Friday, November 30, 2012

Dealing with Neighbor Disputes

"Who are the people in your neighborhood...they're the people that you meet each day!" Mr. Rogers' neighborhood contained a Neighborhood of Make-Believe where a dozen or so regular characters carried out their lives in cooperation - or not - while eager children around the world learned valuable lessons about communication, tolerance, and learning to deal with conflict. These neighborhood disputes were always neatly packaged into a 30-minute or less time frame. In real life, disputes between neighbors are not always concluded with the beginning of a sound track. Sometimes they are surprisingly simple and sometimes they require costly legal processes to resolve.

Dealing with Neighbor Disputes

The most common neighbor disputes have to do with boundary lines, noise, pets, and lifestyle differences. Perhaps a remodel is encroaching on your property. Maybe a dog barks incessantly while your neighbors are at work and your baby can't nap. Are the teenagers next door throwing wild parties when their parents are out for the night? These are the things that can take the feeling of "Home Sweet Home" and make them feel more like "Let's put our house for sale..."

Get to know your neighbors. We all get busy, but getting to know your neighbors before a problem begins is one of the best pro-active measures you can take to smooth things out later on. If someone new moved in next door, make as much of an effort as you can to get to know them. If you just moved in, get yourself - and your family - outside to meet the neighbors. People in relationship are much more likely to work cooperatively towards solutions than perfect strangers.

Communicate immediately. Just like in a romantic relationship, early communication can be the key. If you sit there night after night, fantasizing about poisoning the neighbor's dog(s) even though you're an animal lover, you have waited too long. From the moment you get the "red flag" that something is a problem, it's a good idea to voice your thoughts. For one thing, you are much more apt to speak calmly and rationally, and you will be able to suss out what kind of person you are dealing with: humble, defensive, apologetic, accusing, etc. which can help you to formulate a plan.

Communicate in writing. If verbal communication is going nowhere, you should write a professional letter which outlines the things you have done, i.e. calm communication, expressing your concern, etc. and reiterate your desire to resolve the conflict without external help. Not only can a letter serve as a formal intention, it can provide evidence later on should you need to pursue further measures.

Legal help. You can often seek mediation, before actually taking a neighbor to court. There are laws that govern almost every possible conflict, from legal boundaries and trespassing, to noise pollution and privacy violation. In worst case scenarios, it might require legal intervention before your situation is resolved.

Hopefully a visit or two with honest communication will be enough to return your feelings back to neighborly once again.

Wednesday, November 28, 2012

Median House Prices Rising

Median Real estate prices are up. Real estate prices are down. Investors help fuel the housing market. Investors destroy the market. The news is all over the map. So what is the real scoop when it comes to the varying statistics you read - or hear - regarding rising real estate values? For example, Lawrence Yun, chief economist for the National Association of Realtors (NAR), has reported that the median sales price for real estate is up by a little more than seven percent (7%) from last year. He also projects that those prices will continue to go up to as much as fifteen percent (15%) next year. Whoa! Really?

Median Housing Prices - It All Depends on Investor Math

While Yun stated the median price to be up by 7+ percent, other analysts quoted percentages significantly lower. According to MSN Real Estate, S&P Chase Schiller reports a more modest two percent (2%) increase each year and other sources quote between three and five percent (3-5%). So why all the variance? Part of it has to do with how each statistical entity determines the "median". In the case of the NAR, the median is considered to be the mid-dollar amount between the half of the houses which sold for lower and the half of the houses which sold for higher. In years with more investor activity, where more low-end homes are sold, the median price will be driven down. Currently, the crawling foreclosure market has actually helped the median real estate prices by keeping investors away.

Foreclosures are usually significantly lower priced properties but they can be incredibly frustrating to buy. Instead of the typically smooth real estate transaction which happens between two real estate agents, lenders are usually involved in foreclosure transactions. This can make things more complicated. As a result, investors are starting to balk, which has helped to keep lower-end properties from moving. Thus - due to "investor-based real estate math - median prices continue to rise.

There are other factors which are keeping the median housing price on the literal up-and-up.
  • Loan Modifications. Creative loan modifications have enabled home owners who might have lost their homes in previous years to refinance and adjust their monthly mortgage to a more manageable amount. This is keeping some potentially lower-priced homes off the market.
  • Decrease in Foreclosure Completions. Bank delays, among other things, have had such a dramatic impact that foreclosure rates are down by as much as thirty percent. That keeps the bulk of the real estate transactions in the higher-end, which allows the median prices to rise.
  • New Construction. Now that new construction is beginning to pick back up, first time home buyers are moving into houses at market price which are considered to be higher-end. This scores another point in the increasing median home price column.
If the above factors stay in place for a little while, there is a good chance that median home prices will continue to go up as long as your house is not located in a low-foreclosure area.

