Friday, October 26, 2007

Yes, You Do Need a Home Warranty

A lot of new homeowners get confused on the differences between a homeowners hazard insurance policy and a home warranty plan. And, many think that a warranty may not be necessary, assuming that they are like those questionable extended warranties they offer you on electronics and small appliances. Well, let me weigh in that a home warranty plan is some of the best money you can spend in protecting your home.

Generally, the homeowners hazard insurance policy covers major damage to the structure of a home caused by natural hazards and accidents, whereas a home warranty plan covers the cost of unexpected repairs or replacement of major systems and appliances that break down due to normal usage. My own home warranty has come in very handy, and I have a relatively new home!

For instance, say you move into a house and you have a plumbing problem a few months later. Perhaps the pipes under the kitchen sink develop a leak and need to be replaced. Instead of calling a plumber and paying several hundred dollars for the labor and parts, you would just call your home warranty representative and then pay a small fee of about $50. It is like having dental insurance and paying a set fee for cleanings. That simple! (To extend the comparisons....the water damage caused by pipes would be covered by your homeowners hazard insurance.)

A home warranty plan will cost you a few hundred dollars a year, and it is well worth it. You will be saving money if you make just one or two repair calls a year. Standard home warranty plans cover items such as the following: heaters and furnaces, dishwashers, ovens, garbage disposals, plumbing leaks, water heaters, sump pumps, electrical, and much more...even some pest control issues. And, if you have special items that need coverage--like that fancy built-in wine cooler--you can get additional coverage.

There are a lot of companies out there, and I highly recommend Old Republic. Not only do they have great rates and coverage, their customer service is unbeatable. If you live in the Bay Area, I can hook you up with Alex Quinzon, their top-notch sales rep.

Home warranties can be difficult to get a handle on, especially if you are a new homeowner. If you have any questions or need guidance let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or

Wednesday, October 24, 2007

Computer and Electronics Recycling

Time for another GREEN update. One of the toughest things to Reduce/Reuse/Recycle is old computers and other electronic items. Well, I just discovered a terrific resource in Berkeley that should take care of all of your needs--the Alameda County Computer Resource Center.

The ACCRC will take your old computers and laptops for free. They will even "degauss" (aka clear the hard drive) for a small fee of just $10. They use this impressive instrument with massive electromagnets to clear all your old files and information. Then, they take the old computers and get them up-and-running on a basic Linux system so they can then be donated and re-used by a school or a non-profit or some other needy organization. (Do you need computers for your org? Give them a call!)

Most electronic items with a plug--from cell phones to TVs to toasters--will be accepted free of charge. If you live in Berkeley, they will even pick-up the stuff for free! But, being a non-profit, they will happily accept any donations you can make. The only thing they can't accept is large household items like washing machines, air conditioners, dishwashers, and things of that sort. Visit their website to find out what they do with all this stuff.

There is a ton of great information on their well-written website, but there is one more thing you should know. ACCRC founder James Burgett has just been chosen by CNN as an environmental hero for their current Planet in Peril series.

If you have other questions about recycling and going green, let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or

Tuesday, October 23, 2007

Another Look at the MMAP

Normally, I try very hard not to repeat myself on this blog, but I think the MMAP program is worth another look right now. First, it is one of the most viewed pages on my blog and I get asked about it quite a bit. Second, with the recent changes in the market, I think it is worth another look.

MMAP stands for Monthly Mortgage Assistance Program, and it can help reduce a buyer's payments from $250 to $1000 per month for up to two years. And, all it requires is a simple agreement between the buyer and the seller.

MMAP could be a very valuable tool right now for sellers in this market. Right now, the market is changing from a sellers market to a buyers market, which means that sellers need to do more than ever to make their homes attractive to buyers. Buyers have every reason to be fickle right now, and an attractive feature like MMAP just might be the trick to encourage them to make an offer on your home instead of the one down the street.

So, instead of a price reduction or credit, consider using the MMAP. Basically, the seller agrees to set aside an agreed-upon amount of the purchase price into a trust account (via the MMAP grant program), which is then used to reduce the buyer's monthly mortgage payments anywhere from $250 to $1000 per month for up to 24 months. It is a pretty simple process, and you can get more information by visiting the MMAP website.

If you would like to discuss the MMAP program in depth and find out if it is right for your listing, please let me know. I am always happy to help. I can be reached at 510-547-5970 or

Monday, October 22, 2007

A Consumer Guide to Real Estate Contracts

Most consumers know that a real estate transaction is a very complicated process--from negotiating the price to lifting contingencies to arranging the financing before finally closing escrow. But what a lot of real estate consumers do not realize is that the transaction is also a legal process. The standard purchase offer used in the state of California is also a legally binding contract. So, it is important to understand some of the ins and outs of this innocent looking 8-page document.

The standard California Residential Purchase Agreement is a contract. And, a contract is a legally enforceable agreement between two or more parties that creates an obligation to do or not do particular things. In this case, the agreement is to purchase a house at an agreed upon price, usually with many conditions.

First, after agreeing upon a price, the contract usually states the amount of the initial deposit, down payment, and loan amount. There is often an initial deposit, followed by an increased deposit if certain conditions are met, such as the successful lifting of an inspection or loan contingency. In addition to the signatures, it is the deposit that makes the purchase offer contract valid.

It is important to keep the deposit in mind because the buyers can lose the deposit if they pull out of the contract. The deposit is a good faith display of consideration to the sellers that you intend to complete the purchase of the home at the end of the escrow period. So, if you pull out, you also can lose the deposit. This is covered in depth later in the contract in Section 16 regarding "liquidated damages." And pulling out of a contract is considered damaging to the sellers because they have lost time and other potential buyers and need to be compensated for this damage.

The next important section is regarding contingencies. The buyer has the right to a short period at the beginning of the escrow period to make sure their loan and appraisals are in order and to further inspect the house. This period is a safeguard to the buyer to make sure they are ready and able to make this major transaction and to ensure that home has no hidden defects. Perhaps there is a massive amount of dry rot or a faulty foundation that might cause the buyers to reconsider their interest in the home. By pulling out of the contract before lifting these contingencies, they can also safely get their deposit back (in most situations).

Most of the standard contract is considered "boilerplate" but make sure to read each section and make sure you understand it. There are sections that outline who pays which transfer taxes, who pays for home warranties, which major appliances and other items are included (or not included) in the sale.

One interesting legal fact pertaining to contracts that not a lot of people know is that a counter-offer renders the original contract null and void.

Now there is a lot more to the standard real estate contract here in California than I have covered here. I always advise that you contact a lawyer if you have a questions about the contract or a legal issue arises. If you would like to know more about the purchase offer contact, please let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or