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This week the California Housing Finance Agency announced the full implementation of four programs to help families remain in their homes. The programs, under the umbrella title of Keep Your Home California, are federally funded as part of the U.S. Treasury Department’s Hardest Hit fund, and are aimed at helping low and moderate income homeowners struggling to pay their mortgages. California received a total of nearly $2 billion through the Hardest Hit fund.
All four programs are intended to help avoid foreclosure: three offer several forms of mortgage assistance, as well as a separate program that will provide transition assistance to borrowers who execute a short sale or deed in lieu transaction. All of the programs are designed specifically for low or moderate income homeowners who are either unemployed or are facing another financial hardship, have fallen behind on their mortgages and owe significantly more than the value of their homes.
Specifically, the Keep Your Home California programs provide:
- Mortgage assistance of up to $3,000 per month for unemployed homeowners who are in imminent danger of defaulting on their home loans.
- Funds to help homeowners who have fallen behind on their mortgage payments due to a temporary change in a household circumstance. The program will provide up to $15,000 per household to reinstate mortgages to prevent foreclosures.
- Money to reduce the principal owed on a mortgage for a home where the low or moderate income homeowner is facing a serious financial hardship and owes significantly more than the home is worth. The program requires lenders to match any assistance provided by the Keep Your Home California program.
The programs will be limited to homeowners who meet a number of criteria, including owning and occupying the home as their primary residence, meeting income limits, and facing a financial hardship. Homeowners who consummated a “cash-out” refinance are not eligible for Keep Your Home California programs.
To apply for the assistance, a homeowner should contact the Keep Your Home California call center toll-free at 888.954.KEEP (5337) or their mortgage servicer – the company to which the borrower sends monthly mortgage payments. Each of the mortgage assistance programs requires the participation of the mortgage servicer.
As of February 9, the following servicers are participating in all four Keep Your Home California programs:
- GMAC
- Guild Mortgage
- California Housing Finance Agency
- California Department of Veterans Affairs
Other servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo are currently participating in some, but not all, programs at this time.
Full details regarding programs and servicer participation can be found at http://www.keepyourhomecalifornia.org/.
We have been receiving many questions about a federal real estate transfer tax enacted as part of the health care reforms in 2010. THERE IS NO SUCH TAX! Pay no attention to an Internet posting riddled with errors that is being circulated about such a tax. The National Association of REALTORS® has released a new brochure to help REALTORS® understand the facts behind this issue.
FACT: The health care legislation created a new tax that would apply to a portion of the gain on the sale of any capital asset (including real estate), but that tax will apply ONLY to individuals with more than $200,000 Adjusted Gross Income (AGI), or $250,000 AGI on a joint return. The tax does not apply to any amount excluded from taxation under the $250,000/$500,000 principal residence rules. The tax is never imposed directly on the full amount of any capital gain.
The tax is computed under a multi-step formula that captures only a portion of any gain and will only affect those with total AGI above the amounts noted above. Links are provided for a Q&A on the tax and to a brochure with examples of the tax.
For seniors who are physically and financially challenged, tasks like replacing smoke detector batteries, flipping a mattress or washing the windows can be a major chore, especially if relatives who can help them don’t live nearby. Seniors and the homebound living on the Peninsula and in the South Bay may now request free assistance with such household tasks through the REALTOR® Service Volunteer Program (RSVP) for the week of May 16-20, 2011. The deadline for seniors to request assistance is Monday, February 28.
RSVP is a community outreach program offered each year to qualified seniors who cannot otherwise perform certain household tasks due to physical or financial constraints. This free assistance is offered by local REALTORS® in cooperation with various community organizations and senior centers.
During RSVP Week, teams of REALTORS® and affiliates (professionals who provide industry-related services) will visit senior citizens and perform various cleaning and maintenance tasks free of charge. Seniors can request to have light bulbs replaced, furnace filters changed, windows cleaned, mattresses turned or new smoke detector batteries installed.
This is the 10th year the free assistance is being offered to seniors by local REALTORS®. The annual hands-on effort was organized in 2001 by members of the Silicon Valley Association of REALTORS® (SILVAR), the local trade associations of the real estate industry on the Peninsula and in the South Bay. RSVP has since expanded to include volunteers from the San Mateo County Association of REALTORS®, Santa Clara County Association of REALTORS® and Santa Cruz County Association of REALTORS®.
