It’s almost tax day and with the new tax plan there are some big changes that you need to know about. Check...
How to begin: Tidy up in five easy steps
Are you getting ready to sell your home and feeling overwhelmed? Moving is always a big project, and when you’re introducing your home to prospective buyers, getting your house “show ready,” can be daunting. Here’s where to start, in five easy steps.
- Declutter. Decide what you’ll be taking and get rid of the rest! Knick knacks, though personal for you, may not be as deeply appreciated by buyers who want to imagine a fresh start. Pack the little things you’ll be taking and give the rest to charity. Think to yourself, is this worth carrying with me to my next home? Though it’s hard to let go of memorabilia, the less of it we have, the more we’re able to enjoy those few things we saved.
- Time to pair down your wardrobe. If you don’t love it, someone else might! Goodwill stores are a great way to “recycle” clothing that doesn’t get enough use. It may have been serving a nice purpose, warming your closet all this time, but if you haven’t worn it in the last 2 years, (some home organization experts say the last two MONTHS!) it’s time to give that dress new life. If you love it, but it doesn’t fit you, let it go. Your morning routine will thank you, and your pocketbook eventually will, because buyers love an airy, spacious closet. A packed closet weighs us down emotionally. Give this one a try and see how much lighter you feel.
- Make space for storage. Out with the old in with new doesn’t quite work here. You’ll want to save a few of the oldest boxes you have stored away, along with your tax paperwork and most important documents. Keep those irreplaceable family photos, but limit yourself to one box. Anything beyond that can be digitized using a service like Fotobridge. You send in your photos and they’ll send you zip storage back, so you can take your family memories with you and still save your back.
- Apply a critical eye to furniture. When selling your home, less furniture is more. Throw out anything that’s visibly or functionally broken. Next, set aside anything you can live without, to donate or sell. Apps like “letgo,” work well for this and you’ll get a rush when you see your old furniture given to people who need it.There’s craigslist for selling furniture, and goodwill accepts donations of smaller items. Nextdoor and the Oakland “Buy Nothing,” group on facebook are also great. If you have very large furniture items to offload, tag those, because movers will often happily take larger items off your hands. Even better, call Lulu’s Hauling in Berkeley, at 510.841.1821. They’re local and do it all.
- Second guess everything you’ve kept so far! Are you likely to use this in your new home? Many people are downsizing these days. A family of four in a big house accumulates a lot of “stuff,” but if you are moving to a fancy small spot in the city that’s half the size of your former home, get tough with yourself. Set a goal to get rid of about fifty percent of the things that might get in the way of your own fresh start. The less clutter you have, the less cleaning you’ll do in the next few weeks and going forward. Leaving things behind means getting freedom from them, to enjoy your life in new surroundings. Do it sooner than later, because the more quickly you do the hard work of moving beyond your possessions, especially if a little excessive, the higher a price you can expect when offers start rolling in from all those buyers with imagination, who see a clean slate where they’ll make new memories.
If you’ve got time to get philosophical, or you really need some convincing, check out these popular decluttering trends. Professional organizer, Marie Kondo, has written a book called Tidying Up: The Art of Decluttering, where the test for whether to hold on to an item is whether it “sparks joy.” Read more about how that works at her webiste, Tidyingup.com. On a less joyful but equally compelling tip, there’s the “Swedish Death Cleaning” philosophy, which sounds scary but is super smart. The idea there is to remove unnecessary things as one gets older and wiser, to consciously minimize the amount of junk that defines our mark on the world. Regardless of your strategy, action is the cure for anxiety, so get going on the decluttering as a first step toward listing your home for sale.
Berkeley is one of the few cities in California with rent control and eviction control ordinances. These or...
My thoughts about what to consider when buying a condominium were published in this week’s San Francisco Chronicle. Below I have included the text of the article followed by a few bonus tips. Thanks for reading!
Condominiums can be a great option in our competitive market, as they tend to be less expensive than single family homes with less upkeep. The tradeoff is that you are living near your neighbors which can bring issues. You need to find out whether the community is a good fit, which requires investigation.
