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- Left to right: Panelists Tim Anderson, Phyllis Carmichael, Ethel Green, Gary Herbert, Jim Nappo, and Los Altos/Mountain View District Chair Denise Welsh (standing), who served as moderator.
Veteran REALTORS® with experience ranging from 26 to 36 years shared their perceptions on how much the real estate business has changed over the years at last week’s Los Altos/Mountain District tour meeting. Forming the panel were Tim Anderson (Alain Pinel Realtors), Jim Nappo (Alain Pinel Realtors), Ethel Green (Intero Real Estate), Phyllis Carmichael (Coldwell Banker) and Gary Herbert (Coldwell Banker).
The panelists said technology has been the big business changer, especially in the last 10 years. Technology has contributed to the ease of doing business and quicker response time. Tools available to help REALTORS® provide better service to clients include emails, websites and virtual tours, and smartphones with the ability to send real time data to their clients.
At the same time technology has also brought new demands on REALTORS®. Buyers are now more educated than they used to be and majority do research on the Internet first before finding a home and an agent. As a result, agents show buyers fewer homes, but they are also expected to be very well-versed about the market.
The business has also become more complicated with pages of documents to wade through. Carmichael can still remember when a sale merely required a one-page document, an agreement among the agents, buyer and seller, with no lawyers involved. “We hand delivered everything and spent much time on the road, driving from Blossom Valley all the way to San Carlos, just to deliver the one-page document,” she added.
The panelists said they also feel real estate has become less of a relationship business. “A lot has been lost because people don’t talk to each other anymore. They get emails and this can be a positive as well as a negative,” said Nappo.
What hasn’t changed is they continue to take education courses, network with one another, and still see value in open houses and keeping in touch with their clients. While cell phones and computers have become valuable tools, Herbert and the others insist the best way to help people understand the market is to “pick up the phone and call them, talk to them face to face.”
How different is the local market today? “It’s fascinating. Everywhere, it’s a tailspin, but demand continues to be overwhelming here and for good reasons – the schools and jobs,” commented Anderson.
Green was just as upbeat and said, “We are fortunate because there is no more land here. If you are here for a long time, you will get equity in your house because there is just no more land in this area.”
The Carbon Monoxide Poisoning Prevention Act of 2010 became effective on July 1 and requires every existing single-family residence having a fossil fuel burning heater or appliance, fireplace, or an attached garage to install or plug in a carbon monoxide device. Other existing dwelling units will need to have the devices installed by January 1, 2013.
A carbon monoxide detector is a relatively inexpensive device, similar to a smoke detector that signals detection of carbon monoxide in the air. It can be battery powered or a plug-in device with battery backup. The following FAQs on what homeowners should know about the new carbon monoxide law are provided by the Silicon Valley Association of REALTORS® from information from the California Association of REALTORS®, in accordance with the California Health and Safety Code.
How many devices and where do I place them in the home?
It is recommended that for minimum security, a CO alarm should be centrally located outside of each separate sleeping area in the immediate vicinity of the bedrooms, at least six inches from all exterior walls and at least three feet from supply or return vents.
For new one-to-two family dwellings and townhouses not more than three stories and where work requiring a permit for alterations, repairs or additions exceeding $1,000 in existing dwellings units, a CO detector must be installed outside of each separate sleeping area in the immediate vicinity of the bedroom(s) and on every level, including basements within which fuel-fired appliances are installed and in dwelling units that have attached garages.
Are there any penalties for noncompliance with this law?
A violation is an infraction punishable by a maximum fine of $200 for each offense. However, a property owner must receive a 30-day notice to correct first. If an owner who receives such a notice fails to correct the problem within the 30-day period, then the owner may be assessed the fine.
Can a buyer rescind the sale if the dwelling doesn’t have the necessary carbon monoxide detectors?
While the Real Estate Transfer Disclosure Statement (TDS) has been amended to incorporate the seller’s certification that, by close of escrow, the seller will be in compliance with existing requirements for CO detector, smoke detector and water heater bracing, the TDS specifically states installation of a CO detector, among other appliances and devices, is not a precondition of sale or transfer of the dwelling.
Does a seller have any special carbon monoxide disclosure obligations?
