Lower Interest or Lower Prices?

Right now, buyers have the best of both worlds -- home prices have risen, but they're still below the bubble of 2005, and mortgage interest rates are just above record lows. Yet, many buyers are still waiting for a sign that it's the right time to buy.

Should you wait for prices to go down or for lower interest rates? We advise that you do neither. The price of a home is fixed, so it makes sense to wait for prices to go lower, but you may not realize is that prices have to drop significantly to beat a minor fluctuation in mortgage interest rates.

Home prices have been rising for the past five years, sometimes in the double digits. Between January 2014 and January 2015, home prices rose over six percent. If sales continue at the current pace, it's more likely that the home you don't buy today could be more expensive later.

In the time you wait for price reductions, you could effectively build equity, or ownership in your home. Few homeowners keep a loan for 30 years anymore. People change jobs, get divorced, move up, downsize, refinance and have other reasons for not keeping their original mortgage. So the time is now.

So let's look at a few what-ifs and see when it's best for you to buy a home. Using round numbers, on a $200,000 30-year, fixed-rate mortgage at 4.00 percent, your monthly payment starting May 2015 will be $955. At seven years, the average length of time that most buyers occupy their homes today, you'll pay $52,898 in interest and the remainder of your loan will be $171,738.

If you wait around and interest rates go up, you'll be paying more monthly, plus you won't build equity as quickly. At 4.5 percent, your monthly payment will be $1,013 and you'll pay $59,828 in interest. Your loan remainder is higher - $173, 692. A half a point increase in interest will cost you $58 more per month, $6,930 more in interest, and you'll end up with $1,954 less in equity.

If your home dropped 5% in value and you were able to get a loan for $190,000 and 4.5% interest, your payment would be $963, a difference of $51 less per month than if you'd paid $200,000.

But what if you're wrong and prices go up by five percent? At $210,000 and 4.5 percent interest, you'll pay $1064 per month, $62,820 in interest, and the remainder on the loan will be $182,376. That's a difference of $109 more on your monthly payment and $9830 more in interest, plus you'll lose $10,638 in equity.

Why not buy now when both prices and interest rates are lower?



Source: RealtyTimes, Blance Evans
http://realtytimes.com/consumeradvice/buyersadvice1/item/34646-20150430-should-you-wait-for-lower-prices-or-lower-interest

Occupational Hazard

I got into the real estate business to help people. I got into the business with idea that I would be helping people achieve home ownership, and the worst threat I would face was maybe a lawsuit if I made a mistake or something. I had thought that only people in law enforcement or the military had to worry about actual risk to life and limb.

Well I was wrong about the no risk to life or limb part. You see, as a Realtor I often have to meet with the general public, complete strangers. And some of those strangers can potentially be convicted felons and psychos for all I know. We Realtors always have to think safety when we're doing an open house or showing properties.

Below is a link to yet another story that has come out about a fellow Realtor who almost kidnapped and robbed at gun point, but luckily was able to escape before any harm cam to her. Unfortunately, not all Realtors have been so lucky.

Agent Escapes Kidnapping at Gunpoint

Related:

56 Safety Tips for REALTORS®

Creating a Glamorous Kitchen

Creating a Glamorous Kitchen

Used to be the kitchen was a hardwearing, hidden-from-the-rest-of-the-house space that was all about utility, nothing about attraction. Today's kitchens look as good as they live, especially when a few glamorous touches are thrown in.

"Luxe textiles and reflective pieces add excitement to contemporary interiors," said Houzz. And that's never been more true than in today's kitchen. Just witness the return of brass, now being seen in fixtures, finishes, and even appliances. For warmth and luxe factor, it doesn't get much better than the antithesis of cool stainless and brushed nickel.

Also see: Brass Is Back In Town!

Check out these glamourpuss kitchens and tell us you're not ready to up the luxe quotient in your kitchen.

Glam doesn't mean overhauling your whole kitchen. Sometimes, one spectacular chandelier is all you need to transform a space from "Just OK" to "Holy cow." A gathering of modern Kelly green chairs doesn't hurt either.



If you're looking for one spot to start in glamorizing your kitchen, lighting is a good place to start.

"Chandeliers and pendants are the perfect accessory to not only brighten your kitchen but change the mood of the space," said House Beautiful. "Standard lights that come in most homes and rentals are uniform, change it up and give the most used room in your house some personality or an unexpected element."



It doesn't get much glam than a room full of Calacatta marble.



Don't want to update your counters or your lighting? Modern tin ceilings bring in a little shine from the top down.



It's all in the details. This kitchen featured in Domaine takes showstopping lighting and pairs it with a contrasting paneled island and uniquely detailed range hood.



You can also achieve glam status without baubles and reflective surfaces, as proven by this modern industrial kitchen, which happens to belong to actress Hillary Duff. The loft-like space's hard edges are softened by the plush seating.



Speaking of plush fabrics…a banquette can be utilitarian or it can be luxurious. Or, it can be both. The curvy lines of the table legs and chairs and the sleek modern light fixture overhead create the ideal space for dining and relaxing.



Source: RealtyTimes, Jaymi Naciri
http://realtytimes.com/consumeradvice/homeownersadvice1/item/34571-20150427-creating-a-glamorous-kitchen

Santa Clara County Market Update

Hello everyone. Not only is it a seller's market, but a white hot seller's market. Even though the number homes available for sale is down, the median home sales price is going up as a result of it, at least in part.

California Realtors Urge Legislators To Vote No On Service Tax

Last week approximately 2,000 REALTORS®from all areas of California showed up in Sacramento, the state capital, for the purpose of spending some in-person advocacy time with their respective legislative representatives.

Legislative Day, as it is called, is an annual event for the California Association of REALTORS®(CAR). No year goes by without a sizeable number of bills being introduced that would affect property rights, housing, and/or the real estate business. The annual appearance of these representatives from the state's largest trade organization (approximately 180,000 members currently) is an effective reminder that someone is watching, and with more than casual interest.

This year, one of the bills that received particular attention from the REALTORS®was Senate Bill 8 (Hertzberg), a proposal to impose taxes on services -- something that is not currently done in California.

Real estate transactions are service intensive. Among the services that would be taxed under the Senate Bill 8 proposal are appraisal, home inspection, natural hazard disclosure reporting, pest control inspection and repair, title insurance, loan origination, and brokerage. They add up to a substantial number.

CAR legislative analysts estimated that service fees comprise about 13% of a sales price. That number seems a bit high to me, although they were including "services to prep for sale (painting, cleaning, landscaping, staging, etc.etc.". But even a more modest estimate -- say 8% - 10% -- yields some significant numbers.

The REALTORS®' point to the legislators was that California doesn't need anything that will increase the already too-high cost of housing. With the state-wide cost of a median-priced home at $447,000 (4th quarter, 2014), California has an affordability crisis. Fewer than 40% of its population can afford the median-priced home. Nationally, 59% can afford the U.S. median. California's home ownership rate has dropped below 55%.

A 5% tax on the typical services for a median-priced California home would increase the transaction costs by more than $2,000; a 7.5% service tax would add about $3,000 to the total cost. Those numbers have real consequences. At today's financing costs, the 5% tax would eliminate close to 25,000 potential buyers from that purchase. The 7.5% tax would similarly affect more than 36,000.