Once you find a unit that fits your criteria, have your agent order the disclosure package. Reading through the Covenants, Conditions, and Restrictions (CC&Rs) document will inform you of rules governing the community such as restrictions on renting your unit, and the building’s pet policy.
The disclosures should also come with Homeowners Association meeting minutes. These meetings discuss issues in the building and give clues about how the building is managed. You can take your due diligence a step further by putting together a list of questions and calling the president of the HOA or community manager to learn more.
Here are my condo buyer tips that weren’t included in the original article
- Owner Occupancy Ratio Percentage – This is the number of owners living in their unit divided by the total number of units. This number is important for two reasons: A building with lots of tenants will be more transitory. Owners typically are more invested in the upkeep of the building and ensuring the HOA is run well. It’s rare to have a tenant willing to serve the HOA.
The lender looks at this ratio as part of the guidelines for your loan. Financing can be difficult and more costly if a building’s owner occupancy ratio is less than 50%.
- HOA Solvency – Homeowners Associations in California are required to maintain reserve accounts. The HOA will typically commission a reserve study to forecast future repairs and earmark a portion of the HOA dues to fund the account. The benefit is that you have a forced savings plan for future repairs on your home. The drawback is that if the HOA does not accurately forecast future repairs, they may assess a special assessment where owners will pay out of pocket for expensive repairs. The disclosure statements should include a budget for the HOA. Review this document to make sure the building is prepared for future repairs.
If you’re not a numbers person, consultants can help you sort through the HOA financials.
- Pending Litigation – It’s not uncommon for an HOA to be involved in pending litigation. Pending litigation can mean contractor defects when the building was constructed or slip and fall lawsuits where someone is suing the HOA for an injury that occurred on the property.
If the HOA is currently involved in pending litigation, this can be an issue for the lender who is providing your financing. Make sure to consult with your lender because every situation is different and you may be able to still obtain a mortgage with certain types of litigation.
Building an Additional Dwelling Unit in Berkeley and Oakland
Are you considering an investment property to supplement your income? You may not have to look any further than your backyard. In response to our housing shortage, Oakland and Berkeley have eased restrictions on parking requirements, allowing many homeowners the possibility to build an accessory dwelling unit (ADU). An ADU is a unit, that is often separate from your primary residence. You can use these units as a rental, in-law, office, or guest room. Building an ADU can supplement income, help pay the mortgage, or give seniors more financial stability heading into retirement.
How much will it cost you?
Costs for new construction in the San Francisco East Bay often range between $250 to $300 per square foot. Conservatively, permits for the structure will account for 8% of the budget. According to Kevin Casey from New Avenue Homes, an online platform for managing any design/build project, for $180,000 you can build a one bedroom unit with a 5’x7′ bathroom, washer/dryer, desk area, and a kitchen with 15′ of counter space. Remember, costs will vary based on the complexity of the design and the grade of the finishes.
Financing the ADU Construction
Even if you’re short on cash, you may still have options. You can finance construction with a renovation loan. A renovation loan takes into account the after renovation value. The two most common renovation loans are the FHA 203K and the Conventional Fannie Mae HomeStyle. You can use both loans for home purchase or refinance.
Since construction budgets will vary based on the size, scope, and municipality, it is easier to think in terms of the monthly payment per $100k in renovations.
$100,000 @ 4.5% equals a monthly payment of $507.00
The project outlined above translates to a monthly loan payment of around $1000.
You will trigger a property tax reassessment when you get permits for the unit so you must check with the municipality building department to account for the overall project cost.
Well-located studios in Oakland and Berkeley can rent for over $2000/month in our current market. Because of this, if you are willing to take on the responsibility of being a landlord, the return on your ADU investment is likely greater than the majority of investment properties you can buy in the Bay Area.
Contact Devin Ratoosh from The Ratoosh Group to learn more about rental rates and how an ADU will impact your home’s value. Email Devin at Devin@RatooshGroup.com
Considering financing for your ADU? Contact Tim & Kris Floyd to learn about your options.