Disclosure obligations are satisfied when providing a buyer with the TDS. If the seller is exempt from giving a TDS, the law doesn’t require any specific disclosures regarding CO detector devices.
Do landlords have any special obligations regarding carbon monoxide detectors?
All landlords of dwelling units must install carbon monoxide detectors. The CO device must be operable at the time that a tenant takes possession. However, the tenant has the responsibility of notifying the owner or owner’s agent if the tenant becomes aware of an inoperable or deficient CO device. The landlord is not in violation of the law for a deficient or inoperable CO device if he or she has not received notice of the problem from the tenant.
If the California Building Standards Commission adopts or updates building standards relating to carbon monoxide devices in the future, is the owner required to install the newer device?
Yes, when the owner makes an application for a permit for alterations, repairs, or additions to that dwelling unit with the cost exceeding $1,000.
A new California law now ensures that any lender who agrees to a short sale must accept the agreed upon short sale payment as payment in full of the outstanding balance of all loans, regardless of whether the lender is a senior or junior lien holder. The new measure, signed by California Governor Jerry Brown on July 15, goes into effect immediately.
Last October, California passed a law requiring primary mortgage lenders to accept an agreed-upon short sale payment as full payment for the outstanding balance of the loan, but the rule did not apply to junior or second lien holders. The new law extends the requirement to junior or secondary lenders and ensures that once a lender has agreed to accept a short sale payment on a residential property (one to four units), all lien holders – those in first position and in junior positions – will consider the outstanding balance as paid in full and the homeowner will not be held responsible for any additional payments on the property.
The new law is considered a victory for homeowners, according to the California Association of Realtors, which sponsored the bill, SB 458, authored by Senate Majority leader Ellen Corbett (D-San Leandro). “The signing of this bill is a victory for California homeowners who have been forced to short sell their home only to find that the lender will pursue them after the short sale closes, and demand an additional payment to subsidize the difference,” said C.A.R. President Beth L. Peerce.
The new law does not apply if the short sale seller is a corporation, an LLC, or a limited partnership. It also prohibits a lender from requiring any “additional compensation” other than the proceeds of the sale in exchange for the lender’s approval.
REALTORS® hope the new law will improve the short sale process for distressed sellers. “This provision also attempts to address instances when lenders have demanded additional compensation as a condition of their approval. It is now illegal for a lender to require such payments,” said Gene Lentz, president of the Silicon Valley Association of REALTORS®.
The new law still preserves fraud and waste as exceptions to its protections, such as a lender seeking damages for a borrower’s fraud or waste. The law applies to any short sale transaction which closes on or after July 15, 2011. It does not apply to short sale transactions that closed prior to that date.
The Silicon Valley Association of REALTORS® advises short sale sellers to still consult with appropriate professionals to evaluate all issues that may impact their decision to pursue a short sale process, including adverse impact on credit and tax consequences.”
Late last month, California Insurance Commissioner Dave Jones, joined by Amy Bach, executive director of United Policyholders, announced a series of new homeowner regulations aimed at enhancing the standards and training for estimating the replacement value on homeowners insurance in the event of a disaster. These new regulations also represent a concerted effort to significantly curb the common problem of underinsurance that many homeowners face.
The new regulations include provisions for laying out requirements applicable to replacement value and replacement cost estimates to create a more consistent, comprehensive and accurate replacement cost calculation; setting forth training standards for agents and brokers who sell homeowners insurance; creating standards for real estate appraisers who estimate replacement cost for insurance purposes; requiring the application of certain standards when estimating replacement and construction costs; and establishing record keeping requirements.
The regulation addresses how insurance companies communicate with their customers when they are making a sale, ensuring they give them complete and accurate information and not mislead them. According to Commissioner Jones and complaints filed with the Department, when policies are sold to customers there has been confusion about what a “replacement cost” estimate actually covers. This regulation clears up that confusion. Insurance companies are not required to provide an estimate, but if they do, it must be complete and include certain components.
SILVAR is happy to announce great news and another free benefit for members. Instanet has officially released tablet support. PRDS subscribers are now able to log in to create transactions, forms and edit forms just like you currently do using your desktop or laptop. You can access PRDS Forms on Instanet on popular Apple, Windows and Android-based tablet devices such as the iPad/iPad2, Xoom, Galaxy, Playbook and others at no additional charge.