Homeowners or renters who are advanced in years with physical and financial constraints and live in the communities of Atherton, Campbell, Menlo Park, East Palo Alto, Palo Alto, Woodside, Portola Valley, Los Altos, Los Altos Hills, Mountain View, Cupertino, Sunnyvale, Santa Clara, Saratoga, Monte Sereno and Los Gatos may apply for services by contacting the Silicon Valley Association of REALTORS® at (408) 200-0100, or visit www.silvar.org for more information and to download an application.
The 12th annual Silicon Valley Scholars Program for graduating seniors from 18 public high schools in Silicon Valley is now underway. The scholars program is sponsored by the Charitable Foundation of the Silicon Valley Association of REALTORS®, the over 4,000-member trade association representing REALTORSand affiliate members on the Peninsula and in the South Bay.
The REALTORS®’ scholarship program is a partnership with local high schools in Silicon Valley. Principals and faculty at 18 participating high schools nominate three exceptional graduating seniors. The program awards a $1,000 scholarship in recognition of exemplary records, outstanding academic performance and community spirit to one nominee from each school.
The Class of 2011 Silicon Valley scholars will be selected from the high schools in thecommunities served by members of the Silicon Valley Association of REALTORS®. Final selections will be made by a committee that includes representatives from the local business community, area high schools, area colleges and the Silicon Valley Association of REALTORS®.
“The annual Silicon Valley Scholars Program is an opportunity for our members to show our support for our communities and schools, and to invest in the future of our youth,” said Nina Yamaguchi, chair of the Scholars Program of the Silicon Valley REALTORS® Charitable Foundation. “It’s our way of thanking the students, teachers, administrators and school board members in our communities. Through their hard work and dedication, the schools in our communities are among the best in California and the nation.”
The Silicon Valley REALTORS® Charitable Foundation Scholarship Program has provided nearly $200,000 to 198 graduating seniors in Silicon Valley, since Yamaguchi established the program 11 years ago. Participating schools include Leigh High School and Lynbrook High School in San Jose; Westmont High School in Campbell; Fremont High School in Sunnyvale; Los Altos High School in Los Altos; Los Gatos High School in Los Gatos; Gunn High School and Palo Alto High School in Palo Alto; Menlo Atherton High School in Atherton; Santa Clara High School and Wilcox High School in Santa Clara; Cupertino High School, Homestead High School and Monta Vista High School in Cupertino; Prospect High School and Saratoga High School in Saratoga; Mountain View High School in Mountain View; and Woodside High School in Woodside.
Graduating seniors from the above-mentioned high schools who wish to apply for the scholarships may obtain an application from the respective schools. The completed application must be returned to the high school’s principal or scholarship counselor by Friday, March 11, for submission to the Silicon Valley REALTORS® Charitable Foundation.
For further information, please contact Nina Yamaguchi at (408) 861-8822 or nyamaguchi@cbnorcal.com.
Over 100 members attended Wednesday’s Los Gatos/Saratoga District meeting and listened to longtime appraiser Roger Miller from Taketa, Miller & Associates. Miller’s message was one of “guarded optimism” regarding 2011, but he is especially positive about this spring.
Appraiser Roger Miller
“Things are starting to turn around,” Miller remarked, and proceeded to share his data.
* At this time last year, there were 95 listings in Los Gatos; as of Tuesday evening, Miller indicated there were 111. A year ago, Saratoga had 73 listings; as of Tuesday night, it had 71.
* Pending sales in Los Gatos at this time last year were 39; they are 43 this year. Saratoga had 20 last year; it has 36 this year.
* 2010 home sales were up in Los Gatos 22 percent from 2009; Monte Sereno, up 42 percent; and Saratoga, up 25 percent.
* Homes priced at two million dollars and under are in a very strong market – 92 percent of last year’s home sales in Los Gatos were under $2 million; Monte Sereno, 65 percent; and Saratoga, 81 percent.
