Category

Buyers

Oct 16
0

To Buy or not to Buy…

By | Buyers, Economy, Interest rates, Investing in Real Estate, RE by the numbers, RE Investing, Wine Tasting | No Comments

Operation Twist is the economic policy from the FED:  at their last official meeting in August, the policy making committee decided to keep interest rates low until 2013 …

This is good news for buyers… There is a time window to benefit from low interest rates… Time to get once’s financial house in order…

Some might think that waiting to buy is a better option, they decide to stay on the sideline… Smart idea???

Well depending on your situation: if you rent a home you pay for someone else’s  mortgage. Why rent when you can buy? All the first time home buyers I have been working with recently end up paying less in mortgage than in rent…

Will home prices go down further? All Real Estate is local. While the higher end in Santa Rosa/Sonoma County is expected to loose some more value in the coming time, the lower prices homes have been fairly stable in the last years.

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But what if home prices are coming down a little further? You never know when the market has hit bottom until it goes up again. At that point there will be a lot more competition.In the mean time: you have to live somewhere, might as well pay your own mortgage and take advantage of the tax benefits when owning a home…

Bottom line: the current market in Sonoma is a great market for buyers: although the inventory is low, there are great homes coming on the market all the time. There is no such thing as the perfect home. But right now there is the luxury of not having to worry about interest rates going up dramatically.

Last note: in Netherlands most rental homes are owned by the government, our first home after we got married was government owned. Home ownership is becoming more common but not like in the USA. It’s called the American Dream for a reason.

Have a great weekend and enjoy harvest season in Sonoma County: the first weekend is the 13th Annual Wines and Food Affair

Mirjam

Sep 25
0

Title Insurance: a Scam?

By | Buyers, Disclosures, Economy, Investing in Real Estate, Sellers, Short Sale, Sonoma County info, Visit WineCountry, Wine Tasting | No Comments

When you buy a home and use a mortgage you pay for at least 3 insurance policies: Home Owners Insurance, Home Owners Title Insurance and Lenders Title Insurance. For an average home in Sonoma County, Title Insurance is around $1,800 for both policies. That is a lot of Peet’s Latte’s or paint, or carpet… And if you pay cash for a home, you can opt not to buy Title Insurance. A smart decision?

Last week I had an interesting conversation with Stewart Title, thanks to Jessica Smith, our Title rep. BTW, this was in preparation a presentation for the YPN Morning Buzz group They shared some interesting facts about Title Insurance. Side note : Title Insurance came into place because of inadequate US land record laws. When we moved from Netherlands to California, some friends where making jokes about us moving to the Wild West. When Paul started talking it made me smile, had to think of that.

• When the economy is bad there are more scams with Title/ownership. – One ‘popular’ scam in the Sacramento area has to do with home owners in distress who are upside down, not able to pay their mortgage. There is a company that promises to ‘take care of it’. In order to do this they have to take title to the house ;). This is how:  a ‘fake’ document is recorded, showing that a new private lender has taken over the mortgage. This ‘private lender’ receives the money at closing . The ‘real’ lender receives nothing and eventually will foreclose on the property… Think about the innocent buyer, busf_transamerica_.jpgying this property without Title Insurance… will loose that house. An innocent buyer buying the house with Title Insurance can go back to the Title Company for help…

• Every one knows the Trans America Building in San Francisco… Remember these beautiful Redwood trees next to it? Well that is because of an overlooked PG&E easement that was right underneath the footprint of the building. Apparently when about to start breaking ground, the company hired to do that knew about the PG&E easement and suggested it would not be smart to start digging because of the PG&E lines… Long story short:  The Title Company who had insured the property/loan had missed that easement, they ended up buying the strip of land that is now a small park and paid to have the PG&E easement go around the Trans America Building… Next time you walk to that park, realized that that was paid for by a local Title Company…

There were more interesting stories about easements, deeds and scams. Bottom line when you buy property, always pay for Title Insurance. Chances something goes wrong are not that high but when there is a problem, it is extremely expensive.

