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On Thursday, SILVAR President Suzanne Yost updated members of the Cupertino/Sunnyvale District on the state of the Association. Yost announced the Association is financially secure (SILVAR hasn’t raised dues since 2002) and stressed that SILVAR highly values its membership.
SILVAR offers many valuable member benefits, including PRDS Forms, a complete line of paper and online forms for residential purchase and sales transactions. PRDS Forms were developed specifically for Silicon Valley’s REALTORS® by Silicon Valley REALTORS® who saw the need. These forms are highly acclaimed and available online free of charge as a SILVAR member benefit.
Yost assured members their dues dollars are very well spent, especially on government affairs. She highly credited SILVAR Government Affairs Director Adam Montgomery for his work in successfully warding off many point of sale and transfer tax proposals that could have hurt homeowners had they passed. A recent example is proposed regulations that would have included sewer lateral inspection and compliance mandates at the transfer of property for homeowners in southern San Mateo County. She added since it is a large association with a strong government affairs staff and many accomplishments, “SILVAR has a footprint” at the local, state and national REALTOR® level.
Yost noted SILVAR’s District Council system is an especially good model that emerged upon the merger of the five boards in 1995. This model provides another level of opportunities for leadership. Having more people “with ears close to the ground” helps ensure that the Association meets the needs of agents working in all five districts.
Members are very lucky to be doing business in Silicon Valley, said Yost. Recent speaking engagements before the New York State Association of REALTORS® and the Michigan State Association of REALTORS® brought home this fact, she said. While REALTORS® everywhere have had to face tough markets during the past three years, Silicon Valley’s housing market is improving due to its location and strong tech and other innovative industries.
SILVAR’s president encourages members to take part in the Association. Join your District Council, get involved in activities at the District and Association level, volunteer for RSVP (REALTOR® Service Volunteer Program) and help others in your community, Yost urged.
“We always want to develop new leaders and give you the opportunity to become leaders,” she stressed.
Yost is excited about a couple of new Association components this year. There is SILVAR’s Young Professional Network (YPN), which welcomes all members – the young, as well as the seasoned professionals. SILVAR is also developing a Global Business Council, an initiative which will have a strong education component to help REALTORS® learn how to effectively work with international buyers. She added that SILVAR highly values its Affiliate members and a group is currently working on written policies and guidelines for Affiliates.
Last, but not least, Yost urged members to continue to stay positive. “The numbers are getting better,” said Yost. “2012 is the year we’ll come out of this. 2012 will be better.”
More than 130 members of the Silicon Valley Association of REALTORS® attended SILVAR’s Los Gatos/Saratoga District tour meeting a few weeks ago and listened as Jacquie Berry, owner of Community Association Data Source, emphasized the greatest mistake any seller can make is an incomplete disclosure.
When dealing with homeowner associations (HOAs), it gets especially complicated because the law requires more disclosures from common interest developments (CIDs), in addition to the normal disclosures required in the sale of single-family homes. Common interest developments are condominiums and planned developments that are governed by a homeowner association which administers the property and is responsible for repairing, replacing, or maintaining the common areas. The homeowner association places restrictions on the use of the property and the common areas.
Berry shared the following statistics: There are over 48,000 homeowner associations in California; CIDs make up a quarter of all housing in the state of California; 49 percent of CIDs are self-managed and less than 25 percent are 100 percent funded in their reserves.
Berry said lenders are asking more questions about the financial health of HOAs so buyers won’t be caught by surprise by undisclosed defects in the common areas and underfunded reserve accounts, which result in special assessments. Agents and prospective buyers should review state laws, documents that HOAs are required to provide, and ask questions. She noted forms change, and homeowner associations rarely provide a complete or updated set of disclosure documents.
Also, HOAs may state they have adequate reserves to maintain deferred maintenance, but they do not specify a timeline for which these reserves are adequate. HOAs must prepare a reserves budget every year, providing a current estimate of the costs of repairing and replacing major common area components over the long-term. Ideally, reserve funds should be able to cover all major repair and replacement costs when needed.
“The value of the property is directly related to reserves,” stressed Berry.
Berry said it’s very important that these disclosures be obtained and reviewed by the appropriate professional so the buyer can make an intelligent decision as to whether or not to purchase the property.
“It’s all about disclosure,” Berry said. “It’s not about anything else but disclosure.”
Not being able to get a home insured can stall, if not kill, a transaction. At this morning’s SILVAR Cupertino/Sunnyvale District tour meeting, an affiliate panel shared information on how to avoid such a dilemma. The panel, moderated by Kyle Chuang (Farmers Insurance), included Walt Rowley (Liberty Mutual Group), Linda Bentson (Old Republic Title), Laura Roseblade and Pauline McDonald (both from State Farm Insurance).
Here are some of many tips the panel shared:
• Each insurance company is different and has its own limitations of coverage, so it’s important to shop around and make sure you are dealing with a true insurance professional who knows the business.
