Tuesday, May 31, 2016

5 Ways the Government Can Save You Big Bucks on Your First Home

government-assistance

Itching for the key to unlock your dream of a new house? Here’s yet another reason to love your country: The U.S. has plenty of programs and incentives that could make that goal a reality. If you’re a first-time buyer—and even if you’re not, in some cases—there are some government benefits that can help you afford those new digs.

Before we dive deep into the ways the government can help fund your new home, there’s a little matter to clear up: your eligibility.

The Department of Housing and Urban Development—the U.S. agency that oversees all housing matters—is fond of bolstering the success of first-time buyers. But that doesn’t mean you’re locked out of options if you’ve already owned a home. Here’s what HUD considers a “first-time home buyer”:

  • An individual that hasn’t owned a principal residence during the three-year period ending on the date of purchase of a new property. If a spouse meets this test, the couple does, too.
  • A single parent who owned a home only with a former spouse while married.
  • A displaced homemaker who owned only with a spouse.
  • A person that owned a principal residence not permanently affixed to a permanent foundation. (Maybe you owned a tent, RV, or mobile home unit.)
  • Someone who owned a property that didn’t comply with state, local, or model building codes—and couldn’t be brought into compliance for less than the cost of constructing a permanent structure.

If any (or a few) of those statements sounds like you, these options could make a move even more affordable.

1. Various HUD-funded programs

The folks at HUD grant money to a myriad of different organizations and services that can help first-timers purchase a home. From loan programs that offer lower down payments to special programs for teachers, firefighters, and a few other vocations, HUD’s resources are vast and diverse. HUD even offers federal assistance at the state level, so make sure to see if your state is covered.

2. State-specific assistance

In addition to HUD assistance, states such as Illinois, Ohio, and Washington have down payment assistance programs for first-time buyers. Eligibility criteria vary by state, but often factor in your income and the value of the property you’re hoping to purchase. If you qualify, you could score financial assistance with down payment and closing costs. You might also net some monetary relief to rehab or improve a property.

3. Military benefits

Active-duty and veteran families might be eligible for a zero-down payment Veterans Affairs home loan. It’s part of a benefit program that’s helped millions of veterans and military members purchase a home since World War II. While loans typically top out at $417,000, that limit can swell in counties with higher costs of living.

Not only do these loans allow borrowers to sidestep down payments, service personnel can also roll the mortgage insurance of 2.15 points (a point is equal to 1% of the loan amount) into the loan. More and more veterans are using these flexible, $0 down loans to crack the housing market during a time of tight credit and limping wages.

For more information, consult with a VA home loan provider such as Veterans United Home Loans.

4. Loans for Native Americans

Native American first-time buyers can apply for a Section 184 loan, which lets them buy a home with as little as a 2.25% down payment on loans of $50,000 and more. If you need a loan for less, the down payment dips to 1.24%. Unlike traditional loan approvals that are heavily dependent on a borrower’s credit score, these hinge on the prevailing market rate.

There is a small catch: Section 184 loans are applicable only to single-family homes that are for a primary residence.

5. Your retirement fund

That trusty tool you’re using to fund your golden years can help put a new roof over your head while you’re still young(ish). First-time buyers can pull up to $10,000 during their lifetime from their traditional or Roth IRA without being whacked with the 10% early withdrawal penalty.

However, Uncle Sam might come knocking with his hand out. Pull money out of a traditional IRA and expect to shell out some moolah to cover the income tax on the money. Roth IRAs aren’t subject to income tax because they’re funded with post-tax dough.

Of course, like any government agency, HUD and its local municipality siblings are often tweaking, adding, and (sadly) dropping funding options. So before signing on a purchase offer’s dotted line, make sure you investigate eligibility and availability in your area to make homeownership a tad more affordable.

Source: Realtor.com, Gina Roberts-Grey
http://www.realtor.com/advice/finance/affordability-options-first-time-buyers/?iid=rdc_news_hp_carousel_theLatest

Monday, May 30, 2016

Saturday, May 28, 2016

Silicon Valley’s High Rents Keep People in Toxic Relationships

The cost of living in Silicon Valley takes more than just a financial toll—it’s often deeply, painfully personal. (Illustration by Jeremiah Harada)

When she met him, a cute out-of-towner at the bar, she could already picture their life together. An ensuing long-distance courtship kindled the notion into reality. On the one-way drive from her hometown in Washington to his in Silicon Valley, that imagined future began to take shape.

She transferred her course credits to San Jose State University and worked three jobs to save up while living with his overbearing mom for a year-and-a-half. By 2014, they had enough to move into a one-bedroom Japantown flat.

For a month—a brief, blissful month—she could breathe. She felt at home. He felt like family.

“That’s all I got,” says Amanda, 26, an environmental science major who asked to withhold her name for fear of eviction. “One whole month of happiness.”

Before long, her boyfriend went from affectionate to detached. He got cagey. Stress over his new job, she figured. He locked his phone and began impulsively tilting the screen away from her line of sight. She didn’t dwell on it. School and work kept her busy from dawn to 10 most nights.

On a rare evening off, she invited her closest friend to the apartment to bake jam-topped cookies over wine, cheese and gossip. Amanda’s usually sullen boyfriend suddenly seemed sociable, taking a keen interest in the visitor, who happened to have dated a close friend of his.

“We’re hanging out and he keeps filling our wine glasses,” Amanda says. “Mostly, he just flirted with her, looking through her overnight bag and jokingly telling her to put makeup on him. They’re laughing and I’m sitting there uncomfortably.”

Confused and feeling disrespected, she told her boyfriend to leave them alone. Some sense of guilt prompted her to call him back, as long he behaved. The trio called an awkward truce and watched a movie, with Amanda in the middle. Then, her boyfriend reached across to caress her friend, who kissed Amanda’s cheek.

“What is happening right now?” Amanda recalls asking, jerking herself away from the unwelcome attempt at a three-way.

She marched into the bathroom to cry, half-hoping one of them would come after her to apologize. Nothing. Sobbing, she packed a bag. On her way to the front door she saw her friend straddling her boyfriend. In a few-minute span, he fucked and finished. He later expressed remorse, but more for the brevity than the infidelity.

In a sane world, that would merit a clean break. But there is nothing sane about Silicon Valley’s astronomical housing costs. Amanda couch-surfed, scoured ads for a room to rent on her meager budget and spent one night sleeping in a Wal-Mart parking lot.

With classes and an internship to worry about, she resolved to tough it out with her ex for another 18 months and counting.

Put Up or Shut Up

The cost of living in Silicon Valley takes more than just a financial toll—it’s often deeply, painfully personal. Skyrocketing rents give the housing market a compulsory family planning effect.

People limit the number of kids they have or hold off entirely. Couples delay moving in together for fear of losing a rent-controlled unit. Or they shack up too quickly because of a rent hike. They never leave the house or move back in with parents, doubling or tripling generations in a single home. People put up with smaller, stranger accommodations, such as shared rooms, converted sheds, backyard tents and couches or subdivided common areas.

If a relationship falls apart, there’s often nowhere else to go for months, even years. Exes demoted to housemates have to navigate a post-breakup reality that prevents them from moving on. That can become more than just awkward. Increasingly, people put up with toxic relationships or outright physical, financial or emotional abuse because they simply can’t afford to leave.

“Ten years ago, we didn’t need to be housing experts,” says Colsaria Henderson, program director for Next Door Solutions to Domestic Violence. “But housing has become the key issue with our survivors. I would say it’s paramount. We never really anticipated seeing survivors priced out of everything, or seeing so many of them make that decision to remain with an abuser or risk homelessness.”

Next Door Solutions, Santa Clara County’s largest service provider for victims of domestic violence, turned away 77 women and 87 children from its battered women’s shelter in April.

“These are all women we would have taken into our shelter, these are people who have exhausted all their options,” she says. “There’s just no room.”

Illustration by Jeremiah Harada

Rent Controlled

Katie Taylor, 28, has achieved a tense equilibrium with her ex by creating some emotional distance despite their physical proximity.

“We try to work together to help each other out and to be friends,” says Taylor, a Michigan transplant who lives in one of downtown San Jose’s myriad subdivided Victorians. “I get free food from work but I don’t have a car, so I barter with him by giving him food for a ride. But when we’re in the car together, we’ll argue again.”

At least she moved out, she says, even if she didn’t get that far. Last fall, she left their shared room—where they spent months aggravating seven housemates with late-night shouting matches that sometimes descended into physical fights—for a $425-a-month space on the second floor. It wasn’t her first choice.

“I was telling myself for a really long time that I wasn’t staying there because I needed a place to live,” Taylor says. “I kept telling myself that I could leave if I wanted to.”

Scouting for a new home, however, made it all but impossible to live in denial. The only options within her price range included dank, windowless basements for $650 a month or party houses with washed-up townies or 19-year-old college students.

“After months of looking for somewhere to live, it all came crashing down,” she says. “I realized that I’m totally fucked. I got really depressed. I would lay in bed all day and cry.”

San Jose rents rose to historic heights in the last decade, while million-dollar homes became commonplace.