Have a great weekend, it’s grape harvest time in Sonoma County, a lot of wineries have great events this special time of year.

Mirjam

Sep 11
0

Insurance and Real Estate on Sale

By | Around the house, Buyers, Sellers | 3 Comments

Right now it is common in Sonoma County to buy a property below the value of what it would cost to rebuild… OK let’s read this again: it is more expensive to build a home than to buy one that is already there…

This not only means that building new developments is not interesting for home builders. This also means that a buyer has to make sure that the home owners insurance chosen at time of purchase will cover the cost to rebuild. Quite often, buyers will go with the cheapest bidder. In the blur of the buying process: the inspections, the financing, the reports etc, Home Owners insurance is quite often an overlooked item. Any lender requires insurance coverage, however they may not always look at whether  the coverage is enough. Recently I worked with a buyer who thought he had a great quote for his insurance policy. It was so cheap that luckily the lender he worked with realized this and strongly ‘encouraged’ him to change this. That is by the way that I am very happy with the team of professionals I love to work with : Erin Temple (Vantreo Insurance – phone 303-2574) and Darren Seliga (Seliga Financial – phone 577-8737). But that is beside the point;)

Reason for this blog posting is not only the national disaster that happened in New York 10 years ago but also a recent experience as well as an article I came across in the Huffinton Post. This article is about insurance coverage and disasters.  Usually it is not a national disaster when your house burns down, but one needs coverage in both situations…

sale-left-red.pngI might as well confess: the insurance coverage we have on our house is not on my list of priorities, it was when we choose the insurance we have right now, but then I forget about it in the hurry of every day living. My insurance agent, the aforementioned Erin Temple, reviews each insurance policy every year, to not only see if we are eligible for new discounts but also asks whether we had any changes in our life that might affect our insurance program. If you do not have a pro active insurance agent, it might make sense to have a yearly reminder on your calendar to initiate that call yourself… Or call Erin…

Moral of the story: with the current historic low interest rates as well as homes being ON SALE it is a great time to buy. Do not let insurance coverage be the forgotten stepchild…

And the cheapest is not always the best… quite often it turns out to be the most expensive. Even people with a Dutch heritage realize this;)

Have a most wonderful rest of the day

Mirjam

Jul 31
0

Adverse possession… a home for $16?

By | Buyers, Sellers, Short Sale, Sonoma County info | One Comment

My dear friend Gini sent an interesting link to a video about a man claiming an abandoned home trying to acquire title through adverse possession. An interesting concept. In Netherlands, the adverse possession of property is called ‘Kraken‘ it started in the sixties in big cities as a protest against empty properties while there was a housing shortage. It still happens mainly in the cities. Right now it is still legal to move into a home that has been empty for more than a year. This however is not done with the goal of permanent possession. Usually the city gets involved, they can even decide to donate a property to a non profit organization.

Also California has laws as to adverse possession. It appears that the time for adverse possession is 5 years and there are quite a bit of stipulations before one can claim a property.  I am not an attorney and I would recommend to seek legal council before starting the process of adverse possession like paying taxes etc.  This is needed to eventually claim adverse possession. It is not the wild west anymore although sometimes it might feel like it ;)))

For now, a surer way is to buy a house. Right now owning is cheaper than renting. If you count all the money you need to pay taxes on a property to claim adverse possession while you are still not sure whether an owner might claim the property, you might as well use this money to buy a property. Interest rates are at historic lows and there are still  great mortgage products available allowing you to buy with a minimal down payment. For instance, large parts of Sonoma County qualify for  USDA loans. I am currently working with a first time home buyer buying a small home with a nice yard in Windsor. He will be using a USDA loan, his total housing 21104547.jpgexpense will be around $1,100 a month, and that is before his tax write offs. This program has income limitations, it is great for first time home buyers. Darren Seliga with Seliga financial in Santa Rosa is very familiar with this loan product, you can call him at :707-577-8737.

Mirjam de Rijk