The Wyss Report

Silicon Valley Real Estate Market Update

2012-03-01T09:05:00.002-08:00

Silicon Valley home prices are on the rise.

General Market Conditions: The real estate market in Santa Clara County is vibrant among most price points. In many areas, home values have returned close to their high water marks. Houses in the $750,000 price point and below are moving very quickly as owner-occupants battle investors for great deals. For homes above $750,000, location matters.

“Be fearful when others are greedy. Be greedy when others are fearful.”- Warren Buffett

Because of the resurgence of the real estate market, there are some great opportunities. With the right marketing strategy, we have been very successful helping clients navigate the market, taking advantage of the best opportunity based on our client’s situation.

1. Investment real estate continues to be hot. Three areas of consideration:

A. Buy “cash flow” rental property in Santa Clara County or beyond

B. Buy distressed property at discount and refurbish and “flip”

C. Sell depreciated rental property and “trade up” for better cash flow and tax benefits

If your a flipper, the market offers amazing investment opportunities.

2. “Right Sizing” your current household to adjust for changing family

A. Move up: sell ( or keep for rental income ) your current home and move to larger

B. Move down: for many, now is a good time to make the nest “smaller”

C. Move laterally: sometimes a move to another neighborhood is in the cards

Property is a great 'basket' in which to put some of your 'eggs'.

3. Diversify part of your stock portfolio into real estate

A. Convert current IRA into a “self-directed IRA” to fund real estate diversification strategy.

B. Join a small group of friends/ investors, pool funds and buy income property

We are also getting requests from more clients who are helping elderly parents turn the page on their life long home and move to a variety of different independent care homes.

We continue to be very active helping buyers and sellers throughout Santa Clara County. If any of the opportunities listed here caught your attention and you (or someone you know) would like to discuss them in greater detail, we would be happy to do so.

Real Estate Investors Offer Big Pay Off, If You Can Keep Up.

2012-02-09T11:33:00.000-08:00

JULIE WYSS – Today’s Silicon Valley real estate investor isn’t necessarily a high roller, but more often a working stiff with a small-business, who is tapping existing non-real estate investments to cash in on affordable real estate properties to flip or rent.

If you are a real estate agent looking to serve them, you’d better bring your A-game.

These younger investors aren’t “suits” sporting fancy cars, but are more likely to dress casually and drive a hard bargain, offering all cash or sizable down payments on the properties they buy.

Many are smaller, newer, more innovative-thinking investors with one or two rentals under their wing, looking to acquire more. One thirty-something investor with three children chose to drain the kids’ college accounts and buy three houses with 15-year loans. By the time the kids graduate, mom and pop can sell the farm and pay cash for college.

Some are trading in two-, three- and four-plexes for single-family homes (SFH), considered diamonds in the rough, valued at half what they cost at the peak of the market.

Investors with cash in the bank are getting off the fence because they no longer trust that their money will perform as well in conventional investments, including money market funds, stocks and other investments.

In the business to make money, investors also favor Section 8 housing’s guaranteed rental income.

San Diego-based DataQuick says absentee buyers – mostly investors – purchased a record 23.8 percent of all Bay Area homes sold, up from 21.7 percent in November and 20.2 percent a year earlier. That’s an average. The share is higher in some counties, cities and neighborhoods.

If investors sound like tough cookies, they are, but you can serve them well if you have the energy and expertise to meet their demands.

The average real estate agent thinks the job is to write a contract and pray it gets accepted. Here’s what’s really required.

Going the distance

Investors aren’t in the mood to manage. That’s what they do for a living. They expect you to take the lead on acquiring their investment and expect you to understand their investment goals.

Be prepared to show an investor as many homes as they wish to see in a day, six, eight. And not just any homes. They include short sale properties occupied by families down on their luck and homes in horrid shape.

When a hot property is available, the investor needs to be convinced to tour it.

“You need to see this property and I am picking you up at your office in 30 minutes and will have you back in an hour….” Worker bees may say “no” at first, but later will agree, because you insisted. They appreciate your initiative and ultimately enjoy the thrill of the chase.

Bring hard core negotiating skills to the table. An investor needs a real estate agent familiar with the distressed property market. After several investment purchases, a skilled agent should recognize a good deal and advise the buyer what to offer. Hit the nail on the head and you gain their trust.

When the investor trusts the agent, the investor is more often willing to offer a higher price, if that’s what it takes to get the offer accepted. However, if the investor is an all-cash buyer and can forgo the appraisal contingency, even the property inspection and disclosures contingency, then a lower offer with a quick close is a more effective strategy.

Investors have little time to spare, including the celebratory two-martini lunch after the deal closes. Instead, they’d prefer you to pick them up, get them to the sign-off and back to work in an hour.

Other investors prefer not to leave work, but complete the transaction without leaving their desk. They appreciate the convenience of electronic signatures, when permitted. Electronic signatures are not allowed on a short sale, but offering to send a traveling notary or providing curb-side pick up can overcome that obstacle and help them maintain a sense of control without actually managing you.

Investors don’t care to read the fine print, but they do want to know what’s in the deal. You, along with the lender, must review the note to be sure the rate and the terms are what the investor wants. You must sign off on the title report and be certain there are no problems with liens or easements. The new title must be in the correct name of the investor or the investor’s living trust.

After escrow, the tough keep going

The real work begins after escrow closes.

Whether the investor will flip the property or rent it out, chances are, the property could use some help.

You’ll have to have at the ready a database of trusted vendors available for any work necessary – termite work, painting, hardwood floor finishers, roofers, general contractors, landscapers, pool repair guys, HVAC companies, virtually any provider you can think of. But not just any contractor, great contractors with competitive prices.

You can manage the work by installing a lock box and setting up appointments with the contractors. This allows them to quickly get to work transforming the purchase into an investment with hefty returns.

Source: A short sale and luxury home specialist serving Silicon Valley, Julie Wyss is a broker associate with Intero Real Estate Services-Los Gatos, CA, and mortgage broker at North Star Mortgage Associates. For more information about Julie, please visit her website.

Wyss also has been a DeadlineNews.Com real estate news source featured in:

• “Seven selling sillies that sap home sales”

• “Short sale transaction a tall order”

Testimonials About a Top Producer

2012-01-31T10:09:00.000-08:00

Guided by principles of trust, respect and integrity, we empower people to achieve their dreams.

Open communication, flexibility, integrity and exceptional customer service are all key to ensure the best interest of my clients. I strive to make each feel like they are my only clients as well as to minimize that real estate roller coaster ride.

Below are a few wonderful and much appreciated testimonials from some of my past clients who have chosen me to assist them in their real estate transactions.

Jeremy P.

The home buying process, as we all know, is an emotional roller coaster. Going through this process for the 3rd time was probably the most challenging altogether. Despite all the new apps and web tools that are designed to make your search more efficient, we learned the hard way that most important resource of all is having the right real-estate agent. We needed someone who was going to look out for the best interests of our family. Julie Wyss was by far the most complete and well-rounded agent that we have worked with to date and I would refer her to any of my closest friends or family without hesitation. In our most recent house hunt we were much more savvy on what our needs were. We needed an area specialist for the Los Gatos/Cambrian area. Schools were very important for our children, but we did not want to sacrifice neighborhood, small square footage, or wind up in an outdated home that needs thousands in upgrading. We also felt strong about not overpaying the current market. My wife and I were fortunate to have a large network of friends rich in real-estate referrals. We spent a good amount of time with 2 different agents (both referrals from close friends) before we met Julie. We made offers on several homes and watched them slip through our fingers while they promised us that they did their best to win. It wasn't until we met Julie that we had experienced the value of a full-service agent. Julie is someone who understands the market and looked out for the best interest of our family. She had a relentless pursuit to get us in our dream home and a tenacity that we hadn't seen from other agents. Julie is confident and strong willed and she knows how to make things happen. She is professional and aggressive with her negotiations and it is because of Julie Wyss that we are now in our dream home. If you live in the bay area and are searching for an agent, it would be mistake if you didn't take the time to talk to her. Nov. 2, 2011

Josh Hippauf, Commercial Property Manager

This year I connected with Julie while looking for my first home. From the first phone call, until the final signature, Julie made herself available to me every time I needed something. On our first tour of houses, she had prepared out a detailed list and schedule of our appointments and had all of the information ready for us. When we found a house during the first day, we were uncertain that we wanted to make an offer that quickly, but had a very special feeling about the house. She allowed us to think through it, but was frank in letting us know that we might not have another opportunity to make an offer on it. We ended up going with our gut and bidding on the house and it has now become our home! It is exactly what we had hoped for and I give a huge credit to Julie for keeping us on track and sane through the stressful process of buying a home. Over all, Julie was honest in our discussions and helped me think rationally about my search and kept me cool at times when I was frustrated about the market and buying process. She brought her creative ideas on how to find solutions to the small hurdles that we had to pass in the buying process and in showing us what we could make of the house. She ultimately kept this purchase on track and worked very hard to keep all parties moving forward and I cannot thank her enough for everything that she did to make our dreams come true. I will only work with Julie for any future home purchases/sales and am relieved to know that I have someone out there that I can trust. Nov. 8, 2011

Cindy & David

We were very pleased with the excellent service that you provided for us in selling our home. Your experience, knowledge and efficiency helped us to quickly sell our home. We always felt that you were looking out for our best interest. We would highly recommend you to anyone who is looking to buy or sell a home. Thanks again.

