Shirley Kistler's Real Estate Blog: Serving your Real Estate Needs in Sacramento, Placer and El Dorado Counties

Governor Brown signed Assembly Bill 771, on September 1, 2011.  This bill prevents home buyers in a common interest development, such as a condominium or townhome, from being charged excess document fees. 

Current law requires this information come from the Homeowner’s Association “HOA” and prohibits it from charging fees in excess of what is “reasonable,” not to exceed the actual cost of processing and producing these documents.  HOA generally have provided the document for approximately $75 to $250.  In the past HOAs have been delegating document preparation to third party vendors or contractors who, under a 2007 court decision, are exempt from this fee limitation.  This delegation of responsibility by HOAs sometimes resulted in home purchasers being forced to pay additional fees, as much as $1000, for other documents which were “bundled” with the required documents. 

AB 771 addresses this by specifying that only fees for the required documents may be charged when such documents are provided, effectively prohibiting any “bundling” of fees for other documents with these fees.  The bill also creates a new form detailing which documents are required, and requires the provider to disclose the fees that will be charged for the documents before they are provided.  The seller of the home must complete this form and transmit it to the prospective purchaser along with the required documents.  This will eliminate any uncertainty for the prospective purchase as to exactly which documents are being provided and the precise fees being charged in those documents. 

Mildew, a form of mold is often seen as black, white or greenish growth on siding, drywall, roofing and other areas.  

Mildew likes organic materials like drywall, wood, paper, wallpaper paste, cotton, linen, leather, wool to name a few.  In addition to food, it will grow best in moist and warm areas with lack of air circulation or light. 

One of the most common areas is the bathroom.  Usually the only thing needed here is the installation of a ventilation fan.  Make sure it is ducted to the outside and not just into the attic.  You should use the fan during and after taking a bath or shower.  If you find your family can’t seem to remember to turn the fan on, you might think about having it wired to the light switch.  If you use the fan regularly, it should remove the moisture and circulate the air.  If you find this isn’t enough to combat moisture then you may have moisture generated from somewhere else.  Hidden moisture problems include, leaking valves or supply pipes, loose and/or leaking drain lines, bad wax rings below the toilet, and water around the tub or shower from excessive splash. 

Other areas inside the home include closets, behind beds & other furniture (especially those placed against an exterior wall, combined with high humidity).  Silica gel can help in closets, as well as making sure your clothes are not densely packed in the closet.  Also, moving furniture away from the wall so air can circulate helps alleviate mildew. 

Outside the home you may see mildew on the siding and roof shingles.  If you have widespread areas of mildew this may indicate a larger moisture problem, one that can usually be traced back to lack of ventilation.  Cut back trees, shrubbery or other landscaping that is overgrown that can be the cause of some problems, as well as adjusting your sprinklers not to hit the side of the house. 

If you think you have hidden moisture you should contact a contractor who has a moisture meter and specializes in water damage restoration.

Related articles

• From Clammy to Clean: 9 Ways to Fight Mildew (wisebread.com)

Image by Perfectino Coatings via Flickr

Get Rid of Clutter 

Depersonalize 

Clean, Clean, Clean 

Update Old and Deteriorating Spaces 

Define Spaces 

Fill Empty Rooms 

Lighten Up Spaces 

Open up Indoor Walkways 

Clean out Closets and leave them one-third empty 

Curb and hallway appeal really count 

Be model-ready 

Related articles

• It’s all about Lifestyle…consider what you’re selling and to who! (sellinghighpoint.com)
• Staging your home to sell (marketwatch.com)

Start with your closet.  Everyone has too many clothes.

Make a commitment to refuse to get more stuff.  It will take a while to reduce your belongings and it’s going to take a few months of refusing to get new things before you change your habits. 

Most people around you will not be doing this and may react negatively or defensively.  Whatever you do Stick to It! 

From “Overstuffed” workshop – Nicole Lynskey:

Assess the impact your clutter has on you.  Think of the size of your home, how much you spend on new stuff, the energy put into acquiring, maintaining and storing your stuff and the time you spending searching for things. 

Get in touch with what you really long for in life.  Do you really want to work part time?  Would changing your purchase habits or moving into a smaller space make these things possible for you?

Start with small areas.  The more you declutter the more momentum you will get and the more you will notice things you don’t really need. 