Saturday, November 24, 2012

Jerry Rice's Atherton Home On The Market Again

Former San Francisco 49ers wide receiver, Jerry Rice, is arguably one of  the best American professional football players in history. Children - and adults - who grew up and lived in the Bay Area during the late 80s and 90s boasted Jerry Rice jerseys, t-shirts, and trading cards. Three Super Bowl Rings, and an Oakland Raiders AFC Championship, have made him a local hero. While all the childhood fantasies in the world can't make us become someone else, those who worshiped Rice throughout his decorated professional football career have a chance at moving into his recently re-listed luxury home - for the price of $10.5 million dollars.

Jerry Rice's Atherton Home For Sale

Rice's home has been on and off the real estate market a few times since 2009. Located in Atherton, California, this incredible luxury home was originally listed at closer to $22 million, and then again at $15 million, so the current pricing is actually a steal.

Notable features include:
  • 13,908 square foot home
  • 1.2 acres of pristine landscaped grounds
  • Large pool area with spa and cabana
  • Covered outdoor living space with a fireplace and built-in BBQ pit
  • Six bedroom suites
  • Seven full baths and three half-baths
  • Home theater room
  • Full bar and wine room
  • Game room
  • Library
  • State-of-the-art workout facility (more on that later!)
  • Detached guest house
His three-story home was built in 2001 and boasts French chateau-style architecture and design elements. It is a luxury property which manages to incorporate impressive design features, without sacrificing comfort and homeyness, which is an unusual and desirable combination.

A Home Gym Worth Envying
One of the most striking of the above features is Rice's home gym. Famous for his unfailing dedication to a grueling workout regimen throughout his professional career, Rice's dedication to physical fitness hasn't stopped. The gym is worth approximately half a million dollars. Not only does it include the latest and greatest workout machinery - often multiple versions of the same genre of equipment - Rice's Gym also includes a sauna, a steam-room, and a cold plunge. The football star has commented that outside of working out, it has provided a private space for him to unwind or work off excess energy on a sleepless night, without having to expose himself to the public.

Amazing Outdoor Living Space

For those who aren't as dedicated to working out as Mr. Rice, or who are a bit shy of the multi-million dollar price tag, you may want to see if you can make a deal on his backyard. It is stunning. The large covered eating, lounging, and cooking area is draped with exquisite wisteria vines and surrounded by a pool, hot-tub, and lush lawns. It adds additional living space which is in direct competition with the luxurious interior space.

While we can't all live in the lap of ultra-luxury, it's fun to fantasize every once in a while. In the meantime, the improving real estate market means you are only days away from finding a dream home that's meant for you, which could be the accessible luxury that is Pacific Place!

Monday, November 19, 2012

Is Earthquake Insurance Worth It?

To Buy - or not to buy - that is the question when it comes to earthquake insurance. According to a recent LA times article, Rethinking Your Stance on Earthquake Insurance, only 15% of Californian's own an earthquake specific insurance policy - that leaves 4 out of 5 homeowner's without it. Let's take a look at what the article states as the most common reasons why people avoid purchasing earthquake insurance and how those reasons stack up to the facts.

Is Buying Earthquake Insurance Worth It? Top Reasons People Don't Buy Insurance
  1. Denial. One of the #1 reasons people don't buy earthquake insurance is because they feel The Big One will never happen to them. For many, who are raised in California, this rationale is even more common because unless you lived in the Bay Area in 1989, or Northridge during the 1990s, your life has been "major earthquake free." But in recent years, adding up the earthquake, tsunami, and hurricane victims around the planet, there is more reason to assume that indeed, something disastrous could happen in your lifetime. So how prepared do you want to be?
  2. Extra Money. A good amount of people wouldn't buy auto insurance or home owner's insurance if it weren't required by lenders. Plus, it's an added expense for an event which may not happen; why waste the extra money? This reasoning isn't too far off. Take the example of MSN money partner, Len Penzo. He looked into earthquake insurance for his Southern California home, worth a little over $300,000. He was quoted an annual premium of about $500 (his homeowner's insurance is already around $800/year). The deductible would be 15% of the total structure's cost - meaning Len would have to have around $45,600 worth of damages to pay before the policy kicked in. When he reviewed previous claims from recent tumblers, he found the average claims amounts - after inflation adjustment - were less than his deductible. So his family is choosing to roll the dice. They live in a newer home, which is bolted to the foundation and built to current earthquake codes.
  3. FEMA Will Help Us. Ah, yes. FEMA. Well, you may not want to gamble on that one. FEMA has its own set of operational issues to date. Plus, as the aforementioned LA Times article sites, increasing numbers of natural disasters creating catastrophic results will eventually cause law makers to put a halt to the amount of federal funds which can be used to rebuild and repay. Law makers are becoming especially impatient at sending relief funds to those who don't have the proper insurance for their geographical location. So this reasoning scores a point in the "consider earthquake insurance" column.
When it comes right down to it, you need to do the math. If you live in an older home, without proper retrofits, an earthquake insurance policy might be worth it. If you own a newer home, and have less equity on the table, you may want to consult your accountant about whether or not it really makes sense.