Kevin Macfee

Julie was a great asset during the purchase process and was always acting as an advocate for us. She made things happen when they were otherwise stalled and we truly appreciate her efforts.

Donna Matuszczak

Julie, thank you so much for coming to see my home over the weekend after hosting the open house on Charmeran. I truly appreciate all your feedback. I felt your recommendations were right on and I removed the bookcase, packed the books and clutter near the hall bath. I cleared out all the cubby holes and knickknacks on the kitchen counters and desk and boxed many of the artifacts in the sun room and on the fireplace mantle. I also changed some of the artwork and the house looks and feels so much better, lighter and brighter. Although I enjoyed my little doo-dads, the house looks more executive and beautiful and I feel better! You are wonderful and I sincerely think you are one of the most genuine and helpful Realtors I have ever met. You did me a great service and I am grateful! I hope the best for you with great success and I wish you were the selling agent so that you could be rewarded for your time and effort.

Lisa Koen

Julie is a hard-working dedicated individual. She is an excellent role model to many. She always exudes a wonderful, cheerful, and flexible attitude. She will always look for options keeping her clients best interest in mind. She is a great listener and is very responsive. I would recommend her to any one who is looking for an honest, bright, and energetic individual. April 30, 2010

Kimbal Stanley

I found Julie to be very professional and competent to work with. She demonstrated excellent listening and customer relationship skills. The combination of her skills enabled her show me properties that fit well for my needs. April 21, 2010 Top qualities: Personable, Expert, High Integrity

Barry Mathis

Julie has received some the best training available in the industry and she works with the premier Real Estate company in the area. If you start with the best ingredients you are much more likely to get a desired result. October 6, 2009

Pat Brogan

Julie represented me as a real estate agent. Julie was awesome. She did a great job or marketing, communicating, provided excellent advice and was a pleasure to work with. I'd recommend her to anyone.

Joseph Laguna

Top qualities: Great Results, Expert, Creative April 30, 2010

Jeanette Smith

Julie is of the highest integrity and loyalty. With focused and tireless energy, Julie works overtime to serve her customers and delivers above and beyond their expectations. February 14, 2010

Tom

Julie, I appreciate your report on our property. That is well beyond of what we expect from any real estate agent. It's fair to say that you're the best in the field by a long shot, from what I have experienced and learned about. Thank you again for staying in touch, if any of my friends are in the market, you'll be the first to know.

If you have a current or future need for a real estate professional, please contact me. I would also appreciate your vote of confidence in my service by passing my name to anyone you may know who would benefit from my services.

Alain Pinel Moves to Intero Real Estate

2012-01-16T09:14:00.000-08:00

Real estate entrepreneur and 30-year industry veteran Alain Pinel has moved to Silicon Valley- based Intero Real Estate Services as its senior vice president and managing officer. He will be in charge of Intero's estate and luxury markets in the U.S. and abroad.

"Alain is a seasoned real estate veteran with tremendous knowledge and experience in the industry," said Gino Blefari, Intero's founder, president and CEO, in a statement.

"His extraordinary level of professionalism will continue to lead and expand the Intero brand as a household name locally and abroad."

Formerly senior vice president and general manager of William Raveis Real Estate, Pinel has continually reinvented himself over the course of his long career. He first worked as a journalist in his native France, but after marrying a Californian, he moved to the U.S. and began a career in sales.

He obtained his real estate license in 1976 and worked for Northern California firm Fox & Carskadon Real Estate, quickly moving into management. In 1988, Pinel left the firm and later founded his own brokerage, Alain Pinel Realtors, with two partners.

As founder, chairman, and CEO, Pinel set out to carve a niche for the brokerage by marketing its high-end listings beyond the local area to the rest of the country and abroad.

Shortly thereafter, he sold his interest in the brokerage to his partners. Pinel worked for large real estate company Semifeg in Paris through the end of 1994 before returning to California in 1995 as senior vice president of Coldwell Banker's San Francisco, Peninsula and Silicon Valley region.

In 2002, he returned to France and started Imminence, an online information-sharing business based on the American multiple listing service model.

He joined William Raveis Real Estate in Massachusetts in 2008, where he remained until the fall of last year.

"I have a passion for this business. I am excited to begin a new project with an outstanding brokerage and a progressive leadership team," Pinel said in a statement.

Julie Wyss, Broker Associate at Intero Real Estate in Los Gatos, has been involved with an impressive number of luxury real estate transactions and has a comprehensive knowledge of the Bay Area Luxury Home Market. Julie is an established specialist in premium lifestyle property and is here to help you achieve your real estate dreams, whether they be in a Los Gatos luxury home or a quaint Willow Glen cottage.

Industry veteran and entrepreneur will handle company's luxury brand

By Inman News, Thursday, January 5, 2012.

Inman News®

Common Cooking Mistakes We All Make

2012-01-04T12:22:00.000-08:00

Boiling Pasta in a Pot That's Too Small
Why it's bad: For starters, if you use long noodles, they might not fit unless you break them first. But regardless of the pasta's shape or size, it will probably end up sticky and gummy. "When you add pasta to a small amount of water, it lowers the temperature of the water substantially more than if you added it to a large amount of water, so the water will take longer to return to a boil. In the meantime, the pasta will sit at the bottom of the pot and start to clump up and become mushy unless you are vigilant about stirring," says chef Michael Symon, the owner of five restaurants in Cleveland and an Iron Chef on the Food Network's Iron Chef America. Also, your ratio of pasta starch to water will be too high--another cause of sticking.

Do this instead: Unless you are cooking a single serving of pasta (in which case you can get away with a smaller pot), do as Italian grandmothers do: Fill a large pot (5 to 6 quarts) with water and let it come to a rapid boil. Then add 2 tablespoons of salt (don't be shy--professional chefs say pasta water should taste as salty as the sea). Finally, add the pasta and stir it occasionally until it's al dente.

Using the Wrong Knife

Why it's bad: You'll damage your food. If you've ever tried to slice a baguette with a chef's knife and flattened it as a result, you understand. What's more, when you select the proper knife for the job, you have better control over the blade. This allows you to slice and dice more neatly and efficiently--and helps you keep your digits intact.

Do this instead: Opt for a chef's knife (the big one with the long, wide blade) for most chopping, slicing, dicing, and mincing jobs. It gives you the best leverage, which is particularly helpful when you're dealing with firm ingredients (like onions and squash) or cutting things into small pieces (like garlic and fresh herbs). A small, slim paring knife is best for tasks such as peeling and removing pits, seeds, stems, and potato eyes. Pick up a serrated knife (with the sharp teeth) for bread and bagels; delicate pastries, like meringues and cream puffs (the blade won't compact the layers); and smooth-skinned fruits and vegetables, like tomatoes and plums.

Using a Tiny Cutting Board

Why it's bad: You won't have room to maneuver a knife, which increases your risk of cutting yourself. You'll also make a mess and waste time corralling ingredients that fall off the board.

Do this instead: Think small knife, small board; big knife, big board. You can use a little board for a quick task, like cutting a lemon into wedges with a paring knife. But since most kitchen prep work requires a chef's knife, you probably need a board that is at least 12 by 15 inches. It should be large enough to hold ingredients at every stage of the process. For example, if you're chopping celery, you want room for both the stalks you start with and the pile of cut pieces you end up with. Before you begin, place a damp paper towel or dishcloth underneath the board to prevent it from slipping around on the counter.