The average going rate for a two-bedroom apartment went from $1,775 in 2010 to $2,960 this past February, according to Rent Jungle. That’s a 67 percent jump. The average one-bedroom saw a 77 percent increase from $1,330 to $2,362 in the same timeframe.

More than half of the city’s renters are considered “rent burdened,” which means they spend at least a third of their income on rent. Among those, 27 percent pay at least half of their earnings to keep a roof over their heads.

As a cook at a grocery store, there’s no chance Taylor would be able to afford anything but a place with a partner or several roommates, or both. Regardless, her more immediate anxieties involve cohabiting with an erstwhile lover, which she says prevents her from bringing a date home. The last time a guy spent the night led to a weird, tearful encounter in the bathroom.

On the bright side, the less-than-ideal housing arrangement has forced her to become more diplomatic. “I’m learning good communication skills,” she says. “Now I’m the person who’s saying, ‘OK, let’s work together to clean this place up,’ maybe get on the landlord’s good side.”

Melanie Cauble, a family therapist based in Willow Glen, says there’s a cultural expectation that breaking up means ceasing all contact. For people with kids, divorcees with mutual property or live-in partners who can’t up and leave, a clean break can be all but impossible.

“Sometimes you have to learn how to cope,” she says. “People have this mentality that when they break up they never talk to each other again, but it doesn’t necessarily have to be that way. We’re in this stage in our society where it doesn’t have to be black and white, where exes can be friends or at least remain civil with each other.”

Cauble would know. For a year after divorcing her husband of two years and partner of 10, they lived in the same house. She managed to date and live the single life while summoning the financial wherewithal to strike it out on her own.

“It’s challenging,” she says. “And it doesn’t always work.”

Pity Rent

On the flip side of these unwanted relationships is Paul Gee, a 39-year-old local  landlord who lives with his ex two years after the split.

“I actually feel guilty about how the rental market is, so I let her stay,” he says. “She can’t really afford to move out. I know that. But it’s awkward, there’s always tension and it wasn’t a completely friendly breakup.”

In a two-bedroom cottage, they share a bathroom and, if they can stand it, the living room. To avoid each other they often stay in their own rooms. Underscoring the absurdity of the situation, Gee says, he’s grateful for long work hours and snarled commutes that keep him out of the house.

Though he owns the place, he’s just as stuck.

“Neither one of us can move forward,” Gee says. “I can’t even imagine bringing anyone else over. I’m basically in this impossible situation where I have nowhere to go and she has nowhere to go. But I also totally get where she’s coming from.”

The predicament clouds his future.

“It’s hard to see beyond this,” he says. “I don’t see a way out.”

Nowhere to Turn

For Darlisha Matthews, coping was no longer an option. For a decade, she endured beatings, sexual assault and emotional abuse at the hands of her boyfriend because she had nowhere else to go with four kids and a single income. Affordable housing is tapped out, public subsidies come with 12-year waiting lists and emergency shelters exceed capacity.

Two-and-a-half years ago, Matthews evicted her abuser after he threatened to kill her. But without his portion of the rent, she could no longer afford $1,450 a month. Her landlord was unsympathetic.

In the thick of a white-hot rental market and the wake of her grandmother’s death, Matthews made what she calls “a terrible choice that no one should have to make.” With her two young daughters and one son—the other went to live with his dad—she bunked in their Honda Odyssey or shelters, when there was room. If she scraped together enough cash, she rented cheap motel rooms so they could stretch their legs. Too many nights spent sleeping upright causes the calves to swell, painfully and sometimes permanently.

Most days, Matthews had no clue where they would sleep, where they would shower. Some days, she wanted to die. Despite the chaos, she kept her kids in school and landed a part-time job. She filled out countless applications for apartment waiting lists, shelters and services that might get her family off the streets.

“I was just praying, because I couldn’t take it anymore,” she says. “I would ask the Lord, I would ask my grandmother, ‘What can I do? Where can I get help? Where are you going to guide me to?’”

Finally, she went to HomeFirst, the South Bay’s largest homeless services provider, which found her a subsidized apartment. Since March, her family has had some semblance of stability.

“It takes some getting used to,” says Matthews, 32, from the dining room table of her sunlit breakfast nook. “Some days I wake up and tell the girls, ‘Get up, we got to leave, we got to go.’ And they’re like, ‘No we don’t, mom.’”

It takes a conscious effort to keep her mind from racing and calmly tell her kids, “good morning,” instead of “hurry up, wake up, get going.” However, unless HomeFirst extends their lease, Matthews will need to find a new place within two years.

After two-plus years on the streets, Darlisha Matthews and her daughters have a place of their own—for now. (Photo by Jennifer Wadsworth)

Most domestic violence shelters limit stays from one to a few months and transitional housing to a year or two. But finding a room or apartment to rent often requires a year or more of searching, according to domestic violence nonprofits.

Women, like Matthews, fall into what’s called the “shelter shuffle,” making the circuit from one nonprofit to the other to stay off the streets. Meanwhile, short-term apartments have run out of room as people slated to move out extend their stay for lack of options.

“Transitional housing, in many cases, is no longer transitional,” says Perla Flores, program director for Community Solutions, another local nonprofit that helps abuse survivors. “They’re permanent, or indefinite, which is good for the people who have them but difficult for everyone else.”

It can take years for people in abusive relationships to summon the strength to leave, Matthews says, but faced with the prospect of homelessness, they can lose their resolve.

“Everyone tells you to leave,” she says. “But when you’re finally ready to take that step, nobody knows where you can go.”

People in controlling relationships tend to have bad credit, rental and job histories as a result of their abuse. Factor in a host of inequities, like the gender pay gap that limits a woman’s spending power, and it’s little wonder that women and other marginalized groups are disproportionately impacted by rental-relationship woes.

About half of all homeless women say violence at home forced them onto the streets, according to a 2013 survey by the National Center on Family Homelessness. Among homeless mothers with children, that figure rises to more than 80 percent.

Women in Silicon Valley fare far worse than the rest of the country. While the national homeless population counts three times as many men as women, the South Bay’s is evenly divided between genders with women more likely to experience persistent homelessness. That local gender disparity only recently came to light in a 2015 study by housing nonprofit Destination: Home, which urged policymakers to investigate the region’s unusually high female homeless population.

“As a movement, we built shelters to provide a safe place for people to get on their feet,” says Henderson, who has worked in the field for the better part of two decades. “We were a little blindsided by the woman who wanted to leave her abuser but couldn’t.”

Until policymakers stitch up gaping holes in the social safety net, domestic violence victims will continue to weigh their abuse against the prospect of losing shelter. “People do what they can to survive,” says Nohemi Nogueda, a coordinator for Next Door Solution who worked with a single mom criminally prosecuted for trading sex for shelter. “There’s a lot of pressure when you feel you have no choice.”

Nogueda doesn’t know whether the landlord got busted for what legally amounts to prostitution. But a quick scroll through Craigslist shows plenty of men in Silicon Valley trying to capitalize on down-and-out women looking for a cheap place to stay.

The GF Experience

Market forces that keep exes together long after they break up also compel people to strike up relationships they would never consider otherwise. This creates a type of sex work that flourishes in a housing crisis.

Most of the sex-for-rent ads on Craigslist’s South Bay listings seek female roommates and a selfie. One asks for “young, big, well-built, live-in house boy.” Some openly solicit “tenants with benefits.”

“I don’t want to rent to just anyone,” a self-described “sober/professional” landlord in San Jose wrote in a Craigslist ad. “I would prefer a ‘mutually beneficial arrangement.’”

I responded to a few ads to learn about what these landlords expect from sex-for-rent deals. One of them tells me he owns an auto dealership on Stevens Creek Boulevard. He wants to talk about the arrangement in person but can only meet after 9pm at his office or an upscale wine bar in Santana Row. Others say they won’t disclose the details until I send them a selfie.

A guy from Willow Glen sends a photo of himself first, angling for reciprocation. He says he’s 49 years old and lives alone in a clean, quaint second-story apartment with an orange tabby named Hugo.

“There’s only one bedroom,” he says, apologetically. “But I was hoping for more of a live-in girlfriend, just so we’re clear.”

If someone bites, he continues, this would be the second time in the past few years that he’s offered shelter for “the girlfriend experience.”

“She was young and beautiful and horny all the time,” he says. “But she was also a thief. Found $500 of mine in her purse so I cut her loose. … I chalked it up to experience.”

“Yeah,” I reply, “seems like a gamble, taking in strangers.”

“Loneliness makes one do incredibly stupid things,” he admits. “But just having someone to come home to at night and cuddle with would make it all worth it.”

I ask what he’s looking for in a tenant-with-benefits. One of two types of women, he answers: someone his age or “a young, cute girl who just loves sex.”

“But I’m a realistic thinking person,” he continues, “and I know my limitations and capabilities, so I don’t get my hopes up too high. It would be nice to trade in a little reality sometimes for a little fantasy.”

At the First Presbyterian Church San Jose’s Women’s Gathering Place, which offers meals and a living room-like space for unsheltered women to rest during the day, the attendees tell each other to look out for sex-for-shelter ads.

