Tax crackdown happening now

I heard this week from a friend/client who received a tax bill just recently saying, "We're sorry, but we didn't assess your property improvements you did in 2009. You'll have to pay us retroactive taxes owed since then and will see them on your next tax bill." Serious property tax crack down coming.

Arbitration and the new PRDS Real Estate Purchse Contract

by Deniece Watkins Smith, Realtor

www.dsoldit.com

New Contract

A new Peninsula Regional Data Service (PRDS) Real Estate Purchase Contract, that is used most frequently in purchases and sales of residential properties up to four units in parts of Silicon Valley, has gotten an overhaul. It is available now for use by all Realtors in our area.

One Example of change from the Contract:  Arbitration

Both versions of the contract have an arbitration clause that, when initialed by both the Buyer(s) and Seller(s), causes for any disputes to be handled by an arbitrator, resulting in a final and binding decision which cannot be appealed.  

The previous PRDS Contract (Version 04/07) had an explanation of arbitration in paragraph 7A which read as follows:

"Explanation: Arbitration is a private dispute resolution process in which Parties (by themselves or through their attorneys) submit disputes to a neutral arbitrator who is charged with rendering a fair and impartial decision as to all issues presented. When arbitration is selected, the Parties give up their rights to trial by judge or jury and to full and formal court process. Basic discovery rights (e.g., depositions, document production) are provided for under California law. Rules of evidence and procedure are less rigid than in trial court. Arbitration fees are typically on an hourly basis. The decision of the arbitrator is final and binding on all Parties to the arbitration agreement (Paragraph 7B). The arbitrator can award compensatory damages, punitive damages, and/or order specific performance, injunctive relief and declaratory relief. No trial or other court process is available to re-try the case or to appeal the merits of the arbitrator's ruling. This means that even when a party claims the arbitrator made a clearly wrong decision, based on a misunderstanding of fact or of law or an unwillingness to follow the law, that decision nevertheless remains final and unappealable. Only in cases of actual fraud in the arbitration process, corruption, bias, lack of due process or jurisdiction, or arbitrator's computation error, can an award be vacated or modified. The Parties are advised to confer with legal counsel for advice before committing to binding arbitration."

Some brokerages advise Realtors not to give advice with regards to arbitration.  It is the Buyer(s) and Seller(s) responsibility to decide if they want to initial this clause, which includes it as part of the contract.  In my experience, when I show the highlighted sentence in the explanation to my clients, most have chosen not to initial the Arbitration clause.

The new PRDS Real Estate Purchase Contract (Version 5/11) has Arbitration moved to paragraph 27B, which consequently, is page 8 of 9 in the contract.  Having it be located later in the contract may cause for less enthusiasm when covering this subject, yet still has heavy implications.  This new section reads:

"By initialing below, Buyer and Seller agree to submit any disputes between them concerning and/or arising out of this Contract to binding arbitration if those disputes are not resolved by mediation. Arbitration is a dispute resolution process in which the Parties, either on their own or represented by their attorney, submit disputes to a neutral arbitrator. The arbitrator shall be a retired Superior Court judge or a licensed California attorney with at least five years’ real estate experience. If the Parties cannot agree on an arbitrator, the Superior Court shall appoint the arbitrator. By agreeing to arbitration, the Parties give up their rights to a trial by judge or jury. The decision of the arbitrator is final and the Parties are giving up their right to appeal, except as provided by California law. Arbitration shall be conducted pursuant to Title 9 of the California Code of Civil Procedure including, but not limited to, the right of discovery under Section 1283.05. The decision of the arbitrator is final and binding on all Parties to the arbitration agreement. The real estate licensees are not required to arbitrate. The Parties are advised to consult with an attorney before agreeing to binding arbitration."

Notice that the highlighted sentence from the older version of the contract has been left out of the new explanation. 

I took the time this week to discuss this matter with two of the attorneys who wrote the contract. The conclusion is that the sentence highlighted above is still implied as truth.  This means that when initialed, arbitration is still final and binding on all parties even when the Arbitrator was unwilling to follow the law!