Storing Tomatoes in the Refrigerator

Why it's bad: Tomatoes have delicate cells, and excess cold (or heat, for that matter) causes the cell walls to burst, leaving the tomatoes mealy, says Aki Kamozawa, the author of Ideas in Food: Great Recipes and Why They Work ($25, amazon.com). The flavor-producing enzymes are also destroyed, rendering the tomatoes tasteless.

Do this instead: Keep tomatoes on the kitchen counter in a single layer for maximum air circulation, and avoid putting them in direct sunlight. (You can leave cherry and grape tomatoes in their packaging, so long as it contains holes.) To speed ripening, place tomatoes in a paper bag with an apple, which emits ethylene gas, a ripening agent. Once ripe, they'll last for up to 3 days. Some varieties, like plum tomatoes, will keep for up to 5 days.

Putting Good Knives in the Dishwasher
Why it's bad: Convenience comes at a price. The high-pressure water jets in a dishwasher cause knife blades to knock against other utensils in the silverware basket, dulling and damaging them over time, says Symon. (Unfortunately, a dishwasher that has a specially designed knife rack isn't much better: The blades can still rattle against the sides of the rack.) Additionally, the intense heat of the drying cycle can cause knife handles to warp, which will eventually loosen the rivets.

Do this instead: Wash knives by hand. Hold the handle so the blade faces away from you and wipe it clean with a sponge. Dry knives immediately to avoid the risk of discoloration from water droplets left on the blades. Just a few seconds of work will add years to the lives of your knives.

Written by Melissa Clark, Real Simple Magazine, 12/28/2011

Julie Wyss can help you find the home of your dreams, complete with fabulous kitchen so you can practice your new-found cooking skills!

Underwater Homeowners Renting Out to Move Up, Over or Down

2011-12-27T11:21:00.000-08:00

• Silicon Valley’s Julie Larsen Wyss, a broker associate with Intero Real Estate Services, recently met a couple who wanted to buy one of her listings, but had an existing, slightly underwater home they didn’t want to sell because of the loss potential.

Luckily, the existing home was financed with an adjustable rate mortgage (ARM) currently adjusted to a rate that kept payments low enough so the owners could rent the existing home for $2,800 — enough to cover the mortgage payment, taxes and insurance and allow them to move up without selling right away.

What they didn’t count on was that several qualified renters were willing to pay more – $3,500 a month – to rent the existing home, allowing the homeowners to move up with an actual cash flow from the old home, which became a rental property, according to Wyss.

• New home builder Chicago-based Lexington Homes’ Marketplace Homes program allows buyers to purchase a new home while leasing the old one. The program comes with a “guaranteed lease” deal for an existing home for up to six years — homeowners get the guaranteed rent each month, even if there is no tenant.

Marketplace finds tenants and covers utilities, maintenance, and repairs. If Marketplace Homes sells the home during the term of the lease, the owner gets 100 percent of the asking price.

• Christine Karpinski, HowToRentByOwner.com real estate investor and author of “How To Rent Vacation Properties By Owner” (Kinney Pollack Press, $26), says some homeowners in prime travel destination locations are putting an even more profitable spin on renting out the old home to move up, down or otherwise out – they turn the existing home into a vacation rental for short-term rents that can be a windfall.

“In lieu of renting their home on a long-term lease, they are renting it on a nightly or weekly basis, which generally yields more money than a long term lease,” says Karpinski.

“It’s the best of all worlds. No one wants to sell their home at the low prices, but everyone wants to buy during a down market. The solution? Buy the new home and hold your existing home to rent it out until the market rebounds,” she adds.

Homeowners stuck with a mortgage larger than the value of their home, but who know a bargain when they see one, are cashing in on rising rents by renting out their existing home to move up, down or sideways to a different home, without selling at a loss – for now.

Necessity is the mother of invention

Spawned by a housing market that demands a new level of creative finance thinking, the rent-out to move-up strategy is a new spin on an old approach to moving and investing.

During boom markets, many homeowners rolled over equity into a move-up property or used it to buy a second home. Others tapped equity to buy a vacation rental that would pay for itself. Still others checked out and bought a smaller home to pocket the equity difference for, say, retirement, kids’ education or a business venture.

Today, without the “psychological equivalent of gold” to bank on, thebooming rental market, rock-bottom home prices and low mortgage rateshave converged to give some housing consumers a silver lining.

The strategy’s primary goal is to stave off a loss on an existing home by not selling it while it’s worth less than the mortgage balance.

Those with faith the housing market will recover while the rental sector is still strong can choose to buy up to a larger home or a more expensive home in a better neighborhood.

Others who want to hedge their bets can themselves choose to rent or buy down to a smaller or less expensive home.

Still others, like those in vacation rental markets, can use the strategy to become investors, if they can turn their existing home into a cash cow.

No matter how the rent-out to move-up deal flies, the strategy requires adept financial logistics. You must have a level of good credit to help the deal gel. You must be able to document that you can afford a new mortgage or rent, as well as the old property’s carrying costs, if any, not covered by the rent. And you must otherwise pass muster with a lender who’ll certainly go over the deal with a fine-toothed comb.

“The challenges of financing are there, especially if you choose to rent your home on a short-term basis. If you have a signed long-term lease it’s much easier to get the bank to recognize the rental revenue,” says Karpinski.

“The major difference we’re seeing in the vacation rental world is that these people are buying that second home without traditional financing,” she added.

Chicago’s Taylor Johnson (TJ) , a real estate industry marketing consultant, puts the strategy at the top of current housing trends as the calendar flips over to 2012.

TJ reports that MACK Companies, a Midwestern company that redevelops foreclosed properties into single-family rentals, offers a Real Estate Cash-Flow & Appreciation Program (RECAP) for investors who don’t have the time, expertise or knowledge to manage property. The investors can buy already redeveloped and rented properties enjoying positive cash-flow.

“We predict single-family rental homes as a particularly bright spot, driven by the millions of families who either lost their home to foreclosure or simply can’t secure a mortgage. And we’ll see more investment in distressed single-family homes rehabbed as rentals, both from individuals and real estate investment trusts (REITS),” Jim McClelland, CEO of MACK Companies told TJ.

BY BRODERICK PERKINS · DEADLINENEWS.COM © DECEMBER 26, 2011

The Five Fiduciary Duties

2011-10-18T15:15:00.000-07:00

By Chris Moles
Brokerage Counsel
Intero Real Estate, Inc.

Most real estate agents know that they owe a fiduciary duty to their clients. And they know the fiduciary duty is “the highest and utmost duty of care and loyalty.”

However, the fiduciary duty is actually a composition of five distinct professional duties. Each is a co-equal and important duty and the failure to meet any of the five can constitute a “breach of fiduciary duty” for DRE and civil court purposes.

The Five Fiduciary Duties

Listed in no particular order, the five duties that make up the fiduciary duty are 1) the Duty of Loyalty, 2) the Duty of Care, 3) the Duty to Communicate, 4) the Duty of Confidentiality, and 5) the Duty of Full and Frank Disclosure. When meeting one’s fiduciary duty, the agent must pay each of these duties to the principle. Scholars have written books on each of the aforementioned duties, and the purpose of this article is to simply introduce them and explain how they are commonly breached.

The Duty of Loyalty

The Duty of Loyalty is incredibly important in real estate practice. It is essentially the duty to remain free of actual or potential conflicts of interests with one’s client. If a professional agent has a personal stake in the transaction that might somehow directly conflict with that of the principle, the agent has already breached his fiduciary duty. For example, if an agent represents himself as buyer’s agent he also acts as listing agent for the seller, the agent can be automatically considered in breach of his duty of loyalty. Even if the seller remains happy with the service, the agent has placed his own personal interest in direct conflict with his client. Real estate agents have great latitude to “double end” transactions and coequally represent adverse parties (which is a breach of fiduciary duty for most other professionals – like lawyers), but some real estate agents overstep that latitude when they actually become the adverse party.

The Duty of Loyalty also manifests itself whenever clients claim that a real estate agent breached his fiduciary duty by convincing the client to enter into a bad deal. The argument is essentially that the agent placed his own interest (taking a commission) before that of his principle.

