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Add to Your RE Position

2011-04-06T23:48:00.000-07:00

Add To Your RE Position BY: Joe DiPaola

When the stock market goes south, what do the market analysts tell you to do? View it as a buying opportunity, and add to your position! The same is true for the real estate market. If you believe that the real estate market is fundamentally sound, then look at this downturn as an opportunity to get in and buy cheap.

The big question has become: when will the real estate market hit bottom? No one can predict the bottom --- but why are you even trying to predict the bottom? Stock market analysts will tell you that you should be in the market for the long haul. The same is true for real estate. Waiting for the "bottom" of a downturn to buy is a difficult/impossible prediction task, unless you have a crystal ball. You wouldn't do that in the stock market---so why treat the real estate market differently?

There are very good reasons to buy now:

Reason 1: Shop for bargains. While the overall market may not stop sliding, certain regions/counties are great bargains now. In my opinion, California has some great buying bargains now. Buy and hold. You win in one of two ways in the long run: (1) demand returns; or, (2) inflation occurs. With the first event, you realize gains as prices rise with increasing demand. This is not likely to happen soon, but if you optimistically believe in a quick recovery, then anything is possible. With the second event, inflation causes your house price to rise, while at the same time you are paying your fixed rate mortgage (always get only a fixed rate mortgage) in cheaper dollars.

Reason 2: When the "bottom" to the real estate market finally comes, borrowing/credit will be extremely tight. As this article is being written, 30 year fixed interest rate purchase-money loans are still being offered in the 5% range. Why wait? Lenders have already started to tighten up standards for borrowers---but there is still time to get in now. It's seems obvious what the future holds for borrowing: (1) rates that can only go higher; (2) qualifying criteria that can only get tougher; and (3) fewer loans that will be 30-year fixed. So, unless you have cash, when the magical "bottom" eventually arrives, you might not be able to take advantage of it!

Reason 3: Improve your position. Trade up! In other words, sell your current house, and buy bigger. You are in for the long haul, right? So why not view this downturn as an oportunity to buy a bigger and better house. Yes, your current house will sell for less---but it will cost you less to buy into the larger home, too. And the difference could be in your favor. But be smart---don't buy first, and then expect your existing home to sell quickly--those days are long gone/ It could take months to sell -- even if you are aggressively priced. Get your current house in escrow before you commit to purchase your replacement home.

Reason 4: Builders are dumping any remaining inventory of new homes-- in apparent panic. Builder panic means incredible uopgrade packages and incentives for you. So, steal a new home from a builder.

The real estate market is slow and painful. A market "correction" was both necessary and expected. But Buyers shouldn't be afraid of it---they should welcome it! Just like the stock market, the "correction" should be viewed as an opportunity to add to or improve your housing postion.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $199 for a listing on the MLS. Visit us at http://www.1listing.com/ or call (707) 693-0100.

"Bottom-Feeder" Buyers

2006-11-21T08:41:00.000-08:00

In a Buyer's market, beware of "Bottom-Feeder" Buyers, who prey on distressed Sellers!
Please read the article below, which outlines a typical scheme:

Real Estate Agents And Others Busted In Scheme
Thursday, November 16, 2006
National Realty News (Redacted)

--------------------------------------------------------------------------------

OKLAHOMA CITY, OK - A Federal Grand Jury handed down a 14 count indictment charging that at least seven people were engaged in schemes to defraud various mortgage lenders by artificially inflating the sales prices of homes and submitting false loan applications.

The seven people referenced in the indictment included real estate agents, mortgage brokers, and home buyers.

The scheme involved potential home buyers, represented by certain agents, being told that if they agreed to purchase homes at inflated prices they would receive funds at closing under the guise of “repair costs” which would be for their personal benefit. Sellers of certain hard to sell properties negotiated the sales through the agents. Buyers would always offer more than the listed sales price.

The mortgage brokers facilitated the submission of fraudulent loan applications to lenders for buyers who could not qualify to purchase homes at the artificially inflated prices. False details of income and assets were supplied on the mortgage applications. In some cases Buyers would be provided with “down payment loans” which were to be repaid from the funds they received at closing.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Loan Fraud: Inflating the Purchase Price

2006-09-09T23:12:00.000-07:00

Loan Fraud: Inflating the Purchase Price

By: Joe DiPaola

The Buyers suggest the following transaction to the Sellers: (1) Buyers will inflate the property's value and offer a price significantly above asking price; (2) in return, Sellers will either credit the Buyers with large down paymnent monies, pay a large credit to Buyers for closing costs, or return cash to the Buyers after Close of Escrow. Should anxious-to-sell Sellers agree to the deal?

Absolutely Not!

Tile 18 US Code Section 1014 reads as follows:

"Section 1014. Loan and credit applications generally

Whoever knowingly makes any false statement or report, or
willfully overvalues any land, property or security, for the
purpose of influencing in any way the action of...a Federal land bank, a
Federal land bank association, a Federal Reserve bank...a Federal credit
union, an insured State-chartered credit
union, any institution the accounts of which are insured by the
Federal Deposit Insurance Corporation, the Office of Thrift
Supervision, any Federal home loan bank, the Federal Housing
Finance Board, the Federal Deposit Insurance Corporation, the
Resolution Trust Corporation...upon any
application, advance, discount, purchase, purchase agreement,
repurchase agreement, commitment, or loan, or any change or
extension of any of the same, by renewal, deferment of action or
otherwise, or the acceptance, release, or substitution of security
therefor, shall be fined not more than $1,000,000 or imprisoned not
more than 30 years, or both.... "

Federal law makes it illegal to artificially inflate the value of a property in connection with the making of a loan by a Federally-chartered bank or other Federal financial institution. Federal law makes it illegal to fail to disclose to the lender any/all monies or credits received by the Buyers; all information on the loan application and in loan-related documents must be truthful and complete. So if a Buyer, appraiser, real estate broker, or mortgage broker artifically inlates a property's value, or fails to disclose to the lender all cash/credits received by the Buyers, a crime has been committed. "Whenever the lender is not informed, in writing, of the true nature of a transaction, the transaction is illegal."

Even though Sellers may be stressed about their house not selling, that's no reason to be talked into an illegal scheme by disreputable Buyers. Any time a Buyer structures a "creative" deal involving an offer of more than the asking price and large cash back, bells and whistles should go off!

On the other hand, paying a credit to Buyers at close of escrow, or a giving commission rebate, are permissable as long as they are: (1) fully disclosed up front to all parties; (2) part of the written contract; (3) processed through escrow and disclosed to the lender; and (4) not part of a scheme where the property's value has been artificially inflated. Usually lenders will require, as part of their underwriting criteria, that the sum of all credits to Buyers not exceed 3% of the purchase price.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Home Loan Demand Sinks to Four-Year Low

2006-08-02T16:49:00.000-07:00

Home Loan Demand Sinks to Four-Year Low
By Julie Haviv
Wed Aug 2, 12:07 PM ET

NEW YORK (Reuters) - U.S. mortgage applications last week sank to their lowest level in over four years, an industry trade group said on Wednesday, further evidence that the once robust U.S. housing market is weakening.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity , which includes both refinancing and purchasing loans, for the week ended July 28 decreased 1.2 percent to 527.6 -- its lowest since May 2002 -- from the previous week's 533.8.

Drew Matus, senior financial economist at Lehman Brothers in New York, said that while the indexes are volatile on a weekly basis, they point to a sector that is softening.

"The data suggest that the housing market is cooling and it's cooling pretty substantially," he said. "The question is how much of an impact is it going to have on the economy and that's what we really don't understand at this point."

Matus expects U.S. economic growth in the second half of this year to be slowed by about three-quarters of a percentage point due to the direct effects of softer housing investment.

Nearly all recent measures of housing activity have pointed not just to a slowdown, but to a struggling sector. Sales are sliding, supply is swelling and price appreciation is abating.

Many analysts view the housing market as a key factor in Federal Reserve policy. With a slower housing market, growth in the United States should level off as well, which may set the stage for a halt to the Fed's two-year program of monetary tightening.

INTEREST RATES SLIDE

It was the third straight week that overall mortgage activity slumped, despite a decline in interest rates during that period.

Last week, borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 6.62 percent, down 0.07 percentage point from the previous week, and 0.19 percentage point below the 6.81 percent rate in the first week of July.

The MBA's seasonally adjusted purchase index tumbled for the third straight week, falling 3.3 percent to 376.2, its lowest since November 2003.

The purchase index, widely considered a timely gauge of U.S. home sales, is standing well below its year-ago level of 494.5, a drop of nearly 24 percent.

The group's seasonally adjusted index of refinancing applications increased 2.3 percent to 1,417.2, down 37 percent from a year ago when the index stood at 2,250.3.

The refinance share of applications increased to 37.0 percent from 35.6 percent the previous week. Fixed 15-year mortgage rates averaged 6.28 percent, down from 6.31 percent the previous week.

ADJUSTABLE SHARE AT 2-YEAR LOW

Adjustable-rate mortgages, known as ARMs, have been a refuge for cash-strapped consumers seeking to buy a home with low initial mortgage payments.

But with the U.S. Federal Reserve raising interest rates for two years straight, many of these homeowners will face a sharp increase in their monthly payments when their ARMs eventually reset.

As this transpires, an increase in loan delinquencies and home foreclosures is expected, which analysts say may weigh heavily on the housing market.

Rates on one-year ARMs decreased to 6.18 percent from 6.25 percent. The ARM share of activity fell to 27.8 percent of total applications -- its lowest since March 2004 --from 28.6 percent in the prior week.

After historically low mortgage rates fueled a five-year housing boom, most analysts agree that the market is cooling off from its record run.

"The cooling in housing could last for a year or two," said Matus. "But remember, even when mortgage rates were at 18 percent, people were still buying new homes, so there is a natural trend of demand for housing and it takes a lot more than what we have seen so far to push around that natural trend."

Signs of a cooling market have been more evident in the past few weeks as a deluge of data showed an excessive supply of homes, declining sales and falling prices.

The MBA's survey covers about 50 percent of all U.S. retail residential mortgage loans. Respondents include mortgage bankers, commercial banks and thrifts.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Stuck! Homes Sit Longer on the Market

2006-07-10T23:19:00.000-07:00

Stuck! Homes Sit Longer on the Market

It's taking longer to sell a house these days. Is this another sign that the boom is over?
By Les Christie, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- The tell-tale sign of a stagnating real estate market? When homes for sale start lingering - and that's exactly what real estate brokers and other industry watchers say they're seeing now.

The National Association of Realtors does not maintain national time-on-market figures. But inventory - the number of homes for sale - spiked 37 percent for the 12 months through April 30, the most recent data available.

Homes are staying on the shelf longer.

There are no official regional statistics for the time homes spend on the market. Here are estimates for local brokers.
Market Time on market Up from
Hanover, NH 125 days 65 days
Napa, CA 60 days 10 days
Phoenix, AZ 60 days 7 days
Miami, FL 35 days 20 days

At the same time, the rate of sales has slowed, so that there is now 6 months worth of supply, up from 4.1 months a year earlier.

All that supply means homes are sitting around longer and that sellers are asking more than buyers are willing to pay -- an indication that prices may have to come down.

"Sellers are in denial, and there is a rising disconnect with the buyers," said Jonathan Miller, a real estate appraiser in New York. "Until sellers get the message, you'll see a drop in the number of transactions."

Philadelphia has seen only a modest run-up in time-on-market from about 23 days last year to a still low 33 today. But the city's inventory has grown from nearly 21,000 last year to more than 36,000 today, a more than 50-percent jump.

"The sales pace is identical, but inventory is way up," says Harry Caparo, who runs Coldwell Banker Preferred in Philadelphia. "Time-on-market is going to start to rise."

Two markets

The cool or steady markets seem to be maintaining their equilibrium. David Barnes, a broker in Nashville, Tennessee, says time-on-market there has risen modestly this year to around 75 days from 65 days.

Carolyn Heimlinger, a broker in Des Moines, says the figure there is about 82 days, up from 75 days a year ago. Prices have flattened but not dropped. "Where I see concessions is new constructions," says Heimlinger. "Developers now offer rebates and free upgrades."

In Charlotte, N.C., Wallace Perry, president of Coldwell Banker United for the area, says time-on-market hasn't changed much, at 85 days to 90 days. "It's a very good sign that the market here is holding steady."

But in once superheated markets, things have gotten tougher.

In Hanover, New Hampshire, broker Ned Redpath reports a "drastic" increase in time-on-market.

All through the 2000s, New Hampshire averaged double-digit price increases and about 60 to 70 days on market. Now Redpath estimates average time-on-market at 125 days. He expects price changes to soon reflect that.

"The longer a listing is on the market," he says, "the more the price will come down."

In once white-hot Napa, California, Coldwell Banker broker Doug Fowler reports an increase to between 60 days and 90 days, where they once were a week or two. He thinks the long-term prospects for Napa are fine, but the area could see short-term adjustments.

Boston time-on-market has gone from 52 to 58 days, according to Susan Hsu, a RE/MAX broker.

In Phoenix, according to Valley Wide Homes broker Ron Wilczek, time on the market was often less than a week in 2005. Now it's approaching 60 days.

And in Miami, the time-on-market has lengthened to between 30 and 40 days from about 20 just a few weeks ago, according to Mario Tome, of Greater Miami Realty.

All this is evidence that the real estate boom may have run its course in many hot markets. At the very least, sellers will have to set their prices very carefully if they want to move their properties quickly and avoid long months of having their houses spending time-on-market.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

The Housing Bubble Has Burst In California

2006-07-08T09:07:00.000-07:00

The Housing Bubble Has Burst in California
By Joe DiPaola

Trying to sell your California home in the Summer of 2006? Actually, you are about a year too late. The following are my doom-n-gloom impressions of the California Home Resale Market, and the California economic outlook for the Summer and the rest of 2006.

Loss of Confidence in the Housing Market by Buyers:

Buyers have lost confidence in the housing market. Buyers seem unwilling to purchase, apparently because they do not believe that their savings/investment is protected. A $50,000-100,000 down payment on a $500,000 home can easily be wiped out a year from now by a rapidly declining market. So, a Buyer is only entering the market if the Seller has heavily discounted the price---enough to effectively insure against that kind of loss. Price, in my opinion, is the only thing driving the sale of a house in California today.

Increasing Panic By Sellers:

Yes, panic. Sellers are beginning to panic. They were used to seeing homes sold in 5-10 days. Now, even with signifiicant price reductions on their part, their homes are sometimes sitting unsold for 60 days or more.

Inventory is Building:

Inventory is building. In MLS regions where I do most of my selling, the ratio of homes coming on the market to homes being sold is 2.5:1 or 3:1, and growing.

Bottom-Feeder Buyers are Prowling:

From my own experience, I see "bottom-feeder buyers" on the increase---Buyers who mass-produce drastically low-ball offers to try to steal houses from Sellers. It only takes one distressed Seller out of 20-30 mass-produced offers for them to make a profit. And, if even one Seller accepts their offer, then it establishes a new comparable in that neighborhood, putting even more downward pressure on prices for everyone else trying to sell in that area.

There is Nothing Coming on the Near-Term Horizon To Improve the Situation

If anything, it is my opinion that conditions will worsen for Sellers. There is no bottom, or even temporary floor--in sight. The off-season is ahead. Demand continues to fall, while supply continues to increase. Interest rates continue to rise (although rates are, in my opinion, only a small part of the problem). Buyer and Investor confidence in the market continue to erode. Sellers are getting more desperate. The price reductions are getting bigger, and coming with greater frequency.

My California Home Sales Forecast

My California forecast for the rest of 2006 is for a much slower California economy, led by a rapidly declining housing market, and a declining stock market.

I am predicting a substantial decline in average resale home prices, and a substantial increase in time on the market.

It's hard to predict exact timing and duration, but I predict that the declines will generally occur in waves. For example, I see:
In Northern California:
- Sacramento and San Joaquin Counties declining rapidly
- Other Northern California Counties following suit
- San Francisco, San Mateo, Santa Clara declining more slowly
In Southern California:
-Riverside, San Bernadino, Orange and San Diego Counties declining rapidly
- Other Southern California Counties following suit
- Los Angeles County declining more slowly

I am also greatly concerned about the amount of "creative" home financing which has occurred wholesale over the past few years. A significant number of Sellers marginally qualified as Buyers themselves, have no equity in their homes, and/or have mortgage payments that are becoming increasingly difficult to make. The default/foreclosure rates could balloon---in direct proportion to the fall in housing prices.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Housing Prices Dropping, Buyers Waiting

2006-06-12T22:52:00.000-07:00

Housing Prices Dropping, Buyers Waiting
By Ellen Simon, AP Business Writer

(AP) -- Low-ball bidders, persnickety buyers and cancellations are now the rule in once-hot housing markets. Rising interest rates and sky-high home prices have cooled real-estate investment, "particularly in high-end markets in some juiced-up parts of the country where speculation was most rampant," said Mark Zandi, chief economist at Moody's Economy.com.

The record low interest rates and speculators that once drove prices higher are gone. Observers expect housing prices to stagnate or decline slightly, though a steep crash for housing prices is unlikely. As the market slows, both builders and buyers are getting used to the changes.

On a recent conference call, Ara K. Hovnanian, the president and chief executive officer of homebuilder Hovnanian Enterprises Inc. said that real estate investors "have largely pulled out."

"Investors were a bigger part of the market than many thought, including ourselves," said Hovnanian, whose company builds primarily in the Northeast. Would-be flippers are not only not buying new properties, they're selling what they already own, adding to the record number of homes already on the market.

Stocks in the sector have fallen dramatically. Hovnanian, for instance, is trading near $30 a share, down from its 52-week high of $73.40. Rival Toll Brothers Inc. trades around $27 a share, down from a 52-week high of $58.67.

Wachovia last week cut its rating on builders including Pulte Homes Inc., KB Home and DR Horton Inc., citing a sharper more rapid downturn in the market than expected.

Developers have started canceling projects. Plans were scrapped last week for a 4,400-unit Las Vegas condo resort complex that had been backed by actor George Clooney and nightclub owner Rande Gerber. The development company for the project said rising construction costs and slow sales forced it to rethink the plan.

With land prices falling in some areas, Hovnanian has walked away from about $5.6 million of deposits on land parcels it had options to buy, lopping 5 cents a share off the company's second-quarter earnings.

Buyers in some cooling markets know they're in the driver's seat. Agents say clients are putting in bids well below the sellers' asking prices, or simply waiting.

"Home prices have risen to where buyers can't afford to buy," said Keith Gumbinger vice president at HSH Associates, which publishes consumer loan information.

The national median existing home price was $223,000 in April, according to the National Association of Realtors. While that was a 4.2 percent increase from April 2005, the organization predicts that prices this year will rise only 0.8 percent.

Others aren't so sure they'll rise at all.

There was a 4-month supply of unsold homes on the market in April 2004; it rose to 5.8 months in April 2006, according to the Department of Commerce.

Part of the backlog is 128,000 unsold new homes, the highest level in history, said Mario Ricchio, housing analyst at Zacks Investment Research Inc.

"(H)omebuilders may not be able to push all this supply through the market," he said.

Contract signings for new homes are down sharply and cancellations are up.

"It's a more difficult market and our salespeople are no longer just taking orders; they have to sell," Hovnanian said on the call.

Most observers say housing prices will only slide dramatically if the Federal Reserve continues to raise interest rates.

The Fed's target short-term rate is currently 5 percent. If it passes 7 percent, "then things get very tricky," Zandi said. "Many home owners will have trouble making payments. We'll see significant mortgage credit problems develop."

By the end of 2004, 35 percent of buyers had adjustable-rate loans, up from 18 percent the previous year, according to the Federal Housing Finance Board's interest rate survey.

Those buyers could see a steep increase in their monthly payments if interest rates spike. That, in turn, could cause increased defaults and foreclosure sales at low prices.

"The higher mortgage payment may lead some overstretched owners to default on payments, adding supply to an already glutted market," said Ricchio at Zacks Investment Research.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Selling in a Depressed Housing Market

2006-06-06T07:05:00.000-07:00

Selling in a Depressed Housing Market
By Joe DiPaola

California Sellers: the housing boom is over. This is a Buyer's Market. You must be realistic in your expectations. You must be prepared for a difficult selling process.

The market focus is price. Correctly pricing is the most critical step now to selling your house. And that price is no longer based on your estimate of value---it is based on Buyer's estimate of value. And, what you "need" to net out of a sale bears little or no relationship to whether it will sell.

If you want to sell your house, there are several steps that you are going to have to take which you will not like. Be prepared to take them.

1. Price to beat your competition. Do a radius search of all active listings within a certain radius (0.25 or 0.5 miles) of your house. That is your competition. The larger the inventory of active listings within that radius, then the lower your price will have to be to attract Buyers. For example, if there are 15 homes within that radius which approximate the features and specs of your home, you will need to be priced among the 3-5 lowest to get meaningful Buyer traffic. Your home needs to offer more, and be priced less, than most if not all of your competition. It's about Buyers now--it's not about you.

2. Stay ahead of your competition when it comes to price. Watch what the competition is doing. Your price can get stale, and you won't know it unless you regularly check the competition. If price reductions by your competition take prices to new levels that are significantly lower that yours, then your Buyer traffic will disappear. You do not necessarily have to reduce your price to match the first big reduction. But if 25-30% of your competition reduces price, you need to reduce to stay competitive.

3. Offer concessions/credits. Most lenders will allow Sellers to offer up to 3% to Buyers at COE as credits for things like repairs, improvements, and/or non-recurring closing costs. Offer them. There are not as many Buyers in the market, and some of those Buyers may need closing assistance.

4. Lower your expectations with respect to Buyers. Buyers will be less qualified, offer less down payment, and demand more from Sellers. Be prepared for that. Do not automatically reject marginal buyers - instead, work with a marginal Buyer to help him/her qualify and purchase. Do not automatically reject contingent sales offers--instead, work with a contingent Buyer to give him/her an opportunity to sell and remove the contingency. Margiinal Buyers and contingent Buyers may ironically become "good" Buyers---because they are likely to try hard to suceed in the purchase, less likely to demand Seller concessions during escrow, and less likely to jump from escrow-to-escrow.

5. Except for painting, clean-up, basic repairs, and staging, do not spend money on alterations or additions. If you are getting ready to sell, make sure that your home is staged properly, is clean and presentable, and is freshly painted. But now is not the time to make alterations or additions, or to spend money on improvements that you always dreamed of making to your home. It's better to give Buyers a credit at close of escrow (COE), or to drop the price the equivalent amount.

6. Be prepared to make concessions during escrow. In a Buyer's Market, Buyers are much more likely to demand repairs or other concessions during escrow. Be prepared to negotiate, and to make repairs or give a credit.

7. Use a discount (1-1.5%), full-service realtor as your listing broker. While I am a discount broker, I am not telling you to use my service specifically. What I *am* telling you is that many times there is no difference in quality between a discount full-service broker and a traditional broker. The only difference is price. So, save yourself some commission money on the listing side.

8. Don't be desperate; don't buy into the notion that only the large, traditional brokerages have Buyers. If a large, traditional brokerage tells you that they have Buyers, and that they only show Buyers their own listings, then they have broken the law several ways. First, they have breached their fiduciary duty to their Buyers (if they even have any). Second, they have violated Department of Real Estate (DRE) rules. Third, they have committed a violation of the California Business and Professions Code. Brokers have a statutory and common law duty to show Buyers all possible listings which might fit the Buyer's criteria. Brokers who use improper and illegal tactics to trap Sellers into listing with them are using a "pocket listing" strategy to try to "double-end" the deal. Remember, in a down-turning market, brokers have less sales, too---so they get more desperate to "double-end" each sale. Large, traditional brokers have certain things to offer Sellers---but use of illegal and improper tactics is not one of them.

9. Offer a healthy (2.5 to 3%) co-operating broker commission. Now is NOT the time to try to save on the co-operating (Buyer's) broker commission. While I recommend that you save money on the listing (Seller's) broker side, I do not recommend that you cut the co-operating (Buyer's) broker commission. You need Buyers---and you want to encourage agents to bring them to you. Cutting the co-operating broker commission will only hurt your chances. Brokers are not supposed to look at the co-operating broker commission rate, and are supposed to show Buyers all properties that fit their buying criteria. But the sad reality is that some agents will steer Buyers away from listings where the co-operating broker rate is low, because it means less money for them.

In otherwords, I recommend using a discount, full-service broker on the listing (Seller's) side, but to NOT cut the co-operating (Buyer's) broker commission.

10. If given a choice, close escrow in the shortest time reasonably possible (i.e. 30 days) . If you have a 60 or 90 day escrow, then that's 60 or 90 days during which prices can drop further, and during which Buyer can have a change of heart and try to jump escrow.

11. Be patient--your house will be on the market for quite a while. The average selling time is no longer 7-10 days---it is now 45-60 days, and getting longer. It will take patience and nerves of steel on your part to get through the process.

12. Don't argue with Buyers over little things. Don't argue about little things with Buyers--that's being penny-wise but pound-foolish.

13. Don't waste your money on newspaper ads or special promotions. Make sure that your property is correctly listed on the MLS, and that the listing is also populating to MLS secondary and IDX sites with full address. Put your listing on free classified internet sites with full address (Craigslist, Oodle, Trulia, etc.). But don't spend money on traditional advertising (newspapers, magazines, etc.). Instead, price a little lower--every little bit helps.

14. If you are thinking about re-financing, then do so before you list. Some lenders will not re-finance a property that is currently being offered for sale on the MLS. Even if a lender will re-finance while the property is actively listed, doing so just "invites" a pre-payment penalty from the lender. So re-finance before you list. And, make sure that you have no pre-payment penalty.

