Thursday, January 12, 2017

Want to list your Sacramento area property on AirBnB or VRBO? Here's what you need to know...

"If I buy this downtown condo, can I just list it on AirBnB and rent it to legislators when they visit the Capitol?"... "What if I turn this detached garage into a 'granny unit' and rent it out on AirBnB?" Hmm...good questions.

I get asked pretty often about transient occupancy and short-term rentals. Just to clarify, a transient occupancy or short-term rental is one that is for a term of less than 30-days. Think of a place that might be rented using AirBnB or VRBO -- probably more commonly thought of as vacation rentals. This type of short term arrangement is becoming more common these days thanks to these websites, and can be a nice alternative for travelers who perhaps want to stay somewhere other than a hotel. (Side note: a rental in excess of 30 days does not fall into this category. A landlord-tenant relationship is created in that case, and an entirely different set of laws apply.)

For example, my family and I stayed in a home for 5 days that we rented on VRBO in Scottsdale when we attended the SF Giants Spring Training a couple years ago. It was a nice place and the convenience of having a home where 6 of us could all comfortably stay, with amenities like a kitchen and laundry facilities were great!

It sounds appealing -- and a nice way to supplement income renting out part of your home, or perhaps you have a rental property and you'd like to offer it as a short-term rental instead of leasing for a longer term...People visit Sacramento, right? But as a property owner, what are the local rules? Well, right now the rules differ all over our Sacramento region.

City of Sacramento: for properties within the city limits, the City requires owners to obtain a Short-Term Vacation Rental Permit and pay a fee of $125. Owners must also collect and remit 12%  Transient Occupancy Tax (TOT). And there is a different set of parameters if you are renting out space in your own primary residence, versus renting out a vacant/non-primary residence (such as a 90 days per year limit).

County of Sacramento: for properties within the unincorporated areas of the county (like Antelope, Arden, Orangevale, Fair Oaks, Carmichael, other non-city Sacramento areas, etc.), the county requires owners to obtain a Vacation Rental Permit and pay a fee of $270.66. Owners must also collect and remit 12% TOT. The county does not allow short-term rental of vacant/non-primary residence property.

City of Galt: it seems there is no specific ordinance regarding short-term rentals within the city limits, however if you own any Galt rental property you are required to get a business license from the city. They also require TOT.

The Cities of Citrus Heights, Folsom, Elk Grove, and Rancho Cordova all require collection and remittance of TOT, however it seems they have no specific policies governing short-term rentals right now. You may want to defer to the county's policies here.

Keep in mind that just because the city or county may allow short-term rentals, if your property is located in a Homeowners Association (HOA), the HOA may specifically prohibit short-term rentals. I have started to see this in a number of HOA documents for my transactions. Also, speaking with a local insurance agent, be sure that your property insurance policy covers this sort of activity. Most policies specifically exclude coverage for short-term rentals.

Wednesday, January 11, 2017

New Listing - 952 Q Street, Sacramento, CA 95811

Elegant updated 2 bedroom, 1.5 bathroom, 1,013sf unit in the Saratoga Townhomes in downtown Sacramento at 9th and Q Streets! You will love the great location and modern amenities; updated kitchen with granite counters and new stainless appliances, new laminate flooring downstairs, new carpet upstairs, freshly painted interior, new light fixtures. Private balcony with awning off upstairs bedroom, private patio off living room downstairs. Attached garage with direct access to unit. Bonus - Zone E parking permit included. Close proximity to all downtown has to offer - The State Capitol, Golden 1 Arena, Roosevelt Park, R Street Corridor, art galleries, great restaurants, and other nightlife! Don't wait! Offered at $339,900. HOA dues $269.44/month. For more photos and information please visit 952 Q Street, Sacramento, CA 95811.

Friday, January 6, 2017

Where to get free sandbags in the Sacramento area...

With the torrential rain forecast for the Sacramento area this coming week, many homeowners should stock up on sand bags to prevent flooding in their homes...here are locations where free sand is available:

C-Bar-C Park in Citrus Heights (city of Citrus Heights residents only)
Folsom Fire Station #36 in Folsom (city of Folsom residents only)
Jose P Rizal Community Center in South Sacramento
Lowe's Parking Lot in Rancho Cordova (city of Rancho Cordova residents only)
Orangevale Community Center in Orangevale
Point Pleasant United Methodist Church in Elk Grove
Port of West Sacramento (city of West Sacramento residents only)
Sacramento County Branch Center in the Mather area
Sacramento Metro Fire Station #106 in the Arden area
Sacramento Metro Fire Station #55 in the South Sacramento area
Westside Park in Rio Linda
Wilton Fire Station in Wilton

Many locations have free bags for you to fill as well, however I would suggest that you bring your own bags and a shovel. Most of these locations are completely self-service.










Monday, January 2, 2017

Disclosing death on a property....

It seems a few times per year, I list property where someone has passed away at the home. Death at a property is one of those things that will not bother some people, and for others it will be a deal breaker when deciding whether to purchase a home. But how should it be disclosed? Where should it be disclosed? And for how long is it relevant to disclose?

In late 2016, legislation passed clarifying disclosure obligations in California for death on a property.

The provisions in AB73 are pretty simple: any death in or on a property MUST be disclosed if it occurred within 3 years from the date of the purchase contract. After 3 years has passed, the death, and the manner in which someone passed away, will no longer legally be considered "material facts" and disclosure is not required. Additionally, this legislation clarifies that no disclosure is required if an occupant who lived at the property had HIV, or died from HIV-related complications.

