Archive for the ‘Blog’ Category

Marin Clean Energy: You may be switched in even if you Opted Out.

Tuesday, October 2nd, 2012

I just received an email (displayed below) indicating that customers that opted out of Marin Clean Energy will be automatically re-enrolled when they get a new Smart Meter.

“Hi Jim —

Yep, you were right — many people in Marin will now be switched into Marin Clean Energy even though they Opted Out… due to SmartMeters.

I talked w/ PG&E at 866/ 743-0335 (CCA dedicated line in Fresno) this morning and they did confirm that when new meters are placed onto our home(s) that we get a new Service ID which triggers enrollment into MEA!  This is per CPUC mandate, where new service defaults to MEA.  PG&E customer service reps are not all singing the same tune and give out incorrect information on 877/ 843-4112 (San Jose) and 800/ 743-5000 (San Jose).

As you determined, MEA enrollment is a problem for anyone who receives a SmartMeter (or any new meter) after they already Opted Out of MEA.  So, yes, most of Marin will be receiving “Welcome to Marin Clean Energy!” letters.



(all please forward)”

Low End Housing in Marin is Red Hot

Wednesday, September 12th, 2012

For most of the country a half million dollar home would be considered high-end.  When buyers are looking for Marin county real estate for sale under $550,000 they will find slim pickings.  Currently over 70 percent of those homes are in escrow, over 80 percent in San Rafael.

If you are a buyer in that price range your best strategy is to learn the inventory and market very well so when you find a home you like you are ready to make an offer very quickly.  No longer can buyers what to see if the price will drop because for most those homes it won’t.

Making an offer quickly should only be done if you know the market, feel comfortable with the price you are offering.  Not so high you have regret and not so low you regret it when a another buyer gets the property for an amount you would have paid.

One you are in escrow (an agreement with buyer and seller to purchase the house) don’t let your excitement fog your mind on what you find in inspections.  If they house has expensive problems you may have to walk away.

Good house hunting.

What inspections should you get when buying a house?

Tuesday, August 14th, 2012

I think most agents would agree that for any home purchase it is a good idea to get both a pest inspection and a home inspection regardless of how perfect the home looks, but should you get other inspections too?  The answer is usually yes, depending on issues those inspectors find or if there are obvious problems or concerns.

There are dozens of inspections available, not every home needs every inspection.  Below gives you a general idea of what might be included by the various inspections:

1)      Pest Inspection:  Identifies wood destroying pest such as termites, dry rot, etc. as well as conditions that are not currently causing damage but could lead to future damage such as wood debris under a house.  Pest inspectors do not identify mold but usually will point out moisture issues.  Pest inspectors will usually give you an estimate to correct issues found.

2)      General Home Inspection: Usually referred to as just a Home Inspection they will check to make sure the appliances, electrical, plumbing are functioning.  They will also point out other obvious defects that they see but almost always refer you to another specialist if they find something wrong.  Some inspectors will also do a report on the condition of the roof.

3)      Roof Inspection:  This also is a good idea on most homes. If the roof was recently replaced with permits that might be the exception.

4)      Electrical Inspection: Home inspectors give this a quick look but if you plan on making any improvements to the home this inspection is a must.  Because so many homeowners have fooled around with electrical (and in the vast majority of cases did not do the work correctly) this inspection is a good idea.

5)      Chimney:  Will determine if there are safety issues with your fireplace.

6)      Lead Paint: If your home was built pre-1978 (with is most Marin County real estate) count on it having lead paint.  Most people don’t get this inspection because the year of construction will usually tell you if the paint is an issue.  Most of the homes that do have lead paint have been repainted with non-lead paint.  The issue with lead paint (other than obvious health issues if you ingest it) is repainting a house with lead paint is  now more expensive because of containment required with removing old paint

7)      Structural / Foundation: If there are cracks in a foundation or if the home is not level you should have an engineer take a look.

8)      Pools/ Spa:  If you are going to keep the pool, get the inspection.

9)      Septic and/or Well:  If you have either these inspection are a must.

10)   Mold:  Any signs of mold or if you are sensitive to mold get this inspection.

11)   Tree/Arborist:  Some people do this for any home with large trees.  If the tree is leaning, looks dead, or is on a hillside it is recommended.

12)   Permits and Public Records:  You MUST research this for any home….no questions on this.

13)   Title Prelim:  Read the report when you receive it. If there are questions on anything…Ask questions.  This is where you will find items like easements.

