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
Mirjam on October 25th 2009 in Economy, Disclosures, RE Investing, Buyers
Mark Quinn provided a very informative presentation at the April 1 meeting of the Sonoma County Alliance held at the Santa Rosa Golf and Country Club. The Sonoma County Alliance is a county-wide coalition of business, agriculture, labor and individuals incorporated to encourage a healthy economy, maintain a sound environment, protect private property rights and promote a responsive political process. Their monthly forums seek to maintain a visible force in community affairs; engage elected officials in dialogue regarding the establishment of public policy; provide a forum for its membership concerning land use and development, housing, taxation and allied matters; and increase membership interest and participation in legislative and political affairs on a countywide basis.
Mr. Quinn discussed the recent changes to the SBA 7a and 504 programs in addition to discussing a new program entitled the “American Recovery Program” that will be available in the next 6 weeks. These programs are the backbone of loans for working capital as well as real estate and business acquisition for small businesses.
According to the SBA website www.sba.gov, “The U.S. Small Business Administration (SBA) was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small business concerns, to preserve free competitive enterprise and to maintain and strengthen the overall economy of our nation.” The Obama Administration has specifically set aside funds to stimulate the small business economy since it is recognized that small business is critical to our economic recovery and strength during this recession. Large companies are shedding jobs and it is small businesses that hopefully will add jobs under the government stimulus plans.
Some if the program changes that Mr. Quinn discussed where 1) increase funds of $50M distributed to non-profits for the SBA Micro loan program 2) SBA 7a fees waived which are normally passed on to the small business from banks and the increase from 75%-90% guarantee to banks, and 3) the potential of the Dept of Treasury to buy 7a loans on the secondary market where some banks pick up added revenue. He also introduced the American Recovery Program which will be a new SBA program that will provide “short” term loans specifically for business that may be facing short-term cash flow problems during the recession. Loans will be up to $35,000 and the SBA will pay the first year interest and payment due for the first year. Further details forthcoming in the next few weeks for this program.
Mr. Quinn acknowledged that more resources are needed for the department to assist in processing loans and streamlining the process however it is up to Congress to fund SBA’s activities. He was hopeful that some additional funds will be increased for operations under the stimulus plan since the SBA heavily depends on it SBA “preferred” banks to really carry the burden of local underwriting, processing and outreach.
Denise Beeson works with Small Business Owners and Real Estate professionals specializing in placing commercial loans including SBA with preferred lending institutions and private money financing.
Some people have compared the current financial turbulence to the 1930’s and other ‘black days’. Some facts to know:
- More than 1000 banks closed in 1930 – only 14 U.S. banks have been taken over in 2008
- There are 76 million households in the U.S. that own their home - 24 million of these homes are free and clear
- There are 52 million homes with mortgages - 97.2% of these are not in foreclosure, 93.8% of these homes are current on their payments
On a sobering note:
- Over 20% of homeowners with a mortgage owe more than their home is worth
- 40% of all foreclosures are non-owner occupied
How did we get here?
Resale numbers – the above does not include new home sales.
Sources: Wall Street Journal / Moody’s Economy.com / RealtyTrac / NAR / Forbes
Do you see the problem and thus the predicament we’re in? Something had to happen one way or the other. Of course no one wanted it to be this bad. Let’s see what’s going to happen the coming time. In the mean time, Pat Kitano has a great way of keeping us informed -
In the mean time, it’s an excellent time to buy real estate!
Mirjam
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Denise on September 15th 2008 in Economy, RE Investing, Sonoma County info
George Houghton a CPA in town who is specialized in Real Estate gave a seminar this Friday. His concepts on Real Estate and Real Estate investing in the Bay area are profound and supported by numbers. Please remember, these are concepts, give or take a few years.
Rules of inflation (excluding high tech stuff and salary) : every 30 years add a zero. Think about the value in gold, rent, ticket to the movies etc
For Real Estate: every 10 years values double , every 30 years ad a zero.
