Dec 13
0

House on Fire!

By | Around the house, Buyers, Sonoma County info | No Comments

House on FireAs mentioned before, in Sonoma County, it is cheaper to buy than to rent. BUT there is a major difference between being the tenant vs being the OWNER… When renting, the landlord is ultimately responsible/liable for the house/asset. In the rush of buying, home owners insurance is often the forgotten stepchild. And after the home is bought and nothing happens, it’s something you pay for and never think about. See also a previous posting…

Home Owners insurance is quite often called fire insurance – insurance to rebuilt your house when there is a fire. I have written about this before. Important is for instance the type of roof. There is a surcharge for wood shake roofs vs composition shingle. Side note: many insurance companies are refusing to insure homes in a high fire hazard area.

Home owners insurance is also liability insurance: for instance when someone trips on your property and hurts himself, that is covered under your home owners insurance. Or the puppy that looks sooooo cute. Certain breeds can make you ineligible for Home Owners Insurance coverage. Others are acceptable only if the owners have taken the dog to a ‘Canine Good Citizen’ test through the AKC.

In our area  Animal RN (Robyn Kesnow) provides this service for a nominal fee.

Having a good insurance agent is crucial, for questions about Home Owners Insurance, I can highly recommend Erin Temple of Vantreo Insurance, she is my preferred insurance agent, she is extremely knowledgeable.

So when you decide to buy that cute puppy, call your insurance agent do this to when you are still renting, just to be safe.

Mirjam

Dec 04
0

Foreclosures, is it that bad in Sonoma County?

By | Buyers, Foreclosure, RE by the numbers, Sellers, Short Sale, Sonoma County info | No Comments

Foreclosure Netherlands - Sonoma CountyFollowing the news headlines might give you the impression that every home that is being sold right now is in foreclosure… As this might be the case in certain areas, this is not the case in Sonoma County. To give you an idea of this morning’s numbers in our local MLS:

As of 01/01/2011 up to12/04/2011 the total of all homes sold: 4949. Of these 1461 were bank owned and 1092 were short sales. This means that of the 4949 homes that were sold, 2396 were ‘regular’ sales. According to BofA, Sonoma County is fairly sheltered from the foreclosure crisis.

Every state has different laws as to foreclosures, the worst a home owner can do is to simply walk away from their house.  Right now as mentioned in my previous blog posting, a short sale is in general a much better option.

In the Netherlands, walking away from your house, will result in you having to pay all the remaining debt. There is an insurance you can buy for this purpose, yet you still have to contact your bank and take action.  This is a link to a great website about this subject in the Netherlands. Sorry the website is Dutch;)

By the way, because of these numbers in Sonoma Count, a foreclosure or a short sale is in general not sold below market value. The condition of the property is what determines the value. When you are looking to buy in Sonoma County, look at all the properties for sale not just the ‘distressed’ properties.

For those who want some more specific info/stats, please feel free to send me an email.

Mirjam

Nov 27
0

Deficiency: shortage, deficit… or paying back what you owe…

By | Foreclosure, Mortgage, Sellers, Short Sale, Sonoma County info | No Comments

short-sales.jpgThe majority of people who buy a home need a mortgage or a loan. The home is yours, you pay the mortgage back over the life of the loan. When you sell the home you pay off the remainder of the loan… This is the case in about 50% of the sales in Sonoma County right now.

The remaining 50% is about 25% short sales and 25% foreclosures. The latter is quite often called ‘walking away’ from a home, the homeowner stops paying their mortgage and the bank forecloses… And in case when there are 2 mortgages against the home: the first ‘lien holder” (bank) forecloses, HOWEVER, the second ‘lien holder’ (bank) will pursue repayment…

This is the same in case of a short sale… A home owners sells their home, the bank agrees to take a loss. When there is a second loan, this bank needs to agree with the sale, and usually keeps the right to go after the difference… This CHANGED as of July 1st in CA… but ONLY for short sales. Per July 1st 2011, the 2nd lienholder cannot pursue the deficiency any more. This means, at time of closing you are  DONE. You walk away from a very difficult situation and can start over again. See my blog posting a few months ago.

Bottomline, right now in CA, there is a huge benefit in pursuing the short sale option. Rather than ‘walking away’ it behooves distressed home owners to take action, contact their banks, their trusted Realtor, mortgage advisor, CPA. Going through the short sale process is more work, but it’s worth it.

It is my experience that not enough home owners know about the benefits of pursuing a short sale. Please spread the word and also feel free to contact yours truly.

