The Gory Details...of Real Estate

Urban Legend Hits the Real Estate World

2009-12-01T16:10:14-08:00

Be forewarned -- no, this is not about kidney harvesting, Nigerian Lottery winnings, or Bill Gates giving everyone lots of money for forwarding an email -- there is an email making the rounds titled "HR 2454: CAP AND TRADE ENERGY BILL", which purports that new legislation will require all homes to retroactively pass new energy standards before they are sold.

Some even say that all homes will now be required to get a "label" for your house every year, proving that your home meets new energy standards.

This is all patently and unequivocally FALSE. (and you can even check Snopes.com here to doublecheck)

Firstly, whoever started this email has a serious conspiracy theory complex. They also probably fall into the category of "birther", "teabagger party member", or "Glenn Beck-lover".

Bottom line, our gub'mint is not going to do anything - ANYTHING - that will adversely affect the real estate market, which is absolutely one of the key elements in our ongoing, slow economic recovery. Why do you think they recently overwhelmingly voted to extend the first time buyer $8K tax credit bill, as well as extend the $729K conforming loan limit? They want to encourage people to have more confidence in home ownership.

Anyway, I also consulted our National Association of Realtors (NAR) position on this, and below is what it said. The most revealing statement, which contradicts this email is that this bill "Does not create a federal energy audit requirement for real property"

"The U.S. House of Representatives approved H.R. 2454, the American Clean Energy and Security Act by Reps. Waxman (D‐CA) and Markey (D‐MA). Following NAR’s long‐standing policy to only take a position on legislation, or provisions within legislation that have a direct affect on real estate, NAR worked with our Congressional allies to strip the Energy Bill of provisions that would have adversely affected our industry.

After multiple consultations with the NAR Climate Presidential Advisory Group, the NAR Land Use, Property Rights and Environment Committee, and state associations who had dealt with energy audit legislation at the state level, the Land Use, Property Rights and Environment Committee directed NAR staff to concentrate on the real estate provisions in the bill. As a result, NAR issued calls for action and made this a talking point for Capitol Hill visits during its recent Midyear meeting.

Overall, REALTORS® succeeded in making a number of positive changes affecting the real estate provisions of the bill. The House‐approved bill:

·    Does not create a federal energy audit requirement for real property;

·    Exempts existing homes and buildings from any federal guidelines for new construction energy efficiency information labels.

·    Prohibits the implementation of any labeling during a sales transaction.

·    Leaves the decision to states as to whether to require energy audits, disclosures, etc.

·    Provides property owners with significant financial incentives, matching grants and tools to make property improvements and reduce their energy bills;

·    Prohibits the Environmental Protection Agency from regulating residential and commercial buildings under the Clean Air Act;

·    Eliminated an early proposal to allow citizens to sue over minor climate risks under the Clean Air Act; and Establishes green building incentives for HUD housing, including a loan program for renewable energy, block grants and credit for upgrades in mortgage underwriting."

Federal Tax Credit For Home Buyers Gets Extended - Well, Happy Early Christmas!

2009-11-12T09:29:29-08:00

An early Christmas present for many home buyers came in the form of the extension of the federal tax credit for home buyers, and was signed into law by President Obama Friday, Nov. 6. The tax credit, which was set to expire Nov. 30, has been extended through April 30, 2010 with a 60-day extension if a binding contract is in place prior to deadline. It also was expanded to include existing homeowners who have lived in their primary residences for five consecutive years out of the last eight years.

For all kinds of FAQs (aka, "Everything You Wanted to Know About the Tax Credit....But Were Afraid to Ask), see the official website here.

First-time home buyers still may be eligible for a tax credit of up to $8,000, while existing homeowners may receive a credit of up to $6,500. The bill also increases the qualifying income limits from $75,000 for single tax filers and $150,000 for joint filers, to $125,000 and $225,000, respectively. The purchase price of the home is capped at $800,000 in both instances.

Under additional provisions in the bill, taxpayers can claim the credit on purchases completed in 2010 on their 2009 income tax returns. The bill maintains the provision that home buyers do not have to repay the credit provided the home remains their primary residence for 36 months after purchase, and waives this requirement for active duty military personnel who move due to a military order.

What is WRONG with Short Sales Agents, Anyway?

2009-10-22T12:55:40-07:00

One thing for sure about this difficult market for us agents -- in pure Darwinian fashion, the cream has risen to the top and the strongest are surviving.

It's also unfortunately elevated many agents that in previous years were at the "bottom of the barrel"...to high levels of production that they'd never been accustomed to.

I guess I write this based on my experience this past year so far in seeing how these bottom-dwellers are managing to survive -- these "short sales experts" were experts at nothing 3 years ago, but somehow got an "in" at lender, and many are now the go-to agents for all the short sales coming out of any particular lender.

