RealEstateRaves

Seven months ago I met a young couple and gave them counsel about what to do to buy their first home.  They were far more disciplined than me and followed my advice to a T.  They pretended to have a mortgage and put $4,000 away every month for seven consecutive months.  Last Weds we made an offer that was ultimately accepted and tomorrow we hopefully remove all contingencies and then 2 weeks later I will have the pleasure of watching them move in to their first home.  They did this all without having to rob their piggy bank.  I was able to negotiate a seller credit back that covered all the closing costs for the transaction.  I believe I have an advocate for life and expect to see referrals down the road.

Participating in this life changing experience is what makes my career in real estate so very special.

Joe Parsons

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The efforts by Barney Frank (D-MA) chairman of the federal Financial Services Committee should be applauded for this efforts to clean up the mortgage industry…..BUT the consequences could be devestating and once more an example of our well meaning government to over reach and actually create more serious problems.  It is important for every citizen to carefully review this legislation and write your representative immediately if you feel as I do that this legislation may very well cause more pain than remedy.   

As near as I can tell here are some of the serious consequences that will unfold should this legislation pass the house next week….that’s right next week, week of November 12th!   CONSEQUENCES: 

1.  Mortgage brokers will be required to post enormously costly bonds…so much so that most say they will shut their doors.   Mortgage brokers are in part responsible for maintaining a competitive market place holding large banks in check allowing us to shop for and find competitive mortgage rates.   The oil industry is a good example of what can happen when  a few large players control.  The “seven sisters” as the big boys are known are making pretty good money these days thanks to our willingness to pay $3 + per gallon.  Actually it’s not our willingness….we have no choice.  Let’s not let this happen in the mortgage world.

2.  Standardized underwriting would not allow for special circumstance s among borrowers.  My circumstances are different than everyone else and I want my loan broker or bank to take that into consideration when lending.  One loan doesn’t fit all.  There are exceptions every rule…right?

3.  Mortgage interest rates will go up immediately.  That being the case wouldn’t higher interest rates make our current mortgage crisis even worse making it even more difficult for people victimized by the industry’s loose rules and loan practices in the first place. 

4.  Borrowers will no longer be able to finance closing costs.  In other words, you would not be able to include those costs with your new loan as we all now do.  Instead, after HR3915 passes you would now have to pay these [closing] costs out of your own pocket with cold hard cash.  Depending on your loan that out of pocket expense could be considerable and probably keep you from refinancing, buying, or successfully selling your home to a potential buyer.

5.  Read HR3915….Google.com it now, consider the impact of this legislation on you, your family, your friends and people you care about and if you agree with me write your representatives immediatley and urge or beg them to consider these factors and amend the legislation at once.

Joe Parsons

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I am sure at one time or another we have all asked ourself should I consider another part of the country to live.  We all have our own preferences and levels of importance.  But, how do you really know what some other place might really be like?  Would you just be trading some negatives about your current home front for different and unknown negatives somewhere else?    If our job takes us elsewhere the decision is easy.  But if we are just trying to find a better place, environment, way of life, etc, etc. where do we begin to look?  How will we really know what it’s like short of experimenting or trying a new place out for a while?  Well, I ran across an interesting site I have bookmarked and suggest you do the same.   Check it out:  http://www.bestplaces.net

I am pleased to say I get hundreds of people finding my website http://www.SearchRedwoodCityProperties.com  on Google and Google’s affiliated search engines.  These folks  are thinking of relocating to the Redwood City area just south of San Francisco.   They know Redwood City puts them within striking distance of Silicon Valley’s dynamic economy and robust job market.  Redwood City also puts them in striking distance of San Francisco and so many other economically healthy communities around the bay.    After all  economic conditions are a huge draw for people considering a new place to live. 

Redwood City is one of the last communities that still offers “reasonable” housing prices.  Of course what is reasonable in Redwood City may not be resonable in other parts of the U.S.   All the more important to have a great site like http://www.greatplaces.net  to check “all things considered” before even thinking of relocating.  I hope you enjoy this site as I have…..

Joe Parsons

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This couldn’t be a better time to be buying.  Interest rates are very attractive by year ago standards.  Inventories are growing, prices are softening, and nervous sellers are more cooperative when they are in the midst of serious buyers.  As they say, “buyers are in the cat bird seat”.  

During our Sunday open houses we see lots of buyers that appear to be serious and noticeably sense and smell this is the time.  It definately is as the chart below suggests.  The ”Market Action Index” graph below for Redwood City was designed to measure if the market is a “seller’s” market or a “buyer’s” market.  When the graph line drops below 30 Altos Research labels the market a “buyer’s” market.  Contrast the Redwood City graph below to the Market Action Index for Las Vegas:

Is this the right time to buy?  Let’s consider the facts:  interest rates are low, inventories are up, prices are softening, sellers are willing to deal…well…Absolutely it is the right time to buy in Redwood City and adjoining communities…that’s why there are so many buyers out looking.  It’s also the right time to buy in Las Vegas with more than 15,000 homes for sale at last count!  Add another 4,000+ for next door neighbor Henderson.

