Posted Mon Mar 08 10:47AMReal Estate Unleashed
By Carole Rodoni
Presented by Bamboo Consulting Inc. Vol. 15 March 2010
Page 1
Current Real Estate Update
Copyright 2009-2010 Bamboo Consulting Inc.
www.bambooconsultinginc.com
Sherlock Holmes Has Nothing on Today's Home Inspector
The transaction is in the works, but one potential issue still remains – the home inspection. Buyers typically request a home
inspection to determine the condition of a property. What is uncovered prior to the closing can often result in needed
repairs, which can set off renegotiating the deal with the seller or in extreme cases cause a deal to collapse. The inspectors
are not the enemy. They are simply there to report on the condition of the property. So, the ball is really in the seller's court.
If you've taken care of your home, you'll pass with flying colors.
The biggest and most common defects that can be avoided are:
?Improper electrical wiring usually done by homeowners or unqualified contractors. Think inadequate overload
protection, wires tied together without being housed in a box, etc. All of these issues can cause major problems and
are fire hazards. As a seller, get this kind of work done with a proper permit and by a licensed contractor. It will
save you time and money in the end. And, most electrical issues are safety issues. So, be smart and get it done
right.
?Roof deterioration -- A roof that is old and damaged leads to leaks. If left unrepaired, a totally new roof is often the
only fix and can cost on average almost $20,000. So, check the shingles and tiles on an ongoing yearly basis, clean
gutters yearly, and trim back trees that could cause damage.
?Improper surface draining or grading – Water is a powerful force and can flow into a house because of poor
drainage or grading. Basements and crawl spaces are the most vulnerable. So, assess how your home sheds
water, watch for signs of water damage, and find the source.
?Plumbing problems – The biggest money drainer is dripping faucets. Leaking water can cause damage that can
often be fixed by a part that costs under a dollar. In addition, shoddy plumbing work is cheap, but expensive in the
long run – think mismatched piping materials, improperly installed water heaters, or rocking toilets. So, make sure
your toilets are securely bolted, check faucets and valves periodically for leaks, and do the repairs when the
problems are small.
?General condition – Often cracks, peeling, or dirty painted surfaces, broken appliances, and decayed caulking are
found by inspectors, which can lead to costly repairs. Check these things on a regular basis and fix the issues early.
Reviewing All the Title Documents – Boring but Necessary
Most buyers get a preliminary title report (PTR) and think that is sufficient. But, a PTR is virtually useless unless legible
copies of all underlying documents are carefully reviewed. What are the underlying documents? They are the documents
listed anywhere in the PTR.
Some things to look for are:
?The PTR should list the owners of the property. Make sure their names match the sellers' names in the purchase
sale agreement. You want to make sure that you are dealing with the actual owners of the property.
?Check on the OMG (oh my God) rights such as oil, mineral, and gas. Who owns them and how can you use or
develop them are all good questions.
?Check for monetary liens such as first and junior mortgages, home lines of equity credit, and delinquent property
taxes and HOA dues. You need to remove all monetary items and require that the property be free and clear of all
liens by the close of escrow. Also check for supplemental property taxes, special assessments (i.e. school bonds),
and judgment liens (i.e. IRS money due).
Did You Know?
Continued on Page 2
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Real Estate Unleashed
Copyright 2009-2010 Bamboo Consulting Inc.
www.bambooconsultinginc.com
Vol. 15 March 2010
?If any improvements have been done to the property, require mechanics lien coverage as part of your title coverage.
?Make sure that the parcel you are buying is a “legal lot”. The California Subdivision Map Act (CSMA) states that one
cannot sell, lease, or finance property that does not consist of legal lots. Recorded parcel maps create four or fewer
legal lots and recorded subdivision maps create 5 or more legal lots. Look to make sure your legal description says
“Parcel with a # of Parcel Map” or “Tract with a # of Tract Map”. If the legal description mentions a portion of a lot,
then you may have a problem.
Since title should give you clear ownership of the property, make sure you read the fine print and all the documents. It may
take time and it may be boring, but it is really important.
Polly Wants an Insurance Policy
Pet owners are rushing to buy pet insurance policies featuring everything from high deductible options to alternative
treatments like acupuncture. Some focus on accidents and illnesses, while others include wellness care, checkups, and
shots. Currently, about 1 million pets of all types are insured and that number is growing 10% a year. The largest provider
is Veterinary Pet Insurance (VPI), which is a unit of Nationwide Mutual Insurance Company.