Your first house is free. You have to live somewhere and if you take the cost of renting a home, compare that to all the tax benefits of owning a home, it’s almost the same. Rent is paid to someone else, mortgage is paid ‘to yourself’. Of course this does not work for a million dollar home but for an entry level/median home.
Every rental cost about 10% of the value. Yes, this is true, think about it, I look forward to your reaction!
And last but not least: every $10K spend on a car is the same as $100,000 is Real Estate and 1 million in retirement… I know you have to enjoy life but it gives something to think about an spend more consciously.
By the way: George Houghton wrote a book: Unleash the power of Real Estate.
Have a great weekend!
Mirjam (mirjam@c21alliance.com)
Did you see the new homes at Bridge Trail at the North Village ? It’s developed by Hugh Futrell, a great developer who does unusual projects. He also build The Burbank on seventh street in Santa Rosa. Both developments have something special. All the homes at Bridge Trail come with solar panels a great way to lower your PG&E bill, actually there are tax rebates that can be claimed too!
The homes in the newer subdivisions are built on small lots (post stamp lots), the beauty of the Bridge Trail projects that it comes with open space/trails, kids will be able to walk to the Jack London Elementary and Piner Olivet Charter Middle school. And don’t forget the North Village club community center with pool gym etc.
The homes are priced in the low $400K range, should you be looking for a new home: there is lots of value that come with these homes. Tell them Mirjam de Rijk sent you and say hi to Stan and Juan.
Yesterday’s Wine club party at Seghesio Winery in Healdsburg was great, 400 pounds of crawfish was flown in from New Orleans (Peter’s wife comes from New Orleans) and that was served cajun style with red potatoes, corn and sausage. It came with Gumbo, that was absolutely the best I had.Last time I mentioned the 2004 Venom, a Sangiovese from Rattle snake hill (sold to members only), this time I need to tell you about Defiant, a new wine that will come out next year. Peter shared some of it to sample: it is still very young but already delicious and my expectations are extremely high for when it come out next year. It’s a mix from some Italian vines, will have to ask again what’s in it since I did not write it down.
Oh, Seghesio is also a great place for a picnic: enjoy you picnic with a great glass of wine while enjoying a nice game of Bocce. It doesn’t come better than that: Sonoma County living at it’s best!
Have a great day!
Mirjam (707-486-2638)
With so much said in the news about foreclosures and short sales just some facts.
At this moment the bank owned properties are selling well, the lower price range of our market is selling, some bank owned properties were priced so low that they had more than 20 offers on them and I know of one property ( NW Santa Rosa) that went into escrow $100,000 over asking. It will be interesting to see the numbers when these transactions close.
Financial Title did sent me enclosed stat, an overview of the sub prime ARM’s that will mature the coming months/are maturing now. Sorry to say that quite a bit of these will end up as foreclosure. Banks are only interested to sell these properties as fast as they can.
While you have to be careful buying these (use a good Realtor), they are excellent opportunities for investors and buyers. Should you like to be on my ‘opportunities watch list’, just send me and email with your contact info so I can set you up. By the way, not only bank owned properties are great deals, sometimes a regular sale might be a better deal.
We are going to have a wonderful weekend, great for touring around Sonoma County an enjoy some wines. I did meet Pat Maier at the Chamber Expo this week, she was pouring an excellent 2005 Cabernet. Check out their website, you have to make an appointment to taste their wines, they are also available at some great restaurants in town (one was Willi’s Wine bar in Larkfield).
Have a wonderful weekend!
Mirjam (mirjam@C21alliance.com)
I know the market fluctuates all the time but I have been noticing that a lot of homes have been going into escrow, it has been rising over the last 5 weeks. It started slow but then it picked up. And yes, a lot of the homes that went into escrow also closed. Look at the statistics that I pulled from Broker Metrics a program that very conveniently pulls the data from our local MLS system.