If you are a prospective California Seller and would like further help or advice free of charge, then you can call me at (707) 693-0400. Please note that I respect other agents' listings, and pursuant to Department of Real Estate rules I will not talk to a Seller in an existing listing contract.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Real Estate Transfer Disclosure Statement (TDS)

2006-05-29T04:04:00.000-07:00

Real Estate Transfer Disclosure Statement

By: California Association of Realtors Legal and Board Services Department

Question:
What is the Real Estate Transfer Disclosure Statement?

Answer:
A Real Estate Transfer Disclosure Statement ("TDS") is a form prescribed in Civil Code ss 1102.6. Sellers of residential property with 1-4 units have been required to furnish this completed form to prospective purchasers. Sellers and licensees may comply with this law by utilizing C.A.R. Form TDS-11.

The Real Estate Transfer Disclosure Statement describes the condition of a property and, in the case of a sale, must be given to a prospective buyer as soon as practicable and before transfer of title. In the case of a transfer by a real property sales contract (as defined in Civil Code Section 2985) by a lease coupled with an option to purchase, or by a ground lease coupled with improvements, the TDS is to be delivered before the execution of any of the foregoing.

The seller and any broker(s)/agent(s) involved are to participate in the disclosures. If more than one broker/agent is involved, the broker/agent obtaining the offer is to deliver the disclosures to the prospective buyer unless the seller instructs otherwise.

Delivery to the prospective buyer of a report or opinion prepared by a licensed engineer, land surveyor, geologist, structural pest control operator, contractor, or other expert (dealing with matters within the scope of the professional’s license or expertise) may limit the liability of the seller and the real estate broker(s)/agent(s) when making required disclosures. The overall intention is to provide meaningful disclosures about the condition of the property being sold or transferred. (Cal. Civ. § 1102.4)

Question:
What types of real estate transactions are covered by this disclosure law?

Answer:
These disclosure requirements apply to transfers by sale, exchange, installment land contract, lease with an option to purchase, option to purchase, or ground lease coupled with improvements, of real property (or a residential stock cooperative) improved with 1-4 dwelling units.

Question:
Are there any transactions involving one to four units property for which the seller is exempt from the necessity of providing a Real Estate Transfer Disclosure Statement?

Answer:
Yes. Certain types of transfers are specifically exempted in Civil Code ss 1102.1. They are as follows:

Transfers requiring a public report pursuant to ss 11018.1 of the Business and Professions Code and transfers pursuant to ss 11010.8 of the Business and Professions Code where no public report is required.

Transfers pursuant to court order (such as probate sales, sales by a bankruptcy trustee, etc.).

Transfers by foreclosure (including a deed in lieu of foreclosure and a transfer by beneficiary who has acquired the property by foreclosure or deed in lieu of foreclosure).

Transfers by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust.

Transfers from one co-owner to one or more other co-owners.

Transfer made to a spouse or to a child, grandchild, parent, grandparent, or other direct ancestor or descendant.

Transfers between spouses in connection with a dissolution of marriage or similar proceeding.

Transfers by the State Controller pursuant to the Unclaimed Property Law.

Transfers or exchanges to or from any government entity.

It should be noted, however, that a real estate licensee still has a duty to conduct a reasonably competent and diligent visual inspection of accessible areas in almost all of the above situations. In other words, although the seller is exempted from having to provide a disclosure statement in certain situations, a licensee must conduct this inspection, and disclose the results of the inspection, in almost all residential transactions involving one to four units.

Question:
Must a Transfer Disclosure Statement be provided to a purchaser of a new residential property that is not part of a subdivision, such as a new home being built on a lot?

Answer:
Yes. The disclosure statement must be provided to purchasers of these types of new homes.

Question:
Does the Real Estate Transfer Disclosure Statement requirement apply to "For Sale by Owner" transactions?

Answer:
Yes. The law applies even if there is no real estate licensee involved in the transaction.

Question:
Who must fill out this Real Estate Transfer Disclosure Statement?

Answer:
The seller must fill out sections I and II of the form. If any real estate licensees are involved in the transaction, the listing and selling agents usually fill out sections III and IV, respectively, based on the results of the careful visual inspections they have conducted.

Question:
On 1-4 unit transactions where the seller is exempt from providing the Transfer Disclosure Statements, but where the real estate licensees involved are required to conduct an inspection, should the licensees provide the buyer with a completed TDS form?

Answer:
No. The real estate licensees should never fill out the seller's portion of the Transfer Disclosure Statement. If they wish to, any agent involved in the transaction may disclose the results of his/her inspection on page 2 of the TDS form, or he/she can make the disclosure on a separate piece of paper.

Question:
Are the real estate agents responsible for checking and commenting on the accuracy of the seller's portion of the TDS form?

Answer:
No. The agents do their own inspection and disclose their findings, on the TDS or elsewhere, whether or not their findings agree with the seller's portion.

Question:
What about landlords or relocation companies who have never lived in, or even seen the inside of their residential property (1-4 units)? Are they exempted from having to fill out the disclosure statement?

Answer:
No. A seller in this situation must fill out the disclosure statement to the best of his/her ability.

Question:
Who is responsible for delivering the disclosure statement to the buyer?

Answer:
If two or more real estate licensees are acting as agents in the transaction, the selling agent must deliver the statement to the buyer, unless the seller has given other written instructions for delivery. If only one licensee is involved, that licensee must deliver the statement to the buyer. If no real estate licensees are involved in the transaction, the seller is responsible.

Question:
When does the disclosure statement have to be delivered to the buyer?

Answer:
If possible, it would be preferable to provide the completed disclosure statement to the buyer prior to his/her signing the offer to purchase. If the buyer receives the disclosure statement after execution of his/her offer to purchase, the buyer will have a three or five day period to cancel the transaction.

Question:
When should the prospective buyer of a new home, that is not exempt from the TDS requirement, receive the completed form?

Answer:
The buyer should get the TDS before he/she enters into the contract to purchase the home, even if it has not yet been built. In other words, no special rule applies.

Question:
Does a buyer have a right to cancel the transaction when the Transfer Disclosure Statement is furnished after the buyer has signed the offer to purchase?

Answer:
Yes. "If any disclosure, or any material amendment of any disclosure . . . is delivered after the execution of an offer to purchase, the transferee (buyer) shall have three days after delivery in person or five days after delivery by deposit in the mail, to terminate his or her offer by delivery of a written notice of termination to the transferor (seller) or the transferor's (seller's) agent." (Civil Code ss 1102.2.)

Question:
What if after the disclosure statement is furnished to the buyer but before the close of escrow, an error or omission in the disclosure form is discovered?

Answer:
The Real Estate Transfer Disclosure Statement may be amended, at any time, in writing, by the seller or his/her agent. However, if any material amendment to the disclosure statement is delivered to the buyer after he/she is already obligated under the contract, he/she has three days, if delivered in person, or five days, if deposited in the mail, to rescind the contract. In other words, if the statement is materially amended at any time after the execution of the contract, the buyer has a right to back out of the transaction.

Question:
Is it mandatory that a Real Estate Transfer Disclosure Statement be provided to a buyer in applicable real estate transactions, or can a buyer waive his/her right to receive the form?

Answer:
The law states that the seller must provide the disclosure statement to the buyer. This requirement can not be waived.

Question:
What happens if the seller refuses to fill out a Real Estate Transfer Disclosure Statement?

Answer:
The statute provides that if the seller willfully or negligently violates any of its provisions, the seller will be liable to the buyer for any actual damages which result from such a violation. If the licensee responsible for delivering the disclosure statement cannot obtain it, that licensee must advise the buyer in writing of the buyer's right to receive the statement.

Question:
If a seller gives this form to the buyer, does that mean that he/she does not have to provide other disclosure statements?

Answer:
No. All other disclosures mandated by local, state, or federal law must still be provided to the buyer, in addition to the Real Estate Transfer Disclosure Statement.

Question:
What is the liability under this law of a real estate licensee or seller who fails to comply with the disclosure requirements, either by making intentionally inaccurate statements or omissions, or by failing to deliver it promptly.

Answer:
The Real Estate Transfer Disclosure law provides that anyone "who willfully or negligently violates or fails to perform any duty prescribed by . . . (this law) . . . shall be liable in the amount of actual damages suffered by a transferee (buyer)."

Question:
Under this disclosure law, can a closed transaction be invalidated for failure to comply?

Answer:
No. The Real Estate Transfer Disclosure law specifically states that a completed transaction will not be invalidated by non-compliance. However, failure to comply can result in liability.

Question:
Does the seller have to provide a TDS if he/she sells the property "as-is"?

Answer:
Yes. There is no exemption to providing the disclosure statement for an "as is" transaction.

Question:
What is the seller's responsibility when the TDS states that an item is "not working," while the purchase contract warrants that it is operable? For example, let's say the seller states in the Transfer Disclosure Statement that the dishwasher is not functioning. On the other hand, in the deposit receipt the seller warrants that "all built-in appliances are in working order." Is the seller responsible for fixing the dishwasher?

Answer:
Yes. The seller is responsible for living up to his or her contractual obligations. The Transfer Disclosure Statement is not part of the contract; its only function is to provide information to the buyer to enable the buyer to decide whether or not to go through with the transaction. Even if the buyer decides not to cancel based on the TDS with some negative disclosures, the buyer does not waive any of his/her rights under the purchase contract.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

U.S. Housing Boom Over

2006-05-19T10:46:00.000-07:00

U.S. Housing Boom Over

By Associated Press 5/19/06

Former Federal Reserve Chairman Alan Greenspan said Thursday that Americans' consumption could taper off somewhat now that the U.S. housing market's "extraordinary boom" has ended.

Greenspan, in his first public U.S. speech since retiring in January from a storied tenure leading the Fed, predicted there is no danger of a total collapse of the housing market.

His comments come on speculation the Fed could pause its cycle of rate hikes as a housing slowdown feeds a cooling of the U.S. economy.

"This has been quite an extraordinary boom," Greenspan said in remarks at the Bond Market Association's 30th anniversary dinner in New York. "Home sales are off, applications are off, everything is going in the same direction. The boom is over, and you can say that with a fairly strong degree of confidence."

Greenspan said he doesn't see home prices falling on a national basis, but instead in certain areas of the country. He warned reduced access of Americans to equity loan extraction would have an economic impact, which has had an "important effect" in stimulating the economy.

The housing market has been one of the economy's biggest economic drivers, racking up record-high sales five years in a row. Rapid appreciation in home prices has helped power consumer spending, boosting the economy.

Federal Reserve officials — including current Chairman Ben Bernanke — came out swinging Thursday in a series of speeches to assuage inflation fears. The Fed, which boosted rates last week for the 16th straight time to 5 percent, has left its options open in terms of future rate decisions.

Greenspan cautioned that it was too early to determine how skyrocketing energy prices will affect consumer spending or lead to inflation. He pointed out that non-financial and non-energy company profit margins were not being suppressed by higher energy costs, and that higher prices at the pump weren't dramatically curtailing driving habits.

"One out of 7 barrels of world oil consumption is consumed on American highways," he said. "People apparently don't change the amount of mileage they drive, they change the vehicles they drive. That of course creates lower consumption ... it eats into purchasing power of other things."

His comments come as Wall Street was spooked by inflation worries after a jump in energy costs pushed U.S. consumer prices up sharply last month, according to a government report. Concerns that rising inflation would send rates higher sent the stock market sharply lower Wednesday.

Greenspan also weighed in on Social Security reform, a subject he knows well after leading a commission named after him in the late 1980s for President Ronald Reagan and Democratic Speaker of the House Tip O'Neil. He believes the funding shortage for Social Security "will get resolved," but identified the real fiscal problem facing the federal government as Medicare.

The former U.S. central bank chief said there is a strong probability the government will not be able to fulfill its promises to those tapping the retirement health-care program after the Baby Boom generation. This could trigger both higher debt and interest rates, he said.

"We probably at this stage under existing law have already committed ourselves to a probability which already is uncomfortable," he said. "It's an obligation of government to promise only what government can deliver."

He called the problem a "political" dilemma, and one that can be fixed while avoiding a crisis. With that, Greenspan said he had no intention of leading another commission to delve into the problem.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

California Real Estate Disclosure Forms

2006-05-08T00:38:00.000-07:00

California Real Estate Disclosure Forms
By Joe DiPaola

The following are the "property condition" and "proximity" real estate disclosure documents used by Realtors in a typical residential real estate resale transaction. For the most part, the forms refer to California Association of Realtor (CAR) Forms:

CAR Form SA Seller's Advisory (2 pages)
CAR Form BIA Buyer's Inspection Advisory (2 pages)
CAR Form HID For Your Protection Get A Home Inspection (1 page)
Car Form TDS Real Estate Transfer Disclosure Statement (3 pages)
CAR Form DBD Data Base Disclosure (1 page)
CAR Form WHS Water Heater Statement of Compliance (1 page)
CAR Form SDS Smoke Detector Statement of Compliance (1 page)
CAR Form SSD Supplemental Statutory and Contractual Disclosures (1 page)
CAR Form SPQ Seller Property Questionnaire (3 pages)
CAR Form SBSA Statewide Buyer and Seller Advisory (10 pages)
CAR Form FLD Lead Based Paint and Lead Based Hazards Disclosure (2 pages)
CAR Form MCA Market Condition Advisory (2 pages)
CAR Form RGM Radon Gas and Mold Notice and Release Agreement (1 page)
Earthquake Hazards Report (1 page)
Earthquake Booklet: "Home Owners Guide to Earthquake Safety and Environmental Hazards" (54 pages)
Booklet Receipt: "Home Owners Guide to Earthquake Safety and Environmental Hazards"
(1 page)
Preliminary Title Report (from Title Company)

Sellers will want to make the following additional physical condition disclosures, where applicable:
A Pet Damage and Pet Odor Disclosure
An Asbestos Disclosure
An ABS Pipe Disclosure
A Carbon Monoxide Disclosure
A Geological/Soils Disclosure
A Survey/Boundary Disclosure
CAR Form MHTDS Manufactured/Mobile Home Transfer Disclosure Statement (3 pages)
CAR Form HOA Homeowner Association Information Request (2 pages)

To save time and money, I recommend using a professional service to prepare a Natural Hazards Disclosure Report for Seller, such as:
Geo-TechSolutions.com
CalStateReports.com

Depending on the contract negotiated between the parties, Sellers can become contractually obligated to provide a Pest Control Inspection Report, Section 1 and/or Section 2 Clearance (CAR Form WPA Wood Destroying Pest Inspection And Allocation of Cost Addendum). Realtors/Sellers can check the license status of Pest Control Companies by going to the California Structural Pest Control Board at: http://www.pestboard.ca.gov/license.htm

This list is for educational and informational purposes only, and is not meant to be exhaustive. There may be other disclosures required in a transaction, but this list describes the forms that are typically required to disclose the physical condition of the property and/or its proximity to adverse conditions in a residential real estate resale transaction. Please consult with a Realtor or Attorney about your transaction.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

What Are Flood Zones?

2006-05-04T13:49:00.000-07:00

WHAT ARE FLOOD ZONES?

Flood zones are land areas identified by the Federal Emergency Management Agency (FEMA). Each flood zone describes that land area in terms of its risk of flooding. Everyone lives in a flood zone -- it's just a question of whether you live in a low-, moderate- or high-risk area.

ZONE EXPLANATION

X
An area that is determined to be outside the 100- and 500-year floodplains

A
Areas of 100-yr flood; base flood elevations and flood hazard factors not determined.

AO
Areas of 100-yr shallow flooding where depths are between one (1) and three (3) feet; average depths of inundation are shown, but no flood hazard factors are determined

AH
Areas of 100-yr shallow flooding where depths are between one (1) and three (3) feet; base flood elevations are shown, but no flood hazard factors are determined.

A1-A30
Areas of 100-yr flood; base flood elevations and flood hazard factors determined.

A99
Areas of 100-yr flood to be protected by flood protection system under construction; base flood elevations and flood hazard factors not determined.

B
Areas between limits of the 100-yr flood and 500-yr flood; or certain areas subject to 100-yr flooding with average depths less than one (1) foot or where the contributing drainage area is less than one square mile; or areas protected by levees from the base flood.

C
Areas of minimal flooding.

D
Areas of undetermined, but possible, flood hazards.

V
Areas of 100-yr coastal flood with velocity (wave action); base flood elevations and flood hazard factors not determined.

V1-V30
Areas of 100-yr coastal flood with velocity (wave action); base flood elevations and flood hazard factors determined.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Getting the Most From Your Home Inspection

2006-04-25T03:36:00.000-07:00

Getting the Most From Your Home Inspection
By Michele Dawson

***
Some 77 percent of all home sales in the United States last year involved a home inspection, according to a study by the American Society of Home Inspectors (ASHI) and the National Association of Realtors.

"It's clear from the study that more people are recognizing the importance of home inspections," said John Ghent, president of ASHI, the largest non-profit professional organization for home inspectors.

By following these pointers, you can maximize your home inspection benefits:

Know what it includes: Heating and central air conditioning systems, interior plumbing, electrical systems, the roof, attic, visible insulation, walls, ceilings, floors, windows, foundations, and basements are among the key inspection points. Inspections may also include appliances and outdoor plumbing.

Know what an inspection does not include. Inspections for a typical home require several hours, but they do not concern every dent and scratch. For details, speak with any inspector you are considering.

If you're selling, get a home inspection before you put your home on the market. This can avoid surprises down the road when potential buyers have the home inspected by their own professional. If major or potential problems are detected, they can be repaired before you try to sell.

Hire a qualified inspector. Try to get referrals from friends or anyone you know who has had a satisfactory experience with a home inspector. Also, look for affiliations with organizations like the American Association of Home Inspectors (AAHI) or ASHI. Both groups require its members to be certified, meet professional qualifications, and adhere to specific business ethics.

Be cautious about hiring someone who may have a conflict of interest or may not be impartial. For example, a retired roofing contractor who now does home inspections to make a few extra dollars may find a problem with -- you guessed it -- the roof. This person could take advantage of your need to find someone to make repairs in a hurry, leaving you to wonder if the repairs were needed.

Include a proper home inspection contingency in your purchase agreement. This is important. If an inspector finds that the home can't survive another rainy season without $20,000 worth of roof repairs, you'll want to have the option of bailing out of the deal, asking the seller to make the repairs, or lopping the appropriate amount off the purchase price.

Be there for the full inspection. Spending a few hours with the inspector could prevent headaches and save time in the future. As the home inspector examines the various systems and components of the home, ask him or her to explain what problems may be encountered down the road, what signs to look for, what repairs and replacements are likely to cost, and how to prevent big maintenance bills.

Try to learn how things work and how to maintain systems and equipment during the inspection process. The inspector may also point out little flaws or oddities that don't measure up to being mentioned in the report, but may warrant watching.

In the case of new construction, consider three inspections: At the time the foundation is first poured, when walls are up but not closed, and at the walk-through before closing. Yes, this is expensive, but in the context of a long-term investment -- and a big investment -- such as a home, the cost is easy to justify.

Once the inspection is complete, the inspector will write a report. If major problems are found, then you have the knowledge to better guide your negotiations. And, if your new home receives stellar findings, then you'll have the peace of mind that will be a welcome relief once you're settled into your new home -- priceless!

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Understand "Presentation"

2006-04-25T03:31:00.000-07:00

Understand "Presentation"
By M. Anthony Carr

***
During a real estate course I took years ago, the trainer used a fantastic example of how human nature dictates the selection process. She produced two $1 bills. One was fresh from the bank. You almost had to check to make sure you didn't have a second one pasted to the back it was so new. The second bill looked as if it had been gone through Desert Storm, been laundered several times and was nearly disintegrated.

She went to someone in the front row and asked, "Which one do you want?" The obvious answer was the clean, crisp, freshly printed bill. Why? The value of both was the same. They both are legal tender in any American retail outlet around the country and several countries around the world. But -- the clean one always got selected.

The requirements to get top dollar have and always will be the same:

Clean the house. Thoroughly -- before you put it on the market. If it's not clean, don't even consider putting it on the market. You will lose a contract just because of dust and scum.

Paint the interior. Paint is cheap, but cleans up any dwelling place.

Declutter. Get rid of everything you don't need to live on a day-by-day basis. You don't need your seasonal decorations. The kids can do without half their toys. You can probably live without a third of your furniture. Get it into storage or a friend's house. Space adds value.

Have handouts. With more properties on the market, you need to make sure your house is memorable -- with a good marketing plan that includes a flier the buyers can take with them.

Price right. Look at all the parameters of your house, not just the bedroom and bath count. One of the houses above is sitting on a half-acre lot with a 1-car garage and built in the same year as it's counterpart listed for about the same mount of money, but which has only half as much land and no garage -- not even a carport -- but they're in the same area. (This is mostly the Realtor's job, but a stubborn seller may cause an over-priced listing.)

When placing your house on the market, keep in mind it's more involved and requires more work than selling a used car. We're not talking a difference of a couple hundred dollars on price here. Missing the mark on price and condition could cost you tens of thousands of dollars.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Cashing In on a Second Home in Mexico

2006-04-20T14:44:00.000-07:00

“Cashing In on a Second Home in Mexico”

How to Buy, Rent and Profit from Property South of the Border
By Tom Kelly and Mitch Creekmore

Mexico has it all . . . From lush and tropical mountainous municipalities perched on brilliant bays, to miles of white sand beaches merging into iridescent azure water, to quaint European-style houses lining cobblestone streets in picturesque villages and towns, our Spanish-speaking neighbor to the south is abundantly rich in geographic and natural diversification.

Cashing In on a Second Home in Mexico (Original Paperback, $19.95, ISBN 0-9770920-0-3) is a straightforward, informative guide that helps potential second home buyers, investors and renters easily understand the nuances of Mexican property, mortgage history and closing process, plus:

Discover how to safely hold property within Mexico’s “restricted zone”
Explore dynamic new locations South of the Border
Collect strategies on researching a Mexican property for purchase
How the fidecomiso, or Mexican trust, provides new ownership opportunities
Explore creative avenues of financing your dream retreat
Find innovative ways of attracting desirable, qualified renters
Understand tax benefits, ramifications of a Second Home in Mexico

Written by Tom Kelly, a nationally syndicated real estate columnist and talk show host, and Mitch Creekmore, senior vice president of Stewart International and one of the world’s foremost authorities on Mexican transactions, Cashing In on a Second Home in Mexico leads all consumers who are now working for a safe and profitable getaway property through the maze of options and possibilities of obtaining Mexican property. This useful book especially targets the Baby Boom generation - the largest, healthiest and wealthiest to enter its senior years in history – plus those in the real estate industry who assist them.

Al Heavens, longtime Philadelphia Inquirer real estate writer whose stories appear in newspapers and websites around the country, wrote “this book is as important to the first-time American second-home buyer as the Boy Scout Manual is to the tenderfoot.’’
Heavens, president of the National Association of Real Estate Editors, went on to write “it's true that much of this information can be found on the Internet. The difference is, of course, that Kelly and Creekmore have the kind of expertise that will help you sift through all of that information and make the kind of informed decision that will allow you to make a safe and sane investment in Mexican real estate.”

Cashing In on a Second Home in Mexico also contains real stories of how real people attained their dream of owning Mexican property. It includes helpful maps of some of the most popular areas, preparation checklists, capsule outlines of specific regions plus helpful websites and English-Spanish language tips and terms.

ABOUT THE AUTHORS

Tom Kelly is a nationally syndicated newspaper columnist and radio talk show host. He served The Seattle Times readers for 20 years - several as real estate editor – and his work now appears in The Los Angeles Times, The Houston Chronicle, St. Louis Post Dispatch, The Oakland Tribune, Kansas City Star, Louisville Courier-Journal and Des Moines Register plus more than two dozen other newspapers.

He is the author of “The New Reverse Mortgage Formula” (John Wiley & Sons) and co-author of “How a Second Home Can Be Your Best Investment” (McGraw-Hill) written with John Tuccillo, former chief economist for the National Association of Realtors.

In 2005, Tom’s award-winning radio show “Real Estate Today” began its 12th year on the CBS affiliate in Seattle. The show is syndicated by Business Talk Radio to approximately 40 domestic markets and airs on 450 stations in 160 foreign countries via Armed Forces Radio.

Mitch Creekmore is senior vice president and director of international business development for Stewart Information International, a world leader in title insurance and other real estate information services. He has been a licensed Texas real estate broker for more than 20 years. He has authored numerous articles on the Mexican system of real estate conveyance, Mexico’s foreign ownership requirements including Mexican land title matters, subdivision development procedures, escrow and tax considerations, ejido land and financing issues.

Cashing In on a Second Home in Mexico is distributed to the retail book industry by Partners Publishers Group, Inc.

Crabman Publishing
P.O. Box 4719
Rolling Bay, WA 98061

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Foreclosures Soar 63 Percent Over Last Year

2006-04-19T06:59:00.000-07:00

Foreclosures Soar 63 Percent Over Last Year
From RIS Media

RealtyTrac(TM) (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its March 2006 U.S. Foreclosure Market Report, which shows 101,597 properties nationwide entered some stage of foreclosure in March, a 13 percent decrease from the previous month but a 63 percent increase from March 2005. The report shows a March national foreclosure rate of one new foreclosure for every 1,138 U.S. households.

RealtyTrac publishes the largest and most comprehensive national database of pre-foreclosure and foreclosure properties, with more than 600,000 properties from more than 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate, AOL Real Estate and Knight Ridder Online.

"After rising more than 20 percent during each of the first two months of the year, foreclosure numbers experienced a fairly sharp correction in March," said James J. Saccacio, chief executive officer of RealtyTrac. "We saw a similar drop in March of '05, followed by four consecutive months of increases. Many buyers and investors typically start looking for properties in the spring, and that could have provided distressed homeowners a better chance of selling their properties to avoid default or foreclosure."

