What Is Due Diligence? Find Out What to Do Before Buying a Home

Once you make an offer on a home and it’s accepted, there’s a period lasting a few weeks before you close the deal. During this window of time, buyers are often told to “do their due diligence” on the home they soon hope to own. But just what is due diligence, anyway?

In the world of real estate transactions, due diligence is a fancy term for “do your homework.” Before buying a property, you should fully investigate it for potential problems that could cost major money to fix after you’ve moved in.

“Due diligence in residential real estate means [making sure] you’re getting the asset you’re paying for,” says Larry Anweiler, an Arizona real estate broker who teaches real estate at Kaplan University.

Think of this as your last opportunity to kick the tires, turn on and off all the lights—and generally make sure you’re not getting a lemon. And if you do find flaws, you’ve got time to negotiate with the seller, who could help you fix them or lower the home price. Or, if the seller refuses, you are free to walk away from the deal—and as long as you’ve placed some contingencies in your contract, you won’t have to forfeit that hefty deposit.

Due diligence is definitely worth taking seriously, so here’s a checklist of what you’ll want to scrutinize before closing the deal.

A home inspection

Most home buyers hire a home inspector to scrutinize the house top to bottom, looking for problems that could cost the buyer major money to fix. The inspector is looking for a crumbling foundation, faulty HVAC systems, termites, leaking roof, and other potential big-ticket problems.

You should also hire a separate professional to test for biotoxins, including mold, radon, and asbestos. These hazards are typically not checked by a home inspector and are expensive to fix. You should also check for larger neighborhood issues that could have an impact, like whether your home lies in a flood zone or near some environmental hazard. These can all be reasons to reopen negotiations with the seller and, if you’re not satisfied, prompt you to walk.

A title search

Before you can “take title” to the home—a fancy way of saying you establish legal ownership of the property that’s entered into public record—you’ll want to do a title search to make sure you can indeed do that, free and clear.

For instance, what if the previous owner’s long-lost brother shows up claiming he owns the property, or a creditor has placed a lien on the home due to unpaid debts, or there are unresolved boundary disputes with a neighbor? Such problems can be costly to address, and a title search will bring them to light so you can broach these issues with the seller before you inherit a problem you don’t want to have.

Condo or HOA rules

If you’re buying a condo or property within a homeowners association, you’ll want to thoroughly review its declaration of covenants, conditions, and restrictions, or CC&Rs. Basically this is the list of rules and regulations, as well as fines for infractions. Some can be quite strict, reserving veto power over the color you paint your home or the number or type of vehicles you can have in front of your house (RVs are sometimes banned).

Given these are rules you’ll be living under for the foreseeable future, it’s wise to review them and make sure you’re on board—and if not, you can back out with your deposit in hand.

Source: Realtor.com, Lisa Kaplan Gordon
http://www.realtor.com/advice/buy/what-is-due-diligence/?iid=rdc_news_hp_carousel_theLatest

Santa Clara County has nation’s strongest job market — by far

Geez, what a surprise! The silicon valley has the strongest job growth in the country according to a report from the federal government. For the most part, this is why there is a housing shortage, which is why rent here in the valley is the highest in the nation and why the housing market still remains hot. One thing the article below doesn't point out, dare I say, is that many of these jobs are going to foreign H1B visa workers, not bay area and silicon valley natives - just saying.


Photo: Employee cafe on the Google campus. Photo credit: BANG staff photo

Santa Clara County has nation’s strongest job market — by far

Santa Clara County boasts the nation’s strongest job market, and the South Bay region is No. 1 by a wide margin over its closest contenders, a new report out Tuesday from the federal government shows.

Over the 12 months that ended in July, total payroll employment in Santa Clara County increased 6.2 percent, by far the fastest pace of job growth in the United States, according to the federal Bureau of Labor Statistics.

The Tacoma-Lakewood area of Washington state was the next-strongest job market, with a gain of 5 percent in total jobs over the same one-year period.

Tied for third were the San Francisco-San Mateo County region and the Salt Lake City area, which both grew at an annual pace for job growth of 4.4 percent.

The top five strongest job markets was rounded out by the Orlando region in Florida and the Dallas-Irving-Plano area of Texas, both up 4.1 percent.

The East Bay had a gain of 2.2 percent in its job totals.

Santa Clara County’s status as the nation’s hottest job market is being driven by what appears to be explosive growth in the region’s technology sector, according to a Beacon Economics analysis of figures from the state Employment Development Department.

Over the most recent 12 months that ended in July, high-tech jobs accounted for 30,800 of the 60,400 jobs that Santa Clara County added — or 51 percent of the total.

The San Francisco-San Mateo area is even more dependent on high-tech for its economic expansion. During the same one-year-period in question, tech jobs accounted for 25,800 of the 41,700 total payroll jobs added in that region — 62 percent of the total.

The East Bay’s job growth appears to much more diversified. Tech jobs produced 5,460 of the 21,300 jobs added over the 12 months that ended in July — 21 percent of the total.

Source: Silicon Beat, George Avalos
http://www.siliconbeat.com/2015/09/01/santa-clara-county-has-nations-strongest-job-market-by-far/

The biggest threat to Realtors

The National Association of Realtors (NAR) commissioned a new report called the D.A.N.G.E.R. report. Basically, the report details different threats that are out there that can threaten agents, brokers, real estate associations and the MLS. It's a very informative and useful report. Anyhow, the number 1 threat facing today's realtors is. . . . . . . . other realtors.

Yes, all those untrained, unethical, shady and part time agents are threatening the credibility of our profession. And when the public has no confidence in a group or profession, they will take their dollars elsewhere.

In my time as an agent here in the silicon valley, I've had to deal with my share of incompetent, lazy, unethical and shady operators. Most agents that I have done business with aren't like that, but some are. Many don't want to invest the time and money into getting additional training like I have and some just want to get that commission even if it means being fraudulent. And according to the DANGER report, agents such as this are threatening the credibility of our industry to they point where we viewed in the same light as used car salesmen.

'Marginal Agents' Biggest Threat to Industry