Renters Beware!

Today, I met a woman who was rents a home in Sacramento. We started talking about real estate and the current market conditions. She mentioned to me that her land lord was being foreclosed on and she had to move. After some digging, we found out she had been paying rent to this man for over a year, while he wasn’t paying the mortgage. And, for the past two months, couldn’t get in contact with him.


This is all far too common. From the land lord’s point of view, if he knows he is going to eventually default on his mortgage, he has no reason to tell the tenant. He can keep collecting rent as pure profit. Most often, this does not go on as long as it did in this particular case, but it all depends on how quickly the bank handles their business.

So, how can a renter protect him/herself? Do your due diligence. This information is on tax records, and therefore, is a public record. Any time you are renting a home/condo from an individual, you need to check on the status of the mortgage. It is possible the owner has paid in full and there is no loan on the home, this is a best case scenario.

Ask them if they have a loan, and then check the tax records. If they say they do not, but tax says they do, that is a big red flag. They are lying, plain and simple and there is nothing to keep them from lying in the future. Tax records will also show if they are in default. If they are, stay away. Default means they haven’t made there payment for at least 30 days. Default is the first step in the foreclosure process.

Don’t let yourself get take advantage of. Do the research and protect yourself.

Top Cities

Desirability of the city plays a huge role in real estate prices and how they are affected by the economy. Three cities where this is prevalent are New York, Boston and San Francisco. Although all markets in the country saw a large decline in home value, these cities were less impacted. Demand is still high and prices we begin to rise.

Now, what makes these cites different than others in our country. Yes, they are large and urban, but there are other large urban cities. So we know that is not the reason. Maybe it is because they are relatively coastal cities. Well, Seattle is coastal and Washington DC is relatively close to the coast, as well. So, we know it’s not that.

What I believe is the key reason why these 3 cities stand out compared to all others in our country is they international cities and are filled with ambitious, driven people. This spurs great competitions and we all know competition leads to innovation. People just want to live there. Most have a preference to one of the three and they all have different things to offer.

So remember, if you want to be successful, surround yourself with ambitious people and compete to the best of your abilities.

Foreclosure Help

Given the wake of the recent foreclosure epidemic, I want to take some time to provide a means of knowing if you and your home are at risk. The foreclosure process is long and complicated, but it is possible to minimize your losses and the impact on your credit. The key is to solve the problem as soon as possible. Don’t wait around. The further along the process, the harder it is to stop.


There are 3 main stages the homeowners will deal with before the foreclosure process begins. The first stage is you notice it is becoming harder and harder to pay all your bills, feed your family, and make your monthly payments. Next, you realize you won’t be able to pay your next mortgage payment. And finally, you miss that payment. As I said above, the best time to solve the problem is before that payment is missed. If you are current on your mortgage, your lender will be likely to work with your to prevent missing a payment.

As soon as you know you will have trouble making your payment, call your lender. Let them know there has been a change in your financial situation. Medical bills, insurance, children, school can all be acceptable reasons for your issues. There is a good chance they can postpone the due date of the payment or allow you to double up on your next payment. The benefit of letting them know beforehand is, you are in good standing with the company and you avoid penalties and late fees.

Now, say you did the above, but you still need help. You will want to contact your lender about a loan modification. If you have not missed a payment, there is a really good chance you are eligible for one of the new government programs. You can also contact a third party mortgage broker to have them act as your negotiator which may get better terms on the modification. Finally, you can consult with a HUD-approved Housing Counselor. Find one at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call (800) 569-4287.

Above is what you do if you know you will, but have not yet missed a payment. If you have already missed one or more payments, solving the problem becomes much harder. After your first missed payment, your lender will begin sending you letters requesting payment or to contact them. It is always a good idea to call them. You do not want your lender to think you are avoiding them. Although, technically, the foreclosure action can start as soon as your first payment is reported delinquent, in California, banks tend to wait for the loan to be 90 days delinquent before they begin the action. Keep in mind, each state has its own laws and practices and I will be mostly concentrating on California.
Ok, so here is a timeline of the foreclosure process in California. Most states are similar but it is always good to check with a real estate attorney or mortgage lender in your state. Remember, California uses Deeds of Trust as security for property loans, so it is a non-judicial foreclosure state. If your state uses mortgages as the security, then it would be a judicial foreclosure state and the timeline will be different. Also, just to clarify terms used in the timeline; the Trustee is the home owner, the Trustor (usually the lending bank) manages the loan for the Beneficiary, who is the owner of the note. The beneficiary can be a bank, private investor or other investor.

90 days (approx.) after missed payment – Lender will request to initiate foreclosure.

Day 1 – Notice of Default (NOD) is recorded with the county and Trustee’s Sale (TS) is ordered

Day 2 to 10 – Notice of Default is sent to the owner and the property address (if different).

Within 1 Month – NOD is sent to all interested parties and TS is received and reviewed.

3 Months after recording NOD – TS is prepared and sent to publication

25 Days before Sale – IRS is notified of sale

20 Days before Sale – Begin Publishing sale, Post Notice of Sale on the Property, and mail the Notice to all interested parties (same as NOD).