Instanet’s approach has been to make its site “tablet friendly,” rather than require users to learn an entirely new interface and download an app for a certain device. The goal is to provide as many features as possible on as many devices as possible.
As a current PRDS/Instanet user, all you need to do is log into your existing Instanet account through your tablet browser and you will automatically be accessing the new version. There is no new software to install or apps to download.
Most system functions will already work on the tablet. As Instanet makes more features “tablet ready,” it will give SILVAR updates for users. Instanet will also post a system message for users logging in on tablets, so they are aware of the updates.
PRDS and Instanet Solutions are pleased to bring this mobile technology to SILVAR members.
REALTORS® in Santa Clara County oppose a move to rescind a benefit which for more than two decades has allowed seniors and the disabled from other counties to take advantage of a tax incentive to relocate to the county. Rescinding this benefit provided by Proposition 90 could hurt seniors wishing to move and buy a home in the county.
Under Proposition 60 and 110, if a seller or spouse is over age 55 or if a seller of any age is disabled when their original residence is sold, the seller may transfer the base year value of their home to a replacement primary residence of equal or lesser value within the same county, provided certain conditions are fulfilled. Prop 90 extended this benefit to seniors and the disabled who move to counties that adopted Prop 90 rules.
The Santa Clara County Assessor’s Office wants the board of supervisors to eliminate this important senior tax benefit and rescind Prop 90 transfers as a way to increase revenue. Proponents admit any revenue increase would be “slight” at best. REALTORS® say a minimal increase in revenue does not outweigh the economic benefits these transactions bring to the county.
“Given the limited number of affected parcels, it is not a business or financial decision that motivates REALTORS® to speak out on this issue. We support preserving Prop 90 for the benefits it brings to the county and for qualified seniors and the disabled,” says Gene Lentz, president of the Silicon Valley Association of REALTORS®. “The law provides an incentive for seniors to move into smaller, less expensive homes without being penalized.”
Prop 90 eases the property tax burden that otherwise could prevent seniors from moving into smaller residences, so they can be closer to children and grandchildren who reside in Santa Clara County, says Lynn Grandi-Hill, whose parents moved from San Rafael to Willow Glen in 1989.
“It was wonderful having them close by. … My children got see them more often than they would have had they stayed in San Rafael,” says Grandi-Hill. “As much as families can stay connected and together, Prop 90 is a positive thing for society in general”
Prop 90 counteracts the “lock-in effect” created by Prop 13, which slowed the housing turnover and supply across the state. “Prop 90 helps seniors wanting to live in the county. By living here they, in turn, help the county’s economy since they will buy their groceries here, shop here, buy their gas here. They are a positive economic influence,” says Mike Sibilia, president of the Santa Clara County Association of REALTORS®.
A Southern California senior who moved to Santa Clara County to be close to his children after his wife died, says Prop 90 was a major factor in his decision to buy a house here. “I considered a number of options and I can tell you Prop 90 was big factor in my decision,” he says. “People considering rescinding it are short-sighted. It was a big savings for me, but people like me who move here also spend money here, so the county benefits too. “
Rescinding Prop 90 would reduce the number of qualified buyers considering a home in the county. Seniors are more likely to move and buy a new home once they qualify for Prop 60 and 90 benefits. A California Association of REALTORS® survey indicates 52 percent of Prop 90 transactions would not have taken place if the measure was not in effect.
Diversity doesn’t only encompass different cultures; the term also refers to different generations. People are living longer, so society is now composed of more generations. Each generation has different traits and communicates differently. A REALTOR® needs to have a keen understanding of each generation in order to relate to clients and other agents. The method of communicating or marketing to each generation can affect a transaction, according to Tracey McNeely, a REALTOR® with Keller Williams in Cupertino.
