Saturday, June 18, 2011

REMINDER: Carbon Monoxide Detectors Required In All Single Family Dwellings by July 1

From the SAMCAR Relay Newsletter of 6/10/11:

Carbon Monoxide Detectors must be installed, consistent with new construction standards or according to the approved instructions for the detectors, in all existing single-family dwelling units no later than July 1, 2011. All other dwelling units (such as apartments) must have proper carbon monoxide detectors no later than January 1, 2013.

The new regulation also creates disclosure requirements with respect to carbon monoxide detectors. Currently, sellers of residential properties must provide the buyer with a Transfer Disclosure Statement (TDS). The TDS requires the seller to answer a variety of inquiries as to features of the property. The statute amended the TDS such that, effective January 1, 2011, the seller will have to verify whether or not the property contains one or more carbon monoxide detectors.

Background: on May 7, 2010, California Governor Arnold Schwarzenegger signed into law Senate Bill 183 (Lowenthal), a bill that requires the placement of carbon monoxide detectors in all California dwelling units. The bill also requires that the presence or absence of these devices must be disclosed when residential real estate is transferred.

This law deals with existing housing. (New construction standards are set by other state agencies.) It covers every "dwelling unit intended for human occupancy" which means single-family housing, factory-built homes, condominiums, motels, hotels, dormitories, and dwelling units in "multiple-unit dwelling unit buildings" (apartment houses). It applies to every dwelling unit that has "a fossil fuel burning heater or appliance, fireplace, or an attached garage".

"Fossil fuel" means "coal, kerosene, oil, wood, fuel gases, and other petroleum or hydrocarbon products, which emit carbon monoxide as a byproduct of combustion."

The requirements are that such dwelling units will have to have installed a "carbon monoxide device" that is designed to detect carbon monoxide and produce a "distinct, audible alarm." The device may be battery-powered, a plug in, or hard-wired with a battery backup. The carbon monoxide detector may be combined with a smoke detector, but, if it is, it must emit "an alarm or voice warning in a manner that clearly differentiates between a carbon monoxide alarm warning and a smoke detector warning.

"NOTE: Even if the answer is "no" on the TDS, that data will not invalidate the sale or transfer of the property. Thus, while the lack of such a carbon monoxide detector may fail to meet current safety standards; a transfer of the property may still take place.

Saturday, June 11, 2011

Hey Case Schiller - It's not the end of the real estate world!

This is a very insightful article from Jim Gillespie, the Coldwell Banker CEO. It's so true for the Bay Area because real estate trends are LOCAL and can't be averaged mathematically into a NATIONAL hodge-podge. Contact us with any questions - we are here to help!

So many of us giggled nervously as we thankfully avoided the end of the world a couple of weeks ago. But judging by the continued “end of the world” type coverage the Case-Schiller housing study got this week, maybe we are nearing the end.

Yes. I am joking, but I am amazed at the attention this report gets. It covers 20 markets, yes only 20, and that is just one of its many flaws. Yet many consider it “the be-all-and-end-all” economic indicator that defines our entire national housing picture. As we know, all real estate is local, and it is unfortunate that the reporting on a 20-city “national” index can have such a jarring impact on otherwise rational people.

Look at some of the headlines the other day:
“Home prices at lowest point since 2006 bust”
“Home values continue downward churn”
“No relief in sight’ for falling home prices”

And even in paradise – Maui- the front page headline in the paper screamed “Crash Spreads.” And Maui isn’t one of the 20 markets. In fact the nearest market covered is San Diego, a mere 2500 miles away!

Shawn Daly, an agent with Coldwell Banker Residential Brokerage in Evanston, Illinois, had to calm down two skittish buyers this week.

One, who is currently working in Iraq, had initially placed on offer of $450,000 on a lakefront Chicago condo. The sellers countered with a price of $525,000. But after seeing Case-Schiller inspired headlines on the web, Shawn’s client emailed him to ask that he lower his offering price by $50,000. Shawn explained that the sellers did not agree with his first offer so if he went lower he wouldn’t get the home. The buyer calmed down and agreed.

Shawn correctly pointed that the Case-Schiller Home Price Indices are meaningless to individual buyers who are looking at specific houses, on specific streets, in specific neighborhoods.

Then yesterday, Shawn met another client for a tour of potential homes. They hardly said hello without telling Shawn they were more nervous than ever after seeing the report on the news.

You have a right to be nervous, but I can’t say this enough. Now is the smartest time in my 36 years in real estate to buy a home if you have the lifestyle reason, financial stability and viability to do so.

And it’s all about “Triple I…P”. Inventory, Interest rates, Incentives and Pricing. Start with inventory, because most communities have seen a rise in the amount of homes on the market, you have more choices. Interest rates for mortgages remain at near-historic lows and have actually trended down over the last 7 weeks, with Freddie Mac reporting 30-year fixed rates now averaging 4.55%. Incentives are the tax advantages to home ownership. And of course, there are prices. Prices are down from mid-decade highs, but in many, many markets are showing stability, slight declines or even increases. Home affordability remains near record levels and the price-to-value proposition in most markets is extremely compelling.

If you are interested in buying a home, you owe it to yourself to contact a real estate agent in the community you are interested in. Look at homes, do a rent vs. buy analysis, explore what is available in your price range.

Don’t just take my word for it. Do your homework.

You might just be surprised that the end of the world isn’t here yet … at least until next month’s report.

Wednesday, June 8, 2011

Trulia crime stats are out today!

Trulia's crime statistics beta product is out today for 50 cities. San Francisco is the only Bay Area city included so far. It's interesting - here's the link:

Monday, June 6, 2011

Buyers Beware! $729,500 max loan limit going away this summer!

This information is from Stefani Hartsell with Princeton Capital. She does a great job staying on top of all the news we need to help our clients. If you are thinking of buying in this price range, now would be a good time. Need help - contact us.

I’ve had a few requests to review the changing max temporary high balance conforming loan limit…

Right now the max conforming loan amount in the Bay Area is $729,750. Current legislation has this expiring on 9/30 and it will roll back to $625,500. But what does that date mean?

It is important to understand how the legislation is written. The 9/30 date is the last day that Fannie Mae or Freddie Mac can buy loans up to $729,750. Fannie Mae and Freddie Mac do not lend directly to the public. Lenders do and then they package their loans and sell them to Fannie Mae or Freddie Mac. Currently more than 9 out of 10 of all new mortgages are sold to Fannie Mae or Freddie Mac.

So, Lenders will need to cut-off their lending earlier than 9/30 so that they can package up their loans and get Fannie Mae or Freddie Mac to purchase them prior to the cut-off date. If the loan is not accepted by 9/30, then the Lender gets to keep it for 30 years.

That’s a lot of risk. Last time the temp high balance limit ended, Lenders started cutting off the higher limit 4-6 weeks ahead of the cut-off date. Also, as fewer and fewer lenders were willing to fund those loans, the rates became less and less attractive due to the loss of competition.

No one has made any announcements yet, but the prudent buyer would close well ahead of those dates.

Stefani Hartsell
Senior Loan Consultant
NMLS #281600
(650) 207‐5005 cell