“The men think they can get a woman who’s desperate but still looks like a model,” says Sally Claridge, 65, who’s lived on the streets since being priced out of her Willow Glen apartment of two decades in 2012. “That’s what they’re looking for.”

Granted, they’ll take what they can get, she says. A year ago, still naïve to the catch, she responded to one such ad.

“Over the phone, he says, ‘It’s yours if you pee on my face,’” she says. “I said, ‘Oh no,’ and hung up.”

Another homeless woman, 59-year-old Frenchie Rogers, laughs at the absurdity but urges caution. At least an escort can leave her client at the end of the hour, she says, but a live-in sex-on-demand tenant?

“Trapped,” she says, shaking her head. “I tell other women about Craigslist. I tell them, ‘You gotta be careful out there. You gotta be safe.’”

Break Free

Next year, Amanda graduates. She hopes to land a better job with better pay that could finally give her the economic dependency to break free of the failed relationship that tethers her to an apartment.

Though she lost friendships and a love interest, she feels more resilient for what she’s been through.

“I’m mostly a lone wolf,” Amanda says. When she broke up with her boyfriend, she tried to change that by going out by herself, meeting new people, forming a social life without him.

“I mean, you do feel like your life's on hold,” she says. “I’ve survived each day with this person, I wake up with this person just trying to avoid an argument. But I’ve learned to be happy elsewhere.

“I can see the light.”


Source: San Jose Inside, Jennifer Wadsworth
http://www.sanjoseinside.com/2016/05/26/silicon-valleys-high-rents-keep-people-in-toxic-relationships/

Homeowner Evicted for Not Paying HOA Dues: Can This Happen to You?

overdue HOA fee

Who knew? Even if you pay your mortgage on time every month, your home can still be foreclosed on and sold from under your feet. That, at least, is what Triss McQuiston from Tomball, TX, learned recently when she was notified that she’d have to vacate her place. Why? It turns out she was evicted for not paying her HOA dues.

According to ABC13, McQuiston admits that she was guilty of procrastinating on paying her HOA fees to the Canyon Gate at Northpointe Owners Association in 2014 and 2015. Because she was opening a new business, her HOA bills slipped through the cracks, for a grand total of $1,800 in unpaid dues.

An attorney for the HOA claims that since March 2014, they’d sent McQuiston 12 notices by first-class certified mail to collect these assessments, warning her what would happen if she didn’t. When they received no response, they proceeded with the foreclosure, and sold the home at auction back in September.

Yet McQuiston argues that she’d received no warnings, and was made aware of her dire straits only when she received an eviction notice on her doorstep on May 20. She has since hired an attorney to help fight the case and remain in her home.

“I would never have thought in my wildest dreams that an HOA … would go to these lengths and they’d have this much power,” McQuiston told ABC13.

If this story has you viewing HOAs in a harsh (and terrifying) new light, we don’t blame you. And while the laws vary by state, it turns out that in most cases, HOAs really do have the power to foreclose on your home for unpaid dues, as do condo owners associations.

“Contrary to common perceptions, even if a person is current on a mortgage, the HOA or COA may foreclose,” says Bob Tankel, a Florida attorney specializing in HOA law. “What’s the moral of the story? Pay your assessments. These are not huge amounts. People apparently think that just because assessments are small there’s nothing bad that can happen. But that’s not true.”

To know specifically how your HOA or COA handles late payments, homeowners should “check the Declaration of Covenants, Conditions & Restrictions (CC&Rs),” says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School. You should check not only what constitutes a late payment, but also how you’ll be penalized; additional fees could include late charges, fines, interest, as well as attorneys’ fees.

It’s also smart to check what rights and recourse you have in your state if you end up unable to pay these assessments. “Some states have enacted some procedural protections for homeowners,” says Reiss. “It’s worth figuring those out if you are not able to pay off your HOA right away.”

The bright side? Given HOA fees are fairly small compared with a mortgage, they should be fairly easy to manage with some belt-tightening. In fact, Tankel suggests, “Move payment of assessments to the top of the list of things to pay. If you can’t, you can cancel your high-speed internet or cable TV or stop eating out. None of those services are worth keeping if you can’t pay assessments.”

Take it from McQuiston, who could still stand to lose her home for a mere $1,800. She admits, “I had the money the whole time. That’s the sad part about it. I would have gladly taken care of it.”

Source: Realtor.com, Judy Dutton
http://www.realtor.com/news/trends/evicted-for-not-paying-hoa-dues/?iid=rdc_news_hp_carousel_theLatest

Friday, May 27, 2016

Another One Closed!

Just closed yesterday on a $1.425M in the Evergreen area of San Jose with my wonderful buyers Subrata and Shylaja. It's been a long road since we met, viewing different properties together and through the twists and turns of this transaction, but it was worth it to me to see great clients like you get into your dream home.


5 Ways You Didn’t Know You Could Save for a Down Payment



Buying your first home conjures up all kinds of warm and fuzzy emotions: pride, joy, contentment. But before you get to the good stuff, you’ve got to cobble together a down payment, a daunting sum if you follow the textbook advice to squirrel away 20% of a home’s cost.

Here are five creative ways to build your down payment nest egg faster than you may have ever imagined.

1.  Crowdsource Your Dream Home

You may have heard of people using sites like Kickstarter to fund creative projects like short films and concert tours. Well, who says you can’t crowdsource your first home? Forget the traditional registry, the fine china, and the 16-speed blender. Use sites like Feather the Nest and Hatch My House to raise your down payment. Hatch My House says it’s helped Americans raise more than $2 million for down payments.

2.  Ask the Seller to Help (Really!)

When sellers want to a get a deal done quickly, they might be willing to assist buyers with the closing costs. Fewer closing costs = more money you can apply toward your deposit.

“They’re called seller concessions,” says Ray Rodriguez, regional mortgage sales manager for the New York metro area at TD Bank. Talk with your real estate agent. She might help you negotiate for something like 2% of the overall sales price in concessions to help with the closing costs.

There are limits on concessions depending on the type of mortgage you get. For FHA mortgages, the cap is 6% of the sale price. For Fannie Mae-guaranteed loans, the caps vary between 3% and 9%, depending on the ratio between how much you put down and the amount you finance. Individual banks have varying caps on concessions.

No matter where they net out, concessions must be part of the purchase contract.

Related: New Law Protects You from Surprise Closing Costs

3.  Look into Government Options

The U.S. Department of Housing and Urban Development, or HUD, offers a number of homeownership programs, including assistance with down payment and closing costs. These are typically available for people who meet particular income or location requirements. HUD has a list of links by state that direct you to the appropriate page for information about your state.

HUD offers help based on profession as well. If you’re a law enforcement officer, firefighter, teacher, or EMT, you may be eligible under its Good Neighbor Next Door Sales Program for a 50% discount on a house’s HUD-appraised value in “revitalization areas.” Those areas are designated by Congress for  homeownership opportunities. And if you qualify for an FHA-insured mortgage under this program, the down payment is only $100; you can even finance the closing costs.

For veterans, the VA will guarantee part of a home loan through commercial lenders. Often, there’s no down payment or private mortgage insurance required, and the program helps borrowers secure a competitive interest rate.

Some cities also offer homeownership help. “The city of Hartford has the HouseHartford Program that gives down payment assistance and closing cost assistance,” says Matthew Carbray, a certified financial planner with Ridgeline Financial Partners and Carbray Staunton Financial Planners in Avon, Conn. The program partners with lenders, real estate attorneys, and homebuyer counseling agencies and has helped 1,200 low-income families.

4.  Check with Your Employer

Employer Assisted Housing (EAH) programs help connect low- to moderate-income workers with down payment assistance through their employer. In Pennsylvania, if you work for a participating EAH employer, you can apply for a loan of up to $8,000 for down payment and closing cost assistance. The loan is interest-free and borrowers have 10 years to pay it back. Washington University in St. Louis offers forgivable loans to qualified employees who want to purchase housing in specific city neighborhoods. University employees receive the lesser of 5% of the purchase price or $6,000 toward down payment or closing costs.

Ask the human resources or benefits personnel at your employer if the company is part of an EAH program.

5.  Take Advantage of Special Lender Programs

Finally, many lenders offer programs to help people buy a home with a small down payment. “I would say that the biggest misconception [of homebuying] is that you need 20% for the down payment of a house,” says Rodriguez. “There are a lot of programs out there that need a total of 3% or 3.5% down.”

FHA mortgages, for example, can require as little as 3.5%. But bear in mind that there are both upfront and monthly mortgage insurance payments. “The mortgage insurance could add another $300 to your monthly mortgage payment,” Rodriguez says.

Some lender programs go even further. TD Bank, for example, offers a 3% down payment with no mortgage insurance program, and other banks may have similar offerings. “Check with your regional bank,” Rodriguez says. “Maybe they have their own first-time buyer program.”

Not so daunting after all, is it? There’s actually a lot of help available to many first-time buyers who want to achieve their homeownership dreams. All you need to do is a little research — and start peeking at those home listings!