So it is with a wee bit of vitriol that I rail against these "short sales experts". Granted, there ARE some good ones out there. But the 'good ones' are unfortunately hugely overshadowed by the lack of professionalism, ethics, common sense, attention to detail, and common business courtesy that is so commonly present in these "wastes of space".

Rather than mention the numerous tales from the trenches, all I'll recommend to anyone out there who is considering selling their home via a short sale: make sure you talk to a "real" professional.

Be initially wary of anyone who says they are a "short sale specialist", or even CDPE-certified (CDPE is Certifed Distressed Property Expert). Do your homework as if you're doing a normal sale -- talk to their references; see how many homes they sold not THIS year, but 4 or 5 years ago (HINT: if they've sold 12 homes this year, but ZERO homes in 2004....run away FAST!).

Sandbags Available for Redwood City Residents

2009-10-12T11:14:43-07:00

With the first significant storm coming in on Tuesday, I have heard that sandbags are available for pickup for Redwood City residents starting at this past weekend. If you are in a flood-prone area of Redwood City, you can get sandbags in the parking lot of Redwood City’s Public Works Services building, 1400 Broadway (between Chestnut and Woodside). These are for Redwood City residents only, and there is a limit of 24 bags per household.

For residents of unincorporated areas of San Mateo County, the County provides other sandbag pickup locations:

Grant Corporation Yard, 752 Chestnut, Redwood City – (650) 363-4103

Princeton Corporation Yard, 203 Cornell Avenue – (650) 728-7993

Pescadero Corporation Yard, 1000 Pescadero Road – (650) 879-0202

Pescadero High School, 350 Butano Cutoff Road

La Honda Corporation Yard, 59 Entrada Way – (650) 747-0341

Tales of Buffoonery, aka What the Heck is Bank of America Smoking?

2009-09-25T10:43:35-07:00

Ok, I only republish these two stories below because the last two transactions I've had where B of A was the buyer's lender have me totally convinced that BofA's left hand does not even KNOW there is a right hand. Ok, ok, I know that mortgage regulations did need to be more restrictive compared to the free-wheeling days of 2003-2006 -- but boy, the pendulum has just swung so far to the other end of the spectrum, it can just make a buyer pull their hair out while continually uttering "WTF?"

Read on:

BofA requires armless man to provide fingerprints to access his cash:

http://www.huffingtonpost.com/2009/09/02/bank-of-america-asks-arml_n_275882.html

BofA forces homeowner to buy flood insurance (when she lives on the crest of a big hill)

http://abclocal.go.com/kgo/story?section=news/7_on_your_side&id=6996278

Tales of Short Sale insanity in dealing with BofA

http://agentgenius.com/g-rants-insanity-more/realtors/bank-of-america-retard-division-for-short-sales/

(quick note: I'm just republishing this one, I'm not condoning his metaphor....but do note this, the thesaurus usage of "retard": “the process is retarded by bureaucratic red tape delay, slow down, slow up, hold back, hold up, set back, postpone, put back, detain, decelerate; hinder, hamper, obstruct, inhibit, impede, check, restrain, restrict, trammel.”

Don't Buy That Furniture (If you want the $8000 tax credit, that is)

2009-09-25T10:24:03-07:00

Good article in the WSJ about how lenders might actually be checking your credit on closing day, hence advising would-be benefactors of the $8000 first time homebuyer tax credit to NOT buy stuff until after you close.

Here's some more of the good snippets from the article:

With the deadline on the first-time home buyer tax credit looming, plenty of buyers are under contract and looking to close before Nov. 30. Excited to move into a new home, some of these first-timers start hitting the stores shopping for new furniture, appliances or curtains.

Big mistake.

Real estate agents are reminding buyers to wait until the close to start buying stuff. The reason: Lenders are occasionally running credit reports on closing day, and they might not like to see an increase in credit card debt or indications that debt could soon increase.

While such measures have been used over the years, lenders, still dealing with the fallout from the boom’s lax lending standards, are being especially particular these days. Even buyers with great credit scores face scrutiny.

Agents also advise not moving money between accounts, so don’t join two savings accounts, transfer large sums out of savings or add more funding to checking. Emptying out an account could look like money’s being spent, and lenders might request a paper trail for the money flow. That could delay the closing or, in rare cases, terminate the loan. That wouldn’t necessarily free the buyer from the obligation to buy the home.

Dan Rider, a broker with Dickson Realty in Reno, Nev., says one of his recent closings was delayed by five days when lenders spotted a $500 deposit in a buyer’s checking account. It wasn’t a gift – it was a repaid loan from her mother – but it sparked concerns that the buyer needed help to close the deal. Though the buyer had a healthy checking balance, the lender wanted canceled checks and bank statements and both parties had to write an explanatory letter.

BOTTOM LINE: Stay out of the stores. Don't move money around more than necessary.