It's easy to look at a tax proposal at a fairly high level of abstraction. Last week, on Legislative Day, 2,000 REALTORS®took it upon themselves to show legislators some of SB 8's possible effects in the real world of high-cost, hard-to-afford housing.

Source: Bob Hunt, RealtyTimes

http://realtytimes.com/todaysheadlines1/item/34594-20150428-california-realtors-urge-legislators-to-vote-no-on-service-tax

Survey: Flipping Trend Continues to Gain Momentum Among Investors

The rising trend of home flipping around the country seen in Q4 continued to build momentum among investors in nearly every market surveyed in Q1, according Auction.com's First Quarter 2015 Real Estate Investor Activity Report released on Monday.

The percentage of investors surveyed who said they intended to flip the properties they bought rose by 6.5 percent in Q1 from the previous quarter, according to Auction.com. The rise of that trend was especially evident in the Western States, where the ratio of investors who preferred flipping as a strategy over renting was as high as three to one in some places. The percentage of investors in both California and Washington who said they preferred to flip was 75 percent, compared to 24 percent for renting. The percentage of flippers in Nevada and Idaho was 79 percent and 71 percent, respectively.

“It seems clear that the unusually low inventory of homes for sale has led to higher home prices, which makes it challenging for investors to rent homes out at a rate that’s profitable, and still affordable for tenants,” Auction.com EVP Rick Sharga said. "So in states like California, Washington, Nevada, and Arizona a large number of investors have decided that the best opportunity today is to meet the demand of prospective homeowners by buying, fixing, and re-selling investment properties.”

Overall, 53.5 percent of investors surveyed said they preferred flipping, while 44.8 percent said they intended to rent the houses they purchased. A larger portion of real estate investors (55 percent) and investors working on behalf of another investor (66.3 percent) said they intended to flip, while a majority of investors making a one-time purchase (66.9 percent) said they intended to rent.

Auction.com's survey was collected from investors who bid on properties both online and at live events nationwide during Q1. Investors purchasing at live events generally preferred flipping over renting (62.1 percent compared to 36.7 percent), while investors purchasing properties online tended to lean toward renting over flipping (54.5 percent compared to 43.5 percent).

The majority of investors who purchased only one property per year preferred a hold-to-rent strategy (60.8 percent), while more active investors tended to prefer flipping. Fifty-nine percent of investors who purchased between two and 49 properties during the quarter said they intended to flip, as did 53.6 percent of investors who purchased 50 or more properties.

"Historically, individual investors have owned over 95 percent of the single family homes available for rent," Sharga said. "It looks like these investors are coming back to the market, and filling a growing market need for rental units."



Source: DSNews, Brian Honea
http://dsnews.com/news/04-20-2015/survey-flipping-trend-continues-to-gain-momentum-among-investors

Eco-Friendly Home Updates That Save You Green

Eco-Friendly Home Updates That Save You Green

Each year, Americans save billions of dollars by employing energy-saving measures and investing in energy-efficient homes. Some upgrades — like Energy Star appliances, new hot water heaters, or geothermal pumps — can be pricey upfront, but there are plenty of small, inexpensive updates that will make a big difference in your budget over time. Here are some places to start.

Go low-flow

Thousands of gallons of water go down the drain every day. Toilet flushing and showering are the two biggest culprits. One solution is to upgrade your home’s plumbing fixtures so you use less water to accomplish the same task.

Low-flow fixtures, which are both inexpensive and easy to install, can reduce your home water consumption by as much as 50 percent, and save you up to $145 a year, according to Energy Star.

Insulate, insulate, insulate

Upgrading your home with energy-efficient insulation is one of the quickest energy payback projects you can undertake. If your house doesn’t have enough insulation (and many homes don’t, especially those built before 1980), bringing it up to current standards will not only make it more comfortable all year long, but you’ll save money — anywhere from 10 to 50 percent on your heating and cooling bills.

Consult the Department of Energy’s ZIP code specific recommendations for the right amount of insulation for your climate.

Use compact fluorescent light bulbs

Yes, fluorescent bulbs are more expensive that regular bulbs, but each bulb can save up to $40 over the lifetime of the bulb, and they last 10 times longer than conventional bulbs.

Install a programmable thermostat

Did you know that the average household spends about $2,000 annually on energy bills, and that close to half that figure can be attributed to heating and cooling?

Enter the programmable thermostat. When used properly (don’t be intimidated!), this little gadget, which you reset when you’re asleep or away from your home, can pay for itself in a matter of months. Annually, you’re looking at saving up to $150 or more.



Source: Zillow Blog, Vera Gibbons
http://www.zillow.com/blog/green-home-updates-save-money-174357/

SV150: Current tech boom is no dot-com bubble, experts say

I touched on this a little bit yesterday when I was talking about the current expansion going on at the Valley Fair Shopping mall and how that relates to real estate. The below article from the Mercury News talks about how the current economic boom in the Silicon Valley is not the bubble like we saw in the late 90s and early 2000s. Though I do strongly believe there will be a correction in this real estate market, it won't be a big one by comparison with other parts of the US. Big employers like Google, Apple, Facebook and Intel have their corporate headquarters here, and they know this area is rich with the tech talent they need. Also, as far as housing is concerned, there is not allot more places left in this valley to build. This area is hedged in by to foothills to the east and west and the waters of the bay to the north. So, anyhow, as long as those factors continue to hold true, they will always keep the economy more robust as compared to other parts of the country and home values stable. But that's just my two cents worth.



SV150: Current tech boom is no dot-com bubble, experts say

Silicon Valley's tech cup runneth over. Job growth is humming, coders are being lionized on HBO, Uber and its shared-economy cohorts are on fire, disrupted innovation is unfolding on every corner. And everyone from downtown San Jose to Oakland's Uptown to San Francisco's South of Market is partying like it's 1999.

Luckily, it's not -- at least according to those who say today's boom and the exuberance of the dot-com craze are like night and day.

"Back around 2000, the IPOs were characterized by having only a few years' track record and little in the way of profits," says Brett Trueman, professor of accounting at the UCLA Anderson School of Management. "What's happening today is much different, because a lot of these companies have been around for longer periods of time, and they're more likely to be earning money than the startups during the dot-com boom. That's a clear indication that the froth isn't there now like it was in 2000."

Still, Silicon Valley knows froth. And the urge to compare the current craziness with the heady days of the past and fret about another bubble is understandable. You want froth? The SV 150, this newspaper's ranking of the largest companies in Silicon Valley based on revenue, shows the region lately has been a veritable cash machine: 2014 was the most profitable year since the SV150 began 29 years ago, with a 23.8-percent jump in overall profits, an 11.7-percent rise in sales, and a 7.1-percent increase in job growth.

So is it sustainable?

In a nutshell -- yes, says Beacon Economics founding partner Chris Thornberg, albeit with a small caveat.

"We're seeing record profits today, unlike in the '90s when you had huge valuations but nobody making the money to justify them," he said. "Back then, people were selling the IT and investors were buying it, but it wasn't being integrated into our lives very well."