14)   Lot Survey:  Very few people get this report because of expense and the time required.   What if you find your fence is two feet in the neighbors yard, or vise-versa but everyone is happy.  On the other hand I have seen a small subdivision where ever house was built on the middle of the lot line.  If one of those homes were destroyed the city might not let them rebuild because of setbacks.  To correct this every lot in the subdivision would need a lot-line adjustment.  Most people get a survey when there is a problem with a neighbor or if they want to build an addition to their home.

15)   Soil Stability:  On a hillside or if the home is not level then get this for sure.

This is not the full list, there are other inspection you can get but you can see that if you spent an average of $500 per inspection your cost would quickly add up which is why most people go with the pest and home inspections and if any issues are brought up they usually get additional inspections, ask for a price reduction or back out of the deal.  Choosing which inspections to get is something your agent can help with but the choice is yours.

Warren Carreiro, Broker

Why construction building permits are so important

Wednesday, February 1st, 2012

Just a few years ago no one seemed to care if a home improvement or addition was done without permits.  Appraisers are now required to call out differences between square footage on tax records and actual measurements.  If the home has an addition that was done without permits some banks will not lend on the property, others reduce or eliminate the value of the addition.

When you buy a foreclosure permits are even more important because you don’t get any history of what improvements were done or who did the work.  When improvements are done by a homeowner or unskilled worker the results can be disastrous.  I have seen beautiful bathrooms with the marble falling off the shower walls because it was not installed correctly.  This is something you would not be able to see, and likely a home inspector would not be able to find until the damage was obvious.  I have also run into homes that had windows installed without permits and the windows did not have any headers (the beams that support the wall and roof above the window).  The windows in this same house were installed in such a fashion that the walls had no shear (support that would keep the home from falling down in strong winds or mild earthquake).

Electrical work done by homeowners is almost always done incorrectly and creates unsafe wiring and grounding, overloaded circuits, and unprotected wires.

We don’t like getting permits because it cost money, slows down the job, and of course the building inspector will see everything you are doing. Most people feel they are doing a good job and the permits are not necessary but building codes are designed for safety and are not always easy to follow.

If you buy a home that had work done without permits and you start a project with permits it is possible the building inspector will notice the other work that was done and make you get permits for the old work.  Remember, the responsibility follows the home so once you own the home you also own the improvements that were done by prior owners.

Most homes in Marin County are older and I would guess that many, if not most, of them have had work done without the proper permits.  When buying a home a full investigation of its permit history is in order.   Talk to the county or City, look at the permits and if the permit does not have a “final” stamp that means the work was not done or at least not signed off by the building inspector.  Buy the house if you like it but discount your price for work that may need to be redone.

What it’s like buying a short sale

Monday, April 4th, 2011

I recently wrote about the process of buying a foreclosure, in this article I will cover my least favorite transaction, a Short Sale.  These real estate transactions are called short sales because the bank that has the loan on the house for sale will get shorted on the amount owed them.   It works something like this; the seller, who maybe lost their job and can’t make the payments, owes $800,000 on the home and the most they can sell it for is $600,000.  In this case the Short Sale bank might agree to accept the $600,000 and let the owner sell the house.

The only consistency in Short Sales is the rules change all the time, as a matter of fact, there really are no rules, we are talking the Wild West.  In the above example the bank might agree to let the owner sell and loose $200,000 (actually much more after selling cost; commission etc.) but they could just as easily agree only to do so it they seller signs a promissory note agreeing to pay back the money at some future date.  This is less common because most owners would then just tell the bank to go ahead and foreclose.  When that happens the bank usually cannot go after the seller for lost money.  The main reason people Short Sale rather than foreclose is the hopes of it not affecting credit scores as much and the opportunity to buy another home in just a few years vs. almost 10 years.

Now that some of the basics are out of the way what is this process like for someone buying one of these homes?   First, my advice to my clients is this is the last type of property you want to buy.  Sure, if you just love a house and it is just right for you, go ahead and make an offer even if it is a Short Sale, just don’t get too attached because chances are the deal may fall apart.  Second, if you really want the house just hang in there, it may take months, many months, maybe over a year.

Why do you have to wait so long?  The transaction starts normal enough, you write an offer, the seller accepts it but the offer is contingent on the Short Sale bank accepting the offer.  That is what takes so long, waiting on the Short Sale bank.