Interesting Market Share Data -- Who Sold What Mortgages So Far

2009-08-18T23:11:32-07:00

Ever want to know how many mortgages your lender does, in your area, and what kinds?

Well, with much kudos to my preferred B of A mortage loan officer Shaveta Sareen (who can also be reached at 650-358-4874), take a look at this market share data for San Mateo County, from January to June of this year (H1 '09).

I'll paste the quick snapshot below, but for an even more detailed chart, including # of fixed vs. # of ARM mortgages, and more, see the full PDF here: Download San Mateo - Purchase Mid 2009.

Taking a Close Look at the Homebuyer Tax Credit

2009-08-14T19:53:39-07:00

( Reposting this from our Intero corporate blog, and authored by our illustrious Gino Blefari).

The much talked about American Recovery and Reinvestment Act of 2009 – otherwise known as the “Home buyer tax credit” – expires on December 1, 2009.

That’s just a little over three months from now - not much time when you consider that the average buyer takes six to eight weeks just browsing online for homes before even contacting a Realtor.

What’s more, we are seeing increasing signs of a market bottom. According to Altos Research, a firm based in the Silicon Valley that tracks real estate data, median sales prices for San Jose, Saratoga, Los Gatos and Cupertino all increased in the first week of August.

At Intero, we sold more than 900 homes in July – a one-month record for our company.

My point: If you are thinking at all about buying, now’s the time to take a good look at the tax credit program to see if it makes sense for you.

The National Association of Realtors offers a comprehensive guide to the tax credit on their website, but here’s a quick overview:

The credit is equal to 10% of the purchase price of the home, up to $8,000.
First-time homebuyers who purchase homes between January 1, 2009 and December 1, 2009 are eligible. To be a “first-time home buyer” you or your spouse may not have owned a residence during the three years prior to your purchase.
Single buyers with incomes up to $75,000 and married couples with incomes up to $150,000 may receive the maximum tax credit.
The credit does not need to be repaid if you occupy the home you buy for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.

Do your homework. Get advice from a legal or tax professional if you need it. But don’t let this landmark program expire without taking a closer look.

Let's Pass Another Law to Potentially Delay Escrow Closings

2009-07-29T10:08:23-07:00

Yup, starts tomorrow, folks.

Effective July 30, 2009, if the APR on an initial Good Faith Estimate is no longer accurate (within a 0.125% range) at close of escrow, a lender must generally provide a residential borrower with a new disclosure and a three-day right to rescind before consummating the loan. REALTORS® are forewarned that, because of this new three-day waiting period, a lender's failure to timely provide corrected disclosures has the potential of delaying funding of the loan and close of escrow.

This new requirement is part of the Mortgage Disclosure Improvement Act (MDIA) implementing new loan procedures to protect borrowers and foster greater transparency in mortgage lending. For loan applications submitted on or after July 30, 2009, the new MDIA changes to the Truth In Lending Act are generally as follows:

Applicability: The new MDIA rules pertain to federally-related mortgage loans covered under RESPA and secured by a consumer's dwelling. The rules apply to both purchase and refinance loans.
Early Disclosures: A lender must provide a borrower with an initial Good Faith Estimate within three business days of receiving the borrower's written loan application as specified. For this provision, a "business day" is generally defined as a day on which the lender's offices are open for business.
Upfront Fees Restriction: Neither a lender nor any other person may impose an upfront fee on the borrower (except for credit report) until the borrower has received the early disclosures in person or, if mailed, three business days after the early disclosures are mailed. For this rule, a "business day" is defined as all calendar days except Sundays and legal public holidays as specified.
Seven-Day Waiting Period: A lender must wait seven business days after providing the early disclosures before consummating the loan. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified. A borrower may waive the waiting period in writing in case of personal financial emergency, such as an imminent foreclosure sale.
Re-disclosure Requirement: If the final Annual Percentage Rate (APR) at loan consummation varies more than 0.125% (or 1/8 of one percent) from the initial APR on the early disclosures of a regular transaction, the lender must provide the borrower with a corrected disclosure at least three business days before the loan is consummated. For purposes of this waiting period, a "business day" is defined as all calendar days except Sundays and federal legal holidays as specified.
Three-Day Waiting Period: For corrected disclosures, a lender cannot consummate a loan until three business days after the the borrower receives the corrected disclosure in person. If the corrected disclosure is mailed, the borrower is deemed to have received it three business days after it is placed in the mail. A borrower may waive this waiting period in writing in case of a bona fide personal financial emergency, such as an imminent foreclosure sale.

The new MDIA rules and regulations are set forth at 74 Federal Register 23,289 (May 19, 2009).

Real Estate Friday Humor – TMI?

2009-07-24T10:46:12-07:00

Indeed...sometimes, there’s just TOO much truth in advertising.

(note: this pic has made its way across many RE blogs, so props to whoever it was that found it first)