Politics As Usual?

March 29, 2012 in General Interest | No comments

A few weeks agowe celebrated Washington and Lincoln’s birthdays (two great leaders who deserve to be honored individually if you ask me.) Celebrating “President’s Day” implies we are celebrating my great, great uncle, once removed Millard Fillmore (which I assure you we are not), clearly one of the worst Presidents in US history!!

That got me thinking about Washington DC and all the “politics as usual” going on there. What a mess – really. Just a complete mess – but there is one specific mess I want to bring to your attention and here’s why – it will affect the value of your home.

Is Capitol Hill shifting toward anti-homeownership? With the new group of super conservative Tea Partiers swept into office in the last election, there was a decidedly strong sentiment that anything to do with existing government was bad and had to be eliminated. As our politicians so often do, they are throwing the baby out with the bathwater, addressing a legitimate concern with an extreme solution that will likely end up doing even more harm.

We’re talking about lending and Government backed Fannie Mae and Freddie Mac. Granted, lending got way out of control, loose and irresponsible during the build up to the real estate crash. There was a lack of balance between Risk and Reward – a Basic 101 of almost everything in life.

There was HUGE Reward to lenders and big financial institutions to make these toxic, 100% financed, stated income, subprime loans, but almost NO Risk, thanks to Wallstreet’s Mortgage Backed Securities. That was wrong and had to change.

But Congress is about to have that pendulum swing WAY to far the other way and is considering legislation that would ELIMINATE Fannie and Freddie AND the Mortgage Interest Deduction (MID). Why is this bad for you and your home values?

Because while Fannie and Freddie NEED to be reformed, they are there for good times and bad to insure and provide for real estate financing despite what is happening with private financing. If FHA/Fannie and Freddie weren’t there in any shape, way or form, chances are the Residential Real Estate market, as we know it, would be gone and home prices would PLUMMET.

Only about 5% of the real estate financing out there is strictly private. Get rid of all Government involvement in financing – and we have a market for all cash buyers and no one else. That doesn’t work for 99% of the clients I’ve worked with over the past 22 years.

So contact your Congressperson and Senator and say Reform – YES, Elimination – NO!! Representative John Garamendi, Representative Nancy Pelosi, Senators Feinstein and Boxer, need to hear from you. Because remember, as Real Estate goes, as goes the economy. Send these guys the message that if they can’t make it better, please, please, please at least don’t make it worse!!

Should I stay or should I go now?

October 28, 2011 in Danville Home Owners, Danville Home Sellers | No comments

The Clash

If I go it could be trouble, if I stay it could be double!! Remember those lyrics from The Clash? Wow – that has NEVER been more true regarding selling your home now – or not. If you are anywhere near being “short” (your home value is equal to or less than your loan amounts) get ready to sell NOW!! Here’s why . . .

California just passed CCP 580e (more on that in a second), and who knows, it could be repealed at any time. So if you need to sell short or just sell, DO IT NOW! It’s estimated that as many as 50% of the homes in California are now worth less than their loan amount. While our little world is probably closer to 20-30%, it’s still a huge number and something we should all be thinking about because the laws are changing and what could be a simple short sale now, could be a big financial mess in a few short months.

What is CCP 580e? Let me try to explain (a lawyer nor accountant am I)  . . .When one buys a home – the first loan is called a “purchase money loan”. There is no recourse on a purchase money loan by the bank. In other words, if you default or sell below the loan amount, if the loan is your first (purchase money) loan, the banks can’t come after you for the deficiency. But if you EVER refinanced – 1st, 2nd or wrapped – that is a recourse loan that the bank can come after you for the deficiency. They rarely did, but they COULD, and that possibility prompted CCP 580e.

The California legislature decided to protect the borrower and make second loans non-recourse too, by passing and implementing CCP 580e. So for now, if you sell your home for less than the loan amount owed, whether it’s a first, second or whatever kind of loan – it is now a non-deficiency loan. The bank can’t come back after you to repay the difference between what you owe and what you sell your home for.

Banks giving us the finger?How long do you think the banks are going to let that happen? Who knows, but better safe than sorry. If you know your home is worth less than the loan amount and you think there is any chance you won’t be in it “until death do you part” – it’s worth having a conversation with an attorney or accountant – or both. I can get you started, but I can’t answer legal questions. I just know things are changing – and fast – and there is a window right now for individuals to sell if they think they may need to do so in the next few years.