Economists point to Uber, valued at more than $40 billion, as a prime example of the paradigm shift underway in tech, where an innovative service is changing the way we think about everything from car ownership to insurance to urban planning.

"Today," said Thornberg, information technology, or IT, "is something companies invest in and then make a lot of money off of it. So the guys now selling that IT are also making tons of money."

And the caveat? "The only place you might get into trouble," said Thornberg, "is if the labor markets heat up and corporate profits start going to the employees (for salaries). But it's way too early to call that."

A large chorus of Silicon Valley pundits insist that despite the heat of the moment, what's happening in the today is not "Pets.com, The Sequel."

Yes, the tech-heavy Nasdaq is finally approaching its dot-com high of 5,048. But it's been a long, slow -- and some would say healthy -- ascent that suggests its tech components remain on relatively solid footing. And sure, the "weighting" of IT companies in the S&P 500 index has grown from 6.3 percent in 1990 to nearly 20 percent today, perhaps suggesting a troubling dominance on tech. But consider that IT's share of that index hit more than 29 percent in 1999, just before things went bust so today's share is relatively modest.

While it's true that the SV150 now has the highest market-cap-to-sales ratio (3.8) since the dot-com bubble, meaning that it is valued by investors at nearly four times the annual revenue of those 150 firms, that's still less than half of the 8.1 sales ratio in 1999.

And then there's the Apple effect. The world's most-valuable company recently joined the Dow Jones Industrial Average, becoming one of five tech companies on the Dow 30, three of them based in Silicon Valley. Its inclusion confirms the Cupertino tech giant's crucial role in keeping the tech-boom momentum going. And the price-earnings, or PE, ratios for today's tech giants, which sit in the midteens, are seemingly conservative when viewed beside the 100-plus numbers of AOL and others back before the bottom fell out.

Despite all the comforting news, there's no way a rising tech-boom tide can lift all boats.

"Are there too many tech startups chasing too few things? Yes," says Brent Thill, managing director and senior analyst at the research division of USB Investment Bank. "Not all of them will survive, and you'll start to see the leaders in each category taking more commanding leads.

"This tech boom is sustainable for select companies," said Thill, pointing to Uber. "I don't guarantee Uber's numbers, but I personally use Uber every single day and for me it's become as common as sending a text or making a phone call; Uber has changed the way I view transportation."

But Thill cautions that even while today's boom seems to have legs, that's not to suggest there could still be the occasional stumble.

"There are too many companies out there that think they deserve a billion-dollar valuation, but it's not logical," he said. "They shouldn't assume that, because there can only be so many."



Source: The San Jose Mercury News, Patrick May
http://www.mercurynews.com/news/ci_27942064/sv150:-current-tech-boom-is-no-dotcom-bubble-experts-say

Expansion At Valley Fair Shopping Mall

Here is an article from earlier this month from the Mercury News regarding the expansion that is underway at the Valley Fair Shopping mall. They have already torn down the existing parking garage by the women's Macy's and are currently building a much bigger one that can accommodate 1,000 more cars. This new garage will have technology that can find your car in case you can't remember where you parked. Also, they plan on adding a Bloomingdales, more high end retailers and a luxury movie theater. 

So why am I writing about this in blog for real estate? Because in my opinion the expansion at the very popular and trendy Valley Fair Shopping mall says something about the economic viability of this area. I mean, think about it? They wouldn't be spending millions and millions of dollars expanding the mall if they thought this area didn't have the economic potential to support the expansion. They know that the Silicon Valley is rich with high paying jobs, a higher median income, a high median home sales price of $729K, and nice weather - though we do have a severe drought that could come back to bite us in the a*s economically, but that not withstanding, this valley has long term economic potential. Westfield, the group that owns the mall, that this area has the people with enough disposable income to make the mall expansion good investment.

As a Realtor looking at all this it comes as no supprise for me that there are corporations that are willing to spend big dollars on an investment in this area. I am still seeing multiple offers and a rising median home sales price. I know it is not go on forever, but I also know that betting on this area is a safe bet, be it for retail shopping or real estate.

 



Valley Fair mall 'smart' garage will find your car

Remember those sellers who lost their home to short shale or foreclosure - well about them. . .

In 2011 and 2012, many of the real estate deals I was involved with were short sales and bank owned homes. I reached out to these homeowners who were about to lose their home and I worked hard to help them sell their home before losing it the hard way. 

Anyhow, according to a new survey by the National Association of Realtors many of these same former home owners are are now in the market to buy. Of course some of them still can't buy due to poor credit, but apparently his is not the case for everyone and they are now looking to buy. 

1.5M Buyers Are Coming Back

Higher Prices Don't Deter First-Time Buyers according to survey

The article I have posted here refers to a survey in Canada, but I think is still very relevant to buying habits here in the Silicon Valley.



A new survey of first-time buyers in Canada reveals they are more financially savvy than the general population, well-educated, employed and married or in a common-law relationship. Most of them are millennials (34 or younger) and they share the desire of their parents to own their homes.

The survey, commissioned by mortgage insurer Genworth Canada, "shows that today's first-time buyers have their eyes wide open, their hands firmly on their pocketbook and are thinking hard before assuming the responsibility of homeownership," says Stuart Levings, president and CEO of Genworth Canada.

Rising prices have raised concerns about affordability across the country but especially in Vancouver and Toronto, where the average price for a detached home now exceeds $1 million. The high prices and warnings that interest rates could rise and prices could fall are not deterring first-time buyers, who are taking a hard look at the market and their own finances before making the jump into homeownership.

The survey says first-timers are managing their debt carefully, by not taking on additional debt since buying their home. One-third have been able to reduce their mortgage debt by increasing payments or making lump-sum payments.

"With good incomes, solid jobs and a financial partner with whom to share the responsibility of homeownership, most first-time homebuyers generate a positive profile from the perspective of a mortgage insurer," says Levings.

At a recent conference where the survey was unveiled, Levings said that since the federal government tightened mortgage insurance regulations, the quality of first-time buyer applications has improved. "There has been a big focus on safety to qualify (applicants)," he said. "We have a more responsible, high-quality homebuyer today than what we would have seen in 2007 and 2008."

Erica Nielsen, a vice-president at RBC, told the conference that "as a lender, we take a lot of time to stress-test our portfolio, looking at interest rate shocks as well as other micro-economic factors. We feel comfortable with the performance of our portfolio."

However, the survey did show that nine per cent of respondents said they had to draw on their savings to get by, and four per cent said they had to borrow money to get by.

How are most first-timers coming up with their down payment? The survey says they have higher incomes than the general population, with 31 per cent having household incomes of more than $100,000. Almost seven in 10 paid for their down payment from savings or non-registered investments, while 39 per cent made a withdrawal from their RRSP.

A growing number of them -- almost 30 per cent -- are getting gifts or loans from family members, particularly in the cities where homes cost the most.

Levings said, "The parents have a lot of equity and sometimes that is being drawn out through a line of credit so the kids can get into a home."

Nielsen said that because interest rates are so low, "many parents are finding the best place to fund (their children's) down payment may be from their own home, because it's so cost-effective to borrow.