Mirjam

Nov 06
0

Earthquake Fault Zones and due diligence…

By | Buyers, Disclosures, Sonoma County info | No Comments

fault_types.pngLooking for the perfect home in the perfect neighborhood? There is a little secret I need to share: there is no such thing as the perfect home/perfect place … Ouch… The home might be a great match, the neighborhood might be just perfect but what about natural hazards? WHAT??? one might say…

220px-de_dijk_tussen_kesteren_en_opheusden_tijdens_extreem_hoogwater_van_de_neder_rijn_344320s.jpgYes, Natural Hazards…We are talking about Earthquakes, Flooding, Fires etc. These Hazards are different depending on an area. Living in the Netherlands and about 50% of the Netherlands below sea level, flooding is an important one. Living in Sonoma County, you can live right on an Earthquake Fault zone and in a High Fire Hazard zone (think for instance of Fountaingrove).

This does not mean that these neighborhoods or areas are unfit to live. It means that one has to be aware of these Hazards before the final decision to buy a home,the 3rd party Hazard Report is a report a seller has to provide to a buyer. It is part of the statutory disclosures a seller and their Real Estate agents has to provide. 

There are many 3rd party Hazard Disclosure companies to choose from, one is Property ID. Personally I like their reports since they are easy to read and understand. It is important to go over all the disclosures provided.

Example: living in an earth quake zone means that there are more stringent building codes. This might affect you when remodeling an older home: all of a sudden there are extra requirements adding up to the costs of remodeling. However, these more stringent building codes are for your protection: the likelyhood of your home to withstand an earthquake…

These Natural Hazards also affect your Home Owners Insurance: living in an area with higher risks to be affected by natural disasters results in higher premiums. Recently I sold a home right on the coast of Albion: magnificent location. Small detail: most insurance providers were not willing to insure the property. That is by the way why a good insurance agent/broker is key: my favorite insurance agent, Erin Temple of Vantreo Insurance, was able to find a good insurance company who was willing to insure the property for a reasonable rate… Also lenders require a property to be adequately insured by the way. This is important when buying and refinancing a property.

Moral of the story, is doesn’t matter where you live, it is important to be aware of all material facts affecting the property you decide to buy.

Mirjam

Oct 23
0

Banks not supporting Energy Independence Program

By | Around the house, Buyers, Disclosures, Sellers, Sonoma County info | No Comments

As Kermit in Sesame street sang: ‘It’s not easy being green’

new_kermit.pngSonoma County in general has been promoting lowering our dependence on fossil fuels for a while now. Not only in big things but also in small things like using the old fashioned clothes line for drying clothes. That’s how I grew up in the Netherlands.

A great program that was developed a few years ago is the Sonoma County Energy Independence program (SCEIP

With SCEIP, a home owner can apply for a loan against the property for energy efficient upgrades: Windows, water heater, furnace, solar panels etc. It is a loan against the property, to be paid back in 15 years via property taxes. The current interest rate is 7%. The idea was to encourage home owners to make older homes more energy efficient. And that when a home owner does the upgrades, sells the home that the next home owner can not only benefit from the savings but also help paying for it. Great idea…

However, lenders do not see the loan as part of  assessments on the property taxes. With property taxes generally one also pays for the school, fire department, road bonds… For instance the road bond used to build Fountain Grove Park way is being paid for by home owners as part of the property taxes. Some homeowners have paid it of. When a home is for sale in Fountain Grove it is part of the seller disclosures and a prospective buyer will also see it when he received a copy of the property tax bill.

Now we see homes coming on the market that have the energy efficient upgrades. When the first home went into escrow, it was interesting to see that the lender who was chosen to provide the mortgage for the buyer, did not accept the SCEIP assessment on the property and required that is was paid of before close of escrow. Reason: they see it as an other loan against the property, thus the SCEIP lien will become senior to theirs when they new loan gets recorded. This means that in case of default, they are not in first position and thus responsible for the SCEIP lien in case they foreclose on the property. Also the government loan programs FAFH – Fannie Freddie, do not recognize the program and require the SCEIP assessment to be paid of before they will put a loan on the property…

Extra note, the above is also the case when a home owner wants to refinance his/her property to take advantage of the current historic low interest rates…

Sonoma County is protesting this and has taken FHFA to court.The latest update is on the website.

While the above should not stop a home owner from taking advantage of this program, it is good to be aware of the above developments. AND when you buy a home ALWAYS read the preliminary title report as well as the copy of the tax bill.

Have a most wonderful day!

Mirjam