And here’s the other reason – the tax situation around these short sales is going to change too. As of now, the state and federal governments are not coming after borrowers to pay income taxes on the money they pulled out of their home. So if you got a $200,000 equity loan, and spent that money – on anything from home improvements, to college tuition to that new Porsche in the driveway, as of today you won’t pay income tax on that $200,000. But come December of 2012 – that is changing and both the IRS and state governments are expected to let that tax law expire so they can collect all the income tax on all that money that Americans pulled out of their homes.

As we all know, it’s virtually impossible to get a Home Equity loan these days – so there will be very little “new” money exposed to this expired tax law, but any money borrowed against a home could then be subject to a deficiency judgment (you may need to pay it back), but it could also be taxed as income. OUCH!!

Hmmmm – are we surprised that big banks and the government are aggressively seeking new avenues of income for their strapped divisions and agencies? I get it, and I even get that there is personal responsibility for those who over borrowed on their houses – but let’s not be naïve or ignorant and sit back and not be strategic and smart on how this entire financial meltdown could affect us.

So if you find yourself in a questionable circumstance – talk with someone who can properly advise you on your income, tax and liability surrounding your mortgage. I have several very specialized attorneys I work with who can coach you through your options.

There are also big credit rating ramifications on short sale v. foreclosure v. deed in lieu of etc. It’s all gotten sooooooo complicated, and I am far from the expert – but I know enough to know now is the time to be considering your options because while the freefall in pricing may have stopped, home values are not going back up any time soon, and the laws surrounding how that could affect YOU and your family and your family’s future are changing fast.

Information OverloadI know that was a lot of information to digest, so let’s reduce it to the bottom line. However much you may be emotionally attached to your home, you need to think strategically about your financial future for the long run. If you are not sure where you stand regarding your mortgage, home value and how the changing laws may affect you, pick up the phone and get some professional advise right now, rather than later.

If you need somewhere to start, start by calling me and I’ll send you in the right direction. You are important to me and I want you to know that I am always here to help.

IMPORTANT NOTICE: I am not an attorney or tax expert. Any comments I make in regards to tax/legal issues are of a general nature and should not be relied upon. Please seek expert counsel in these areas for specifics to your situation.

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The Hills are Alive!!!

July 21, 2011 in Danville Home Buyers | No comments

As some of you know, Tuesday and Thursday mornings are my hiking days. I used to call it trail running, and we do a bit of running, but mostly a group of us (open to anyone who would like to join us – just let me know and I’ll get you on the distribution list!), just go out on the trails at 8:30 on Tuesday and Thursday morning and hike the many trails of our area.

The Hills are Alive!We were in the Briones Open space this morning and at the top of one ridge we stopped to take in the panoramic view – WOW! We had a 360° view of Mt. Diablo to the Benicia Bridge to the Las Trampas Hills and down the San Ramon Valley. What a gift! I had a Julie Andrews moment – the Hills Are Alive . . . !!! I was tempted to brake out in song – you’ll be glad to know I didn’t.

And as always, Real Estate never being too far from my thoughts, I started thinking about what it is about views that are always so appealing and significantly affect the value of a home? Views are always a plus, and sometimes a must for certain buyers. We are fortunate to have views.

My favorite view is of the Las Trampas Hills. I know the more desirable view is to the East and our beautiful Mt. Diablo – but I like views of the Las Trampas Hills. I love the plush greenness of the hills, and the gangly majestic Heritage Oaks and I really love to see the fog hanging on the hills in the early morning. And those rare days when the fog pours over the hills like Niagara Falls – a blanket of fog keeping us cool. What a delight! Gorgeous!

Golf Course ViewBut there are more than just mountain views around here. We have lots of Golf Course views – always pretty and of course just views of the Open Space – which is just a breath of nothing and always offers privacy. Alamo has a mandated 1/2 acre minimum lot size (with a few exceptions, like Round Hill Country Club), so there is lots of space and as you go up the hills in either direction the views get better and better.

Newer homes built here were built to take advantage of the views. Architects and builders knew to position a home properly if the lot had a view.

Windows, and lots of them, are the hallmark of a home built to take advantage of the views. French doors and indoor/outdoor spaces to bring the glory of the views into the home are a common element in our area.

I always laugh at some of the older homes, or homes built as part of the tract developments – where the builder just went in and built without taking into account how to place the house on the lot to best frame the view. Sometimes this can be fixed, most of the time it can’t.

I often stand in a home or a back yard when previewing properties and just scratch my head. What was the builder thinking? Sometimes I just want to pick the house up and move it a few feet this way or that.

