This covers a wide range if subjects, even the neighborhood is involved. That’s why the list is endless: depending on property and buyer. Everyone has different priorities.

Title: once the escrow is opened,  the title company provides a preliminary title report, stating the legal owners, the liens against the property, the easements etc etc. A problem with title can severely delay the sales process.

In our area, in general,  the contingency period is 17 days. This period gives a buyer the time to have all ‘contingencies’ taken care of. Should something seriously pop up you can either ask for an extension to do more inspections, ask for money to remedy the problem, sign of on the contingencies and move forward with the sale or decide that this is not your house and cancel the dale. You can say, when inspection period is up you have to really decide (what is that expression again?).

There is a lot more to say about the subject but this is the basics to remember about the ‘buts’.

Have a great Sunday!

Mirjam

With all the focus in the news about Short Sales, foreclosures, bankruptcy, it might feel that these are the only properties out there.

Just sharing with you the local sales numbers in Sonoma County as of 5 minutes ago, all the properties that sold since January 1, 2010:

Total sold properties: 3131. Of these, 1538 were either foreclosure of shortsale. Bottom line, this year so far 50% of all the sales were distressed sales. This is not saying anything about the future but just the plain numbers as of the moment I am writing this.

With the current interest rates at a historic low, the numbers mean that it is a great time to sell property and a great time to buy property.

On a side note: despite what you might think: foreclosures are not always the best deal in town.

Have a great day, enjoy this sunny afternoon!

Great news from the Sonoma County Permit & Resource Management department!

For a limited time, permits to legalize non-permitted construction will not be subject to civil penalties and investigative fees.

Projects eligible to participate are:

Residential buildings and accessory structures  •  Construction completed prior to July 13, 2010 • ‘Self-Disclosed” construction

Eligible permit applications must be received between August 1, 2010 and February 1, 2011.

Now is the time to safe money, permitted construction always results in higher value!

Mirjam

Reporting from Washington - If you’re thinking about applying for the new $6,500 home buyer federal tax credit or the extended $8,000 version, the Internal Revenue Service has just issued its first formal guidelines for you.

A great article in the Los Angeles Times: it is an easy to read outline of the new rules.

It is still a great time to buy but also a great time to sell with the tax credit for repeat home buyers. So you can sell your home and take advantage of the tax credit to buy your new home. The housing inventory in Sonoma County is so low, properties priced well sell fast and you are able to take advantage of the current market to move into your dream house.

  Mirjam

I am copying a posting from Kevin deBoer from 3 Oceans Real Estate. The link didn’t work but the info is interesting:

We are continuing to see the benefits of the current government programs to spur home sales across the country. Recent news that the $729,750 limit on conforming loans in our area has been extended into 2010, and that the government will continue to buy loans into 2010 have both contributed to increased sales and consumer confidence in our area, which means more buyers and sales. buyers+sales = Happy Realtors!

Even with those two incentives in place, there are some would-be-home-buyers that are still sitting on the fence. Here are two additional data points of interest:

Today the 10 year Treasury yield is at 3.2%. This indicator corresponds to mortgage rates – typically when it’s down, mortgage rates are down. Throughout this year rates have remained at historical lows; the average 10 Year Treasury yield for the last 12 months was 3.17%. However, the average yield over the last 10 years was 4.50%. In fact, from April 1953 to December 2008 the average annual yield for the 10 year Treasury was 6.36%. The highest rate during that 55 year period was 15.32%; the lowest rate was 2.29%. The high was attained in September of 1981. The low was achieved in April of 1954.

Translation: Evidence shows the 10 year Treasury yield and conforming mortgage rates are at historic lows; it’s unlikely they’ll continue in this range throughout 2010. How often does a 55 year interest rate low occur? About every 55 years!
According to the National Association of Realtors®, last month showed another big gain in existing-home sales, while inventories continue to decline.

Translation: the competition is getting tougher.

So, let’s see if all this “once in a lifetime” economic data, low interest rates, low prices, etc. are the bottom, or just the middle of the “double-dip recession” that the pessimists are talking about.

Mirjam

For all of us in Sonoma County the name Clem Carinalli is a familiar name. Once a name of trust and reliability, now a name connected to scandal and swindle. This morning’s Pressdemocrat has an interesting article about the shock of the investors.

Interestingly, halfway in the articles, several investors did admit that they also have themselves to blame by not doing their due diligence as to the investments they were making.

Due diligence… related to Real Estate, many times used in the CAR purchase agreement we generally use and the disclosures being given to sellers and buyers.

