Tuesday, February 24, 2015

Look up potential "Natural and Environmental Hazards" in your neighborhood before you buy or sell a home...

Law in the State of California requires that home sellers disclose to home buyers the potential environmental hazards that may affect the property for sale. I find that most home buyers are just excited at the thought of home ownership, and aren't necessarily thinking about this stuff. But it is definitely an important element for buyers to consider when making a decision where to purchase a home.

A resource that buyers can use in advance of starting a home search to locate potential environmental risks is the State of California Emergency Management Agency (CalEMA)'s Hazard Mitigation Portal. At this portal, you can enter an address and use a mapping tool to figure out if the house of your dreams is in or near a flood zone, for example. Or you can enter a zip code and determine what potential hazards an entire neighborhood may face. For example, if you enter my office address (4215 Freeport Blvd, Sacramento, CA 95822), you can see that FEMA maps indicate a potential flood hazard. You can also see that it is not in an Earthquake Fault Zone, not in a Tsunami Hazard Zone, etc. So if a buyer wants to do some research in advance, this is a great tool.

The paragraph (10B) in the current version of the California Residential Purchase Agreement that deals with Natural and Environmental Hazard Disclosures reads, "Within the time specified in paragraph 14A, Seller shall, if required by Law: (i) Deliver to buyer earthquake guide(s) (and questionnaire), environmental hazards booklet, and home energy rating pamphlet; (ii) disclose if the property is located in a Special Flood Hazard Area; Potential Flooding (Inundation) Area; Very High Fire Hazard Zone; State Fire Responsibility Area; Earthquake Fault Zone; and Seismic Hazard Zone; and (iii) disclose any other zone as required by Law and provide any other information required for those zones."

Most sellers will opt to provide a Natural Hazard Disclosure Report -- something Realtors tend to refer to "the NHD." There are a few third party companies that provide them for usually around $75 - $100. Those reports are extremely comprehensive and go well beyond items (i) and (ii) above. There are MANY types of "hazard" zones that are added in that cover item (iii) above as well. Another benefit of obtaining a third party report is most of the companies offer an insurance policy in the event they omit, or misreport a hazard zone. So the seller can shift liability to a third party in many cases...and the buyer has the benefit of a more comprehensive disclosure, as well as the insurance in the event of an omission. So that's generally a win-win.

What are the "other" types of zones? NHD reports cover things like Protected Species and Habitat Zones, Radon Gas Zones, Airport Influence Zones, Naturally Occurring Asbestos Areas, Abandoned Mining Operation Zones, Military Facilities Zones....I could go on and on.

Ultimately, it is important to know what you are buying so you can plan accordingly. It's nearly impossible to find a neighborhood that is free from any and all environmental hazards (this is California, after all!), but you can make an informed decision as to where you purchase your home, and take appropriate steps to protect yourself with additional insurance policies, preventative maintenance to the home, etc.

Thursday, February 19, 2015

New Listing - 5420 D Street, (East) Sacramento, CA 95819

Adorable light and bright 2 bedroom, 1 bathroom 1,153sf East Sac home! You will love the updated kitchen with tile counters, dishwasher, and stainless appliances, wood floors, gas fireplace insert, updated bathroom with tub/shower combo, whole house fan, dual pane windows, central heat and air, and recently painted interior and exterior. Backyard offers a lovely brick patio, large yard, and shed. 216sf professionally installed sunroom offers so many possibilities! Short distance to restaurants, shopping, CSUS, K-8 schools, public transportation, the river, and downtown. Don't wait! Offered at $389,500. For more photos and additional information, please visit 5420 D Street, Sacramento, CA 95819.

Friday, February 13, 2015

Selling a Sacramento investment property is a lot different than selling your own home...

Recently I have received a lot of inquiries to list and sell small "investment properties." What's an investment property? An investment property is any rental property - for example, a duplex, triplex or fourplex, or a single family home or condo.

Since property values in Sacramento have increased in the last few years since the bottom of the real estate market, it seems that folks are looking to cash in their chips. The element that is most interesting to me is that most (not all) of the investment property sellers I am speaking with are looking to sell because they don't like being landlords, and rather than roll their equity or sales proceeds into a bigger better investment property via a tax deferred 1031 Exchange, they are just looking to cash out.