Published 2:11 pm, Friday, February 19, 2016
A: Property search websites like Zillow and Trulia, as well as an agent’s personal site, created the most profound impact on real estate transactions during the last decade.
These websites have revolutionized the way buyers search for property. They make home information available to everyone. According to Inman News, 90 percent of people use a property search website when shopping for or selling a home.
When searching for properties, it is better to use your agent’s home search website. A good agent will have a website that allows their clients to search for homes. These websites share the client’s search history with the real estate agent, providing insights about that client’s needs and wants for their next home.
My property search website (www.BuyEastBay.com) allows you to search for timely and accurate information on all the homes listed in the Bay Area, including Alameda, Contra Costa, San Francisco and Marin County.
The Bay Area’s housing market stumbled in May — prime home-buying season — as high prices and low inventory held real estate sales well below normal levels, according to a report Thursday.
Sales of single-family houses were down from the same month last year in the East Bay, Peninsula and South Bay, while prices were up, according to real estate information service DataQuick, which released the report. Prices for all types of homes were at their highest since November 2007 in the nine-county Bay Area.
“There is still some pent-up demand out there, but we can’t muster enough sales to beat last year,” said Andrew LePage of DataQuick. “Inventory remains one of the key reasons, but affordability has cropped up as one of the reasons as well.”
Some potential buyers say they’re either priced out or worn out from the competition for a relatively small number of desirable homes for sale.
Anurag Singh has decided to take a breather from home shopping. The Silicon Valley engineer said he started looking in November and December, when houses he liked were priced within his reach. But his offers kept getting trumped by higher offers.
“Then I realized it is hard to get a house in this market,” Singh said.
Now, for the same type of house he was looking for late last year, prices have risen $50,000 or more, he said. “I’m still looking but not as actively as I was earlier.”
His agent, Gina Saporito of Clickhome Realty in Santa Clara, said, “We still need more inventory. There’s a lot of buyers out there.”
But even with sales slowing, there are still enough buyers making multiple offers for what’s available to keep prices rising.
“It’s a great time to be selling real estate in the Bay Area area right now,” said Devin Ratoosh with Marvin Gardens Real Estate in Berkeley. “It really makes it easy for sellers when there’s this much competition lining up for a house.”
DataQuick reported that Contra Costa County’s median sales price gained 13.8 percent from May 2013 to $479,000, while Alameda County was up 25.8 percent to $644,000.
Santa Clara County, which surpassed its peak price for existing single-family homes in April, saw a gain of 6.7 percent to $800,000, and San Mateo County was up 14.2 percent to $925,000.
Marilyn Cunningham, president of the Contra Costa Association of Realtors, said that two weeks into June, she’s seeing an increase in listings of homes for sale, but they’re being snapped up so quickly that inventory remains low. And prices keep rising, she said.
“It’s good for sellers,” she said. “They are getting their equity back. And buyers are coming out, but it’s getting more difficult for them because prices are going up.”
May usually sees a big boost in sales as the home-buying season gets in full swing, but the tight market and high prices have sales of all types of homes — including condos and townhomes — in the nine-county Bay Area down 7.5 percent from a year ago, and 17.4 percent below the May average going back to 1988, DataQuick said.
The price gains are leveling off, however, as they near their previous peaks and as buyers drop out. The year-over-year gains between May 2012 and May 2013 were much larger in all but Alameda County, according to DataQuick.
“Buyers for whatever reason are not willing to line up for a mortgage to buy a house,” said Richard Calhoun of Creekside Realty in San Jose.
Some buyers just can’t find their dream house at affordable prices, and prefer to wait. “I want to fall in love, I don’t want to compromise,” said Shawn Clark, a chip company engineer who is content to continue renting his two-bedroom home in Sunnyvale.
If prices are rising in middle-income parts of the Bay Area, they’re through the roof in the wealthiest enclaves of Silicon Valley.
