Archive for the ‘Buying & Selling Homes’ Category

So you want a foreclosure?

Monday, June 29th, 2009

Buying a foreclosure is for the pros with a big checkbook. In Marin a “real” foreclosure is literally sold on the steps of the courthouse on Fifth Avenue in San Rafael. The buyers have several denominations of Cashers Checks that add up to the maximum they will pay. They bid against each other and the bank that holds the loan on the house and is foreclosing on it. The bank has the upper hand because they don’t have to write a check unless the bidding goes over the loan amount.

You will be bidding on a house you likely have not seen on the inside. No bank will lend you money until you buy the home. This is a cash transaction that does not come with title insurance.

When you hear someone say they bought a foreclosure that usually means they purchased a home that has already been foreclosed on by the lender. They are known as REO’s, which stands for Real Estate Owned (by the bank). When buying an REO the paperwork sucks. Banks expect buyers to start their inspection and financing timelines without so much as a signed offer acceptance from the bank. In many cases the acceptance of the offer is conveyed to the buyer verbally. As you know, in real estate verbal does not cut it, the law requires everything in writing. But as long as you are getting a good deal are you really going to fight with the bank that selling the house?

Homes are also sold in pre-foreclosure status which may mean the seller had a notice of default (they are late in mortgage payments) or it is a short sale. In a short sale the seller gets the bank to agree to sell the home for less than the amount owed.

Warren Carreiro

Keep your property tax rate when you move

Thursday, May 14th, 2009

Propositions 60 and 90 were passed by California voters and lets you transfer your current property tax rate to your new home sell and purchase your primary residence. These propositions apply if you or your spouse are 55 or older. In some situations the rules also apply to permanently disabled individuals (prop 110).

This is not intended as tax advice, I am not qualified to offer that so please check with your accountant, attorney and the county assessor to verify you qualify.

The basic rules are:

  1. The home must be your primary residence.
  2. You or your spouse must be 55 or older when you sold your primary residence.
  3. The replacement property must be purchased two years before or after you sell your primary residence.
  4. This exclusion may only be used once in a lifetime.
  5. The replacement property must be of equal or lesser market value.
    1. 100% if purchased before the sale of your home
    2. 105% if purchased up to one year after the sale
    3. 110% if purchased in the second year.
  6. Prop 60 only applies if you new home is in the same county as the one you sold.
  7. Prop 90 allows transfer to a different county if the new county allows. Most counties do not follow prop 90 so check with the assessor before you count on this. Counties change their rules so check again even if you have previously done so.

The counties take the rules very seriously so don’t think or try to “beat the system” because it will come back to bite you. Also, the rule refers to market value and in some cases counties are looking at REO (Bank Owned Homes) as not selling at market value. For more information look at the Board of Equalization web site.

Warren Carreiro, Broker.

How to Purchase a Foreclosure

Wednesday, August 6th, 2008

It is not uncommon for a client to ask me about purchasing foreclosure homes.  We hear the misleading ads on the radio, “I just bought a home for $199 a month”.  While that number is totally unrealistic in Marin, foreclosures can be a bargain.  In some parts of the country banks and other owners have foreclosure auctions, other than the occasional homeowner (usually with an unrealistic reserve) I have not seen this in Marin. Although our foreclosure rate is significantly up from prior years it still is very low and most foreclosed properties are taken back by the bank.

In Marin, properties in foreclosure are sold at the court-house steps.  Buyers with cashiers checks (for the full amount) bid against each other and the bank.  The bank does not need a cashiers check because it is their loan that would be paid off.  Okay, get this straight, you need cash to buy the home, often you have never seen the inside of the house, and you many not be sure the title is completely clean.  Once you win the auction you can get title, go to a bank and then (after you bought the home) try to get a loan.  You also get to evict the occupants and finally see the inside of the home you just purchased.  The experienced buyers have lots of cash and make a bundle on most of them but do loose their shirts on about one in ten.  This is a rich person’s game as most of us don’t have the extra cash laying around and can’t afford our one purchase to be the dog that is a money looser.

So the court-house auction does not work for most of us but the next best thing is post foreclosure, bank owned property (REO – real estate owned by the bank). Once a bank takes a home back they want to sell it quickly because they are in the business of lending money, not owing excess homes.  These REO homes are priced (usually) realistically, as the banks wants to dump them within a month or two. Caution here; just because a home is an REO does not mean it is a good deal and the banks will negotiate.

If you are interested in looking for these homes ask your agent (or me if you don’t have one) as it is easy to do a search in the Marin MLS.

Should you use a buyer’s agent when looking for a home?

Tuesday, July 29th, 2008

What is the difference between using a listing agent, buyer’s agent or just finding a house on my own using the Internet?  Over 80% of people start their home search on the Internet, and in my opinion usually continue to use the Internet throughout your search process.

The Internet should include all tools available including e-mail, Web searching, and agent offered tools such as CleanOffer or Home Alert.  The Internet is a great tool to give you a basic understanding of the prices of homes available and also to rule out some homes you find undesirable for one reason or another.  If you know the type of home you are looking for i.e.: number of bedrooms price range cities and school district it is possible to have those listings e-mailed directly to you as they come on the market. 

