The Effect of Interest Rates Increase

What happens to your mortgage payments when interest rates change?

For all buyers trying to get in contract right now, the same question is on everyone's mind: what are interest rates today, and how much is my loan payment going to be after my offer is accepted?

This informational slide below, compliments of the California Association of Realtors, gives us a pretty good idea on the impact of any change in the rates:

Also, here is a good link for current mortgage rates, to keep abreast of interest rates in general.

Tip: unless you are a gambler, it is usually a good idea to lock the rate the moment you are in contract to purchase a home.
Should 30-yr fixed rates increase too much on you, and you cannot qualify for the same amount any longer, you may have to consider a loan that would be fixed for a few years, and which then becomes adjustable.  These are the "3-yr, or 5-yr, or 7-yr fixed then adjustable" loans.  The starting rate, on which you are qualified by the lender, is lower, and that in turn allows you to qualify for a larger loan amount.  Ask your lender to advise you on the matter.

Let me know if I can help with any of your real estate questions!

Thank you for reading!
Francis

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Disclosures Sellers Don't Have to Make...

Do you have to disclose that a house is haunted?

Since disclosures are one of the most important topics to address for sellers who sell their home, this is a subject certainly worth talking about.  A good rule of thumb is typically: if you wonder if you have to disclose something about your property, usually the answer is a resounding "YES".

With this in mind, I found this article from the Law Offices of Peter Brewer most interesting.  It details a few (rare) items that sellers do not have to disclose.
Arguably, the fact that one does not have to disclose does not necessarily mean they should not disclose, and in all cases it is always advisable to ask a qualified California Licensed Real Estate Attorney whether to disclose a specific item if you really are wondering about it - if you sell in California.

Although Realtors cannot advise on legal matters, they will usually tell you that it is best to disclose if you are in doubt (with a few exceptions) - and this is where the above article, written by attorneys, comes in as most interesting.

Most real estate lawsuits stem from sellers' or agents' disclosures or I should say: "lack of disclosures".

Marketing your property is certainly a very important aspect of selling a property, but working on preparing good disclosures when you sell your home is in my opinion by far the most important thing to do, and the wrong guidance on this matter could cost you a lot. I think it is the most important criterion in choosing your Realtor to sell your California property.

Thank you for reading!
Francis

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Price Correlation - SF Bay Area - Nasdaq

Interesting correlation between the average sales price in the San Francisco Bay Area, and the Nasdaq over the past 20 years or so.

This graph is compliment of our Coldwell Banker analysts, and shows the average sales price for Coldwell Banker properties only, not ALL of the sales of properties on the market.

Still, it shows how heavily our local market, around San Francisco, is leaning on the high-tech heavy Nasdaq.

Click on the graph to see larger.

Thanks for reading!
Francis

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More Buyers Gamble with Sight-Unseen Offers

I was really surprised to read this article in the Realtor Magazine (National Association of Realtors) about the number of people making offers without seeing the property first.
The source of the article is a survey of more than 1,500 home purchasers by the real estate company Redfin.

The figures are, I think, somewhat staggering:
in June of 2016, 19% of purchasers made an offer sight-unseen,
in May of 2017, it was 33%, and
in November/December of 2017, it was up to 35%.

It has happened to me to have a client make a purchase "long distance", so I understand the circumstances under which it can happen, but this number still surprises me.  I guess with the market going up so much, and properties selling so fast (especially in the Silicon Valley), one can see how some home buyers may have to cut some corners.

You can click on these links for more details on the Realtor.org article, and the original article on the Redfin web site.

Nationwide, US home prices are up 6.7% year-over-year in February.   

Thanks for reading!
Francis

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The Difference Between "Deed" and "Title"

What is the difference between a “Deed” and “title” to a property?

From our specialists at Cornerstone Title, the Title Insurance branch of Coldwell Banker, here are some pointers for buyers and real estate owners in California. (adapted from an article by Audrey Ference on Realtor.com).

A deed is a legal document used to confirm or convey the ownership rights to real property. It must be a physical document signed by the seller/ grantor.

Title, however, is a legal way of saying you have ownership of real property. Title is not a document, but a concept that says you have the rights to that property.

So when you buy a property, you will receive the deed, a document that proves you own it. That deed is an official document that shows that title to the real property has been conveyed to you as the grantee.

How to get the deed and take title of a property?

To get the deed and "take title," or legally own the property, your title company will perform a title search. This ensures that the seller has the legal right to transfer ownership of the property to you, and that there are no liens against it. If everything is clear, then at closing the seller will transfer the title to you, and you become the legal owner of the property.

In California, the title company will ensure the deed is recorded at the county recorder’s office or courthouse, depending on where you live. You'll generally get a notification a few weeks after closing escrow, that your deed has been recorded. At that point, you have the deed and title to the real estate and the property is all yours.