Summary

I've highlighted one nuance that stands out in the new contract that has affect on all parties to the contract.  There are 32 paragraphs in the new contract.  It is nine pages long.  Using a Realtor who is absolutely familiar with what your contract really says is essential when you're buying or selling a home in our area.

Cash Buyers, High-End Sales, Local Market Strength

by Deniece Watkins Smith
Realtor, ePro, SRES
Coldwell Banker, Los Altos
www.dsoldit.com


     Six out of twenty-one homes in Los Altos that have closed escrow in the past month have closed over their asking price.  Twelve out of thirty-two homes in Mountain View that have closed escrow in the past month have closed over their asking price.  

     When we hear news on TV about real estate it's mostly for the entire bay area, state, or even nation.  Real estate is extremely localized and only local real estate news can tell you what's happening in your area.  

     For approximately three months now, we have been in a very active, multiple offer market.  Approximately one-third of all primary residences are being purchased with 100% cash.  Approximately one-fourth of all second homes are being purchased 100% cash.  Usually, when the cash buyers are out in force is when the "investors" believe the bottom of the market has been reached.  

     Thirty-one homes from Sartoga to Atherton have closed escrow over four million dollars.  Those are the ones actually reported on the MLS. Some (like Yuri Milner's Los Altos Hills property rumored to have sold for $100 million) have closed without ever being reported to the MLS. For a long time the high-end market was completely dormant.  Since February of this year that market has woken up.  


     It is my opinion that when the high end market starts up and is active, it is an indication that company leaders are confident in the economy and should, in-turn, be an indicator of hiring in the near future.

     So we have a great start to Spring of 2011 as far as Silicon Valley real estate goes.  Let's hope the ball keeps on rolling!

Brandon Knapp's Market Update Jan 24, 2010

In This Issue...

Last Week in Review: The US Dollar has dropped. Find out why and what it could mean to home loan rates! Forecast for the Week: A full load of economic reports hits the markets. Read what they are and why they matter. View: How much can you deduct for driving? Discover what’s changed...and how you can benefit! Read Entire Article

When Mortgage Rate Locks Expire

By LYNNLEY BROWNING

Published: January 6, 2011

A lock-in agreement — also called a rate lock or rate commitment — protects against sudden spikes in interest rates by freezing the terms of a loan while it is being processed, which could ultimately save a borrower tens of thousands of dollars in interest costs over the life of the loan.


Read Entire Article

Biz Break: For California's real estate market, hope or despair?

By Frank Michael Russell

frussell@mercurynews.com

Posted: 01/21/2011 01:19:10 PM PST

Updated: 01/21/2011 01:26:38 PM PST

Today: Los Altos, Cupertino and Los Gatos were among the state's 10 most expensive communities last month by median home price, and Santa Cruz and Gilroy were among the 10 with the biggest price gains. Plus: Google tries to block "webspam." And: Silicon Valley's jobless rate falls


Read Entire Article 

Brandon Knapp's Market Update Jan 10, 2010

In This Issue

Last Week in Review: The labor market continues to improve, and while that’s good news for our economy, what does it mean for home loan rates? Forecast for the Week: Very impactful reports are in store for the week ahead - including a look at inflation, retail sales, and how American consumers are feeling these days. View: Breaking news... you won’t need to sweat the dreaded April 15th date this year. Find out why below. Read full story here

Real Estate News for week of 10/10/2010 from San Jose Mercury News

Foreclosure crisis: Officials in 50 states, D.C. launch probe

First came revelations that errors riddled foreclosures across the country. Next, several large lenders put their operations on hold amid lawsuits and calls for a national moratorium. On Wednesday, the attorneys general in all 50 states joined forces to see whether the corner-cutting banks had broken the law as they pushed delinquent borrowers from their homes. Read article »

Who sold what, published Oct. 9

Residential transactions in Santa Clara County, San Mateo County, San Francisco and southern Alameda County. ---------------------------------------------- Read article »

Bank of America halts foreclosure sales in all 50 states

WASHINGTON -- Potential flaws in foreclosure documents are threatening to throw the real estate industry into a full-blown crisis, as Bank of America on Friday became the first bank to stop sales of foreclosed homes in all 50 states. Read article »

Mortgage rates fall to decades-low of 4.27 percent

NEW YORK (AP) -- Rates on 30-year mortgages fell to the lowest level in decades for the ninth time in 12 weeks, pushed down by traders anticipating a move by the Federal Reserve to pump more money into the economy. Read article »

Biz Break: Will California's flailing real estate market stabilize next year?