Related articles

• Top Tips To Decluttering (chicagonow.com)

What is Real Estate Investing?
A tangible, cash-generating asset and appreciates in value.  Real estate investment has proven to be a powerful method of accumulating wealth over time and investors are getting a return on their investment in three ways, cash flow, return on taxes and appreciation. 

What are the benefits?
The main benefit is the profit that you can make if you handle your investment correctly.  Rental property provides a source of income, but other than that, investment properties qualify for numerous tax deductions which may include cost of building maintenance and repairs and interest paid on loans related to the property.

Are you looking to Rent or Flip?
If you choose to hold and rent it, take into consideration the responsibility it takes to be a landlord.  You will need a lease agreement specifying what you will be responsible for maintaining, fixing, etc. and the rent, date of payment and length from the tenant.  It can turn into a very profitable venture if you make sure you are well versed in property management.  While you can self-manage, it may be wise to outsource this to a local experienced property management company.

If you choose to flip you must take into account any and all property updates and repairs that need to be made.  Flipping a home can be considered less of a responsibility than becoming a landlord, but keep in mind that someone will be living in the home you are flipping and you want to make sure they will find it worth their money to purchase.  Keep in mind that flipping may not be the wise choice in a down housing market. 

How are your Finances? 
The better your credit, the more likely you will be able to get a decent loan.  It is also important to have a cash reserve left over to put towards unexpected vacancies, maintenance and repairs.  Typically lenders require 20% down on an investor loan.

Additional considerations:
Location, Location, Location – make sure it is in an area where you can attract tenants.  Selling a home in a great location usually means a shorter hold time and likely a greater return.

Timeline and budget.  Having a reasonable, realistic timeline and budget for repairs will prepare you for success and stick to the guidelines you set.

Do not Over Improve!  This is not your personal residence.  Only make improvements that will either make it more attractive to sell/rent.

 As a seasoned Investor myself, please feel free to contact me to help you decide if you want to become a Real Estate Investor.

The U.S. Treasury has releases its regular monthly report card on the Home Affordable Modification Program (HAMP).  This time is an assessment of how the 10 larges HAMP servicers are performing. 

Substantial Improvement was given to Bank of America, Ocwen Loan Servicing, Wells Fargo and JP Morgan Chase.  Of those four, three – Bank of America, JPMorgan Chase and Wells Fargo – Treasury is withholding all future financial incentives until they make specific improvements.  Should they fail to correct identified problems in a “reasonable time”, it may permanently reduce their financial incentives.  As problems are remedied, incentive payments will resume.  

Moderate Improvement was given to the remaining six servicers – American Home Mortgage Servicing, CitiMortgage, GMAC Mortgage, Litton Loan Servicing, OneWest, and Select Portfolio Servicing.  These firms could have incentives withheld in the future if they fail to make certain improvements. 

All withholdings apply only to incentives owed to servicers for their participation in the federal program.  Incentives slated to go to homeowners or investors will still be paid through the servicer. 

No servicer has been identified as needing only Minor Improvement. 

Servicers are paid $1,000 for every permanent modification made under HAMP.  “Pay for Success” incentives are then awarded to servicers annually for three years as long as the borrower stays current.  HAMP participation is voluntary and Treasury doesn’t have the authority to impose fines like a regulator could, they’re using the tools they have to push servicers to take remedial actions when they are not in compliance with program guidelines. 

According to the report, there are currently 608,000 permanent HAMP modifications in active status.  Servicers converted 29,000 trial modifications to permanent during the month of April and started another 29,000 trial plans during the month.  The average length of the trial period has been 3.5 months and 70% of those have been converted to permanent modifications. 

The median payment reduction amount permanent modifications is 37%, or more than $500 a month, and they say re-defaults have been “lower than anyone expected.” 

Excerpts from this article from DSnews.com by Carrie Bay 6/9/11

Related articles

• U.S. Treasury penalizes 3 large mortgage servicers (sfgate.com)
• Treasury slams big banks’ mortgage modifications (usatoday.com)
• Treasury Punishes Top Banks for Poor Loan Modification Performance (theroot.com)

A recent survey conducted by FindLaw.com a legal information website found that 60% of Americans believe that it is “never OK” for homeowners to simply stop making payments on their mortgages.  34% say it’s OK for homeowners to walk away from mortgages, but only if they aren’t able to make the monthly payments.  Only 3% believe that homeowners should be able to walk away from their mortgage anytime they want. 