Levings added that many baby boomers are tapping their home equity for renovations, second homes or investment properties, so it's not surprising to see some of that money going to help out their children.

A recent report about generation trends in luxury real estate by Sotheby's International Realty Canada says that in the luxury market, "Despite above-average incomes… 85 to 95 per cent of luxury buyers are reliant on mortgages. The vast majority also receive outside financial assistance towards down payments, primarily from baby boomer parents." The report said that only a small number of Generation X (born from 1965 to 1979) buyers receive gifts or loans on their initial down payment.

David MacDonald of Environics Research Group, which conducted the survey, said that although the millennials are educated and used to researching financial and real estate matters on the Internet, they still want to consult professionals when buying a home. Asked where they found "important sources of information", the first-timers most often cited mortgage professionals, family/friends, bank/credit union representatives and real estate agents.

Phil Soper, president and CEO of Royal LePage Real Estate Services and another panel participant, was asked if for-sale-by-owner and discount real estate commission companies are gaining market share.

"Naw, they don't have a chance," he joked. "If you look at the percentage of people (buying a home) who are not using a licensed professional Realtor, it hasn't changed. It's about 10 per cent outside of Quebec and 50 per cent in Quebec" where private sales are a well-established tradition. That number hasn't grown, he said.

"Millennials want to work with professionals," said MacDonald. He said when it comes to personal finances, "when you start to see six digits in a row, you want to make sure you are doing the right thing so that means working with a financial advisor or a mortgage professional or a real estate agent to help you."

He says professionals working with millennials to buy a home should "open their eyes to the tools (that are available to them, such as mortgage calculators on the Internet) and show them the step-by-step process they need to go through to make a decision. Let them know it requires a little bit of work right now but it will all be worth it in the end."



Source: RealtyTimes, Jim Adair
http://realtytimes.com/canadiannews1/item/34439-20150421-higher-prices-dont-deter-first-time-buyers

What's The Best Type Of Mortgage Loan For You?

Very informative article about mortgage loans for those of you out there looking for one. By the way, if any of you are looking for a great loan officer, let me know. I know of a couple I could refer you to.


Question: We are first time home buyers. We have signed a contract to purchase an older home in a nice neighborhood, and the purchase price is $400,000. We have 45 days in which to obtain financing, and have started shopping around with different mortgage lenders. We have two questions. First, the contract states that we will put down 20 percent and obtain a mortgage loan of 80 percent (i.e. $320,000). However, we have begun to realize that there will be significant closing and moving costs, and we would prefer to put down less money. Are we committed to a 20 percent down payment, since that is spelled out in the contract? Second, what kind of loans are available and what's best for us?

Answer: Your first question is easy. Technically (or legally) speaking, you are bound by the terms of the sales contract. You must put down 20 percent -- or $80,000. However, as a practical matter, I suspect that you and your sellers can sign an addendum to the contract which modifies these terms. So long as the amendment (1) will not create any delay in the time you have to go to settlement and (2) will not cause the seller's to spend any more money than was originally called for in the sales contract, this addendum should cause the sellers no problem and indeed it can probably be signed when you actually go to settlement. I suspect that your lender will want to have this addendum in its files.

Your second question is quite difficult to answer, since I do not have any financial information about you. You should discuss these issues with your potential lenders. Ask them to qualify you based on the highest (and the lowest) loan which you are seeking. For example, a "conventional" loan is where you put down 20 percent and borrow 80 percent. In your case, this will require that you put down $80,000. Since you have indicated that this will create a financial strain for you, you can also consider the following options:

• an 80-10-10 loan. Here, you will be obtaining two loans. One in the amount of 80 percent (i.e. $320,000) and a second loan in the amount of $40,000. Under this arrangement, you will only have to put $40,000 down when you go to settlement. The 80-10-10 loan was designed to help homeowners avoid the necessity of paying private mortgage insurance (PMI). Lenders want to be sure that should you become delinquent on your mortgage payments, and the lender has to foreclose on the property, that there will be some equity left in the property. The typical benchmark is 20 percent. If you borrow more than 80 percent of the value of the house (called "loan to value ratio") you will be required to pay private mortgage premiums for a long period of time. This PMI is insurance coverage for your lender, which will cover any loss which it incurs should the house be foreclosed upon and the foreclosing price does not cover the entire mortgage balance.

However, since the lender in an 80-10-10 loan is only making a first mortgage (deed of trust) in the amount of 80 percent, no PMI is required. You should understand that you will have to sign a second deed of trust in the amount of 10 percent of the value of the house. This second trust will carry a higher mortgage interest rate than you will get for the first trust. Additionally, the second trust will probably have a shorter due date (perhaps 10 years) than your first trust.

• a 90 percent loan. Here, you will borrow $360,000, and sign only one mortgage document. You will still need $40,000 cash at settlement. And private mortgage insurance will be required.

• a 95 percent loan. Again, private mortgage insurance will be required, but you will only have to put down five percent (i.e.$20,000).

This is but a small sample of the various loan which are available. There are also variations on these various mortgages. For example:

1. Fixed thirty year. Here, the loan will be amortized over 30 years. Each and every month, you will make the same monthly mortgage payment (although if the lender escrows for taxes and insurance, the amount may change on a yearly basis depending on whether taxes and insurance premiums are increased).

2. Fixed fifteen year. Here, the loan will be amortized over 15 years. This means that although the interest rate will be lower than for a 30 year loan, your monthly payments will be much higher, since you will be paying off the loan in half the time. While some people like the idea of paying off their mortgage early -- and thus saving a lot of interest payments -- I am personally opposed to a 15 year loan. If you have the right to pay off the loan (in whole or in part) without penalty, a thirty loan gives you the right to make payments as if they are based on a 15-year amortization, but you are not obligated to make these higher payments should you decide that your money can be used for other -- and better -- purposes.

3. Finally, there are a number of adjustable rate mortgages -- called "ARMS" -- which carry different rate adjustment periods. These adjustments can be made on a yearly basis, or once every three-five-seven or even ten years. Keep in mind, that the smaller the adjustment period, the lower the interest rate will be.

4. Balloon notes. Here, your loan may require that you pay monthly mortgage payments based on a 30-year amortization. However, at the end of a fixed period (for example 7 or 10 years) the entire balance then outstanding will become due and payable. This kind of loan is typically more common for commercial or investment loans, but you should be aware that balloon loans do exist -- and you should make sure that your loan will not suddenly become due (i.e. balloon) after a number of years.

You should contact two or three mortgage lenders and ask the following questions:

• what kinds of loans do you have available?
• what are the rates for each loan?
• based on our financial situation, can we qualify for any or all of the various loans?
• is there a pre-payment penalty if we decide to refinance early, and if so, how much is the penalty?
• can we pay our real estate taxes and homeowner's insurance premiums directly, or will you require that we escrow. This means that the mortgage lender will collect, on a monthly basis, one-twelfth of the real estate tax and one-twelfth of the annual insurance premium. When the tax and the insurance comes due, the lender will make these payments on your behalf. However, when a lender requires these escrows, this means that your monthly mortgage payment will be higher. This is referred to a PITI (payments of Principal, Interest, Taxes and Insurance).

