Why I Love Real Estate: On 1031 Exchanges
Eleven years ago I left my high tech marketing job for the world of real estate. The huge difference in careers for me is the personal connection I can make with my clients and how I have a immediate tangible feedback of how I make a difference in their lives. Here are some really nice words written by a client of mine who hired me to help them with some of their real estate investments. It is so nice to be appreciated. Thanks Diane. XOXO.
We wanted to sell our single-family home investment property in Cupertino and purchase a multi-residential building on the Peninsula. I had known Connie through volunteering at our children’s school. Thinking she would be as diligent in real estate as she was in her volunteering, we hired Connie. She exceeded our expectations. We were worried how the market would react to our Cupertino home as it was on a busy street. Connie led the efforts to make sensible updates to the home prior to putting it on the market and did a fantastic job in the contract negotiations. We ended up getting multiple offers and selling the home for more than we expected. On the buy side, Connie sent a mailer to all apartment building owners whose property fit our criteria. When we found the apartment building we wanted, we felt that she looked out for us, making sure all the information we needed to make a purchase decision was there before we committed, and we got the building for under asking price. She managed the 1031 Exchange coordinating with the exchange and title companies without a glitch. We were very pleased with Connie’s service. We’ve been recommending Connie to everyone who has mentioned selling/buying, including our neighbors, who recently said they were thinking about talking to a few realtors to see what they might get for their house, and the next thing we knew the new owner is moving in, and we’re pretty sure our (former) neighbors never talked to another Realtor after they met Connie! If you’re thinking of selling/buying, just take a few minutes to talk to Connie and you’ll be convinced that she can represent you brilliantly. Diane and Harold Wachs – Los Altos Hills
What is MDA/MFA with respect to Los Altos Hills real estate?
Understanding the constraints of remodeling and new construction in Los Altos Hills should be considered before you buy a house in Los Altos Hills. The Town relies extensively on calculations commonly known as MDA and MFA in determining the maximum size house you can build and also how much impermeable space (hard scape) you can have on your property.
Controlling the MDA, or maximum development area lets the town protect the hillsides against too much run off and erosion and also helps to retain the rural natural setting for which the town is revered. Typical MDA for the standard one acre lot is 7,500 square foot. This varies depending upon the slop of the lot and other factors. Items that are included in MDA include concrete walk ways, paved driveways, tennis courts, pools and patios. You can get an allowance for more MDA by using pavers that have holes in them through which grass can grow or gravel or other means.
MFA stands for maximum floor area ratio. Like MDA, MFA can be pretty complicated. Floor area, as per the official town document, “shall be defined as the gross horizontal area of the several floors of all buildings, including garage and carport spaces, measured to the outside of exterior walls.” Basements, if they fit the town definition of basements , are not included. Typical MFA on a standard acre lot is 5,000SF. This can be complicated and usually requires a survey to determine the exact MDA and MFA.
It is best to reference the town documents and work with a planner to be certain of your constraints. For more information see the Town’s worksheet and info at http://www.losaltoshills.ca.gov/doc-browse/doc_details/144-mfa-mda-worksheets
Ten Characteristics of a Great Realtor
Ten Characteristics of a Great Realtor:
- A great Realtor has time for you. They don’t try to wow you with the dozens upon dozens of listings they have sold. They manage your home sale or purchase personally and are the single point of contact for you. They answer your calls within a few hours and make you feel as though yours is the only home sale or purchase on which they are working. Your sale is never delegated to an assistant for important tasks.
- A great Realtor shows you how they are going to market your house using a completely integrated marketing plan that includes, print, a strong internet presence, direct mail and word of mouth. For print pieces, your house gets more than a postage stamp sized mention. For internet, your home is syndicated on as many web sites as possible and you have your own property specific web site.
- The best Realtors are honest about the price they expect your home to command. The Realtor who tells you your house has the highest value is not necessarily the Realtor who will get you the most money. It is well known among Realtors that there are Realtors who ‘buy the listing’ by telling you an artificially indefensible number you want to hear, not one that the market may bear.
- Hire a Realtor who walks the walk, not just one who talks the talk. It is amazing the number of Realtors who rent the house in which they live. A December 2008 study by Realtor magazine said only 41% of all Realtors own investment property. Would you hire a stock broker who owned no stock? Until a Realtor has been in your shoes, they cannot fully advise you.
- A great Realtor belongs to a reputable brokerage. The brokerage represents the Realtor’s support structure for you. Do they have a market presence that can attract buyers? Do they offer their Realtors legal support, training and advertising assistance that can insure your house is sold in a legally sound manner and for the highest price? Real estate companies with only a handful of Realtors typically do not have the kind of infrastructure that can protect you and get you the best price for your home. Nor do they have the network of agents who can get the word out about your home.
- A great Realtor earns every cent of her commission and strives to keep it as vehemently as she strives to get you the highest possible price for your home. If Discount Realtors are so quick to discount their own fees, how do you think they will be in standing up for you during a hard negotiation to get you a great price for your home?