The Duty of Care

The Duty of Care is the duty to use the skill and care of a reasonable professional under the given circumstances. Fiduciary professionals cannot be careless. At all points during the representation a fiduciary agent must take those actions that other professionals might reasonably take in similar situations. For real estate agents, the Duty of Care is often alleged to be breached in situations where the principle elected to release contingencies prematurely or the principle waived his right to order inspections or something. While this is certainly the principle’s right and the agent must do as the principle directs, an agent has a duty to advise the principle in a careful and professional manner. In hindsight, many clients claim that they made a bad decision because their agent failed to adequately help them evaluate and weigh the risks. These are technically Duty of Care attacks. Keeping email strings and advising principles to get professional advice is a great way to defeat these attacks.

The Duty to Communicate

The Duty to Communicate is a duty that can survive after the transaction and it is a very common way that real estate brokerages are attacked. Simply put, the fiduciary duty includes a duty to correspond with your client. Obviously, this includes the duty to share details and return calls. Agents are representatives, and so they need to be accessible to their principles.

This is a huge problem in times where agents and brokers find themselves in disputes with clients. The natural tendency is to say “go pound sand” and then not return a phone call. However, this can be improper under certain circumstances. Even though there is never a duty to “settle” disputes or to “give into” a client’s demand, there is always a duty to communicate. Sometimes this means sitting with the client and saying “I disagree and I am not in a position to do as you ask, but you can seek legal counsel and/or forward any grievance to the local trade union if you deem it necessary.” Regardless of whether or not an agent owes some form of remuneration to his client, all governing authorities will consider how responsive an agent was to his client’s concerns when determining a fiduciary duty issue.

The Duty of Confidentiality

The Duty of Confidentiality is a big deal for real estate agents. Real estate agents are trusted with very sensitive personal information about the client’s job, finances, income, and family. This information can indicate the leverage that the client has or lacks during contract negotiations and its unauthorized disclosure can have negative consequences. The fiduciary duty includes a duty to properly use and protect the client’s information.

The Duty of Confidentiality is limited to the client, and it is NEVER owed to the property. If the property has a defect or if the property has a cloud on title that will materially alter the adverse party’s evaluation (like it is overleveraged and it will be a short sale), agents must reveal that information. Serious dilemmas occur when the client objects to making a material disclosure. This situation is never easy. However, the answer is always the same. Strongly advise that the client make the disclosure and, if the client refuses to act properly, discontinue the representation. The fiduciary duty does not include a duty to aid a client’s fraud.

Duty of Disclosure

The Duty of Full and Frank Disclosure is the all encompassing duty. An agent has to give the client all the information the client needs. All five fiduciary duties overlap, but elements of the Duty of Disclosure are found in each of the other fiduciary duties – making it extremely important. Clients have a right to know what you know. In real estate, unique exceptions are made for the confidential information of the adverse party in instances of duel agency. However, the Duty of Disclosure burdens agents to reveal all known information that might be desirable to the client.

Of course, the most common cases for Breach of Disclosure are cases where the agent does not give information, like certain purchase offers or adverse information, to his client. While these infractions clearly overlap with the duties of loyalty and care, they are most clearly violations of the fiduciary duty to disclose.

Top Home Buying Tips For 2011

2011-10-05T10:35:00.001-07:00

By Julie Wyss, Broker Associate

Intero Real Estate Services

518 North Santa Cruz Ave. Los Gatos, Ca.

www.juliewyss.com

julie@juliewyss.com

408-687-2026

Research Recently Sold, Comparable Properties

A comparable property is one that is similar in size, condition, neighborhood and amenities. One 1,800-square-foot, that was recently remodeled, one-story home with an attached garage should be listed at roughly the same price as a similar 1,800-square-foot home in the same neighborhood. That said, you can also gain valuable information by looking at how the property you're interested in compares in price to different properties. Is it considerably less expensive than larger or nicer properties? Is it more expensive than smaller or less attractive properties? Your Real Estate Agent is the best source of accurate, up-to-date information on comparable properties. You can also look at comps that are currently in escrow, meaning that the property has a buyer but the sale is not yet complete.

Check Out Comparable Properties That Are Currently on the Market

In this case, you can actually visit other homes and get a true sense of how their size, condition and amenities compare to the property you're considering buying. Then you can compare prices and see what seems fair. Reasonable sellers know that they must price their properties similarly to market comparables if they want to be competitive.

Consider Market Conditions and Appreciation Rates in the Area

Have prices been going up recently or going down? In a seller's market, properties will probably be somewhat overpriced, and in a buyer's market, properties are apt to be underpriced. It all depends on where the market currently sits on the real estate curve. Even in a seller's market, properties may not be overpriced if the market is on the upswing and not near its peak. Conversely, properties can be overpriced even in a buyer's market if prices have only recently begun to decline. Also consider the impact of mortgage interest rates and the job market on the economy.

What Is the Expected Appreciation for the Area?

The future prospects for your chosen neighborhood can have an impact on price. If positive development is planned, such as a major mall being built, the extension of light rail to the neighborhood, or a large new company moving to the area, the prospects of future home appreciation look good. Even small developments like plans to add more roads or build a new school can be a good sign. On the other hand, if grocery stores and gas stations are closing down, the home price should be lower to reflect that, and you should probably reconsider moving to the area. The development of new housing can go either way - it can mean that the area is hot and is likely to be in high demand in the future, increasing your home's value, or it can result in a surplus of housing, which will lower the value of all the homes in the area.

Does the Price Feel Fair to You?

If you're not happy with the property, the price will never seem fair, even if you get a bargain. Even if you pay a little over market value for a home you love, in the end, you won't really care.

Test the Waters

Even in a seller's market, you can always offer below list price just to see how the seller reacts. Some sellers list properties for the lowest price they're willing to take because they don't want to negotiate, while others list their homes for higher than they expect to earn because they expect to negotiate downward or they want to see if someone will make an offer at the higher price. If the seller accepts your price or counteroffer, you'll get an indication that the property probably wasn't worth what it was listed for and you have a good chance at getting a fair deal. On the other hand, some sellers may underprice their properties in the hope of generating lots of interest and sparking a bidding war. Unlike on eBay, however, the seller doesn't have to simply sell to the highest bidder: sellers can reject any and all offers that don't meet their expectations. If you have your heart set on the property, be warned that some sellers may be offended by lowball offers and refuse to work with you if you chose to employ such a tactic. Also, when you offer less than the list price, you may increase your risk of being outbid by another buyer.

Get an Appraised Value and a Home Inspection

Once you're under contract, the lender will have an appraisal of the property done (usually at your expense) to protect its financial interests. The lender wants to make sure that if you stop making your mortgage payments, it'll be able to get a reasonable amount of its money back when it forecloses on your home. If the appraisal comes in at considerably less than your offering price, you may not be getting a fair deal. In fact, the lender may not even let you purchase the home unless the seller is willing to bring the price down. A home inspection, which is completed after you're under contract, will also give you a way to gauge your offering price. If the home needs many expensive repairs, you'll want to ask the seller to make the repairs for you or discount the purchase price so you can make them yourself.

Conclusion

When you're shopping for a home, it's important to understand how homes are priced so you can make a sound investment and reach a fair agreement with the seller. Using these tips, you'll be able to make a confident and well-informed offer on any home in any market.

Looking for a great buyer’s agent in the Los Gatos Area? Give Julie Wyss a call at 408-687-2026.

How to Prepare Your House for Sale

2011-09-08T08:11:00.000-07:00

How to Prepare Your House for Sale

By Julie Wyss, Broker Associate

Intero Real Estate Services

518 North Santa Cruz Ave. Los Gatos, Ca.

www.juliewyss.com

julie@juliewyss.com

408-687-2026

Time Required: Seven to 10 Days

Here's How:

1) Disassociate Yourself With Your Home.

Say to yourself, "This is not my home; it is a house -- a product to be sold much like a box of cereal on the grocery store shelf.

Make the mental decision to "let go" of your emotions and focus on the fact that soon this house will no longer be yours.

2) De-Personalize.

Pack up those personal photographs and family heirlooms. Buyers can't see past personal artifacts, and you don't want them to be distracted. You want buyers to imagine their own photos on the walls, and they can't do that if yours are there! You don't want to make any buyer ask, "I wonder what kind of people live in this home?" You want buyers to say, "I can seemyself living here."

3) De-Clutter!

People collect an amazing quantity of junk. Consider this: if you haven't used it in over a year, you probably don't need it.

If you don't need it, why not donate it or throw it away?
Remove all books from bookcases.
Pack up those knickknacks.
Clean off everything on kitchen counters.
Put essential items used daily in a small box that can be stored in a closet when not in use.
Think of this process as a head-start on the packing you will eventually need to do anyway.

