Your HOA and Special Assessments

Buying a condominium can be such a great deal and a very affordable way to enter the housing market. But, always look beyond the mortgage at your HOA dues and special assessments, making sure to figure them in to your real estate investment.

Now most people know that you have to pay monthly Homeowner Association (HOA) dues when you own a condo. This goes to take care of the upkeep and maintenance of the common areas, covering everything from general cleaning to security, depending on the building. A low maintenance building might have lower monthly fees, but premium buildings can often have HOA dues over $500 each month or more.

The fee to be very aware of is the "special assessment." This is when the HOA decides that some special maintenance work is needed, perhaps a new roof or paint job. Where does this money come from? Well, it comes from you, the home owner. If there is not enough money in reserves, the costs for the special work will be divided up and split between the homeowners to be paid as a "special assessment." And, there is no predicting how much it could be. It might just be a few thousand dollars here and there, but if the building needs a lot of work or if there is some emergency, your special assessment could be tens of thousands of dollars.

Sometimes special assessments can be paid for in an installment plan, but it is best to be proactive. One solution would be to save money to use in the event of a special assessment, or get involved with the HOA so that you have more of a voice in running the building. For more information, check out my previous blog entry "A New Way to HOA."

If you have any questions about condos and HOAs, please let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net. HAPPY NEW YEAR!

The New Cost vs. Value Report for the Bay Area

You just know that an updated bathroom would help your house sell, but you wonder if you will be able to recoup the costs of the renovation. I hear this question, and others like it, all the time from sellers. That is why the annual "Cost vs. Value" report is so helpful. It provides a snapshot of how much a renovation project might cost, and how much you might be able to recoup.

The annual report for the Bay Area was just released, and I wanted to share it with you. With this chart, you can look at an evaluation for about twenty common renovations, and about a dozen bigger projects. The charts give you a run down on the average cost of the project in the Bay Area, along with the projected amount of added value. You can then compare it to the national numbers.

For instance, the addition of a wood deck or a minor kitchen remodel should recoup your money and more. And, a home office remodel might not add that much value to the home.

Now keep in mind that these are just averages for the whole Bay Area region, and the values can be different for your city or even your neighborhood. If you would like more information on planning a remodeling project to get your home ready to sell, just let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.

A Great Local Resource for Both Newcomers and Lifers

If you have been in the real estate business for awhile, you might remember the McCormack's Guides. These are terrific little books with everything you could possibly want to know about a geographic area, and more. And, I mean EVERYTHING, from school scores to history to the local zeitgeist. All of this information is now online, and I wanted to make sure that everyone knew about it. For Alameda County, just visit this link to the McCormack's website.

Want the 2007 school scores? Got it! Want to know how to read the scores? Got that too! Need information on topics ranging from garbage collection to property taxes? That is there too, of course! Have to go to the emergency room? Find out which hospitals are nearby! Ready to go have some fun? Look here for ideas! (Like all good things, you have to take the good with the bad, so that means you can also look up crime statistics.)

What I love is that all of this information is now free. So, bookmark it today. Of course, you can still purchase the hard copy books, but all the information will soon be completely and exclusively online. And, if you need information on other California regions, you can find it on the home page.

I am always happy to be a resource, but you will probably get a pretty good start with www.McCormacks.com. And, when you are ready for more detailed or up-to-date information, please let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.

Quick Trips around the Bay

This holiday season, take some time out to have a little adventure with your family and enjoy all that the Bay Area has to offer. If you are here in the East Bay, plan some day trips to get out and enjoy something new. Set a destination and let the day unfold!

*Take the ferry to Pier 39 and be a tourist for the day. Stroll from Ghirardelli Square to Pier 39, grab some chocolate, have some lunch, stare at the sea lions, watch the cable car turnaround and just relax. For a quick virtual visit, check out the live sea lion webcam!

*The San Jose Tech Museum of Innovation is a fascinating for young and old alike. Located in Downtown San Jose, current exhibits include the eye-popping Body World display on anatomy and the progressive Green By Design displays. Make it more fun by taking BART to CalTrain or the Santa Clara VTA Train.

*Head north to visit the Charles M. Schultz Museum in Santa Rosa and re-discover the local genius behind Peanuts. Exhibits look at the history of the comic strip, its influence, and the art of cartooning. Save some time to go next door to the Redwood Empire Ice Arena, also built by longtime hockey enthusiast Schultz, for some wintry athleticism.

*Another fun day trip, though a bit further, would be to take the Amtrak train up to Sacramento to visit the California State Railroad Museum, a fascinating way to take in California history. Located in Old Sacramento, there is also a great deal of other state history around, as well as great shopping and restaurants. And, taking a relaxing train trip to get there is the way to go.