If a listing is under $2 million, if it’s priced right and in the Los Gatos school district, it will sell in one to two months or less. “If your listing is under a million (dollars) in Los Gatos and it hasn’t sold, there’s something wrong,” Miller told REALTORS®.
There is no question prices have dropped, some by as much as 20 percent, and others more, depending on the area. Miller said a home bought at the end of 2007 or at the beginning of 2008 would sell roughly for the same price today.
If there are many foreclosures and REOs in a neighborhood, the market will certainly be affected. This is not much of an issue in the Los Gatos area, according to Miller. There continue to be multiple offers in Silicon Valley – one home just received six offers recently. There are also a number of high-end homes that have sold in the $4 million and above range in Woodside, Atherton and Los Altos Hills.
Miller advised REALTORS® to always do a true history on comps and always check the absorption rate. In Los Gatos, for homes priced between $1 and 2 million, the absorption rate is three months; between $2 to 3 million, seven months; between $3 to 4 million, seven to10 months. In Saratoga, the absorption rate for homes priced under $1 million is one month; between $1 and 2 million, two months; between $2 and 3 million, eight months. Between $3 and 4 million, 5.5 months.
Miller said REALTORS® should NOT have to deal with out-of-town appraisers, unless the report is co-signed by an appraiser who knows the area. Speak with the bank manager; it is important to know the bank you are dealing with, he stressed.
There’s more optimism in the air, according to Miller. Here are some signs:
*Stocks have improved.
* The unemployment rate has gone down a bit – the unemployment rate in the San Jose-Sunnyvale-Santa Clara MSA was 10.7 percent in December 2010, down from a revised 10.9 percent in November 2010, and below the year-ago estimate of 11.5 percent, according to the Employment Development Department.
* Google is hiring 6,000 new employees nationwide and 2,000 locally.
* Heavier traffic these days points to more activity and more people being employed.
“Everything is starting to turn,” Miller repeated.
Miller, who is well-known for his expertise in the business, said he is very confident that the housing market in the region will do well this spring. But time is of essence. He told REALTORS® if they have sellers who are sitting on the fence, “tell them to get their house on the market now, within the next two weeks.”
There’s an optimism in the air. It’s quite evident in attendance at the different SILVAR district meetings. It’s also evident in the attitudes and points of view of the various speakers at each of SILVAR’s districts.
Left to right: Chris Trapani (Sereno Group), John Thompson (Intero Real Estate), Bill Lewis (Alain Pinel Realtors) and Fred Hibbert (Coldwell Banker)
The first 2011 Los Altos/Mountain View District tour meeting took place last Friday with a good attendance and a broker/manager panel, which included Chris Trapani (Sereno Group), John Thompson (Intero Real Estate), Bill Lewis (Alain Pinel Realtors) and Fred Hibbert (Coldwell Banker). 2011 District Chair Denise Welsh, who served as moderator, asked the brokers to share their greatest challenges, advice to agents for positioning buyers (and sellers) in 2011, and valuable traits they look for in an agent.
For Fred Hibbert, the greatest challenge is managing expectations of buyers and sellers.
Bill Lewis said it’s staying on top of the market. “Success is preparation and opportunity. You need to know the market,” he stressed.
John Thompson said knowledge and skills in the industry are important. An agent needs to be objective and focus on what he/she should improve.
Chris Trapani said it’s important for him as a manager to see growth in his office. His goal is to have his agents succeed. He especially wants to coach agents who have not yet experienced levels of success and guide them to a place of stability.
What is the panel’s advice to agents for 2011? Hibbert advised agents to study the information, be knowledgeable about the market, and know the stats.
“Stats are important and talking points are important,” confirmed Lewis. Armed with this knowledge, Lewis said agents can discuss real estate and show their knowledge to everyone, even while waiting in line in the supermarket.
“Have patience,” Lewis added. “You have to understand your clients and help your clients understand the market and manage their expectations.”
Thompson said there’s no excuse for agents to be operating without stats. Agents have access to the data and need to be able to explain the short and long-term impact on value in the different neighborhoods.
As for valuable traits the managers look for in an agent, Trapani said he looks at the agent’s track record, and most of all, he looks for a “culture fit” in his company.
Thompson looks for intangibles, especially personality. “If a person knows what they want to get out of this business, I can help them with a business plan. They have to know what they want,” Thompson stressed.
