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.

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.

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: http://www.trulia.com/crime/

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
www.princetoncap.com/stefanihartsell

Protect Your Home While You Travel

Planning your next getaway? Unfortunately, an empty house can be a tempting target for would-be burglars. Follow a few simple precautionary measures to secure your home, whether you’re leaving for weeks or just a weekend.

Make your home look lived in - Install automatic timer switches on lights, radios, and the TV. They’re inexpensive and many include variable timing schedules to create the appearance of activity in the house. Take extra steps to make your home seem occupied by turning off the ringer for your phone and parking a car in the driveway.

Alert the neighbors - Ask your neighbors to keep an eye on the house and leave them an emergency phone number. You might also consider hiring them to mow the lawn, water the plants, and put the trash cans out.

Stop all deliveries - Make sure things don’t pile up on the porch while you’re gone. Newspapers, mail, packages, and door flyers are all tell-tale signs that you’re away.

Secure your doors and windows - Use high-quality deadbolt locks on your doors, additional blocking devices on sliding glass doors, and sash locks on your windows. These can be easily retrofitted.

Install an alarm system - Deter would-be intruders with an alarm system and stickers on the exterior of your home. Many systems offer monthly monitoring for added protection. However, make sure everyone in the home knows how to properly use the system to avoid false alarms.

Remove valuables and keys - Leave your house key with a trusted friend (not hidden outside your home), and take valuables to a bank safe deposit box.

Spending a little time to protect your home before you go on vacation is well worth the effort. You’ll reduce your chances of being targeted and ensure a happy homecoming.

Enjoy your trip!

Millbrae requires sewer lateral test before close effective 4.22.11

Just like Burlingame and Hillsborough, Millbrae now requires a sewer lateral inspection when a home is sold. The inspection must be done and reviewed by the City before close of escrow.

The inspection should cost between $250 and $300. If issues are found during inspection or during the City's review of the inspection video, repairs must be made.

The biggest gotcha is this - if the property is found to have a shared sewer lateral, it's the property owner's responsibility to separate the sewer into separate sewer laterals for each parcel. Typically, these costs are split 50/50. It's the selling owner who has to negotiate this split.

Yikes.

San Carlos Real Estate Stats for January-April, 2011

Realtors Take to Capitol Hill to Fight For Homeowners

This article is from Rick Turley, the President of the SF Bay Region of Coldwell Banker, our boss.

Bay Area home buyers, sellers and real estate agents better get familiar with a few acronyms – MID, QRM and GSE – because they’re likely to hear a lot about them in the months ahead. These are the equivalent of WMD to the housing market. And what happens to them could have a very real impact on local home values and the health of our market.

As a Director at NAR, I represent Coldwell Banker in a committee consisting of leaders of large brokerage firms across the country, assembled to give guidance and feedback to the NAR executive team. The NAR legislative meetings held last week in Washington DC, also offers the opportunity each year for Realtors to meet with Congressional leaders on Capitol Hill. Along with hundreds of other NAR committee members from all 50 states, including some of our very own Bay Area CB Realtors, we called upon our respective elected officials to discuss our fragile housing recovery. Congressional leaders are looking at anything and everything during this time of historic national debt, and they need to understand the devastating impact that some proposed changes in housing policy could have on our local market.

Lawmakers are considering a variety of policy revisions, including reducing or even eliminating the mortgage interest deduction (MID); tightening Qualified Residential Mortgage (QRM) rules for borrowers, and eliminating Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac, which are critical to keeping mortgage money readily available.

We met with Senator Diane Feinstein, and Representatives Speier, Honda, and Eshoo about the importance of maintaining the mortgage interest deduction, especially here in the Bay Area. The deduction is something all of us take for granted as we file our annual tax returns. It’s one of the foundations of homeownership in this country and helps bring housing within reach of millions of Americans.

If lawmakers lower the maximum loan amount to $500,000 – one of the plans under consideration – it may not have a big impact in places like the Midwest or South, where homes typically sell for $200,000 to $300,000. But it would have a huge impact for high-priced markets like ours in the Bay Area.

Members of Congress don’t consider the high cost of living in areas like ours when they propose changes like this. Most assume $800,000 will buy a mansion for the wealthy. But those of us who live here understand that it may just get you a modest starter home. I doubt that first-time buyers in many Bay Area cities who are using both of the couple’s income to qualify for a $750,000 to $800,000 home feel very wealthy.

“Tax incentives for home ownership have been a part of our tax system for decades and are deeply woven into our economic fabric,” a local Realtor Association president told lawmakers. “Reducing or eliminating the MID is a de facto tax increase on home owners, who already pay 80 to 90 percent of U.S. federal income tax.”

Changes to QRM rules would require significantly higher down payments for both homebuyers as well as those trying to refinance their mortgage. Buyers would face a minimum of 20 percent down, while those refinancing mortgages would be required to have 25-30 percent equity in their properties in order to get a loan.

We understand Congress’ interest in trying to reduce the default rate among borrowers, but this isn’t the answer. As the Mortgage Bankers Association pointed out in a white paper, high down payment and equity requirements will not have a meaningful impact on default rates. But they will require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily higher interest rates.

Finally, a number of bills making their way through Congress have provisions that would significantly reduce or eliminate Freddie Mac and Fannie Mae within the next few years. Since both GSEs purchase mortgage loans and repackage pooled loans that are sold on the secondary market, this could have a significant impact on the availability of home loan financing.