- A great Realtor knows your neighborhood. They can quote the statistics of what is selling, why and where. They know the schools, the stores, where to get a dog groomed, the traffic patterns and what the hot issues for the town are. They know how far the parks are from your home. In short, they know everything about your neighborhood so they can do the best job of selling your home.
- A great Realtor has a track record of successful negotiations. When you interview a Realtor, as her to recount a story or two about a really tough negotiation she has had and how she succeeded in getting what their client wanted. If you get a deer in the headlight type response to this question pick another Realtor.
- A great Realtor probably has some advanced designations. Approximately ninety percent of Realtors have a Salesperson license while the balance has a Broker designation. Brokers have to go through a more rigorous exam studying more Agency law, Disclosure law and other things that make them better able to navigate the complex process of buying and selling a home. The National Association of Realtors currently offers 23 additional designations in a variety of specialties that require the designee to have additional matriculation and continued study. The more a Realtor knows, the more they can make the process smoother for you.
- 10) A great Realtor gives you a defensible, comprehensive market analysis to support their price and marketing recommendation.
I can make the buying and selling experience great for you. Call me and I can help. Connie 650-279-7074
How is a Realtor Paid?
Getting the most out of your Realtor might be as easy as understanding how Realtors are paid. The majority of realtors are self-employed individuals who are on 100% commission. They work hard and don’t make a cent until you close escrow on your house. They typically pay all of their own advertising and overhead expenses and give a percentage of their earnings, based on volume sold, to the brokerage they hang their license with. If you are working with one Realtor from a given brokerage and then switch to another Realtor within the same brokerage, that first realtor makes nothing. It does not matter that they have the same logo on their business card. They are self-employed.
It is common for buyers to go through a process before they actually figure out what they really want to buy. The best realtors work as hard for you as you are loyal to them. If you are playing several realtors simultaneously, the odds of their hard work paying off are diminished by the number of realtors you call. If you show your loyalty to a realtor, they will reward you with theirs and put you first.
Some buyers think they can get the best deal if they work directly with the listing agent and that they don’t need representation. That is not my experience. The sellers in the sale of a house pay the commission. Usually half of that goes to the realtor representing the seller, the other half, to the realtor representing the buyer. Typically, this is 3% for each side. Buyers who employ this tactic feel that they can get the listing agent to discount their commissions since they would make commissions on both sides of the transaction and have commissions to give away. I would caution a buyer against this unless there is incredible goodwill on each side and the paperwork is more of a formality. But typically, there are price negotiations and repairs that need to be negotiated. Why would a listing agent favor a buyer in any negotiation? You might get one percent of the purchase price in commissions back if you are lucky, but you have no one looking out for you in the process. Why risk one of the most important purchases of your life to one percent of the purchase price? It makes no sense. You need someone looking out for you and no one else. Get your own buyer’s agent.
Interview a few realtors. Pick one whose communication style matches yours. Do they keep the hours you do? Are they proficient in email and texting like you might be? What response time do you expect? Find someone who is knowledgeable about the area(s) you are interested in. For example, if you are looking for a Los Altos Realtor, find someone who lives there. Their office might not necessarily be there but they have to be able to articulate all the details of why certain areas are better than others. If the agent you start with is not working out for you, be fair and tell this to the realtor before you begin the dance with another one.
Avoid Foreclosure Rescue Scams
This piece came from the California Association of Realtors. The last thing in the world any of us want is for people to profit off of other people’s hard times. Please read this to be on the look out for scams. As one television personality used to say, “Be safe out there.”
With the recent rise in foreclosures, foreclosure-related scams have exploded onto the real estate scene. These so-called “foreclosure rescue companies” claim they will help save your home, but in reality are out to make a profit — at your expense.
Red Flags for Foreclosure Rescue Scams
If you are at risk of or in foreclosure, you should be on the lookout for foreclosure scams. Here are some of the red flags to
watch out for:
• Asks for money upfront before providing any service
• Instructs you not to contact your lender, lawyer, housing counselor, family, friends, or others
• Asks for mortgage payments to be made directly to his or her company or a bank account set up by that person, rather than your lender.
• Requires payment only in the form of cash, cashier’s check, or wire transfer
• Promises to stop the foreclosure process, no matter the circumstances
• Advises you to transfer your property deed or title to his or her company
• Offers to fill out paperwork for you
• Asks for something to be done immediately and without delay. This includes pressuring you into signing paperwork that you have not had the chance to read thoroughly or do not fully understand
• Encourages you to lease your house and buy it back over time
• Offers to buy your house for a fixed price that is not set by the housing market at the time of sale
• Asks for you to give a power of attorney
• Asks for signatures on a grant deed or deed of trust
• Asks for signatures on a document that has lines left blank
• Fails to provide copies of signed documents
• Refuses or fails to put an oral promise in writing
Report Fraud
If you have been a victim of a foreclosure-related scam or approached by a scam artist, you may report the incident to the following organizations and government enforcement agencies:
• California Attorney General
• California Department of Real Estate
• Department of Housing and Urban Development (HUD)
• Federal Trade Commission (FTC)
www.ftc.gov
• Your local Better Business Bureau
Legitimate Resources
If you are at risk of foreclosure or have already received a foreclosure notice, you should contact your lender immediately. Homeowners also may seek the advice of a reputable housing, financial or credit counselor, attorney, or other qualified professional.