4) Rearrange Bedroom Closets and Kitchen Cabinets.

Buyers love to snoop and will open closet and cabinet doors. Think of the message it sends if items fall out! Now imagine what a buyer believes about you if she sees everything organized. It says you probably take good care of the rest of the house as well. This means:

Neatly stack dishes.
Turn coffee cup handles facing the same way.
Hang shirts together, buttoned and facing the same direction.
Line up shoes.

5) Rent a Storage Unit.

Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room's purpose and plenty of room to move around.

6) Remove/Replace Favorite Items.

If you want to take window coverings, built-in appliances or fixtures with you, remove them now. If the chandelier in the dining room once belonged to your great grandmother, take it down. If a buyer never sees it, she won't want it. Once you tell a buyer she can't have an item, she will covet it, and it could blow your deal. Pack those items and replace them, if necessary.

7) Make Minor Repairs.

Replace cracked floor or counter tiles.
Patch holes in walls.
Fix leaky faucets.
Fix doors that don't close properly and kitchen drawers that jam.
Consider painting your walls neutral colors, especially if you have grown accustomed to purple or pink walls.
Replace burned-out light bulbs.
If you've considered replacing a worn bedspread, do so now!

8) Make the House Sparkle!

Wash windows inside and out.
Rent a pressure washer and spray down sidewalks and exterior.
Clean out cobwebs.
Re-caulk tubs, showers and sinks.
Polish chrome faucets and mirrors.
Clean out the refrigerator.
Vacuum daily.
Wax floors.
Dust furniture, ceiling fan blades and light fixtures.
Bleach dingy grout.
Replace worn rugs.
Hang up fresh towels.
Bathroom towels look great fastened with ribbon and bows.
Clean and air out any musty smelling areas. Odors are a no-no.

9) Scrutinize.

Go outside and open your front door. Stand there. Do you want to go inside? Does the house welcome you?
Linger in the doorway of every single room and imagine how your house will look to a buyer.
Examine carefully how furniture is arranged and move pieces around until it makes sense.
Make sure window coverings hang level.
Tune in to the room's statement and its emotional pull. Does it have impact and pizzazz?
Does it look like nobody lives in this house? You're almost finished.

10) Check Curb Appeal.

If a buyer won't get out of her agent's car because she doesn't like the exterior of your home, you'll never get her inside.

Keep the sidewalks cleared.
Mow the lawn.
Paint faded window trim.
Plant yellow flowers or group flower pots together. Yellow evokes a buying emotion. Marigolds are inexpensive.
Trim your bushes.
Make sure visitors can clearly read your house number.

Looking for a great buyers agent in the Los gatos Area? Give Julie Wyss a call at 408-687-2026.

How to Lower Your Property Taxes

2011-08-30T14:02:00.001-07:00

Here are some cool ideas from the California Association of Realtors®:

Despite home prices in major urban centers decreasing 31 percent between 2005 and 2009, property taxes across the U.S. increased by nearly 20 percent. There is good news, however; homeowners can fight back.

Homeowners should keep in mind that property taxes do not always correspond with home values, because local governments typically don’t measure values every year and some have limits on annual property-tax increases.
As a result, current property taxes might reflect the home’s value when the market was healthier. According to the Congressional Budget Office, property-tax adjustments lag behind changes in home prices by an average of three years.
Although homeowners cannot change their property-tax rate, which is set by the local government, homeowners can get their assessment lowered if they appeal to their local assessor.
One key to a successful appeal is fact checking the assessor’s work. About half of all successful appeals come from homeowners pointing out an error in the assessor’s description of the home, according to one property tax expert.
During the appeal process, which is similar to a less-formal court hearing, homeowners may present their case to several local officials or representatives. The simplest way to convince officials that a property has been incorrectly valued is to provide evidence of the sales price of homes that are comparable to the property being discussed. This should include square footage, amenities, and neighborhood characteristics. Sale documents and photos of the property in question, as well as the comparable properties also should be brought in.
Homeowners who have made improvements or substantial changes to the property should be cautious about appealing an assessment though, as it could have negative effects and actually increase the property’s value and, in turn, the property taxes.

If you are a buyer looking at homes in your area, be sure to ask your realtor® for the tax information of the neighborhood. Mello-roos and special assessments can vary greatly from one area to another even in the same city. You don’t want to be in escrow before you find out that the taxes are going to increase your monthly payments beyond your comfort zone.

Looking for a great buyers agent in the Bay Area? Give Julie Wyss a call at 408-687-2026.

Top 5 Characteristics Home Buyers Want in a Real Estate Agent

2011-07-06T13:49:00.000-07:00

Julie Wyss, Broker Associate

What do home buyer's want in a real estate agent?

1. Honesty and Credibility

Win them over with the truth!

2. Neighborhood Knowledge

Do your neighborhood homework!

3. Excellent Follow Through

You say it, you do it.

4. Organization

Keep it in order.

5. Good Listener

Everyone is unique. Treat them like it!

MARS' Loan Modification Protections Extend To Short Sales, Other Foreclosure Relief

2011-05-20T13:29:00.000-07:00

Rules protecting consumers from being taken by modification services also extend to short sale services and other forms of mortgage assistance, including some assistance offered by real estate agents.

Effective Jan. 31, 2011 modification assistance firms have been banned from collecting fees until a home owner agrees with a written foreclosure or modification plan approved by their lender or loan servicer.

The ban and other related disclosure and regulatory provisions are part of the Federal Trade Commission's (FTC) "Mortgage Assistance Relief Services (MARS) Rule", designed to curb fraud, scams and rip-offs in the distressed mortgage services industry.

While MARS news has been focused largely on the cottage industry of private companies offering modification services to consumers, the rule impacts all mortgage assistance relief services including those offering short sale services and other assistance.

Some real estate agents must comply

Laurie Janik, National Association of Realtors' general counsel, recently reviewed the new rule at a forum during the Realtors 2011 Midyear Legislative Meetings & Trade Expo in Washington, D.C. and put on notice, real estate agents who provide short sale services, according to a recent DSNews report.

"As the leading advocate for homeownership, NAR supports efforts to ensure that mortgage assistance relief services truly benefit consumers. Nevertheless, NAR has some concerns about the rule and its application to real estate professionals involved in short sales transactions," Janik told DSNews.

But it's not just short sales. The official Federal Register Vol. 75, No. 230 rendition of the rule is pretty clear, as federal regulations go.

"The Rule is intended to regulate for-profit providers of mortgage assistance relief services...defined as 'any service, plan, or program, offered or provided to the consumer in exchange for consideration, that is represented, expressly or by implication, to assist or attempt to assist the consumer' in negotiating a modification of a dwelling loan…stopping, preventing, or postponing a foreclosure or repossession; or obtaining one of several other types of relief to avoid delinquency or foreclosure... (including) a forbearance or repayment plan; an extension of time to cure default, reinstate a loan, or redeem a property; a waiver of an acceleration clause or balloon payment; and a short sale, deed-in-lieu of foreclosure, or any other disposition of the property except a sale to a third-party that is not the loan holder."

One question is obvious: If a company doesn't charge for mortgage relief services, does the MARS rule apply?

"Most of the local short sale specialists advertise this as a free service to our sellers and understand that the cost of the professional negotiations will be paid out of the hired Realtor's commission," said Julie Larsen Wyss, broker associate, Intero Real Estate Services, Los Gatos, CA.

Janik acknowledged to DSNews that real estate agents who do offer fee-based services must not take upfront fees, as the law requires, but she also voiced concern that other MARS rules could also apply to real estate agents helping with short sales, including rules that touch on disclosures, advertising, communicating with clients, negotiating a short sale or arranging for a short sale negotiation.

"NAR is discussing with the FTC some language in the second and third disclosures as well as some other requirements found in the MARS rule," Janik said, according to DSNews.

"The FTC is considering possible options to help make the rule more applicable to a real estate brokerage…when they are performing traditional real estate functions in a short sale transaction," she added.

A history of fraud

Too many foreclosure rescue and loan modification services became a festering outgrowth of the mortgage market meltdown that left many home owners underwater with a mortgage balance greater than the value of the home.

The operations often promised to be a go-between and negotiate with the lender to obtain a modification short sale or some other relief from foreclosure. Some also duped home owners into believing they were affiliated with real government assistance programs.

Now, without up-front fees, many fly-by-night operations don't have the capital to resume operations.