Lewis looks for a high level of honesty, integrity and fair dealing in an agent. It’s his foundation to building a culture in the office. The agent would need to get along with others in the office.
Hibbert wants the agent to have a game plan and goals.
A red flag to these managers is when the agent immediately wants to know what the deal is, and does not express much interest in the company’s philosophy.
The brokers are very optimistic about 2011. Enjoy the ride, be prepared, focus on what you want, but you have to work. Get out there, get the inventory, get the listings, they said.
The 2011 leadership team of the Silicon Valley Association of REALTORS® (SILVAR) was installed Jan. 13 at the Menlo Circus Club in Atherton. California Association of REALTORS® President-elect LeFrancis Arnold administered the oath of office to 2011 SILVAR President E. H. “Gene” Lentz. The Honorable Quentin Kopp administered the oath of office to the local trade association’s 2011 officers and Board of Directors.
California Association of REALTORS® President-elect LeFrancis Arnold administered the oath of office to 2011 SILVAR President E. H. “Gene” Lentz. Lentz is a REALTOR® with Red Hawk Real Estate in Menlo Park.
In addition to Gene Lentz, a REALTOR® with Red Hawk Real Estate in Menlo Park, SILVAR’s 2011 officers include Suzanne Yost, a REALTOR® with Alain Pinel Realtors in Los Gatos, President-elect; and Phyllis Carmichael, a REALTOR® with Coldwell Banker in Los Altos, Treasurer.
The 2011 Board of Directors includes Jeff Bell (Coldwell Banker), Past President; Julia Truesdale Keady (Alain Pinel Realtors), Region 9 Chair; Bill Moody (Referral Realty), Cupertino/Sunnyvale District Chair; Denise Welsh (Intero Real Estate Services), Los Altos/Mountain View District Chair; Doug Evans (Coldwell Banker), Los Gatos/Saratoga District Chair; Penelope Huang (RE/MAX Distinctive Properties), Menlo Park/Atherton District Chair; Nancy Macleod (Homes2Buy.com), Palo Alto District Chair; Judy Ellis (Alain Pinel Realtors), National Association of REALTORS® Director; Alicia Nuzzo (Sereno Group), At-large; Dave Tonna (Alain Pinel Realtors), At-large; Carolyn Miller (RE/MAX Real Estate Services), At-large; Bill Rehbock (Coldwell Banker), At-large; Bryan Robertson (Sereno Group), At-large; and Jimmy Kang (Wells Fargo Home Mortgage), Affiliate Chair.
The Honorable Quentin Kopp administered the oath of office to SILVAR's 2011 officers and Board of Directors.
Lentz has worked in real estate for 15 years and is highly regarded for his intimate knowledge of his community and strong work ethic. An active member of the local trade association, Lentz has served as Menlo Park District Chair (2007), Political Action Committee Chair (2006, 2007), Menlo Park District Local Government Relations Committee Chair (2002-2009), and a member of the Menlo Park Citizens Budget Advisory Committee (FY 2005-2006). Lentz is also a member of the California Association of REALTORS® (Director 2007, 2008) and National Association of REALTORS®.
The 2010 Appreciation Awards were also presented by 2010 President Jeff Bell and Executive Officer Paul Cardus to Nina Yamaguchi (Coldwell Banker), REALTOR® of the Year; Chris Grammar (Allied Brokers Insurance), Affiliate of the Year; and Lisa Keith (Red Hawk Real Estate), Spirit of SILVAR. Past president Leannah Hunt (Coldwell Banker) was recognized for her work as 2010 Region 9 Chair.
Leannah Hunt, 2010 Region 9 Chair
Gerry Lawrence (Coldwell Banker), SILVAR’s treasurer for the past seven years, and longtime board director and past president John Tripp (Foundation Trust) were presented the special President’s award by Bell for their valuable guidance and assistance during his term of office and their continued contributions to the association.
Gerry Lawrence, 2010 President's Award recipient
John Tripp, 2010 President's Award recipient
Bell noted 2010 REALTOR® of the Year Nina Yamaguchi was instrumental in branding the “Silicon Valley Association of REALTORS®.” Yamaguchi chairs the Silicon Valley REALTORS® Charitable Foundation Scholarship Program, which has provided nearly $200,000 to 198 graduating seniors, since she established the program 11 years ago.
