Market Update

The Return of the Loan Contingency?

In the East Bay's go-go-market of the last few years, loan approvals happened without a second thought. And, since buyers have to be competitive in that market climate, they often dropped the loan contingency from their offers. Well, the credit market is tightening up--especially with American Home Mortgage and others like them closing their doors--and loans won't be so easy to come by.

I think this means we'll start seeing the return of the loan contingency. Buyers are going to have to cover themselves, as in the past, when it comes to getting their loans funded. Firms like AHM stopped funding new loans last week, and then closed their doors. What happened to buyers who were ready to close escrow last week, but their lender disappeared on them? I hope they had loan contingencies in place.

We'll also start to see a return to conforming loans--aka those loans that conform to federal Fannie Mae and Freddie Mac standards--and fewer and fewer jumbo loans. I also think we might start seeing more seller financing, which could be very interesting. What do you think? Comment below or drop me a line at Msmartt@jps.net.

Financial Tips

Tips for Improving Your FICO Score

Like it or not, your ability to get a good home loan is highly dependent on your FICO score. And, many people don't realize that a good FICO score has nothing to do with how much money you have. It is a measure of how well you handle credit and pay back those companies you borrow money from.

I once knew a very well-off young couple. They were newly married and ready to buy a home, but their FICO score was in the basement. Why? Because they had always paid cash for everything and never used any credit cards or loans. After spending a year building a credit history, they finally got a good FICO score, a good loan, and a lovely first home.

There are lots of great tips to improving your credit score, and everyone's needs are different. If you need to improve your FICO score, please give me a call and I will recommend several reliable mortgage brokers who know a lot about improving your credit profile.

But, in the meantime, here are several great tips that should apply to most people:

1. Get a copy of your credit report from all three credit bureaus and review it for accuracy. It is estimated that 60-70% of credit reports contain inaccuracies.

2. Pay your credit cards on time, every month, even if it is the minimum payment. Lenders are looking for a strong history of paying your debts in a timely manner.

3. Use your credit cards to build a profile, but don't max them out. Most advisors recommmend using just 25-40% of your credit limit. Lenders are looking for responsible use of credit.

4. Be patient. It can take 6-12 months to see a strong improvement in your credit score.

For a more complete look at your FICO score, visit the Fair Isaac MyFico.com website. And, feel free to contact me anytime to discuss FICO scores and lending. I can be reached at 510-547-5970 x57 or MSmartt@jps.net

(photo courtesy of MyFico.com)

Mary's List!

I've added a new feature to my web presence that is sure to grow and grow, and I hope you find it helpful--Mary's List. This is a list of great people and businesses that can help you with your home and life. Find a computer specialist, a hauler, or someone to help with new floors...and more. And, do you have someone to suggest...just let me know. Drop me a line at 510-547-5970 x57 or MSmartt@jps.net.

Have a fun weekend!

Fun Time

Alrighty, enough talk about real estate....time to take a break and have some fun this weekend! The East Bay always has so much to do that it can be hard to decide! Here are some of my picks for fun in the East Bay this weekend:



The San Francisco Jewish Film Festival makes its annual trek to Berkeley for a week of screenings at the Berkeley Rep. Highlights include the magical drama AVIVA MY LOVE and the romantic comedy GORGEOUS!




Lyle Lovett and His Large Band take the stage with kd lang at the Sleep Train Pavilion in Concord. What a great combo!



Get some exercise and remember Oakland's historic "work holiday"--a citywide general strike that led to over 100,000 workers walking out on their jobs in 1946--the last general strike in US history. The walk starts in Downtown Oakland at Broadway & Telegraph on Saturday morning at 10:30am.




I'm also going with family on Friday night to see Hairspray. Loved it onstage and can't wait for the movie. You can't stop the beat!



Have a fun weekend...and if you happen to visit some open houses on Sunday and want to make an offer, let me know. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.

Real Estate 101

Tenants in Common

In the Bay Area, where real estate prices continue to be high and challenging for first time buyers, creative solutions are always appreciated. Holding title to your home in a TIC, or Tenants in Common, is one such solution. So, what is a TIC?

A Tenants in Common arrangement allows a group of people to hold title together in percentage shares with undivided interest. Imagine a 4-unit building owned together by the residents of each unit. And, whereas a single loan had to be arranged for all of the owners in the past, that is changing these days, making TIC ownership easier than ever.

TIC ownership allows Right of Survivorship, which means you can leave the home to your heirs. This might seem logical, but it is the key difference between TICs and Joint Tenancy ownership, in which your share goes to the other joint tenant owners.

While there are many similarities between TICs and Condos, there are also key differences. TIC owners retain the airspace to their units and jointly own the common areas. In a condo, you lose the airspace and the HOA owns the common areas. TICs usually have monthly fees to cover general area maintenance and such, but you will always own your share.

TICs can be tricky, but are becoming more and more common and continue to be a great way to enter the real estate market. If you have questions about them or would like to discuss it further, I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.

Financial Tips

Watch out for that Pre-Pay Penalty!

If you are thinking about selling your home, make sure to check your existing home loan(s) for any pre-payment penalty. They can be quite stiff!

Remember back when you were setting up your mortgage, and perhaps you got a better deal by including a pre-payment clause? The lender gave you a better deal because they thought you might stick around for awhile sending them regular checks. They like checks! Well, if you go away before 3 years or 5 years (depending on your own loan), you could get stung with a hefty penalty costing you thousands of dollars.

Even if you are selling your home close to the date, it could throw a wrench in the process. Say you want to schedule close of escrow for right after the pre-payment cut-off date, but if you submit a loan payoff demand even 24-hours before the the penalty phase ends, you could still owe the fee. So, watch the dates in addition to watching the money.

For more on pre-payment penalties, including a great summary of why they exist, check out Mike Mueller's blog. Or if you have further questions about the little details you have to watch out for when selling your home, let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.

Hot Property--311 Oak Street #837

My colleague Perry Riani has just listed a terrific loft at the Sierra building in Jack London Square, and I must say it is one of the best deals in the neighborhood.

This is a huge top-floor loft with nearly 1400 square feet and unbeatable views of Oakland and SF. It isn't technically a penthouse, but you feel like you are on top of the world, and--even better--you aren't paying penthouse prices. At $589,000, it has a great price per square foot--one of the best in the neighborhood.


And, the features are impressive. It is a 1 bedroom/1.5 bath loft unit, but it also has a nice bonus space that could be a nursery or a home office. The hardwood floors and open kitchen floor plan are beautiful, and give this modern industrial design a warm homey feel. A wall of windows lets in the perfect Bay Area sunlight--and they even open. Or you can modulate the mood and temperature with remote-controlled blinds and air conditioning. The building has many great amenities, including a fitness center, pool, 24/7 security, concierege....and a really great deli on the corner!


Take a virtual tour at 311OakStreet.com. And,don't miss the open house this Sunday, because this unit won't last long. If you would like to preview it, I would be happy to give you a tour. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.

Have a sunny and fun weekend!