MARS does allow licensed attorneys to charge advance fees, provided the fees are held in an escrow (trust) account and provided the attorney complies with state laws and regulations related to the federal rule.

MARS rules are disclosure heavy. The rules say mortgage assistance relief services must disclose:

• The proposed cost of the service.

• That consumers have a right to reject any offer from the service or the lender without charge and can stop doing business with the service company at any time.

• That the service is not affiliated or associated with nor approved by any government entity.

• That the lender can reject any change to the home owner's loan.

• That home owners could lose their home and damage their credit rating if they follow a service's advice to stop paying their mortgage.

If services are offered or negotiated in Chinese, Korean, Spanish, Tagalong or Vietnamese, the disclosures must also be provided in the same language.

Foreclosure rescue and loan modification services are also prohibited from making any false or misleading claims about their services, including claims about results, government affiliation; the consumer's financial obligations; refund and cancellation policies; legal representation and the amount of savings a consumer can expect, among others.

Home owners should also check with their state rules for the services. Some states have stronger regulations than the federal MARS rule.

by Broderick Perkins, Deadline News Group, May 18, 2011

Take 2 with Intero as They Sponsor Los Gatos Music in the Park

2011-05-19T08:08:00.000-07:00

Intero Real Estate is proud to be one of the sponsors of this summer's Los Gatos Music in the Park. Join us on Sunday, July 24th for an evening of rock, pop, R&B and hip-hop music with Take 2. Make an evening of it: pack your lawn chairs, a picnic dinner and your best hip-hop moves.

The Music in the Park 2011 series begins June 10th from 5-7pm at the Civic Center lawn.

Break Out the Mr. Clean (or Mr. Green)

2011-05-16T09:40:00.000-07:00

At some point in the past, somebody decided spring meant scrubbing your home from top to bottom.

According to Wikipedia, in North America and northern Europe, the custom found a practical value due to those regions' continental and wet climates. During the 19th century in America, prior to the advent of the vacuum cleaner, March was often the best time for dusting because it was warm enough to open windows and doors (but not warm enough for bugs to be a problem), and the high winds could carry the dust out of the house. (Now that's my idea of the way to dust!)

For the same reason, modern rural households often use the month of March for cleaning projects involving the use of chemical products which generate fumes.

But whatever the origin, many of us undergo the sometimes daunting task of spring cleaning. Unless you are Monica Gellar from Friends who's idea of a good time is vacuuming her vacuum, you probably don't do a dance of joy at the idea of a major cleaning overhaul. But here are a few tips that can help make it more manageable.

Create a List

Make a list of each room
Bulletize what needs cleaned and organized by room

Divide the Tasks

Everyone in the family should help
Make it fun by creating a friendly competition

Have Supplies at the Ready

Hit Target in advance and stock up on gloves, pails, rags, and other supplies (the most crucial being chocolate...)

Clean One Room at a Time

Tackle the dirtiest room first and work your way down

When you are all done, be sure to celebrate the fact that you have a full year before you have to get down and dirty again!

Curb Appeal Can Curb Buyer Enthusiasm

2011-05-11T15:02:00.000-07:00

A large percentage of home buyers decide whether or not to look inside a house or take it seriously based on its curb appeal—the view they see when they drive by or arrive for a showing. You can help make sure they want to come inside your house by spending some time working on the its exterior appearance.

It's difficult to look at our own house in the same way that potential home buyers do, because when we become accustomed to the way something looks and functions, we can't see its faults. Decide right now to stop thinking of the property as a home. It's a house—a commodity you want to sell for the highest dollar possible.

Curb Appeal Exercise

The next time you come home, stop across the street or far enough down the driveway to get a good view of the house and its surroundings.
1.What is your first impression of the house and yard area?
2.What are the best exterior features of the house or lot? How can you enhance them?
3.What are the worst exterior features of the house or lot? How can you minimize or improve them?

Park where a potential buyer would and walk towards the house, looking around you as if it were your first visit. Is the approach clean and tidy? What could you do to make it more attractive?

Take photos of the home's exterior. If you have a digital camera, view the color versions first, then remove the color and look at it in black and white, because it's easier to see problems when color isn't around to affect our senses.
Make a list of the problem areas you discovered. Tackle clean up and repair chores first, then put some time into projects that make the grounds more attractive.

•Kill mold and mildew on the house, sidewalks, roof, or driveway.
•Stow away unnecessary garden implements and tools.
•Clean windows and gutters.
•Pressure wash dirty siding and dingy decks.
•Edge sidewalks and remove vegetation growing between concrete or bricks.
•Mow the lawn. Get rid of weeds.
•Rake and dispose of leaves, even if your lot is wooded.
•Trim tree limbs that are near or touching the home's roof.
Don't Forget the Rear View
Buyers doing a drive by will try their best to see your back yard. If it's visible from another street or from someone's driveway, include it in your curb appeal efforts.

Evening Curb Appeal

Do your curb appeal exercise again at dusk, because it isn't unusual for potential buyers to drive by houses in the evening.
One quick way to improve evening curb appeal is with lighting:

•String low voltage lighting along your driveway, sidewalks, and near important landscaping elements.
•Add a decorative street lamp or an attractive light fixture to a front porch.
•Make sure lighting that's visible through front doors and windows enhances the home's appearance.

Landscaping Decisions

There are times that adding elements to your landscaping can improve curb appeal, but there are other times when removing something is even more effective.

For example, we had a listing for a large brick house with large white columns. Tall evergreens, planted in front of each column, had grown taller than the roof. They obscured the columns and windows and made it difficult to see the front of the house.

We suggested that the owner remove them. She trimmed them back, but it didn't do the trick—they were unattractive and still kept potential buyers from seeing the true character of the house.

I sold the house to a couple who could see past the trees. One of their first tasks after closing was to yank them out of the ground, instantly boosting the home's curb appeal.

Most buyers cannot visualize changes, and often won't take a second look at a house if the first look doesn't appeal to them. Home buyers who can visualize changes, and are prepared to make them, expect you to reduce the price of the house to compensate for the work they plan to do.

A Few Curb Appeal Tips

•If you can budget it, a fresh paint job does wonders for a dingy house. Drive around your town to find color schemes that are appealing.
•Install a more attractive front door, maybe something with leaded glass inserts.
•If you can't justify the cost of a new door, consider replacing plain doorknob hardware with something more attractive.
•If new hardware is beyond your budget, repaint or stain the door and polish the hardware.

If you brainstorm, you'll find that there's a solution to most problems—one that lets you stay within your budget. The trick is to find the areas where improvements are needed, then work on them as best you can.

Source: Janet Wickell, former About.com Guide

Landmark Consumer Protection Law Heavy With Strong Mortgage Rules

2011-05-08T19:44:00.000-07:00

By Broderick Perkins

Posted: 10/13/2010 11:39:36 AM PDT

Known as "Wall Street Reform" the new Restoring American Financial Stability (RAFS) Act of 2010, in part, eliminates many of the questionable mortgage lending practices that helped spark the financial meltdown.

President Obama signed the landmark consumer protection legislation earlier this year to, among other efforts, create a new Federal Reserve-based watchdog, the Consumer Financial Protection Agency.

The agency is designed to ensure consumers get clear, accurate information necessary to shop for mortgages, credit cards and other financial products. It also protects consumers from hidden fees, predatory terms and deception in a host of transactions.

In September, Obama appointed populist Elizabeth Warren as his assistant to implement the new law and as Special Advisor to the Secretary of the Treasury to help roll out the agency.

In the wake of the worst recession to hit the nation since the Great Depression, Warren previously served as chair of a Congressional oversight panel created to investigate the U.S. banking bailout (formally known as the Troubled Assets Relief Program or TARP).

She has long advocated the creation of a new Consumer Finance Protection Agency.

"The Dodd-Frank Act (RAFS Act is also known as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) addresses critical gaps and weaknesses of the U.S. regulatory framework, many of which were revealed by the crisis," said Federal Reserve Chairman Ben S. Bernanke during a regulatory reform implementation hearing before the U.S. Senate's, Committee on Banking, Housing, and Urban Affairs.

"The Federal Reserve is committed to working with the other financial regulatory agencies to effectively implement and execute the act, while also developing complementary improvements to the financial regulatory framework," Bernanke testified.

John Tripp, a real estate agent and mortgage broker with Foundation Trust Mortgage Securities in San Jose said the new law is so far reaching it could take from one to three years before all the provisions are fully implemented.

