Category

Economy

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

Jun 22
0

Real Estate On Sale!

By | Buyers, Economy, Investing in Real Estate, Sonoma County info | No Comments

Always love a good sale, especially when the value is there. Buying just because it’s cheap doesn’t make sense. However, when something I like is on sale… Buying season! Sonoma County is a great place to live and right now Real Estate is on sale. Owning a home or even investing in this beautiful part of California is not just a dream right now, it is doable. In fact, it is cheaper to buy than to rent right now.

Darren Seliga from Seliga Financial Funding and Investment  gave a presentation at our weekly networking group recently and did the math for us using an example of a medium priced home.

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Buying a home right now is a smart thing to do, with a 30 year fixed mortgage you will know for the coming time how much you will spend on your home. Rents go up every year, a 30 year fixed mortgage is fixed… for 30 years…and paid of in 30 years.

Mirjam


Jun 12
0

Green Living, what does that mean for you?

By | Buyers, Economy, Investing in Real Estate, Sellers, Sonoma County info | One Comment

220px-flesinname.jpgOne of the funny stories when we moved to CA had to do with recycling. In Netherlands you pay deposit money for a lot of the glass and plastic bottles. The gorcery store has a recycling station: you bring your bottles and crates back and receive the refund. For some of the bottles this might be a high as an Euro. Great reason to recycle… Also in most towns, the glass bottles you don’t pay deposit money for, have to be brought to recycling containers, separated according to color… In the first month after we moved to CA, I walked through twice through the local grocery store to find the recycle station… and then I finally asked…

In Sonoma County we have Curbside recycling for glass, paper etc, there is a recycling guide for all the items that need recycling. We might not realize it but we have more ‘toxic waste’ products in our homes than we think.

Recycling is just one part of Green Living. A lot of the buyers I work with like to live in a spot where they can bike to work, walk to the farmers market, walk to the store. The numbers show a trend that is becoming more important. Popular neighborhoods in Santa Rosa for this reason: JC area, Burbank Gardens, Proctor Terrace, Sherwood Forest, Montgomery Village, the West End district. It will be interesting to see how this is going to impact for instance the homes in Fountain Grove, right now the same SqFt home in Fountain Grove is less expensive than in the areas mentioned before.

santa-rosa-charlie-brown.jpg Think about this: if you pay $600 a month to fill up your car to get to work while you could save this money by biking to work or walking to the stores… with current mortgage interest rates, that is about $100,000 in mortgage payment…

Just some thoughts I wanted to share, not only when buying a property to live in but also when investing in real estate. Properties in areas closer to good schools, shopping, parks, public transportation are just easier to rent.

Green living saves money!

Mirjam

May 29
0

Get Rich Quick Scheme

By | Buyers, Economy, Investing in Real Estate, Retirement, Sonoma County info, Wine Tasting, Winery with picnic place | No Comments

“Ora et Labora”, historically the mantra of the Northern provinces of the Netherlands. Totally opposite of this are the “Get Rich Quick Schemes” -> if it is too goo to be true… What does this have to do with Real Estate? Well, Real Estate is a great way to built wealth, to built a nest egg HOWEVER, it is not a quick rich scheme. It is consistent and stable, despite the ‘hick-up’ we had. The quick rich schemes in Real Estate in the roaring 2003/2006 didn’t work, initially the majority of all the foreclosures were non owner occupied, victims of these schemes. Not built on cash flow but solely on appreciation, hence the problem. Did you know we still has an increase of 30.14% since 2000 despite the negative economic factors?

What does this have to do with you? Real Estate is still a good way to built money for retirement, just as part of a good financial strategy. AND there is a need for rental housing: on average about 33% of all adult Americans need housing and are not in a position to buy. In the USA this is not provided by the government (as it is in Netherlands ->the local department of housing provides rentals) but provided by private investors. The reason for all the tax benefits for owning investment property.

Myth:you need to be rich to invest in real estate. Fact: median income for an investor in 2010 was $87,600. Myth: you need cash to buy properties for investment. Fact: there are great mortgage products available. And Self Directed IRA’s that allow you to invest in Real Estate.

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This overview of historic values in Real Estate speaks for yourself. We all know what happened in the 3 years we had negative appreciation. But do you also see it’s a tad bit above the 0% again. Just a but and that is GOOD, that is what we like to see. Do you know what this also means? That now is a great time to invest in real estate, the numbers haven’t been this good in a long time, in Sonoma County the last time we had this was about 27 years ago.

And although Real Estate is fun, don’t forget to enjoy the good things in life, next week Windsor Oaks Winery has a ‘Chillin’ by the Pinot Pond party. Julie and Doug are passionate about wine and are happy to share their passion and knowledge about wines with you.

Enjoy,

Mirjam

May 22
0

Real Estate and Inflation

By | Buyers, Economy, RE Investing, Sonoma County info | No Comments

When you buy a home you stop inflation on your housing expenses. What does that mean for you? leerdam.jpg

Ask your grandparent, your parents, maybe a neighbor who has lived in his/her house for 30 years: what did they pay for their house, OR for how much did they pay in rent… Get it? The first home we bought when we lived in the Netherlands was on the Tiendweg in Leerdam . It was built in the 1930-s and these homes initially sold for a whopping 3,000 to 5,000 Guilders each… Right now this around 445,000 Euro (Euro is 2 guilders) Back to Sonoma County, the homes in Montgomery village in Santa Rosa, when these homes were built in the 1950-s they sold for the unthinkable price of 5,000 Dollars, considered expensive in these days.

But then again, ask the same grandparents, how much they paid for a loaf of bread…

My CPA George Hougthon uses as rule of thumb: every 30 years add a zero, to both buying a house and renting a house… Looking back in history: the time when people rented a house for $200 a month is not that long ago… Right now expect to pay $2,000 a month to rent a house…

Buying real estate is smart, inflation is just one reason… And think about investing in real estate in the context of inflation. Investing in real estate is a smart way to built a nest egg.

What are your thoughts?

Mirjam