Selling an investment property is a lot different than selling your own home. First and foremost, somebody else, a tenant, is likely living in the property. Second, since you don't live there, you may not know much about the property. Third, there are things like deposits, maintenance expenses, utilities, repairs, and rental income to factor into the equation. And fourth, often times the monthly rental income the property produces is an important element in determining value -- not just the property as compared to the sales prices of other recent sales of comparable properties.

Over the next few weeks I will write about the different considerations investment property owners face when selling...

Let's talk about tenants first. A tenant can really make or break your property's sale. An uncooperative tenant can cost a seller thousands of dollars in a sale. For example, are they tidy or messy? Some tenants treat rental property like their own home, are clean and take pride in its appearance, maybe do minor maintenance themselves, and let their landlords know if something is broken and needs fixing. On the other side, I've seen some tenants who are borderline hoarders, their units smell bad, there are dirty clothes and moldy food everywhere, and they haven't cleaned the bathroom in a few years. A new buyer looks at those issues and immediately thinks in terms of potential cleaning and repair costs, and may pass on the property all together or hit you up for a lower price or concessions for repairs. Another thing to consider when selling a property with a tenant: are they going to be cooperative with allowing showings, or not? Some tenants are very understanding, want to make a good impression on their possible future landlord and accommodate showings and access to the property for inspections. Other tenants will feel threatened by the possibility of a new landlord, feel afraid they will be kicked out of their home, and not make the effort to make the unit available on their own accord. Some tenants will insist to be present for showings and sabotage the potential buyer’s impression of the property.

So what do you do when you have a tenant who falls into the problem category? I find the best approach with tenants is complete and total transparency -- do not hide the fact you are planning to sell. Nothing creates more tenant hostility than a landlord who lists a property and the first notice a tenant gets is a seeing a “for sale” sign in the front yard. Communicate with them. Let them know that you want/need to sell and that you want to make the process as easy as possible. Ask to make an appointment with them and meet at their unit - this allows you the chance to talk, and allows you to see the unit. If the unit is messy, offer to have it professionally cleaned for them. Most tenants will jump at the chance to have their unit cleaned for free. If you can afford it, you might offer to incentivise the tenant by offering a temporary reduction in rent in exchange for cooperation with showings while the property is for sale. If you do that, be sure to do it in writing with very clear parameters. Be sure to introduce your Realtor to the tenants and make sure they know how to contact each other. Set clear parameters for arranging showings and access -- like “by appointment with 24 hours notice.” If you need to arrange extended access to a buyer for inspections, maybe offer them some movie tickets in exchange for being away 3-4 hours.

Most tenants do want to help you succeed in your sale and make a smooth transition to the new owner...next week I will talk about disclosures for a rental property since you don’t have first hand knowledge of the potential idiosyncrasies about the property...

Friday, January 30, 2015

New Listing - 3715 Tallyho Drive, Unit 29, Sacramento, CA 95826

Adorable 2 bedroom, 2 bathroom Rosemont condo in "The Highlands." You will love the remodeled kitchen and bathrooms with granite counters, maple cabinets, and stainless appliances. Spacious light and bright layout, nice fireplace, big bedrooms, lots of storage space, dual pane windows, inside laundry, private patio and more! Gated community with park-like grounds, swimming pool, club house & tennis court. Conveniently located just minutes from CSUS, the river, downtown, and public transportation. Don't wait! Offered at $105,000. For more photos and information, please visit 3715 Tallyho Drive, Unit 29, Sacramento, CA 95826.

Tuesday, January 27, 2015

New Listing - 9121 Plumgrove Way, Sacramento, CA 95826

Adorable, light and bright 3 bedroom, 2 bathroom, 1,425sf Rosemont home! You will love the vaulted ceilings, recessed lighting, huge living room with fireplace insert, updated kitchen, custom counters and backsplash, stainless appliances, breakfast bar, large dining area, updated bathrooms, and more! Backyard has great covered patio, fruit trees, veggie garden, and lovely blooms in the spring. Conveniently located just minutes from shopping, light rail, freeway access, CSUS, downtown, and the river. Don't wait! Offered at $259,900. For more photos and information, visit 9121 Plumgrove Way, Sacramento, CA 95826.