Realtors urged lawmakers to tread very carefully in reforming Fannie and Freddie. Without a secondary market, mortgage interest rates would be unnecessarily higher and outright unaffordable for many Bay Area buyers. While GSE reform is necessary, the federal government must have a continued key role in the secondary mortgage market to ensure capital and liquidity in the market.

This is not the time for Congress to consider radical housing policy changes. Just as we are seeing a gradual recovery in the housing market, any one of these legislative changes could halt the progress we’ve made. All three could be catastrophic. I urge you to join me in contacting your local representatives in Congress to urge them to take these facts into consideration as they look at any changes to our nation’s housing policy.

That’s it for now. Have a good week!
Rick

Rick Turley
President, San Francisco Bay Area
Coldwell Banker Residential Brokerage

Great News - onerous 1099 landlord reporting law repealed!

Congress repealed a law in early April that would have required ALL landlords (even those who rent out a room in their home) to file a 1099 for any services paid to vendors over $600 starting next year.

Whew! That will save lots of time and money. Thank goodness for the National Association of Realtors!

Here's a link to a detailed article:
http://speakingofrealestate.blogs.realtor.org/2011/04/08/600-1099-landlord-reporting-law-repealed/

Here are some interesting ideas for remodeling if you can't afford to move up to a new home at this time:

Homeowners unable to purchase a new home – either due to stricter loan guidelines or because they are underwater on their current mortgage -- may want to consider remodeling certain areas of their home to make it more suitable to their current lifestyle. Currently, homeowners can find bargains for items such as kitchen cabinets, granite in the bathroom, and landscaping services.

The costs for custom cabinets are down approximately 20- to 30-percent, due to lower material costs and cabinetmaker discounts. Some cabinet manufacturers are responding to the fall in demand by reducing or eliminating surcharges for custom-size cabinets, decorative finishes, and higher-end wood types.

In the bathroom, homeowners can find discounts of up to 50 percent on granite, due to inventory backlogs and new foreign competition, and on porcelain sinks, due to a surge in Chinese imports.

Experts say homeowners are continuing to focus upgrades less on recouping their investment and more on the enjoyment factor, which is one reason there has been a surge in outdoor living spaces. Costs of installation are down 20 percent or more amid a construction labor glut and consumers are finding it easier to negotiate prices with landscapers.

Interesting alternative to refinancing to remove spouse from loan

Here's a link to an interesting article from the N.Y. Times. It offers an alternative solution to refinancing to remove a spouse's name from the mortgage after a divorce. May not work for everyone, but definitely something to consider:


http://www.nytimes.com/2011/04/10/realestate/10mortgages-refinancing-divorce.html?_r=2&ref=realestate

Prompt Decision for Qualification for Short Sale Act of 2011

Here's an article from the National Association of Realtors website which brings a little hope to the heart of Realtors and troubled homeowners alike. Caution - talk to an attorney and a CPA before deciding which path to take if you cannot make your mortage payments.

Washington, April 13, 2011

A new bill to improve the process for approving short sales may soon bring relief to distressed home owners who are unable to keep their homes and hope to avoid foreclosure. The bill, introduced in the U.S. House yesterday and strongly supported by the National Association of Realtors®, would impose a deadline of 45 days on lenders to respond to short sale requests.


The legislation, the “Prompt Decision for Qualification for Short Sale Act of 2011,” was offered in Congress by U.S. Reps. Tom Rooney (R-Fla.) and Robert Andrews (D-N.J.).


“The current short sale process can be time-consuming and inefficient, and many would-be buyers end up walking away from a sale that could have saved a home owner from foreclosure,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I.


“Realtors® and consumers continue to raise issues about delays in the short sale process, because lenders are unable to decide whether to approve a short sale. After many months of delays, and with no response from lenders, potential buyers are losing patience and cancelling their contracts, often resulting in the property entering foreclosure. A short sale minimizes the negative impact on sellers and generally costs the lender less than a foreclosure,” said Phipps.


NAR has been actively pushing the lending industry to improve the process for approving short sales, which represent about 13 percent of recent home sales according to NAR data. Phipps praised Reps. Rooney and Andrews for their efforts on the bill and urged Congress to pass the bill quickly.


“As the leading advocate for home ownership and housing issues, Realtors® want to help more home owners avoid foreclosure by facilitating a short sale when a family is absolutely unable to keep their home; however, that can only happen if lenders and servicers approve short sale offers in a reasonable amount of time,” said Phipps. “Streamlining short sales transactions will reduce the amount of time it takes to sell the property, improve the likelihood that the transaction will close and reduce the overall number of foreclosures. This benefits sellers, lenders, buyers and the entire community.”


The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.1 million members involved in all aspects of the residential and commercial real estate industries.

A B Trust rules are changing for 2011

The new laws signed in December, 2010 for tax relief and job creation contain many tid-bits for estate planning. Now each individual has a $5 million combined exemption for estate and gifts. There is also a new tax rate of 35% which applies to both. A married couple is allowed "portability" or the chance to share their $5 million each for a possible total exemption of $10 million. Whew - my head is spinning already! So glad I have a great estate tax attorney who can help me understand all these changes. Need a referral? Contact me and I would be happy to provide. Judy Clarke The Clarke Team Bay Area Real Estate 650-489-5399 sold@clarketeam.com