Real Estate Insights Blog

Before you make your final buying or selling decision, you should have the home inspected by a professional home inspector. A thoroughly conducted home inspection can alert you to all sorts of potential problems with a property and enable you to make an informed decision regarding the purchase and negotiation of any necessary repairs.

But, not all home inspectors are as knowledgeable or thorough as they should be. So to help you choose a well qualified inspector, here are some of the top recommended questions to ask prospective home inspectors:

As we enter our third straight year of a real estate market brimming with “short sales” it should be no shock to hear that these sales have become the source of much pain and frustration for many buyers and sellers alike. Just ask any realtor today and I’m sure that they will do anything to dissuade a buyer from pursuing a short sale transaction over an REO or traditional sale, even if the buyer has a chance to pick up the property at a great deal.

In fact, I once heard that less than 10% of all listed short sales actually close escrow successfully – this means that there is a 90% chance that a short sale will fail.  Now while I can’t admit that I truly believe that 9 out of 10 short sales are doomed, our offices have successfully closed well over 90% of the short sales that we have listed, but I can admit that there are some pretty big challenges that can lie in the way of a successful closing.

Here is a list of just some of the top reasons why a short sale may not make it to closing:

10. Seller will not qualify for a short sale as they have not suffered a true “financial hardship”

9. Seller is unwilling to cooperate with their lender’s requests to provide personal documentation

8. Seller may incur State or Federal income tax consequences, or even face legal liability from a short sale that may stop them from completing the transaction

7. The listing agent hired by the seller is inexperienced in handling short sale transactions – all lenders have different procedures for handling short sales

6. The Buyer is impatient and unwilling to purchase the Seller’s property in “as-is” condition and the seller is unable to pay for any repairs out-of-pocket since they are short selling their home

5. Seller’s lender may have hired a Mortgage Servicing Company that has ability to make decision regarding short sale approvals, and they may get paid more for managing the default servicing (i.e. the foreclosure) than the short sale.

4. The short sale may involve two different banks in which the second mortgage holder will not settle for the maximum contribution allowed by the first mortgage holder, and often the buyer is unwilling to make up the difference

3. The Seller may have additional liens filed against the property that his lenders will not cover, such as HOA dues, default property taxes, Personal liens and judgments.

2. Seller’s lender offers seller a loan modification or forces seller to try a modification trial period before approving a short sale

1. The seller’s bank(s) just couldn’t handle the request from the homeowner to grant a short sale in time to stop the foreclosure, they are just too overwhelmed and do not have the work force to handle the volume of distressed borrowers

Of course every real estate transaction has its own unique set of challenges, it’s just that short sales tend to have the deck stacked against them more times than non-short sale transactions. And this doesn’t mean that under certain circumstances that a buyer cannot get an incredible deal by purchasing a short sale, but the more informed and prepared the buyer is the better are the chances of making it to the closing table.

Although the best time for individuals to purchase a home will mainly depend on their own personal living and financial situations, the present housing market is offering some great opportunities for homebuyers that have not existed for years. 

But how do you really know that now is a great time to buy a home? Here are just some of the many factors that are currently influencing the current Buyer’s market:

1.) Home prices are very competitive

• Existing home sales in 2009 have turned the corner and have proven that our market is stabilizing, and with Bay Area median home prices down around their 2001 levels housing inventory has decreased 100% from this time last year and has returned to healthy long-term ranges  
• Home prices in many communities are still down 25-40% over their 2005 peaks
• In some areas you might find a home selling for less than it sold 10-15 years ago!
• And with the abundance of foreclosures and short sales lined up for 2010, banks are willing to negotiate in order to get these properties off their books - good deals are everywhere!

2.) Homeownership offers tax incentives

• Owning real estate and paying mortgage interest is still the best income tax deduction you can have
• The Federal Government has extended and improved the First Time Homebuyer Tax Credit, for a limited time qualifying buyers can receive a tax credit up to 10.0% of the sales price (maximum credit of $8,000) while previous homeowners (move-up buyers) can qualify for a tax credit up to $6,500.
• The tax credit will expire, you must have your sales contract signed by April 30^th and you must close on the purchase no later than June 30th!

3.) The current interest rates associated with home loans have fallen below 40-year lows with 30 year fixed rate mortgages offering 4.5% to 5.0%

• Surprisingly the rates offered right now on conforming 30 year fixed rate loans are posting some of the lowest rates ever recorded since Freddie Mac started their mortgage interest rate surveys back in the 1970's.
• Over the past 36 years, there have only been three other years when interest rates were even as close as low as it is today – back in 2003, 2004 and 2005, which was during the last housing boom.
• There are still many loan programs for deserving buyers - Fannie Mae, Freddie Mac, FHA, CalHFA all offer loans up to $729,750 at phenomenal rates with little to nothing down (0% to 10%)

4.) Will rates go even lower?  Don’t count on it!  