Colorado's foreclosure rate leapfrogged to highest among the states thanks to a 31 percent increase in new foreclosures from the previous month. The state reported 5,392 properties entering some stage of foreclosure in March, a foreclosure rate of one new foreclosure for every 339 households -- more than three times the national average.

After spending the two previous months as highest in the nation, Georgia's foreclosure rate dropped to second highest behind Colorado thanks in part to new foreclosures decreasing 19 percent from the previous month. The state reported a total of 7,656 properties entering some stage of foreclosure in March, a foreclosure rate of one new foreclosure for every 404 households and a 77 percent year-over-year increase.
With a total of 4,933 properties entering some stage of foreclosure in March, Indiana's foreclosure rate -- one new foreclosure for every 512 households -- ranked among the nation's five highest for the third month in a row despite a 17 percent decrease from the previous month.

Utah foreclosures increased 21 percent from the previous month and replaced Ohio, where new foreclosures dropped 52 percent, among the states with the five highest foreclosure rates. Utah reported a total of 1,437 properties entering some stage of foreclosure in March, a foreclosure rate of one new foreclosure for every 535 households and a 32 percent year-over-year increase.

Michigan's foreclosure rate dropped from second to fifth place among the top state foreclosure rates thanks to a 25 percent decrease in new foreclosures from the previous month. The state reported 7,727 properties entering some stage of foreclosure in March, a foreclosure rate of one new foreclosure for every 547 households and more than three times the number reported in March 2005.

Texas documented the most new foreclosures of any state for the fourth month in a row even though foreclosures there decreased for the second consecutive month. The state reported a total of 11,951 properties entering some stage of foreclosure, a foreclosure rate of one new foreclosure for every 674 households -- 1.7 times the national average.

California reported 11,073 properties entering some stage of foreclosure in March, the second most of any state, and the state's foreclosure rate registered slightly above the national average thanks to a 22 percent increase from the previous month.

Florida foreclosures decreased 7 percent from the previous month and 12 percent from March 2005, but the state still reported 9,283 properties entering some stage of foreclosure in March -- the third most of any state and a foreclosure rate 1.5 times the national average.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Google and Craigslist in RE Market

2006-04-10T20:31:00.000-07:00

Google and Craigslist May Weaken
Realtors' Hold on Home Listings

By James R. Hagerty
From The Wall Street Journal Online

Craigslist.com and Google.com, two Web sites that have fundamentally altered the way consumers buy a broad range of products, are emerging as places to shop for residential real estate, a development that in the long term could weaken Realtors' hold on home selling.

Listings of real estate for sale on Craigslist, a popular Web site featuring free classified ads, rose to 335,126 in March, more than triple the level of a year earlier. Google Inc., meanwhile, is testing a tool to help users sort through listings of homes for sale. Several more specialized sites launched in the past year -- including Trulia.com, Oodle.com and Propsmart.com -- offer free access to substantial numbers of listings.

While their real-estate ventures are still relatively small, sites like Google and Craigslist have begun reshaping the advertising world as they offer a potent alternative to ad spending on traditional media such as newspapers and TV. Craigslist in particular has become a popular place to post classified listings for rental apartments, child care, jobs, furniture and personals. With household brand names and huge numbers of users -- Google had 89 million visitors in February, according to research firm NetRatings Inc. -- Google and Craigslist have the potential to draw large numbers of home-sale listings.

The proliferation of real-estate sites comes as brokers are under pressure from several directions. As home sales slow, an increasing number of discount brokers are vying for customers. In addition, the U.S. Justice Department and the Federal Trade Commission are investigating industry practices that they say deter competition.

Commissions on home sales have declined slightly over the past decade and now average around 5.1%, according to estimates from Real Trends, an industry publication.

The Web-site companies say they don't aim to revolutionize real-estate brokerage and indeed are working to cooperate with brokers in many cases. But the growth of the sites may embolden more consumers to try selling their homes themselves and, when they do use agents, to reduce their reliance on them. Abdullah Yavas, a real-estate professor at Pennsylvania State University, says these sites may encourage an "unbundling" of agents' services, with consumers paying for only the services they want, rather than a whole package. For instance, a consumer might list a home on Craigslist and arrange showings, but still hire an agent -- for a lower commission -- to help with negotiations or guide the paper work.

Craigslist's chief executive, Jim Buckmaster, sees a move toward even more public access to information about homes for sale. The information "isn't something that should be controlled or owned by brokers," Mr. Buckmaster says. "It's going to eventually happen" that all the brokers' listings become publicly available. "You can mark that down as done. It's just a matter of when."

Unlike buying books or airplane tickets, real-estate transactions are complicated, so most people still want agents' help to complete the process of buying or selling homes. For buyers, the new home-shopping sites promise to further erode the information advantage enjoyed by real-estate agents over consumers. Most of the new sites offer listings of homes being sold directly by owners, as well as those being sold through agents. (Trulia.com includes only agent listings.) That contrasts with the policy of Realtor.com, the popular real-estate Web site owned by the National Association of Realtors. Realtor.com excludes homes for sale by owners.

"As a buyer, you want to see everything that's available," not just the homes represented by agents, says Ron Hornbaker, co-founder and president of Propsmart Inc., Kansas City, Mo., which owns Propsmart.com.

Shoppers can't rely on agents to tell them about for-sale-by-owner offerings, because agents often don't earn commissions for introducing buyers to these properties and find such transactions more difficult to complete. Agents also may fail to tell potential buyers about homes being sold through discount brokers.

There are already a host of specialized for-sale-by-owner Web sites, but none of them can promise one-stop shopping. ForSaleByOwner.com, one of the biggest such sites, estimates that it has 10% of all owner listings. While Craigslist and Google won't be comprehensive either, their sheer size will likely attract more listings. Another attraction for sellers: They can post information on the new sites free, while some specialized FSBO sites charge fees.

Realtor.com still has a formidable advantage, with about three million listings -- around 10 times the number on Craigslist. Realtor.com gets listings from nearly all multiple-listing services -- the local firms that compile listings from brokers and are generally owned by local Realtor organizations. The National Association of Realtors says about 13% of home sales last year were FSBO and that often those were sales between people who already knew each other.

Google in November began allowing consumers and businesses to directly submit content such as real-estate listings for inclusion in some Google search results through a service called Base. Google previously included real-estate listings from sites it came across, but they weren't always up-to-date and couldn't easily be sorted by price and other attributes. In March, Google began on a test basis letting consumers who were searching terms such as "Los Angeles real estate" narrow their results by choosing various categories -- saying whether they want to rent or buy, for example -- and letting them see real-estate listings plotted on a map.

To keep up with the competition, a number of real-estate brokers are improving their own sites. Real Living Inc., a big regional broker based in Columbus, Ohio, recently upgraded its site to provide email alerts to buyers when there is new information about some properties and to let sellers see how many people have viewed their homes and what comments they have made.

Most sellers still want their homes listed on the local services operated by Realtors. Perry Ahmed, an investor with several properties for sale in the Washington, D.C., area, lists them through real-estate agents on a multiple-listing service but also puts them on Google and Craigslist. He has worked out a deal with his agent that will ensure that he pays lower fees if he finds a buyer without the agent's help.

Many of the ads on both Google and Craigslist are for homes whose owners are represented by real-estate agents. But some are from people like Leigh Chodos, a marketing consultant in Brookline, Mass., who isn't using an agent in his efforts to sell a condo. "I'd rather save myself the 6% commission," Mr. Chodos says.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Understanding Rates, Points and Fees

2006-04-03T20:35:00.000-07:00

Understanding Mortgage Rates, Points, and Fees

By David Reed

March 31, 2006

Freddie Mac pushes a lot of numbers, and one of the numbers they push is perhaps one of the most widely published … their weekly interest rate survey. Freddie Mac has people who contact 125 lenders or so, get their rate quotes on different mortgage programs, specifically the 30 and 15 year fixed, 5/1 hybrid and 1-year ARM, then publish those averages for all to see.

Not a bad way for the consumer to get a handle on just how their current or quoted interest rate stacks up with the rest of the country. Just this past week for example, the 30 year fixed rate average as reported by Freddie Mac was 6.32 percent, with 0.6 percent in points and fees.

This means the "average" consumer in this poll got a 30 year fixed rate at 6.32 percent and paid $1,200, or 0.6 percent on a $200,000 loan, in either discount points or lender fees or any combination thereof. Okay, that's pretty neat by itself. Nice of Freddie to do that, don't you think? I do.

Freddie has been doing this for a long time, since 1971. I think Nixon was President then. The highest this rate has ever been was 17.48 percent in 1982 (can you believe it!) and the lowest recorded was 5.23 percent in 2003.

But looking a bit deeper into those numbers, one trend is also definite: People are paying less and less in points and fees to get those rates. In fact, if you go back twenty years, the average points paid on a 30 year mortgage was 2.3 points paid on every 30 year mortgage. On average.

Again on a $200,000 loan that's $4,600. Okay, yeah rates were higher then (10.89 percent) so people paid more to get a lower rate but that doesn't explain why when rates were 10.39 percent in 1979 consumers only paid 1.6 points. But enough of those numbers, the important point is … why pay any points at all?

Clearly, consumers are paying less at the mortgage pump. Point-wise. Why? I've got a good guess … because rarely does paying points, or origination fees for that matter, make good financial sense. At least in getting a return from the points paid. And more importantly, consumers might just be finding out that paying points is an option and not a requirement.

A discount point, at 1 percent of the loan amount, usually benefits the borrower by .25 percent. For each point paid, the borrowers rate is reduced by .25 percent. At least that's the way it should generally work. Some consumers get screwed right out of the gate by paying 2 or 3 points just because their loan officer told them they had to.

For instance, on a standard 30 year fixed rate today at 6.50 percent with a $300,000 loan the payment would be $1,896. At no points. Now pay one point and get a .25 percent lower rate at 6.25 percent and the monthly payment drops to $1,847, or $48 lower. But that lower payment costs $3,000. Tax deductible usually, but still $3,000.

If you divide that $3,000 by the $48 monthly savings it would take 62.5 months to "recover" that discount point paid at purchase. That's a long time in my book. One could take that $3,000 and put it into a retirement fund or something and get a better return. Or even take the $3,000 and make a principal pay-down with that same money.

But often the trade-off between discount points and lower payments rarely makes sense. For that matter, so does paying an origination fee. An origination fee is also typically 1 percent of the loan amount and is also an option and not a requirement.

Every loan that I know of doesn't automatically require you to pay an origination charge. Heck, in certain parts of the country origination fees are mostly unheard of. In certain parts of the country where origination charges aren't common the rates are the same there as they are anywhere else.

This means that when getting a rate quote or deciding whether or not to pay points or origination charges, think hard. Points and origination fees don't have to be a part of the equation. They can, and should be, a choice.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Homeowners Struggle to Keep Up...

2006-04-03T20:25:00.000-07:00

Homeowners Struggle To Keep Up With Adjustable Rates

By Noelle Knox, USA TODAY
Mon Apr 3, 7:00 AM ET

For 45 years, Robert and Lorraine Brown have lived in their ranch-style home in Florissant, Mo. One of their four children was even born there. But for the past eight months, the couple have been locked in a sleep-wrecking race to keep up with their rising mortgage bills. They've switched to cheaper phone service, cut back on groceries and sometimes put off ordering medicine.

When they refinanced their home two years ago to pay off some bills, Robert, now 78, was working as a deliveryman. But his employer went out of business last April. Now he and Lorraine, 72, a retired nurse, are both seeking work. The rate on their mortgage has jumped from 7% to 10.5%.

"We were having a hard time meeting bills at the time we refinanced. It seems once you get behind, you do desperate things to catch up, and you never do," says Lorraine, trying to hold back tears. "At the time of the loan, they tell you, 'Well, it may go up, but it's probably going to go down.' You want it to be so, so you believe it."

They feel alone, but they're not. America's five-year real estate boom was fueled partly by a tempting array of cut-rate mortgages that helped millions of Americans qualify for home or refinance loans. To afford soaring home prices, many turned to adjustable-rate and other, riskier loans with low initial payments. The homeownership rate hit a record 70%.

Now, the real estate market is cooling, interest rates are rising and tens of thousands more Americans are starting to have trouble paying their mortgages. Nearly 25% of mortgages - 10 million - carry adjustable interest rates. And most of them went to people with subpar credit ratings who accepted higher interest rates, according to the Mortgage Bankers Association.

"Within the last year, I would say 60% to 70% of calls to our hotlines are issues related to ARM (adjustable-rate mortgage) loans," says Chris Krehmeyer, executive director of Beyond Housing, a non-profit group that offers homeownership support services in St. Louis. "That's significantly higher than in years past, because the ARMs are coming home to roost."

Last week, the Federal Reserve raised interest rates for the 15th time since June 2004 and signaled that at least one more increase is likely. That trend is ominous for borrowers who were seduced by adjustable-rate loans that offered interest-only payment options or teaser rates below 2% or that let the borrower pay less than the interest owed. They will face bigger payment shock once their loans reset to higher rates.

The number of borrowers in trouble will rise this year and peak in 2007 and 2008 as the largest number of mortgages reset to higher rates, according to First American Real Estate Solutions, a real estate data provider.

Already, in West Virginia, Alabama, Michigan, Missouri and Tennessee, about one in five homeowners with a high-interest (subprime) ARM was at least 30 days late at the end of last year, according to the Mortgage Bankers Association. After 90 days, the foreclosure clock starts ticking.

Most of those foreclosures are related to job losses in auto and garment factories; higher mortgage payments were often the last straw.

What worries experts such as Christopher Cagan at First American Real Estate Solutions are the adjustable-rate loans made in 2004 and 2005, at the end of the housing boom. These loans were concentrated in the hottest markets, such as California, where about 60% of all loans last year were interest-only or payment-option ARMs. That's the highest such rate in the country.

Of the 7.7 million households who took out ARMs over the past two years to buy or refinance, up to 1 million could lose their homes through foreclosure over the next five years because they won't be able to afford their mortgage payments, and their homes will be worth less than they owe, according to Cagan's research.

The losses to the banking industry, he estimates, will exceed $100 billion. That's less than the damage from the savings-and-loan crisis in the 1990s, which cost the country $150 billion. "It will sting the economy, but it won't break it," he says.

'What can we do?'

In the Atlanta area, credit counselors for The Impact Group say 85% of their calls are now related to ARM or interest-only loans. The calls start "when the statement hits them with the new monthly payment," says Marina Peed, executive director for the non-profit group, which offers homeownership education, counseling and financial services. "They are calling and asking, 'What can we do?' "

The call volume jumped after January, as holiday credit card bills, higher gas bills and rising mortgage payments hit some borrowers at the same time.

When Paul and Sandra Wilson moved from California, where they couldn't afford to buy a home, to Georgia in May 2004, they bought a house with an interest-only loan. But Paul, 52, has had a tough time finding work, and they lost most of their savings in a business venture. They refinanced to an ARM with a lower rate but one that reset every six months and that charges a $20,000 penalty if they refinance within three years.

The loan broker "convinced us that it was in our best interest, and in most likelihood within six months our financial situation would turn around and we were going to look at selling," says Sandra, 53, a former law enforcement officer who is disabled.

In less than a year, their loan payment jumped from $2,275 to more than $2,800. The couple filed for bankruptcy and will lose their home next month. "This was our fourth home," Sandra says. "It's not as if we weren't aware, but we'd never had an adjustable-rate mortgage before."

Banking regulators are concerned about risky loans made to people with precarious finances or those who didn't understand the complex terms and the peril they could face if interest rates rose.

In December, regulators proposed new guidelines for mortgage lenders to crack down on loose lending practices. The rules would require better risk disclosure and a fuller analysis of the borrowers' ability to repay the loan through maturity - and at the highest rates allowed under the loan terms.

Bank trade groups complained that concerns were overblown. "We do not believe it is appropriate or possible for the lender to dictate the best mortgage products for individual consumers," America's Community Bankers responded.

No matter what the final guidelines say, they will be too late to help people such as Susan Cambero. She got into trouble after she took out an equity line of credit on her home in Lilburn, Ga., to pay off her car and other bills. As a single mother with total income of $38,000 a year, including child support, she never would have been able to qualify for the $57,000 line of credit from a conservative lender. That line of credit, when added to the balance on her fixed-rate mortgage, totaled $10,000 more than her home was worth.

The monthly payments for the equity line have more than doubled in four years, to about $400. (She also has a $700-a-month mortgage and hefty credit card bills.) "I can pay it, but I have nothing left over to eat," says Cambero, a contract analyst for a computer company. "I'm going to lose my house."

Some success stories

There are few resources to help homeowners in dire financial straits, but there are some. The Homeownership Preservation Foundation offers free credit counseling and referrals, 24 hours a day, seven days a week (888-995-HOPE, or 888-995-4673). And NeighborWorks America, a national non-profit that supports homeownership and financial literacy, has member groups in every state.

One of its members, Neighborhood Housing Services of Chicago, has been receiving about five calls a day since January from borrowers who are falling behind on ARMs.

Marilyn Maxwell is one of their success stories. She refinanced her loan in 2002. Maxwell, 58, is a former U.S. postal worker who's living on disability payments from the government. She agreed to an ARM that reset every six months.

She kept up with her payments on her house on the southeast side of Chicago until last April, after her daughter, who was helping Maxwell pay the mortgage, lost her job. Last week, Maxwell refinanced her home with the help of Neighborhood Housing Services. She got a 6.8%, fixed-rate loan, plus grants to help make long-neglected repairs.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Old Collections...Pay Them Off?

2006-03-30T04:13:00.000-08:00

Old Collections... Pay Them Off?

By: Lee Kendrick

You should always try to pay your debts in a timely manner, so that you don't end up with collections and/or charge-offs appearing in your credit profiles.

However, if you are typical & among the majority of Americans, you'll have at least 1 collection account (erroneous or not) appearing in your credit profile. And, eventually, it'll be recommended that you payoff that old collection account. Before you do this, let's cover the "pros & cons" of this action.

First of all, I must provide you with the legal and politically correct answer... that paying off collection & charged off accounts will improve our overall credit rating... and this is true... for a LONG-TERM approach. However, if you're in the midst of applying for any type of loan... especially a mortgage loan... it's always best that you attempt to have the account deleted on the basis of any inaccuracy, incompleteness or unverifiability.

Secondly, failing in your attempt to have the account(s) deleted using the Fair Credit Reporting Act... you could negotiate a partial of full payoff of the account... as long as the creditor or collection agency provides you (IN ADVANCE) with a written agreement stating their willingness to PERMANENTLY DELETE the account from ALL 3 credit reporting agencies... once they've received the agreed payment amount.

Lastly, as a worst case scenario... failing to have the account deleted... most lenders recognize that any payment toward an old collection account will change the "date of last activity" to a more recent date... which will usually cause your credit scores to drop. Your "date of activity" (aka DLA) can be changed to a more recent date if you dispute the account, contact the creditor, the creditor contacts you, a payment is made, etc.

The mathematical algorithms, scoring models & computers used by the credit reporting agencies... unfortunately... "think" that you have a NEW credit problem with a more recent date of last activity... even if the account balance is now reporting as zero owed... because the words "collection", "charge off", "reposession", "foreclosure", etc. NEVER GO AWAY! This is typically referred to as the "reporting clock"... which can remain on your credit report for up to 7 years + 6 months from the date of last activity. Tax liens and bankruptcies can remain on your credit report for longer periods of time.

I'm hoping you realize the importance of negotiating to have the account deleted, before paying any monies toward any old "negative or derogatory" account(s).

And, if your credit scores drop, you may be denied for your loan request.

It's always best to order copies of your credit reports at least 45-90 days in advance of any anticipated loan requests... to insure the overall accuracy of your credit report information. Many borrowers with great credit... unfortunately... have found out that they've become the victims of identity theft... AFTER they've already made large deposits for the purchase of homes... which can be embarrassing & frustrating. It's also recommended that you order a free credit report from each of the 3 major credit reporting agencies (Equifax, Experian & TransUnion) at the beginning of each year... keeping your more informed about your overall credit rating.

There are also numerous internet services that offer to monitor your credit inquiries, scores & payment histories, but we recommend that you only use the services offered by the credit reporting agencies... to protect you from unscrupulous vendors... as these vendors may be identity thieves in disguise.

Family Mortgage in Winchester Kentucky (http://www.fmiusa.com) has a new computer program that will recommend steps for your overall credit score improvement... and this tool is offered by their credit report provider. It (specifically) offers advice to be completed in a specific step-by-step manner to improve your credit scores... to whatever score you're trying to achieve.

In some cases, paying down credit card balances may be required. In other cases, simply opening a $300 credit card account may be what's recommended. This service only costs $15 per client, and the reports are provided to you within minutes.

This service is not to be mistaken for credit repair, but it can give you ideas on what should be concentrated on first & foremost.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

U.S. Housing Market to See Sustained Decline in 2006

2005-12-07T05:37:00.000-08:00

Economic Report: U.S. Housing Market to See Sustained Decline in 2006

LOS ANGELES (AP) -- The U.S. housing market will see a sustained decline next year, causing a drag on the nation's economy but falling short of triggering a recession, according to a new economic report.

"We expect housing to start slowing the economy this quarter or the next," Edward Leamer, director of the quarterly University of California, Los Angeles, Anderson Forecast, wrote in the report to be released later Wednesday.

The cooldown in the housing sector is likely to be spread over several years, with as many 500,000 construction jobs and 300,000 financial sector jobs lost, the report said.

"Some jobs in manufacturing might well disappear as a result of weakness in housing, but this may be offset by jobs brought home or not lost to foreign competition," Leamer wrote.

The forecast said eight of the last 10 economic recessions were started by housing market slowdowns.

Previous UCLA Anderson Forecasts have suggested a decline in housing construction would begin by mid-2005.

The current report cites several signs that the decline could be underway:

-- New construction of housing in October was down 5.6 percent from the previous month, with new construction of single-family housing accounting for a 3.7 percent dip.

-- New home sales have declined.

-- Applications for home mortgages have trended downward since late September as rates increased.

-- In some regions, homes are remaining unsold longer and the pace of housing construction is outpacing population growth, which could spell a decline in demand.

"On all these grounds, we believe housing is due for a sustained decline," economist Michael Bazdarich wrote in the Anderson Forecast. "The remaining questions are how hard the fall will be and when it will begin."

The forecast for California, where housing prices lead the nation and housing-related jobs have been driving economic growth, resembles the national outlook.

Economist Ryan Ratcliff said the state's housing market will see a slowdown in spending along with job losses in construction and related sectors.

He expects California home prices to plateau while sales and new construction see moderate decreases during two years of weak growth.

"If the housing market slows more than we are expecting, a recession is not out of the question," Ratcliff wrote.

Counties showing signs of a cooldown include San Francisco, where housing sales have been off 20 percent since peaking in June, 2004. San Diego County has seen sales slow about 13 percent, while monthly price gains have plummeted to low single digits.

California's job picture has been lackluster in recent months. The rate of employment growth has slowed after a significant number of jobs were added in July and August.

Construction has remained the fastest-growing sector. But Ratcliff predicts a slowdown in construction activity through 2007 and moderate construction job losses.

Sales of Houses Fall in October

2005-11-28T15:45:00.000-08:00

NEWS ARTICLE- WASHINGTON - Sales of existing homes fell a bigger-than-expected 2.7 percent in October, a fresh sign that the red-hot housing market is cooling. The decline would have been worse without increased demand from displaced hurricane victims.

Though prices rose at the fastest clip in more than a quarter-century, the number of unsold homes rose to the highest level in 19 years. Analysts forecast that this backlog will dampen future price gains.

The National Association of Realtors reported Monday that sales of existing homes and condominiums fell by 2.7 percent in October, more than double the 1.1 percent decline analysts expected.

It left sales at a seasonally adjusted annual rate of 7.09 million, down from a sales rate of 7.29 million units in September, which was the second-fastest pace on record.

Economists said the latest report, which showed sales declines in all regions of the country, appeared to be a signal that the booming housing market was beginning to slow under the impact of steadily rising mortgage rates.

"The housing sector has likely passed its peak. The boom is winding down," said David Lereah, chief economist for the Realtors. "I expect continued softening in housing if rates remain at these levels or go higher."On Wall Street, stocks fell moderately as mixed news on holiday shopping prompted investors to take a pause from the recent five-week rally. The Dow Jones industrial average lost 40.90 points to close at 10,890.72.

The decline in sales pushed the number of unsold homes to 2.87 million, the highest level in more than 19 years. It would take 4.9 months to deplete that inventory level at the current sales pace.

The median, or midpoint, price of an existing home sold last month rose by 16.6 percent to $218,000, compared with October 2004.

Economists predicted the buildup in unsold homes would help dampen the surge in home prices that saw 69 cities report double-digit gains in prices this summer, compared with the third quarter of 2004.The sales slowdown was linked to the Federal Reserve''s continued campaign to boost interest rates to combat the threat of higher inflation after the recent surge in energy prices.

The average commitment rate for 30-year mortgages rose to 6.07 percent in October, up from 5.77 percent in September.

Patrick Newport, an economist with Global Insight, a forecasting firm in Lexington, Mass., said he expected rates, which are up by about a half-point in the past 10 weeks, to rise by another half-point in the next six months as the Fed keeps boosting short-term interest rates.
"These increases will cool off the housing market and deflate many local housing bubbles without creating a housing crash," he predicted.

Most analysts believe housing will cool gradually to more sustainable levels but will escape the adverse consequences that occurred when the Internet stock bubble burst in early 2000, wiping out trillions of dollars in paper wealth and helping to push the economy into a recession.

Lereah said he believes gains in home prices would slow to around 5 percent nationally in 2006.He forecast that sales of existing homes would decline by 3.5 percent to 6.86 million units next year, but he said 2005 should finish with 7.11 million sales, setting a record for the fifth straight year.