14 Days before Sale – Notice of Trustee’s Sale is Recorded by the County

5 Days before Sale – Buyers right to reinstate the loan expires

Day of Sale – Property is Sold, Sale is postponed or the Property reverts to the Beneficiary.

DISCLAIMER: This timeline is for informational purposes only and should not be considered legal advice or an official description of the judicial or non-judicial process. The timeline is for consumer information only and based on California policies. It is advised all consumers seek professional legal counsel with regard to any default proceeding.

Tips for Sellers - Staging the House

Continuing with advice for sellers, this article covers the staging process. Staging a home is when you make the interior as neutral and welcoming as possible. Remember from last week, first impressions are everything. There are two ways you can tackle staging your home. You can do it yourself or hire a professional. Both have their advantages. If you are going to be living in the house while it is on the market, I recommend doing the staging yourself. It shouldn’t take more than a weekend and can also make the moving process easier.


If you already moved and the house is empty, hire a professional. They can be a great asset in the presentation of your home. You do have another option if you already moved. You can leave the house empty. I don’t recommend this. Although it’s a good way to save money, it is hard for buyers to imagine what an empty house will look like with furniture in it. Every staging pro will have their own concepts and you should use similar discretion as you would when hiring a Real Estate. (insert hyperlink)

When staging a home yourself, there are 3 steps to address. The first is the removal of personal items. Next is organizing the storage and living space. And lastly is cleaning. The purpose of removing most of your personal items is to allow prospective buyers to imagine their stuff all over the place. The home should look like a blank slate.

The items you want to address are personal awards and photos. You should take most if not all of your pictures, diplomas, and/or awards off the walls. It is ok to leave some artwork, but it should be neutral. If you have kids, pack up most of their toys and put them away. Not all buyers have kids and toys also tend to add clutter. This goes for any collections you may have.

After you are done removing your personal items, you can start organizing your space. It is a good idea to get rid of extra furniture from the living and family rooms. This includes pool tables, sculptures, mounted animals, and religious figures. It’s best for rooms to look clean, simple, and organized. This gives buyers the best opportunity to visualize how the house will look when they move in. When it comes to the bathrooms, it is best if there is uniformity. It is a good idea to create some form or simple theme. At the least, each bathroom should have matching towels and floor mats. The bathrooms should also be free of unnecessary items and appliances.

Finally there is cleaning. All your previous efforts are pointless if the buyers walk in to a dirty house. Carpets need to be vacuumed and possibly steam cleaned; depending on their condition. Tile and laminate should be mopped and hardwood floors should be waxed. Remember, spending some money upfront can be very beneficial for both your selling price and the time spent on the market. Also, if your home needs it, touch up the interior paint. This can make a huge difference.

Tips for Home Sellers: Preparing Your Home for Sale

Before you start showing your home, it is a good idea to make it as presentable as possible. This includes making some repairs and/or improvements. This stage of the selling process is call “pre-marketing”.

The first part of the home you want to check is the exterior, including the yard. First impressions are very important, especially with homes. You want the buyer to pull up to your house and say “wow”. For your back yard, make sure your lawn is green and mowed and clean your outdoor furniture. The front should be as inviting as possible so you want to do the same as you did with the back, plus more. Trim the hedges, give the fence a fresh coat of paint, and make sure the drive way is clean and free of clutter. You may even want to consider planting some bright colored flowers to make the front more welcoming.

As for the exterior of the house itself, it’s a good idea to touch up the paint. Make sure mail box is clean and the numbers a legible. You also want to check for any cracks in the chimney or walls and have them filled. Finally, you should repair any loose trim or drain pipes, and clean the windows and doors.

Next is the garage. This is pretty simple. All you need to do is make sure it is organized and clean the floor. You want the buyer to feel the garage is large, with plenty of storage space. If your garage is messy, buyers will be turned off.

Finally, you need to work on the interior. As with the outside, touching up the paint is a good idea. However, you may want to consider repainting in neutral tones. Most buyers want a home that is like a “blank canvas”, ready for them to make their own. Although you may love your deep red dining room, but if someone is not particularly fond of red, it can be a turn off. Carpets and drapes should be steam cleaned and all the light bulbs need to be working. In the kitchen, make sure the counters are and sink are spotless. Also clean the stove and oven. Make sure the bedrooms and closets are clean and organized as well.

Overall, you want the house to look very clean, bright, and inviting. It is also a good idea to hire an interior designer or home staging specialist, if your home in is a higher priced area.

I hope this provides some useful information, and as always, feel free to ask a question or leave a comment below.

Tips for Home Sellers: Choosing an Agent

So now that I've spent some time giving tips for consumers looking to buy a home, I will devote my next few post to providing advice for sellers.  Even though the market is dominated by foreclosures and short sales, which are significantly discounted compared to a traditional sale, it still could be the right time to sell.  There are a lot of buyers out there, with great credit, looking for a new home.  Many buyers don’t want to have to deal with the headache or drama associated with foreclosures and short sales so they prefer to buy a non-distressed home, even if they have to pay more for it.

