The Devil's in the Details - a Follow-up

Last week I wrote a blog about the PACE program.  Today I was fortunate to hear a speaker that represents one of the companies that offer this type of program.  The company is known as Ygrene (Energy spelled backwards).  I

For those of you who are not familiar with this program, it offers a loan to do energy improvements to your home.  The difference is that the loan is paid back via your property taxes.  In other words, the loan does not stay with the borrower, but with the property.

I thought you might like to learn a bit more about the program that is offered by Ygrene.

• The term of the loan can be either 10 years or 20 years.
• The interest rate is 6.5% or 7.5% respective to the above terms.
• There must be a 15% equity in the home
• The borrower must be current on his/her property taxes and mortgages for the past 3 years.
• The borrower must not have had a bankruptcy in the past 3 years.
• The borrower may borrow up to 10% of the properties market value.
• There is a 3% prepayment penalty if the loan does not go full term.
• There is approximately $750 in loan fees to be paid.
• The borrower may be owner or non-owner occupied.
• The contractor that the borrower uses must be on their certified contractor list.
• 50%-60% of the loans of this type will have to be paid off when the property transfers

So, there you have it.  Hopefully if you were considering a PACE loan, this will help you decide how to proceed.

PACE Loans...the Good, the Bad and the Ugly

The PACE Program (Property Assessed Clean Energy) was first developed in Berkeley, California in 2008.  It's intent was to help Berkeley achieve the Bay Area's climate goals.  Since 2008, 30 states and the District of Columbia have passed laws to allow for PACE financing programs.
The program hit a substantial roadblock when Federal Housing Finance Agency along with Fannie Mae and Freddie Mac declined to back mortgages with PACE liens on them.  The reasoning was that these types of loans become senior liens over any other liens on the property.
The intent of these types of loans is admirable.  They have been created to finance energy savings improvements in homes without the significant outlay of money by a homeowner.  They could have insulation installed, solar panels installed, dual pane windows and more and have it billed through their annual tax bills over longer length of time (typically around 20 years).
The issue is when a property transfers, how are these loans disclosed?  Depending on the timing, these new tax liens may or may not show up on the assessors records that the title companies rely on.  If the property was purchased as a "flip" and the contractor takes out this type of loan for improvements, the property could turn so quickly that the bill for the tax period that would show the lien hasn't occurred yet.  The only way to ensure that this type of lien is or is not on the tax bill is to ask the seller. 
Another issue is when a "flip" occurs, the contractor get an increase in value due to the improvements made.  If the lien is not paid off at the time of transfer, the contractors gets the full benefit of the increased equity by the buyer paying for the value of the improvements...then the buyer pays for it again in the tax bills.
This will be an interesting issue to follow in the coming years.  I understand that it is being done successfully in many areas of the country...and I would like to ask how they are overcoming these significant issues. 
- See more at: http://activerain.com/blogsview/4240370/pace-programs-getting-a-fooothold-in-california-buyers-beware#sthash.9dc08cF7.dpuf

HOW AND WHEN TO FIND A REALTOR

The moment you make the exciting decision to purchase a home, the search for a Realtor should begin. Remember, the commission is usually paid by the seller, so you get to have a Realtor represent you at no cost (the exception may be if you sign a buyer/broker agreement and there is no commission offered by a seller).

There are several ways to find the perfect Realtor for you. One of the best ways (and Realtors like this too) is to ask people you trust. Did they have a good experience? What did they like about their Realtor? Did they feel like they were well represented? Be sure that you ask about Realtors that work the neighborhoods you are interested in. You might find a great Realtor, but if they are not familiar with the neighborhoods you have chosen, they will not know the idiosyncrasies of that neighborhood, which is critical. A good Realtor will tell you if they feel comfortable helping you in your selected locations. Interview several Realtors and select the one you feel you can trust.

If some of the people you ask give a bad review of an agent, you might want to listen carefully to what they are saying and ask a few more questions. Did the person take the advice of their Realtor or feel that they knew better? Were they available to look at property when their Realtor called? Did they take the advice of their Realtor when writing an offer, or did they insist on writing it their own way? Particularly regarding the offering price, the Realtor will know what it will take for the buyer to get the property. Sometimes buyers can be their own downfall.