The weakness in existing home sales in October followed an earlier report that construction of new homes and apartments fell by 5.6 percent last month, the biggest setback in seven months. Applications for new building permits, a good sign of future activity, fell by 6.7 percent, the biggest decline in six years.

The 2.7 percent drop in sales of existing homes would have been a larger 3.2 percent decline without a boost in activity from people relocating after hurricanes Katrina and Rita devastated the Gulf Coast.Sales surged by 83 percent in Baton Rouge, La.; 32 percent in Mobile, Ala., and 14 percent in Houston. This more than offset sales declines of 42 percent in New Orleans and 44 percent in Beaumont, Texas.

The 16.6 percent increase in the median sales price was the biggest year-over-year price increase since a 17.2 percent jump in July 1979. The backlog of 2.87 million unsold homes was the highest since April 1986.

By region of the country, October's biggest sales decline occurred in the Northeast, a drop of 7.4 percent. Sales were down 1.9 percent in the Midwest and 1.2 percent in the West. Sales were down 1.8 percent in the South despite the big gains in areas where displaced homeowners relocated.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Record Low for Home Affordability in California

2005-10-08T10:29:00.000-07:00

Record low for home affordability in California

By Jim Christie Thu Oct 6, 7:06 PM ET

SAN FRANCISCO (Reuters) - Soaring prices in California's housing market have shut out a record 86 percent of households from buying a typical home with a traditional down-payment, according to a study released on Thursday.

Home prices across California have more than doubled since late 2001, increasing pressure on home buyers, who needed a minimum household income of $133,800 to buy a home at the August median price of $568,890, the California Association of Realtors said in its report.

That meant that only 14 percent of households could afford the typical home, down from 18 percent a year earlier, and the lowest level since records began in 1989, the report said.

The group's calculation was based on a mortgage interest rate of 5.87 percent and assumed a 20 percent down payment. The national minimum household income needed to buy a median-priced home at $220,000 last month was $51,740, the group said.

"It certainly is a concern when we reach a record low for affordability," said association economist Robert Kleinhenz.

August's affordability reading matched a record low 14 percent recorded in early 1989, shortly before a downturn in property prices that began in mid-1991.

"Households in California want to buy homes and can find loan products to do so, but they have to stretch," Kleinhenz added. "Large numbers of households are dedicating 40 percent and in some case 50 percent of their income to housing costs ... The norm nationally is 30 percent."

Fast-rising prices in California have forced home buyers to opt increasingly for interest-only and adjustable-rate mortgages over 30-year fixed-rate mortgages to lower their monthly mortgage payments, a trend concerning many analysts.

They argue that mortgage payments when the loans readjust will be too large for many borrowers if interest rates rise and hold at high levels -- driving more homeowners to sell under distress if they can not refinance loans.

"Our concern is that because it's been so easy to refinance, people assume it always will be," said Beth Haiken, a spokeswoman for PMI Mortgage Insurance Co., a unit of PMI Group Inc.. "They may be able to refinance, but not on the loan terms they want."

Just under a third of mortgages initiated or refinanced in California this year have interest-only components, compared with 1.4 percent in 2000, according to LoanPerformance, a unit of data provider First American Corp.

Another way home buyers in California are coping with high home prices is by increasingly moving from pricey urban coastal areas to inland areas where homes are more affordable.

California's coastal Santa Barbara region, where just 6 percent of state households could afford a median-priced home, was the state's least affordable market in August, the real-estate trade group said.

California's most affordable area in August was the High Desert region north and east of Los Angeles, followed by the Sacramento region in the central part of the state.

Twenty-eight percent of households could afford to buy homes in the High Desert region and 19 percent could afford homes in and around Sacramento, the state capital.

Home-price appreciation next year will be stronger in inland areas than in coastal areas, Kleinhenz said, adding that the overall pace of home-price appreciation in California was expected to slow next year.

"For 2006, we're saying California's median home price will go up by 10 percent, compared with a projected increase of 16 percent for 2005," Kleinhenz said.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

FSBO Challenges

2005-09-09T06:35:00.000-07:00

FSBO Challenges

Yes, there are challenges to being a FSBO Seller. Here are just a few (with some solutions):

1. CORRECTLY SET THE ASKING PRICE FOR YOUR HOME.

The first For Sale By Owner (FSBO) challenge is the difficultly a do-it-yourself home seller has correctly setting the asking price.

SOLUTION: FSBO sellers should interview at least three successful realty agents who sell homes in your vicinity. The agents interviewed won't mind if you tell them you are considering selling your home without an agent.
They count on "for sale by owner" sellers failing, and listing their home with them within 30 to 60 days. The agent most likely to get the listing is one of the agents who was previously interviewed.

Each agent interviewed should provide the home seller with a written CMA (comparative market analysis) showing the recent sales prices of comparable nearly homes and the asking prices of similar nearby homes now listed for sale (the competition).

The prime reason at least three agents should be interviewed is the home seller then has three expert opinions of market value. If one estimate is very high, that's called "buying the listing." When a market-value estimate is very low compared to the others, that agent could be hoping for a quick sale.

SOLUTION: Contact a title company (customer service desk). Explain that you are a FSBO seller, and that you want to obtain a Property Profile and CMA. Some will assist FSBO Sellers, others won't. There may be a nominal $25-50 charge - but it should be worth the price.

SOLUTION: Use a free online CMA service offered by a Realtor. Both NCaHome and 1Listing.com, for example, offer Home Valuation Reports for free to California homeowners.

2. SUCCESSFULLY SELL YOUR HOME IN A "BUYER'S" MARKET.

In a local "hot market" where there are more qualified home buyers than homes available for sale (called a "seller's market"), it's very easy to sell a home by waiting for the purchase offers from buyers. But when there are more homes for sale than qualified buyers, that is a "buyer's market."

Statistics show more than 70 percent of home buyers begin their search online. The key then, is getting online presence.

SOLUTION: 1Listing.com offers a fixed fee MLS entry only service for $299. The service not only also gets your listing posted in the local Realtor Multiple Listing Service (MLS), but also gets it published on Realtor.com, and almost every major realty company's search engine through secondary/IDX feeds. In other words, your listing populates almost everywhere that counts on the internet! Your residence gets exposed to the largest number of prospective home buyers in your community.

3. PREPARE A LEGALLY BINDING PURCHASE OFFER.

A major problem for many FSBO home sellers is how to create a legally binding and comprehensive purchase contract without a listing agent being involved. Lacking a listing agent, this task can be a major challenge because the home sale forms sold at stationery stores are worthless.

In addition, home sellers must comply with California disclosure laws, such as providing written defect disclosures (Transfer Disclosure Statement; Supplemental Statutory Disclosures; etc.) , smoke detector and water heater compliance statements, natural hazard disclosures, lead-based-paint disclosures, and other applicable disclosures.

SOLUTION: By law, commissions are NEGOTIABLE in California. Contact a local realtor or attorney, and negotiate a fixed fee for these services. It will likely be a lot cheaper than paying 3% commission.

SOLUTION: NCaHome offers a fixed fee Seller Representation service for $3699---that's complete, fixed fee full-service representation from contract to close of escrow for $3699 (no matter what the price of the house is).

SOLUTION: Use California Association of Realtors (CAR) forms. These are standardized forms made available by CAR to its members for use in a California residential real estate transaction. CAR forms are incredibly comprehensive, and they are universally used by Realtors throughout California.

4. WATCH OUT FOR CONTRACT CONTINGENCY CLAUSES.

Virtually every home buyer needs to include, for the buyer's protection, at least two or three contingency clauses in their purchase offers.

The first customary contingency is for a satisfactory appraisal of the home by the lender's professional appraiser. If the appraisal doesn't reflect the sales price agreed upon in writing by the buyer and seller, the buyer probably won't be able to arrange satisfactory financing.

The second contingency is the loan contingency. The buyer makes his offer contingent upon obtaining financing on the terms and conditions stated in the offer. If the financing is not approved, the contingency fails.

The third contingency clause requires the buyer's approval of their professional home inspector's report. Because most home sales today involve such an inspection, buyers can use the results of such an inspection to re-negotiate the purchase price (depending on the problems/defects found during inspection), or cancel the purchase based on the inspection results.

The fourth contingency clause that most home buyers insist upon is a professional termite or pest control inspection clearance. Home sellers sometimes have such a report completed before listing so they can take care of any discovered problems prior to the home being put on the market for sale.

There can be other contingencies, too. For example, the buyer can make the purchase contingent on the sale of his/her existing home. Contingencies dramatically affect the legal consequences of the contract.

SOLUTION: Require Buyer to make an Initial Deposit (up to 3% of the purchase price) to cover your damages in the event of breach, and sign the Liquidated Damages Clause in the CAR Residential Purchase Agreement. The default time limit for removal of standard contingencies (loan, appraisal, inspection) in the CAR Residential Purchase Agreement is 17 days; ask for written removal of all such contingencies when 17 days from the date of the contact has passed.

SOLUTION: Pay a professional a fixed fee to review and advise you regarding the contract and disclosure documentation (discussed above). As stated above, this should generate significant savings versus paying a 3% listing broker commission.

5. REVIEW THE BUYER'S MORTGAGE FINANCING.

Home buyers generally obtain written pre-approval letters or certificates from mortgage lenders before beginning their home search---don't accept a buyer's offer until the buyer produces one.

SOLUTION: Call the lender who pre-qualified the buyer. Ask the lender to verify the information in the pre-qualification letter. Ask the lender if he/she forsees any problems financing the buyer's purchase on the terms stated, and/or if the lender can fund and close the financing in a timely manner so that escrow can close on time.

SOLUTION: As stated above, use a Realtor or other professional to help you review offers, and prospective buyers' financing, for a fixed fee.

6. ARRANGE THE HOME SALE CLOSING DETAILS.

Another task FSBO home sellers have is to arrange for the closing/settlement for the transaction.

SOLUTION: Use a title and escrow company which is friendly to FSBO sellers. Many title and escrow companies have officers who work with FSBO transactions, and are more than willing to provide that little bit of extra help to a FSBO Selller.

SOLUTION: Use a fixed fee service. As stated above, NCaHome offers full-service representation to California sellers for $3699.

IS IT WORTH THE HASSLE TO SELL YOUR HOME ALONE?

Consider these pros and cons of selling a home alone without a professional real estate agent. "Is it worth the hassle to sell my home alone in the hope of saving about 3 percent of the sales price?"

Yes and no. The savings in commisions can be substantial. However, the aggravation and stress can be substantial, too. NCaHome and 1Listing.com suggest a middle ground---use their fixed fee services for $3699, or negotiate with your own realtor friend or attorney for fixed fee services to help you in your transaction. Paying 3% for a listing broker in today's economy is just too expensive and a waste of good money.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Cutting the Commissions

2005-07-18T12:56:00.000-07:00

NEWSWEEK MAGAZINE ARTICLE July 18, 2005
Reprinted by the 1Listing Program (1Listing.com)

Cutting the Commissions
Most real-estate agents still want a 6 percent cut. But a few clever brokers have figured out how to sell homes cheaper, by setting up Web offices.

Newsweek
July 18 issue - Will the Internet finally smash the real-estate cartel? Home prices have risen 40 percent in the past five years, yet most real-estate brokers still quote sales commissions at about 6 percent (some negotiate, if asked). The industry is using its political clout to hold down price-cutting. But consumers could win, now that prices are on the Web.

Brokers do business through the computerized Multiple Listing Service (MLS), where firms list the houses they have for sale. They work hard for their customers and know their neighborhoods. The trouble is, they trade with each other politely, at the cartel price. So a few clever (impolite!) brokers figured out how to sell homes cheaper by setting up Internet offices and letting you peep at MLS listings on your own. (These listings also go onto Realtor.com, but with less information.) A thousand flowers are starting to bloom:
Discount real-estate firms. If you're selling your house, a discounter can save you a ton of money. These brokers offer all the usual services and expertise. But instead of charging you 6 percent of the sales price, they take 4 percent or even 3 percent. That's a saving of $7,000 to $10,500 on a $350,000 house—a no-brainer, I'd say.

***You can find discounters almost everywhere. Just enter the name of your city or county into a Web search engine, along with "real-estate broker," then "low commission," "3% commission" or "discount."
FSBO sites (pronounced "fiz-bo")—"for sale by owner." People selling their own homes account for roughly 15 to 20 percent of sales. You'll find pots of free how-to information on FSBO Web sites. For a fee, you can buy a FOR SALE sign, an 800-number service for taking calls and a listing on the FSBO's site, with pictures of your home. You can even buy a listing on the MLS, so shoppers everywhere can find you. But buyers have to call you directly. If you want a broker to bring you customers, you'll have to offer a commission.

The FSBO sites offer different services at varying prices. A package at ForSaleByOwner.com includes personal telephone consulting to guide you through the sale. Owners.com is affiliated with Cendant (Century 21, Coldwell Banker). If your house doesn't sell and you decide to switch to certain of its brokers, you'll get a $1,000 rebate on the commission. Owner.com (not affiliated with Owners.com) lists other FSBO sites.

Fee for service. These brokers offer a menu of services, each at its own price. If you're selling your own house, you might want help with paperwork after you've found a buyer, or you might want the broker to show your house, or you might want an MLS listing. You buy only the service you want. Two such franchises: HelpUSell.com and Assist2Sell.com.

Referrals and rebates. These sites link home shoppers with real-estate brokers. If you buy, the broker pays the site for the referral, which in turn rebates part of that money to you. At Realestate.com, the rebate ranges from $100 to $2,250, depending on the price of the house, and comes in the form of a Home Depot or American Express gift card.

Bidding sites. At HomeGain.com, you describe the property you want to sell or buy and ask brokers for proposals (including commission charges). A new site, HungryAgents.com, encourages brokers to bid aggressively for your business.

Unfortunately, some of you aren't allowed to use all these money-saving services. Your state's self-interested real-estate brokers are driving them out. Six states (Florida, Illinois, Iowa, Oklahoma, Texas and Utah) now curtail companies that offer discounts, according to Inman Real Estate News. Other states have stopped FSBO sites from helping you market your home through the MLS. A dozen state real-estate commissions are trying to regulate discounters out of existence. Kentucky bans rebates entirely—but, in a strike for consumers—it's being sued by the U.S. Department of Justice for restricting price competition. The National Association of Realtors was planning to set new MLS rules to let traditional brokers keep their listings off the discounters' sites. The Justice Department stopped that, too.

The higher-priced brokers will keep up the fight for their cartel, but the discounters have the wind at their backs, says Stephen Murray, editor of the industry newsletter Real Trends. Today they're just 2 percent of the market, but could grow to 12 percent by 2010. Hey, this is America—we're supposed to support price competition. That means brokers, too.

Reporter Associate: Temma Ehrenfeld
© 2005 Newsweek, Inc.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

For Sale By Owner (FSBO) FAQs

2005-03-02T16:52:00.000-08:00

FOR SALE BY OWNER (FSBO) FAQs

How Much Can I Save in Commissions?

Most Real Estate agents charge a commission based on the selling price of the home, which has traditionally been 6% in California (3% listing; 3% selling).

On a typical $400,000 home, the 6% commission would amount to $24,000.00. Under the 1Listing Program, you pay $3699 on the listing side, and we recommend advertising the selling/co-operating broker commission at 2.5%. If NCaHome/1Listing is the listing broker and a traditional brokerage is the selling broker, the total commission is $13,699 (versus $24,000). If NCaHome/1Listing is both the listing and selling broker, the total commission is $9699 (versus $24,000). You only pay if the the home is sold.

NCaHome/1Listing is a full service Realtor, but offering discount and fixed fee commission rates.Please feel free to contact 1Listing for more information about its listing programs.

Why do Traditional Real Estate Agents Charge So Much?

There is work involved with selling a home. Overhead, advertising, working with potential buyers, assisting financing and guiding through closing are all services performed by licensed Real Estate Agents.

However, even conceding these items, NCaHome/1Listing believe that real estate commissions are excessive.
One reason that agents have kept their fees so high has been because access to the mass market of buyers has been controlled by the MLS system. While still very important, this is starting to change with the advent of inexpensive mass market advertising through the Internet.

How Long Should It Take to Sell My Home?

The average time on the market varies greatly depending on the area and the local economy, but is typically 10-30 days. In a hot market, houses may sell in a matter of days, while in a slow or rural area houses may take much, much longer to sell.

Most Agents require listing contracts of six months. NCaHome/1Listing limits its listing period to 90 days, and gives sellers a cancellation clause (almost unheard of in the industry).

NCaHome/1Listing believes that 90 days should be more than adequate time to effectively advertise and sell a home. If your house has been on the market over 90 days, you need to look closely at whether you are properly marketing your home, or whether you have some problem with your home (usually a selling price problem).

Do I need a Lawyer?

You may or may not need the assistance of an attorney depending on the circumstances and your own knowledge and experience.

If you need help with the contract due to inexperience or special circumstances, here you can obtain the help of a qualified real estate attorney who can advise you and draw a standard contract for purchase and sell. Fees for this service are typically under a thousand dollars.

How can I help the buyer find financing?

A professional mortgage broker or banker should be one of the first people that a buyer contacts. Most can quickly pre-qualify the buyer over the phone, get the buyer approved for an appropriate mortgage and handle all of the mortgage paperwork.

How can you advertise my home for $299?

Under the 1Listing Program, a seller's home is entered in the Multiple Listing Service (MLS). The seller also receives listings on several Internet Web sites and listing services including Realtor.com (the number one visited real estate site), Homes.com, and NCaHome.com.

These tools make selling a home easy and fast for clients.

How do I post photographs to list my property?

You can scan your photographs with a scanner, or have a friend, local print shop of Kinko's do this for you. Digital cameras are becoming inexpensive and are a popular option as well. A third option is ordering a photo disk, usually just a few dollars from your film processor when you have the photos developed.

In any case, be sure to save your photos in a standard format such as jpeg or gif and in an appropriate size. The software that comes with your scanner can assist you with this. The better web sites allow you to upload and manage the photos yourself or you can mail them in for assistance.

The pictures can then be emailed to 1Listing, and 1Listing will load them into the listing free of charge.

Does Advertising on the Internet Work?

Over 90% of all homes sell through the MLS. And, the number one visited real estate website in the US is Realtor.com. Sellers obtain tremendous listing exposure through the 1Listing Program.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Real Estate License Boards

2005-03-02T16:45:00.000-08:00

Real Estate License Links (Boards By State)

STATE	AGENCY/DEPARTMENT WEBSITE
Alabama	Alabama Real Estate Commission
Alaska	Division of Occupational Licensing Real Estate Commission
Arizona	Department of Real Estate
Arkansas	Real Estate Commission
California	State of California Department of Real Estate
Colorado	Department of Regulatory Agencies Division of Real Estate
Connecticut	Department of Consumer Protection Occupational and Professional Licensing Division
Delaware	Real Estate Commission
District Of Columbia	Board of Real Estate
Florida	Division of Real Estate
Georgia	Real Estate Commission
Hawaii	Real Estate Commission
Idaho	Real Estate Commission
Illinois	Office of Banks and Real Estate
Indiana	Professional Licensing Agency
Iowa	Real Estate Commission
Kansas	Real Estate Commission
Kentucky	Real Estate Commission
Louisiana	Real Estate Commission
Maine	Real Estate Commission
Maryland	Real Estate Commission
Massachusetts	Real Estate Board
Michigan	Department of Consumer and Industry Services Bureau of Commercial Services
Minnesota	Minnesota Department of Commerce
Mississippi	Real Estate Commission
Missouri	Real Estate Commission
Montana	Board of Realty Regulation
Nebraska	Real Estate Commission
Nevada	Department of Business & Industry Real Estate Division
New Hampshire	Real Estate Commission State House Annex
New Jersey	Real Estate Commission
New Mexico	Real Estate Commission
New York	Division of Licensing Services
North Carolina	Real Estate Commission
North Dakota	Real Estate Commission
Ohio	Division of Real Estate and Professional Licensing
Oklahoma	Real Estate Commission Shepherd Mall
Oregon	Real Estate Agency
Pennsylvania	Real Estate Commission
Rhode Island	Department of Business Regulation
South Carolina	Department of Labor Licensing & Regulation Real Estate Commission
South Dakota	Real Estate Commission
Tennessee	Real Estate Commission
Texas	Real Estate Commission
Utah	Division of Real Estate
Vermont	Office of Professional Regulation Real Estate Commission
Virginia	Department of Professional and Occupational Regulation
Washington	Department of Licensing Business and Professions Division, Real Estate
West Virginia	Real Estate Commission
Wisconsin	Bureau of Direct Licensing and Real Estate
Wyoming	Real Estate Commission

Home Loan FAQs (Part 2)

2005-03-02T15:56:00.000-08:00

What should I know about buying a home?

[Reprinted from Empire Capital Mortgage]

• How much house can I afford?
• Why should I refinance?

• What are the costs of refinancing?
• What kinds of mortgages are available?

• What is a Fixed Rate Mortgage?
• What is an Adjustable Rate Mortgage?

• What is a VA Loan?
• What is a FHA Loan?

• How can I save on a Fixed Rate Mortgage?
• What determines the cost of a mortgage?

• What is a Private Mortgage Insurance?
• What should I ask my lender?

• What documents will I need for my loan application?
• What is involved in the closing meeting?

• What costs will I pay at closing?
• How do lenders decide home loan approval?

• What decisions do credit lenders make?

What should I know before buying a home?
Here are some tips that could save you a lot of time, money and trouble.

Plan ahead. Establish good credit and save as much as you can for the down payment and closing costs.

Get pre-approved online before you start looking. Not only do real estate agents prefer working with pre-qualified buyers; you will have more negotiating power and an edge over homebuyers who are not pre-approved.

Set a budget and stick to it. The Mortgage Calculator can help you determine a comfortable price range.

Know what you really want in a home. How long will you live there? Is your family growing? What are the schools like? How long is your commute? Consider every angle before diving in.

Make a reasonable offer. To determine a fair value on the home, ask your real estate agent for a comparative market analysis listing all the sales prices of other houses in the neighborhood.

Choose your home loan (and your lender) carefully. For some tips, see the question in this section about comparing loans.

Consult with your lender before paying off debts. You may qualify even with your existing debt, especially if it frees up more cash for a down payment.

Keep your day job. If there is a career move in your future, make the move after your home loan is approved. Lenders tend to favor a stable employment history.

Do not shift money around. A lender needs to verify all sources of funds. By leaving everything where it is, the process is a lot easier on everyone involved.

Do not add to your debt. If you increase your debt by financing a new car, boat, furniture or other large purchase, it could prevent you from qualifying.

Timing is everything. If you already own a home loan, you may need to sell your current home to qualify for a new one. If you are renting, simply time the move to the end of the lease.

How Much House Can I Afford?

How much house you can afford depends on how much cash you can put down and how much a creditor will lend you. There are two rules of thumb:

You can afford a home that's up to 2 1/2 times your annual gross income.

Your monthly payments (principal and interest) should be 1/4 of your gross pay, or 1/3 of your take-home pay.

The downpayment and closing costs - how much cash will you need? Generally speaking, the more money you put down, the lower your mortgage. You can put as little as 3% down,
depending on the loan, but you'll have a higher interest rate. Furthermore, anything less than 20% down will require you to pay Private Mortgage Insurance (PMI) which protects the
lender if you can't make the payments. Also, expect to pay 3% to 6% of the loan amount in closing costs. These are fees required to close the home loan including points, insurance,
inspections and title fees. To save on closing costs you may ask the seller to pay some of them, in which case the lender simply adds that amount to the price of the house and you
finance them with the mortgage. A lender may also ask you to have two months' mortgage payments in savings when applying for a home loan. The mortgage - how much can you borrow? A
lender will look at your income and your existing debt when evaluating your home loan application. They use two ratios as guidelines:

Housing expense ratio. Your monthly PITI payment (Principal, Interest, Taxes and Insurance) should not exceed 28% of your monthly gross income.

Debt-to-income ratio. Your long-term debt (any debt that will take over 10 months to pay off - mortgages, car loans, student loans, alimony, child support, credit cards) shouldn't exceed 36% of your monthly gross income.

Lenders aren't inflexible, however. These are just guidelines. If you can make a large downpayment or if you've been paying rent that's close to the
same amount as your proposed mortgage, the lender may bend a little. Use our calculator to see how you fit into these guidelines and to find out how much home you can afford.

Why Should I Refinance?
If you have a low, 30-year fixed interest rate you're in good shape. But
if any of these Five Reasons applies to your situation, you may want to look into refinancing.

1. Decrease monthly payments.
If you can get a fixed rate that's lower than the one you currently have, you can lower your monthly payments.

2. Get cash out of your equity.
If you have enough equity you can get cash out by refinancing. Just decide how much you want to take out and increase the
new home loan by that amount. It's one way to release money for major expenditures like home improvements and college tuition.

3. Switch from an adjustable to a fixed rate.
If interest rates are increasing and you want the security of a fixed rate, or, if interest rates have fallen below
your current rate you can refinance your adjustable home loan to get the fixed rate you're looking for.

4. Consolidate debt.
You can refinance your mortgage to pay off debt, too. Simply increase the new home loan amount by the amount you need
and the lender will give you that cash to pay off creditors. You'll still owe the lender but at a much lower interest rate - and that interest may be tax-deductible. (seek the
advice of your tax advisor or the equivalent.)

5. Pay off your mortgage sooner.
If you switch to a shorter term or a bi-weekly payment plan, you can pay off your home earlier and save in interest. And if your current
interest rate is higher than the new rate, the difference in monthly payments may not be as big as you'd expect.