No matter where you choose to spend your holidays, have a great time enjoying this amazing region!

(Charlie Brown picture courtesy of http://www.schulzmuseum.org/)

Methods of Holding Title

Okay, students, time once again for a little Real Estate 101. Today's topic is methods of holding title. Many people begin by wondering, "What does holding title mean?" Well, when you own a house, there are many ways to own it, or, in other words, many ways to have the title in your name.



If only it was as simple as owning an iPod or even a car. But, there are many important issues at stake in how a home is owned, such as division of ownership or what happens to the property after an owner dies. Holding title is a very complicated issue, so remember that this is a just a brief overview.

A married couple usually owns their home as either Community Property or Community Property with Right of Survivorship. In both cases, the couple owns equal shares in the "community property" and cannot be divided by creditors. When it comes to survivorship, the home will automatically become the sole property of the surviving spouse under the Right of Survivorship arrangement. Without Right of Survivorship, each spouse can leave their share to someone else (in which case title would be held as a Tenancy in Common).

So, what is a Tenancy in Common, then? When a property is held as a Tenancy in Common, there can be any number of owners with equal or unequal interests. For instance, three people could own a home, with one person owning 50% and the other two owning 25% each. Each person can sell their share as they please, or will it to someone after their death. Any new owner would simply become a new member of the Tenancy in Common arrangement. Some married couples even choose to hold title this way.

Finally, there is Joint Tenancy, which allows any number of owners as long as all the ownership interests are equal. If there are three owners, they each own 33.33% interest. If one person sells their share, the property then becomes a Tenancy in Common. But, if one of the owners dies, they cannot will their share to someone because Joint Tenancy has Right of Survivorship. The interest of the deceased owner is shared between the remaining owners. So, if one of the three owners dies, the surviving two owners would then have a 50% interest each.

Now, remember, this is a just an overview. There are many twists and turns on the path to choosing the right method of holding title for your home. You can get great information on this topic and others from Placer Title, an escrow and title company that is terrific to work with. If you have questions about holding title, please let me know. I am always happy to help. I can be reached at 510-547-5970 or MSmartt@jps.net.

A Little Perspective on Today's Market

I just returned from a two-day real estate seminar that I regularly attend (presented by Buffini & Company), and wanted to share some of the statistics and information on the real estate market that were discussed.

Newspapers and the cable news networks continue to talk about the foreclosure mess. And, it is indeed a mess, but the singular focus on this story is distracting from some other fascinating numbers and stories. So, this is a healthy reminder to have a little perspective on the market, and to look past the alarmist reports out of the media.

Did you know that as of July 2007, right before the subprime problems began to emerge, that about 97% of all mortgages were current? And that about 30% of all real estate was owned free and clear, unencumbered by mortgage obligations? The real surprise is that those numbers have not changed all that much in the intervening months. As of November 30th, 95.1% of all mortgages are current.

Various forecasts predict that about 20-30 billion dollars are going to have to be written off because of foreclosures on subprime loans. That sounds terrible, but given that there are almost 10 trillion dollars in mortgages out there, that is less than 1 percent of all mortgages being affected by the subprime fallout.

It is a very complicated economic situation, so it is important to have some perspective on the big picture. But, keep in mind that the market is simply correcting itself. There are and will continue to be some negative results for some individuals and a ripple effect through some sectors of the economy. Yet, interest rates are terrific right now, There are some hot deals and motivated buyers out there, and it is a great time to invest in real estate for the future.

Next week, I will be mailing out to my regular clients a detailed look at the 2007 real estate market and a look ahead to 2008. If you would like information on the market from a trusted advisor, please let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net

The East Bay's "Green Corridor"

Four major East Bay cities--Oakland, Berkeley, Emeryville and Richmond--have announced that they will work together to create what they call the "Green Corridor," a business region comparable to the Silicon Valley that will focus on Green technologies and solutions. This is a terrific commitment that should greatly benefit the local economy and, of course, the earth.

According to the Oakland Tribune, the cities will work together to "create programs and policies that promote energy conservation, green construction, a green industry and more. They plan collectively to seek state, federal and private money for research, job training and job placement targeting high school and community college students."

I hope to see this take off in the coming years, and it feels like we have a huge head start with so many leading edge eco-friendly developers and companies like the Alameda County Computer Resource Center, the City of Berkeley's new solar initiatives, and companies like EcoHome Improvement, Build It Green, and Bio-Diesel Hauling. These are just the tip of the iceberg, of course, and don't forget Lawton Associates own green condo development Gate 48 in the Temescal district!

Living in the East Bay, it is just so easy to go green, and I am happy to see the local city governments providing the incentives and vision to take us even further.