However, much regulatory reform for the mortgage industry is already underway, but the Federal Reserve is charged with completing more than 50 RAFS Act rulemakings amid some 250 projects necessary to fully implement the new law.

The so-called "Wall Street Reform" is laden with plenty of provisions for people who live on Main Street.

"Frankly, I don't know how consumers got by without these laws in place up until now and it's beyond me as to why the laws and guidelines were so loosely structured up until now," said Julie Larsen Wyss, a broker associate with Intero Real Estate Services in San Jose.

Planned are a national consumer complaint hotline so consumers will have, for the first time, a single, toll-free number to report problems with financial products and services; a new Office of Financial Literacy, and a new U.S. Department of Housing and Urban Development (HUD) Office of Housing Counseling to boost homeownership and rental housing counseling.

"For the consumer there will be more emphasis on counseling and education in financial transactions for obtaining credit, using credit and changed circumstances, like unemployment, financial hardship, etc.," said Tripp, also a past president of the Silicon Valley Association of Realtors.

"Good or bad, it will be harder for marginal financial qualified consumers to obtain credit or a loan," Tripp added.

The new law governs banks and credit unions with assets of over $10 billion and all mortgage-related businesses (lenders, servicers, mortgage brokers, and foreclosure scam operators), payday lenders, and student lenders as well as other non-bank financial companies, including debt collectors and consumer reporting agencies.

Banks and credit unions with assets of $10 billion or less will be examined for consumer complaints by the appropriate regulator.

"On this, all I can say is that the testing and knowledge guidelines (for mortgage lenders, banks and other financial institutions) are brutal. We are required to know details from underwriting to appraisals and everything in-between," said Wyss, also a broker associate at North Star Mortgage in San Jose.

She added, "Only the dedicated mortgage originators will be in the business by the end of this year.....as it should be."

Among its provisions, the RAFS Act includes help for homeowners and home buyers, including:

-- Prohibiting unfair lending. RAFS prohibits "yield spread premiums" and other financial incentives that encourage lenders to steer borrowers to more costly loans and pre-payment penalties that trapped so many borrowers in unaffordable loans.

-- Establishing penalties for irresponsible lending. Lenders and mortgage brokers who don't comply with new standards will be held accountable by consumers for as much as three-years of interest payments and damages plus attorney's fees. The law also protects borrowers against foreclosure for violations of these standards.

-- Expanding consumer protections for high-cost mortgages. The new law expands the protections available under federal rules on high-cost loans by lowering the interest rate and the points and fee triggers that define high cost loans. Also, lenders must disclose the maximum a consumer could pay on a variable rate mortgage, with a warning that payments will vary based on interest rate changes.

-- Requiring lenders to ensure borrowers' ability to repay. The act establishes a simple federal standard for all home loans: institutions must ensure that borrowers can repay the loans they are sold.

-- Requiring additional mortgage disclosures. Lenders must disclose the maximum a consumer could pay on a variable rate mortgage, with a warning that payments will vary based on interest rate changes.

-- Emergency mortgage relief. Based on a successful Pennsylvania program, the new law provides $1 billion for bridge loans to qualified unemployed homeowners with reasonable prospects for reemployment to help cover mortgage payments until they are reemployed.

-- Foreclosure legal assistance. The law authorizes a HUD-administered program for making grants to provide foreclosure legal assistance to low- and moderate-income homeowners and tenants related to homeownership preservation, home foreclosure prevention, and tenancy associated with home foreclosure.

-- Free credit scores. Consumers will get free access to their credit score if their score negatively affects them in a financial transaction or a hiring decision. Credit scores are highly considered in mortgage applications.

"This is all a reminder of who we are as mortgage professionals, the rules that we must abide by, and how we are to manage our consumer's needs and wants," said Richard K. Miller, regional sales manager for Proficio Mortgage Ventures in Milpitas.

Miller says, given the scope of the new law, the mortgage industry will have to hunker down and learn the new ropes, but once all provisions are in place it should prevent another housing crisis from bringing down the economy.

"We, as the originators, spend enormous amount of time in selling, but we tend to spend little time explaining. These changes and more will affect our business but, in the future, there will be continued stability in the industry for the future leaders in our industry, as well as opportunity of homeownership for our consumers and clients," Miller said.

Real Estate Investing for Beginners

2011-05-08T19:03:00.000-07:00

by Broderick Perkins
DeadlineNews.Com

(09/01/2010) The real estate investment band wagon is rolling again, but try to hop aboard before you know how to hang on and you could end up under the wheels.

Savvy, experienced investors looking to buy low and sell high are always the first to hitch a ride when the housing market skids along the bottom but right now, others, maybe less experienced, are jumping aboard.

The number of buyers who plan to buy a home as an investment is more than double what it was a year ago, according to a recent Move.com Homeownership Survey.

"This latest Homeownership Survey validates what many had hoped to see in the housing markets -- affordable prices and ample inventories are restoring the appeal of real estate to investors," said Move, Inc.'s chief revenue officer, Errol Samuelson.

Relatively low list prices, an inventory of bargain-priced distressed properties and interest rates hovering at and below 4.5 percent, are all combining to bring existing and first-time investors to market.

"If you anticipate inflationary conditions in the future, investment property could be a good bet to hedge against it," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Real estate investments can pay off, but not without a lot of ground work.

• Buy your own home first. The general rule of thumb is that buying your own home will not only put a roof over your head, but also add to your insight beyond acquisition information. You'll learn not only how to buy, but you'll also get schooled in the true cost -- in time and money -- of property ownership.

With homeownership comes lessons in market conditions, financing, and property maintenance. You'll also get introduced to a host of professionals who could prove invaluable as your investment portfolio grows.

What's more, your first home could later become your first investmentproperty, a property in a market with which you are familiar.

There is one exception to the buy-your-own-home-first rule. If you live with Mom or Pop or the cost of your rental housing is low, stay put and purchase investment properties.

Just watch your cash flow -- the amount you hope to net each month after all your costs.

"No one knows better than a property manger true maintenance, repair and replacement costs, market rental values, tenant turnover, hidden liability costs, and the best areas to invest," said Andrea G. Caldwell a property manager with Century 21 Alpha in San Jose.

• Get professional help. In addition to a property manger for those buying investment properties, you'll also want additional professional help, an investment mentor and partner would could be a real estate agent, attorney or other investor who's been around the block a few times.

Seek referrals from friends, family, professionals you've previously hired and others you trust. Someone who already knows the ropes will come in handy when you are on the ropes. "Just be sure to hire a Realtor who is an aggressive negotiator, who will get your offer accepted," says short sale expert Julie Larsen Wyss, a broker associate with Intero Real Estate Services in San Jose.

Wyss says the professional should be particularly endowed with the ability to go toe-to-toe with investors who are often flush with cash.

"You need a fully underwritten loan approval, proof of additional funds in the bank for a down payment and the difference between the appraised value and the actual selling price. Be prepared to offer and pay over the asking price and appraised value, Wyss says.

• Go back to school. Turn to the Internet, libraries of books by reputable authors, successful, credible investment groups, college and university level courses, even your state's real estate license program. You don't have to actually get a license, but you can become just as educated as a licensed agent with their curriculum.

• Learn your investment market. A home in one market could give you rental income to offset all your costs, but still not appreciate. Another home could fail to bring home the bacon but appreciate over the long haul to offset long term carrying costs.

Just because the investors are back in town, doesn't guarantee you a real estate investment windfall, especially it, say, rents are down.

Lower rents can mean poor cash flow and that could force you to count on appreciation, an illusive ingredient in today's housing market.

"If you find a well-priced property, located in a healthy rental market and are able to manage and monitor the property and maintain a positive cash flow from the onset for a unit used strictly for income purposes, rather than being held with the expectation of price appreciation, this could be a good time to become a landlord," Osborne said.

Short Sale Transaction a Tall Order

2011-05-08T18:50:00.000-07:00

A short sale could be a better deal than bankruptcy or foreclosure, but it can also sap your time, wither your credit score and well, cost you money.

To produce a down and dirty primer on short sales, we went to Intero Real Estate Services in Silicon Valley and checked in with other real estate and consumer professionals to get the experts to show us -- and you -- the ropes.

A short sale occurs when your lender agrees to accept a lower price on your home than the current mortgage balance, provided you meet the lender's requirements and have a qualified buyer.