• While there are lenders who may insist that insurance should cover the amount of the loan, insurance companies will only cover the value of the home. The amount an insurance company will cover differs from the appraised value because the appraised value includes land, while home insurance just covers the structure.
• The condition of a house affects insurance coverage more than the age of a house. The following may affect coverage:
– Roof condition – Some companies may deny coverage if an additional layer is placed on top of the original layer.
– Trees and brush in close proximity to the house
– Distance of a fire hydrant or fire station to the house – Some insurance companies will not insure a home if it is more than three miles away from a fire station
– Certain pets
• You have to think in terms of risk. Would you take a risk on a condition that you have observed? Inform you client about a potential problem so it can be fixed right away.
• In the case of condominiums, work closely with the lender. It’s important to know the insurance company that handles the master policy, what the HOA master policy entails, and get a copy of the certification of insurance for the master policy.
• Once you have all insurance documents, get them to your escrow officer as soon a possible.
PRDS Forms is an extensive line of paper and online forms used in the buying and selling of residential real estate. These forms are available online for free as a member benefit to all REALTOR® members of SILVAR and SAMCAR (San Mateo County Association of REALTORS®).
What makes these forms special?
These forms are created by REALTORS® for REALTORS®, and are trademarks of Advanced Real Estate Solutions, Inc., a subsidiary of the Silicon Valley Association of REALTORS®. These forms are highly acclaimed, and have been heavily used for over 25 years by listing agents from leading offices in Silicon Valley and the San Francisco Peninsula. In fact, some listing agents will entertain only offers presented on those forms.
PRDS forms are unique to the Santa Clara County and San Mateo County markets. While the California Association of REALTORS® also has a list of forms that are standard use for all the contracts, PRDS forms have a different template and verbiage, which is more unique to these regions. PRDS forms are designed with a litigation avoidance/risk management focus – every form is backed by liability insurance. These forms are also responsive to mandated legal changes, regional issues and current market conditions because the Standard Forms Committee, composed of 25 members from SILVAR and SAMCAR, meets every other week and works very hard to make sure all forms are current and reflect local practice.
“We continually update these forms and add new forms to make them compatible with different areas, as laws and market conditions change in each city,” said Mark Burns, president of the PRDS Board of Drectors. “We make REALTORS® aware of these changes and look out for our members.”
Depending on the city in which a residence is located, forms explaining the local option for airport noise, water heater and smoke detector compliance, disclosure regarding safety improvement projects, certain inclusions with regard to inspections and disclosures, may be incorporated in the PRDS forms packet. Attorneys on the committee assist committee members in continually updating the forms when needed.
PRDS forms contain all the other common forms that pertain to agency disclosure, including TDS (Transfer Disclosure Statements), a Supplemental Seller’s Checklist, etc. They are also less expensive to members when compared to other forms. The paper form may be purchased at each association’s store, but SILVAR and SAMCAR REALTOR®) members may obtain the forms online for free.
For a broker, providing agents paper forms might not seem like a big cost, but it can be. Every set of PRDS forms costs from $1 to $1.50 each. The cost adds up when agents use thousands of forms a year. If agents used the form electronically, there is no cost to the broker. Mistakes can easily be fixed online so the forms look professional, give buyers an edge, and ultimately help agents achieve their goal – a successful sale.
Replying to a question on Trulia.com, SILVAR member Aaron Wheeler, president of Oakville Properties & Oakville Capital, wrote “I like to use these forms as they are very pro-buyer, and there is less opportunity for error (look at all of the different checkboxes on the CAR contract, I see too many agents make mistakes). They also incorporate “as-is” language into the contract very nicely.”
Sebastian Wong, REALTOR® with Asante Real Estate Group and a SILVAR member, explains it well in his blog. He writes, “I personally think that PRDS gives more protection for the buyer because I think the verbiage is better. … For all you buyers and sellers out there, this may be a question you want to ask your agent. What association are you with? … While the forms aren’t such a big deal for all, if you are buying in Cupertino, most houses here are done with PRDS. If your agent is a C.A.R. user, they might have no experience using the PRDS forms and might overlook something. Just something to look out for!”
There are more good things about these forms. This summer, Instanet Solutions and Advanced Real Estate Solutions, a wholly owned subsidiary of SILVAR, provided SILVAR REALTOR® members with access to PRDS Forms via InstanetForms, as a member benefit. This means PRDS users are now able to access their forms ANYWHERE and ANYTIME, from virtually any Internet-connected PC or Mac.
Also, PRDS will soon be coming out with a new advisory for use in San Mateo and Santa Clara counties that will be “faster, better, easier for REALTORS®,” Burns said. The new PRDS advisory is for the counties of San Mateo and Santa Clara, replaces C.A.R.’s SBSA, and encompasses a wide variety of regional and proprietary advisories and disclosures. Best of all, Burns said the PRDS advisory in draft form is just 16 pages long.
Stay tune for this new PRDS advisory!
Silicon Valley Association of REALTORS® says ... 