Trust is huge in the real estate experience. Your purchase can actually be smooth and fun as long as you have a Realtor you trust...and nothing will throw an experience like a buyer and Realtor who are constantly questioning each other. If you do not feel you can trust your Realtor, then you should not hire him or her.

Search for Realtors on the internet. Read their biography. If they write blogs, read them. See if they have comments from previous clients and if so, what the clients have to say. Many times you can find where they sell homes so you know if they sell in the areas you are looking.

While it is tempting to select a Realtor according to how many of their signs you see in the location you want to buy, don't rely on this completely. Sometimes Realtors are more listing agents than selling agents, so they may not be the best Realtor for you. If you go this approach, interview them. Ask how many homes they have sold in which they represented the buyers.

Ask the Realtor you are interviewing if they have a buyers agent they use. Will you be working with the Realtor or the buyers agent? If it is the buyers agent, you may want to rethink using that Realtor...after all, the trust is with the Realtor you interviewed...not their buyers agent. If you still want to work with that Realtor, ask to interview their buyers agent.

While experience is certainly a factor, many times the newer Realtors have loads of energy, initiative and drive. If you connect with a newer Realtor, ask them if they have someone who they can call if something arises that they don't know how to handle. Most of the time, they will have a mentor or broker who will be there if the need arises.

In summary, find a Realtor as soon has you have made the decision to purchase. Make sure it is someone you feel you can trust. Do your homework. And then...have fun!!!

BUYERS...USE YOUR REALTOR!

The beauty of teaming up with a Realtor for buyers is that it usually does not cost them a dime...and will maximize their possibility of purchasing the property they are looking for.
However, there are many steps a buyer can take that will help their Realtor give them the very best service possible.

• Be honest with the purchase price for which you can qualify. A Realtor needs to know your top qualifying price, even if you don't want to go that high. The reason for this is while you may not want to go that high, you are probably looking that high on the internet and ads. You will get frustrated with your Realtor for not showing you properties that you might consider because they aren't aware you can go higher than the price range they are looking. Just tell them that while you can qualify for X, you only want to go as high as Y. This way, if there is the perfect house out there that you would make an exception for, your Realtor can at least show it to you.
• Be available. If you are serious about purchasing, then you need to be available to view property. This becomes particularly pertinent in this market of multiple offers. If you are an out of town buyer, it will be better to simply wait until you are in town to look at property. Making offers on properties you have not seen is not looked upon kindly by listing agents or their sellers. Once you are in town, be prepared to write an offer. Have your prequalification letter in hand.
• Be flexible. Your Realtor is going to show you homes that fit within the parameters you have given them. It is unusual for one property to have all of the features you are looking for. Most of the time, I find buyers fall in love with one or two aspects of the home and are willing to forgo some of their other needs to enjoy the features they like. Sticking to a strict list will make your home search frustrating to everyone.
• Once you have decided on a property, stick with it. You have an accepted offer...lucky you! Backing out once could be excused...backing out multiple times is discouraging for your Realtor who gets excited for you only to find out that you have changed your mind...again. At some point, if this continues, your Realtor will probably put you on on a back burner and pay more attention to more motivated buyers that they are working with.
• Trust your Realtor. You have selected that Realtor for a reason; a referral, meeting them at an open house, reading about them on the internet. Whatever the reason, once you have made that decision, trust that they are working for your best interests. They will consult you on properties available, proper offering prices, the best terms to write up and negotiate the inspection results. Their experience and expertise should be taken advantage of. If you don't feel you can trust them, then you have selected the wrong Realtor...kindly explain that it isn't working for you and move on to another Realtor who you feel you can trust.

Approach your home search and purchase in this way and you have maximized your Realtors ability to help you...and have a great experience along the way!

I AM SAD TODAY

I wrote this blog in August of 2010.... please read and then I will follow up on why I am reposting this.