And Views bump the value of a home too – but value that is so hard to define. So many homes in the area have some kind of view, so what is that worth? Some people will say everything – it has a huge impact on price and value. Some feel it is an intangible that has little value. All I know is that a home that sits up and has that feeling of being above it all has a better feel than a home that is down on the flats.

View from the hills of DanvilleThe trade off is usually flat land – the higher up the hills you go the better the view, but the steeper the lot, typically. That’s why when we find a house that sits up with views AND has a big flat lot – that is the one that has the best value, and a higher price tag.

Did you know there is even a book dedicated to Views? It’s call Homes with a View (duh!) and offers hundreds of homes with breathtaking views of Oceans, Golf Courses and Mountains.

Like most things in life, the good comes with the bad. We live in a pretty narrow valley, so while our valley provides spectacular views, our ever present freeway makes for Freeway Noise just about anywhere you live in Alamo, and most places in Danville – especially that very desirable West Side. But the upside of our narrow valley is that we have plentiful views. Views of Mt. Diablo, views of the Las Trampas Hills, just plain “sitting above it all” views.

One last view we have that isn’t as desirable is our “Freeway View” homes. Yes, unfortunately, there are plenty of homes nestled up along the hills that shoulder our beloved I-680 freeway that must have spectacular freeway views – and thundering freeway noise. This apparently doesn’t (or didn’t) bother those home owners because some of the most spectacular homes in our area you can see from the freeway, which means they can see the freeway from their homes. There is, as we say, a buyer for every home.

So if you have a home with a view, I have several buyers looking for one. Let know if you’ve been thinking about selling, or maybe you have a neighbor who’s been talking about it. I can help. In the mean time, enjoy your view everyday and be glad we don’t live in a place where everything is flat as a pancake. If you don’t love your view, come take a walk with me and my group next week.

 

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I Feel Your Pain!

July 7, 2011 in Danville Home Owners, Danville Home Sellers, General Interest | No comments

Have you noticed my newsletter has been missing the past couple of weeks? Why you ask? Well, all the normal stuff: two graduations, kids home from college, very busy with “the Spring market” (which actually hit in June!) and then this little item . . . I put my own house on the market last week.

OH MY GOSH!! I have never worked so hard, been so exhausted or completely frazzled. Every Realtor should put their own house on the market every few years!! It has been all the things I warn my clients about – space invasion, stagers moving my personal things and worse, stagers not liking my personal things (“But I LOVE that painting there!!”), thinking (wishing) my home was worth more than I logically know it is. It’s all very difficult.

My husband took a new job which offered a re-lo (relocation) package (yea!!), so the time was right to sell our big Alamo house (www.306CanterburyCt.com) and buy down. Because it’s a re-lo, and no relation to the employee (I’m his wife!) can benefit financially from the sale – I had to hire an agent to sell my own home! Weird. So my first step was to interview agents. Weird again! We had to interview three Realtors (Sirva re-lo requirements).

306 Canterbury Ct

Wow – it is all about style and who you click with. We all have about the same tools and marketing, but who you click with, trust and feel comfortable with makes all the difference!! All the agents we spoke with were great – it’s just that they are in MY home, with my stuff, and my dogs and kids!! But just like a lawyer, accountant, doctor or dentist – when hiring a service provider, check their credentials and verify their experience – then go with your gut. This is such a personal transaction – it’s critical that you are comfortable opening your home to this person.

Being an agent myself, I didn’t want to be a “difficult seller”. So I promised myself I would do everything my agent asked me to do. I am very easy with all that – my husband – not so much.

First we had to get the house clean, clean, clean!! (have you heard me say that before?) We keep our home pretty clean, but now it had to sparkle. So I started having the cleaners there every week – and that can get expensive. I have an awesome cleaning crew if you need one.

This cleaning included carpets. I have a big house, so even getting ALL the carpets cleaned was expensive (I’ve usually only done the rooms that particularly needed it). Not this time – all 5000+ square feet got cleaned! And then it rained that afternoon, so with two dogs and two kids home, I had wet carpets for two days. Great.

The stager came in and “tagged” furniture and accessories that needed to go. Fortunately our office administrator was hosting her annual garage sale benefitting Breast Cancer prevention – so I told her if she would come get it, it was all hers. Oh my! Imagine the wails of “but I love that bookshelf – I’ve had it since I was in college!”, “I’ve had that couch since my first house in Maryland in 1985!!” to which the garage sale husband said “that’s ok, you’ll have a garage in your new house too”.