Is refinancing worth it?
Refinancing costs money. Like buying a new home, there are points and fees to consider. Usually it takes at least three years
to recoup the costs of refinancing your home loan, so if you don't plan to stay that long it isn't worth the money. But if your interest rate is high it may be smart to refinance to a
lower interest rate, even if it is for the short term. If your mortgage has a prepayment penalty, this is another cost you will incur if you refinance.

Use the reasons above as a guideline and determine whether or not refinancing is the right thing to do. You can also use our refinance analysis calculator to help you decide.

What Are the Costs of Refinancing?
Here's what you can expect to pay when you refinance:

The 3-6 Percent Rule
Plan to pay between 3% and 6% of the amount of the new home loan amount (if want cash-out, the home loan amount will be
larger). Yet some lenders offer no-cost refinancing in exchange for a higher rate.

Getting to the Points
Points play a big part in how much it'll cost to refinance - if you pay more points, you can lower your interest rate.
Points are a good idea if you're planning to stay in your home for a while, but if you'll be moving soon you should try to avoid paying points altogether.

Negotiate the Fees
Be aggressive and investigate the fees your lender is asking you to pay.
You may not need an appraisal, or your loan-to-value may be such that you no longer need Private Mortgage Insurance. Sometimes if you refinance
with your current lender they won't need a credit report. With a little research it's amazing how much you can save.

Here, we've explained the different home loan refinancing fees.

Application Fee: This covers the initial costs of processing your home loan application and checking your credit.

Appraisal Fee: An appraisal provides an estimate or opinion of your property's value.

Title Search and Title Insurance: A Title Search examines the public record to discover if any other party claims ownership of the property. Title
Insurance covers you if any discrepancies arise in ownership. (A reissue of the title can save 70% over the cost of a new policy.)

Lender's Attorney's Review Fees: In any financial transaction of this scope, a lawyer's participation ensures that the lender isn't legally
vulnerable. This fee is passed on to you. Although such fees are not applicable in many Western States.

Home Loan Origination Fees: This is the cost of evaluating and preparing a mortgage home loan.

Points: These are basically finance charges you pay the lender. One point equals 1% of the home loan amount (for example, one point on a $75,000 home loan is $750). The
total number of points a lender charges depends on market conditions and the loan's interest rate.

Prepayment Penalty: Some mortgages require the borrower to pay a penalty if the mortgage is paid off before a certain time. FHA and VA loans, issued by
the government, are forbidden to charge prepayment penalties.

Miscellaneous:Other fees may include costs for a VA home loan guarantee, FHA mortgage insurance, private mortgage insurance, credit checks, inspections and
other fees and taxes.

How to Save Money Refinancing:

Research all costs and fees.
Don't be afraid to negotiate with your lender.

Shop around for the lowest rates.
Check with your current lender for lower rates

What Kinds of Mortgages Are Available?

Fixed-Rate Mortgage - interest rates and monthly payments remain unchanged for the life of the home loan

Adjustable-Rate Mortgage - interest rates and monthly payments can go up or down, depending on the market

Hybrid Loans - a combination of fixed and adjustable mortgages

How do you decide which home loan is best? These questions may help.

How much cash do you have for a downpayment?

What can you afford in monthly payments?

How might your financial situation change in the near future and beyond?

How long do you intend to keep this house?

How comfortable would you be with the possibility of your monthly payments increasing?

Discuss these with your lender so they can help you decide which home loan would best suit you.

What is a Fixed Rate Mortgage?
This is the most common home loan arrangement in the U.S. With a fixed-rate mortgage the loan's principal and interest
are amortized, or spread out evenly, over the life of the home loan, giving you a predictable monthly payment.

The upside is, if rates are low, you can lock in for as long as 30 years and protect yourself against rising
rates. However, if rates fall you can't change your rate without refinancing the home loan, and that could cost money.

The 30-year Fixed-Rate Mortgage, the most popular and easiest to qualify for, will give you the lowest payment. But you can also get a 20-, 15- and
even a 10-year fixed-rate mortgage if you wish to save interest and pay your home off sooner.

What is an Adjustable Rate Mortgage?
With Adjustable-Rate Mortgages (ARMs) interest rates are tied directly to the
economy so your monthly payment could rise or fall. Because you're essentially sharing the market risks with the lender, you are compensated with an
introductory rate that is lower than the going fixed rate.

How often does the interest rate change?
That depends on the home loan. Changes can occur every six
months, annually, once every three years or whenever the mortgage dictates.

How much can my rate change?

Your ARM will stipulate a percentage cap for each adjustment period, which means your interest may not increase beyond that percentage point. If
the market holds steady, there may be no increase at all. You may even see your payment decrease if interest rates fall.

How are the changes determined?
Every ARM home loan is tied to a financial market index, such
as CDs, T-Bills or LIBOR rates. Your rate is determined by adding an additional percentage (known
as a margin) to that index's rate. When the index rises or falls, your rate rises or falls with it.

Is there a limit to how much interest I'll be charged?

Yes. It's called a ceiling, or lifetime cap. This is a guarantee that your interest rate will never exceed a designated
percentage. For instance, if your introductory rate was 5% and you have a lifetime interest rate increase cap of 6% (meaning
that your interest rate can never increase more than 6% during the life of the home loan) then your ceiling would be 11%.

What are the benefits of an ARM?

With a lower initial interest rate (usually 2% to 3% lower than fixed-rate mortgages), qualifying is easier and the payments are more manageable at first.
You may qualify for a larger home loan than you would with a fixed-rate mortgage.

If you're only planning to stay a short time the interest rate is likely to stay lower than that of a fixed-rate mortgage.

If you expect regular pay increases that would cover the increase in your interest, or if you believe interest rates will fall, an ARM might be the wiser choice.

A few words of caution:

Negative Amortization -This happens when a lender allows you to make a payment that doesn't cover the
cost of principal and interest. Watch for this. It may be used as a lure to get you into a home with the promise of low initial payments. Or, a lender may give you a payment
cap instead of a rate cap. In this mortgage arrangement, if interest rates increase, your monthly payments could stay the same - but the higher interest will still be charged to
your home loan, adding to it instead of reducing it. Either way, if you find yourself with a negative amortization ARM, you'll be adding to your debt.

Discounted interest rates - Sometimes a lender will advertise an unusually low initial rate. This is a discounted rate, and it's essentially a marketing
tool. If your ARM offers a discounted interest rate you are certain to see an increase at your next adjustment period, even if interest rates don't
change.

What is a VA Home Loan?
Administered by the Department of Veterans Affairs, these special loans make housing
affordable for U.S. veterans. To qualify you must be a veteran, reservist, on active duty, or a surviving spouse of a veteran with 100% entitlement.

A VA home loan is simply a fixed-rate mortgage with a very competitive interest rate. Qualified buyers can also use a VA home loan to purchase a home with no money down,
no cash reserves, no application fee and reduced closing costs. Some states allow a VA home loan for refinancing as well.

Many lenders are approved to handle VA loans. Your VA regional office can tell you if you're qualified.

What is a FHA Loan?
FHA loans are designed to make housing more affordable for first-time homebuyers and those with low to moderate income.

Both fixed- and adjustable-rate FHA loans are available, and in most states, an FHA home loan can be used for refinancing. The difference is, they're insured by the
U.S. Department of Housing and Urban Development (HUD). With FHA Insurance, eligible buyers can put down as
little as 3% of the FHA appraisal value or the purchase price, whichever is lower. Qualifying standards are not as strict
and the rates are slightly better than with conventional loans.

Convertible ARMs
Some adjustable-rate mortgages allow you to convert to a fixed rate at certain specified times. This mitigates some of the risk of fluctuating
interest rates, but there will be a substantial fee to do it. And your new fixed rate may be higher than the going fixed rate.

Two-Step Mortgages
This is an ARM that only adjusts once at five or seven years, then remains fixed for the duration of the home loan. Not
only will you benefit from a lower rate for the first few years, but interest rate cannot increase beyond the stated fixed rate. It may even be lower, depending on market conditions.
Then again, you also run the risk of adjusting to a much higher rate.

Convertible Loans
Another ARM choice, the convertible home loan offers a fixed rate for the first three, five or seven years, then switches
to a traditional ARM that fluctuates with the market. If you strongly believe that interest rates will fall a convertible home loan might be a smart move.

Balloon Mortgages
These short-term loans begin with low, fixed payments. Then, in five, seven or ten years a single large payment (balloon)
for all remaining principal is due. While this saves money up front, coming up with a large payment at the end of the home loan may be difficult. Some lenders will allow you to
refinance that payment, but some won't, so be sure you know what you're getting into.

Graduated Payment Mortgage (GPM)
With a GPM you pay smaller payments that gradually increase and level off after about five years. Lower payments can make
it possible for you to afford a bigger home, but they'll be interest-only payments, which deduct nothing from the principal. To the extent that full interest payments are made, this will
not result in a negative amortization. In other words, there will be no increase of principal and no amortization of the
home loan principal.

How Can I save on a Fixed Rate Mortgage?
Short Term Mortgages
You don't have to finance your home for 30 years.
Granted, the payments will be lower, but you'll be paying them longer. You could, instead, opt for a period of 20, 15 or even 10 years, pay your home
off sooner and save in interest.

Furthermore, lenders offer much more attractive interest rates with short-term loans, so your payments may not be as much as you'd think.

The table below shows you the interest savings on a $100,000 home loan at 8.5% interest:

Term	Monthly Payment	Total Interest Accrued
30 yr	$768.91	$176,808.95
20 yr	$867.83	$108,277.58
15 yr	$984.74	$ 77,253.12

By paying $215.83 more a month on a 15-year mortgage, you'd save $99,555.83 in interest over a 30-year home loan - and own the house in half the time.

What Determines the Cost of a Mortgage?
There are five factors that determine the ultimate cost of a mortgage.

The principal, or amount of the home loan, is the total amount you borrow (the purchase price minus your downpayment).

The interest rate adds significantly to the cost of your mortgage. Fixed or adjustable, the interest paid at the end of the home loan can exceed the original cost
of the home itself. For instance, a $100,000 loan balance at 8.5% for 30 years will cost you $277,000 by the time the home loan is retired.

The term of the home loan is the length of time until the loan is paid off. A longer term means more interest and higher cost.

Points are interest paid on the home loan and they're purely optional. You pay points at closing if you want to reduce the interest rate and make your monthly
payments smaller. One point equals one percent of the loan amount.

Fees are paid to the lender at closing to cover the costs of preparing the mortgage. They can vary according to where you live and what type of home loan you're securing.

While points and fees are not financed, they still contribute to the cost of the mortgage.

What is Private Mortgage Insurance?

Private Mortgage Insurance, or PMI, is insurance purchased by the buyer to protect the lender in case the buyer defaults
on the home loan. PMI is generally applied when you put down less than 20% of the home's purchase price. The reason is this:

With 20% down, you are considered a low risk. Even if you default the lender will probably come out ahead because they've only loaned 80% of the home's
value and they can probably recoup at least that amount when they sell the foreclosed property.

But with 5% or 10% down, the lender has a lot more invested in the home loan and if you default, they will almost surely lose money. This is why lenders require buyers
to purchase PMI if they put down less than 20%. It's insurance that, no matter what happens, the lender will recoup its investment.

How does PMI increase your buying power?
In simplest terms, PMI allows you to put less money down, and the benefits are as follows:

If you have good credit but are short on cash for a downpayment you can put as little as 5% down.

It doesn't take as long to accumulate a 5% or 10% downpayment so you could buy a home much sooner than you anticipated.

A smaller downpayment allows you to purchase a larger or nicer home.

For repeat buyers, a smaller downpayment on the new home can free up cash from the sale of their previous home to use for other debts or expenses.

Your interest will be higher if you put down less than 20%, but that interest is tax-deductible.

What does PMI cost?
A Good Faith Estimate will be provided to you within a few days after we received your home loan application. This disclosure
will provide you with an estimate of your monthly PMI premium as well as the initial premium you'll need to pay at closing. Additionally, we will be providing you a disclosure on your
rights (if applicable) to cancel the PMI.

What Should I Ask My Lender?

What type of home loan is best for me?
If you've done some groundwork you should have a pretty good
idea of what type of home loan you need. But your lender may offer options you hadn't considered or even something you haven't yet heard about.

What will my closing costs be?
At closing, you'll be required to pay a number of fees such as transfer of title, origination and appraisal, attorney
services, credit report, title insurance and inspections. Your lender is required to provide an estimate of these costs within a few days after
your application is received, but you can always ask for an estimate sooner.

Will I be charged points?
Sometimes you'll have to pay points (one point = 1% of the
home loan amount) in order to get the interest rate the lender has quoted you. Before proceeding with your home loan application
find out if there are any points attached to your loan.

What items must be prepaid?
Some expenses, such as first year's property taxes and insurance, must be paid at closing. Your lender will let you know what's required.

How long will I be guaranteed the quoted interest rate?

This is called "locking in" a rate and most lenders provide this service. When you apply for your home loan, the
lender will lock in the agreed interest rate for an agreed period of time. But there may be a fee for this, so ask. Also,
obtain such lock-ins in writing, which is a requirement in most states.

How long will it take to get approval?
It varies, so make sure you get an estimate of how long approval will take, especially if you have a deadline for closing on a new home.

Does the home loan have a pre-payment penalty?
If you even think there's a possibility you may pay off your loan early (this includes refinancing) find out if there's a penalty for doing so.

Is there a call option attached?
A call option allows the lender to require you to pay off
your home loan balance before it's due. You don't want this, so make sure it's not in the contract. Also, in many states, these are not permissible on residential loans.

What Documents Will I Need for My Home Loan Application?
When preparing a home loan, the lender will ask for substantial documentation. Here's a list of what is usually required.

Personal Information

Address and telephone numbers of each borrower
Previous address(es) over the last seven years

Social Security number(s) of applicants
Age of applicant(s) and dependent(s)

Name and address of landlord(s) or lender(s) for the past two years and proof of payment

Current housing expense details (rent, mortgage payments, taxes, insurance)

Employment/Income

Name and address of employer(s) for the past two years
Pay stubs for the past 30 days · W-2 forms for the past two years

A written explanation of any employment gaps
If you're self-employed you'll need:

Complete, signed Federal Income Tax Returns for the past two years (personal and corporate)

Year-to-date Profit and Loss Statement and Balance Sheet

Other Income

If you receive Social Security, a pension, disability or VA benefits you'll need:

A copy of your awards letter (or tax returns for the past two years)
A copy of your most recent check

Child Support

If you pay child support you'll need:
A copy of the divorce or separation agreement

Evidence of payment for the last 6-12 months (cancelled checks of pay history from the courts)

Rental Income
If you receive rental income you'll need:

A copy of the lease

Debt Disclosure - Credit Cards, Loans and/or Current Mortgages

Name and address of each creditor
Account number, monthly payment and outstanding balance for each

Proof of recent payment or current statement for each
Documentation of alimony or child support you are required to pay

Written explanation of any past credit problems

Home Loan Application for Home Purchase

A complete, signed copy of sales contract. Mailing address and property description (if it's not in the contract)

A copy of your cancelled earnest money check Home Loan Application for Refinance

A copy of the deed

A copy of your hazard insurance policy
A copy of the property survey

Proof that your home has passed a termite inspection

Evidence of Funds for Downpayment

If the downpayment is a gift you'll need a signed gift letter, the giver's bank statement showing sufficient funds, a copy of the check and a deposit slip

If you have any recent large deposits or new accounts you'll need to show documentation

Other

If your home loan is for new construction the lender will need to see plans and specifications

If there's a bankruptcy in your financial history you'll need complete documentation

Fees

Appraisal fee (approximately $350)

Credit report fee (approximately $50)

In some areas, a flood determination fee (approximately $20)

What's Involved in the Closing Meeting?

Preparing for Closing
Many things must be taken care of before you come to the closing meeting. Ask your lender for a list of your responsibilities so you can arrive fully prepared.

Set a Closing Date
When choosing a closing date give yourself time to gather all your information and free up any necessary funds. The
lender will need time to prepare and deliver home loan documents (usually 3-5 days), home inspections must be scheduled and
if any repairs are needed allow enough time for them to be completed. Also, if your rate is locked in, make sure you
close before the deadline so you'll be guaranteed the quoted interest rate.

Other Required Items
Your lender will provide you with a commitment letter that lists all the other documentation that's required at closing. The following are common examples.

Survey - This shows the property's boundaries and any improvements made to it. It also details any encroachments on the property like fences or buildings.
Major encroachments must be corrected before closing.

Termite Inspection - Many areas legally require homes to pass a termite inspection, and all FHA and VA loans require one. If a termite inspection is required you must bring the certification to closing.

Homeowner's Insurance - Lenders require you to carry insurance for the replacement cost of the property. Bring the policy with you to closing.

Title Insurance Policy - All lenders require title insurance to protect them against claims of property ownership by anyone other than the borrower. The
title insurance issues the policy company after conducting a title search.

Flood Insurance - A flood insurance policy is necessary for any property located in a flood plain.

Water and Sewer Certification - If the property isn't served by public water and sewer facilities you'll need certification from the local government
that you have a private water source and sanitary sewer facility.

Certificate of Occupancy - For a new home you'll need one of these before you move in. The builder should get it for you from the city or county.

Building Code Compliance - An inspection is often required to make sure the property conforms to current building codes. There will be an inspection fee,
and the contract should specify who pays for any repairs needed to bring the home up to code.

Final Walk-Through
A day or two before closing it's a good idea to take one last look at the home to make sure repairs have been made, there's no new damage, and
anything meant to be sold with the property is still there. You can do this on your own or with your real estate agent.

Closing Costs
One business day before closing your lender must allow you to review your

Settlement Statement
This is the final exact amount you'll owe at closing and it must be brought
in the form of a certified or cashier's check. (Our Closing Costs Checklist can help you keep track of these expenses.)

The Closing Meeting
The legal sale and purchase of your home happens at the closing meeting which is attended by the buyer (you), the home loan
officer, the seller and any real estate agents or attorneys involved. (In some areas, closing is done by an agent without a meeting.)

Examination and Signing of Documents
At the closing meeting, the closing agent will review the
settlement sheet with you and the seller and ask you both to sign it. This is also when you'll present evidence of insurance
and inspections and sign all other home loan documents.

Payment of Closing Costs
Once all papers are signed and in order you'll hand over the check for
closing costs (the downpayment is included in check) and the lender provides the remaining funds to purchase the house.

Transfer of Property
Congratulations! You now own your new home. After the meeting, the closing
agent will record the mortgage and deed in your name with local government records and all funds will be disbursed.

Documents
During closing you'll sign stacks of important paperwork, including the following:

HUD-1 Settlement Sheet - This is the itemized list of closing costs your lender gave
you the day before closing. After the closing agent completes it you and the seller both sign it.

Truth-in-Lending Statementt - Given to you soon after you applied for your loan, it outlines the cost of
the home loan, gives you the APR (annual percentage rate) and defines the loan terms and number of payments.

The Mortgage Note - The mortgage (or promissory) note is legal evidence of your promise to repay the home
loan according to the agreed terms which this document outlines.

The Mortgage - This is the legal document that gives the lender a claim against your house if you fail
to uphold the terms of the mortgage note. Although you have possession of the house the lender shares ownership until
you pay off the home loan, and can demand full payment or foreclosure if you default. Some states use a deed of trust
instead that conveys title to a trustee until the home loan is repaid.

Affidavits - These are documents required either by the lender or the law. Your lender can explain any affidavits you're asked to sign.

The Deed - This document transfers ownership to your name and is signed by the seller at closing. You'll get a copy at closing and the original will be sent to
you after it's recorded.

What Costs Will I Pay at Closing?
Closing costs vary according to lender, location and even from sale to sale. Some
costs can be negotiated, reduced or even waived and some may be paid by the seller.

When you're doing your research, use this checklist to get a rough idea of what you'll pay at closing. The lender or closing agent will provide you
with an exact total a day or two before closing.

Closing Costs Checklist

$______Down payment
$______Lender's points
$______Prepaid interest
$______Home Loan origination fee
$______Mortgage insurance

$______Credit reports
$______Appraisal(s)
$______Survey of property
$______Inspections
$______Homeowner's insurance

$______Attorneys' fees
$______Title search
$______Title insurance
$______Prorated property taxes
$______Recording fees

$______Closing taxes
$______Escrow account for and insurance
$______Other costs specified in purchase agreement
$______Other costs

How Do Lenders Decide Home Loan Approval?
The Four "Cs" of Home Loan Approval

1. Capacity
2. Credit
3. Collateral
4. Character

Capacity
A lender will weigh your housing expenses and total debt against your monthly income to determine your ability to repay a home loan.

Monthly Income - Your net monthly income. If you're self-employed or receive commissions or bonuses, the lender averages your monthly income over the last two years.

Housing Expenses - This is the monthly payment you'll have with the new home loan, along with the monthly cost
of insurance, property taxes and any homeowner's fees or other costs.

Total debt - Add up any current mortgages, credit card balances, child support or alimony payments, tuition, car loans or other installment loans that will take longer
than 10 months to pay off and this is your total debt. If your monthly mortgage payment is less than 28% of your net monthly income, a lender will typically consider you qualified
to repay the home loan. That figure can even go as high as 36% depending on the buyer. For instance, many lenders will allow a first-time buyer's housing expenses to take
up more of their income.

Credit
To find out what kind of credit risk you represent, your lender will investigate your:

Previous mortgage payment history
Rent payment history

Credit card use
Installment debt payment history

A few late payments on a credit card may not hurt you all that much. But collections, repossessions, foreclosures and bankruptcies can be serious problems.
If you have a good explanation you may still be able to repair your credit rating and get approval.

Collateral
When you ask for a home loan, you're putting the home itself up as collateral. Naturally, the lender will want to know that the home is worth
at least as much as the loan amount, which is why an inspection is required.

But they'll also want proof that you have the cash necessary for the downpayment and closing costs. They'll seek verification of funds from sources including
bank accounts, stocks, bonds, mutual funds, the sale of an existing property or any gifts from family members that will not have to be repaid.

Character
The way you conduct your financial transactions tells a lender a great deal about your fiscal character. If you take responsibility for your
debts by paying your bills regularly and on-time, you will appear to have the integrity they're looking for in a borrower.

Other Compensating Factors
Many factors can sway a lender in your favor. The bottom line is that the lender
wants to feel secure in loaning you money. Even if there are a few dings in your credit, if you appear to be a safe credit risk overall
you should be confident your loan will be approved.

What Decisions Do Credit Lenders Make?
There are three major decisions that a credit lender is empowered to make.

1. Home Loan Approval
Approval is often given with conditions, such as the sale of current property, that require documentation for final approval.

2. Home Loan Suspension
A loan is suspended when information is incomplete or questions remain unanswered in the loan application. The buyer must supply the
needed information before a final decision can be made.

3. Home Loan Denial
There are a number of reasons why your home loan may be denied, and you're entitled to know those reasons. If denial is based
on your credit you're entitled to a free copy of that report.

VA Home Loan Eligibility FAQs

2005-03-02T15:34:00.000-08:00

Veterans Administration Home Loan Eligibility - Frequently Asked Questions

Questions about who is eligible for a
VA loan and reuse of eligibility for another VA loan.

Q: How do I apply for a VA guaranteed
loan?

A: You can apply for a VA loan with
any mortgage lender that participates in the VA home loan program. At
some point, you will need to get a Certificate of Eligibility from VA
to prove to the lender that you are eligible for a VA loan.

Q: How do I get a Certificate of Eligibility?

A. Complete an 1880: You
can apply for a Certificate of Eligibility by submitting a completed
VA
Form 26-1880, Request For A Certificate of Eligibility For
Home Loan Benefits, to one of the VA
Eligibility Centers, along with proof of military service.
In some cases it may be possible for VA to establish eligibility without
your proof of service. However, to avoid any possible delays, it's best
to provide such evidence.

Q: Can my lender get my Certificate of
Eligibility for me?

A. Yes,
it's called ACE (automated certificate of eligibility). Most lenders
have access to the ACE (automated certificate of eligibility) system.
This Internet based application can establish eligibility and issue an
online Certificate of Eligibility in a matter of seconds. Not all cases
can be processed through ACE - only those for which VA has sufficient
data in our records. However, veterans are encouraged to ask their lenders
about this method of obtaining a certificate.

Q: What is acceptable proof of military
service?

A: If you are still serving on regular
active duty, you must include an original statement of service signed
by, or by direction of, the adjutant, personnel officer, or commander
of your unit or higher headquarters which identifies you and your
social security number, and provides your date of entry on your
current active duty period and the duration of any time lost.

If you were discharged from regular active
duty after January 1, 1950, a copy of DD Form 214, Certificate of Release
or Discharge From Active Duty should be included with your VA Form 26-1880.
If you were discharged after October 1, 1979, DD Form 214 copy 4 should
be included. A PHOTOCOPY OF DD214 WILL SUFFICE.....DO
NOT SUBMIT AN ORIGINAL DOCUMENT.

If you are still serving on regular active
duty, you must include an original statement of service
signed by, or by direction of, the adjutant, personnel officer, or commander
of your unit or higher headquarters which shows your date of entry on
your current active duty period and the duration of any time lost.

If you were discharged from the Selected
Reserves or the National Guard, you must include copies of adequate
documentation of at least 6 years of honorable service. If you were
discharged from the Army or Air Force National Guard, you may submit
NGB Form 22, Report of Separation and Record of Service, or NGB Form
23, Retirement Points Accounting, or it’s equivalent. If you were discharged
from the Selected Reserve, you may submit a copy of your latest annual
points statement and evidence of honorable service. Unfortunately, there
is no single form used by the Reserves or National Guard similar to
the DD Form 214. It is your responsibility to furnish adequate documentation
of at least 6 years of honorable service.