Source: HouseLogic, Erik Sherman
https://www.houselogic.com/buy/first-time-home-buyer/down-payment-assistance/

Thursday, May 26, 2016

New Mortgage Rules For Self-Employed Borrowers

shutterstock_289273250

If you’re self-employed, you must meet different requirements than a salaried person to qualify for a mortgage. The rules about how that works were updated in recent months to take an even closer look at your business income, so let’s review the rules for self-employed people borrowing for the first time, and for those who will be impacted by new rules next time they get a loan.

Self-employed borrower basics

Two of the most important things lenders review to qualify you for a mortgage are income and assets, which respectively, determine how much monthly payment you can afford and where your down payment is coming from.

When it comes to income, self-employed borrowers report income as sole proprietors or owners of entities like corporations, partnerships, or limited liability companies (LLCs).

As a sole proprietor, you will file your self-employed income on IRS Schedule C, which tracks your income and expenses for a given year.

Unlike with salaried employees, who get to use their gross income for loan qualifying, sole proprietor borrowers must qualify using their net income from Schedule C. Furthermore, lenders calculate a 24-month average of net income for sole proprietors (as opposed to sometimes requiring just one year from salaried borrowers), and if the most recent Schedule C has lower net income than the previous year, lenders will use worst-case income by calculating a 12-month average of the most recent year.

If you’re self-employed and conduct business via a corporation, partnership, or LLC, the IRS requires these entities to file separate sets of tax returns. If you own 25 percent or more of the entity, you will need to provide lenders with these full business tax returns, as well as your personal returns.

Just like with Schedule C, lenders will average income for 24 months using two years of filed business (and personal) returns, and if the most recent year is lower, they will average 12 months of the lower year.

When it comes to assets, self-employed borrowers sometimes have a lot of their money in their business, and may want to use those funds for down payment. Some lenders will let you do this, and if so, they often require that your tax preparer verifies that use of business funds for a home purchase won’t have a material impact on the business.

New rules for self-employed borrowers

In February 2016, Fannie Mae updated self-employment income calculation guidelines for borrowers who own partnerships and S corporations. These guidelines impose stricter analysis on income and debt trends of a company to determine whether the company has sufficient assets to support the withdrawal of earnings to pay its owners.

If you own an entity like this, your income from the entity shows up on a form called Schedule K-1. This form is part of the entity’s tax filing, and the figures on this form get carried over to your personal tax return as income.

This income most often comes in two main forms: “ordinary business income” and “distributions.”

New rules for self-employed borrowers now impose conditions on whether you can use either of these forms of income. For example, if distributions are greater than ordinary business income, then ordinary business income may be used to qualify. But if distributions are less than ordinary business income (or distributions don’t exist), then there are a host of guidelines to determine how you qualify.

These guidelines will be specific to your profile and they will vary by lender, so the best way to determine whether you qualify for a loan as a full or part owner of a corporation or partnership is to find a local lender who can analyze your tax returns for you.


Source: Zillow Blog, Julian Hebron
http://www.zillow.com/blog/new-mortgage-rules-self-employed-197638/

Wednesday, May 25, 2016

6 Reasons Real Estate Agents Aren’t Extinct

realtor handing couple keys

It’s 2016, and it seems our need for real live people is ever-diminishing. There’s self-checkout instead of cashiers, selfie sticks instead of photographers, self-driving cars, self-watering plants, self-administered colonoscopies … well, you get the idea. Given that technology has become so important to buying and selling homes, you’d also think real estate agents would be a dying breed—yet they aren’t showing any signs of slowing down, with approximately 2 million active real estate agents throughout the country.

So why did real estate agents make the technology transition fully intact as opposed to, say, travel agents? We asked some experts to weigh in.

Reason No. 1: Selling is complicated

For many people, “a real estate transaction is financially momentous and complex—the most complex transaction people do in their life,” explains David Reiss, a law professor and academic program director for the Center for Urban Business Entrepreneurship at Brooklyn Law School.

Comparatively, personal travel agents—the kind where you’d walk in their office and have them book you a hotel and a flight—have gone the way of the dodo, because now that’s all simple DIY stuff (to be fair, not all travel agents are out of a job—there’s still a healthy travel agency sector that thrives on corporate and luxury bookings).

“People like having an expert when dealing with large, complicated transactions,” says Jeff Tomasul, founder of Vespula Capital LLC, an investment management company based in Greenwich, CT. “Why do people still have financial advisers? They want someone who does it full-time to make sure they are not doing anything wrong.” Same with real estate agents.

And real estate transactions are often anything but straightforward. Some deals, like short sales, can be “much more intricate than a regular transaction,” Reiss says, with lenders who have requirements that “a regular person would have no idea about.”

Reason No. 2: Buying ain’t easy, either

Buying a home, even if you come in with all cash, is not a cookie-cutter task, and you can find yourself drowning in paperwork and stressed out juggling things like meeting buyers, and dealing with the seller’s agent, lender, and title companies. Agents ease the whole transaction, and it’s something that has kept their profession alive.

“They can hold your hand through the process,” Reiss explains. “They might say, ‘This lender takes a long time, so put in your contract immediately and sign this and that paper and get all this stuff ready before you’re walking over hot coals with the lender for money.”

Reason No. 3: It’s their top priority

Your own interests and priorities will very likely always be split—because of those pesky little things like, say, job and family—but a Realtor® can be laser-focused on getting the deal done. “A Realtor has a singular aim: to sell houses,” Reiss says.

Simply put, having a real estate agent can make your life easier. Tomasul found himself in a frustrating position when he tried to sell his apartment in Manhattan without an agent. “Showing it was so tough with my schedule, and it was hard having a full-time job and keeping up in a timely matter with potential buyers,” he recalls.

That means the less you make time for buyers, the longer your place will stay on the market—and that’s not good for your bottom line.

Reason No. 4: They know the market, and the players, better than you

“The agent knows the market intimately, even more than a pretty informed resident,” Reiss says. And all that knowledge saves time. “Tracking sales, knowing listings, spending a lot of shoe leather on houses already for sale—right off the bat, they know more than the ordinary Joe and Jane. They understand condo boards and title companies. As a player in the game, they know what the other players are looking for and how to deliver.”

Reason No. 5: They’re objective

Without an agent showing your house for you, you have no shield from criticisms that can—and will—be made about your house from prospective buyers. Your favorite room in the home might be described as “tacky,” “needing a renovation,” or much worse. Sometimes such comments are negotiating tactics. Sometimes they are heartfelt, off-the-cuff opinions. But either way, they can lead to problems.

“It impacts objectivity for a seller to hear negative things about their own place,” Reiss explains. “Realtors aren’t emotionally invested. They don’t take comments personally. It’s not ‘Oh, you don’t like my chandelier? Then get out of my house.’”

Reason No. 6: The cost is worth it

We’re not saying a 6% commission is chump change. It can be a good amount of money when you’re selling your house. But using an agent saves a ton of time. Even with a 6% commission, time is money—for many people, time saved negates the cost. Plus, given that home buying and selling is a negotiation where you can save big if you bargain right, skilled real estate agents can step in to fight on your behalf, saving you major money. In other words, typically the money you pay an agent will come right backatcha.

Feeling a bit more confident than ever that you should have a real estate agent watching your back? Then Find a Realtor now and get moving.

Source: Realtor.com, Craig Donofrio
http://www.realtor.com/advice/buy/why-realtors-are-here-to-stay/?iid=rdc_news_hp_carousel_theLatest

Tuesday, May 24, 2016

Not Sure How to Price Your Home? Expert Strategies Help You Hit the Spot


You don’t need to be Bob Barker to know when the price just isn’t right. Just ask Candace Talmadge. She originally listed her Lancaster, Texas, home for $129,000, but “eventually had to accept the market reality” and chop $4,000 off the price.

The home’s location proved challenging: Buyers were either turned off by the area — a lower-income neighborhood south of Dallas — or unable to afford the home.

“Sellers have to keep in mind the location,” says Talmadge. “Who are going to be the likely buyers?”

Home pricing is more of a science than an art, but many homeowners price with their heartstrings instead of cold, hard data. Here’s why crunching the numbers is always the better route to an accurate home price — as well as what can happen when home sellers overlook those all important data points.

Related: 5 Things You Need to Ask Yourself Before Turning Down a Low-Ball Offer

The Pitfalls of Overpricing

Homeowners often think that it’s OK to overprice at first, because — who knows? — maybe you’ll just get what you’re asking for. Although you can certainly lower an inflated price later, you’ll sacrifice a lot in the process. The most obvious damage: A house that remains on the market for months can prevent you from moving into your dream home. Already purchased that next home? You might saddle yourself with two mortgages.

“You lose a lot of time and money if you don’t price it right,” says Norma Newgent, an agent with Area Pro Realty in Tampa, Fla.

And worse: Continually lowering the price could turn off potential buyers who might start wondering just what is wrong with your home.

“Buyers are smart and educated,” says Lisa Hjorten of Marketplace Sotheby’s International Realty in Redmond, Wash. “You’re probably going to lose them.”

The Pricing Traps

It’s easy for homeowners to stumble into two common traps:

1.  Conflating actual value with sentimental value — how much they assume their home’s worth because they lived there and loved the time they spent there.