The first step in selling your home, is selecting a Realtor.  A good Realtor can be one of the most important parts of selling your home.  They will provide you will information regarding current market conditions and where you should price your home.  They can also provide referrals to staging and moving companies.

You want to look for an agent who is active and knowledgeable in your area.  It is also common to use the same agent you used when you first purchased the home, provided you are happy with their service.  As with selecting an agent for the buying process, you want to make sure you are comfortable with him or her.  Does the agent answer your questions sufficiently? How quickly do they respond to your phone calls? These are the types of questions to ask yourself.

What it really comes down to, is you want an agent whom you are comfortable with and who will best market your property.  There are many marketing venues when it comes to real estate and your agent should utilize a lot of them.  The best agents will use, MLS, virtual tours, social media, craigslist and a few listing web sites.  The key is to make your property as visible as possible.  The more people who see your how, the more likely you will sell it quickly and for your asking price.  They should also follow up with agents who showed the home and ask for their input on the price, staging and condition of the home.

Remember, what you don’t want is a “yes man”.  You agent should have an extensive knowledge of the market and the industry, and they should know more than you.  Therefore, listen to their suggestions.  They want to sell your home just as much as you do and they know what works and what doesn't.

Next time I will go over what pre-marketing is and what you should be doing during that process.  Take care and remember, good things come to those who make it happen!

Home Buying Tips: Part 3

Hello Everyone, I hope you all had a great Holiday break and New Year. Now that we are back to the grind, I will continue with tips for home buyers. If you remember, my last two posts went over getting started and finding the right home. Today, I will talk about what to do once you find the right house. This includes the inspections and making an offer.

Having an inspection is a very important part of the home buying process. It is one of the ways you “the buyer” can protect yourself from any problems with the functionality or construction of the home. The primary purpose of the inspection is to check and estimate the cost to repair any issues with pests, water, foundation and all other aspects of construction. If there a major problem is discovered, the inspector may recommend a more specific inspection of that area.

You also need to consider if the home is in a flood plain. Your Realtor will answer this question for you and if it is, you will be required to purchase flood insurance. If you are near, but not in a flood plain, you still should consider buying flood insurance because floods are typically not covered in basic home owners insurance. Other factors you want to consider are probability of natural disasters, zoning laws, and building codes. These are all questions your real estate agent should be able assist you with. Some states, including California, require the seller give a natural hazards disclosure statement to buyers which covers earthquakes, floods, wildfires and dams.

It is important that you have the inspection done before you make an offer, because once your offer is accepted, it is legally binding. If you do not have an inspection done before the offer, you need to make sure your offer contains an “inspection contingency”. This allows you to pull out of the sale if the inspection finds any major problems. I’ll go offers and contingencies next.

Making an offer is not a difficult process, but it’s not as easy and telling the seller you will buy the house for the asking price. There is a specific format and all offers should include the following:

Complete legal description of the property

·         Move-in date

·         Closing date

·         Amount of deposit

·         Down payment amount and financing details

·         Purchase price

·         Time period for which the offer is valid

·         Details of the offer

The legal description of the property is not just the address. It describes the specific parcel of land and how it was accounted for in county’s map and usually contains the property’s Assessor Parcel Number (APN). The move-in date is the day you wish to occupy the home and the closing date is the day ownership is legally transferred.

Your deposit is a sum of money, included with the offer, which you give to the seller to show you are “serious” about buying the home. It is usually 1 to 5 percent of the purchase price. If your offer is accepted, the deposit becomes part of your down payment. If it is rejected, then the deposit is returned to you. The down payment amount and full purchase price need to be included as well. Most banks want to see a 20% down payment, but there is no “mandatory standard” so it is always negotiable.

The details sections will include any contingencies regarding the offer/purchase. Contingencies are items which must be fulfilled by either party or the agreement can be terminated. There are a wide variety of contingences, but some of the major ones involve inspections, financing, and the purchase/sale of other homes. An example of the purchase contingency would be if the seller only wanted to sell if they found a new home to buy. Sale contingencies would be used if the buyer didn’t want to buy the home unless they can sell their other home.

Determining the purchase price and contingencies are the hardest parts of making an offer and this is when it is good to have a knowledgeable agent. They will know what similar homes are selling for in similar areas and how different types of financing affect the price. The amount of time the home has been on the market affects the price, as well. Usually, sellers will accept an offer which is lower than the list price, if the home has been for sale for a long time. Your agent will help you decided what contingencies are necessary, as each situation is different.

Remember, once an offer is accepted, it is legally binding. Meaning, if you submit an offer and it is accepted by the seller and all contingencies are fulfilled, you are legally bound to purchase the house. If you back out of the sale, your deposit may be forfeited to the seller and you may be liable for any losses incurred by the seller, seller’s agent, and/or your agent as a result of cancelling the agreement.

I hope this provided some good information for you and as always, if you have any questions or comments, leave them below. Take care and see you next week.