As I've written about before, a lot of people still ask me about buying foreclosures. Due to the media's coverage of real estate market and the sub-prime fallout, there is a belief that there are tons of foreclosure deals out there just waiting to be snapped up. But think again. The East Bay is just different.
Click here to visit a list of Countrywide's currently active foreclosures in California (and dig deeper to look at the whole country). There are over 4200 Countrywide foreclosures in the state as of February 12th. How many are in our neck of the woods?
Well, Oakland has 33 on the list, and your search pretty much begins and ends with that. There is one foreclosure in Berkeley, and none in Albany, Emeryville, El Cerrito and Piedmont.
That Oakland list does offer some deals for people who are willing to put a lot of work into the homes and a lot of patience. Most of the deals are in the $200k and $300k range, but there is one as low as $118,000 and one as high as $744,000. Buying foreclosures takes a lot of time because everything needs to pass through the bank's bureaucracies, and the purchases are "as-is."
I found it to be quite interesting and wanted to share it with you. So, peruse the list and let me know what you think. And, if you have any questions about foreclosures, please let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Wednesday, February 27, 2008
Tuesday, February 26, 2008
The Inspection Contingency Period
So, you've made an offer on a home and it has been accepted. Congratulations! Within the escrow period, there is the inspection contingency period for you to look into all of the nooks and crannies of the house to make sure it is the perfect home for you. And, if you do find any significant faults, the inspection contingency provides the ability to pull out of the contract.
Now, you probably aren't an expert in foundations or furnaces or termites, so you have to get the experts in to inspect your home. But, what should you expect to inspect? Of course, every home is different in size, history, style and more, but this is a general list to set you on the right path to a successful completion of your inspection contingency period.
General Home—A look at all of the basic systems in the house, from heating and electrical to roofs and windows. The general home inspection can sometimes lead to additional specialized inspections.
Roof—An examination of the age, style and condition of the roof.
Sewer Lateral Inspection—This inspection looks at the plumbing connection from the private home to the city’s sewer system to find any possible leaks or seepage.
Pest and Structural—A investigation of any termite infestation or basic structural defects.
Foundation—A detailed investigation of the home’s basic foundation.
Heater—An examination of the age, type and condition of the home’s heating system.
Electrical—An examination of the age, type and condition of the home’s electrical system.
Plumbing—An examination of the age, type and condition of the home’s plumbing system.
The cost of these inspections can vary from free to several hundred dollars, so make sure to budget that into your plans. If you need a referral to a qualified inspection, check out The Smartt List or give me a call. I'm always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Now, you probably aren't an expert in foundations or furnaces or termites, so you have to get the experts in to inspect your home. But, what should you expect to inspect? Of course, every home is different in size, history, style and more, but this is a general list to set you on the right path to a successful completion of your inspection contingency period.
General Home—A look at all of the basic systems in the house, from heating and electrical to roofs and windows. The general home inspection can sometimes lead to additional specialized inspections.
Roof—An examination of the age, style and condition of the roof.
Sewer Lateral Inspection—This inspection looks at the plumbing connection from the private home to the city’s sewer system to find any possible leaks or seepage.
Pest and Structural—A investigation of any termite infestation or basic structural defects.
Foundation—A detailed investigation of the home’s basic foundation.
Heater—An examination of the age, type and condition of the home’s heating system.
Electrical—An examination of the age, type and condition of the home’s electrical system.
Plumbing—An examination of the age, type and condition of the home’s plumbing system.
The cost of these inspections can vary from free to several hundred dollars, so make sure to budget that into your plans. If you need a referral to a qualified inspection, check out The Smartt List or give me a call. I'm always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Wednesday, February 20, 2008
The ABCs of PMI
With all of the seismic changes happening in the mortgage markets, one aspect to keep in mind is PMI, aka Private Mortgage Insurance. PMI is when you buy insurance to cover your lender (not you) because you are taking out a loan deemed to be riskier than most.
PMI is usually needed on loans for more than 80% of a home's assessed value, which account for many mortgages in the Bay Area. So, if you are putting less than 20% down on your home purchase, you will most likely need PMI.
How much is PMI? Generally, it costs one-half of one percent of the total loan. So, if your loan is for $500,000, your annual PMI will probably be around $2500 annually, or about $210 per month. That is a lot of money to add to your monthly budget, and it is not always tax deductible.
Because of the major shifts in the mortgage industry, PMI guidelines will also be getting tighter. The private mortgage insurance companies are indicating that they will no longer provide the insurance for 100% financing or even for loans with just 5% down. It appears that a minimum of a 10% downpayment will become necessary. And, if you can't get PMI, then you probably can't get your loan.
There are some ways around PMI. Some lenders will waive it if you get your loan at a higher interest rate, and that interest would be tax deductible. Or, you can get a second mortgage (at a higher interest rate) to help get to a 20% downpayment.