Thursday, November 15, 2012

6 Months Mortgage Free?

Hinted at on our Facebook page yesterday, Pacific Place of Redwood City is pleased to announce an incredible promotion that's will sweeten the already fantastic deal for those considering moving into our new community.

What we're offering is an incentive for 6 months of your mortgage paid*. Sound too good to be true? This isn't a dream, but you could be living in your dream home if you act quickly and grab one of these brand new homes eligible for the offer. This is a limited time offer!

So how do you get in on this? Just phone our sales office at 650-568-6214 or better yet, visit our models at 1613 Kentfield Avenue.

Here's the not so small print:

Six (6) Months Free Mortgage is subject to the following eligibility requirements, limitations and restrictions: (1) Eligibility – Offer is valid only on the purchase of a Lot 14 (20 Ludina Way, Redwood City, California 94061.) and Lot 16 (1607 Kentfield Avenue, Redwood City, California 94061). Escrow must close on or before 12/31/2012 to qualify for Six (6) Months Free Mortgage. (2) A qualifying purchase will entitle Buyer to the following: Seller will reimburse Buyer for six (6) consecutive monthly mortgage payments in an amount equal to Buyer’s monthly mortgage payment (excluding any impounds, if applicable) for a qualifying property, up to a maximum amount of $3,500.00/month. Only a qualified Buyer is entitled to Six (6) Months Free Mortgage; no assignment, transfer or substitution is allowed, including any transfers by reason of law, or upon death.

Wednesday, November 14, 2012

Moving to a New City

Moving to a new city can conjure one of two feelings - pure excitement at the prospect of new sights, sounds, and people OR utter devastation at leaving the people and places you love in order to begin anew. Either way, the best way to adjust you a new city is to get out and about, meet people, and begin to cultivate your new "favorite" spots. But how does one go about finding all those places?

Moving to a New City - There's No Place Like Home

The internet has made is easy for newbies to find the best places to go but don't forget about some of the more old-fashioned methods either. Here are some tips on how to make friends, find favorite haunts, and make your new city feel like home.
  1. Meet the Neighbors. It's so easy to hole up in your new home. You mean to say hello to the immediate neighbors but, by the time the boxes are unpacked, you've already acclimated to the daily work/gym/home routine and time just keeps slipping by. However, if you make a batch of good old fashioned cookies - or gluten-free-dairy-free-sugar-free muffins - and visit a few neighbors, you will be the hero of the block!
  2. Chamber of Commerce. Almost every city, town and village, has a website for their chamber of commerce. A wealth of information can be found there regarding businesses, things-to-do, hiking trails, historical data, schools, local attractions, etc. Using that as a base can help you take notes on things that interest you for further research later. Better yet, when you have some free time, visit your Chamber of Commerce in person. Most Chambers have racks of brochures and pamphlets on everything pertaining to your new local community. Most of the time, new visitors and residents end up learning more, and visiting more places, than long-time residents ever have.
  3. Bing! Google! Yelp! Search engines and are testament to our population's interest in sharing their opinion. Due to the relative anonymity - people aren't afraid to tell you how they really feel. You can use key search phrases such as "best coffee shop _____" or "gourmet restaurants ______" (fill in the city name) and you'll have a variety of ratings to read and evaluate to give you an idea of where to start eating, drinking, and shopping.
  4. Get Lost! One of the best ways to learn about your new city and/or community is to start walking. This is where you learn about the things no tourist bureau or website can write about: the guy who sits on his porch three blocks down and loves to shoot the breeze, or a local ethnic market that has the best produce selection but will never have a website. Taking the time to walk and learn local ins and outs is one of the best ways to make a community yours.
Once you've found your favorite coffee shop, jogging route, and the best place to eat a delicious breakfast on your day off, you will begin to feel right at home.