The media is giving you info that the economy is going through the drain, the Fed will have to cut interest rates again. Perhaps they are right, but keep in mind John D. Rockefeller who said “The way to make money is to buy when blood is running in the streets.”
The info is also great for sellers, should you need or want to sell your home, the numbers clearly indicate the ‘new reality’.
The above statistic is from all Sonoma County. The drop shows that a some people have take their home of the market at the end of the year, some home owners who were trying to do a ’shot sale’ did not succeed and the property went into foreclosure (these properties will come back a few months later as an REO) and it clearly show the increase of activity.
I look forward to your feedback!
Mirjam (707-486-2638)
In today’s housing market, the media’s continued focus on negative real estate news is keeping many people solidly on the sidelines. But remember, you are not getting the whole story.
FACT #1: THERE IS STILL OVER $23 TRILLION OF VALUE IN U.S. HOUSING STOCK. Home ownership continues to be the basis of our wealth in this country.
FACT #2: THE HOUSING MARKET CANNOT HELP BUT GROW. Our country’s tremendous wealth, liquidity, and entrepreneurship will continue to drive our economy. 70-100 million people will be added to our market in the next 40 years.
FACT #3: REAL ESTATE IS CYCLICAL. The biggest fear in good times is that the fair weather won’t last forever—because it doesn’t. But the reality of a cyclical real estate market also provides its brightest hope in bad times—foul weather won’t last forever either. What’s happening today is a market correction, severe in some places, but it’s not the end of the world. The markets will stabilize.
FACT #4: 2008 IS THE BEST YEAR TO BUY A HOME IN 35 YEARS. 1973 was the last time mortgage rates were this low in a buyer’s market. We had rates this low in 2001 and 2002, but those were strong seller’s markets with little inventory. The last two big buyer’s markets, in the early ‘80s and early ‘90s had much higher rates. Low rates and good inventory make 2008 the best year to buy in decades!
FACT #5: FIRST-TIME BUYERS HAVE A REAL ADVANTAGE IN TODAY’S MARKET. First-time buyers can buy at a reduced price without having to sell at one too. Higher limits on lower cost conforming loans also help first-time buyers purchase more home for their money. Today’s ‘starter’ homes can be pretty impressive.
FACT #6: FIRST-TIME BUYERS LOSE MONEY WHILE THEY WAIT ON THE SIDELINES. First, renters typically pay more state and federal income taxes than homeowners with a mortgage deduction. Renters are also losing the wealth they could be accumulating as they pay down their mortgage and as their home increases in value over time (as it surely will). Lastly, renters who wait to buy will lose money if interest rates increase by the time they finally act. Higher payments from higher interest rates represent money buyers could have kept if they had bought earlier. Conversely, if they were willing to spend that amount of money earlier, they could have bought more home.
FACT #7: HOMES SELL WHEN THEY’RE PRICED RIGHT AND SHOW WELL. When sellers make their home’s value obvious, they make a sale—it’s as simple as that. The facts are showing this. In Sonoma County we see investors coming back into the market.
… Have a great day!
Mirjam (707) 486-2638
Mirjam on April 17th 2008 in Economy, Sellers, RE Investing, Buyers
Good news for all you folks who own investment property for appreciation purposes in a ‘vacation’ area (Lake Tahoe, Hawaii). Exchanging this property will be a whole lot easier.
Per March 10, 2008 the IRS officially allows limited personal use of an investment property and will not prevent the qualification of a property held for trade or business or investment use for purposes of the tax-free-exchange rules. Here is a link to an article from Tom Kelly.
Using your investment property 1 or 2 weeks a year and keep it vacant for the rest of the year and still qualifying for 1031 exchange rules is ok by the IRS.
Sonoma County is a great area, historically track records of property values doubling every 10 years, the wine county is a great vacation destination and on top of that: great opportunities right now!
Have a great day.
Mirjam (mirjam@c21alliance.com)