2.  Assuming renovations should result in a dollar-for-dollar increase in the selling price — or more.

“Many homeowners think, ‘Of course my home is worth a bazillion dollars,’” says Newgent. If they put in a few thousand dollars worth of new flooring, for example, they might overestimate the upgrade’s impact on the home’s value into the tens of thousands.

Talmadge’s Texas home came with a built-in renovation trap: It was already the nicest home in the area, making it harder to sell. Major additions had inflated the square footage — and the price, according to one appraiser — without accounting for the surrounding neighborhood. That created a disconnect for buyers: Wealthier ones who might be interested in the upgraded home disliked the neighborhood, and less affluent buyers couldn’t afford the asking price.

“Don’t buy the nicest home on the block” is common real estate advice for this reason.

That’s not to say that renovations aren’t worth it. You want to enjoy your home while you’re in it, right? Smart renovations make your home more comfortable and functional but should typically reflect the neighborhood. A REALTOR® can help you understand what certain upgrades can recoup when you sell and which appeal to buyers.

Another culprit for many a mispriced home is online tools, like Zillow’s “Zestimate,” that prescribe an estimated market value based on local data.

The estimate is often wildly inaccurate. A Virginia-area real estate company, McEnearney & Associates, has compared actual sold prices with predicted online estimates for several hundred homes in the area for the past few years and concluded the predictions failed half of the time.

The Right Stats for the Right Price

The best pricing strategy? Consult a real estate agent, who will use something called comps (also known as “comparable sales”) to determine the appropriate listing price. They’re not just looking at your neighbors; they’re seeking out near-identical homes with similar floor plans, square footage, and amenities that sold in the last few months.

Once they’ve assembled a list of similar homes (and the real prices buyers paid), they can make an accurate estimate of what you can expect to receive for your home. If a three-bedroom bungalow with granite countertops and a walk-out basement down the block sold for $359,000, expecting more from your own three-bedroom bungalow with granite countertops and a walk-out basement is a pipe dream.

After crunching the data, they’ll work with you to determine a fair price that’ll entice buyers. The number might be less than you hope and expect, but listing your home correctly — not idealistically — is a sure way to avoid the aches and pains of a long, drawn-out listing that just won’t sell.

Knowing When the Price is Too High

Once your home is on the market, you’ll start accumulating another set of data that will serve as the ultimate price test: how buyers react.

Agent Hjorten says there’s an easy way to tell if you’ve priced too high: “If we have no showings, it’s way too high. Lots of showings and no offer means you’ve marketed well — but it’s overpriced once people get inside.”

Talmadge didn’t struggle with showings. She says a number of people were interested in the home, but not enough at the price. In the end, Talmadge sold her home for $125,000, with a $5,000 seller’s assist, a discount on the cost of the home applied directly to closing costs.

“It all boils down to location, location, location. In [another] neighborhood, our house might well have sold for well over $130,000,” Talmadge says.

When it comes to finding a buyer, pricing your home according to data — and the right data, at that — is crucial to making the sale.

Source: Houselogic.com, Jamie Wiebe
https://www.houselogic.com/sell/how-much-is-my-home-worth/?cid=pm_ps_google_cac

Monday, May 23, 2016

Rental Scams That Anyone Can Fall For—and How to Avoid Them


realestatescamThe rental market is tough enough without having to deal with fake ads and crooks looking to steal your money. But it happens all the time. And it’s alarmingly easy for these rental scams to rope in even the smartest among us.

Take, for example, Angela Farrell, a single mom in West Chester, OH. She recently found a perfect rental house for her family—the price was good and the landlord seemed nice. She even drove by the place to check it out.

But there was a catch: The landlord was out of town and couldn’t let her in to see the inside. Still, she’d talked to him a few times and she knew the house was real—what was the harm? So she forked over the deposit money.

And that’s when the “landlord” disappeared with her $600 deposit.

So how do you keep it from happening to you?

To beat a scammer, you need to think like a scammer. Here are a few trademark secrets behind those rental swindles—and how you can beat them at their own game.

1. They ‘hijack’ real ads

It’s so easy for fraudsters to trick you because they’re using real ads.

“They don’t want to work that hard, and they don’t have to,” says Michael Monteiro, CEO and co-founder of property management software company Buildium. “They’re mostly stealing real rental ads, copying the text and the images, and making some minor tweaks—something as small as changing the rent amount.”

It’s something Monteiro has dealt with firsthand. When his company was first creating its rental platform, crooks infiltrated it and stole the company’s ads.

And they aren’t always using rental ads.

“They’re finding a house that’s for sale, and they’re turning it into a rental ad,” he says.

2. They cast a wide net

Think you’re safe with one rental site but not another? Think again.

“These guys aren’t just posting on one site. They’ll use a syndication tool—a platform that posts one listing to multiple locations—to cast a wide net,” Monteiro says.

And they do it with gusto. Most scammers post dozens of ads on dozens of sites, bagging as much cash as they can before retreating.

3. The landlord is suspiciously unavailable

When you reach out to the “landlord” by email, pay close attention to how the conversation feels.

“If you’re going back and forth with a prospective landlord, and the email has lots of grammatical errors and typos, that is a red flag,” Monteiro says.

If the email doesn’t seem too fishy, set up a time to meet the landlord and view the property.

The landlord may try to put off meeting you entirely. It’s possible he’ll have a story about being out of town (in Farrell’s case, the fake landlord told her he was out of the country on missionary work) and say he needs to rent out the place ASAP. If he doesn’t want to meet you at all, that’s a clear sign to cease communication immediately.

If the landlord is willing to meet you, that still isn’t proof that everything is on the up and up. You need to go inside the rental property first.

“Some scammers will show up at the property. They may even produce a set of keys, but then something happens and you won’t be able to actually get inside,” Monteiro says.

How to avoid fake listings

So how do you win? The best thing you can do is not contact the scammer in the first place, but “it isn’t always easy to spot a scam listing just by looking at it,” Monteiro says.

To help weed things out, turn to the all-powerful internet search.

First, if you can get the address, search for it. If the address pops up “for sale,” that doesn’t necessarily mean it’s a scam; many owners will try to rent and sell a property at the same time. But you should be cautious if you want to proceed.
No address? Try searching for the images. Most browsers give you this option. In Chrome, for example, right-click on the image, scroll to “Search Google for image,” and you’ll see a list of search results that also used the picture. Seeing it on multiple sites? Open up a few, and see if the ad is the same or if rent prices and contact info vary widely.

Protect your bank account

At some point, a con artist is going to want money from you—that’s the point, right?

In most cases, the fraudster will ask you to wire money after he’s “unable” to meet you. He might tell you he’ll mail you the keys, or he’ll meet you the day you’re supposed to move in.

If you did meet the landlord but couldn’t get in to see the rental, he might tell you he’s working on getting the keys but needs a deposit upfront to hold the place. It’s a tight rental market, after all.

Whether he’s hoping to play into your empathy or your fear of not finding another rental as good as this one, the goal is to get your money either wired, in cash, or through a money order before you sign any legal documents. Why?

“There really is not much you can do then. Once you wire the money, it is essentially gone,” Monteiro says.

And that’s easy to avoid: Don’t do it.

“Don’t give money to anyone you haven’t met,” Monteiro says. “And don’t give them any money until you’ve seen in the rental.”

Even then, don’t agree to pay anything in advance of signing the lease unless you can get a receipt or other legally binding document that proves you paid. And if you want to be really safe, insist on paying by check.

“At least you can cancel a personal check,” Monteiro says.

Source: Realtor.com, Angela Colley
http://www.realtor.com/advice/rent/rental-scams-and-how-to-avoid/

Saturday, May 21, 2016

Vacant "Zombie" Foreclosures Decrease 30 Percent in Second Quarter 2016 Compared to a Year Ago

Top States for Zombie Foreclosures are New Jersey, New York, Florida, Illinois, Ohio;
1.4 Million Overall Vacant U.S. Residential Properties Up 2.7 Percent From Previous Quarter
Investment Properties Account for 75 Percent of all Vacant Properties Nationwide



Source: RealtyTrac
http://www.realtytrac.com/news/foreclosure-trends/q2-2016-u-s-residential-property-and-zombie-foreclosure-report/

Milpitas amoung the fastest growing cities in America



You don't often hear about a California or Bay Area, or more specifically a Silicon Valley city being listed among the fastest growing in anything. Even though the job market in this valley is robust, the housing market is still hot (excepts the higher end homes), most of the growth going on in the country is outside of California in places like Texas. So I was surprised to see that at least one Silicon Valley city, Milpitas, CA., is listed as #8 on the U.S. Census Bureau's list.

More people are moving to Texas. In fact, the Lone Star State boasts five of the 11 fastest-growing cities over the past year, according to the Census Bureau’s annual analysis of population trends in America’s cities.


Georgetown, Texas, part of Austin’s metro area, is the nation’s fastest-growing city. Its population has surged 7.8 percent in the past year alone. Austin also is seeing booming growth in Pflugerville, which is the nation’s 11th fastest-growing city.