306 Canterbury Ct

I don’t think he was even trying to be funny – but I laughed out loud. Why exactly are we keeping a 30 year old couch that hasn’t left our garage since we moved into the house eight years ago? But we did. They filled an entire big truck with stuff that was going – just going away. We’d probably had it too long anyway – uh, ya think?

The big sectional in the family room where “Big Brown“, our Vizsla/Lab mix has slept every afternoon of her five years with the family, and where “Tank” the 15 pound male cat has decided to mark his territory and use as a scratching pole had to go. I couldn’t even find anyone to take it!! Even the garage sale people didn’t want it!! Ha!! (For those of you who are wondering, my no less than perfect “Cookie” my 4 1/2 pound Maltese has been my perfect stress soothing dog throughout.)

We didn’t want to buy a big new sectional since we were moving DOWN not UP – so we ended up renting furniture. Beautiful stuff – but not very comfortable (and it’s rental). Guess what kind of success I’ve had with “Big Brown”? Good thing we have insurance on the rental furniture!

We had to hire a landscape stager to spruce up the front – two days and several thousand dollars later – we had cleaned, pruned and manicured hedges and bushes, lots of fresh bark and beautiful new carpet of roses, petunias, geraniums and other lovelies I have no idea of their names. Wow – it looked GREAT!! The photographer was coming in the morning – all good. Unfortunately the deer got there before the photographer did and had a fine breakfast of all our new color in front. AAAUUURRRGGH!!!

306 Canterbury Ct

So we are sparkling clean, staged inside and out – not a thing out of place. How long do you think that lasted with three kids, two dogs and a husband? Oh my gosh, the pain of it all.

I have felt your pain. While I will still ask you, my beloved sellers, to do all the things you need to do to get your house in its best possible condition to sell, at least now I’ll know the pain, stress and anxiety it is causing you!! Been there, done that!!

 

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What’s Up in this Down Market?

June 30, 2011 in Danville Home Buyers, Danville Home Owners, Danville Home Sellers | No comments

I attended a Real Estate Economic Update last week and it painted a relatively rosy picture for the Bay Area Real Estate market. Really?!? Are we (the East Bay markets) really different? And if so – why? We have always been about six to eight months behind The City (San Francisco), the South Bay and the Peninsula. They hit the bubble before we did, they crashed before we did and we are still lagging while they are hot, hot, hot. Multiple offers at very strong prices.

We know that is probably because high tech and finance drive those markets, and we have less of that here. The good news is, that economic element has helped to hold our prices, in general, lower. And don’t even get me started on how that has affected our schools (we have twelve years of great public schools because from financially struggling to insanely affluent, we have not abandoned our public schools – unlike most of The City, The Peninsula and South Bay).

So we are the East Bay Area middle class and our Real Estate values have always been better because of that. I suspect that is also why from a real estate perspective we lagged behind other Bay Area pockets.

So are we hot, hot, hot? No. This has not been a great year, which surprises me because last year was so strong for me. It may just be an anomaly – our board is full (how we track office activity) and transactions are up. Prices are down, but not dramatically, and interest rates are still amazingly low.

Perhaps it’s due to the lousy weather we’ve had, or that consumer confidence is still on the fence about our economic recovery. You’d think that everyone in the Mid West would be moving to California to escape the flooding there.

And look at the Bank Buster numbers (to the left)! Alamo Notices of Defaults, Auction and Bank Owned properties are all dramatically lower than last year (-13%, -19%, -44% respectively Year over Year). Danville is similar with -31%, -9% and -5% respectively. I think this is the first time since I’ve started tracking these numbers that those numbers have ALL been down, and ALL been down pretty dramatically! And when you look at the TOTAL number of distressed homes (in default, scheduled for Auction or foreclosed), it continues to be a fraction of our residential roof tops (about 1% in both Alamo and Danville).

Now don’t get me wrong – I am NOT suggesting that Real Estate is fat and happy in our little world. It’s a VERY tough market, the toughest I’ve been through in twenty years – but the wheels ARE NOT FALLING off. To hear the media we have “double dipped” and we are back in a recession. I just don’t believe it.

 

Regardless of what the economists say or what the statistics and trends point to, this is still a wonderful place to live. We have lovely, established communities, great schools, a temperate climate (usually) and a better than average standard of living.

 

So call me Pollyanna, and even though the market hasn’t rebounded as fast as I predicted earlier in the year, I still think it’s a great time (and place) to buy or sell a home. And remember that if you have any questions about the value or your home, or what’s happening in your neighborhood, just give me a ring. I’m here to serve you.

 

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