Nina Yamaguchi, 2010 REALTOR® of the Year
“By her leadership and example, she inspires us professionally and personally to be the best we can be and look beyond our successes and give back to others,” Bell said.
Bell commended 2010 Affiliate of the Year Chris Grammar for his generosity with his sponsorship support and being instrumental in coordinating and preparing tour sponsorships for several districts.
Chris Grammar, 2010 Affiliate of the Year
2010 Spirit of SILVAR recipient Lisa Keith was honored for her kindness and generosity, having supported the Charitable Foundation Trust as the annual golf and dinner/auction’s lead sponsor for two years in a row, serving as its inspiring chair and working tirelessly to make the 2010 fundraiser a success.
Lisa Keith, 2010 Spirit of SILVAR Award recipient
This year’s Installation Sponsors included SILVAR’s Menlo Park/Atherton District, MLSListings Inc., Supra, Wells Fargo Home Mortgage – Palo Alto, Alain Pinel Realtors – Los Gatos, Sereno Group, Steve Papapietro with Bank of America Home Loans and Keller Williams Realty – Palo Alto.
Thank you 2011 Installation Sponsors
The Silicon Valley REALTORS® Charitable Foundation donated $44,800 in 2010 to different non-profit organizations that help low-income individuals and families in Silicon Valley. The Charitable Foundation is a trust which makes grants available to organizations from donations by REALTORS®, affiliate members and friends of the Silicon Valley Association of REALTORS® (SILVAR).
The grant recipients are from SILVAR’s five districts – Los Gatos/Saratoga, Cupertino/Sunnyvale, Los Altos/Mountain View, Palo Alto and Menlo Park/Atherton. The 2010 recipients include Abilities United (formerly Community Association for Rehabilitation), Assistant League of Los Gatos/Saratoga, Child Advocates of Silicon Valley, Christmas Bureau of Palo Alto, Cleo Eulau Center, Community Health Awareness Council, East Palo Alto Kids Foundation, Family & Children Services-F&CS – (including FAST-Families and Schools Together), Friends for Youth, Friends of Deer Hollow Farm, Friends of Palo Alto Junior Museum & Zoo, JustREAD (on Campus of Mountain View/Los Altos Union High School District), Kara, Reading Partners, Support Network for Battered Women, Via Services, Westwind 4-H Handicapped Riding Institute and Youth Community Services.
Also in 2010, as part of its Scholarship Program, the Silicon Valley REALTORS® Charitable Foundation presented a $1,000 scholarship grant to each of 18 graduating seniors from public high schools in the Silicon Valley communities. 2010 is the 11th year the Foundation has been assisting students with the scholarship grants.
“Local nonprofits have been hit hard by the weak economy and unemployment,” said 2010 Silicon Valley REALTORS® Charitable Foundation president Lisa Keith. “We thank our members and friends who, even in this difficult year, have been very generous with their donations.”
At a recent Menlo Park/Atherton District meeting, the Silicon Valley REALTORS® Charitable Foundation Trust presented $2,500 to the Westwind 4-H Riding Program for the Handicapped. Silicon Valley REALTORS® Charitable Foundation President Lisa Keith (right) presented the grant to Judy Lookabill, board member of the Westwind Riding Institute.
Non-profit organizations operating within the areas served by the Silicon Valley Association of REALTORS® are eligible for grant consideration provided they meet the evaluation criteria below. Grant applicants are evaluated on the following guidelines:
- The community need for the expenditure, as well as the number of people who will be served;
- The impact on the recipient organization;
- The location of the community served; (Although requests for state, national and international projects are considered, preference is given to projects with a more local base.)
- The financial soundness and efficiency of the organization;
- Accuracy and completeness of the application;
- The structure of volunteer organization and level of volunteer support; and
- Appropriate use of the Foundation’s previous grants (if applicable).
The Charitable Foundation Trustees meet quarterly (March, June, September, and December) to evaluate applications. Applications must be received by Feb. 15, May 15, Aug. 15, and Nov. 15 in order to be considered at the quarterly meeting. For more information and details about the Charitable Foundation grants and an application form, visit www.silvar.org, or call SILVAR at (408) 200-0100.