Okay, now you’ve searched for your home on the Internet found a likely suspect and it’s time to just go to the listing agent and make your offer right?  Some buyers to go directly to the listing agent to make their offers and it is not illegal for the agent to write your offer and some agents love it, after all they get double the commission.  Now it’s time for the negotiations to begin.  The listing agent you’ve chosen as legally committed to represent the seller’s best interest and now you as a buyer can in the picture and they are also you represent your best interest?  Some agents love this for obvious reasons others shy away from it just to avoid the appearance of a possible conflict of interest.  I think what the buyer is hoping is that because the agent gets double the commission they will share some of that with them and the buyer will end up with a better deal.  Theoretically that better deal is possible, however, in reality because the agent is negotiating with himself they may not have the same incentive to get you the best possible deal which could far exceed any commission savings are in my opinion, this is like going to a car dealer and asking the salesperson to go to the manager and have them tell you the best deal he can give you on the car.

I good buyers agent will give you an honest opinion of the value of a property show you other properties that perhaps are even a better deal.  They will take the time to learn what type of house you like, the neighborhoods that appeal to you and give you an honest opinion of the value of that house in that neighborhood.  Their fiduciary responsibility requires them to negotiate the best possible deal you and they will also show you homes that may not even be on the Internet yet.  For most buyers, this is by far the best method to use when looking for a new home.

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San Rafael & The Real Estate Meltdown

Wednesday, April 16th, 2008

Reading the newspaper and watching television I could assume that my home town of San Rafael, California has experienced a meltdown as well.  Well, I hate to pop your bubble but the Marin County B.A.R.I.E.S (MLS) statistics don’t show that has occurred as you can see from the chart below.

Does this mean this is the best time to buy San Rafael real estate? As a real estate broker you would expect me to say, don’t wait, this is the best time to buy Marin real estate.  Well, I don’t want to disappoint but I don’t know when the bottom (or top) of the market has hit.  I recently heard someone say that those who will make money in real estate in the next ten years will be buying in the next two years and I agree with that.

Additionally, why are you buying a home, is this going to be a place to put your roots down and stay for many years or are you trying to flip it with perfect timing?  When I purchased my home in 1992 prices were soft for a couple of years after.  If my intention was to flip it I would have lost money.  That was not my intention, I was looking for a home for my family. The home has increased in value tremendously and has been a fantastic investment. It really did not and does not matter if the value goes up or down for a few years because I am not selling, this is my home.

So, if you are in the market for a home and plan on spending over five years there, Marin history says it will also be a great investment. If interest rates were to rise, and they are still low, it would make that purchase all the more difficult.  If you are waiting for the “bottom” of the market we may already be there and if you wait until the market turns it is too late to negotiate while you still hold the cards. 

Here are the statistics for single family homes in Central San Rafael (zip 94901) for the past three years

Single Family Homes First Quarter2006 First Quarter2007 First Quarter2008
Number Sold 55 59 32
Median Price $956,000 $875,000 $982,500
Median Sq. Ft. 2,023 1,914 2,125
Days on Market 37 45 86


Homes are are taking longer to sell and if you can qualify for loan, you have great negotiating power.

Warren Carreiro, Broker 


What is a REO Home Sale?

Monday, March 10th, 2008

REO Hosue

REO House

March 10, 2008

REO is a real estate term which means “real estate owned”.  The real estate is owned by bank or lender, typically as a result of foreclosure.  When a bank lends you money to purchase a house, the home is collateral for the loan which means if you don’t make your payments the bank has the right to take ownership of the property.  Mind you, this is not property the bank wanted or wants to keep, it is a drag on their balance sheet and ties up money that could be used for other loans.

Once a bank owns the home they want to sell it a quickly as possible.  This does not mean a fire sale but often the prices are slightly under market price.  The banks will use a professional appraiser and a couple of real estate brokers to help determine market price.  The bank is not legally required to complete the usual disclosure documents because typically they don’t have enough information, though they still must disclose what they do know.  For buyer’s this means the home is purchase “as is” so it is especially important to get good inspections.

Warren Carreiro, Broker
Marin County Real Estate
Homes You Love. Advice You Trust TM

3 Years of Marin County January Homes Sales Stats

Monday, February 4th, 2008

Marin Home

Marin Home Most of Marin County Real Estate does not know what a bubble is.  Sure, the Novato market is soft with lower prices and Marin County Starter Homes have not prices like this in years but when you look at the whole picture we are doing quite well.  The chart below is for single family homes and does not include condominiums.  It looks at January BARIES MLS results for three years and was compiled by Warren Carreiro, a broker with Frank Howard Allen Realtors.  Looking at one month at a time does not show a tread, however, with three years running it suggest where the market stands.

Marin County Single Family Home Sales (using median for square feet, sales price and days on market: DOM)

All of Marin
Year Jan 2008 Jan 2007 Jan 2006
# Sales 79 113 116
Sq. Ft. 1918 1936 1856
Price $1,050,000 950,000 869,000
DOM 84 87 70
Without Novato
Year Jan 2008 Jan 2007 Jan 2006
# Sales 68 95 89
Sq. Ft. 1922 2011 1854
Price $1,227,500 1,085,000 895,000
DOM 68 83 77
Novato Only
Year Jan 2008 Jan 2007 Jan 2006
 # Sales 11 18 27
Sq. Ft. 1911 1692 1971
Price $639,000 701,500 755,000
DOM 147 102 59
Warren Carreiro, Broker