Before making any major decisions, homeowners should consult with financial and legal professionals, including accountants, real estate attorneys and financial advisors.  Any major change to a mortgage situation could lead to serious and unanticipated consequences involving taxes, contract law, credit scores, ability to borrow in the future, potential for lawsuits and much more.

Related articles

• Is Walking Away From Your Mortgage OK? (creditloan.com)
• How Will a Strategic Default Impact My Credit Score? (askthemoneycoach.com)

Image via Wikipedia

When to Prune?  Knowing the right time is crucial, pruning at the wrong time may not damage plants but it can sacrifice that year’s flowers or fruit. 

Late spring/Early Summer
Prune spring-flowering shrubs and trees which flower before July 1 immediately after the flowers fade. 

Midsummer
Several deciduous trees produce a heavy sap flow in early spring.  Pruning braches in this season won’t kill the tree, but the sap flow can bleed on to outdoor furnishings, patios, cars and walkways.  Avoid a sticky situation by pruning these trees in midsummer.  

Fall/Early Winter
Spring and Summer blooming hawthorns and viburnums are typically grown for their fruits, which attract wildlife.  Don’t prune these plants after flowering.  Allow fruits to mature and then prune plants after wildlife consume fruits.

Winter/Early Spring
Prune summer blooming trees and shrubs in winter or early spring, before new growth emerges.

Tips for Pruning
Keep cutting surfaces clean and sharp.  Keep metal parts of pruning tools oiled regularly to prevent rust.  Use pruning tools for pruning only, other materials can dull or damage the blades. 

No matter what kind of plant you’re pruning, you will use three basic techniques. 

Pinching is typically done by hand, using thumb and forefinger.  It’s a good method to increase bushiness and curtail and control plant size. 

Thinning involves removing branches back to the trunk, a main branch or the soil line.  With thinning cuts, don’t remove the branch collar (the wrinkled area near the trunk or main branch).  This area contains the cells needed to heal the cutting wound.  Slicing in the branch collar creates an opening for infection and disease to enter. 

Heading back shortens branches to a healthy bud or lateral branch.  Place cuts roughly ¼ inch above the bud or branch.

 This article is excerpted from Lowe’s Creative Ideas magazine.

Image via Wikipedia

 1)      Obtain a Home Inspection – The house may look great on the surface but might have hidden problems which could require expensive repairs.  On the other hand, a fixer may look bad but could have excellent bones that can be repaired at a reasonable cost.  Even if the listing agent has previous inspections and reports that may be a few months old, you may want to still consider having a new inspection as a sitting home can deteriorate a bit. 

2)      Use Common Real Estate Logic – Too many people focus on price alone.  You need to keep in mind sub-par locations, poor lighting, terrible views, below average school district, high crime rates and other negatives that may be another reason why a home went into foreclosure.  You should always try to find out how long the home has been empty; the longer it has, the more of chance it may not be a good deal.  Also, if there are other foreclosures nearby, that may be a reason for concern. 

3)      Rethink or Skip the Flip – Even if the house looks like a great flipping opportunity, beware unless you are a pro, with incredible contractor connections.  You may want to triple the amount you think you will be spending to fix up the home.  Sometimes the temptation to make fast money doesn’t always pan out, so think it through and speak to a real estate professional and contractors. 

4)      Go over the Budget – A fixer-upper means nothing if you can’t afford to fix it up.  Make sure you have an ample budget to do all of the repairs needed.

 5)      See the house in person – You should never buy a house without going in person to see it.

  Related articles

• 4 mistakes to avoid when buying a foreclosure (georgegmiller.wordpress.com)
• The pitfalls of buying a foreclosure house (theglobeandmail.com)

Image by HeatherMG via Flickr

Protect your home and family now!

California residents must have carbon monoxide detectors in their homes as of July 1, 2011.  This timeline applies only to single-family homes that have appliances that burn fossil fuels (wood, gas and oil) or homes that have attached garages or fireplaces.  For all other types of housing, such as apartments and hotels, detectors should be in place as of January 1, 2013. 

Related articles

• Carbon Monoxide Detectors Mandated by July 1, 2011 (nextgenrecorp.wordpress.com)