Just how grim is the real estate market in the Golden State? Even the Realtors (normally an optimistic bunch whose income depends on improving conditions in the housing market) expect sales to plunge 10 percent this year from 2009. Read article »

Mortgage rates: 30-year fixed loans at decades-low of 4.27 percent

NEW YORK -- Rates on 30-year mortgages fell to the lowest level in decades for the ninth time in 12 weeks, pushed down by traders anticipating a move by the Federal Reserve to pump more money into the economy. Read article »

Wells Fargo to pay $24M to end 'pick-a-payment' mortgage probe

WASHINGTON -- Wells Fargo is paying $24 million to end an investigation by eight states probing whether lenders acquired by the company made risky mortgages to consumers without disclosing their perils. Read article »

U.S. pending home sales rise 4.3 percent in August

WASHINGTON -- The number of people who signed contracts to buy homes rose in August for the second straight month but remained far below last year's pace. The weak economy and fears that prices will fall are keeping many consumers away from the housing market. Read article »

BofA delays foreclosures in 23 states

WASHINGTON -- Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.Read article »

Who sold what, published Oct. 2

Residential transactions in Santa Clara County, San Mateo County, San Francisco and southern Alameda County. ---------------------------------------------- Read article »

Downsizing is booming

Smaller homes are trendy again as baby boomers look to shed excess room and recession makes large homes too costly.

Read the full story.

From the San Diego Union Tribune

Foreclosure activity increases 4 percent in August

Foreclosure filings – notices of default, scheduled auctions, and bank repossessions – increased 4 percent in August compared with July, but decreased 5 percent compared with the same period a year ago, according to RealtyTrac. 

Properties receiving a notice of default decreased 1 percent in August compared with July and 30 percent compared with August 2009 marking the seventh consecutive month of year-over-year decreases.  Foreclosure auctions increased 9 percent in August compared with the prior month, while bank repossessions increased 3 percent during the same period, according to the report.

California accounted for 20 percent of the total number of properties receiving a foreclosure notice in August, an increase of 3 percent from July, but down 25 percent compared with August 2009.

More Info

Bad FICO score? How to boost it

If you’re thinking about buying a home, you know it’s more important than ever to have a high FICO score.  Several components make up your score. What steps would you take to bump it up? How would you even know where to start?

Read the full story

Lenders putting few foreclosed homes on the market

Thousands of homes remain stuck in the foreclosure process as lenders continue to offer relatively few foreclosed homes for sale, according to a report released Tuesday.

Read the full story

Foreclosure fraudsters: The criminals who slow down recovery

From the Wall Street Journal

Foreclosures are once again on the minds of many.  After a summer of record lows in home sales and widespread pessimism in the economy, many market-watchers say the next leg down in home prices may come from pressure brought by foreclosed home inventory hitting the market.


Read full story here

California housing prices on the rebound

From CNN MoneyThe national housing market is shrouded in uncertainty.  But in California, there are glimmers of stability.
Read full story here

10 reasons to buy a home

From the Wall Street Journal With newspaper headlines declaring that foreclosures are on the rise, short sales are difficult to navigate, and the rate of homeownership is on the decline, some home buyers may no longer see the value of purchasing a home.  However, there are several reasons why homeownership makes economic, financial, and personal sense.
Read full story here

Brandon Knapp's Market Update 8/23/10

Brandon Knapp Branch Manager RPM Mortgage Office: 408-583-3205 Fax: 408-404-5574 E-Mail: bknapp@rpm-mtg.com Website: www.rpm-mtg.com/bknapp