Homeowners may visit the U.S. Department of Housing and Urban Development (HUD) Web site at http://www.hud.gov/ to view its Guide to Avoiding Foreclosure and its list of California HUD-approved housing counseling agencies. In addition, the non-profit
Homeownership Preservation Foundation has a 24/7 toll-free Homeowner’s HOPE Hotline at (999) 995-HOPE.
Copyright© 2009 CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). Permission is granted to C.A.R. members only to reproduce this material for non-commercial purposes. Other reproduction or use is strictly prohibited without the express written permission of the C.A.R. Legal Department. All rights reserved.
The information contained herein is believed to be accurate as of April 9, 2009. It is intended to provide general answers to general questions and is not intended as a substitute for individual
legal advice. Advice in specific situations may differ depending upon a wide variety of factors. Therefore, readers with specific legal questions should seek the advice of an attorney.
Updated market report now available
The latest Silicon Valley Real Estate market report is now available. You can see the current trends by Santa Clara County in general, or drill down to city specific data. Most cities in Silicon Valley show a clear recovery trend with reductions in inventory, increases in sale prices and reduced days of inventory. The bottom right part of the page is County specific and stagnant, but the charts and graphs are dynamic and provide data on whatever city you select. This is great data. To check it out, click here
Coming Soon: In the Highlands of Los Altos
Coming Soon: Fabulous Highlands area home in Los Altos. Original Owner of 52 years. House is in impeccable condition. The pest inspector seemed quite disappointed when he could not find any termites in the house. This is the perfect fixer upper. It has a great lay out with fabulous bones. Walk to Pete’s, Starbuck’s and Trader Joes. Call me if you want to know more.
Has the Real Estate Market Bottomed Out?
What indicator do you use for determining when the Silicon Valley real estate market has hit bottom? Number of weeks of reduced inventory? We are there. Velocity of sales increasing? We are there. Return to multiple offers? We are there. Folks, I think the market has officially bottomed out. And as soon as the Fed figures that out, interest rates are going to rise.
Here is a snapshot of last week:
Rate of sales increased in Los Altos for the 6th week in a row. When started tracking this, 9% of all houses were selling. This past week, 22% of all listings went sale pending. Specific Los Altos listings that sold. Pine, Solana, both listings on Greenview Place, Colonial Oaks, Don Kirk and Rosita all went sale pending on MLS. Rumor is both listings on Odell Way also sold. Solana, Pine and Loucks all went with multiple offers. The week before that, Mira Loma in Los Altos Hills sold with multiple offers. That was priced around $4.3M.
Other agents in my office came back battered from having to compete in multiple offer situations. Here is a sampling: 14 offers were made on a listing in Milpitas. 3 offers on a house in Campbell. Another agent wrote four offers on houses in San Jose. All were multiple offer situations.
Even if there is another wave of foreclosures that hit the market after the government imposed moratorium is lifted, the strength of the high end market in Los Altos leads me to believe we have decisively turned a corner.
I see many engineers coming to my open houses trying to calculate the exact market bottom. Well, if this data does not compel you to act now, I doubt if anything will.
Great New Jumbo Rates from B of A
Bank of America recently announced some unbelievable deals in jumbo loan financing. Remember those? Non conforming loans over the Freddie and Fannie backed limits. Well, you can now get 80% financing for jumbos with B of A as well as back end ratios around 50%. You need good credit scores (over 720) and decent reserves (rumored to be six months) But rates are good in the 5s. These are definitely worth checking out if you have wanted to move into a nice community but have had a problem with the higher down payment some banks are requiring. Of course as soon as I print this it will be outdated. So, talk to B of A directly. But it looks like at least one bank is finally putting that TARP money to good use for something that can actually benefit us here in Silicon Valley.
Important Sales in Silicon Valley Last Week
Houses are selling in Silicon Valley. Houses at entry price points and houses at the very high end have had an increase in activity as measured by sale pendings last week. We know about the sub-prime neighborhoods in East San Jose and South County being bought by people who recognize the value there. But for me, most notable are the four high-end homes that went under contract last week in Los Altos Hills. Los Altos Hills has been one of the slowest high end markets around and the floodgates just broke open. One new home that went on the market for just under $10M sold in less than two weeks. Another one listed for just under $7M that had been on the market a while recently sold. And two more hovering around the $4M mark also went under contract in Los Altos Hills. Enter Saratoga. Glen Una, the platinum triangle, the epicenter of high end Saratoga real estate. A house there last week in the $7Ms just went under contract as well. What do these Silicon Valley executives who are buying these properties know that we don’t? Seems it could be confidence in Silicon Valley. Have we who live and thrive in this fast paced valley ever not recovered in a downturn? Look at the cycles we have been through. Chip cycles. Workstation cycles. Internet cycles. We always make it through and reinvent ourselves. This will be no different. These executives know this.
About Me
Connie Miller
- Trusted
- Experienced
- Proven Negotiator
Contact Me. I can help.
Email or phone 650-279-7074