It used to be ‘buyers beware’ and sellers/agents were not statutary obligated to disclose anything they know about a property and affects the desirability of a property. However… always and I mean always read your disclosures, if you don’t understand what you are reading, talk to your Realtor, Mortgage broker, Home Inspector, Pest Inspector, Escrow officer etc etc. Not only do you have the right to do so, you also owe it to yourself to do so. These professionals are there to help you. Sometimes they might ‘assume’ that you understand every document you sign and read, please don’t hesitate to ask, the only ‘dumb’  question is a question not asked.

For myself, I have included a copy of the purchase agreement as wel as some general disclosure documents in a Buyers Guide I put together for my buyer clients. Quite frankly I hope they take the time to read it and mark the items they don’t understand. I love working with people who like to educate themselves as to what they are doing.

   It is a beautiful autumn day in Sonoma County, enjoy it.

Mirjam

Just wanted to share this information… great info for buyers!

Fannie Mae and Freddie Mac are offering financing incentives for buyers of foreclosed homes owned by Fannie and Freddie.  Home buyers have until Oct. 30 to apply for Freddie Mac’s SmartBuy program, which started in July, and offers up to 3.5 percent of a home’s sale price to help cover closing costs.

To qualify, the home must be a principal residence and must be selected from Freddie Mac’s HomeSteps Web site (www.homesteps.com/homeshoppers.htm) for its foreclosed properties. Loans must close by year’s end.  The HomeSteps properties also include two-year warranties on major appliances and electrical, plumbing, and air-conditioning and heating systems.

Fannie Mae’s HomePath program (www.homepath.com) is an ongoing program and offers more incentives than Freddie Mac’s.  Through participating lenders, Fannie will offer mortgages to buyers who make a down payment of 3 percent.  The buyers do not have to secure private mortgage insurance, a common practice with nearly all lenders.  Home buyers also can negotiate for Fannie Mae to offer closing-cost assistance.  Unlike Freddie Mac’s program, Fannie’s assistance level is not capped.  Under the HomePath program, the average participating homeowner has received payments equivalent to 3.75 percent of the loan’s value.

The homepath program is also a good option for investors to consider.No matter what the media tells us, today is a great time to buy property in Sonoma County!

Yesterday we received a ‘Red Alert’ email from our local MLS board about the Rental Scam on Listed properties. The PressDemocrat had an interesting article about the subject earlier this week.

There is a rental scam taking place in which listed properties are advertised on Craigslist and other online classified services for rent, when the property is not for rent at all.  The ads run for a very brief period of time.

 How can you protect your listings from being a part of the scam?
Some brokers have removed the address of their listings on the internet.  While this hides the address from the scammers, both the buying public and the seller could be disadvantaged.
Monitor classified advertising internet sites like Craigslist to watch for ads using your listing information “for rent”.
Put a “NOT FOR RENT” rider on your signs.

The FBI’s guidelines for the general public to avoid being victimized.

• Only deal with landlords or renters who are local.
• Be suspicious if you’re asked to only use a wire transfer service.
• Beware of e-mail correspondence from the “landlord” that’s written in poor or broken English.
• Research the average rental rates in that area and be suspicious if the rate is significantly lower.
• Don’t give out personal information, like social security, bank account, or credit card numbers.

Should you have your property listed, please follow the advise your Realtor gives you. He/She is made aware of the problem and knows how to handle this. So far we do not know of people being victimized in Sonoma County and right now it is a major nuisance.

Enjoy the rest of this wonderful weekend, it’s a bit breezy still sunny and warm.

  Mirjam

This program was developed to help address first-time home buyers’ concerns about potential job loss and how such a loss would impact their ability to make their mortgage payment. Through the Mortgage Protection Program, first-time home buyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month, for up to six months, to help make their mortgage payments. A qualified co-buyer also can participate in the program, and receive a monthly benefit of $750 per month for up to six months.

The first time home buyers tax credit ends in a few month, together withe the mortgage protection program this is a time to get serious about buying a home.

And the definition of a first time home buyer: someone who has not lived in his owner occupied home for 3 years. So technically, someone who owns rental property and has been renting the last 3 years is a first time home buyer.

The government pays you to buy a house, go for it!

    Mirjam

Some buyers are trying to time the bottom of the market and purchase once it appears that prices are consistently and steadily rising.  Many housing forecasters advise against this approach as buyers should not view their homes solely as investment opportunities.  Historically, the average annual rate of return on a home lived in for five years or more is nearly 12 percent, based on data C.A.R. has collected over the last 40 years.

Despite what you make think: today is a great day to buy your next home in Sonoma County.

Have a great weekend,

Mirjam