According to the U.S. Census, the following are the fastest-growing cities and towns between July 2014 and July 2015:


  1. Georgetown, Texas: 7.8% growth
  2. New Braunfels, Texas: 6.6%
  3. Ankeny, Iowa: 6.5%
  4. Frisco, Texas: 6.3%
  5. South Jordan, Utah: 6%
  6. Dublin, Calif.: 5.5%
  7. Pearland, Texas: 5.3%
  8. Milpitas, Calif.: 5.3%
  9. Broomfield, Colo.: 5.2%
  10. Mount Pleasant, S.C.: 4.7%
  11. Pflugerville, Texas: 4.5%
  12. Fort Myers, Fla.: 4.4%
  13. Murfreesboro, Tenn.: 4.4%
  14. Goodyear, Ariz.: 4.3%
  15. Buckeye, Ariz.: 4.3%


The latest Census statistics show the following are the nation’s largest cities:


  1. New York: 8,550,405
  2. Los Angeles.: 3,971,883
  3. Chicago: 2,720,546
  4. Houston: 2,296,224
  5. Philadelphia: 1,567,442


Source: RealtorMag Online > “Census Spots America’s Fastest Growing Cities…” BUILDER (May 19, 2016)
http://realtormag.realtor.org/daily-news/2016/05/20/fastest-growing-cities?om_rid=AAFmZk&om_mid=_BXP4CuB9N3VtTQ&om_ntype=RMODaily

How Much Are Closing Costs? What Home Buyers and Sellers Can Expect

closing-costs

Closing costs are the fees paid to third parties that help facilitate the sale of a home, and they vary widely by location. But as a rule, you can estimate that they typically total 2% to 7% of the home’s purchase price. So on a $250,000 home, your closing costs would amount to anywhere from $5,000 to $17,500. Yep that’s one heck of a wide range. More on that below.

Both buyers and sellers typically pitch in on closing costs, but buyers shoulder the lion’s share of the load (3% to 4% of the home’s price) compared with sellers (1% to 3%). And while some closing costs must be paid before the home is officially sold (e.g., the home inspection fee when the service is rendered), most are paid at the end when you close on the home and the keys exchange hands.

How much are closing costs for buyers?

Home buyers pay the majority of closing costs since many of these fees are associated with the mortgage.

“If you’re paying cash for a property, there are still a few closing costs, but they are significantly less,” says Cara Ameer, a Realtor® in Ponte Vedra, FL. Here are some of the fees home buyers should brace themselves to pay:


  • A loan origination fee, which lenders charge for processing the paperwork for your loan.
  • A fee for running your credit report.
  • A fee for the underwriter, who assesses your credit worthiness.
  • A fee for the appraisal of the home you hope to own to make sure its value matches the size of the loan you want.
  • A fee for the home inspection, which checks the home for potential problems from cracks in the foundation to a leaky roof.
  • A fee for a title search to unearth any liens on the property that could interfere with your ownership of it.
  • A survey fee if it’s a single-family home or townhome (but not condos)
  • Taxes, also called stamp taxes, on the money you’ve borrowed for your home loan.



How much are closing costs for sellers?

Here are the closing costs that sellers are typically responsible for:

  • A closing fee, paid to the title company or attorney’s office where everyone meets to close on the home.
  • Taxes on the home sale.
  • A fee for an attorney, if the home seller has one.
  • A fee for transferring the title to the new owner.


While this doesn’t seem like much compared with what home buyers have to cough up, keep in mind that sellers typically pay all real estate agents’ commissions, which amount to 4% to 7% of the home’s sales price. So, no one sneaks through a home closing scot-free.

Why closing costs vary

The reason for the huge disparity in closing costs boils down to the fact that different states and municipalities have different legal requirements—and fees—for the sale of a home.

“If you live in a jurisdiction with high title insurance premiums and property transfer taxes, they can really add up,” says David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School. “New York City, for instance, has something called a mansion tax, which adds a 1% tax to sales that exceed $1 million. And then there are the surprise expenses that can crop up like so-called ‘flip taxes’ that condos charge sellers.”

To estimate your closing costs, plug your numbers into an online closing costs calculator, or ask your Realtor, lender, or mortgage broker for a more accurate estimate. Then, at least three days before closing, the lender is required by federal law to send buyers a closing disclosure that outlines those costs once again. (Meanwhile sellers should receive similar documents from their Realtor outlining their own costs.)

Word to the wise: “Before you close, make sure to review these documents to see if the numbers line up to what you were originally quoted,” says Ameer. Errors can and do creep in, and since you’re already ponying up so much cash, it pays, literally, to eyeball those numbers one last time before the big day.

Source: Realtor.com, Judy Dutton
http://www.realtor.com/advice/finance/how-much-are-closing-costs/?iid=rdc_news_hp_carousel_theLatest




Friday, May 20, 2016

Silicon Valley Mansions Linger on Market in Real Estate Slowdown


A custom-built home in Palo Alto.
A custom-built home in the heart of California’s Silicon Valley had its price cut by $500,000 last week after sitting on the market since the end of March -- a move that would’ve been almost unfathomable a year ago and a signal that frenzied demand has peaked.

The six-bedroom, five-bath house in Palo Alto -- located blocks from Stanford University and the homes of Google co-founder Larry Page and Steve Jobs’s widow, Laurene Powell Jobs -- is now listed for $7.5 million. It joins a growing inventory of high-end homes in the area that are taking longer to sell.

“We’ve recently noticed a slowdown,” Jack Woodson, who works at Alain Pinel Realtors in nearby Menlo Park, said on a tour of the house in the Old Palo Alto neighborhood. “Buyers are taking more time to decide about making offers.”

Silicon Valley, the most-expensive U.S. housing market, is seeing a pullback by the wealthiest homebuyers after a four-year real estate boom marked by bidding wars and multimillion-dollar prices. Stock-market turmoil, a drop in foreign investors and concerns of a technology-industry slowdown are cooling demand at the high end, even as interest remains robust for more moderately priced properties.

In Palo Alto, an ultra-wealthy city that’s home to many Google and Facebook Inc. executives, homes costing more than $5 million were on the market for a median of 16 days in April, compared with 11 in the same month in 2015 and 10 in 2014, according to data from Irvine, California-based John Burns Real Estate Consulting. The 11 active listings in that price range as of May 14 have been on the market a median of 30 days.



While that’s quick by most standards -- across the U.S., the median time on the market is 67 days -- it’s a departure from recent years, when newly minted millionaires from tech initial public offerings raced against buyers from China to scoop up anemic inventory.

“The seemingly inexhaustible well of very high-end buyers has proven exhaustible after all,” said Dean Wehrli, a senior vice president at John Burns. “The peak is behind us, and that’s becoming clearer and clearer to builders and buyers.”

Pricey Properties

The San Jose metropolitan area, encompassing Silicon Valley, is the most expensive U.S. housing market, with a median single-family home price of $970,000, according to the National Association of Realtors. In Palo Alto, the median home price was $2.5 million in the first quarter, data from Zillow show. That’s higher than San Francisco, at $1.1 million, and New York, at $616,100.

Across the country, luxury-home sales are cooling as turmoil in the global economy and the prospect of higher interest rates roils financial markets. Silicon Valley has the added pressures of being closely correlated to the tech industry and a top target for foreign buyers.

Venture-capital investments in Silicon Valley fell almost 20 percent in the first quarter from a year earlier to $4.9 billion, according to an April report from PricewaterhouseCoopers LLP. Chinese buyers -- hit by a slowing economy and government restrictions on how much money can leave the country -- have slowed purchases after they had “really been driving the market,” said Woodson of Alain Pinel.

“We’re probably moving toward normalization,” said Katharine Carroll, vice president at Pacific Union Real Estate in Palo Alto. “Buyers see that they have a few more options. They don’t feel the urgency that they have to decide on something right away and put an offer in. They can kick the tires a little bit more.”

Statewide Slower

The sale of luxury real estate is slowing statewide, with homes costing more than $3 million sitting on the market 52.5 days in the first quarter, compared with 40 days the year before, said Jordan Levine, an economist at the California Association of Realtors in Los Angeles.

In Santa Clara County, home to Palo Alto, there were 13 sales of homes costing more than $5 million in the first quarter, down from 20 a year earlier, he said. In nearby Los Altos, there were six active listings of homes costing more than $5 million on the market for a median of 25.5 days as of May 14, while the 25 listings in Atherton were on the market a median of 100 days, according to John Burns.



“Given that a larger proportion of the $3 million-plus category is purchased with cash, or folks use some of their other assets to make those kinds of purchases, I think they’re more susceptible to stock-market volatility than your entry-level buyer would be,” Levine said. “That’s one of the big drivers of the current slowdown.”

Mid-Range Demand

There’s no let-up in the demand for homes in the $2 million to $3 million range. Realtors say those properties are still generating multiple offers and selling above asking prices because they are still affordable to software engineers. Aggressive hiring at Facebook and Google is propping up the middle segment of the housing market in Silicon Valley, said Ken DeLeon, founder of DeLeon Realty in Palo Alto.

“Palo Alto is at a crossroads, where some homes are doing very well, and some homes are lingering that last year would have sold with multiple offers,” DeLeon said. “When they do sell, it’s when the seller cuts the price below what they would have gotten last year.”