What is title insurance?

Even with all of the due diligence a title company does before closing, there can be rare instances when title problems can pop up later (e.g., missed liens and other legal issues that can be very costly to resolve). To protect against any financial loss, two types of title insurance exist: owner's title insurance and lender's title insurance.

Unlike other types of insurance that protect the policyholder from events that may happen in the future, an owner’s title policy protects the buyer from events that have happened in the past that may jeopardize your financial interest, such as title defects, fraud, and unpaid liens against the property, or claims that someone else is the real, legal property owner.  On the other hand, when you secure a mortgage, your lender or bank will require that you purchase lender's title insurance to protect the lender in case any title problems arise. Lender's title insurance protects the lender's interest in your property until the loan has been paid off.
Thank you for reading!

Francis   

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The Property Tax Fairness Initiative

The California Association of REALTORS® (C.A.R.) is embarking on an historic effort to increase homeownership opportunities. C.A.R. is going to qualify an initiative - the Property Tax Fairness Initiative - for the November 2018 ballot which will allow senior homeowners (55 years of age and older) among others to keep all or most of their Proposition 13 property tax savings when they move.

I think this is important, because seniors, who are often on a fixed income, fear they will not be able to afford a big property tax increase if they sell their existing home and buy another one, discouraging them from ever moving. As a result of this “moving penalty” almost three-quarters of homeowners 55 and older haven’t moved since 2000. C.A.R.’s portability initiative would allow senior homeowners to transfer their property tax base from their current residence to a replacement residence located anywhere in California.

The measure, if approved by voters, will let thousands of seniors, currently “locked into” their homes by low property tax rates purchase a home that will better suit their needs while expanding the housing inventory for young families seeking to buy a home.  According to the California Legislative Analyst's Office, tens of thousands additional homeownership opportunities will occur annually.

The initiative would remove the “moving penalty” for seniors 55 and older, and also for the disabled and victims of natural disasters, allowing them to carry their current Proposition 13-protected property tax assessment level to another home of any price, anywhere in the state, any number of times.

Let me know if you are interested in more information on this subject or if you would like to sign a petition to place this initiative on the November ballot.

Thank you for reading!

Francis

My Home Valuation tool
Detailed, local trends etc...
Current mortgage rates
A worthy local non-profit to remember: Community Services Agency in Mountain View.

Tiny Homes in the Bay Area?

I like to read about the progress of the "Tiny Homes" movement in the Bay Area.  It is such a fascinating concept to allow more people to have a home, even if it is a small one, since the alternative for many is often to have none at all.

There have been several newspaper articles written recently on the subject as the concept applies to the homeless population of San Jose.  This is a movement that tries to mitigate the scarcity of land in this part of the Country and allow more people to have a home, albeit a small one, instead of living on the streets.

The latest articles I read were in the San Jose Mercury News by Barbara Marshman, recounting the back and forth in the movement at the level of the San Jose City Council.  Many forces at are work here, among them a concern and push back from local residents, afraid of the proximity of new neighbors living in this kind of housing arrangement, but also a quest to find a solution to the homeless situation in the County.  A follow up article on 12/13/17 by Ramona Giwargis reports that the City Council voted 9-2 to build one tiny home village of 40 units.
Another push back is from people advocating that faster results can be had for the benefit of homeless residents, with the money allocated to the project, in the form of a program to lease existing apartments (to house some of the homeless people).

Even if it is not for the homeless population, Tiny Homes can be such an attractive concept for reducing one's carbon footprint and simplifying one's life, or for vacationing.  I believe there is a lot of future for this concept in an environment like the Bay Area where there is so little land to build new housing.  With some zoning changes, I can see that whole developments could be built for tiny homes: cheaper homes to buy, with smaller land, allowing home ownership to a whole range of population currently coping with the cost of housing, with the possibility to create interesting forms of new residential neighborhood arrangements.  It is very easy to imagine that smaller homes can present various advantages to several subsets of the population.

More information can be found on several web sites, among which: Tumbleweed Tiny Houses, Architecture Art Design, and for the Bay Area, Delta Bay Tiny Houses, claiming to be the only Tiny House Community in Northern California.

Thankyou for reading.
Francis

Silicon Valley real estate specialist
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LASD to expand? - And create a new school close to the San Antonio Center?

Will LASD be successful in its bid to create a new school at the site of the old Old Mill shopping center?  The location is right next to the Parc Crossings complex and a stone's throw to the Old Mill complex of homes.

This 12/12/17 article from Kevin Forestieri of the Mountain View Voice goes into the complexities of the proposition, some historical perspective and future possibilities that it opens.  The comments below give an idea of how controversial the various use choices for the location will be (should the project come to fruition).

Thanks for reading,

Francis

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