A new home owner called Len Tillem on his Radio talk show today. He bought a house close to San Thomas Expressway for about $800k. The seller wrote in his disclosure that there was no traffic noise so he assumed that it was quiet. He claimed that he only saw the place during the weekend and it was quiet. Now that he moved in he hears the traffic all the time and he is angry at the sellers and the real estate agents. He thinks that he should have paid less for his property or not buy it.

He is rightfully just to be angry at them. It should have been disclosed to him. The agents should have warned him that being close to a freeway there will be noise.

An advice to any buyer who purchases a new property. Always visit the property at all hours of the day. You are going to live there and spend many hours at your new home. Listen to the noises in the area. Some people are sensitive to noises and smells and will be miserable if they hear water, or traffic, or airplanes, or trains, or even dogs barking. You are investing so much money. For many of you this is your largest expense, invest a little time, it doesn’t even cost money. Go there, get out of your car and stand there or walk around the place. Talk to the neighbors. There is always a nice neighbor who would love to tell you everything about the neighborhood. Drive to your work place from that house and drive back as though it was your home. This way you’ll avoid aggravation and live happier in your new home.

In California the Real Estate Broker is responsible for pre qualifying the buyers, finding a suitable house/property that will fit the needs and budget of the buyer, negotiate the best price and terms, write the contract which is the purchase agreement, coordinate with the lender to get the best loan, inspect and check the property with professional inspectors, follow up and make sure all needed work be completed as per the contract, pay attention to every detail and educate the buyers through the process, walk through the check the property before releasing the down payment funds, check the closing statement and follow up with the home warranty and advice for many years to come. For Sellers, the Broker has to help decide on a marketable price, help prepare the house like a bride for her wedding day, do all property inspections, help the seller fill up all the disclosures, market the house and advertise in all possible ways, hold open house every weekend until the house sells, show it whenever needed, help maintain the house clean and tidy, choose the best suitable buyer, negotiate the best price and terms, check the lender and follow-up with every step of the sale process, and the contract and help deliver the house clean and ready to the next owners.

There are many other roles a broker has that are not written, like staging, moving furniture around, decorate with fresh flower arrangements, and be a real friend.

With the new situation of the mortgage companies and banks that are going under, like Indibank this week and who knows who is next on the list, there is a feeling of uncertainty. Buyers are afraid to remove loan contingency because their lender might change terms at the last moment or even go under, leaving the buyers with no loan, risking their deposit check of 3% of the sale price, which is a considerable amount of money in our area. Until about 1985 the contract enabled the buyer to have loan contingency up to the final approval of the loan or the funding day. It is still the case in other states like Texas and Louisiana but not in the bay area. Here, the seller gets mad and asks the buyer what rights he has to expect the seller to hold his property off the market while he waits for his loan to get approved without jeopardizing his deposit check. Maybe it’s time to change this condition and give the anxious buyer some peace of mind.

The Real estate market is more balanced these days. There are more negotiations and less bidding wars. Some extraordinary homes still sell with multiple bids but most homes are being sold after a few weeks on the market and tight negotiations. Sellers still insist on their prices and buyers are more cautious. Many buyers wait to see what will happen with the banking industry, but others still buy homes especially in the preferred areas with the good schools.

I was having an email exchange with somebody about county taxes which are due in the next few days.

Here is what we talked about

Dear David

The seller pays his taxes according to the county assessed price. If it’s a house that was purchased 45 years ago for $28,000 (ha, ha,) her yearly payments should be around $600. Proposition 13 is protecting homeowners from a big raise in tax payments. Not more than 2% a year.

When you buy that same house for $1.1M (I am giving you an actual example from reality) your taxes will be about $13,200 a year. You would have to pay it in 2 installments one by December 10 and the other by April 10. $6600 each.

When you buy the house the county takes time to adjust the prices and you might benefit (temporarily) from that by paying what your seller paid, but be sure that the county will remember you and ask you to pay for the adjusted price. That would be the assessed price. They should send you a letter with the amount that you need to add on top of the original payment and probably let you pay it in 2 installments.
Have a great day!

Miri

—–Original Message—–
From: David

Thanks Miri for the answer. I should check this HUD-1 document.

What are the supplemental taxes? Aren’t they included in the Property tax?

Thanks,

David.

On 4/3/08, Miri Bialik <mbialik@interorealestate.com> wrote:

Hi David, if you just closed on the house there are 2 options:

1. The escrow company calculated your taxes and charged you through escrow and

you are good until November 2nd (becomes delinquent by December 10th)

2. The escrow company didn’t charge you but gave you credit for the time the

seller owned the house and it’s your responsibility to pay.

The answer will be in the HUD-1 document – the closing statement.

Most probably they have already charged you but it’s your responsibility to

make sure that you paid your taxes. The penalty for not paying on time is brutal.

———- Forwarded message ———-

From: David > Date: Thu, Apr 3, 2008 at 3:16 PM

Hi Miri,

Thanks for the information. If I start to own a house on Feb 29,2008

then when my property tax is due?

Thanks,

David

On 4/3/08, Miri Bialik <miri@miribialik.com> wrote:

Hi,

If you own Real estate property make sure you paid property taxes by 4/10/08.

Property taxes were due Feb 2nd and they become delinquent if the county

does not get them by 4/10/08. The penalty is painful.

Always at your service, Miri

My client won the house, competing with 3 other buyers. The seller was so happy. The offer was:”as is”, no contingencies, 3 weeks free rent back, great price, all that for the luxury to own home in Sunnyvale. My client shopped around for the best loan. First he was going with a mortgage broker who promised him the best 30 year fixed conforming loan he could get. Then he found a B of A lender who was willing to get him 5 year arm for 5% (with 1 point). What a deal! The mortgage broker could not match that rate and my client was going to do the loan with B of A. 2 days later the original mortgage broker found a 30 year fixed  for 5.25% with a 1 point buy down. They locked that rate which disappeared that afternoon. The B of A lender could not match that loan and the buyer, being a conservative borrower preferred the 30 year fixed.

A diligent broker has to be on top of things, check the rates a few times a day and be in touch with many lenders.

So you have decided to sell your home and chose your favorite agent. You are working on preparing your home for sale and beautifying it but in the back of your mind there is always the nagging question, how much shall I ask for it in order to get a good strong offer?

Pricing the house is the marketing strategic. In different times you would use different marketing styles.

In a seller’s market you can comfortably price it low knowing that you’ll generate many offers and get wonderful offers, well beyond  your asking price, but in a transition market like now, you can dream about the good old times and hope for many offers.  Price your house as close to what you think you can get for it realistically. You do not have the luxury of pricing low and get $100k over the asking price with 2 month free rent back and ‘as is’ sale.

For example, Sunnyvale real estate conditions can vary from one neighborhood to another. In Homestead high school area you can still play with the low pricing. Everything sells there. In North Sunnyvale it can’t be done. Together with your agent you can weigh and analyze the local market and set the list price. Cupertino also varies from one neighborhood to another. Monta Vista High school area is still hot while other areas with less desired schools take longer to sell. Price your house as close to the market price but not too high. If the house is priced too high agents and buyers lose interest, the property becomes “stale” and you’ll end up getting less money for your property.