For the week of Aug 23, 2010 --- Vol. 8, Issue 34

"There is nothing wrong with change, if it is in the right direction." Winston Churchill. And certainly, seeing our economy improve is change in the right direction. But what steps will get us there... and how will those steps impact home loan rates. Here’s what you need to know. Last Tuesday, the government held a "Future of Housing Finance" conference to discuss changes needed in this area. Most participants agreed that government assistance for housing must be reduced but not eliminated. Bill Gross, from PIMCO and one of the panelists, called for a massive refinancing of certain mortgages backed by Fannie/Freddie/FHA, believing such a move would lift home prices 5% to 10% and provide a $50 Billion stimulus to the economy. I will be watching this situation closely for further developments. Home sales and the job market - two key aspects to our continued recovery - are also areas we need to see change in an improving direction. Last week, the NAHB Housing Market Index came in a bit worse than expectations and showed housing to be at a 17-month low. It can be argued that the tax credits actually hurt the housing market by not adding any sales, just pushing them up. This has now resulted in a void or softer period in the market, potentially wasting billions of dollars. Housing Starts and Building Permits were also reported lower than expected last week. Clearly, demand for housing has slowed over the past few months, due to the expiration of the Home Buyer Tax Credit and persistently high unemployment. Speaking of unemployment, awful is the only way to describe last week’s Initial Jobless Claims report. According to the report, 500,000 people filed to receive unemployment benefits for the first time, which was well higher than the lofty 475,000 expected and the highest reading since November 2009. In addition, between Continuing Claims and people receiving Emergency Unemployment Compensation or EUC, the combined total of people receiving unemployment benefits now equals 9.25 Million people. The bottom line is this: The labor market is the foundation of our economy. Job growth and confidence is the best and most sustainable way for our economy to recover. The present anti-business regulatory environment is pushing Initial Claims, a leading indicator on the health of the labor market, in the wrong direction. But home loan rates, meanwhile, continue to remain at historic low levels. Though keep in mind, inflation is the arch enemy of Bonds and home loan rates, which means it can cause both to worsen. Both the Producer Price Index (which measures inflation at the wholesale level) and the Consumer Price Index were recently reported hotter than expected. If rates do start to rise, they will likely do so quickly. If you or anyone you know would like to learn more about taking advantage of historically low home loan rates, please don’t hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I’d be happy to talk to them free of charge. WHEN YOU’RE BUYING A HOUSE, THE LAST THING YOU WANT IS AN UNSUCCESSFUL CLOSING. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR SOME INFORMATION THAT WILL HELP ENSURE YOUR HOMEBUYING EXPERIENCE MOVES IN THE RIGHT DIRECTION.

Forecast for the Week:

More housing and job news follows this week, but will there be change in an improving direction? We’ll find out with Tuesday’s Existing Home Sales Report, Wednesday’s New Home Sales Report, and Thursday’s Initial and Continuing Jobless Claims Report. Also, on Wednesday we'll get a read on the health of the economy with the Durable Goods Report, which gives us an update on consumer and business buying behavior on big-ticket items that last for an extended period of time. Meanwhile, Friday will bring another read on the economy with the Gross Domestic Product Report, which is the broadest measure of economic activity.Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, last week’s weak economic news helped home loan rates hit record lows again, but volatility was rampant. I’ll be watching closely to see what this week brings. -----------------------Chart: Fannie Mae 3.5% Mortgage Bond (Friday, August 20, 2010)