"Search for a buyer, especially those who have expressed an interest in buying short sale properties. The buyer must be willing to deal with extended deadlines and additional demands made by your lender," said Julie Larsen Wyss, a RealtyU graduate and holder of its new Certified Short-Sale Professional (CSP) designation.

"Your lender is the key to a successful short sale transaction and it will need to feel confident in the new buyer," added Wyss, also a real estate broker associate with Intero Real Estate Services in San Jose, CA. She's also founder/broker of Vista Mortgage Solutions.

While recent cash incentives for you and your lender make short sales more enticing these days, incentives alone won't get the job done.
To go the distance on a short sale, you must document you are a hardship case -- but not because you falsified the original loan documents.

It can be a win-win scenario -- the bank reduces a portion of "bad debt," avoids foreclosure costs and keeps the home occupied, while you shed a housing payment you can't afford.

"If done right, the short sale is a winning proposition for all, including the lender because the costs involved are certainly lower than that of foreclosing," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Don't come up short, prove your case.

To prove your case, you'll need to spend some time on a cover letter explaining your hardship and provide full financial disclosure; the original purchase contract; a balance sheet of your income and expenses; asset statements, proof of income; bank statements; two years of tax returns; and a professional who knows the ropes.

"Simply stating, 'My house is worth less than the loan and I don't want to pay any more,' will not be acceptable. Lenders would rather foreclose than develop a reputation as an easy target," said Zdenka Mahan, a real estate agent with Intero in Saratoga, CA.

Along with the required documentation, you stand the best chance of getting through the two- to seven-month short sale ordeal if the home is marketable; the second mortgage holder (if there is one) gets a cut or otherwise goes along with the deal; the same lender holds all mortgages; and there is enough time before foreclosure (at least about 4 months).

"A major reason why a short sale fails is the length of time it takes to get the lender's approval. Long delays frequently cause the buyer to drop out of escrow and buy another home," said Mahan, a short-sale experienced "Downtown San Jose (CA) Specialist."

Buyers can also suffer lost opportunity

"Buyers risk the opportunity cost of losing out on another property if they are tied up in a long, protracted short sale negotiation which could potentially go on for months," said Osborne.

"The burden to make the deal work falls largely on the seller's shoulders and their ability to do their homework up front, making things as easy as possible for a potential buyer," Osborne added.

A short sale works in your favor if your mortgage debt is secured by your home and was used to acquire, construct or substantially improve your home.

Short sales that stop short

Wyss says don't count on a short sale if you can't prove hardship; you are current on your mortgage; are in bankruptcy; have recently completed a cash-out refinance or have a lien with a third party.
Because a short sale forgives a portion of the debt owed, that portion could be considered as taxable income and you should seek the advice of a tax attorney, certified public accountant, enrolled agent or other person fully schooled in the tax ramifications of a short sale.

According to FICO, the leading credit scoring system provider, there also may be some credit score implications.

While a short sale won't be as damaging as a foreclosure or bankruptcy, expect some negative impact. Variables include how the lender reports the deal and what's already on your credit report.

Negatives compound.

Consumer Reports' Money Advisor suggests that before you enter a mortgage modification or short sale, ask how the lender will report it so you can weigh your priorities.

If you need the break, take the deal sooner rather than later, even if it will hurt your credit score. Negatives on your credit file are removed after seven years. The sooner you get the clock ticking, the better.

Get a short sale team for the long haul

Wyss says the best approach to a short sale is by contracting with a real estate professional familiar with the transaction. As well as RealtyU's CSP designation the National Association of Realtors offers a Short Sales and Foreclosure Certification Program (SFR).

However, the designations aren't a guarantee you've found the most experienced short sale agent. Some agents without the designation are just as experienced, if not more so. Others are less experienced. Get referrals from friends, family members, co-workers and others you trust who have worked with an agent experienced in short sales or have a close friend with a satisfactory experience.

"A real estate agent needs to put together the most comprehensive short sale proposal possible to minimize the back-and-forth delays," said Mahan.

You may also need legal and tax counsel. A solid professional team is best for determining the viability of the sale, assembling the package and pricing and listing the property to find a buyer.

Wyss says determine your home's marketing position from comparative market analyses (CMA) used to price your home.

"If your home's value is significantly less than debt tied to the property, you are a candidate for a short sale. Position your home so that it sells quickly, but at a high enough price so the lender will agree to the terms," says Wyss.

Keep in mind, you don't control the final decision.

You aren't selling a home on the open market so much as you are selling your case to the lender.

"Lenders are under no obligation to accept a short sale and the terms will be examined closely by the lender," Wyss added.

Written by Broderick Perkins
February 18, 2010

Seven Sillies That Sap Home Sales

2011-05-08T16:55:00.000-07:00

At last count, nationwide, new home sales were down more than 12 percent and resale home sales down even more -- 27 percent.

In part, it's the economy. The rate of unemployment nationwide remains at just under 10 percent and some locales are still in double digits.

In the Gulf Coast area, blame the oil disaster for washing away more sales.

And, unless your state is one of the few with a home buying tax credit, the end of the federal tax credit also took a bite out of home sales.

Some of the home sale depression, however, comes from home sellers who still just don't get it and make mistakes that tank the deal.

To find help for sellers we went to Silicon Valley where, even as home sales dropped nearly 9 percent in August, home prices are up nearly 12 percent a year ago.

Some sellers, apparently, are making all the right moves.

We sought help from Julie Larsen Wyss, a hard core Silicon Valley Intero Real Estate Services broker associate in San Jose, CA.

Wyss, also a broker associate at North Star Mortgage Associates and short sale specialist offered these mistakes sellers ought not make if they want to move their home off the list of homes that languish unsold.

Pricing too high. A high listing price will cause some buyers to lose interest sight-unseen. It may also lead other buyers to expect more than what you have to offer. Overpriced homes tend to take an unusually long time to sell, ultimately selling at a lower price.

"Every seller obviously wants to get the most money for his product. Ironically, the best way to do this is NOT to list your home at an excessively high price," Wyss advises.

Mistaking refinance appraisals for the market value. Lenders often estimate the value of homes at a higher level than it's actually worth to encourage refinancing. Ask your real estate agent for the most recent information regarding property sales (similar to yours) in your community.

"This will give you an up to date and factually accurate estimate of your property value," she said.

Forgetting to showcase your home. When selling your home, make it look as pleasant and move-in-ready as possible. Make necessary repairs. Clean. De-clutter.

Says Wyss, "A poorly kept home in need of repairs will surely lower the selling price and will even turn away some potential buyers. In spite of how frequently this mistake is addressed and how simple it is to avoid, its prevalence is still widespread."

Using the "hard sell" while showing. "Don't try haggling or forcefully selling. Allow prospective buyers to comfortably examine your property," Wyss said.
Buying a house is always an emotional and difficult decision. Instead, be friendly and hospitable. A good idea would be to point out any subtle amenities and be receptive to questions.

Trying to sell to "looky-loos." A prospective buyer who shows up because they saw a for sale sign likely isn't interested in your property. Buyers who don't come through a real estate agent, typically are six to nine months away from buying. They just want to see what's available. Chances are, they still have to sell their house, haven't been to a lender and may not be able to afford a home yet.

"Your real estate agent can distinguish real potential buyers from lookers because they will take the time to determine a prospective buyer's savings, credit rating, and purchasing power. If your agent fails to do so, you should investigate on your own, avoid wasting time investigating and questioning on your own, and get a new real estate agent," Wyss said.

Being ignorant of your rights and responsibilities. Know the details of the sales contract. They are legally binding documents that can be complex and confusing. Know your responsibilities before signing the contract. Can the property be sold "as is"? How will deed restrictions and local zoning laws affect your transaction? There's much more to know.

Wyss said, "Not knowing can end up costing you a considerable amount of money."

Signing a listing contract with no escape clause. Hopefully you will choose the best real estate agent. However, stuff happens. Perhaps you misjudged your agent. Perhaps the agent has other priorities. In any case, you should have the right to fire your agent. You are the boss. He or she is your employee. You should also have the right to select another agent. Many real estate companies will simply replace one agent with another one from the same company, without consulting you.

"Take control before signing a real estate listing contract," Wyss said.

Continue reading on Examiner.com: Seven selling sillies that sap home sales - National real estate news | Examiner.com http://www.examiner.com/real-estate-news-in-national/seven-selling-sillies-that-sap-home-sales#ixzz1LoAZPSA6