Why do so many of these escrows fall apart (this list is long)?  The buyers may get tired of waiting and find another home thus cancelling the Short Sale escrow.  After waiting several months for the Short Sale bank to approve the deal you get out-bid by another buyer.  The seller might change their mind and decide to let the bank foreclose on them so they get a few extra months free rent. The Short Sale bank might decide the offer price is way too low and counter at something much higher than the buyer can afford (this is not necessarily unreasonable as sometimes listing agents price short sale too low in the hopes of getting an offer before the foreclosure).  Your inspection period usually does not start until the Short Sale bank has accepted the offer and if you find something bad at that point you may have just spent several months waiting for nothing.

Like I said, if the house you love is a short sale make an offer just don’t get your hopes up.

Warren Carreiro

What it’s like buying a Bank Owned Foreclosure

Wednesday, March 30th, 2011

You’ve been looking and finally found the house you want to buy and it is a foreclosure, also known as an REO (Real Estate Owned –“by a bank”).  Usually these are considered a good deal, at least they typically are priced a little below the going rate.

Here is what you need to know.  There are no disclosures, nothing telling you the next door neighbors might be noisy or maybe water leaks under the house in heavy rains.  There are reasons for this; the bank has never lived in the house so they don’t know anything about it.  The former owners that got foreclosed on are not anxious to help the bank sell the house.  Also, those owners might make the house look better or worse than it is just to “get back at the bank”.  All this means you better do your homework and get inspections so you know what you are getting into.

When you write an offer on a foreclosure it may take several days for the bank to let you know if your offer is accepted, we are talking bankers’ hours.  Most of the larger banks with counter your offer, even if they like your price, with an addendum that turns the whole purchase contract in their favor.  For example, in a typical purchase contract you might have 17 days to do your inspections and if you don’t expressly remove the Inspection Contingency you can get out of the contract without losing your deposit.   The banks addendum changes that so if you don’t remove your Inspection Contingency by the given date it is assumed everything is okay and you are stuck in the contract.  Not only that but they usually give you just 5 to 7 days to complete inspections.

I suppose we could live with the shorter timeline and passive removal of contingencies except it is usually not clear when your timeline starts.  This is because when the bank counters your offer with their addendum they may sign it one day and you don’t receive it for several days after that.  Usually that would not be a problem but the bank form might say the start date is when it is signed by the bank.  At this point I can’t guarantee my clients what the real start day of the contract is so we have to go conservative and assume it starts when the bank signs it.  That can take our 7 day inspection period down to just a few days or worse if it is Friday or a long weekend.  No problem, right?  All we need to do it issue an addendum asking for more time for our inspections.   The listing agent will say okay and send it to the REO bank.  Problem is the bank never signs the extension but you are told it is okay.  We all know everything in real estate has to be in writing but we can’t get the bank to sign anything.  I have to say, so far, the banks have been honorable with their word but who wants to be there when they aren’t.

If a buyer get emotional in a multiple offer situation they may offer more than they wanted once all the dust settles.   No problem for the bank, their addendum takes care of that for them.  If you want the deal they make you sign a form that says if the home appraises for less that your offer you will still go through with the deal and make up the difference with a larger down payment.

Regardless of all these problems with buying a bank owned foreclosure, REO, it likely will still be less frustrating that buying a Short Sale…

Warren Carreiro

More Home Loan Problems

Tuesday, November 16th, 2010

Getting loan approval is only half the battle.  Sure you need to have verifiable income and a down payment but even with that is does not necessarily mean you can get loan approval for the home you want.  Why, because the home you choose has to be approved by the bank as well.

Appraisers are often asked to make note of any of the following issues when appraising a home:

1)      Peeling paint

2)      Missing appliances

3)      Heat or hot water issues.

4)      Additions or improvements done without permits

5)      Major fixers

One of the newer issues is banks asking appraisers to make note of improvements done without permits.  Because most the homes in Marin are older it is not uncommon, over time, for something to be done without the benefits of permits.  Some banks do not want to lend on those homes unless the permit problems are resolved.  Usually something can be worked out with the city, if the seller has the time and money to get retroactive permits.  Historically, unpermitted remodel projects did not cause a problem with loans, maybe with the City but not with your lender.

Often REO (foreclosures) and Short Sale homes have deferred maintenance and in some cases have been trashed.  If it in very bad condition most banks will not lend on the property which often means cash investors are the only buyers.