WE SHOULD SELL HOMES LIKE HE SELLS FLOWERS (edit/delete)

My daughters and I regularly enjoy a local famer's market. It is just hard to beat the quality of the fresh food and the very reasonable prices.
One of my favorite stops is the flower booth of one particular vendor. Now, there are several flower vendors there and they all sell pretty much the same flowers. Why, then, do I loyally go back each and every time to him?
He doesn't just sell his flowers - he romances his flowers. He also makes me feel special. Once in a while, when he is running low of my favority tuber roses, he saves me the last bunch. Last week he made sure to hold 2 bouquets for me. He gave my granddaughters each a beautiful stalk of gladiolas. He always wears a smile. By his demeanor, he makes you feel like he never has a bad day...he's the kind of person you want to be around.
We should sell homes this way. We should romance the homes we show. We should make our clients feel special...like they are the only clients we have at the moment. We should reflect a positive attitude that makes them feel that they have chosen the best REALTOR. We should listen...really listen, so we know when we have found the perfect house for our buyers.
And let's not forget, flowers have a fragrance that lasts a long time...let's hope our clients remember us like that fragrance .... a long time.

www.PaulaSwayne.com
CA DRE# 01188158
I went to the farmers market today, looking forward to seeing my friend Ed, the flower man. I was surprised to see his space empty except for a few flowers. I figured he had sold out early and gone home. He had never done this before, but what else would make sense? I went to the booth across from his to purchase my summer squash, and the couple there explained. Ed was killed in a head on accident caused by a drunk driver at a little after noon on September 29th. His 10 year old daughter was with him and was in critical condition. I can't imagine what his family is going through, knowing my own grief. So, please, enjoy every single moment of your life and the people you meet every day. And just as important, please, never, NEVER, drive after drinking. Thank you for your indulgence.

A BUYERS LIST OF MUST-HAVES

This real estate market is not for the faint of heart. Competition has made negotiating an art form. If you are considering purchasing a home, be certain that you approach your purchase with every possible bit of ammunition you can muster. Here is a list of the "must have's" in this market:

• An experienced REALTOR
• An experienced REALTOR
• An experienced REALTOR
• A lender who is responsive and knowledgeable...this does NOT necessarily mean your best friend or your uncle.
• The very best loan for which you can qualify. FHA, while wonderful, is the first offer to be eliminated in a multiple offer situation. If you can go conventional, DO!
• If you must go FHA, consider finding homes that have been on the market a while. There will be less, if any competition and you will have a seller who is much more motivated.
• Have as much money saved as possible in case that appraisal doesn't come in. You will be able to make up the difference between the appraised amount and the offered amount if you really want the house.
• Be informed. Listen to your REALTOR. They have been in the trenches, working this market. They know what it is going to take to get you that house. As was mentioned first, negotiating has become a true art form in this market and you need someone who understands what it is going to take to make that home your own.

This is a tough market. There are far too few homes to purchase and far too many buyers that want them. Be ready for the possibility that you may not get the first house you write an offer on. But, don't give up...hang in there and the reward will be your perfect home!

ETHICS AND FAIRNESS IN SACRAMENTO REAL ESTATE

Five little words cost a third of my commission. Now there's a way to start a blog!

How did this happen? As with many unfortunate things, quite simply. After showing my clients many houses, we found THE ONE. It was perfect. We wrote an offer and it was accepted. Soon after, we went by the house to have a contractor bid painting. As we were taking a look at the work, we realized there was no heat or air conditioning upstairs. I told them I would look into it, as it would certainly affect the value of the house and the price we had offered.

Then, when I looked back on the computer printout, I discovered five little words that changed everything...."No heat and air upstairs" was written in the "agent only" remarks. I had missed it. I immediately called my clients, let them know of my oversight and told them that I would be happy to pay for the heat and air as I had missed it and had negotiated a price that possibly should have been less.

Do I resent this? No...because as with many things in my life, I learn more by my mistakes than with my successes. I will read "agent only" remarks more closely next time. Also, it is an opportunity to serve my clients well and hopefully, get referrals because I was willing to step up.