The Mortgage Market Guide View

Credit Reports: One May Not Be Enough This summer, Fannie Mae instructed lenders that they should adopt a new policy that would include a second review of an applicant's credit report just prior to closing. Why? The answer is simple: the credit profile of a borrower may have changed between the time of the initial review of the credit report and the time of closing. How will this impact the home loan? The potential impact to a borrower who has utilized credit to make significant purchases after the initial credit report could include: A delay in closing Increase of closing costs and/or interest rate A decreased loan amount Denial of the loan That’s right, in the worst-case scenario, a change in credit could even result in a loan being denied - even after an original approval had been granted. What should homebuyers do (or not do)? In order to eliminate any possibility of potential problems before closing, anyone in the application process should use credit sparingly and make sure they adhere to the tips provided below by credit expert Linda Ferrari of Credit Resource Corp: Don't do anything that causes a red flag to be raised by the scoring system. Don't apply for new credit of any kind. Don't pay off collections or charge offs. Don't max out or over charge on your credit accounts. Don't consolidate debt onto one or two credit cards. This list is not comprehensive, but it does give you a peek into situations that could create issues and could also be contrary to some ideas you have read previously. --------------------------Economic Calendar for the Week of August 23-27, 2010 Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of August 23 - August 27 Date ET Economic Report For Estimate Actual Prior Impact Tue. August 24 10:00 Existing Home Sales Jul 4.75M 5.37M Moderate Wed. August 25 08:30 Durable Goods Orders Jul 3.1% -1.2% Moderate Wed. August 25 10:00 New Home Sales Jul 330K 330K Moderate Wed. August 25 10:30 Crude Inventories 8/21 NA -0.818M Moderate Thu. August 26 08:30 Jobless Claims (Initial) 8/21 485K 500K Moderate Fri. August 27 08:30 Gross Domestic Product (GDP) Q2 1.4% 2.4% Moderate Fri. August 27 08:30 Chain Deflator Q2 1.8% 1.8% Moderate Fri. August 27 10:00 Consumer Sentiment Index (UoM) Aug 69.4 69.6 Moderate

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is not without errors. As your trusted advisor, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you. In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: bknapp@rpm-mtg.com If you prefer to send your removal request by mail the address is: Brandon Knapp RPM Mortgage 1901 S Bascom Ave Ste 1600 Campbell, CA 95008 Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Success Source, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

Low-Flow No-Go, Issues with new low-flow toilets

by Deniece Watkins Smith, Realtor

Trying to be conscientious environmental consumers, my husband and I recently updated our circa 1940's toilets to low-flow toilets.  We took advantage of the  rebate that Santa Clara County offered  and got a toilet that flushed at a rate of 1.6 gallons per flush.  

Just this last weekend, only two months after installing the toilet, we had to call a plumber in to help us determine the cause of water not draining appropriately from our home.  

The conclusion was a "soft-plug" which caused a clogging between the home and the street.  We had used Drano without result.  The City of Mountain View had helped us attempt a "snaking" on their end.  We had rented a snake from Home Depot for $94.00 to "snake" from the home to the curb, and after a few different attempts, our home smelling like an outhouse for 3 days, my husband having to get dirtier than is really fair, and another call to a plumber, the problem got fixed.

The plumber who finally fixed the issue said many new low-flow toilets do not have enough pressure to actually flush as they need to.  As a result, debris stays in the lines and eventually causes a blockage or "soft-plug".  His suggestion:  "You might want to flush twice to make sure the toilet actually flushes."  This seems a little counter-productive to our whole purpose, not to mention, that the annual $100 estimated savings on our water bill for changing toilets was exceeded in only one visit from a plumber.

Ironically, two other neighbors, both approximately one block from us, had plumbers out that same week.  I confirmed with one of the plumbers, that the neighbor had the same issue.  

I did a little research on Google to find we are not alone. I found an article by the Mesa, AZ Utilities Department, called "The Toilet Papers - Vol. 1", which mentions that there is a label by the EPA called "WaterSense", which indicates a product that is supposed to be designed to save water with no trade-off in flushing power.  A plumber named Terry Love, out of Washington State, writes a pretty good article suggesting which types of toilets actually do the job of the low-flow intended purpose.  

eHow.com has an article which states that the "The National Energy Policy Act of 1992 contained a provision that defined low-flow toilets as the federal standard. The federal standard went into effect in January 1994. The provision applies to new construction and replacement installations. Manufactures and retailers are required to comply by producing and selling toilets with a maximum volume of 1.6 gallons per flush."  Evidently, the energy act did not consider the, "and be able to push the poop down the drain as necessary" clause.  