You are entitled to get information giving you an estimate of what you will have to pay when you go to settlement. You are also entitled to get full disclosures of the mortgage interest rate for your loan. For more information, go to the Consumer Financial Protection Bureau (CFPB) website and search "Know Before You Owe".

Shopping for a mortgage loan is time-consuming, tedious and often confusing. However, it is your money at stake and you don't want to make a drastic mistake which will haunt you for years to come.



Source: RealtyTimes, Benny L. Kass
http://realtytimes.com/movingadvice1/item/34320-20150415-whats-the-best-type-of-mortgage-loan-for-you

4 Reasons to Buy a Home This Spring

Well, if you ask me, it Always a great time to buy, but certain times are better to buy than others.



4 Reasons to Buy a Home This Spring

It’s not just temperatures and tulips that are on the rise these days. Interest in home buying is way up, too.

The home buying season is about to get under way, and it’s expected to be a busy one. Here are four factors that are likely to influence buyers.

Low mortgage rates

Everyone knows that the low-rate party is coming to end. Zillow is forecasting that mortgage rates – currently around 4 percent for the 30-year fixed – will rise to 5 percent by the end of 2015.

Granted, a 1-percent rise may not sound like much, but it’s a great motivator to get in and buy now. After all, a 1-percent increase in rates reduces affordability by a whopping 11 percent.

Confidence

Zillow’s Housing Confidence Index (ZHCI), which is designed to offer insights into homeowners’ and renters’ intentions and attitudes concerning the housing market, is a forward-looking gauge of housing market health. And things are looking up.

Confidence in the housing market is higher this year than it was last year — among homeowners as well as renters, many of whom are now rethinking their attitudes toward home ownership and are ultimately becoming more interested in buying.

High rents

Rental affordability is as bad as it’s ever been across the U.S., in part because there are not enough new, affordable units to meet demand. Renters can expect to spend 30.1 percent of their income on rent, while home buyers can expect to spend about 15.3 percent of their monthly income on a mortgage payment.

Those numbers alone are driving renters who can save for a down payment to pursue homeownership. In fact, data from Zillow shows that 5.2 million renters want to buy in the next year. That’s up from 4.2 million renters from the same time last year — almost a 25-percent boost.

Loan availability

Getting a mortgage is significantly easier than it was a year ago, and the markets are rapidly approaching pre-crisis credit conditions.

What this means to borrowers: Those who last year may have only been eligible for an FHA loan are now being offered conventional loans with private mortgage insurance. As lenders open their doors wider, borrowers have more options, with competitive terms and rates.



Source: Zillow Blog
http://www.zillow.com/blog/reasons-to-buy-home-this-spring-174183/

Home Staging Basics for Clients

Home Staging Basics for Clients

From first impressions to possible layouts, home staging can provide potential buyers with a visual representation of the home and can help sell it faster and for a higher price. Staging showcases a home, making it easier for buyers to envision how they could ultimately embrace the space. These tips can help your clients understand what to expect during the staging process.

Staging is an investment
A thorough and professional staging effort can be the leading reason a property sells quickly, and in many cases, for over the asking price. If a property is styled and furnished in good taste it translates into competitive offers, increased demand and a higher sale price. A staged home also will show better than its competitive properties; more often than not, the cost of staging comes back to a seller many times over in the final sale price. Ultimately, the benefits of marketing a home that has been thoroughly styled and prepared for the broader buying audience outweighs the initial expenses and yields a far greater return.

Best represent the property
One major goal is to enhance the appeal of a home while maintaining its design integrity; that is, by editing and styling each room and dressing it up so that it appeals to the broadest market audience. While some homes are staged when they're vacant, others are staged by de-cluttering and incorporating a carefully edited selection of the seller's furnishings with the stager's in a coordinated way to create a look that best represents the property.

Staging also makes each room feel less personal by removing older furniture and minimizing
clutter. For example, adding new bedding and accessories as well as accent pillows and flowers can perk up rooms with color and excitement. Shelves can be styled with books and interesting objects; and artwork can be displayed throughout the house.

Make a few easy improvements
Many homes may need a few quick upgrades before staging. These improvements could consist of painting walls in lighter colors, installing new carpeting, and upgrading lighting by adding uniform-colored bulbs. The seller might also consider resurfacing kitchen counters and replacing old appliances with new, stainless ones.

Use the space wisely
Thoughtful furniture installation and placement can give a buyer an understanding of how to use a space or how to best arrange their own furnishings. Staging and styling can also help "animate" a home by adding a fresh, light feeling.

It's always good to remember that not all staging is created equal. While some sellers prefer to show an interior as if its lifted from the pages of a style magazine, while some might approach it from a more realistic  "lived in" perspective.

Staging offers sellers the opportunity to view their home from a different perspective.
Overall, staging goes beyond furniture placement and filling a house with inventory. For many sellers, staging is about creating style that inspires a buyer's excitement as they visualize themselves emotionally and physically "at home" in the house. By looking at a home from the viewpoint of a buyer, the strengths of the home can be highlighted, and sellers can show buyers a home's true potential without forcing them to use their imaginations.



Source: RealtorMag.org
http://realtormag.realtor.org/daily-news/2015/04/14/home-staging-basics-for-clients?om_rid=AAFmZk&om_mid=_BVLUeXB9Avk0vm&om_ntype=RMODaily

Saturday Stats

Great market information from MLS Listings about the state of the real estate market here in the Silicon Valley amid California's drought problem.

View The Full Printable PDF

The Right Agent makes all the difference when buying your home

5 Questions to Help You Find the Right Buyer's Agent

Get the information you need to choose the best guide for your home-buying journey.



The relationship between buyer and seller is one that could last a very long time. The dynamic home-buying process can take unexpected twists and turns, so having the right agent by your side makes all the difference.

Unlike a seller, who signs an agreement with an agent, a buyer rarely has anything in writing that binds them to an agent or requires an agent to perform particular tasks. This makes it important to choose the right agent, instead of just jumping in with the first one who comes along.

What’s most important is to go with your gut. This person will be a significant presence in your life while you search for a home. Above all, you must feel comfortable with them.

Here are some questions to ask a buyer’s agent before you start working with them.

How long does it take typical buyers you’ve worked with to find a home and close?

If he tells you that his typical buyers move quickly, within weeks or a month, he is probably used to working with buyers who’ve done a lot of independent research prior to engaging the agent. If he says it’s more like a year or longer, he is likely more patient and lets the home-buying process run its course.

In which towns or neighborhoods do you do the most business?

Agents tend to focus on where and what they know. Most have a solid knowledge of a few towns, and then a cursory knowledge of nearby areas.

Your home search can take you through multiple towns and school districts. If you start working with a real estate agent you meet at your first open house, and she only truly works in that town, someone else for another area may better serve you. But its better to have one agent throughout the process, which is why good agents typically cover a broader geography.

Do you work independently or with a team? Do you have an assistant?

Home buying is incredibly personal, so you want to make sure you know who you’ll be working with. It’s helpful to have the same person by your side during the journey so they can track your experience.

Ask your agent what her arrangement is and make sure you are comfortable with it. If she works with assistants or junior agents, make sure you won’t be pushed off to someone with less experience.