Sunday, January 25, 2015

New Listing - 50 Regency Park Circle, Unit 8109, Sacramento, CA 95835

Lovely Natomas 2 bedroom, 2.5 bathroom, 1,303sf end unit condo with a 2-car attached garage. You will love the granite counters and stylish backsplash in the kitchen, custom paint selections, upgraded carpet & lovely tile floors. Lots of natural light! Desirable Plan C built by Warmington Homes - Serenade at Regency Park Community amenities include a built-in pool, barbecue area, & fitness center. Washer, dryer, and refrigerator included. Close to neighborhood parks, bike/running trails, shopping, and dining. Easy access to I-5, Downtown, and Sacramento International Airport. Don't wait! Offered at $159,900. For more photos and detail visit 50 Regency Park Circle #8109, Sacramento, CA 95835.

Tuesday, January 6, 2015

Does it make more sense to rent or buy a home in the Sacramento area? The data is here...

For the last few years in the month of January, I have written about the difference between typical monthly mortgage payments vs. the average rent payments in certain neighborhoods in the greater Sacramento area. I thought I would start 2015 much the same way, updated with today's interest rates, average Sacramento home prices, and average rents.

2015 has started and my phone has been ringing off the hook. I have been busy with both home buyers and sellers. Who has been calling me? Prospective home buyers who finally have decided that 2015 is the time take the plunge and buy a home in Sacramento, folks who are relocating to the area, or looking for a bigger home who also need to sell their current home. I have also been called by several folks so far in 2015 who are looking to sell an investment property they've been holding on to. This is very similar to my activity that started 2014...

While home values have increased a bit since this time last year, it is still currently more affordable in many areas to buy a home in Sacramento than rent a home. And compared to our market's peak in 2005, prices are still extremely low, plus rents seem to have increased.

When you take into consideration the median home price and probable monthly mortgage payment in particular Sacramento neighborhoods vs. the typical rent, often times the mortgage payment is less. Plus often times the 'average' home that is purchased is much larger or nicer than the 'average' home rented. So as per usual, let's take a look at a few different areas...just for the sake of citing my information sources, for median home price (used to calculate mortgage payment scenarios) I am using most recent year end December 2014 Trendgraphix data, which is taken directly from MLS, and for average rent I am using the most recent Q4 2014 Homepointe Quarterly Residential Rental Survey. For my mortgage payment calculations, I am basing it on a 4.0% interest rate (which is actually slightly above today's average market interest rates), and including the full PITI - loan principle, interest, monthly property taxes, and monthly homeowner's insurance (and mortgage insurance where applicable).

Natomas - 95833, 95834, 95835
Median single family home sale price: $288,000
Average rent for a 3 bedroom home: $1,353 (range $1,095 - $1,795)
30-Year Fixed VA Loan (Zero downpayment): $1,788
30-Year Fixed FHA Loan (3.5% downpayment): $2,046
30-Year Fixed Conventional Loan (10% downpayment): $1,735
30-Year Fixed Conventional Loan (20% downpayment): $1,483

Elk Grove / Laguna - 95757, 95758
Median single family home sale price: $321,000
Average rent for a 3 bedroom home: $1,471 (range $1,195 - $1,950)
30-Year Fixed VA Loan (Zero downpayment): $1,993
30-Year Fixed FHA Loan (3.5% downpayment): $2,281
30-Year Fixed Conventional Loan (10% downpayment): $1,934
30-Year Fixed Conventional Loan (20% downpayment): $1,654

Rosemont / College Greens - 95826, 95827
Median single family home sale price: $244,000
Average rent for a 3 bedroom home: $1,239 (range $90 - $1,495)
30-Year Fixed VA Loan (Zero downpayment): $1,515
30-Year Fixed FHA Loan (3.5% downpayment): $1,734
30-Year Fixed Conventional Loan (10% downpayment): $1,470
30-Year Fixed Conventional Loan (20% downpayment): $1,257

Arden - 95821, 95825, 95864
Median single family home sale price: $250,000
Average rent for a 3 bedroom home: $1,275 (range $995 - $1700)
30-Year Fixed VA Loan (Zero downpayment): $1,552
30-Year Fixed FHA Loan (3.5% downpayment): $1,776
30-Year Fixed Conventional Loan (10% downpayment): $1,506
30-Year Fixed Conventional Loan (20% downpayment): $1,288

Carmichael, Fair Oaks - 95608, 95628
Median single family home sale price: $318,000
Average rent for a 3 bedroom home: $1,649 (range $900 - $2,600)
30-Year Fixed VA Loan (Zero downpayment): $1,974
30-Year Fixed FHA Loan (3.5% downpayment): $2,259
30-Year Fixed Conventional Loan (10% downpayment): $1,916
30-Year Fixed Conventional Loan (20% downpayment): $1,638