So if you're anything like my husband and myself, and would wish to conserve water, even when not mandated by law, but would like to do so without learning a lesson the hard way, know that not all toilets that flush less, actually do the job.  Hopefully this article will start your endeavor in a good direction and "soft-plug" will not become a phrase to add to your vocabulary.


All underlined phrases or words link out to the articles in reference.

Credit scores can drop after getting loan help

By ALAN ZIBEL, AP Real Estate Writer Friday, March 19, 2010 Some homeowners who sign up for the government's mortgage assistance program are getting a nasty surprise: Lower credit scores. For borrowers who are making their payments on time but are on the verge of default, the Obama administration's loan modification program can reduce their credit score as much as 100 points. That makes it harder to get a loan and can present a problem when applying for a new job. Housing counselors say it's unfair, especially because the news often comes as a surprise to homeowners. "Why should people's credit be hurt even worse when they're trying to do the right thing?" said Eileen Anderson, senior vice president at Community Development Corp. of Long Island, a housing counseling group in New York. And many homeowners are angry that a program designed to help carries such a penalty, said Kathy Conley, a housing counselor with GreenPath Inc., a nonprofit group in Farmington Hills, Mich. "It's a feeling of being duped," she said. Still, the impact is far less severe than a foreclosure, where borrowers typically find their credit is in tatters for years. That's due to the cumulative impact of many months of missed payments and the foreclosure itself, which drags down a homeowner's' credit by 150 points or more on a scale of 300 to 850. To enroll in the Obama administration's $75 billion "Making Home Affordable" program, borrowers enter a trial period in which they make at least three payments. But some are finding out that their credit score takes a dive during this trial phase. It happens once their mortgage company notifies the three big credit bureaus — Experian, Equifax and TransUnion. For delinquent borrowers, the damage was done when they fell behind on their loans. But for homeowners who are having financial troubles but managing to pay their bills, a request for a loan modification is the first sign of difficulty. And that means a sharp drop in the borrower's credit score. The credit rating industry defends the practice. People who sign up for loan modifications would not be asking for help unless they were having severe money troubles, said Norm Magnuson, spokesman for the Consumer Data Industry Association, a trade group in Washington that represents the credit bureaus. "The consumer is going into the program because they're in a financial bind," he said. "Other lenders would need to be aware of that." The Obama administration acknowledges that enrolling in the program can hurt credit scores. But Meg Reilly, a Treasury Department spokeswoman, said that foreclosure "brings far more serious financial consequences for borrowers and their families." The credit score issue is an unexpected consequence of the program that has been plagued with problems and disappointing results since its launch last year. Only about 170,000 homeowners had completed the process as of February. Hundreds of thousands more are still in limbo. Jim Owens, 46, of Harrisburg, Ore., was accepted on a trial basis for the Obama plan last year. He and his family were in bad financial shape. They were barely able to pay the mortgage and utility bills. The main reason: After being laid off and unemployed for six months, he took a job as maintenance director at a retirement home. But it paid only around $25,000 year, about $10,000 less than his former job in a city public works department. He and his wife were also struggling with debt, after taking out a second mortgage four years ago to pay off debt and medical bills. Late last year, he was searching for a used sport-utility vehicle. He got a 30-day approval for $2,000 car loan. But that time ran out before he found a car, so he had to reapply for the loan. He was shocked to learn that, after signing up for the Obama plan, he was denied. "I should have been told," that this might happen, Owens said. "Without credit, you can't do a whole lot in life." A Citi spokesman, Mark Rodgers, said the company follows the Treasury Department's guidelines for reporting to credit bureaus. "We do not determine credit scores," said Rodgers, who declined to comment on Owens' case. The impact is worse for borrowers who enroll in the Obama program and are then ruled ineligible. If homeowners do manage to get accepted into the Obama program and have their loans permanently modified, lenders update the credit bureaus. The new status neither hurts nor helps the borrower's credit score. Over time, they can see their score increase. "The best way to build credit back is to continue to pay bills as agreed, to use credit wisely," said Tom Quinn, vice president of scoring solutions at Fair Issac Corp., which designed the well-known FICO score system.  "As time goes on, the score gradually increases."