If you are in the market for pet insurance, check out the fine print. Pet insurance often places strict limits on what it will pay
for specific procedures. Premiums can vary from $10.00 to $75.00 per month as breed type, age, and pre-existing
conditions can affect price and coverage. Some questions to consider are:
?On what basis does a policy pay claims? They may pay amounts according to a fee schedule, as a percentage of
the actual bill, or as a percentage of what they consider “usual and customary” fees. If payments are based on
actual bills, check the fine print.
?What can a policy cover? Typically, policies start with a “blackout” period where nothing is covered. The also
usually do not cover pre-existing conditions or pregnancy costs.
?What is your out of pocket cost going to be? Total benefit payouts probably will be capped either on a per-year or
per-incident basis. Thus, once you reach the cap, the balance is due and payable by you.
?What happens when you renew the policy? Your premiums might be based on the age of your pet, on the number
of claims you have made, etc. Check to make sure that the new policy covers chronic illnesses.
It is important that you get the policy documents to review so that all of your questions can be answered.
Words of the Year
Every year, dictionaries pick out words of the year. Here are some of the highlights.
?New Oxford American Dictionary – unfriend: a verb, which means to remove someone as a “friend” on a social
networking site
?In 2007, the Collins English Dictionary listed “Facebook” and this year it was “Twitter”
?Here are the tech words Oxford picked:
?hashtag – a # sign added to a word or phrase that enables Twitter users to search for tweets that are similar
to theirs
?intexicated – one who is distracted while texting and driving
?paywall – a way of blocking access to a part of a web site that is only available to paying customers
?There are also words attached to politics, the economy, and pop culture including “fun employed”, “trampstamp”,
and “hypermilling”
The Last Word
Pants (n)
Pantalone was an unmarried physician who professed to have the power of healing. He was so adored that in Venice a
Church, San Pantalone, was dedicated to him. Also, in Roman times, famous people were often portrayed in theatre. The
costume signature for Pantalone was a pair of red leggings that reached his feet. Over the years, his name was shortened
and used to describe varying fashions of long trousers. And, thus, we have the word pants.
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Real Estate Unleashed
Copyright 2009-2010 Bamboo Consulting Inc.
www.bambooconsultinginc.com
Vol. 15 March 2010
Bay Area Statistics January 2010
?Numbers are down from December in sales, but up in both price and sales from one year ago.
?The median price was $350,000, which is down 7.9% from December. This is up 16.7% from January 2009.
?More low-end homes sold. Foreclosures were 37% of the market versus 34% in December 2009.
?Areas of large foreclosures include Contra Costa, Solano, Sonoma, and Napa. These areas equated for 60% of the
foreclosure sales.
?Sales over $500,000 were 31%. This is up 22% from one year ago, but down from December 2009.
?The buyers were 20% investors, 24% all cash offers, and 2.9% flippers.
Existing Single-Family Home Sales (December 2009)
Statistics
County
Number
Sold
Percent
Change
(YOY)
Median
Price
Percent Change
(YOY)
Alameda 936 -5.8% $341,000 13.7%
Contra Costa 1,078 -19.1% $257,250 16.9%
Marin 153 25.4% $535,000 1.9%
Merced 252 - $115,000 0.0%
Monterey 272 - $237,000 13.1%
Napa 87 11.5% $350,000 -5.4%
Placer 421 - $282,000 -4.4%
San Francisco 311 35.8% $629,000 11.9%
San Joaquin 749 - $160,000 -4.8%
San Luis Obispo 180 - $372,000 -0.7%
San Mateo 355 30.0% $579,000 18.3%
Santa Barbara 210 - $300,000 23.0%
Santa Clara 1,137 9.6% $451,000 12.8%
Santa Cruz 128 - $385,000 8.5%
Sacramento 1,459 - $165,000 0.0%
Solano 462 -17.5% $201,000 4.4%
Sonoma 334 -3.9% $350,000 16.7%
Dear Carole
Question: What happened in the high-end market in 2009?
Answer: The high-end market definitely struggled in 2009. In the state of California, 18,000 one plus million dollar homes
sold compared to 56,000 in 2006. Of those sold at the one million dollar price point, 33% paid all cash. At the 5 million dollar
range, over 40% paid all cash. If the buyer needed a loan, the average down payment was 40% and the average interest
rate was 7%. The high-end market saw some changes last year too-- some properties went into foreclosure, there were
short sales, some people were forced to sell their homes, and buyers held back either because they were concerned about
the market, had lost their jobs or had lost money in the stock market. All in all, most high-end areas saw decreases in value
from 9-15%.
Yet, there are still buyers willing to buy. They only will respond to properties that are aggressively priced and work with
sellers who are flexible as to terms and conditions. And, an even bigger surprise this year is that even more of the buyers
are all cash buyers. So, if you are seller, price your property "to sell". If you are a buyer, this is the opportunity to get into
the high-end at a price of a lifetime.
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