Sales in November picked up from the previous month in the state of California and nationwide. This is a sign that the market is recovering on its own, according to REALTOR® officials.
The California Association of REALTORS® reported last week that California home sales rose in November, though down from the previous year. Closed escrow sales of existing, single-family detached homes in California totaled 490,950 in November, according to information collected by C.A.R. from more than 90 local REALTOR® associations statewide. Sales were up 9.2 percent from October’s revised pace of 449,480, but down 8.6 percent from November 2009.
The statewide median price declined from both the previous month and previous year. The November 2010 median price was $296,820, down 2.4 percent from October’s $304,220 median price and down 2.5 percent from the revised $304,550 median price in November 2009.
Santa Clara County home sales rose 6 percent in November from that of the previous month, but were down 8.6 percent from November 2009. The November median sales price of a single-family detached home was $589,980, down 7.5 percent from October when it was $637,750, and down 2.5 percent from November 2009, when it was $605,000.
“Sales last year were spurred by the government home buyer tax credit program,” said Jeff Bell, president of the Silicon Valley Association of REALTORS®. “We are now seeing market gains, without help from the stimulus program, and this is a positive sign.”
The Silicon Valley cities of Saratoga, Los Gatos and Cupertino continued to rank among the top 10 cities with the highest median home price during November 2010. Saratoga’s median home price in November was $1,235,000; Los Gatos, $850,000; and Cupertino, $850,000.
The National Association of REALTORS® also reported last week that November’s existing-home sales (completed transactions that include single-family, townhomes, condominiums and co-ops) rose 5.6 percent to 4.68 million from 4.43 million in October, but are 27.9 percent from November 2009. The national median existing-home price for all housing types was $170,600 in November, up 0.4 percent from November 2009. Distressed homes accounted for 33 percent of November sales.
“Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” says NAR chief economist Lawrence Yun.
Yun says the relationship between mortgage interest rates, home prices and family income continues to be the most favorable on record for buying a home since NAR started measuring in 1970.
During 2010, two new permanent information reporting requirements have been added to the duties of property owners and owners of small businesses (including self-employed individuals and independent contractors).
The recently enacted small business legislation (HR 5297) included an expansion of the 1099 reporting related to a trade or business. To date, only those real estate professionals engaged in property management-type businesses have been required to file Forms 1099. Congress has extended the Form 1099 requirement to any person who receives rental income. This requirement would apply to any landlord (including a small investor), rather than only those who are in the business of managing property.
Starting in 2011, any person who receives rental income must provide a Form 1099 for all payments of $600 or more made to service providers, such as plumbers, carpenters, yard services and repair workers. The purchase of goods is not included within the reporting requirement. The Form 1099 is provided to the IRS and to the service provider. The new requirement applies to both residential and commercial property.
Also, the Health Care Reform legislation enacted earlier this year adds a new, controversial and burdensome reporting requirement that goes into effect in 2012. The 2012 reporting requirement affects any business that makes a payment of $600 or more to any payee (except a tax-exempt organization) for property and services. This provision expands the 1099 information reporting requirement of current law.
Several amendments were offered, supported by the National Association of REALTORS®, to the small business legislation that would have repealed, or at least mitigated the impact of this new requirement. Those efforts failed. The amendments to mitigate the impact would have imposed the requirement only on those businesses with more than 25 (or 50) employees and/or payments of more than $5,000 to any particular vendor or service provider.
Bottom Line for Real Estate:
- Current Law: Information reporting requirements apply only to businesses.
- 2011 Rule: All persons who receive rental payments must provide Form 1099. This affects all owners (both individuals and businesses) of rental properties, both residential and commercial. Thus, “mom and pop” investors and those who invest in real estate for their personal portfolios are subject to the new reporting requirement. Only aggregate annual payments of $600 or more for services (but not goods) must be reported.
- 2012 Rule: All businesses, including real estate businesses, self-employed individuals and independent contractors will be required to make a 1099 report of any aggregate annual payment of $600 or more to any person from whom they acquired goods and services.
Silicon Valley Association of REALTORS® says ... 