If you are still serving in the Selected
Reserves or the National Guard, you must include an original
statement of service signed by, or by the direction of, the adjutant,
personnel officer, or commander of your unit or higher headquarters
showing the length of time that you have been a member of the Selected
Reserves. Again, at least 6 years of honorable service must be documented.

Q: How can I obtain proof of military
service?

A: Standard
Form 180, Request Pertaining to Military Records, is used
to apply for proof of military service regardless of whether you served
on regular active duty or in the selected reserves. This request form
is NOT processed by VA. Rather, Standard Form 180 is completed and mailed
to the appropriate custodian of military service records. Instructions
are provided on the reverse of the form to assist in determining the
correct forwarding address.

Q: I have already obtained one VA loan.
Can I get another one?

A: Yes, your eligibility is reusable
depending on the circumstances. Normally, if you have paid off your
prior VA loan and disposed of the property, you can have your used eligibility
restored for additional use. Also, on a one-time only basis,
you may have your eligibility restored if your prior VA loan has been
paid in full but you still own the property. In either case,
to obtain restoration of eligibility, the veteran must send VA a completed
VA
Form 26-1880 to one of our VA
Eligibility Centers. To prevent delays in
processing, it is also advisable to include evidence that the prior
loan has been paid in full and, if applicable, the property disposed
of. This evidence can be in the form of a paid-in-full statement from
the former lender, or a copy of the HUD-1 settlement statement completed
in connection with a sale of the property or refinance of the prior
loan.

Q: I sold the property I obtained
with my prior VA loan on an assumption. Can I get my eligibility restored
to use for a new loan?

A: In this case the veteran’s eligibility
can be restored only if the qualified assumer is also an eligible veteran
who is willing to substitute his or her available eligibility for that
of the original veteran. Otherwise, the original veteran cannot have
eligibility restored until the assumer has paid off the VA loan.

Q: My prior VA loan was assumed, the assumer
defaulted on the loan, and VA paid a claim to the lender. VA said it wasn’t
my fault and waived the debt. Now I need a new VA loan but I am told that
my used eligibility can not be restored. Why?

Or,

Q: My prior loan was foreclosed on, or
I gave a deed in lieu of foreclosure, or the VA paid a compromise (partial)
claim. Although I was released from liability on the loan and/or the debt
was waived, I am told that I cannot have my used eligibility restored.
Why?

A: In either case, although the
veteran’s debt was waived by VA, the Government still suffered a loss
on the loan. The law does not permit the used portion of the veteran’s
eligibility to be restored until the loss has been repaid in full.

Q: Only a portion of my eligibility is
available at this time because my prior loan has not been paid in full
even though I don’t own the property anymore. Can I still obtain a VA
guaranteed home loan?

A: Yes, depending on the circumstances.
If a veteran has already used a portion of his or her eligibility and
the used portion cannot yet be restored, any partial remaining eligibility
would be available for use. The veteran would have to discuss with a
lender whether the remaining balance would be sufficient for the loan
amount sought and whether any down payment would be required.

Q: Is the surviving spouse of a deceased
veteran eligible for the home loan benefit?

A: The unmarried surviving spouse
of a veteran who died on active duty or as the result
of a service-connected disability is eligible for the home loan
benefit. If you wish to make application for the home loan benefit as
a surviving spouse, contact one of our VA
Eligibility Centers. In addition, a surviving spouse who
obtained a VA home loan with the veteran prior to his or her death (regardless
of the cause of death), may obtain a VA guaranteed interest rate reduction
refinance loan. For more information, contact one of our VA
Eligibility Centers.

[NOTE: Also,
a surviving spouse who remarries on or after attaining age 57, and on
or after December 16, 2003, may be eligible for the home loan benefit.

However, a surviving spouse who remarried before December 16, 2003,
and on or after attaining age 57, must apply no later than December
15, 2004, to establish home loan eligibility. VA must deny applications
from surviving spouses who remarried before December 16, 2003 that are
received after December 15, 2004.]

Q: Are the children
of a living or deceased veteran eligible for the home loan benefit?

A: No, the
children of an eligible veteran are not eligible for the home loan benefit.

Information
on the Home Loan Program

Eligibility Information

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Home Loan FAQs

2005-03-02T15:31:00.000-08:00

California Home Loan FAQs

Question: What type of home can I afford to own?

Answer: Historically, mortgage lenders go by two guidelines when determining if a particular home is affordable to a homebuyer:
1) If the price of the home is less than 2.5 times your annual income, you can afford the home.
2) Generally, your total housing cost should not exceed 30% of your monthly income. The total housing costs includes insurance, taxes, maintenance and repairs, and homeowners association dues.

Question: What factors are taken into consideration when I apply for a mortgage loan?

Answer: Mortgage lenders take many factors into consideration when reviewing a mortgage application. Because each situation is unique, they view each application carefully and make their determination based on the information you provide. Basically, they will want to know if you have a steady, reliable source of income, and the ability (and willingness) to repay the mortgage loan.

Question: What are the advantages of owning a home?

Answer: Homeownership has many advantages. Home owners are making an investment and building equity, they are taking advantage of tax breaks, and they are enjoying freedom, stability, and the security of having their own home.

Question: Are there special mortgages for first-time home buyers?

Answer: Yes, many programs are specifically for first-time home buyers. These programs offer mortgage options for those who have no credit, or bad credit, and/or need assistance with the down payment or closing costs.

Question: Do I need a large down payment?

Answer: Making a large down payment does reduce the amount you have to borrow, thus the more equity you'll have. Loans with less than 20% generally require Private Mortgage Insurance (PMI), which adds to the cost of the loan. However, most programs do have mortgage options with a required down payment of less than 5% of the purchase price.

Question: What does the monthly mortgage payment include?

Answer: The monthly mortgage payment includes the principal and interest of the loan, as well as, local real estate taxes, and homeowner's insurance.

Question: How is the mortgage payment figured?

Answer: The amount of the down payment, the original loan amount, the repayment terms, and the interest rate is taken into consideration when computing the mortgage payment.

Question: What documentation is typically required to apply for a mortgage loan?

Answer: Proof of current income, pay stubs for the past 3 months,W-2 forms and tax returns for the past 2 years, a current credit report, and recent bank statements. Additional documents may be requested as needed.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Home Inspection FAQs

2005-03-02T15:29:00.000-08:00

Home Inspection FAQs

Reprinted from: United Professional Real Estate Inspections www.uprei.com

Why should I have a home inspection?

The purchase of a home or commercial building is one of the largest single investments you will ever make. You should know exactly what to expect --- both indoors and out -- in terms of needed and future repairs and maintenance. A fresh coat of paint could be hiding serious structural concerns. Stains on the ceiling may indicate a chronic roof leakage condition or may be simply the result of a single incident. The inspector interprets these and other clues, then presents a professional opinion as to the condition of the property so you can avoid unpleasant surprises afterward. Of course, an inspection will also point out the positive aspects of a building, as well as the type of maintenance needed to keep it in good shape. After the inspection, you will have a much clearer understanding of the property you are about to purchase, and be able to make your decision confidently.
As a seller, if you have owned your building for a period of time, an inspection can identify potential concerns in the sale of your building and can recommend preventive measures which might avoid future expensive repairs.
If your Realtor recommended a home inspection, it is because your realtor wants you to be a totally informed purchaser, they can only disclose what has been made known to them. They are looking out for your best interest by suggesting that a qualified home inspector evaluate the property you are about to purchase.

What is a home inspection?

An inspection is a visual examination of the structure and systems of a building. If you are thinking of buying a home, condominium, mobile home, or commercial building, you should have it thoroughly inspected before the final purchase by an experienced and impartial professional inspector.

What gets inspected when I have a professional home inspection?

A UPREI Professional Home Inspection includes evaluation of:
Proper Drainage
Crawl Space & Ventilation
Insulation
Framing
Plumbing
ABS Pipe
Complete Exterior
Complete Interior
Air Conditioning
Safety Equipment
Swimming Pool & Spa
Carbon Monoxide
Electrical
Foundation
Masonry
Appliances
Windows
Doors
Roofing
Heat Pumps
Furnace
Siding
and more...

When do I request an Inspector?

The best time to consult an inspector is right after you have made an offer on your new building. The real estate contract usually allows for a grace period to inspect the building. Ask your professional Real Estate agent to include this inspection clause in the contract, making your purchase obligation contingent upon the findings of a professional inspection.

Who should I call?

A professionally trained home inspector who has been certified by a governing body like the American Institute of Inspectors, preferably one with many years experience.
Should the inspector be licensed?
Yes, but unfortunately, unlike your Realtor who had to complete extensive schooling and testing to receive his/her license, home inspectors are not legally required to be licensed or certified in California. Therefore, it is highly recommended that you hire a home inspector who is also a licensed general contractor with the state of California.

How is the industry regulated?

In California all inspections should be performed to the standards adopted by the California Real Estate Inspection Association. To become a member, your inspector must pass a written examination to prove their competency. American Institute of Inspectors (AII) and other professional training and certifying agencies train and certify their members through rigorous classroom and field testing. CREIA and AII inspectors must participate in continuing education courses to maintain their certifications and/or memberships. AII & CREIA inspectors adhere to a strict code of ethics and standards of practice.

Once I find a qualified inspector, what specific questions should I ask?

◊ How long to complete the inspection?
A typical inspection will take from two to eight hours depending on the size of the home and it's components. Then another two to eight hours of document preparation.
◊ Ask if they plan to meet with you on-site to review the report.This service is crucial to understanding your report and is an important part of any professional home inspection.
◊ What kind of report will I receive?
Many reports are hand written on a few pages, they look very unprofessional, and are hard to read. Look for a report that is computer generated narrative report customized to your home, not just a check list along with a narrative summary.
◊ What happens if the inspector honestly miss something?
Errors & Omissions Insurance, typically comes with a very high deductible, this means your home inspector must be financially able to pay the deductible from his/her own pocket, if there is ever a claim. Do a little background check to make sure his/her reputation is good within the community. Ask for the phone number of his/her banker, ask for his/her contractor's license number and his/her inspector's certification number and check them out.

How much does a home inspection cost?

This is sometimes the first question asked but tells the least about the inspector. Fees are generally based according to size, age and various other components of the home. Inspection fees from a certified professional home inspector generally start at $295, and are typically about $400. A quality inspection backed by a company who's been in business a long time, with a reputation for standing behind their work sometimes requires a higher investment but it's worth it. You'll avoid headaches later on down the line.

1Listing.com is a California fixed fee Multiple Listing Service (MLS) listing and marketing website for California For Sale By Owner (FSBO) sellers. 1Listing charges only $299 for a listing on the MLS. Visit us at www.1Listing.com or call (707) 693-0100.

Escrow (Part 2) FAQs

2005-02-05T09:12:00.000-08:00

Escrow FAQs

Edited and Reprinted from Fidelity National Title Insurance

What is an escrow?

An escrow is created when money and/or documents are deposited by two or more parties with a third neutral party, which are to be delivered upon the completion of certain conditions. The third neutral party is known as the escrow agent or escrow holder.

The authority given to an escrow holder is strictly limited by instructions provided by the parties involved. Consequently, an escrow holder acts on mutual instructions deposited into escrow and DOES NOT represent any party. The escrow officer is authorized by instructions to allocate the funds for items during the escrow period, such as real estate commissions, title insurance, liens, recording fees, and other closing costs. Instructions also specify the method of collecting funds, proration issues, time limitations and all the terms of the transaction. The escrow process protects all parties involved by retaining money and documents until the mutual instructions are met.

The statutory definition of escrow is found in Section 17003 of the California Financial Code and reads as follows: "Escrow" means any transaction wherein on person, for the purpose of effecting the sale, transfer, encumbering, or leasing of real or personal property to another person, delivers any written instrument, money, evidence of title to real or personal property, or other thing of value to a third person to be held by such third person until the happening of a specified event of the performance of a prescribed condition, when it is then to be delivered by such third person to a grantee, grantor, promisee, promisor, obligee, obligor, bailee, bailor, or any agent or employee of any of the latter.

How do I open an escrow?

Opening an Escrow - A Checklist for Success
The company at which your escrow is opened can be negotiated in your purchase agreement. As soon as you execute the purchase agreement, the buyer's or their agent will place the buyer's initial deposit into an escrow account at Fidelity National Title. The following checklist covers some of the information needed to open escrow.

- 1. A copy of the Seller's existing title policy, if possible. If the policy is not available, provide the Escrow Officer with the following: a. Legal description and/or address of the property b. Assessor's Parcel Number (APN) c. Name of party in ownership d. Name of existing lienholders and type of loan

- 2. Direct which liens are to remain and which are to be paid in full. Provide the name, address and loan number(s) of existing lienholders. Request a 30-day notice letter if an FHA loan is being paid off.

- 3. Full names, addresses (including zip codes) and phone numbers of parties involved. This includes buyers, sellers, real estate agents and any new lenders with the name of the loan officer.

- 4. Vesting - How buyers desire to take title. Include the correct spelling of each buyer's name.

- 5. Consider the issue of required owner occupancy for residential property.

- 6. What will the amount of the Buyer's deposit be? Direct whether funds are to be deposited into escrow or held in the broker's trust account.

- 7. Include information on the amounts of commission and breakdown of payments.

- 8. Inform the Escrow Officer of the type of property (Single Family, land with mobile home, etc.)

- 9. If a termite report is required, provide information as to who is paying the fee. If corrective work is required, promptly order and deposit into escrow.

- 10. If there are rents to prorate, leases to assign and/or a Bill of Sale to be drawn, secure and deposit into escrow a rental schedule showing amounts of rents, date rents are paid and the amount of security/cleaning deposits to be credited to buyer. An inventory of personal property for the Bill of Sale and copies of all leases to be assigned should also be provided to escrow.

- 11. Inform the Escrow Officer of all items to be prorated and the proration date.

- 12. If there is a Homeowner's Association, provide us with the name and address of the management company.

- 13. Provide us with the hazard insurance agent's name and phone number. Promptly order and deposit into escrow.

- 14. If a loan is remaining that has an existing trust fund for taxes and insurance, direct how said account is to be handled.

- 15. Submit all terms of notes and security documents to be typed by escrow officer.

- 16. Direct who is to receive copies of the preliminary title report and the number of copies to be sent. Provide information as to whether copies of the tract restrictions or CC&R's are required.

- 17. Discuss all closing costs and who will be responsible for each.

- 18. Communicate all contingencies and conditions required prior to closing.

- 19. If the Seller is a non-resident of California, contact your escrow office immediately as additional disclosures may be required.

- 20. If Seller or Buyer is a corporation, submit the Articles of Incorporation, bylaws, and a corporate resolution authorizing the sale or purchase of the subject property.

- 21. If the Seller or Buyer is a partnership, submit a copy of the partnership agreement and a copy of the recorded statement/certificate of partnership.

- 22. If the Seller or Buyer is a trust entity, submit a copy of the trust agreement and a signed verification of trustee.

If a power of attorney is to be used, provide escrow and the lender with the power of attorney form for review and approval.

What is title insurance? What Does The Title Company Do?

Preliminary Title Report (PTR): The Title Company issues a Preliminary Title Report (PTR). The PTR is a report showing the condition of the title before a sale or loan transaction. After the completion of the transaction the title policy is issued.

Title Insurance Policy: Title insurance is insurance against loss resulting from defects of title to a specifically described parcel of real property. Defects may run to the fee (chain of title) or to encumbrances on the property.

Drafts a Deed of Trust: The Deed of Trust is drafted by the title company along with any other necessary documents. A Deed of Trust is a document filed with the county showing a property is transferred to trustee by the borrower (trustor) in favor of the lender (beneficiary) and reconveyed upon payment in full.

Pay Off Existing Loans: The title company pays off the existing loans when so ordered.

Taxes and Insurance: The title company prorates the taxes and insurance upon instructions
from the buyer and the seller.

Computes Interest On Loans: The Title Company computes the loan interest.

Acquires Hazard Insurance: The Title company secures or verifies hazard insurance.

Signing of Documents: Escrow and title will assists the buyer and seller when signing documents.

Recording Documents: The title company records the appropriate documents with the county office, giving public notice.

Disbursements: The title company disburses the documents and money to each party involved.

What do I need to do before closing escrow?

Close of Escrow (COE)
Below is a list of items that you will need before your appointment to sign the escrow papers:

- 1. Identification: There are several acceptable forms of identification, which may be used during the escrow process. These include: A current driver's license, passport, State of California Department of Motor Vehicles ID Card or Military ID.One of these forms of identification must be presented at the signing of escrow in order for the signature to be notarized.

- 2. At The Signing: Sellers will also be asked how proceeds are to be disbursed. On rare occasions, funds are insufficient to close escrow and you, as the seller must deposit money into the escrow. Should this situation occur, you will need to obtain a cashier's check or certified check issued by a California financial institution made payable to Fidelity National Title in the amount indicated to you by your escrow officer. A personal check may delay the closing since Fidelity National Title is required by law to have "good funds" (check clearance) before disbursing funds from escrow. Similarly, an out-of-state check could cause a delay in closing, due to delays in clearing the check.

- 3. Closing the Escrow: Closing escrow is a legal transfer of title to the property from the seller to the buyer and is the culmination of the transaction.Once all the conditions of the escrow have been satisfied, the escrow officer advises you of the date the escrow will close and takes care of technical and financial details. Usually the Grant Deed and Deed of Trust are recorded within one working day of the escrow's receipt of loan funds.

This completes the transaction and signifies the "close of escrow". Once all of the terms and conditions of escrow of both buyer and seller have been fulfilled, and all closing conditions satisfied, the escrow officer will return the instructions and documents to the lender for a final review. Following the review, which usually occurs in a day or two, the lender is ready to fund the loan and advises the officer, so that the necessary work can be completed to record the documents and "close" the escrow.

After the Close of Escrow: After the loan has been finalized, the documents signed and recorded, and the financial settlement completed, there are still several steps, which must be accomplished to complete the transaction. Your existing loan is being paid in full from the escrow. Your lender is required by law to issue a full reconveyance (release) of their loan. As soon as the deed of reconveyance removing the previous Deed of Trust is received, it should be recorded and the original returned to you. This may take several weeks.

Who Is Expected To Pay Which Closing Costs? (Typical Allocation in Most Counties)

The SELLER Can Generally Be Expected To Pay For:
Title insurance premium covering loan policy (Buyer)
Escrow Fees (1/2)
Real Estate Commission
Document preparation fee for deed
Document recording charges that effect the seller
County Transfer Tax ($1.10 per $1,000 of sales price) This varies with county & city
Any loan fees required by buyer's lender (as per contract)
Notary fees - Sellers Documents
Any city transfer/conveyance tax
Special delivery/courier fees
Payoff of all loans in sellers name
Interest accrued to old lender, Statement fees, Reconveyance fees and any prepayment penalties
Homeowners' association transfer fee and prorata dues (Negotiable)
Bonds or assessments according to contract
Termite inspection according to contract
Termite work or repairs according to the contract
Home warranty according to the contract
All delinquent taxes
Any judgment, tax liens, etc against the seller
Recording charges to clear all documents of record against seller

The BUYER Can Generally Be Expected To Pay For:
Title insurance premium covering loan policy (ALTA)
Escrow Fees (1/2)
Notary Fees - Buyers Documents
Document preparation fees - Buyer documents
Termite Inspection according to contract
Inspection fees (roofing, geological, property, etc.)
Special delivery / courier fees
All new loan charges (except those requires by lender for seller to pay) (as per contract)
Interest on new loan from date of funding to 30 days prior to first payment
Home warranty according to the contract
Fire insurance premium for first year
City transfer/conveyance tax according to the contract
Preliminary change of ownership fee
Assumption / change of records fees for takeover of existing loan
Beneficiary statement fee for assumption of existing loan
Other prorations if applicable

The above items are negotiable between the buyer and seller, as agreed upon in your individual sales contract. This is for informational purposes only and reflects typical charges.

What about property taxes?

Experience had shown that many tax delinquencies occur during the first year of property ownership. As a new property owner, you should be aware of the manner in which real property taxes are currently billed and paid.

It is your responsibility to obtain and pay the real property tax bill. Failure to receive a tax bill does not relieve the imposition of penalties after the delinquencies date. The Tax Collector has no discretion regarding penalties.

County taxes are levied on both real and personal property and become a lien, annually, on the first day in January preceding the fiscal year for which such taxes are levied. The Fiscal year begins on July 1 and ends on June 30 of the following calendar year.

Property taxes are due and payable in two installments, although the property owner may pay both installments prior to December 10 without penalty.

- The first installment is due November 1 and delinquent at 5:00 pm and December 10.
- The second installment is due February 1 and delinquent at 5:00 pm on April 10.
- If the 10th Day of December or April falls on Saturday, Sunday or Holiday, the time of delinquency is 5:00 pm n the next regular business day.

Penalties of 10% immediately begin accruing if payment is not made when due.

If your deed records after January 1st, the tax bill may be mailed to the prior owner. It is your responsibility to contact the Tax Collector's office if you fail to receive the tax bill in November of each year. If you have made alternate arrangements for the taxes to be paid on your behalf by a lender or agent, you may want to confirm that they are in receipt of the current tax bill to avoid penalties.

In addition, the within described property may be subject to supplemental real property taxes due to the change of ownership taking place through this escrow. Any supplemental real property taxes arising as a result of the transfer of the property to you shall be your sole responsibility. The due dates and delinquency dates may differ.

You are encouraged to contact the Tax Collector if you have any questions or if you wish to confirm your correct address on record to avoid penalties

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.

Escrow FAQs

2005-02-05T08:52:00.000-08:00

Escrow FAQs

Edited and reprinted from Woodbridge Escrow

Escrow...what is it?
Very simply defined, an escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. The California Escrow Law-Section 17003 of the Financial Code-provides the legal definition.

Whether you are the buyer, seller, lender or borrower, you want the assurance that no funds or property will change hands until ALL of the instructions in the transaction have been followed. The escrow holder has the obligation to safeguard the funds and/or documents while they are in the possession of the escrow holder, and to disburse funds and/or convey title only when all provisions of the escrow have been complied with.

The principals to the escrow - buyer, seller, lender, borrower - cause escrow instructions, in writing, to be created, signed and delivered to the escrow officer. If a broker is involved, the broker will normally provide the escrow officer with the information necessary for the preparation of your escrow instructions and documents.

The escrow officer will process the escrow, in accordance with the escrow instructions, and when all conditions required in the escrow can be met or achieved, the escrow will be "closed". Each escrow, although following a similar pattern, will be different in some respects, as it deals with YOUR property and the transaction at hand.

The duties of an escrow holder include: following the instruction given by the principals and parties to the transaction in a timely manner, handling the funds and/or documents in accordance with instructions; paying all bills as authorized; responding to authorized requests from the principals; closing the escrow only when all terms and conditions have been met; and disbursing the funds in accordance with instructions and providing an accounting for same - the Closing and Settlement Statement.

Who Chooses the Escrow?
The selection of the escrow holder is normally done by agreement between the principals. If a real estate broker is involved in the transaction, the broker may recommend an escrow holder. However, it is the right of the principals to use an escrow holder who is competent and who is experienced in handling the type of escrow at hand. There are laws that prohibit the payment of referral fees; this affords the consumer the best possible escrow services without any compromise caused by a person receiving a referral fee.

What Do I Have To Do While In Escrow?
The key to any transaction as important as your sale, purchase or loan, is to READ and understand your escrow instructions. If you do not understand them, you should ask your escrow officer to explain the instructions. Then sign and return immediately to your escrow officer.

Your escrow officer is not an attorney and cannot practice law; you should consult your lawyer for legal advice. Do not expect your escrow officer to advise you as to whether or not you have a "good deal" or are doing things the right way. The escrow officer is there to follow the instructions given by the principals in the escrow.

In order to expedite the closing of the escrow, you should check with your escrow officer as to what specific items you could do to assist. Ask the question - "What can I do to expedite the closing of this escrow?

Respond quickly to correspondence. This will assist in the timely closing of the transaction.

If you are required to deliver funds into the escrow, make sure that you provide "good" funds in the form required by the escrow officer. Company procedures differ in this regard, and there are ways that you can help at the time of closing; check with your escrow officer. Do not give the escrow officer a personal check and expect the escrow to close immediately; the escrow can only close on cleared funds, and the processing of a personal check can take days, possibly even a week or more.

When the escrow officer closes the escrow, some of you may want the closing papers, checks, title policies, statement, etc. made available immediately. There are many aspects to the closing of the escrow, and some of these cannot be processed on the day of the closing; they may take several days. If you have a special need, you should communicate that need to the escrow officer early in the processing of the escrow.

Escrow And Your New Loan
If you are obtaining a new loan, your escrow officer will be in touch with the lender who will need copies of the escrow instructions, the preliminary title report and any other documents escrow could supply. In the processing and the closing of the escrow, the escrow holder is obligated to comply with the lender’s instructions.

It has become a practice of lenders to forward their loan documents to escrow for signing. You should be aware that these papers are lender’s documents and CANNOT be explained or interpreted by the escrow officer. You have the option of requesting a representative from the lender’s office to be present for explanation, or arrange to meet with your lender to sign the documents in their office.

What is a closing statement?
A closing statement is an accounting, in writing, prepared at the close of escrow which sets forth the charges and credits of your account. The items shown on the statement will reflect the purchase price, the funds deposited or credited to your account, payoffs on existing encumbrances and/or liens, the costs for all services and a determination of the funds you are entitled to at the close of the escrow.
When going through your closing papers, examine all of them; there may be a refund check in there. Cash the check immediately. Be sure to have the check properly endorsed. All payees must endorse the check. This will eliminate the check being returned unpaid due to irregular or missing endorsements.