Sunday, November 11, 2012

3 Advantages to Buying a New Construction Home

Older real estate definitely has its appeal. Historic homes present the allure of architectural designs and craftsmanship long since past. Less-older homes may offer a reduced sticker price in exchange for their "fixer-upper" status. What's a little work here and there to make the home your own, right? Well - unless you are 100% set on purchasing an older home, you may want to consider the advantages of buying a new construction home. Even if the sticker price is a little higher, you will most likely end up ahead at the end of the fiscal year - here's why.

3 Advantages to Buying a New Construction Home
  1. Warranties. Unless you are Mr. and/or Mrs. DIY, fixer-uppers are a lot more romantic in theory than in practice. The problem is, DIY projects in fixer-uppers usually open a can of two, three, or five more fixer-upper projects - and then you move on to Item 2 on your list. Can you see the dollar signs swimming in your head? While you can purchase home warranty policies, which might help with some of the replacement or repair costs, the brunt of the repair bills will be on you. Again, if this is something that you are good at or you enjoy, that might not be a problem. Otherwise, you may find you are in over your head, and spending thousands of dollars more than you originally anticipated. For the most part, new construction homes are "turn-key" and require no additional work. The earlier you get in on the buying side of things, the more say you will have in selecting your options and upgrades which will make your move-in process that much easier.
  2. New Things. Just like the scent of a "new car," the scent of a "new house" can be heady. There is just something satisfying about moving into a brand new home where nobody else has lived. Nobody else's dingy old paint to get rid of or decades worth of carpet stains to ignore. New appliances are less inclined to break, new tiles are less inclined to pop up, and new carpet looks, well, new! Each of these "new" products also has their own warranty attached, which means you have the support of both the builder warranties and the vendor warranties behind you.
  3. Resale Value. The statistics show that many Americans won't be in their new home for more than 5 years. So what does that mean for home buyers? It means that whether you have your heart set on a specific home, or particular price range, you also have to be thinking about resale value. Turn-key properties have higher resale values than their fixer-upper counterparts for obvious reasons. Should you opt not to purchase a new construction home, with the idea that you will be fixing your house up over time, make sure the improvements you make are adding equivalently valued equity and are done in a timely fashion.
New construction homes combine the best of the real estate world: aesthetic value, full warranties, and optimal resale value.

Thursday, November 8, 2012

Don't Underestimate the Value of a Realtor

When it comes to buying and selling a home, people often consider forgoing the use of a realtor in an effort to save money. Do not underestimate the value of realtors when it comes to buying or selling a home. A good realtor is an insurance policy that you will make the best decisions financially, legally, and professionally throughout your real estate transaction.

A Good Realtor is an Insurance Policy

While you may feel like you can just do it all yourself - and maybe you can - chances are you will eventually throw up your hands and start calling local real estate agents. This is because from the legal realm to the myriad of hidden costs and/or unexpected situations that arise, a good realtor has the experience and wisdom to help you make the best decisions regarding your transaction. Here are some examples.
  1. Legalities. Real estate law is not simple and straight forward. Not only that, it also changes. If you aren't thoroughly educated regarding real estate laws in your state, or you aren't an expert at reading "legalese" it's not going to take you very long to realize the documents you need to understand and execute are beyond the abilities of the average adult professional. Plus, should you make any mistakes along the way, you can either be liable in court later on (if you are the seller) or you can be severely taken advantage of if you are the buyer. A real estate agent will be able to navigate potentially choppy waters, and s/he will be on the line if things go awry.
  2. Neighborhood Knowledge. If you've been living in an area for a while, you may know the ins and outs of every neighborhood. Otherwise, an experienced realtor will be able to steer you in the right direction. You may have found the house of your dreams only to learn, thanks to your realtor, that there is a fire station one block away that has noisy engines coming and going at all hours. Or that the neighbor to your left is notorious for having late night parties and get-togethers. This kind of knowledge is crucial when you are making the important decision to buy a home.
  3. Hidden Costs. Buying a home is more than just qualifying for a loan that matches the purchase price. There are closing costs, taxes, and insurance fees. There may be things that come up during the inspection which require repair work or remodeling to bring the house up to code. These costs add up quickly. Without a realtor on your side, you may be left paying thousands of dollars more than if your trusty realtor negotiates with the buyer/seller's agent to get the best possible deal.
If you are in the market to buy or sell a home, do yourself a favor and find the best realtor in your area. Not only will know  your real estate transaction will move as smoothly as possible, you will also be doing your part to keep our economy moving forward.