High-end buyers are pickier and are more likely to let a property go, instead of competing with multiple offers and an auction dynamic that led to homes selling well above asking price until very recently, he said.

“I’m having buyers who are much more open to waiting, to taking a risk that the home might sell,” he said. “There’s just not that motivation.”

Source: Bloomberg, Alison Vekshin
http://www.bloomberg.com/news/articles/2016-05-17/silicon-valley-mansions-linger-on-market-in-real-estate-slowdown

How to Begin Investing in Real Estate


The housing market is well on the mend, with prices steadily rising in much of the country. It may be a good time, then, to think about adding real estate to an investing portfolio.

True believers say there's nothing like owning a second, third or fourth property. Of course, true believers tend to be those who survived catastrophes like the housing meltdown about a decade ago. Ask those who were hammered and you get another view.

One thing is clear: for a beginner, real estate is a different game. The lessons you learned with stocks, bonds and mutual funds aren't much of a guide.

"The biggest thing someone should understand is that a real estate investment is more than an investment when compared to stocks and bonds. It should be viewed as a business," says Donovan Ryckis, financial advisor at J Donovan Financial in Florida. "It will require time, management and due diligence above and beyond most investments."

While that can be daunting, it has its upside, says Eric Workman, senior vice president of marketing at Chicago-based Renovo Financial, a lender to real estate investors. Unlike with stocks, you're not casting your lot with executives you've never met.

"As an investor, you have complete control over all of the decisions related to the property – level of finish, items replaced and or repaired, standards of tenant quality, rentals rates, etc.," Workman says.

Over the past year, single-family home prices have grown by 5.3 percent, while the stock market has been nearly flat, according to the Case-Shiller index of home prices. Studies have shown that, nationwide, homes appreciate at just over the inflation rate for the long term, and that stocks do better. But nationwide averages don't mean much to the investor looking for a property in one local market.

Also, most real estate investors hope to earn income from rents as well as profit from appreciation.

"Prices have risen for the past seven-plus years, and part of what has driven that growth is the (low) cost and availability of debt and equity," says David Becker, managing director of the equity division at Time Equities, a New York City-based real estate firm. "Interest rates remain at all-time lows, which is fueling certain asset classes like multi-family (buildings)."

Among real estate's appeals: it often marches to a different drummer. If your stocks are down, perhaps your real estate will be up. That's not always true, as homes and stocks plunged in tandem in the financial crisis, but it's true often enough for many advocates.

Real estate prices tend to be less volatile than stock prices, because homes, stores and offices cannot be bought and sold with the click of a mouse.

Because real estate can be used as collateral, it's cheaper to borrow to pay for real estate than for many other investments. And if you borrow, say, 80 percent of the purchase price, selling for 10 percent more than your purchase price means a 50 percent gain.

Buying a vacation property has an added bonus: using it yourself.

Still, there are drawbacks. That same leverage that turned a 20 percent down payment into a 50 percent gain can quickly turn into a loss if the market sours. The stability that looks so appealing when you buy can turn into a nightmare if you cannot quickly attract a buyer when you want to sell.

And the benefit of a small down payment may be offset by mortgage interest payments, taxes, and insurance and upkeep costs, while carrying costs are little or nothing for stocks, bonds and funds. The vacation "benefit" can get stale if you feel it's a waste of money to go somewhere else. On top of all that are the headaches of dealing with renters.

"Unforeseen events are always a risk when it comes to real estate investing," Becker says.

If interest rates rise, for example, prospective buyers won't have as much to spend, undercutting property values. "I do not see interest rates rising overnight, but a market can quickly be turned sideways by a major negative event," Becker says.

With those warnings in hand, here are a few options for a real estate investment.

Buy a vacation home. You get to use it yourself while hoping to make some money. Though rental income may not cover all your costs, especially at the beginning, you may profit from appreciation over the years.

"I would advise to start with vacation property rather than a fixer-upper," says Peter Anadranistakis, president of Caliber, The Wealth Development Company, in Scottsdale, Arizona. "Get a property in a dense neighborhood, close to cafes, museums, restaurants, attractions and public transportation."

[See: 8 Stocks to Buy For a Starter Portfolio.]

In addition to the costs mentioned above, you may have to pay a rental manager. In some markets, commissions gobble 25 percent of the rent. If the property is not near your main home, you'll probably have to pay a professional to deal with maintenance and repairs, even little things you would do yourself at home, such as squeaky hinges and blown light bulbs.

Vacation home markets can be especially volatile, with prices and rental income plunging in a weak economy when people shun luxuries.

Buy a full-time rental. Buying a home or condo for full-time renters means you are not limited to a vacation area like the beach, lake or mountains. You can get a property near where you live, cutting some of the maintenance costs. And you won't have to find a new renter every week or two, though you could lose plenty of sleep with a bad renter who's not going anywhere.

Flipping. Buying a home, fixing it up and quickly selling is reality-show staple, but most experts warn this is a risky way to get started in real estate. It takes a lot of knowledge, time and tolerance for setbacks, and it's very hard to make money without contributing sweat equity. If you're not handy and don't enjoy construction work, stay away.

"It is becoming harder to find deals to flip, as spreads (between purchase and sales prices) are becoming smaller with appreciation," says Than Merrill, CEO of FortuneBuilders, a San Diego-based training firm for real estate investors.

Invest in your own home. Remodeling, renovating and expanding can add value to the home you live in, and have an immediate payoff in enjoyment. If your home has serious need for improvement and is in a healthy market, this is probably the smartest real estate investment for a beginner nervous about being a landlord.

Be careful though, because most improvements do not add as much value as they cost, according to the annual surveys by Remodeler magazine. To make improvements pay financially, you need to choose carefully, not get carried away with personal preferences, and probably do a lot of the work yourself.

Buy real estate investment trusts. REITs are like mutual funds that own real estate instead of stocks or bonds, and they can be bought and sold in an instant. Though each REIT specializes in a certain type of property – strip malls, apartment buildings, office complexes and so on – REITs spread the risk among a number of properties and use professional management, says Wilson Magee, director of Franklin Global Real Estate and Infrastructure Securities.

"Investors can build a real estate portfolio that has geographic and sector diversification by investing in a few selected REITs," Magee says.

With a REIT, he says, you can buy into a big property you could never afford with a direct investment, and REIT management minimizes costs with economies of scale.

Whatever approach you take to real estate investing, most experts recommend dipping a toe rather than plunging in, so you'll survive if things go wrong or the hassles become intolerable.

Source: U.S. News & World Report, Jeff Brown
http://money.usnews.com/investing/articles/2016-05-17/how-to-begin-investing-in-real-estate

Thursday, May 19, 2016

San Jose housing prices: County's median hits $1 million for first time



April 2016: Paul and Ruby Callary speak with their realtor Mark Wong before an open house  at their home of 27 years in San Jose, Calif. With high demand and a tight market, Bay Area housing prices continue to soar, setting record highs in April in Santa Clara and Alameda counties.

The median price of a single-family home in Santa Clara County hit seven figures for the first time last month: $1 million on the button. Prices grew even dizzier in San Mateo County, where the $1.2 million average matched the previous record, set in May 2015.

The East Bay also saw a run-up in prices, with the median Alameda County home reaching $750,000, up more than 10 percent from the previous month. Tugged upward by prices in Walnut Creek and other high-end areas, the median Contra Costa County price grew to $525,000, its steepest in seven years, according to new housing figures released Wednesday.

"We just don't have a market under $700,000 in Walnut Creek," said Alain Pinel agent Margaret Garber-Teeter. "And even at $700,000, you're going to be in second-tier schools. So there's still an affordability problem for young families, unless their parents help them, and a lot of young families get help."

Overall, the Bay Area's nine counties saw the median single-family home price rise to $725,000, just shy of the $738,500 peak of July 2007.

"It's the same story: The housing supply isn't keeping up with the demand," said Andrew LePage, research analyst for real estate information service CoreLogic, which released the latest numbers. "Mortgage rates remain low. The region's generating jobs. But you still have relatively low inventory, at least in the mid- and lower-priced markets, where most people are shopping."

The numbers reflect a crisis that is squeezing low-income earners and the middle class. According to a recent poll by the Bay Area Council, more than a third of the population, fed up with housing costs and endless commutes, are considering moving away.

While regional prices rose last month, the volume of sales fell from a year earlier: by 9.5 percent in Santa Clara County, 18.3 percent in San Mateo County, 13.1 percent in Alameda County, 5.1 percent in Contra Costa County and 9.5 percent for the nine-county region. It was the second consecutive month of year-over-year declines for the Bay Area.

Recognizing that there aren't enough houses to satisfy all the potential buyers, computer engineer Eugene Jong sensed a seller's market and worked it to his advantage.

Two years ago, he and his wife, Linda, also an engineer, moved from their San Jose townhouse to a single-family home in Los Gatos.

He watched as San Jose prices kept rising. Then in April, he pulled the trigger, listing the 1,250-square-foot townhouse for $599,950: "The open house was a month ago. The first day, 100 people came. The second day, about 50 more came. I had some numbers in mind in terms of the selling price -- what would be average and what would make me feel really happy. And it ended up that the price was way above the price where I felt really happy."