McNeely shared information about the different generations at last week’s Cupertino/Sunnyvale District tour meeting. She identified the following four generations in today’s society and shared their general characteristics:
1. Veterans, born 1922-45
Respect for authority, conformers, disciplined and never buck the system, traditional nuclear family, savers, put away cash, communicate one-to-one, work hard, duty before fun, prefer to communicate via formal memo or mailed letter
2. Boomers, born 1946-64
Optimistic, involved, casual (“Call me any time.”), many disintegrating nuclear families, workaholics, grew up with the rotary and touch phone, “buy now, pay later” mentality, crusade for causes, question authority, their lives are broadened beyond the scope of the family, prefer to communicate in person
3. Generation X, born 1965-1980
Skeptics, like a lot of fun and informality, many grew up as latchkey kids, touch tone phone – it’s perfectly fine with them to leave messages on their answering machine, screen calls (“Don’t call me after work.”), like to eliminate tasks, self-reliant, have no patience, like immediate action, like to communicate directly
4. Generation Y Millennials, born 1981-Present
Filled with realism, confident, love extreme sports for fun, product of merged families similar to the TV show “Modern Family,” very adept with cell phones, entrepreneurial, multi-taskers, tenacious, oriented, tolerant, communicate via voicemail, email, Facebook, Skype, text messaging, like to chat online.
“Remember, when you have another agent on the other end, try to look at their generation and adjust your way of communicating,” McNeely told members.
In recognition of Fair Housing Month in April, REALTORS® continue to reaffirm their commitment to equal access to housing and home ownership. Signed into law in 1968 and amended in 1988, the Fair Housing Act prohibits housing discrimination on the basis of race, color, religion, sex, disability, familial status and national origin.
“Fair housing is not an option; it’s the law,” said Gene Lentz, president of the Silicon Valley Association of REALTORS® . “REALTORS® are on the ‘front lines,’ working with buyers and sellers to see that they enjoy the benefits of a housing market free from discrimination.”
To mark Fair Housing Month, SILVAR on April 8 offered the National Association of REALTORS® ’ At Home with Diversity certification course for all REALTORS® and affiliates. The course teaches real estate professionals how to increase their sensitivity and adaptability to future market trends and how to transact business across cultures, generations and other differences. More than 25,000 REALTORS® have completed the program.
“People have a right to live wherever they can afford to live,” Lentz said. “Fair housing means opening those doors for everyone in this country whose goal it is to own a home.”
Lentz indicated Santa Clara County is among the most diverse counties in the U.S. The 2010 U.S. Census figures show the county grew by nearly 6 percent in the past decade. Much of the growth in population is attributed to a gain of about 140,000 Asians and 76,000 Latinos, yet minority home ownership comprises a very low percentage of the population.
“Diverse neighborhoods and schools strengthen communities, and minority population growth is vital to sustaining housing markets,” said Lentz.
Lentz said the home seller, the prospective home buyer and the real estate professional all have rights and responsibilities under the law.
A home seller or landlord is required under the law not to discriminate in the sale, rental and financing of property on the basis of race, color, religion, sex, handicap, familial status, or national origin. They cannot instruct their agent to convey any limitations in the sale or rental because the real estate professional is also bound by law not to discriminate.
Buyers or renters have the right to expect that housing will be available without discrimination, including the right to expect housing in their price range made available without discrimination; equal professional service; the opportunity to consider a broad range of housing choices; no discriminatory limitations on communities or locations of housing; no discrimination in the financing, appraising, or insuring of housing; reasonable accommodations in rules, practices and procedures for persons with disabilities; non-discriminatory terms and conditions for the sale, rental, financing, or insuring of a dwelling; and freedom from harassment or intimidation for exercising their fair housing rights.
People who believe they have experienced discrimination may file a complaint with the Department of Fair Employment and Housing (DFEH). Complaints must be filed within one year of the alleged discrimination.
The current continuing resolution providing funding for government operations is set to expire today. If legislation to extend funding is not signed into law after today, the federal government could shut down. This means many, but not all government programs, including some that impact federal housing and mortgage programs, could grind to a halt as early as tomorrow, April 9. While the true impact of a shutdown is unclear until it actually begins, below is a synopsis of how federal housing programs will likely operate in the event of a shutdown.
The Office of Management and Budget requires each agency to have contingency plans in place and reportedly has instructed agencies to not provide specific information on impacted operations.