Joe Parsons

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Selling a home is an art these days…. the contract is a science.  Working with the right agent is very helpful provided he/she speaks up and gives you good valuable advice during the process of selling your home.  I have learned over the years there are 5 costly mistakes “smart” people make when selling their home….so I thought I would share them.

Mistake #1:  Basing the decision regarding the asking price for the home on “needs” or “emotion” rather than market value.  I have seen there is often a great urge by home owners to price a home based on how much they paid or invested in their home.  I think we all know overpriced homes take much longer to sell and usually net less money in the end.

Mistake #2:  Failing to “Show-Case” their home.  You only have one shot at a “first impression”.  From my experience every $100 dollars in needed repairs not done reduces an offer by $300-500 dollars.  Staging a seller’s home has almost become mandatory these days….particularly when competition from other nearby and similar homes is fierce.

Mistake #3:  Sellers trying to Sell their own home when buyers come to see it.  Enthusiastic home sellers make a big mistake when they follow a prospective buyer around to give them first hand details about their wonderful home.  This well meaning seller tactic usually has a negative impact on the buyer.  I have found buyers want quiet, uninterrupted time to view a home where they are free to express themselves when the need arises.

Mistake #4:  Choosing the wrong agent or choosing him/her for the wrong reason.  I have observed form my own experience that sellers sometimes choose an agent based on the high price they can get for their home.   What counts in my view is the marketing strategy and the agent’s experience and track record that in the end gets the most for a seller’s home.

Mistake #5:  Not knowing all of a seller’s legal rights and obligations.  I think we would all agree real estate law is complex.  The real estate contract is a legally binding contract.   If the seller executes this contract without a full and thorough understanding it can potentially cost thousands of dollars and much heart ache.

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It’s not just showing up with a stack of brochures about 1:30pm….at least for me.  About Friday I begin to consider what I should do to prepare for my Sunday hosting experience and what I can do to make the most of it.  We “open house” hosts don’t have preconceived ideas that we will actually sell the home we host but sometimes it actually happens.  This Sunday it’s 2199 Valparaiso Ave. in Menlo Park, CA.  I held this home open last Sunday, met a number of wonderful people who seemed to admire and like the house but never really expressed that passionate love at first sight manner.  That’s the look we hosts are always looking for. 

Real estate is a funny business.  It takes on a personal, emotional, and very private quality where otherwise  honest and upfront folks find the absolute need to “not be discovered” as an interested homebuyer or seller.  Not to dissimilar from the internet experience where most people including yours truly don’t want to come out of our protective internet caccoon and therefor keep our true feelings hidden from view.   Ah the challenge….how to break through those protective defenses to determine if you are talking to a serious buyer or seller.  The answer lies in the question: What’s important about buying a home.  It’s a simple question but the true answer is often burried under layers of feelings, wants, and desires that don’t always rise to the top quickly and often not without a little coaxing by ….you guessed it, your open house host.

So here I sit thinking what can I do to make every visitor’s experience to 2199 Valparaiso memorable.  What I know, this is a beautiful home situated in a nice part of Menlo Park and offering outstanding schools….obviously a very powerful component on someone’s shopping list.  I aslo know the owner of this prestine property had visions of building a home significantly above the norm adorned with the very best of architectural elements one can find today.  A Bentley in the sea of upper class cars.  This he has achieved but not at the return he had dreamed of and now faces the reality of what the “market” will dictate.   Herein lies the wonderful opportunity for a family who wants the [best of the best] in an area considered world class by all accounts.

My challenge is to communicate to you why you should stop what you are doing and hightail it over to my openhosue today to see for yourself what I am talking about.   I thought I would start by describing those architectural elements I mentioned earlier, Hickory Floors distressed for effect, solid pieces of natural Limstone inlaid in the midst of that very Unique Hickory floor,  Nearly 12″ high lightly stained Maple baseboards each with its own mini-crown molding detail, and of course matching Maple Crown Molding throughout,  you have to see the solid single piece  2″ thick Limstone large central counter in the kitchen  surrounded by matching Limstone under custom counters done in picture frame style, solid matching Maple doors to name just a few of the very special architectural elements.  As you walk through this home you can’t help but continue to see the owner’s hand print everywhere you turn.  Bottom line most of us might never commit to such a high end approach to accessorizing our home.