The townhouse drew 15 offers over the asking price and sold in seven days for $665,000.

Alain Pinel agent Mark Wong, who negotiated the sale, said it was a matter of good timing: If Jong had delayed and listed his townhouse in May, his fortunes might now be up in the air -- at least in part because the amount of inventory is "creeping up" and softening competition.

"The market is shifting right now," Wong said. "The market is really mixed. Some people are getting multiple offers, some are getting no buyers. Just in one month, the market has changed a lot."

High prices "are the new normal," said Julie Ray, a Coldwell Banker agent in Redwood City, "and fabulous houses with curb appeal" still get grabbed up. But "buyers are getting more picky. The inventory has come up to a level where people say, 'You know what? This one I'm not going to bid on, because it's not what I want.' "

In Contra Costa County, Garber-Teeter agreed that May has brought "a leveling" to the market. In more affordable areas -- she mentioned northern Concord, near Pittsburg -- inventory has opened up to the point that "the market is softening, homes are sitting."

Even in desirable Lafayette, Moraga, Orinda and Walnut Creek, she said, "We do have a little more inventory, but then you have to weed through that and find the few that are ready to go."

Expecting stiff competition in April, Garber-Teeter helped clients Tom and Heather Young "get all their ducks in a row" in order to sell their Walnut Creek house and buy a new one in Orinda.

They had purchased the Walnut Creek home, a fixer-upper, for $475,000 in 2009, and spent $225,000 on improvements. Last month, they listed it at $985,000, held open houses on two consecutive weekends, then took offers on the Tuesday after: "We had multiple offers and a buyer that night," said Tom Young, who runs an online advertising company and works at home.

The selling price: $1,070,000.

Last month, they also bought their new place in Orinda: four bedrooms, four baths and 3,700 square feet on a hillside with 100-year-old oak trees and "tons of wildlife."

It listed at $1,350,000. Their bid -- for $1,475,000 -- was one of five. The seller went with a higher offer, but the deal fell out of escrow. The seller then approached a second buyer, who dropped out, leaving the Youngs as main contenders. They had lined up those ducks, showing liquid funds and pitching the seller with a persuasive letter and a photo of their 6-month-old baby.

Now in his new home, Tom Young called last month "the most stressful period of my life, not because anything terrible happened, but because there were an overwhelming number of scenarios to think through and my brain got pretty busy. Now I'm waking up in a brand new place."

Source: San Jose Mercury News, Richard Scheinin
http://www.mercurynews.com/business/ci_29908398/record-high-bay-area-homes-april

Record high prices for Bay Area homes in April



Record highs, once again.

The median price paid for Bay Area homes -- single family, condominiums and townhouses -- hit a new peak for the nine-county region in April: $686,000, surpassing the prior peak of $665,000 set in June and July of 2007.

The new regional high -- up 5.5 percent from March 2016 and up 4 percent from the year before -- was only part of the story. According to CoreLogic, the real estate information service, Santa Clara, Alameda and San Francisco counties also set record sale prices: $860,500 in Santa Clara (up 3.7 percent from March 2016), $685,500 in Alameda (up 6.7 percent) and $1,300,000 in San Francisco (up 13 percent).

The $520,000 median price in Contra Costa County was up 3.2 percent month-over-month, while San Mateo County's $990,000 median represented a 5 percent month-over-month boost.

Across the nine counties, 7,518 homes were sold in April, up 7.7 percent from March, but down 7.3 percent from the year before. April's year-over-year decline in sales was just the second time in the last 12 months that sales have fallen on a year-over-year basis.

"It's no surprise that in a month when the San Francisco Bay Area's median home sale price hit a record high the region also logged a year-over-year decline in sales, which remained well below the long-term average," said Andrew LePage, research analyst for CoreLogic, which has charted the numbers since 1988. "Low mortgage rates, job growth and other drivers have stoked demand, but the supply of homes for sale -- especially in the low-to-middle price ranges -- hasn't kept pace, leaving many would-be buyers struggling with a thin and increasingly expensive inventory."

Source: San Jose Mercury News, Richard Scheinin
http://www.mercurynews.com/portlet/article/html/fragments/print_article.jsp?articleId=29908398&siteId=568

BBB warning of real estate scheme targeting home buyers



BBB warning of real estate scheme targeting home buyers

PROVIDENCE, R.I. (WPRI) — The Better Business Bureau and the Federal Trade Commission are warning residents of a new scheme that targets home buyers as they’re preparing to close on their property.

Because of the new scam, the FTC said your bank account could be wiped out in minutes.

“If you’re in the very stressful situation of buying a new home, oftentimes you are moving so quickly in the process that you’re not sure exactly what to do or where to go – or who to write the check out to,” said Paula Fleming with the BBB. “And scam artists are taking advantage of this.”

According to the BBB and FTC, hackers have been breaking into some buyers’ and real estate agents’ email accounts to get information about upcoming real estate transactions.

Then, the hackers send emails to the home buyers posing as a real estate agent or someone from a title company.

The scammers instruct the home buyer to wire closing costs to a certain account – and people are falling for it because the emails look official.

“Oftentimes, people don’t realize they’ve been duped until they sit down to actually sign off on the paperwork,” Fleming said. “And they they’re asked for the check and they say we’ve already wired the money.”

According to Fleming, once you wire the money, you’re more than likely not going to get it back.

Here’s how to protect yourself:

Don’t answer unsolicited emails – and never email financial information because email is not secure.
If you do receive an official-looking email and you have questions about it, your best bet is to pick up the phone and call your real estate agent. He or she will be able to quickly tell you if the email is legitimate.

Source: WPRI.com Eyewitness News, Susan Campbell
http://wpri.com/2016/05/17/bbb-warning-of-real-estate-scheme-targeting-home-buyers/

Wednesday, May 18, 2016

Film spotlights Palo Alto's only mobile home park, Buena Vista

Affordable housing is a hot topic here in the Silicon Valley. Housing prices are at an all time high (not complaining as a Realtor), rents are high and there are many in this valley who don't have the well paying jobs at the valley's many tech giants such as Google, Apple or others. There are many on the lower rung of the socio-economic latter such as janitors, food service workers, etc. who are just as important to this valley as the tech workers and they still need housing - affordable housing.

So there is a low income, mobile home park in Palo Alto, Buena Vista, that is under threat of closure due to developers who want the land. For that last 3+ years the residents haven't taken the matter lying down and protested, sat in on city council meetings, etc. to stop the closure. Well now the residents of Buena Vista Mobile home park are going to have a powerful new tool in their fight against the big developer who wants the land, a Moive; NOTES FROM BUENA VISTA (Teaser).

Time will tell if this movie will be effetive in stopping the plans of the developer and city council.



PALO ALTO -- The only mobile home park in Palo Alto is the subject of a documentary that will be shown Tuesday and Wednesday as part of Affordable Housing Week 2016 in Santa Clara County.

"Notes from Buena Vista," a documentary by filmmaker Elizabeth Lo, is an exploration of the Buena Vista Mobile Home Park's 400 low-income, mostly Latino residents, who could lose their homes if property owners are successful in closing the housing site at 3980 El Camino Real.

Organizers say Lo's film addresses how "the severe shortage of affordable homes in Silicon Valley puts tremendous pressure on our communities, as households of all incomes compete to secure safe and affordable homes."

Buena Vista residents have lived with the uncertainty of their housing situation for about 3 ½ years.

The park's closure remains in limbo as residents, the property owner and the city of Palo Alto work out differences in court.

The park's owners, Toufic and Eva Jisser, filed an application to close the site in November 2012.

The Palo Alto City Council decided in May of last year to allow the Jissers to close the park.

The Buena Vista Mobile Home Park Residents Association then filed a lawsuit against the city in August, seeking to overturn the council's decision and, at the minimum, a larger relocation assistance package for tenants than required by the city.

In November, the Jissers also filed a lawsuit against the city, saying that requiring the owners to pay $8 million in tenant relocation assistance as a condition to close the park is a "staggering financial demand."

Lo's documentary explores how development pressures in Silicon Valley threaten the livability of this area for many, such as the Buena Vista residents.

The documentary will be shown at 5 p.m. Tuesday at the Aquarius Theatre, 430 Emerson St. in Palo Alto and at 5 p.m. Wednesday at Camera 12 Cinemas, 201 S. Second St. in San Jose.

Admission is free. For tickets, visit SVatHome.EventBrite.com.

A discussion with the filmmaker and panelists will follow each screening.

Tuesday's panel includes Erika Escalante, president of the Buena Vista Mobile Home Park Residents Association; Amado Padilla, Stanford University professor who authored a report on the mobile home park residents' health and education; and Kyra Kazantzis of the Law Foundation of Silicon Valley.

Wednesday's panel includes Melodie Chaney, a resident of the mobile home park; Kent Greathouse, a resident of Winchester Ranch Mobile Home Park in San Jose; Diana Castillo of the Law Foundation of Silicon Valley; and Adam Marcus of the San Jose Housing Department.

Source: San Jose Mercury News, Jacqueline Lee
http://www.mercurynews.com/real-estate-news/ci_29904055/film-spotlights-palo-altos-only-mobile-home-park