Wendy McPherson of Coldwell Banker in Menlo Park said recent tech company public offerings and acquisitions are creating wealthy buyers at a brisk pace. “We just had a buyer buy a $20 million property who was living in a $900,000 house,” she said.
Ken DeLeon of DeLeon Realty in Palo Alto said demand is so brisk for luxury real estate that one home in Atherton sold for $14 million in three days.
“I believe we are probably hitting affordability limits,” said Brett Jennings of Keller Williams in Los Gatos. His said his typical buyers are a husband and wife in tech, making a combined $240,000 a year, who still can’t afford a basic home in some parts of the valley.
“When the median home price is no longer supported by the median income, we’re near top,” he said.
Contact Pete Carey at 408-920-5419. Follow him on Twitter.com/petecarey.
One day, more than three years ago, Suzanna Wertheim lost her job as a hospice nurse and learned she had terminal cancer. To cover chemotherapy and other health costs, she dug into her savings and unemployment benefits and quickly fell behind on paying the mortgage for her three-bedroom home in Oakland, Calif.
I first wrote about Wertheim for the investigative reporting newsroom ProPublica in August 2010, when she was on the brink of foreclosure. She described the year and a half she had spent trying to get Wells Fargo & Co. to modify her loan as “Kafkaesque,” an endless runaround of lost documents and mixed messages that many struggling borrowers know all too well. As the process dragged on, Wertheim kept accruing fees and falling further behind.
After the story ran, The Rachel Maddow Show interviewed Wertheim and within days, Wells Fargo offered her a modification that lowered her monthly payments to something she could afford. When I caught up with Wertheim at the end of 2010, shesaid it was a “godsend” to have peace of mind, knowing she wouldn’t be forced out of her home in her final days—which she knew were numbered after her cancer spread to her spine, cervix, and brain. A few months later, in March 2011, Wertheim died at age 50, leaving her home to her three kids.
The three-bedroom house is about 2,200 square-feet, “a whimsical tree house with a view,” says Rebeccah Wertheim-Knapp, the middle child. None of the kids were living there, so Wertheim’s eldest daughter, Kaiya, began figuring out how to sell it. They put it on the market last June, asking $664,000. Almost no buyers expressed interest. In December, they brought in a new realtor team and lowered the price to $575,000. One of their realtors, Devin Ratoosh, says hundreds of people looked at the house, but none made an offer. After lowering the price to $475,000, they got one promising bid—an all-cash offer for $450,000.
If it had been up to them, the three would have accepted the offer immediately. But it’s not. That’s because the mortgage debt on the house exceeds $535,000, so—like the properties of one in five homeowners nationwide—it is underwater. The Wertheims needed Wells Fargo to approve a short sale, by which the home is sold for less than what’s due on the mortgage. The bank rejected the request for a short sale, saying it valued the home at $675,000, an amount Ratoosh calls an “obscene unrealistic valuation.” He says Wells Fargo wouldn’t entertain a challenge to the pricing, including a report showing $60,000 of termite damage to the home.
Wells Fargo spokeswoman Vickee Adams says that under the valuation the bank made, the offer was too low. Adams says Wells Fargo did a drive-by appraisal; from the curb, the property “looked well-cared for,” so the bank assumed the house was occupied. That assumption ended up dinging the Wertheims because it’s easier to get short sales approved when a home is vacant, Adams says. The drive-by valuation also didn’t take into account such internal problems as the termite damage. Adams says the bank will re-examine the appraisal.
Short sales usually fetch more money than foreclosures, according to Lender Processing Services, a Florida company that handles defaults for mortgages lenders. The average foreclosure is discounted 29 percent, while a short sale typically goes for only 23 percent less than a comparable non-distressed home. Only recently have short sales begun picking up.
The Wertheims hope to be part of this growing trend. They could let the home go into foreclosure—financially, it wouldn’t make a big difference—but it takes about a year to process foreclosures in California. Wertheim-Knapp, who works 50 hours a week as a nanny and has no savings, hopes she and her siblings can move on. “It would be nice if everything just finally stopped,” she says.