Federal Housing Administration
FHA cannot offer endorsements for any new loans in the Single Family Program and cannot make commitments in the Multi-Family Program in the event of a shutdown. FHA will maintain operational activities, including paying claims and collecting premiums. Management & Marketing Contractors managing the REO portfolio can continue to operate.
VA Loan Guaranty Program
Lenders may continue to process and guarantee mortgages through the Loan Guaranty program in the event of a government shutdown.
Internal Revenue Service
Should the federal government shut down, the IRS cannot process federal income tax returns or issue refunds (but it can deposit tax payments). Consumers who were expecting to use their tax returns as part of the down payment for a home purchase will temporarily not have access to these refunds.
Flood Insurance
The Federal Emergency Management Agency confirmed that the National Flood Insurance Program will not be impacted by a government shutdown.
Rural Housing Programs
For U.S. Department of Agriculture programs, essential personnel working during a shutdown do not include field office staff who typically issue conditional commitments, loan note guarantees and modification approvals. Thus, lenders will not receive approvals during the shutdown. If the lender has already received a conditional commitment from the Rural Development office, then the lender may proceed to close those loans during the shutdown. A conditional commitment, which is good for 90 days, is given to a lender once a USDA underwriter approves the loan. If a commitment was already issued, the funds were already set aside, the lender may close the loan at his leisure. If Rural Development has not issued a conditional commitment, the lender must wait until funding legislation is enacted before closing a loan.
Government Sponsored Enterprises
Fannie Mae and Freddie Mac will continue operating normally, as will their regulator, the Federal Housing Finance Agency.
Treasury
No official word as of yet, but the Making Home Affordable program, including HAMP (Home Affordable Modification Program) and HAFA (Home Affordable Foreclosure Alternatives), may not be affected because the program is funded through the Emergency Economic Stabilization Act, which is mandatory spending, not discretionary.
For more information, visit www.realtor.org.
Carole Rodoni
Real estate consultant Carole Rodoni didn’t mince words when she talked to Silicon Valley REALTORS® at SILVAR’s Palo Alto District this morning. She is appalled at how lawmakers have handled the budget, the deficit, short sales and foreclosures, and even the war in Libya, but with regard to Silicon Valley real estate, Rodoni is upbeat.
The former president of Fox & Carskadon Realtors, former COO of Cornish and Carey Real Estate and Alain Pinel Realtors, and now president of Bamboo Consulting Inc. says the media can talk about a slump in the housing market, but the San Francisco Bay Area is an “oasis in the desert.” This region is the gateway to the Pacific Rim, with the best universities, diversity of culture and education.
“People aspire to live here and there is no more land here. Land is valuable and land here will keep its value,” says Rodoni. “At the end of the day, how can anyone say Silicon Valley isn’t alive and well?”
What should REALTORS® tell buyers? “Tell them they are getting a free gift right now,” Rodoni says.
Prices have come down a bit, interest rates have edged up from 3 percent to about 4 percent, but they are still low. She predicts rates will rise even more by the end of this year, possibly to 5 percent or more, and perhaps 6 and 7 percent in three years because of inflation. “The stars have aligned here,” according to Rodoni. “Where do you find this affordability?”
Rodoni says buyers should “buy it, hold it – don’t spin it, and keep it for at least five years.” Also, while buyers should pay attention to interest rates, she says they should also watch out for lending fees because she is sure they will increase.
“Loans will be 5 to 8 percent more expensive than last year,” Rodoni says. “At the end of the day interest counts, but understand that everything is going up because of loan fees. If you are a buyer, while it’s good to look at price, look also at loan fees. Match interest rate to the loan product.”
She says buyers should ask themselves these questions: Is it the right price? Is it the right place? Examine where you are looking. Will it appraise for that price? Is the lender going to like it? Then she cautions: Do not attempt to low ball when you’re facing a multiple offer situation. How high are you going to go? Especially in this region, you cannot sit with terms and conditions.
“It would be like playing football in a baseball diamond,” she says. “Investors know there is value here and they will continue to come in. Silicon Valley is the bread and butter market. They see the sweet spot and will fight to get it.”
Silicon Valley Association of REALTORS® says ... 