• At the end of 2008 the Federal Government implemented a program that focused on keeping interest rates low on conforming 30 year fixed loan programs, more specifically the US Treasury has been actively purchasing Fannie Mae and Freddie Mac mortgage-backed securities (MBS) in order to artificially keep rates low, but their trillion-dollar plan is drawing to end and it is expected they will stop these purchases sometime by the end of first quarter 2010. So without the Treasury actively purchasing MBS there will be no where for rates to go but up.

5.) Real estate is still a worthy long-term investment

• The 38-year annual appreciation rate for California real estate is 7.75 percent.
• New housing starts in California are down 70% from their 2006 levels – less supply on the market will lead to faster home appreciation
• Compared to other parts of California, the Bay Area housing market is – and always has been – even more stable and dependable. Our local market has long been characterized by an increasing supply-demand imbalance: Silicon Valley continues to enjoy a booming economy while limited land and environmental concerns restricts the development of new housing tracts.
• San Jose ranks third, and San Francisco ranks fourth among the top 10 best performing real estate markets in the nation, according to Forbes.

Hot off the pressess is a list of the top 10 most innovative and exciting new home products from the unofficial "what's new guru" of improvement Don Logay. He has compiled his list from this year's round of trade shows and trade publications to highlight only the most intriguing new concepts and gadgets that are affordable yet make life a little bit easier.

10. INVISILED Low Profile Accent Lighting Tapes

Create dramatic indirect lighting effects almost anywhere with strips of miniature LED lights. INVISILED by WAC Lighting offers five basic colors (white, amber, red, blue, and green). One- and 5-foot peel-and-stick or screw-mounted sections can be cut at every inch. New Palette system offers continuous red-green-blue changing colors with control for speed and brilliance. Cost ranges $75 to $90 per foot. Plug-in drivers cost $60 to $120. Maximum spans from 25 feet to 40 feet. For information and retailers visit www.waclighting.com or call 1-800-526-2588.

9. One2Flush Dual Flush Conversion Kit

Saving water is as “easy as 1, 2…” with the brand new award-winning One2Flush toilet conversion kit. In about 20-minutes, you can quickly and easily turn a standard water-guzzling tank-type toilet into an eco-friendly, high-efficiency, water-saving dual flush model. University tests prove One2Flush — with it’s “half flush for liquids and full flush for solids” — reduces water use by more than 38 percent and can save an average family over 10 percent on monthly water bills. Fits all standard two-piece toilets, 1.6-gallon flush and up. Available nationwide at most hardware stores (Ace, True Value, Do-It-Best). For more information visit www.one2flush.com

8. Telezapper / Blocks Telemarketer Calls

Get rid of annoying telemarketer calls once and for all. This nifty little device plugs into your phone cord and only intercepts computer-generated calls — indicating this number is disconnected — which automatically takes you off their list. Other incoming calls are not affected. When first introduced, millions were sold. Ever since, this product has been “flying under the radar.” Additional info at www.telezapper.com.

7. Liquid Stainless Steel Brush-on Paint Kit

Want to give your dingy, old kitchen appliances a gleaming stainless steel finish? Award-winning Liquid Stainless Steel is the world’s first brush-on/roll-on “real stainless steel” finish designed to give older stoves, refrigerators and dishwashers a new lease on life. Complete kits are easy to use and update an average size refrigerator for $49 or a range and dishwasher combo for only $19.95. Available at paint and hardware stores nationwide. Order online at www.liquidstainlesssteel.com or call 1-800-650-5699.

6. Dead Bolt Secure Entry Lock Protection

Burglars with “bump keys” can open virtually any standard lock (deadbolt or otherwise) with ease. Until now, the only defense was expensive high-end, pick-proof locks. The new award-winning Dead Bolt Secure offers a low-cost, ingenious solution that makes standard deadbolt locks (with a lever or twist-type inside handle) virtually bump-key and pick-proof. It even blocks entry for anyone with a legitimate key. How? A simple spring-loaded device that installs in minutes, flips down to prevent a dead bolt’s handle from turning — no matter how it is being unlocked. The best part? It only costs $9.95. Order online at www.arclink.net.