How do showings work?

There are multiple ways to see properties, and the most effective approach is different for every buyer and in every market. Some markets rely heavily on open houses, where buyers can see the home on their own. Others require private appointments or the use of a lock box to see homes. If the agent prefers that you leverage open houses as much as possible, but you desire a little more handholding, she may not be the agent for you.

How do you search for properties, and what’s the best way to collaborate or communicate?

Buyers don’t rely only on their agent to find properties anymore. What’s more, many agents encourage buyers to search online independently. Agents leverage their local multiple listing service (MLS), and will send buyers emails and alerts from there.

Good collaboration makes for a seamless process, so ask the agent how they collaborate with their buyers for searches. Finally, ask if they’re a phone, text or email kind of person. Identify an agent who works well with your own communication style.



Source: Zillow Blog, Brendon Desimone
http://www.zillow.com/blog/questions-buyers-agent-173819/

NAR to Congress: Ease Up on Mortgage Credit

Everyone who calls themselves a REALTOR, such as myself, does so because they are a member of the National Association of Realtors. They are a national advocacy group for those of us in the real estate profession. Not only are they looking out for the best interest of Realtors like me, but also for the average home buyer and seller. NAR testified before the U.S. Senate Banking, Housing and Urban Affairs Committee yesterday to urge our legislators to have banks ease underwriting requirements for borrowers to make it easier to get a loan. Yes, on one hand we want tougher standards on banks so we don't have a repeat of the 2008 housing collapse where by banks were issues out loans to unqualified borrowers, BUT on the other hand, we don't want banks to go too far. If the banks make it too burdensome for buyers to obtain financing, then that will impact the market negatively - something nobody wants to see.



NAR to Congress: Ease Up on Mortgage Credit

Credit-worthy borrowers are being denied a chance at home ownership due to "unnecessary regulatory burdens" that are preventing them from qualifying for a mortgage, National Association of REALTORS® leaders testified Thursday before the U.S. Senate Banking, Housing and Urban Affairs Committee.

"REALTORS® support strong underwriting standards to protect consumers from the risky lending practices of the past, but we are concerned that the pendulum has swung too far," NAR President Chris Polychron testified. "In some cases, well-intentioned, but over-corrective policies are severely hampering the ability of millions of qualified buyers to purchase a home. I believe, and our members believe, that we have yet to strike the right balance between regulation and opportunity."

Mortgage rates continue to hover near historical lows, yet the number of first-time buyers entering the market is at its lowest point since 1987. The number of homes purchased annually is less than 70 percent of what was purchased prior to the real estate boom and the subsequent collapse, NAR states.

"No one wants to see a return to the unscrupulous, predatory lending practices that caused the Great Recession, but some modifications to existing regulations would help restore the home ownership rate to pre-bubble levels," Polychron said.

Polychron proposed adjustments to several regulations that he said would still ensure safe access to mortgage credit. For example, he urged changes to restrictive condominium polices from the Federal Housing Administration and the Government-Sponsored Enterprises, which he says are limiting opportunities for buyers to own condos. Condos often represent the most affordable buying options for first-time home buyers and minorities.

Polychron also urged the Consumer Financial Protection Bureau to conduct more lending from responsible community banks and provide more flexibility for lending in small specialty markets, such as rural communities.

Polychron voiced the association's support of the Mortgage Choice Act, bipartisan legislation that redefines a provision in the Ability-to-Repay rules that limits mortgage fees and points to 3 percent in order for home loans to be considered "Qualified Mortgages." Polychron urged the Senate to approve the legislation, following the House of Representatives' passage of the act earlier this week.

Currently, the rules "unfairly prevent consumers from obtaining Qualified Mortgage loans through certain affiliated lenders whose joint venture services are collectively counted against the cap, while individual services from large retail financial institutions are each capped separately," according to NAR's testimony. "The discrimination in the calculation of fees and points is being felt by consumers, including lower-end buyers, who are seeing reduced choices and added obstacles in their transactions."



Source: National Association of Realtors via RealtorMag Online
http://realtormag.realtor.org/daily-news/2015/04/17/nar-congress-ease-up-mortgage-credit?om_rid=AAFmZk&om_mid=_BVMVEuB9A4eKHv&om_ntype=RMODaily

5 Mistakes People Make When Selling a Home

I always advise my sellers on the correct course of action and the pitfalls to be aware of when listing their home for sale with me. My advice always proves to be successful in getting their home sold, IF the sellers are willing to listen. Below is a great article that elaborates on what you need to be aware of when listing your home for sale.


5 Mistakes People Make When Selling a Home


Eighty-three percent of people view their home as a good financial investment, a 2014 survey by the National Association of Realtors (NAR) found. Not only is their home the biggest single asset most people own, but it’s also filled with memories — the average seller has lived in his house for a decade, according to the NAR. So it’s no wonder that when it comes time to sell property, people can get a little emotional.

Yet if people actually want to get a return on their investment in their home, they need to be smart about how they approach selling it. Letting emotions, not logic, drive decisions means you’re more likely to make mistakes that can make it difficult to find a buyer or force you into accepting a lower offer than you would like.

The good news for sellers is that the market is tight. That’s pushing home prices higher across the country, and the number of homes being sold is also up. The typical seller receives 97% of his final asking price, and his home was on the market for about a month, says the NAR.

But those numbers don’t mean that every homeowner sells his property quickly or gets the price he wants. You can increase your chances of a successful real estate transaction if you avoid these five mistakes when listing your home.

1. Not being realistic about your home’s value
What you think your home is worth and the price you can actually sell it for are often two very different numbers. “Nobody cares what you paid for it,” one frustrated home seller told the Wall Street Journal. He’d bought a home for $325,000 and spent another $150,000 on renovations, but the property eventually sold for $83,000 less than he originally paid for it.

Even in markets where inventory is tight, sellers need to be careful not to get too greedy when picking a listing price. Properties that are overpriced at the outset tend to eventually sell at a lower price than they would have if they’d been appropriately priced in the first place. Choose a reasonable price based on factors like how much comparable properties are selling for and the home’s appraised value. If you’re not getting any interest, adjust your strategy. “No offers within a 30-day period means the price is too high,” real estate agent Djana Morris wrote in The Washington Post.

2. Not making your home look its best
By now, we’ve all watched enough HGTV shows to know that good staging and curb appeal help to sell homes. “At a minimum, homeowners should conduct a thorough cleaning, haul out clutter, make sure the home is well-lit and fix any major aesthetic issues,” said Chris Polychron, president of the NAR, in a statement about the value of home staging. More elaborate staging, such as repainting with neutral colors, sprucing up landscaping, or purchasing new furniture can also help. Overall, professionally staged homes can sell five to seven times faster than non-staged homes, according to the Real Estate Staging Association.

3. Refusing to negotiate
You should start by setting a fair and reasonable price for your home, but you also need to build in some wiggle room, especially if you need to sell quickly. Many buyers will start with an offer well below your asking price, particularly if they think it’s a buyer’s market. Naturally, their goal is to pay as little as possible for the home they want. Plus, many people want to feel like they’ve snagged a deal on what may be the biggest purchase of their lives.