Your Closing Statement And All Other Escrow Papers Should Be Kept Virtually Forever For Income Tax Purposes. Your accountant will need the information about the sale or purchase of the property. IRS and other agencies may require you to prove your costs and/or profit on the sale of any property. The closing statement will assist in this task.

Do not rely on your escrow holder retaining the escrow file so that you can"...always call and get copies of the Closing Statement", most escrow holders will be destroying the files after the statutory retention period, usually 3 years. Maintaining and storing the closed escrow files is a costly endeavor to the escrow holder. Therefore, a nominal fee may be charged by your escrow holder for the retrieval of a file from storage, photocopying the requested documents and returning the file to storage.

What Fees And Costs Will Be Charged?
Escrow fees are not regulated by the State. Escrow holders, like any other business, will charge fees that are commensurate with the costs of producing the service, the liability undertaken, and the overhead expenses which include a profit factor. Therefore, the fees will vary between companies and from county to county. Normally, the escrow holder will follow its minimum fee schedule, which will provide for extra charges based upon the differing elements of your escrow. On occasions, an additional fee will be charged for unusual expenditure of time on a given transaction.

The escrow holder has no control over the costs of other services that are obtained, such as the title insurance policy, the lender’s charges, insurance, recording charges, etc. Your escrow officer, upon request, can provide you with an estimate of the escrow fees and costs as well as fees charged by others, provided such information is available.

What About Escrow Cancellation?
No escrow is opened with the intention that it will cancel, but there are occasions when a contingency cannot be met or when the parties disagree during the pendency of the escrow. Some escrow holders provide for such an event by incorporating an instruction in the typed or printed General Provisions.

Ordinarily, an escrow holder will take the position that no funds on deposit can be refunded until the escrow holder is in receipt of mutual cancellation instructions signed by the principals. The escrow holder cannot normally make a determination as to who is the "rightful" party in a dispute on a cancellation and therefore will not return the funds or documents until the principals agree; the escrow holder is not a judge.

A cancellation fee is typically charged, as this is a charge for professional services rendered and quite often for several "out of pocket" expenses that have been incurred on the client’s behalf. These fees can vary from company to company depending upon their policies.

Sometimes, when a dispute exists, the escrow holder may be forced to allow a court to decide which party is entitled to what documents or funds; this is called an Interpleader Action. Fortunately most disputes are resolved before the Interpleader is filed, as the costs for such legal actions are extreme. Those costs, incidentally, are normally paid out of the funds on deposit in the escrow.

What About Title Insurance?
Title insurance is usually obtained when real property is purchased. The policy of title insurance insures the owner and/or the lender of ownership of the property. There are various coverages afforded, but a basic policy insures that the buyer is the owner and that any lender shown on the policy is an "insured" lender. Many different types of extended coverages are available’ for example, an ALTA policy is quite often required by institutional lenders to afford them additional protection under the title insurance policy. The title policy is written after an extensive examination of the public records is made and the recording of the required documents as called for in the escrow.

The title insurance policy fee is a one-time fee, paid at the close of escrow. The determination of who pays for the policy is not uniform from county to county in California. In some counties, the buyer will pay while in others the seller will pay. In other counties the seller will pay for the owner’s policy and in almost every case, the question of who pays closing costs is a matter of agreement between the parties. Usually this agreement is based on the customary practice in your county or area. In the case of some FHA or VA transactions, the escrow officer must follow the guidelines as required by the lender and/or government.

What About Property Taxes?
The terms of your transaction and the resultant escrow instructions determine how the property taxes will be handled. If there is no mention of the proration of taxes, your escrow officer will not deal with any credits or charges for prorated taxes. However, if your escrow calls for a proration of taxes, there will be an item in your closing statement that will reflect either a credit or charge to your account. If the taxes are not paid (even though there has been a credit or charge against your account), the buyer is obligated to obtain a tax bill and pay the taxes. If the buyer does not have a tax bill with which to pay the taxes, you can request a bill from the Tax Collector; send a photocopy of the deed.

Supplemental Property Taxes is another concern of the buyer. Upon transfer of real property, a supplemental tax bill is generated. This is accomplished in cooperation with the County Assessor and the County Tax Collector.

Shortly after the close of an escrow involving the conveyance of real property, the County Assessor will request information about the property from the buyer. This information assists the Assessor in determining the value of the property for taxation purposes. Some of the information may have previously been supplied by the escrow holder at the time of the closing of the escrow, via a Preliminary Change of Ownership form that should accompany each deed when it is recorded.

Problems With Escrow: Which Government Agency Should Be Contacted
If you have been unable to resolve problems with your escrow company, there are five different regulatory agencies governing the escrow operations in California; Superintendent of Banks; Department of Corporations; Department of Insurance; the Department of Real Estate; and Department of Savings and Loan.

The government agency you contact depends on how the escrow company is licensed:
(1 ) An escrow officer employed by a bank, whose supervising agency is the Department of Banking.
( 2 ) An escrow officer employed by an independent escrow company, whose supervising agency is the Department of Corporations.
( 3) An escrow officer employed by a title company or title insurance company, whose supervising agency is the Department of Insurance.
(4 ) An escrow officer employed by a real estate broker, whose supervising agency is the Department of Real Estate.
( 5) An escrow officer employed by a Savings Bank or Savings and Loan Association, whose supervising agency is the Department of Savings and Loan.

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.

Home Inspection (Part 3) FAQs

2005-02-05T07:29:00.000-08:00

Home Inspection (Part 3) FAQs

Edited and reprinted from the California Real Estate Inspection Association (CREIA)

CREIA's Mission Statement
To represent the Real Estate Inspection Industry
To recognize and promote Real Estate Inspection as a unique, professional discipline
To provide leadership through education and by maintaining ethical and technical standards
To enhance consumer protection and promote public awareness of the Association

What Is An Inspection?
An inspection is a visual examination of the structure and systems of a building. If you are thinking of buying a home, condominium, mobile home, or commercial building, you should have it thoroughly inspected before the final purchase by an experienced and impartial professional inspector.

What Does An Inspection Include?
A complete inspection includes a visual examination of the building from top to bottom. The inspector evaluates and reports the condition of the structure, roof, foundation, drainage, plumbing, heating system, central air-conditioning system, visible insulation, walls, windows, and doors. Only those items that are visible and accessible by normal means are included in the report.

When Do I Request An Inspector?
The best time to consult the inspector is right after you’ve made an offer on your new building. The real estate contract usually allows for a grace period to inspect the building. Ask your professional agent to include this inspection clause in the contract, making your purchase obligation contingent upon the findings of a professional inspection.

Can A Building “Fail” The Inspection?
No. A professional inspection is simply an examination into the current condition of your prospective real estate purchase. It is not an appraisal or a Municipal Code inspection. An inspector, therefore, will not pass or fail a building, but will simply describe its condition and indicate which items will be in need of minor or major repairs or replacement.

What If The Report Reveals Problems?
If the inspector finds problems in a building, it does not necessarily mean you shouldn’t buy it, only that you will know in advance what type of repairs to anticipate. A seller may be willing to make repairs because of significant problems discovered by the inspector. If your budget is tight, or if you do not wish to become involved in future repair work, you may decide that this is not the property for you. The choice is yours.

If The Report Is Favorable, Did I Really Need An Inspection?
Yes. Now you can complete your purchase with peace of mind about the condition of the property and its equipment and systems. You may have learned a few things about your property from the inspection report, and will want to keep that information for your future reference. Above all, you can rest assured that you are making a well-informed purchase decision and that you will be able to enjoy or occupy your new home or building the way you want.

Why Do I Need An Inspection?
The purchase of a home or commercial building is one of the largest single investments you will ever make. You should know exactly what to expect --- both indoors and out -- in terms of needed and future repairs and maintenance. A fresh coat of paint could be hiding serious structural problems. Stains on the ceiling may indicate a chronic roof leakage problem or may be simply the result of a single incident. The inspector interprets these and other clues, then presents a professional opinion as to the condition of the property so you can avoid unpleasant surprises afterward. Of course, an inspection will also point out the positive aspects of a building, as well as the type of maintenance needed to keep it in good shape. After the inspection, you will have a much clearer understanding of the property you are about to purchase, and be able to make your decision confidently.
As a seller, if you have owned your building for a period of time, an inspection can identify potential problems in the sale of your building and can recommend preventive measures which might avoid future expensive repairs.

Can I Inspect The Building Myself?
Even the most experienced building or home owner lacks the knowledge and expertise of a professional inspector who has inspected hundreds, and perhaps thousands of homes and buildings in their career. An inspector is equally familiar with the critical elements of construction and with the proper installation, maintenance and inter-relationships of these elements. Above all, most buyers find it difficult to remain completely objective and unemotional about the building they really want, and this may lead to a poor assessment.

What Will The Inspection Cost?
The inspection fee for a typical single-family house or commercial building varies geographically, as does the cost of housing, similarly, within a geographic area the inspection fees charged by different inspection services may vary depending upon the size of the building, particular features of the building, age, type of structure, etc. However, the cost should not be a factor in the decision whether or not to have a physical inspection. You might save many times the cost of the inspection if you are able to have the seller perform repairs based on significant problems revealed by the inspector. Consult your professional agent for guidance.

Should I Attend The Inspection?
It is not necessary for you to be present for the inspection, but it is a good idea. By following the inspector through the inspection, observing and asking questions, you will learn about the new building and get some tips on general maintenance. Information that will be of great help to you after you’ve moved in.

How Do I Find A “Qualified” Inspector?
To find a CREIA Inspector in your area call the toll free referral service at 800-388-8443. Personal contacts, either from prior inspections or from a friend, relative, or business acquaintance who has had a recent inspection is an excellent method. Another alternative is to ask your real estate agent/broker who he or she would recommend. Most inspection services promote their business with brochures through the real estate offices. Many claim that their reports meet or follow CREIA Standards of Practice. Do not be fooled; look for the CREIA emblem on these brochures. Only inspectors who meet CREIA’s rigorous professional and educational requirements may qualify as members.

What Is CREIA?
The California Real Estate Inspection Association, (CREIA), was established in 1976 in California as a non-profit voluntary professional association. CREIA has grown to over 500 members and candidates today. CREIA’s Standards of Practice and professional Code of Ethics provides the consumer with the assurance of quality and professionalism. Members of CREIA are either owners or employees of professional building inspection companies. Today CREIA has members throughout the state and is recognized in California as the leading authority in the building inspection industry.

CREIA has established a high Standards of Practice for the inspection profession that is used throughout the state to ensure the buyer who retains a CREIA member of a complete and detailed inspection and report.
All members must abide by these standards and code of ethics. CREIA offers its members and candidates continuing education in the latest building technology, training, and materials to ensure the most professional inspection for the consumer. CREIA acts as a public information service to real estate buyers and provides technical support and training to realty agents, state agencies and other related professions.
Many CREIA members have engineering, architectural, or technical backgrounds. most members have had experience in various construction fields and are or have been building contractors. Visit the CREIA website to find a CREIA Inspector in your area.

What Is A Master CREIA Inspector (MCI)?
The MASTER CREIA INSPECTOR (MCI) designation is the highest rating that can be obtained through CREIA. This designation is only given to those inspectors that have obtained many hours of additional training and have been tested for knowledge above the already high standards set for the members of CREIA. Each report prepared by a MCI will bear the MCI seal representing the best quality inspection for your investment.

What Is A CREIA New Construction Specialist (CNCS)?
A professional new construction inspection specialist is only looking out for your best interest. Many homebuyers are now taking advantage of CREIA inspectors who specialize in new construction stage inspections. CREIA has established a specialty classification for professional inspectors who have received additional education and testing related to new construction inspections. These Inspectors are identified as CREIA New Construction Specialist (CNCS)

Your New House Needs a Professional Inspection
The California Real Estate Inspection Association (CREIA) encourages homebuyers entering into a contract for the building of their new house —whether it is custom or tract built — to retain the services of a professional home inspector during the construction of their new home. Homebuyers building their new dream house have many important decisions and considerations. They need to know that someone is looking out for them with independent, unbiased professional eyes.

What Is A New Home Construction Inspection?
A new home construction inspection (or “in-progress” inspection) is an independent, third party inspection to ensure that the work completed is in compliance with plans, specifications, and the construction schedule. Once a home is built, many conditions that could have been observed during construction are now covered and are no longer visible for inspection. Often a poorly installed/constructed condition that could have been visually reviewed during a construction progress inspection becomes covered or concealed later in the building process cause a potential financial burden for the property owner for future corrective action. For these reasons, it is important that a home be inspected during construction by the buyer’s representative whenever possible so that any reportable defects can be corrected before completion and transfer of title.

It is not good business to forego a home inspection on a newly constructed house, regardless of how conscientious and reputable your home builder. No home, regardless of how well it is constructed, is totally free of defects. The construction of a house involves thousands of details, performed at the hands of scores of individuals. No general contractor can possibly oversee every one of these elements, and the very nature of human fallibility dictates that some mistakes and oversights will occur, even when the most talented and best-intentioned tradespeople are involved. It is also an unfortunate aspect of modern times that some builders/developers do not stand behind their workmanship and may not return to fix or replace defective components installed after the sale is complete.

Often the builder/developer will state the home has been built to “code” and that it was inspected at different stages and signed off by the local jurisdiction. However, building codes are frequently “minimum in nature” — that is, the primary intent of building regulations (codes) is to provide reasonable controls for the construction, use and occupancy of buildings. The builder is responsible to meet minimal standards at best — you may want higher standards applied to your dream house. Also, it is an unfortunate fact of the hectic pace of construction, that local building department inspectors are often overbooked with inspections, which results in their spending a minimal amount of time at the construction job site and important details may be overlooked. Finally, jurisdictional inspectors are not concerned with workmanship as long as all the systems and components in a new home meet minimum code requirements.

A professional in-progress inspection is a great value to a new construction homebuyer because the home inspector will spendwhatever time it takes to evaluate every readily accessible parts of the home they can safely reach and then prepare an inspection report containing their findings. This, in turn, will provide a “fix-it” list that can be brought to the attention of the builder/developer. Additionally the homebuyer has peace of mind in knowing they took the extra step in protecting their investment by helping ensure they are made aware of any overlooked defects.

A new construction progress inspection by a qualified professional allows the inspector to become the “eyes of the homebuyer” through a series of inspections that occur during different stages of the construction of their new home. Typically, these inspections are performed at the following stages:
- Foundation form work before concrete placement
- After installation of support posts, beams and floor joists
- After installation of all rough framing, rough electrical wiring, heating/cooling duct work and the building's sanitary pipe drainage and potable water supply systems
- Exterior siding(s) including roof coverings
- Final "walk-through" inspection checking all visually accessible systems and components such as: heating/cooling, electrical and plumbing systems including safety items such as; smoke detectors, stairs, handrails and guard railings, compliance with emergency-egress requirements, and proper installation of safety/tempered glazing within hazardous areas.

It is important to let your builder know up front that you intend to have the work inspected by an independent third party construction expert. This will help set a tone with the builder and let them know that you expect things to be done properly. Ideally, you will want to start communication with your inspector as soon as you sign a contract with your builder. It is recommended that have a professional inspection of the foundation prior to the pour. A follow up inspection should be conducted after the foundation has set up.

Other Inspection Related Services
In addition to performing building inspections, many CREIA inspectors help with analysis and solutions to specific problems, such as foundations, energy conservation, and roofing problems. CREIA inspectors are also frequently called upon to review restoration and home improvement plans as well as maintenance specifications, contracts and progress inspections for new construction to help ensure proper completion of contracted work. If you find that you are involved in a dispute regarding construction work performed on your building, a CREIA member can provide expert advice. Also, many CREIA members inspect commercial and investment properties, multiple unit dwellings, condominiums, townhomes, mobile homes and perform reserve studies as well.

Easing The Transaction For A Home Seller
Home sellers are being urged to utilize home inspections prior to listing their homes. Professional inspections can discover unknown conditions allowing sellers an opportunity to perform desired repairs before placing the property on the market. A professional “listing inspection” is just good business, it may facilitate a smoother transaction by putting potential buyers at ease, reducing negotiating points, and bypassing annoying delays.

Home Seller Disclosure Obligations
California case law states that it is the duty of a seller to disclose relevant facts concerning the property for sale through a TDS form. (Transfer Document Statement) This basically means a seller of one to four residential units has a legal obligation to disclose all of the conditions of the property know to them to perspective buyers, which is often accomplished through use of a “Transfer Disclosure Statement.” While the listing inspection report cannot be used as a substitute for that disclosure, it does allow the seller to provide prospective buyers with additional information, based on an unbiased, third party, professional inspection.

Do I Have to Repair Everything Wrong With The House?
A listing inspection report is not intended to be a “do” or repair list for the home. Sellers are not obligated to repair conditions noted in the report, nor are they required to produce a flawless house. With a pre-listing home inspection, potential repair items already known by both parties are subject to any negotiations. A home seller can make repairs as a matter of choice, not obligation; to foster good will or to facilitate the sale. Sellers maintain the legal right to refuse repair demands, except where requirements are set forth by state law, local ordinance, or the real estate purchase contract.

What Is An Listing Inspection?
An inspection consists of a non-invasive physical examination of a home’s systems, structures and components intended to identify material defects that exist at the time of inspection. The heating and cooling equipment is activated along with operating plumbing fixtures, testing accessible electrical outlets and fixtures, and operating a representative sampling of doors and windows. Visual inspection of the roof, walls and drainage adjacent to the home are included. Because of the wide range of construction practices and the “normal” wear and tear placed on the components of home, a professional home inspection can help provide a wealth of information to a home seller anxious to convey the condition of their home to perspective buyers.
Do I Really Need A Listing Home Inspection?
As a seller, if you have owned your property for a period of time, an inspection can help identify potential problems and recommend preventive measures, which might avoid future expensive repairs. There is no such thing as a home that is too new or too well built to benefit from a professional inspection. Anyone advising against an inspection is doing a disservice to the homebuyer. Many problems frequently encountered after the buyer moves in, are a routine discovery for a qualified home inspection.

Is There Anything I Can Do Better To Maintain My Home?
Inspection reports often identify the same neglected maintenance items. Performing some basic maintenance can help keep your home in better condition, thus reduce the chance of those conditions showing up on the inspection report. To present a better maintained home to perspective buyers follow these tips from the California Real Estate Inspection Association. Most of these items can be accomplished with little or no cost, while the benefits of selling a well maintained home can be worth the effort.
- Clean both rain gutters and any roof debris and trim back excessive foliage from the exterior siding.
- Divert all water away from the house (for example, rain-gutter downspouts, sump pump discharge locations, and clean out garage and basement interiors.
- Clean or replace all furnace filters.
- Remove grade or mulch from contact with siding (preferable 6-8 inches of clearance).
- Paint all weathered exterior wood and caulk around trim, chimneys, windows, doors, and all exterior wall penetrations.
- Make sure all windows and doors are in proper operating condition; replace cracked windowpanes.
- Replace burned out light bulbs.
- Make sure all of the plumbing fixtures are in spotless condition (toilets, tubs, showers, sinks) and in proper working order (repair leaks).
- Provide clear access to both attic and foundation crawl spaces, heating/cooling systems, water heater/s, electrical main and distribution panels and remove the car/s from the garage.

And finally, if the house is vacant make sure that all utilities are turned on. Should the water, gas or electric be off at the time of inspection the inspector will not turn them on. Therefore, the inspection process will be incomplete, which may possibly affect the time frame in removing sales contract contingencies.

Locating A Qualified Inspector
It is imperative that the seller secures the services of a qualified home inspector. Make sure to hire an inspector who is both trained and experienced in home inspection, maintains proper insurance, and is a member of a professional association such as the California Real Estate Inspection Association (CREIA). You can visit the CREIA website to find a CREIA Inspector in your area.

Please exercise extreme care and cautious consideration before hiring just anyone. Select your home inspector with the following criteria in mind:

Professional Affiliation:
In California, there are standards for home inspectors that have been enacted by the California Real Estate Inspection Association (CREIA) and recognized in California statutes. Membership in this professional association requires obtaining initial training, passing a rigorous membership exam, and mandatory adherence to professional standards of practice and participation in ongoing education (a minimum of 30 hours per year). When you choose a home inspector, you should specify membership in CREIA.

Inspection Experience.
Of paramount importance is an inspector's actual level of direct experience in the practice of home inspection. A general contractor's license can be an important credential, but when it comes to home inspection, a license to build indicates very little as it relates to competence as a property inspector. The experience that matters most is specific home inspection training and experience, not building experience.

Avoid Price Shopping.
Home inspection fees vary widely. A home is the most expensive commodity you are likely to purchase and or sell in a lifetime. One defect missed by your inspector could cost 100 times what you save with a bargain inspection. The best method of price shopping is to shop for quality. Considering the high cost of real estate today, an inspection fee is a small price to pay. It can save thousands of dollars and years of regret.

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.

Termite Inspection (Part 4) FAQs

2005-02-05T07:06:00.000-08:00

Termite Inspection (Part 4) FAQs

Reprinted from the California Structural Pest Control Board

UNDER WHAT CONDITIONS IS A PEST CONTROL INSPECTION REPORT REQUIRED?

Although the State of California regulates structural pest control firms, it does not require an inspection report prior to the sale of property. However, financial intuitions usually require the report to ensure that the building is structurally sound. This requirement protects their investments and provides the home buyer with an inexpensive safeguard against the cost of pest control repair and treatment. Although some homes are sold "as-is," a home buyer is advised to arrange for a pest control inspection anyway. The cost of an inspection is usually no more than $100.00 dollars, while the cost of repairing undetected pest damage may run in the thousands-of-dollars.

WHAT ARE THE RIGHTS OF THE BUYER WITH REGARD TO PEST INSPECTION REPORTS AND PEST CONTROL TREATMENT?

When a pest control company is hired, it is accountable to both the buyer and seller, regardless of who pays for the inspection. It is required to furnish the person who orders the inspection with a copy of the report within (5) five days. Under [section 1099 of the Civil Code], the seller must deliver a copy of the report to the buyer. If there is any question about the report, the buyer should contact the company which performed the work and, if necessary, arrange for another inspection.

WHAT INFORMATION MUST BE INCLUDED ON THE INSPECTION REPORT?

The Structural Pest Control Board requires that all pest control companies in the State use a standardized inspection report form. The inspection report identifies wood-destroying organisms or conditions likely to cause pest infection or infestation, and the area where the problem exists.

Recommendations are also made for corrective treatment. Normally, only the main structure of the property is inspected, but an inspection may be made of other wooden structures detached from the house at the owner's request.

A diagram on the inspection report will detail every part of the house checked for signs of infestation. The report must also state areas which have been inspected and areas considered to be inaccessible. It is important to insure exactly which areas were inspected and to make sure the inspector understands what structures you want inspected.

If you did not order the report, be sure to check if the report is a limited or complete report before accepting it. For Real Estate transfers, a complete structural pest inspection report is preferable.

Conditions considered likely to lead to pest infestations are also indicated on the inspection report. These include conditions caused by excessive moisture, earth-wood, contacts, and faulty grade levels about the foundation.

Pest control inspections are limited to those items subject to wood-destroying organisms. Inspectors operating in a strict capacity, do not include information about the condition of air conditioning, plumbing or electrical systems in their reports. But most inspectors will alert the consumer to obviously dangerous conditions which they discover during the inspection.

WHAT AREAS ARE CONSIDERED TO BE INACCESSIBLE ON THE INSPECTION REPORT?

Those areas which cannot be inspected without opening the structure or removing the objects blocking the opening are considered inaccessible. Attics without adequate crawl space, slab foundations without openings to bathroom plumbing, floors covered in carpeting, wall interiors and locked storage areas are the most common inaccessible areas.

The pest control inspector must list all inaccessible areas and the specific reasons why they are not inspected. Careful attention should be paid to these areas as there may be structural pest problems, which cannot be detected without further inspection. The report will recommend whether or not further inspection is appropriate.

DO ALL RECOMMENDATIONS LISTED ON AN INSPECTION REPORT HAVE TO BE COMPLETED PRIOR TO THE SALE OF THE HOME?

Many financial intuitions require that both the inspection and repair work be completed prior to the closing of escrow. If it is not required, the buyer should be aware of work, which has been done and work, which has yet to be completed before purchasing the home. Pest control companies are required to complete a Notice of Work Completed and Not Completed when any work is done on a structure.

IF TWO INSPECTION REPORTS ARE FILED ON THE SAME STRUCTURE WITHIN A REASONABLY CLOSE PERIOD, SHOULD THEY BE NEARLY IDENTICAL?

There are (3) three parts of an inspection report - findings. recommendations and estimates - and each may differ from company to company.

Findings should be similar, no matter which company performs the inspection, though minor differences are not uncommon. Any major differences, like failing to spot active infestations, should be reported to both companies. If their explanations are not satisfactory, the Structural Pest Control Board should be contacted for assistance.
Recommendations made by pest control companies can differ considerably since there are numerous ways to repair pest damage or correct conditions. The disparity may be due to differences in the inspector's professional judgment or material availability.
Estimates to correct the problems and/or conditions identified by the inspection report may vary widely. The Structural Pest Control Board does not regulate or control prices in any way.

HOW LONG IS AN INSPECTION REPORT CONSIDERED VALID, AND ARE COMPANIES REQUIRED TO CERTIFY THEIR INSPECTION WORK?

Under the Structural Pest Control Act, all licensees are responsible for any inspection for two years from the date of such work. However, they are not responsible for conditions, which develop after the inspection. For that reason, it is advisable for the buyer to obtain an inspection report as close as possible to the close of escrow. If the seller orders the report, it is advisable to obtain it when the house is listed so that repairs may be completed before the start of escrow.

Pest control companies are required to certify their inspection work, if requested by the homeowner. They will certify one of the following:

The inspection disclosed no evidence of active infestation or infection by pests;
The inspection disclosed active infestation and that the repairs have been completed; or
The property is free of pest infestation, except for areas indicated on the report.