5. Schlage Keyless Entry Locks and Wireless LiNK Option

Tired of fumbling with keys? Schlage electronic keypad entry locks and deadbolts — using four-digit access codes — are now both practical and affordable, offered in the $120 to $150 range. Company also offers Schlage LiNK, the first and only DIY wireless system allowing 24/7 remote control for keypad locks and other home management functions via the Internet. Lock or unlock doors from anywhere, add/remove access codes and control lights. Available at Lowe’s, Radio Shack, and www.amazon.com, or visit www.consumer.schlage.com for retailers.

4. Aspect Peel and Stick Metal Wall Tile

Create a designer kitchen “look” quickly, easily and affordably with new Aspect peel-and-stick 3-inch by 6-inch metal tiles. Offered in three popular brushed finishes (stainless, copper, and bronze) for dramatic and dazzling accents, whether a gleaming over-the-counter backsplash or an entire luxurious floor-to-ceiling wall. Aspect tiles adhere to any sub-surface (drywall, plaster, paneling, and old tiles) and are offered with horizontal or vertical graining. Gives kitchens and baths a fresh, new look. Box of eight tiles covers 1-square-foot and costs about $20. The only limitation is your imagination. Available at some Lowe’s stores or order online at www.aspectideas.com.

3. Easy Crown Molding by EZ-A-PEEL

Budget-minded? Not up for hammering and sawing? Renting? Add elegance to almost any room with “peel-and-stick” Easy Crown Molding. Kits offer quick and easy installation and an inexpensive alternative to fancy millwork. Installs in about one hour and can be left white or painted to match décor. Offered in three popular crown molding profiles for various sized rooms with 16 inside and four outside corners included. Kits start at under $50. To order call 1-888-EZAPEEL (1-800-392-7335) or visit www.easycrownmolding.com.

2. Evoba Modular Wood Ceiling System

Turn any room into a stunning showplace with the architectural impact of a rich “coffered” wood ceiling. Prefabricated Evoba system (that’s “Above” spelled backwards), offers the warmth and beauty of real wood without the cost of custom millwork. Available as a suspension or surface mount system, in a variety of wood species and finishes, at $12 to $30 per square foot. It’s affordable-chic that rivals the elegance of any Euro-mansion or lavish boardroom. Available at www.acpideas.com.

1. Giani Granite Countertop Paint

Got a kitchen countertop that’s seen better days? Laminate chipped and discolored? Solid surface counter stained and scratched? Giani is the world’s first granite paint kit for countertop makeovers. Get the premium “look” of granite at a fraction of the cost — with lots of extra benefits too. Water-based paint kits come in five realistic-looking color combinations and include everything needed to go “granite” in three easy steps in 24-hours or less. One $39.95 kit covers 35 square feet (16 running feet of 24-inch wide counter). Available at paint and hardware stores nationwide. Visit www.GianiGranite.com or call 1-800-650-5699.

For more information on Don Logay please visit his website at: http://donlogay.com/

San Jose is a fantastic place to be for the Holidays and this year will be no exception. Choose from an abundant number of activities, from ice skating under the stars at San Jose Downtown Ice, to walking through Christmas in the Park, to San Jose’s own Christmas parade, to Christmas performances at San Jose’s great theaters. No matter what you’re looking for you’ll find great shopping, wonderful films and plays, winter activities, and great places to eat.

Here are the top 5 things to do this Christmas in San Jose:

1. Visit Christmas in the Park: http://www.christmasinthepark.com/displays/

2. The San Jose Holiday Parade is almost here and there are many new additions that are sure to delight fans! Some of our special guests include Cirque du Soleil, the EriAm Sisters and The Peanuts, all who are making their way to San Jose to share in the magic of Adventures in Toyland. Try the San Jose Christmas Parade - http://www.sanjoseholidayparade.com/overview.htm

3. Catch Ballet San Jose's production of The Nutcracker http://www.balletsj.org/

4. Go ice skating in Downtown San Jose - http://www.sjdowntown.com/downtownice.html

5. Catch some Christmas flicks at the Camera 12 Cinemas in downtown - http://www.cameracinemas.com/index.shtml

Other things to do include trips to Santana Row, a fun place to walk a few miles away from downtown San Jose (note: the shops will probably be closed on Christmas). And the Winchester Mystery House is just across the street.

http://www.santanarow.com/

http://www.winchestermysteryhouse.com/

For more information and a complete list of activities try these websites:

View the official San Jose City guide at: http://www.sanjose.org/visitors/events/dates.php?thru=30

If you’re in Downtown San Jose for the Holidays then visit: http://www.sjdowntown.com/Calendar.html

Heading into 2010 the national unemployment rate is at 10.2% (California’s rate even higher) and still climbing, foreclosure activity is finally decreasing, a large volume of ARM resets are looming, and banks have yet to release an unknown volume of foreclosed homes onto the market. But are things really this bleak…I suggest not.