One final note: always make sure to cancel the PMI when you pay down the premium to 80% of the home's value. Don't wait for the lender to do it, even though they are legally required to.
PMI and the changing mortgage market can be challenging to understand, but please let me know if you have any questions. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
PMI is usually needed on loans for more than 80% of a home's assessed value, which account for many mortgages in the Bay Area. So, if you are putting less than 20% down on your home purchase, you will most likely need PMI.
How much is PMI? Generally, it costs one-half of one percent of the total loan. So, if your loan is for $500,000, your annual PMI will probably be around $2500 annually, or about $210 per month. That is a lot of money to add to your monthly budget, and it is not always tax deductible.
Because of the major shifts in the mortgage industry, PMI guidelines will also be getting tighter. The private mortgage insurance companies are indicating that they will no longer provide the insurance for 100% financing or even for loans with just 5% down. It appears that a minimum of a 10% downpayment will become necessary. And, if you can't get PMI, then you probably can't get your loan.
There are some ways around PMI. Some lenders will waive it if you get your loan at a higher interest rate, and that interest would be tax deductible. Or, you can get a second mortgage (at a higher interest rate) to help get to a 20% downpayment.
One final note: always make sure to cancel the PMI when you pay down the premium to 80% of the home's value. Don't wait for the lender to do it, even though they are legally required to.
PMI and the changing mortgage market can be challenging to understand, but please let me know if you have any questions. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Friday, February 15, 2008
The Rockridge Market is Just Different
Today, Ron Kriss, our broker here at Lawton Associates, announced a comprehensive and historical comparative analysis of the Rockridge real estate market. And, he has concluded that "Rockridge is Just Different." I have worked with Ron Since the mid-90s and we have seen the market in all of its many ups and downs.
Rockridge has long been one of the most desirable neighborhoods in the entire Bay Area, and the real estate market here is atypical. Lawton Associates, an expert in the Rockridge district, has been the top-selling real estate brokerage in the neighborhood for over 10 years.
This chart, compiled by Ron, demonstrates the fact that there were more homes sold in Rockridge in 2007 than in the two previous years. The average list price and the average sold price have gone up every year including 2007. The chart includes a split of 2007 into the first half and second half of the year, to further counter the mainstream media’s point that the market is getting worse. “Maybe things are getting worse in the Greater Bay Area, the State of California, and the United States,” adds Kriss, “but not in Rockridge. Both six-month periods of 2007 were very strong and there was even continued over bidding on many premium homes.”
Ron adds, “Compared to the peak of 2004, there were fewer homes sold in Rockridge in the 2005-2007 time period. This is mostly because there were just fewer homes on the market during this 3-year time period, not because homes were not selling. The number of cancelled, withdrawn, and expired listings over the above chart’s four year period has not changed very much.”
Ron's 2008 Forecast—“ The market could actually get very hot in 2008”
Based on early trends from January 2008 and the proposed increase of the conforming loan limit, Ron also provides a forecast for the next eleven months.
“I can tell you that the spring real estate market has already started off with a bang and there is not enough inventory. This coupled with historically low interest rates has shown us a very robust marketplace so far. If buyers are waiting for prices to drop and sellers to give their homes away, I don’t think 2008 is the year. In fact with the conforming loan limits set to increase under the just signed “Economic Stimulus Package” the market could actually get very hot in 2008.”
If you have questions about the Rockridge market, or other markets in Oakland and Berkeley, just let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Rockridge has long been one of the most desirable neighborhoods in the entire Bay Area, and the real estate market here is atypical. Lawton Associates, an expert in the Rockridge district, has been the top-selling real estate brokerage in the neighborhood for over 10 years.
This chart, compiled by Ron, demonstrates the fact that there were more homes sold in Rockridge in 2007 than in the two previous years. The average list price and the average sold price have gone up every year including 2007. The chart includes a split of 2007 into the first half and second half of the year, to further counter the mainstream media’s point that the market is getting worse. “Maybe things are getting worse in the Greater Bay Area, the State of California, and the United States,” adds Kriss, “but not in Rockridge. Both six-month periods of 2007 were very strong and there was even continued over bidding on many premium homes.”
Ron adds, “Compared to the peak of 2004, there were fewer homes sold in Rockridge in the 2005-2007 time period. This is mostly because there were just fewer homes on the market during this 3-year time period, not because homes were not selling. The number of cancelled, withdrawn, and expired listings over the above chart’s four year period has not changed very much.”Ron's 2008 Forecast—“ The market could actually get very hot in 2008”
Based on early trends from January 2008 and the proposed increase of the conforming loan limit, Ron also provides a forecast for the next eleven months.