As I assist sellers to fill out their property disclosures, when we get to this question in the Seller Property Questionnaire, usually the answer is no and the "no" box is checked accordingly. However when the answer is yes, just checking the "yes" box that there has been a death on the property within the last 3 years, is usually not enough. I would recommend noting, if known, the location within the house where the death occurred and circumstances. Something like "Previous occupant passed away by natural causes in the master bedroom" is appropriate. It's also something I put in the agent comments section in MLS, so that it can be known to buyers before they view a property. If buyers have additional questions about the death, I generally suggest they ask in writing so that the seller can respond appropriately.

I also ask my clients to think about other notable deaths that may have occurred at the property. I recently had a seller who buried a 60-pound dog in the backyard, and after some discussion we agreed was a good idea to disclose that burial. What new owner wants to start landscaping and unexpectedly find buried bones in the backyard? Providing appropriate detail may save everyone from surprises later.

Friday, December 30, 2016

Verify wiring instructions before you wire funds to escrow...

So luckily I have not experienced this first hand with any of my clients, however I know other agents who have clients that have fallen victim to this. Beware...falling victim to this scam can not only derail your home purchase, but also completely derail your life.

BUYERS: WHEN YOU WIRE YOUR DEPOSIT OR DOWNPAYMENT FUNDS TO ESCROW, BE SURE TO VERIFY THE WIRE INSTRUCTIONS AND ROUTING INFORMATION WITH YOUR AGENT AND ESCROW DIRECTLY.

I can not emphasize this enough. If you receive an email with wiring instructions, call and personally talk to your agent to verify the information is correct and legitimate.

Sadly enough, there is an online email scam that seems to be getting more prevalent. Criminals will hack into a real estate agent's email and just sit back, read the emails, and monitor activity and the progress of transactions...then, when it comes time for a transaction to close, the hacker will use the agent's email and send wiring instructions to the client -- impersonating the agent. The wiring instructions lead to offshore bank accounts, not to escrow. One funds are wired to an offshore bank account, they can not be recovered.

Again, this is not some rumor. I know real people this has happened to. I know an agent whose client wired over $100,000 to Nigeria -- lost and gone forever. Don't let this happen to you! I have recommended to my buyers NOT to wire funds at all, and obtain cashiers checks and deliver them to escrow directly. The California Association of Realtors has a new advisory/disclosure document that addresses this as well. Just be careful.

Tuesday, December 27, 2016

Make sure to read inspection reports provided to you...

Not long ago, I represented the buyer for the purchase of an investment property in Rancho Cordova. The duplex had previously been in contract with another buyer who ultimately was unable to complete the purchase. That buyer had obtained a few inspections on the property, which were passed along to us as disclosures. They had also negotiated a section one termite clearance with the seller and that repair work had been completed already. Section one work includes remediating things like treating for active termites and repairing deteriorated wood. That's obviously nice!

However upon reading the original termite inspection that the clearance was based upon, I noticed there was a glaring omission. The sub-area, aka the crawl space under the structure, had not been inspected and was not included in the clearance! That's a big exclusion...often times a home that looks pristine on the exterior can have major issues underneath.

So, we requested that a smaller inspector come back out to the duplex, one who could fit underneath, and complete the inspection. The supplemental inspection found some rotten floor joists. Obviously that needed to be addressed, and we negotiated that the seller took pay for those repairs.

The moral of the story is -- make sure to read inspection reports that are provided to you.

Saturday, December 24, 2016

From my family to yours....

From my family to yours, for whatever you might be celebrating this time of year -- I hope you have a great holiday season and a fantastic new year. Here's to 2017!

Wednesday, December 7, 2016

Water Conserving, Low-Flow Plumbing Fixtures are Required in Single Family Homes in California Starting in 2017....

Due to legislation passed in California several years ago, starting in just a few weeks on January 1, 2017, ALL single family homes constructed before 1994 in the state must install water conserving plumbing fixtures. Some basic standards are:
- Toilets: use of no more than 1.6 gallons per flush
- Urinals: use of no more than 1 gallon per flush
- Showers: use of no more than 2.5 gallons per minute
- Internal faucets: use of no more than 2.2 gallons per minute

Generally, if you have replaced these items in your home in your pre-1994 home the last few years and purchased the fixtures in at suppliers in California, what you installed should be appropriate water conserving fixtures.

If you are selling your home, will you be required to upgrade all of your plumbing fixtures? Well, the short answer is no, you are not required to as a condition of closing the transaction. You as seller will have to disclose to the buyer if all of your home's plumbing fixtures are in compliance with the water conservation laws or not. I do suspect that if a seller discloses that fixtures in a home are not water conserving fixtures, then the buyer may be inclined to request that the seller bring the home into compliance with the law and replace all of the non-compliant fixtures.

At this point, I am not sure if or how appraisers will be asked by lenders to determine if a property has water conserving fixtures. Candidly, I am not even sure how one might go about measuring the flow of fixtures, short of turning them on and letting them run for a minute into a large bucket and then measuring the output. That said, I am sure appraisers will figure it out if banks demand it, or home inspectors and plumbers will figure out a way to do this if home buyers demand it...

I have a new listing coming onto the market in January that was built in the 1980's and while the seller was performing some other updates, he proactively went ahead and replaced both toilets, interior faucets, and the shower head to comply with the law.  The cost was about $600. So that is not completely cost prohibitive, but as most sellers try to net as much money as possible out of a sale, I am sure it is an expense most sellers would prefer not to absorb.

In 2019, all multi-family and commercial property will also have to comply with these water-conserving plumbing fixture standards.