You can make your buyers happy while also getting the price you need by being willing to accept slightly less than asking price for your home. Alternatively, you might agree to concessions like paying the closing costs, throwing in appliances, or making certain repairs to the property in order to sweeten the deal. Working with an experienced agent can help you negotiate the tricky dance of getting the price you want without scaring off a buyer.

4. Hiding the truth about your home
Sellers who want to be rid of their property quickly may be tempted to try to hide problems with the home from prospective buyers. But trying to cover up serious flaws, like foundation problems, leaky roofs, or mold, could come back to haunt you later. If you aren’t up front about your home’s issues, the buyer may well discover them during the home inspection. At that point, they’ll probably either back out of the deal or ask you to cover the costs of fixing the problem. If the issues are serious and are discovered after the sale goes through, you could end up caught in a messy, protracted legal battle.

Real estate site Zillow recommends being upfront with both your listing agent and your buyer about potential issues with the home. Price your home appropriately given its condition and document the problems you’re aware of and have your buyer sign off on them. Full disclosure is the best way to avoid a lawsuit.

5. Not having a backup plan
In a perfect world, you’re able to smoothly navigate the transition between selling your current home and buying a new one. In reality, things rarely go as planned. Savvy sellers have contingency plans in place to avoid either getting stuck with two mortgages at once or not having a place to live, or to protect them if a deal falls through.

Some people insert clauses into their contracts that make it clear that they won’t move forward with the sale unless they are able to purchase a new home. You may also want to be prepared to find temporary housing, like a rental or staying with family, in case your home sells quickly. If you must move before your home sells, make sure you’ve budgeted to afford the carrying costs of the old home. Finally, if there are multiple people interested in your home, you may be able to accept backup offers, which involve agreeing to sell to a second buyer if the first one backs out.



Source: CheatSheet, Megan Elliott
http://www.cheatsheet.com/personal-finance/5-mistakes-people-make-when-selling-a-home.html/?a=viewall

Another great home brought to you by Mimi Wang - 3128 Loma Verde Dr

$439,888, 2Bd/2Ba Condo, 901 sqft.

Mimi Wang | Century 21 M&M and Associates | 408-569-3808mimi@mimihomes.com | 3128 Loma Verde Dr #212, San Jose, CA 95117 Just Listed - Great Condo, 8 Years New 2Bd/2Ba Condo $439,888 Year Built 2007 Sq Footage 901 sqft. Bedrooms 2 Beds Bathrooms 2 Baths Floors 1 Parking 1 Garage Lot Size 250 Square Feet HOA/Maint $241 Website mwanghomes.com/31... DESCRIPTION Come see this well maintained condo home located close to schools, parks, shopping centers, and freeways. This unit features granite counter tops in kitchen, an indoor washer and dryer, double pane windows, laminate flooring and carpeting, stainless steel appliances, fresh paint and a private balcony. This condo home is located in a newer condo community (built in 2007) featuring a spacious courtyard, an elevator for easy access, a children's play area, private underground parking garage, and restricted street access. Located just a few miles from Valley Fair, Santana Row, and Pruneyard Shopping center. It will make great homes for a first time home buyer or investor. San Jose see additional photos below Unit Features - Living room - Master bath - Range / Oven - Refrigerator - Dishwasher - Microwave - Stainless steel appliances - Balcony, Deck, or Patio - Fenced yard - Porch - Heat: forced air - Central A/C - Air conditioning - Double pane / Storm windows - Granite countertop Community Features - Elevator - Secured entry - Controlled access - Gated entry - Playground - Guest parking - On-street parking - Garage - Attached ADDITIONAL PHOTOS Contact info: Mimi Wang Century 21 M&M and Associates 408-569-3808 mimi@mimihomes.com For sale by Agent/Broker Posted: Apr 10, 2015, 10:19pm EDT

Are You Paying Too Much Property Tax?

Are You Paying Too Much Property Tax?

Errors in your home’s assessment could cost you big time. Here’s how to make sure all the facts line up.


When tax time rolls around, many homeowners are surprised at the amount of property tax they owe. If you disagree with the stated value of your property, it’s worth a closer look to see if your bill has increased fairly.

To be sure you’re not paying more than you should, check the following factors.

Basic errors

First, verify that there are no mistakes on your property card — a document that records information such as dimensions, acreage and value. Does the card show that your home has three bedrooms when it only has two? That it sits on 3.0-acre lot when it’s only on .30? That it has a finished basement when, in fact, it doesn’t? That it has two fireplaces when it only has one?

Errors like these can — and do — occur, and they’re actually quite common. But you won’t know about discrepancies if you haven’t seen your home’s card and reviewed it carefully. Get a copy at the town hall, bringing any errors to the immediate attention of the assessor. Adjustments can often be made without the need for a formal appeal.

Comps

After you pull your home’s property card, take a look at a few of your neighbors’ cards — specifically, neighbors who have homes that are similar to yours in terms of age, size, style, condition and location.

How do their assessments line up with yours? Maybe your four-bedroom house with a one-car garage has been assessed at $250,000. Your neighbor also owns a four-bedroom home, but this house has a two-car garage, a nice little shed, and even a swimming pool — and yet it’s valued at $235,000. Make a case, as you likely have one.

Unique conditions

Do you live in a home that’s in deteriorating condition? In a neighborhood that’s undesirable due to strange smells, poor air quality or heavy street traffic? These are the types of factors that could lower your property’s value.

Improvements

Prior to construction, you may have had discussions about how much that new pool or deck was going to cost you in terms of property tax. After all, you needed to know what to expect, and just how much higher the bills were going to be.

But here’s the thing: Maybe those structural improvements never came to fruition or are not yet completed, and yet your bill reflects these assessments as if you’ve been enjoying them. Speak up and save!

Exemptions

Are you taking advantage of special exemptions? Some states offer tax reductions for veterans, the disabled, and senior citizens. Some also provide reductions for historic buildings and special energy-efficient systems. Ask about these — and other incentives for tax reductions — that you may be eligible for. It’s worth a shot.



Source: Zillow Blog
http://www.zillow.com/blog/paying-too-much-property-tax-173061/

Racing to Buy Homes Sight Unseen

In my real estate business here in the Silicon Valley, I worked with many first time home buyers. Many of those first time home buyers are working families where both the husband and wife are working, often in a high tech company such as Google or Apple and with a couple of kids. As well paid as they are, often times in the last year or so my clients have had to compete against some fierce competition from the investor community. Many of my buyer clients are buying with a home loan which is all well and good, but when you are a seller and you have the choice between taking an offer from a buyer with a loan or taking an offer that is All Cash, most likely you're gonna take the all cash offer simply because you can close quicker and such offers are usually less headaches.

Now it seems, according to this article in the Wall Street Journal, there is a growing number of big time investors who are buying homes without having even seeing it based solely on numbers and other data! Personally I haven't seen any investors making offers sign unseen, at least on my listings, but I have seen investor and first time home buyers from China and India making all cash offers.