“I can tell you that the spring real estate market has already started off with a bang and there is not enough inventory. This coupled with historically low interest rates has shown us a very robust marketplace so far. If buyers are waiting for prices to drop and sellers to give their homes away, I don’t think 2008 is the year. In fact with the conforming loan limits set to increase under the just signed “Economic Stimulus Package” the market could actually get very hot in 2008.”
If you have questions about the Rockridge market, or other markets in Oakland and Berkeley, just let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Wednesday, February 13, 2008
Below Market Rate Condominiums
One terrific option for first time homebuyers in any market is the purchase of a "below market rate" condominium. These are generally city-run programs to provide affordable entry to the real estate market for low and moderate income earners, especially in areas where housing prices can be high.
Every program is different, but many cities generally work with developers to set aside a percentage of units that would be designated as "below market rate." For instance, a one bedroom condominium might cost $275,000 instead of $425,000. And, these units are usually required to be as equitable to the condos priced at a fair market value.
These BMR programs have income restrictions and they often have lotteries for high-demand developments. But, the extra paperwork and patience can pay off if you are looking for affordable homeownership. The main downside to these programs is that you will earn little or no profit when you sell the unit, due to restrictive re-sale regulations, and you still have to pay HOA dues. But if homeownership is the goal, not profit-making, then BMR programs are a great option.
For information on the City of Emeryville's well-developed BMR program, visit their website. Berkeley also offers a BMR program, and so does San Francisco. Check out your own city's housing department if you don't live in these cities.
And, it just so happens that I am currently listing a beautiful BMR resale condo in the desirable Terraces at Emery Station building in Emeryville. It is a one-bedrom/one-bath top floor condo with some views of the Oakland Hills. The location is terrific, close to everything in Emeryville, from Ikea to Emery Bay and more. Plus, it is perfect for Amtrak commuters. The Terraces has great amenities, such as a gym with sauna and an entertainment room. And, this BMR condo is listed at just $264,400.
If you would like more information on this BMR condo or how to apply for BMR programs, please let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Every program is different, but many cities generally work with developers to set aside a percentage of units that would be designated as "below market rate." For instance, a one bedroom condominium might cost $275,000 instead of $425,000. And, these units are usually required to be as equitable to the condos priced at a fair market value.
These BMR programs have income restrictions and they often have lotteries for high-demand developments. But, the extra paperwork and patience can pay off if you are looking for affordable homeownership. The main downside to these programs is that you will earn little or no profit when you sell the unit, due to restrictive re-sale regulations, and you still have to pay HOA dues. But if homeownership is the goal, not profit-making, then BMR programs are a great option.
For information on the City of Emeryville's well-developed BMR program, visit their website. Berkeley also offers a BMR program, and so does San Francisco. Check out your own city's housing department if you don't live in these cities.
And, it just so happens that I am currently listing a beautiful BMR resale condo in the desirable Terraces at Emery Station building in Emeryville. It is a one-bedrom/one-bath top floor condo with some views of the Oakland Hills. The location is terrific, close to everything in Emeryville, from Ikea to Emery Bay and more. Plus, it is perfect for Amtrak commuters. The Terraces has great amenities, such as a gym with sauna and an entertainment room. And, this BMR condo is listed at just $264,400.
If you would like more information on this BMR condo or how to apply for BMR programs, please let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Tuesday, February 12, 2008
Why I Haven't Blogged in Two Weeks...
Why haven't I blogged in two weeks? Because I'm so busy with my clients! They say the market is busting, but I am not seeing too much evidence of that in our market. This just goes to show you that the real estate market is truly a neighborhood-by-neighborhood market.
Here in Berkeley, Rockridge, and other parts of Oakland, there continues to be a consistent number of homes available for sale. And, buyers are starting to come out of the woodwork due to interest rates that are both low and sane and some great deals that are out there.
So, what does this say about the market in our neighborhoods? Here are some tips for both buyers and sellers.
SELLERS:
*Be Patient. At the top of market, sometimes homes were barely on the market before they received multiple offers over asking price. Now, deals are happening, but buyers are being a bit more cautious. Hang on, homeseller, and price it right and make it shine.
*Price it Right. Don't compare your home sale to sales that happened in your neighborhood last year or at the top of the market. While sales are happening, we are not seeing record-breaking profits. If that is why you are selling your home, perhaps it is best to wait until the market goes nuts again.
* Make your home shine. This is always the case, but now more than ever. With a slower market, you need to make sure your home is better than the competition. Fix that fence and paint those walls! The investment will be well worth it.
BUYERS:
*Get your Loan Pre-Approved. Talk to a mortgage broker (or call me for a referral) and get your loan set-up. The mortgage landscape is changing constantly right now, and mostly for the better. Rates are low and sensible, so now is the time.
*Don't Get Desperate. Take the time to find the home that is right for you. This might take some patience, but it will be well worth it in the long run. But be prepared! Some properties are still hot and do demand a multiple offer situation.