Citrus Heights, Orangevale - 95610, 95621, 95662
Median single family home sale price: $251,000
Average rent for a 3 bedroom home: $1,278 (range $995 - $1,550)
30-Year Fixed VA Loan (Zero downpayment): $1,558
30-Year Fixed FHA Loan (3.5% downpayment): $1,783
30-Year Fixed Conventional Loan (10% downpayment): $1,512
30-Year Fixed Conventional Loan (20% downpayment): $1,293

South Land Park, Pocket / Greenhaven - 95822, 95831
Median single family home sale price: $223,000
Average rent for a 3 bedroom home: $1,293 (range $1,000 - $1,795)
30-Year Fixed VA Loan (Zero downpayment): $1,384
30-Year Fixed FHA Loan (3.5% downpayment): $1,584
30-Year Fixed Conventional Loan (10% downpayment): $1,344
30-Year Fixed Conventional Loan (20% downpayment): $1,149

Obviously there are other tangible and intangible benefits to home ownership as well...for example, a tangible benefit is the fact you can write-off or deduct your mortgage interest on your income taxes, and also deduct some other related expenses each year. An intangible benefit might be that as a homeowner, you have the freedom to paint the walls, decorate, plant a garden, remodel, etc.

So clearly these numbers are just a baseline to give you an idea of housing affordability in certain areas. You definitely need to consult a loan officer to see what type of financing is the best fit for you, and ultimately just how much you can afford - and there are several variables that will affect your interest rate and terms. You should also speak with a CPA or qualified tax professional regarding the mortgage interest and other tax deductions to see how it will affect your particular situation. If you need a good referral to either one, feel free to contact me and I can put you in touch. And of course I can help you purchase your home and all that goes with it...

Monday, December 29, 2014

Need to list your Sacramento home quickly? Here are a few tips to get it ready in a short amount of time...

I tour a lot of homes. A LOT. And not just in the course of showing a lot of homes to buyers. I make a weekly habit of looking at properties for the sake of reference, to know and be familiar with what is on the market in certain Sacramento area neighborhoods. This helps me help both my buyers AND my sellers.

One thing I see frequently is a complete and total lack of preparation of a home for sale. As in this photo here to the left in a Land Park home I toured - this home seller covered a big mess of stuff with some blankets. And it looked crappy. Take a few minutes and box that stuff up...WHY would a seller not want to present a home in the best possible light? And that leads me to wonder why on earth would a seller choose a listing agent who doesn't help them or suggest ways to get the house ready to sell?

I do sometimes get calls from folks who want to list their home right away...and with RIGHT AWAY comes a time crunch to get a home presentable for showings. Perhaps it's a short sale situation and there is a risk of foreclosure looming? Maybe it is a divorce situation and there is a court order to sell? Perhaps they found another house they want to buy and need their existing home on the market now? Whatever the case, it happens. Here are a few quick ideas for home sellers who want to have their home on the market asap...

First and foremost - clean your home. If you do not have the time to clean it yourself, please hire a professional. It is really important that your home smell clean, the bathrooms be free of the ring around the toilet, the shower enclosure be free of scum, the kitchen appliances and fixtures are free from grease, and the floors are clean. Added bonus if you can have your carpets professionally cleaned and your windows professionally washed.

Mow the lawns. At least the front lawn, even if you do not have time for the back yard. Blow leaves and tidy up planter beds. If you have kids, put them to work pulling weeds or scooping dog poop. Most buyers form their impression of a home within seconds of seeing the exterior. If the exterior looks uncared for, that's usually an indication of what the interior will look like. Added bonus if you can power wash your driveway and front walkways.

De-clutter as much as it's possible to. If this means your have to cram stuff into your closets or garage, then by all means do it. You will have to pack for moving anyway. Grab a few boxes and start thinning things out - put some of the knick knacks away, put away the unfolded laundry, box up your DVD collection, maybe pack-up the winter or summer clothes (depending on what time of year it is). If you have kids and their toys are everywhere, get a Rubbermaid tote that you can throw all of the toys into for showings. Added bonus if you can do something simple like set your dining room table with clean linens with a pretty, fragrant vase of flowers in the center.

These are the basics to maximizing your home's appeal with time constraints...of course if you have more time to prepare, that's ideal. Because taking some time, when you have it, to truly prepare a home for sale can yield a higher selling price in a shorter time on the market. But that's another article I wrote...