Tuesday, November 6, 2012

The Responsibilites of an HOA

How would you like it if  your front yard landscaping and exterior maintenance were taken care of regularly by someone else? How would you feel if your exterior paint color or the number of cars parked in your driveway were dictated by a governing board? These are things homeowners need to consider when purchasing a home, condominium, or townhouse which is run by a homeowner's association - or HOA. HOAs have their pros and cons but before you determine whether or not to be part of one, it's important to understand the parameters of where their responsibilities begin and end.

The Responsibilities of an HOA

Homeowner's Associations got their start towards the middle of the 19th century, however it wasn't until the 1960s that they became a common institution. Booming residential development, a societal trend towards a more uniform look amongst houses/structures in particular housing developments, and shrinking land supplies in urban areas have allowed HOAs to prosper. In their most basic form, HOAs are really all about preserving the aesthetic value of a common community. These "values" are determined originally by the developer, and can be amended over time by the HOA board and members.

The variances of HOA responsibilities are as numerous as the number of housing developments that have been constructed since the post-WWII era. There are a few general areas for which HOAs are known to take responsibility:
  • Membership/Dues. Each homeowner in the development is a mandatory HOA member and will be required to pay "dues." These are usually monthly payments and are often incorporated into the mortgage payments until the property is paid off. Members are encouraged to be active in their HOAs, participate in meetings, and express their desires regarding the laws that govern their community.
  • Meetings. As mentioned above, the board and HOA members hold regular meetings to discuss current issues, upcoming prospective changes or amendments to the rules/regulations, and to organize the election of future officers/board members. The meetings also provide a forum for homeowners to discuss or air concerns over less-desirable happenings in the community. HOAs can also plan fun events such as holiday parties or decorating contests.
  • Uphold the Bylaws/regulations. Depending on your community, the HOA may be in charge of each and every repair that happens in common areas, exterior structures, and possible interior structures as well. They usually take responsibility for some portion of the maintenance for landscaping, exterior lighting, playgrounds/equipment, etc. It's imperative that owners have a clear understanding of exactly what their HOA takes responsibility for so owners know where their responsibility begins. Failure to do so can result in grave misunderstandings down the road.
  • Property Management. While the HOA is responsible for repairs/upkeep/monitoring of land and property as set out by the bylaws and regulations, they often hire a property management company to take care of business. This management company is ultimately hired/fired as per the HOA board members' decisions.
Most homeowners feel the pros of an HOA outweigh the cons which is why HOAs continue to prosper in US residential developments.

Friday, November 2, 2012

Is Real Estate Flipping Profitable or Risky?

Question: Is real estate flipping profitable or risky?

Answer: Yes and Yes.

Real estate flipping is not for the feint of heart. That being said, with the right attitude, patience, and a little DIY know-how, buying and selling properties for investment purposes can be something the whole family can get into. If you are adverse to taking risks, don't have much of a nest egg saved up, and/or aren't interested in being a landlord, it's probably not for you. Otherwise, here are the things to think about before you buy real estate with the aim to flip it and make some money.

Things to Consider Before Buying and Flipping Real Estate
How Much Money Will be Involved?

How are you paying for your investment? Are you wanting to tie up some cash as a tax write-off? Are you planning on getting a mortgage? Does the property need work before you can make a profit? If so, how much work and who will be doing it? Are you content to hold the property for a while if need be?

These are important questions to ask if you are just starting out in the Buying & Flipping business. At the end of the day, you are gambling on the real estate market. If you are getting a loan, you are betting on the Feds and their interest rates (although right now, with interest rates holding at a steady low, that's a good bet). If you have the money to fix the house up, that's great. Even better is if you, family members, and or close friends have enough knowledge to fix up the house sans labor costs.

How Much Time do You Have?

Right now, real estate prices are low but due to the economy, they are probably going to stay that way for several years. Are you prepared to wait? Unless you're buying a serious fixer-upper, and plan to do the work yourself, you are probably not going to see much of a return on your investment for a while. Buying a home with good resale value can help you to wait for a more dramatic upward turn from the real estate market and can help you get some higher-paying tenants in the meantime. Which brings us to the next point...

How do You Feel About Being a Landlord?

Remember the glory days of 1996, when you could buy a home and then resell it the next month and make $50,000? While that's a bit of an exaggeration, quick flips of houses aren't that profitable right now so you may want to enjoy the high rental market and wait out the lull. If you don't mind searching for tenants and dealing with some occasional repair issues, there is a good chance you'll be able to make more than your mortgage on an investment home and spin it later when home values go up more dramatically.

Nobody can say that buying and flipping real estate doesn't carry some risk, but when it's done right real estate investment is almost always profitable.