Joe Parsons

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They say it takes a village….absolutely.  Our world is too complicated and we can’t do it all on our own.  Thanks Elizabeth Everitt of Princeton Capital www.princetoncap.com for your great suggestions how  parents like us can help our children buy a home.

There are lots of options for parents to help their kids.  Standard gift rules allow each parent to give without tax consequences $11,000 each year.  So, if you gave much needed capital to your son or daughter in November you could give another gift on January 1st as well.  Gifting is based on a calendar year.  This rule applies to an “unlimited” number of recipients so the same amount above could also be gifted to a son or daughter-in-law.

Another thought, everyone has a lifetime exemption of $1,000,000.  That means each parent can give up to $1,000,000 as a gift anytime they wish without tax consequences.  The gift amount however is deducted from this lifetime limit reducing the tax emption when a donor dies.  But it’s still a great resource to help a child in need while the parent/donor is alive and able to enjoy the happiness a gift like this brings.

Before acting on anything in this post contact your CPA, or legal counsel for personal advice.

Joe Parsons

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We aren’t kidding!  Not many know that their are programs available right now that allow first time home buyers to acquire there first home.   [by the way, first time buyer means anyone who has not owned a home in the last 3 years]  Just when you thouht it was impossible there is hope!  Now, not everyone knows about these programs and sometimes those that do know don’t want to spend the time necessary to help a prospective buyer.  Fortunately there are some lenders who are passionate about helping first time home buyers….you definately want to meet one of those special people! 

There is some truth that processing these loans is difficult but done by a knowledgeable lender it is very doable.   Thanks to our state and their desire to truly help first time home buyers California created the CalHFA program.   30,35, and 40 year fixed loans at below conventional market rates allow first timers to buy “more home” than they otherwise thought they could.   CalHFA also helps with “closing costs” using  their sister program: ChDAP.  Additionally, there are programs sponsored by various CA cities helping fund down payments.  When multiple loans are used to buy a home we call this “layering”  which is fully permissable in California.

OK, what’s the catch?  There are rules…..Maximum allowable income per household 1-2 people: $121,589 in San Mateo County; $118,704 in Santa Clara County.  100% financing OK.  2nd & 3rd mortgages are deferred…no payments are made until property is sold or re-financed.  *you might want to re-read that last sentenance.  Qualifying is based on 1st mortgage only.  Gifts allowed for down payment or 100% of closing costs.   Maximum existing home price: $652,257 San Mateo County and $673,953 Santa Clara County. Who’s the next person you know and care about that is thinking about buying their first home.  Call me and I will put you in touch with that “special lender”.

By the way….there are 382 single family homes for sale [right now] in San Mateo County priced less than $652,258

Joe Parsons  (650-329-6653)

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We all feel we just don’t have enough time to get everything done and that often leads to over-load and overwhelm.  I think we would all agree.  So, the next time you find yourself saying that….remember you have exactly the same number of hours per day that were given to Helen Keller, Pasteur, Michelangelo, Mother Teresa, Leonardo Da Vinci, Thomas Jefferson, and Albert Einstein.   Thank you for the thought H.Jackson Brown Jr.

Joe Parsons

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Here’s a new concept….at least to me.  The Rex Agreement.  It’s not a “loan”, but a real estate investment agreement in the form of a purchase option.  It gives homeowners a portion of their home equity in cash today in exchange for the right of REX & Co. to share in a specified percentage of the future increase or decrease in their home s value.

For the right to share in an agreed upon percentage of the future change in value of the home, REX & Co. pays the homeowner what is called an Option Exercise Price equal to the current value of the home multiplied by the percentage of the future change in value granted to REX & Co.  If the home increases in value, REX & Co. shares in the gain. If the home declines in value, REX & Co. shares in the loss. Simply stated, there is nothing like the REX Agreement right now in home finance.

It’s just another way to finance your home today to pull out much needed cash that you otherwise might not be able to obtain.  For that option you sell a portion of your current and future equity to the Rex Company and they participate as a partner in your house and receive a portion of the net proceeds when your house sells or receives a portion of the loss should it sell for less than expected.  This new and very creative approach to “financing” is not for everyone but definately worth checking out.  It can work for anyone of the following reasons some or all of us face from time to time:

1.  if you are considering refinancing to reduce debt, pay off all or a portion of the mortgage, credit cards, or reduce monthly payments.

2.  homeowners considering other debt-based financing alternatives to get cash out of their home

3.  homeowners considering a reverse mortgage

4.  homeowners considering an equity loan to finance a child’s education

5.  homeowners with more than 50% of their net worth locked in their home equity

6.  first time home buyers who are able to put down 10-15% down payment on a home

7.  move-up homeowners who want to increase their down payment to reduce debt and monthly payments

8.  move-up homeowners who want to buy more house at the same out of pocket monthly payment

check it out at www.rexagreement.com

Joe Parsons

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