Racing to Buy Homes Sight Unseen
Residential real estate to be the next frontier for speed-based investing

Home Staging on a Budget

When I list a home, I usually offer free staging, but for whatever reason, sometimes my seller clients don't want me to stage their home and would prefer to do it themselves. When this is the case, if they are on a budget, below is a great info graphic that shows some money saving tips.

Home Staging on a Budget

When you show your home’s best features by staging it effectively, you help increase your final selling price without breaking the bank; in fact, on average, sellers receive $2 in increased sale price for every $1 they put into staging a home. As our infographic below shows, the following five golden rules of home staging will help you show off its best assets:

(click to see full size)

Source: Moshells.com

http://www.moshells.com/stage-your-home.html

7 Renovations You Don't Want To Waste Your Money On

7 Renovations You Don't Want To Waste Your Money On



Home renovation is a $400 billion business. But that doesn't mean every renovation is a successful one. So how do you know which ones bring home the ROI and which ones you shouldn't waste your time - and money - on?

We consult Remodeling magazine's Cost versus Value Report to find the highest return on investment for home projects. But how about the ones that don't pay you back?

Here are seven you should be wary of.

1. Mid-Range Bathroom Remodel

"The average cost is $16,634 with an average resale value of $10,668. The cost recouped is 64%," said WCVB. A high-end bathroom remodel fares even worse, with a $76,429 spend providing a 59.8% ROI.

2. Master Suite Addition

"The average cost is $108,090 and the average resale value is $68,146, putting the cost recouped at 63%," said WCVB. Where it's feasible to create an attic bedroom instead, the ROI is significantly better, at 77.2% with $55,696 spent on a midrange project.

3. Family Room Addition

With an average cost of $85,740, a family room addition typically pays back $53,624 for a 62% ROI. Direct those funds toward a deck addition instead, and this desirable amenity will pay you back with an 80.05% ROI and will cost just $10,048 on a midrange project.

4. Garage Addition

You've got to really want a garage knowing that "the average midscale job cost is $60,608 with an average resale value of $35,876. The cost recouped is 59%."

5. Bathroom Addition

Looking to add a bathroom instead of renovating one? This will cost $40,710 but only return 53% or $21,695. Perhaps you might want to reconsider that expensive tub and shower, fancy vanity, and tricked-out toilet, and instead do a couple of easy fixes—painted cabinets, and new lighting and hardware.

6. Sunroom Addition

While the idea of a serene spot to soak in the sun sounds ideal, the ROI is not. The $75,224 spend will only bring you back $36,540, for a 49% ROI.

7. Home Office Remodeling

The only project with a lower ROI than a sunroom is home office remodeling. With an average cost of $28,888, the ROI is only 46% or $13,235. Perhaps working from the couch isn't so bad after all.



Source: RealtyTimes, Jaymi Naciri
http://realtytimes.com/consumeradvice/homeownersadvice1/item/34132-20150406-7-renovations-you-dont-want-to-waste-your-money-on

Don't rely on bad advice on skipping earthquake insurance

I'm here is California folks, and so are the people I help buy or sell their home. As much as I love the Silicon Valley, one thought that always hangs is my mind is the possibility of "the big one." Scientist have been saying for years that this area due for one. The valley sits between the San Andreas and Hayward fault and either one of them can go off at any time. So I always advise my clients to get earthquake insurance if their policy doesn't already cover it.



Don't rely on bad advice on skipping earthquake insurance

The Top Markets for Real Estate Investment in 2015

Happy Sunday everyone!

This video is from January, but I thought I would post it anyway because it gives perspective on the real estate market for investors that is still relevant for the market we're in now. Check it out.

Saturday Stats

Hello everyone! Hope you are all having a great saturday. 
Below I have some interesting market data for Santa Clara County, Silicon Valley area.

9 vital home repairs to complete before negotiating a sale

9 vital home repairs to complete before negotiating a sale

Even a burned-out light bulb can get a surprising write-up by inspector

There’s something that I see generated in almost every transaction — a list of repair items found during due diligence inspections that buyers would like completed before closing. This can cause heartaches for sellers, who have negotiated their best deal and then feel “put upon” because they’re being asked to make repairs to close the sale.

The problems that arise, however, could be remedied upfront if a home inspection were done when the house was listed. Let’s face it: We live in our homes and don’t address or even see some of the issues that arise because they don’t affect our daily lives. We look at homes online with a more critical eye than we do our own homes. I have seen too many sellers caught by surprise regarding the same issues that seem to pop up frequently.

Have these items addressed prior to listing the house, not before your seller has negotiated the best possible sales price, and everyone will be happier on the day of closing!

Fogged windows

A seal has broken, and although the window is functional, it really is “windy.” If your new listing has one or 12 of these drafty portals around the house, encourage the seller to replace them prior to listing.

Jet tubs that leak

Some of my recent experiences indicate that this applies to all jet tubs. In the past month, whether I was acting as a buyer’s agent or listing agent, every single jet tub has leaked in the homes that I’ve seen. Many of us don’t use bathtubs as often as we used to, and I am convinced that most jet tubs go unused for, potentially, years. Checking your tub for leaks prior to listing will ensure that no leaks appear during a home inspection. No buyer likes leaks, after all.

Water damage to exterior trim

On any home that’s more than 8-10 years old, I frequently see rotten wood on exterior trim. If you can see splitting or rotten boards as you walk along the front or rear of your property, have them replaced, then caulk and paint. Nothing says “well maintained” like a coat of fresh paint on fascia and trim! Pay special attention to chimney areas on homes built before the late ’90s (and the advent of HardiePlank or cement board).

Roofing items

Are there split or missing roof shingles on your new listing? If so, the best thing a seller can do is pay a roofer to give the roof a once-over, replacing any missing or damaged shingles.

Loose handrails or deck rails

Last year, a buyer told me that he checked the stair handrails and deck rails in homes. If they were wobbly, he took that as a sign that the house wasn’t cared for overall. Whether that’s fair or not, this is a safety issue that seems to sneak its way onto inspection reports more times than I can remember.

Gutters

Gutters that are not functional or do not properly channel water away from the foundation of the home are problems. Have them freed of debris and functional prior to listing.

Leaky showers

And, in fact, leaky faucets throughout the house. If it leaks, it shouldn’t. Have it fixed by a licensed plumber.

Heating, ventilation and air conditioning (HVAC)

These issues can be a big concern due to the cost to replace HVAC units. If your unit has rust on it and appears to be inoperable, clean it and service the unit prior to closing. Change the air filter and make sure it is in good working order!

Light bulbs

Please change them! I cannot tell you how many times I have seen light bulbs missing or not working, and on every single occasion, the home inspector writes up “lights not working, have evaluated by a licensed electrician.” I asked one inspector if they tested whether the bulb was just burned out. He said, “No; if we did that, it would take us longer to complete the inspection.” Yikes! Licensed electricians cost money, and that inspector could give your seller the impression that there’s a major electrical issue with the home.

It is true that during the home inspection, the buyer will usually find something else beyond these fundamental fixes, but addressing these issues will decrease the risk of any deal-killers and hopefully avoid some major expenses for sellers.



Source: inman, Hank Bailey
http://www.inman.com/2015/03/14/9-vital-home-repairs-to-complete-before-negotiating-a-sale/