There are positives looking forward, the first time homebuyer tax credit was just extended and improved to include previous homeowners, the temporary loan limits from 2009 have been extended into 2010, and the government is still sticking with their mortgage backed security purchase program that is keeping interest rates at incredible levels. But there are definitely some unknown factors that will affect our housing market in 2010.

The number one anticipated factor to affect our market this coming year is another anticipated round of foreclosures sure to flood our local markets and kill any price stability we may have gained through the end of this year. But, although it has been speculated that banks have an insurmountable stockpile of foreclosures on their books, I don’t believe that we’ll see the same affects on the housing market that foreclosures had in 2008.

Market conditions for one should keep banks from flooding the markets with their inventory of REO properties. While local market conditions may seem plausible for banks to begin releasing their stockpiled foreclosure inventory, they may not be willing to release them until broader housing markets show better signs of recovery.

Other reasons may be more logistical in nature… I think it’s more than obvious that banks (that are left) have a lot on their plates at the moment. You may recall that some nationally (some internationally) held banks have recently consolidated with failing banks over the past year (Bank of America acquiring Countrywide, Chase acquiring Washington Mutual, Wells Fargo acquiring Wachovia) and may not be able to liquidate much of their foreclosure holdings until they have implemented systems to handle the workload.

Also considering added strict government oversight due to previous bank failures, banks must now show signs of recovery or face lack of government support. When a bank brings a foreclosed home to market they must simultaneously write down the loss from the asset (the home) which will then show up on their balance sheet and thus affect their gross worth as a company.

And many banks have finally realized the benefits of short sales and have been implementing new policies in order to expedite these sales. Think about it, if the bank never has to foreclose and market the property as an REO then they don’t have write down the asset on their books until the short sale has been finalized. This will help them avoid being cut off from possible federal lifelines.

Recalling the first wave of foreclosures that rocked our housing market over 2008, the majority of those loans were mostly subprime mortgages from banks that no longer exist (Lehman Brothers, First Franklin, Indy Mac Bank, etc.). Current foreclosure activity is being linked to more stable loan programs from lenders who can offer alternatives for the homeowners to avoid foreclosure, such as loan modifications, short sales, or even lease back programs aimed at keeping families in their homes. All of this will lead to better housing stability.

Taking into further consideration with the recent recovery in the stock market (if you can call it recovery), we are now seeing levels near 10,000 points in the DOW, which means people are beginning to regain losses on their investments. So, unlike homeowners who suffered mortgage delinquency earlier this year when the stock market tanked out at 6,500 points back in March, today’s homeowners have the ability to dip into their stock investments and help pay for homeownership expenses.

Foreclosure activity has also been steadily decreasing for a few months now (according to RealtyTrac.com) from March of 2009 which was the peak of foreclosure activity for CA. This means there will be less defaults moving forward and hopefully the real estate market will gain some real ground moving into 2010.

I've been getting a lot of questions regarding the new homebuyer tax credit just passed into law last week. You may already know that as part of the Homeownership and Business Assistance Act of 2009, the firt time homebuyer tax credit from last year has been extended and improved in several different ways:

Tax Filing Deadline has been Extended - Under the new law, an eligible taxpayer must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2010 and close on the home by June 30, 2010. For qualifying purchases in 2010, taxpayers have the option of claiming the credit on either their 2009 or 2010 return

Tax Credit Extended to Existing Homeowners - Not only are first time homebuyers eligible but the tax credit has been extended to include existing homeowners as well. Now homebuyers who have been residing in their principal residence for five consecutive years out of the last eight and are purchasing a home to be their new principal residence (“repeat buyer”), may be eligible for up to a $6,500 tax credit.

Qualifying Income limits have been Increased - People with higher incomes can qualify for the tax credit.

• Homebuyers who file as single or head-of-household taxpayers can claim the full credit ($8,000 for first-time buyers and $6,500 for repeat buyers) if their modified adjusted gross income (MAGI) is less than $125,000.
• For married couples filing a joint return, the combined income limit is $225,000.
• Single or head-of-household taxpayers who earn between $125,000 and $145,000, and married couples who earn between $225,000 and $245,000 are eligible to receive a partial credit. 

There is a lot of information available on the new homebuyer tax credit but the best places for the most accurate updates are:

• National Association of Realtors - Comparison Chart
• The IRS website - http://www.irs.gov/newsroom/article/0,,id=204671,00.html?portlet=7
• National Association of Home Builder's website - http://www.federalhousingtaxcredit.com/home.html