*Avoid Foreclosure Hype. As I've blogged before, a lot of people think they can get great deals on foreclosures right now but this is a tricky and risky business. Now what you are doing before you move on a foreclosure.
Alright, I'm hoping to get more blog entries out there again after being so busy lately. Next I am going to write about below-market rate opportunities and a great new listing I just put on the market. As, always, I'm happy to help. If you have any questions, just let me know. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Here in Berkeley, Rockridge, and other parts of Oakland, there continues to be a consistent number of homes available for sale. And, buyers are starting to come out of the woodwork due to interest rates that are both low and sane and some great deals that are out there.
So, what does this say about the market in our neighborhoods? Here are some tips for both buyers and sellers.
SELLERS:
*Be Patient. At the top of market, sometimes homes were barely on the market before they received multiple offers over asking price. Now, deals are happening, but buyers are being a bit more cautious. Hang on, homeseller, and price it right and make it shine.
*Price it Right. Don't compare your home sale to sales that happened in your neighborhood last year or at the top of the market. While sales are happening, we are not seeing record-breaking profits. If that is why you are selling your home, perhaps it is best to wait until the market goes nuts again.
* Make your home shine. This is always the case, but now more than ever. With a slower market, you need to make sure your home is better than the competition. Fix that fence and paint those walls! The investment will be well worth it.
BUYERS:
*Get your Loan Pre-Approved. Talk to a mortgage broker (or call me for a referral) and get your loan set-up. The mortgage landscape is changing constantly right now, and mostly for the better. Rates are low and sensible, so now is the time.
*Don't Get Desperate. Take the time to find the home that is right for you. This might take some patience, but it will be well worth it in the long run. But be prepared! Some properties are still hot and do demand a multiple offer situation.
*Avoid Foreclosure Hype. As I've blogged before, a lot of people think they can get great deals on foreclosures right now but this is a tricky and risky business. Now what you are doing before you move on a foreclosure.
Alright, I'm hoping to get more blog entries out there again after being so busy lately. Next I am going to write about below-market rate opportunities and a great new listing I just put on the market. As, always, I'm happy to help. If you have any questions, just let me know. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
Thursday, January 31, 2008
The Highly Touted Jack London Square Revival
Living in the East Bay for the last 15+ years, it seems like the powers that be are always talking about a revival of Jack London Square. And, it looks like it might actually be on the verge of happening!
First, there is the highly anticipated California Harvest Hall, which is planned to be largest public market on the west coast, rivaling even Seattle. That should be opening in 2009 and promises to bring in a lot of local visitors and tourists alike.
Today, Eater SF has a run down on other great developments in the neighborhood. Among the news is that Cocina Poblano has just opened and offers the largest tequila selection in the east bay. Plus, the upscale hotelier Joie de Vivre has taken over the Waterfront Hotel and will be opening up a new restaurant from local celebrity chef Joey Altman. And, Jack London Square already has one of the best farmer's markets around and lots of history and charm.
So, what about the market? Is now a good time to buy in Jack London Square? I would say so. There was a lot of development in the neighborhood over the last few years getting ready for the promised revival of Jack London Square. Now, there is a lot of inventory. And, with today's market, there are some great deals. Even a quick look at the available properties in the area shows that there are about 70 properties listed at $500,000 and less.
Another great option if you are interested in buying property near Jack London Square is the nearby East Lake Lofts. These are authentic industrial brick-and-timber lofts next to Laney College. These are filling up fast, but some choice lofts are still available.
If you have questions about Jack London Square or would like to purchase a condo or home in the area, please let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
First, there is the highly anticipated California Harvest Hall, which is planned to be largest public market on the west coast, rivaling even Seattle. That should be opening in 2009 and promises to bring in a lot of local visitors and tourists alike.
Today, Eater SF has a run down on other great developments in the neighborhood. Among the news is that Cocina Poblano has just opened and offers the largest tequila selection in the east bay. Plus, the upscale hotelier Joie de Vivre has taken over the Waterfront Hotel and will be opening up a new restaurant from local celebrity chef Joey Altman. And, Jack London Square already has one of the best farmer's markets around and lots of history and charm.
So, what about the market? Is now a good time to buy in Jack London Square? I would say so. There was a lot of development in the neighborhood over the last few years getting ready for the promised revival of Jack London Square. Now, there is a lot of inventory. And, with today's market, there are some great deals. Even a quick look at the available properties in the area shows that there are about 70 properties listed at $500,000 and less.
Another great option if you are interested in buying property near Jack London Square is the nearby East Lake Lofts. These are authentic industrial brick-and-timber lofts next to Laney College. These are filling up fast, but some choice lofts are still available.
If you have questions about Jack London Square or would like to purchase a condo or home in the area, please let me know. I am always happy to help. I can be reached at 510-547-5970 x57 or MSmartt@jps.net.
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