Every completion report that provides for certification should be compared with a copy of the inspection report to determine if there are any conditions, which have not been corrected.

HOW CAN A CONSUMER TELL IF A HOUSE HAS BEEN INSPECTED BEFORE OR IF ANY WORK HAS BEEN COMPLETED?

Effective October 1, 1979, every time a pest control company makes an inspection for wood-destroying pests or organisms, it must post a tag at the entrance of the attic or sub areas or in the garage. the tag contains the firm's name and the date of the inspection. A similar tag must be posted next to the inspection tag when the company completes a Notice of Work Completed or Not Completed indicating any work completed with respect to wood-destroying pests or organisms. In addition to the firm's name and the date of the completion, this tag must indicate any chemical used.

The pest control company must also note on an inspection report the location of the inspection tag as well as the presence of any other inspection tag or fumigation tag that is less than two years old.

Also, anyone who wishes to determine if there are additional inspection reports or completion notices on file or wants copies of known reports may contact the Structural Pest Control Board's Sacramento office where copies may be obtained for a $2.00 dollar search fee.

WHAT CRITERIA SHOULD A CONSUMER USE IN SELECTING THE SERVICES OF A PARTICULAR PEST CONTROL COMPANY?

The approach should be similar to buying other goods. Consult the yellow pages, shop around, compare prices and services, and get more than one estimate for an inspection. Ask friends or neighbors who have recently used structural pest control services for references.

Realtors may also recommend companies, but you are not required to accept their recommendations, and may want to select your own company. After selecting a company, you can write or telephone the Structural Pest Control Board to verify the company's license status and complaint history for the previous two years.

WHAT RECOURSE DOES A CONSUMER HAVE IF DISSATISFIED WITH THE SERVICES OF THE PEST CONTROL COMPANY?

After reading the information in this brochure, contact the company with whom you are dissatisfied and explain your problem.

If the company does not resolve the problem to your satisfaction, you can contact the Structural Pest Control Board for additional information or assistance by telephoning:

Southern California: (213) 620-2428;
Northern California: (916) 920-6323.

Or you may send for a complaint questionnaire by writing:

Structural Pest Control Complaints
Structural Pest Control Board
1430 Howe Avenue
Sacramento, CA, 95825

The Structural Pest Control Board will first try to mediate you complaint. If this does not result in a satisfactory solution and further investigation is warranted, the complaint may be referred to the Department of Consumer Affairs Division of investigation. However, even if an investigation results in a license suspension or revocation, the Board cannot guarantee that you will receive any restitution. You may still have to file a civil action lawsuit to get your money back.

Complements of the Structural Pest Control Board.

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.

Termite Inspection (Part 3) FAQs

2005-02-05T06:41:00.000-08:00

Termite Inspection FAQs

Edited and Reprinted from MasterCareWeb

Why do I need a termite inspection?
Before any property is sold, bought or refinanced a termite inspection is required by most banks and lending institutions. Its purpose is to ensure that there are no active termite infestations in the property.

What does the inspector for in a inspection?
Evidence that would be typical of a termite infestation: Damaged wood, termite droppings, termite kick-out holes, termite wings are just a few indications that you have termites. An inspector also looks for any other type of wood destroying organism such as dry rot and fungus.

What if no evidence of termites is found?
You will receive a written termite report stating that no visible evidences of infestation have been found in the accessible areas that were checked. Every home should be reinspected periodically, especially if neighboring homes show signs of termites.

Is an annual re-inspection contract advisable?
Yes. Every home should be inspected once a year. Generally, the cost of an annual service control program is reasonable compared to the damage termites can do to your home.

How many type of termites exist?
There are 2 common types of termites found in Southern California. homes. Drywood termites and Subterranean termites. Drywood termites like to eat “dry wood”. They are most commonly found above the soil in attics, garages and throughout the home. Subterranean termites are usually found underneath the house usually in the sub area, vent areas as well as throughout the house.

How do termites get into a house?
Sometimes they fly in from a neighboring home, from wood that is in contact with the soil around your home and from their yearly swarming season (Mar-May).

Are there other wood-destroying insects besides termites?
Yes. Besides the most common termites -- the Drywood and Subterranean -- there are wood-destroying beetles, carpenter ants and carpenter bees.

What if the inspection shows termites or other wood-destroying insects are present?
Then it will be necessary to treat the property to prevent any further damage. If left untreated the problem will continue and cause greater damage and expense.

When is a fumigation recommended?
Since Drywood termites live in the wood it is impossible to check every piece of wood in a house. If evidence of Drywood termites extend into inaccessible areas of the property, fumigation is the only recommended solution.

How long does a fumigation last?
Usually three days. The first day is used to cover the property with a tarp and to insert the Vikane gas. The 2nd day the pest control company will return to the property, remove the tarp and allow the Vikane gas to dissipate. On the 3rd day the pest control company will we return to the property and check to ensure, with special equipment, that the Vikane gas is completely removed from your home. It is at this point that the pest control company will give the house clearance and allow reentry.

Do I need to turn off the gas?
Yes. If your house requires fumigation you will need to contact your gas company as soon as your know the fumigation date. Note: the gas company may need advance notice to schedule a gas shut-off date.

What chemicals are typically used to control termites?
There are two traditional classes in use today -- organophosphates and synthetic pyrethroids. Both are effective and will protect your home when used properly. Your inspector should explain these differences to you. In addition, a new category of non-repellant termiticides has achieved a very high level of performance in eliminating termite infestation. Because of its non-repellant nature, termites move through the treated soil picking up an effective dose. Subsequent contact with the other termite colony members helps transfer the dose to other colony members and accelerate population reduction.

What is the best way to totally eliminate Drywood termites?
By fumigation. Unlike partial spot treatments, fumigation completely eliminates Drywood termites from your home.

How do subterranean termites get into a house?
Very easily. All they need is an opening 1/64 inches wide. They may enter directly from their colony in the soil to the wood of your house. They usually commute daily between the wood and their colony.

Is there any other method of treating drywood termites besides fumigation?
The most common method of treating Drywood termites aside from a fumigation is a localized treatment in areas of infestation. This method should be considered as a secondary method of control due to its inability to reach areas that are inaccessible to the inspector and the pest control technician.

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.

Termite Inspection (Part 2) FAQs

2005-02-05T06:29:00.000-08:00

Termite Inspection (Part 2) FAQs

Edited and reprinted from the Structural Pest Control Board

What should I do if I have termites in my home or if I think termites are damaging my home?
If your house has never been treated for termites by an exterminator, contact several local pest control companies and get estimates for their termite control services. These same companies can inspect your house to see exactly what types of pests are attacking your home. If you are not sure you have a termite infestation, an inspection will reveal if a visible termite infestation is/is not present. If you have termites swarming (flying around) in your house, the swarmers can be combated using a variety of over-the-counter pesticides designed for flying insects that are available to homeowners. Termites generally swarm once a year for a period or about twenty-four (24) hours. The swarmer is the reproductive form of the termite, and does not do damage to wood. It is helpful to save several of the swarmers in a plastic bag for the inspection by your local pest control operator before a termite treatment is performed.

What chemicals or techniques are commonly used for termite control, and how safe and effective are those chemicals?
Currently, several chemicals on the market are commonly used for termite control. Additionally, some companies use a technique called “ termite baiting”. The baiting technique involves the installation and monitoring of bait stations intended to attract termites. Once the termites have been detected in the stations, the bait is changed to use a bait that has been treated with a termiticide which, when carried to the colony or nest and fed to other members of the colony, will kill the individuals that receive the bait. Termiticides are registered with the Environmental Protection Agency (EPA). Termiticides are considered an acceptable means of termite control. A consumer should receive disclosure information, including a label of the termiticide that is being proposed for use and warranty information, from the pest control operator at the time of bid. A consumer trying to determine which company to employ should review the disclosure information. Termiticides alone will not guarantee elimination of a termite infestation. Inspection methods, procedures and application techniques all contribute to a successful treatment. If you have a health-related question concerning the termite measures to be used on your home, or that has already been applied to your home, you may obtain a copy of the chemical's package label from your pest control operator and take it to your family doctor for analysis.

What treatment methods are commonly used to combat termites?
Subterranean termites are treated using the methods and procedures listed on the product label. Drywood termites are commonly treated using fumigation, wood removal or borate products for spot applications. When fumigation is performed, a certified applicator for the pest company must be present at the time the gas is released into the house and when the house is released for occupancy following the fumigation and proper aeration. A technician licensed to do termite work with the advice of a certified applicator can perform a treatment for Subterranean termites without the Certified Applicator being present.
Where and how do termites live?
All termites subsist on cellulose, which termites get from wood. Termites are social insects with a highly organized caste system, much like ants or bees. Subterranean termites usually live outside the house in underground nests. Subterranean termites use moisture in the earth to survive. Since subterranean termites also need cellulose, they often tunnel into nearby homes to get it. Drywood termites, on the other hand, need no contact with the earth. Drywood termites live right inside the homes that they devour.

What is the difference between Subterranean and Drywood termites?
Subterranean termites usually return to the soil to live and reproduce, and are found throughout Texas. Drywood termites, found more commonly in coastal areas such as Houston and Corpus Christi, do not have soil contact but can live inside walls or other wooden building materials.

I had a pest control company treat my house for termites last year, but now I have termites again. What should I do?
Retreatment for subterranean termites can only be performed if there is clear evidence of reinfestation or disruption of the barrier due to construction, excavation or landscaping and/or evidence of the breakdown of the termiticide barrier in the soil. These vulnerable or reinfested areas may be retreated in accordance with application techniques described in each individual product’s labeling. The timing and type of these retreatments will vary, depending on facts such as termite pressure, soil types, soil conditions, and other factors, which may reduce the effectiveness of the barrier. Annual retreatment of the structure is prohibited unless there is clear evidence that reinfestation or barrier disruption has occurred.
Keep in mind that termite control is as much an art as it is a science. Many factors can affect the adequacy of a treatment, including the construction of the house, and re-treatments may be necessary. Termites can still be in the walls of the house six to eight weeks even after a proper termite treatment. If you have a re-infestation and are under contract with a company, contact the company so licensed individuals may identify and address the problem.

Is the pest control company required to give me termite treatment disclosure documents before performing a termite treatment on my house?
At the time a bid is submitted and prior to treating, the pest control company proposing the treatment is required to give the prospective customer termite treatment disclosure documents. The documents must include, but are not limited to, the following items: (1) A diagram of the structure or structures to be treated; (2) A label for any pesticide recommended or to be used, and the proposed concentration of the termiticide to be used; (3) The complete details of the warranty provided; (4) Definitions of the types of treatment; and (5) The signature of approval of the certified applicator or technician licensed in the termite category employed by the company making the proposal.
If the warranty does not include the entire structure treated, the areas included must be listed. The warranty information must also include the time period of the warranty, the renewal options and cost, the obligations of the pest control operator to retreat for termite infestations or repair termite damage caused by termite infestation during the warranty period, and conditions that could develop as a result of the owner's action or inaction that could void the warranty.

What should I expect from a wood destroying insect inspection?
The first thing you need to know is that any structure containing wood or cellulose material provides a natural food source for subterranean termites. Even structures that are mostly steel and concrete are vulnerable to termite attack. The following list will provide some general conditions conducive to termite infestation; (1) Earth-Wood contact; (2) Firewood stacked against foundation; (3) Wood debris in crawl space; (4) Wood mulch [within 3 ft. of foundation]; (5) Faulty grade; (6) Insufficient ventilation; or (7) Moisture.
A licensed person will conduct a careful inspection to determine the presence or absence of visible evidence of infestation from wood destroying insects. The inspection will be made in those areas which are readily accessible and where infestation is most likely to occur. No inspection is made in areas which require the breaking apart, or dismantling or removal of any objects. Therefore, it is not a warranty as to the absence of wood destroying insects. It is not a structural damage report. A wood destroying insect inspector is not ordinarily a construction or building trade expert, and therefore, is not expected to possess any special qualifications, which enable him to detect the extent of structural damage. Evidence of wood destroying insects is noted in the report.

What steps can I take to choose a pest control service that will meet my home's needs?
Contact several companies in your area to get information on the types of services they offer and what they charge. You may find a great deal of variation on contract terms, prices, and treatment options. Review the contract terms carefully and ask about anything you do not understand. Note whether the company offers coverage for damages caused by termites, what the renewal options are, and what conditions could void the warranty. Companies are required to be licensed in order to provide commercial pest control services. Ask the company to provide verification of licensure. Ask the company to provide you information concerning termite experience and training the inspector and/or applicator have received. Each person may have different levels of experience. A new company may have personnel who have years of experience in the industry. An existing company may have a high turnover rate resulting in inexperienced personnel.

How destructive are termites?
Nationwide, termites cause over a billion dollars in damage annually—more than all tornadoes, hurricanes and windstorms combined. Because they nibble away slowly from the inside, damage can be very extensive before it’s noticed. It’s not unusual for a termite to feast on a building throughout a life span of 15 years—and the queen can live and produce eggs for up to 50 years. Undetected and untreated, termites can severely damage and, in time, destroy a home.

Don’t termites attack only old, run-down buildings?
Termites have been found in buildings as early as four days after construction. Every building fabricated wholly or partly of wood is susceptible. Chemical or mechanical barriers can be established in the construction stage, however, to prevent or discourage termite infestations in new homes.

Are there different kinds of termites?
Entomologists have identified over 2000 species, 55 of which exist in the United States. But there are only two kinds, basically, that homeowners have to worry about: subterranean termites and drywood termites.

What’s the difference?
They’re basically very similar. All termites subsist on cellulose, which they get from wood. And all termites are social insects with a highly organized caste system, much like ants. But subterranean termites, as the name indicates, usually live outside the house in underground nests. They use moisture in the earth to survive. Since they also need cellulose, they often tunnel into nearby homes to get it. Drywood termites, on the other hand, need no contact with the earth. They live right inside the homes that they devour.

Where are termites found in the U.S.?
Subterranean termites inhabit the entire 48 states and Hawaii, but are most common in the southern two-thirds of the U.S. Drywood termites are not as widespread as subterranean termites. They’re mainly a problem in the South.

How can I tell if I have a termite problem? And, if so, what kind?
Subterranean termites are often detected during swarming, usually in the spring, when some fly from their nests to start new colonies. Other signs are shelter tubes primarily composed of mud on the surface of walls, joists, piers, chimneys, plumbing and other fixtures. Weak or broken structural members, blistered wood and soil in cracks can also be evidence of subterranean termites. Drywood termites sometimes give themselves away by creating surface blisters on wood and leaving wings or piles of waste that look like sawdust on windowsills and floors.
If none of these signs is present, does that mean my home is free of termites?
Not necessarily. Termites work from the inside out and are very often hard to detect. Especially drywood termites that have no link to the outside and spend their entire lives indoors—in walls, in roofs, etc. The only way you can be sure you’re not sharing your home with termites is to have it inspected by a professional pest control operator.

What does such an inspection involve?
Because a pest control operator has a trained eye and knows what to look for, his examination will be brief but thorough. He’ll identify evidence of any previous treatments or infestations, any wood-destroying organisms present and the damage they’ve caused, and any structural conditions that may make your home especially vulnerable to attack.

What will an inspection cost?
The cost of an inspection varies. However, the fee is usually small - typically about $120. You should keep in mind that even if the results of an inspection are negative--if termites aren’t present--your money wasn’t wasted. You’ve purchased peace of mind.

Suppose my home has drywood termites. How can I get rid of them?
You have three options: spot treatment, fumigation or physical removal of infested wood. But a wood-penetrating gas fumigant is the best way to get them all.

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.

Home Inspection (Part 2) FAQs

2005-02-04T22:02:00.000-08:00

Home Inspection FAQs

Reprinted from US Inspect

What does the home inspection entail?
There are four basic steps to the home inspection. First, the inspector arrives at the property, makes general introductions and both explains what is going to take place and asks about any special questions or requests. Next, while the inspection agreement is being reviewed, the inspector will make a quick circuit of the property to size up the scope of the inspection. Then, there will be an in-depth walk-through inspection with the client. This involves inspecting all visible areas and reviewing all accessible items and areas, including the heating system, central air conditioning system, interior plumbing and electrical systems, the roof, attic space and all visible insulation, the walls, ceilings, floors, doors, windows, basement or crawlspace area, and the foundation and all visible structural components. Any questions or items of special interest regarding a particular system or structural component are usually addressed at this time. Finally, a check of the entire property is made to verify that the condition of the property is the same as when the inspection started. After this last circuit, the inspector will complete the hard copy of the inspection report. All deficiencies and maintenance recommendations will be noted and a recap of deficiencies will be entered onto the summary sheet for the client.

How long does the inspection take?
An average home inspection will take between 2 and 3 hours, depending on the size of the house. Larger and more complex houses will take longer for the inspector to completely and accurately evaluate. Another factor that may affect the inspection time is the condition of the components at the property. If the house and appliances have not been properly maintained, the inspector may need additional time to explain to the buyer what options they may have to either maintain or replace the items.
How does a home inspection differ from a code inspection?
A typical buyer’s inspection is an introduction to the house and is focused on informing and educating the client about the property. A code inspector, on the other hand, works for the local municipality and enforces the local and state codes with little or no concern for the buyer’s understanding of these codes. A code inspection does not communicate whether or not the house was well constructed.
The general home inspector is aware of the local codes, and the inspection and report will consider these codes. However, the scope of a general home inspection is targeted more at providing an informative, detailed and objective evaluation of the house so that the buyer understands the home that he/she is considering purchasing.

Why do I need a home inspection?
The purchase of a home is probably one of the single largest investments you will ever make. You should be as informed and educated as you possibly can when considering a home purchase. And a home inspection can provide that education. Also, the FHA and the VA, as well as many other mortgage lenders, recommend that a home inspection be performed.
A home inspection lets you know the condition of the property as well as identifies the need for any repairs before you buy, so that you can make an informed purchasing decision. A home inspection also informs the buyer of the positive aspects of the home, as well as any maintenance that may be recommended to keep the house in good shape and to keep all major systems operating smoothly. After the inspection, you will have a much better understanding of the property you intend to purchase.
A home inspection is also valuable for homeowners for identifying any potential problems that may need tending to, as well as for learning preventive maintenance measures to help avoid any costly future repairs. If you intend to put your house on the market, a home inspection could identify items that would be called out on a buyer’s inspection, which allows you to be proactive in making repairs, thereby putting you house in a more sellable position.

Why do I need a home inspection on a house that I am having built?
An inspection on a new home is important for the buyer to level the playing field. As in any job, there are shortcuts and tricks of the trade that someone who is unfamiliar with them can easily miss. A home inspector is better able to see nuances that may not be readily visible to an untrained eye. You also need an inspector to offset the builder’s or contractor's interest. There is actually quite a lot of information about a home that most people either take for granted or simply don’t know.
An inspection of the house before the drywall is installed, otherwise known as a “pre close-in inspection,” provides a level of quality assurance for the buyer that many builders don’t usually provide for their contractors. This inspection gives you a better chance of identifying and correcting potential problems when they are much easier and less expensive to fix, before they become physically or financially prohibitive, such as moving a wall so that kitchen cabinets don’t protrude into a doorway opening, or moving electrical receptacles so they are placed where you need them.

What is the cost of a home inspection?
The cost of a home inspection for a single family home varies due to the geographical location, as well as its size and age - typically it's about $400. The cost can also vary when additional inspection services are requested, such as septic, well, radon or pest inspections. However, you should not let cost be a factor in determining whether or not to have a home inspection performed or in choosing your home inspector. You should consider the money spent as an educational investment that will more than pay for itself. The most important consideration should be the qualifications, training and experience of the inspector, as well as any professional affiliations he or she may have.

Do I need to attend the inspection?
It is not necessary that you attend the inspection. However, it is strongly recommeded that you or a representative for you attends the inspection so that you are properly informed of the investment that you are considering making.
If you attend you will be able to follow the inspector around and visually learn about the condition of your house, how the various systems operate and how to properly maintain them. You will also have a better understanding of the contents of the report if you are able to see it from the home inspector's perspective and can ask him/her questions as they arise.

Is the inspector licensed or certified?
In California all inspections should be performed to the standards adopted by the California Real Estate Inspection Association. To become a member, your inspector must pass a written examination to prove their competency. American Institute of Inspectors (AII) and other professional training and certifying agencies train and certify their members through rigorous classroom and field testing. CREIA and AII inspectors must participate in continuing education courses to maintain their certifications and/or memberships. AII & CREIA inspectors adhere to a strict code of ethics and standards of practice. Inspectors should also be ASHI Members or Candidates.

Should I ask the Home Inspector if he/she carries Errors and Omissions Insurance?
It is recommended. Errors and Ommissions Insurance is intended to protect you in the event of negligence in the inspection.

How hard is it to upgrade the electric service in my house?
Upgrading the electric service is an involved procedure that will include one or all of the following: replacement of the service entrance cable; upgrade and possible replacement of the main disconnect panel; installation of an additional branch circuit over current devices (commonly known as fuses and circuit breakers); and rewiring the branch circuit connections at the main disconnect panel. This is a question that you could ask an inspector and receive advice that may help you determine a reasonable plan of action. Anytime repairs are performed on or within the electrical system and its components, a licensed electrician should be contacted to make these repairs.

What is a double-tapped circuit?
Double-tapping, also known as “double-lugging,” is a condition where there is more than one wire conductor terminated in a service panel fuse or circuit breaker. Double-tapping is permissible only if the terminals are identified for that use. Most breakers and fuse connections are designed to hold and handle just a single incoming circuit, although there are some manufacturers, such as Square-D™, that market breakers designed to allow two wires to be securely attached. Any time repairs are performed on or within the electrical system and its components, a licensed electrician should be contacted to make these repairs.

What are the estimated life spans of all the systems in my house?
There is no accurate method to determine exactly how long a particular system or component is going to last. This is due to a number of reasons: the geographic area; the physical location of the units; and the climate and weather. This is similar to asking how long a car lasts. There are too many variables to determine the life span of items that need maintenance and have thousands of integral components.For example, with heating systems, many factors can directly affect the life span of the appliance. If the furnace is located in an unconditioned crawlspace or in the attic, the elevated humidity levels can rapidly cause heat exchangers to prematurely rust. In addition, when furnaces are used in the colder months, the differences between the low air temperature and the high temperature of the heat exchanger can cause expansion/contraction cracking that can lead to leaks in the heat exchanger.Roofs, on the other hand, can be affected by factors like the amount of direct sunlight, adequacy of attic ventilation, number of layers of roofing material, as well as the quality of the roofing material itself. Climate and weather can affect the life of the roof also. For instance, in the west and southwest parts of the U.S., asphalt composition shingles have a tendency to last no more than 10 to 15 years on average, whereas in the northeastern states and around the Great Lakes area, the same roofing material can last 18 to 22 years or longer.

System Component/ Estimated Design Life

Roofing
Asphalt Composition Shingle 18 - 22 Years
Asphalt Composition Rolled Roofing 10 - 15 Years
Built-Up Roofing 10 - 15 Years
Elastomeric / Rubber Roofing 10 - 15 Years
Wood Shakes / Shingles 15 - 25 Years
Clay / Terra Cotta Tiles 25 Plus Years
Concrete / Cement Tiles 25 Plus Years
Slate Roofing 50 Plus Years
Metal Roofing (flat, standing-seam, corrugated) Indefinite
Plastic / Fiberglass corrugated panels 10 Plus Years
Glass Panels (sun rooms, etc.) 15 Plus Years
Gutters and Downspouts 15 - 20 Years

Heating
Boiler (Steam / Hydronic) 25 - 40 Years
Forced Air Furnace - Gas / Oil 15 - 35 Years
Forced Air Furnace - Electric 15 - 25 Years
Electric Resistance, Baseboard 15 - 25 Years

Cooling
Heat Pump 10 - 15 Years
Central Split System 10 - 15 Years
A/C Compressor 10 - 15 Years
Window A/C Unit 10 - 15 Years
Evaporative (Swamp) Cooler 10 - 20 Years

Plumbing
Water Heater - Electric 12 - 18 Years
Water Heater - Gas / Oil 10 - 15 Years
Solid Waste Pump 5 - 10 Years
Sump Pump 5 - 8 Years
Submersible Well Pump 10 - 15 Years
Shallow or Deep well Jet Pump 10 - 15 Years

Kitchen Appliances
Dishwasher 5 - 10 Years
Garbage Disposal 5 - 10 Years
Cook Top - (Electric / Gas) 15 - 20 Years
Range / Oven 15 - 20 Years
Refrigerator 5 - 25 Years
Trash Compactor 5 - 10 Years
Ventilator / Draft Hood 8 - 12 Years
Washing Machine / Clothes Dryer 8 - 12 Years

Miscellaneous
Chemical Termite Treatment (subterranean) 5 Years
Fumigation for Drywood Termites 2 Years
Radon Mitigation System Life of the fan

What things should I take into consideration when planning to finish my basement?
If you are thinking of finishing your basement to provide additional living space, you need to take into account every major system that is going to be impacted or modified. These include the electrical system (Is the existing electrical service capable of handling the additional circuits that are going to be installed?); the plumbing (Do you plan on installing an additional bathroom or bar sink?); the heating and air conditioning (all finished/livable rooms need to have a permanent source of heat installed), as well as any possible concerns with water penetration or leakage into the basement.

Why is it important to enter a service agreement for my furnace?
Murphy’s Law says: “The heat is going to quit on the coldest day of winter, and the air conditioning is going to quit on the hottest day of summer.“
One of the greatest benefits of having a service agreement is that you are considered a paying customer. In the event that your heating or cooling quits when you need it most, the paying customer will usually get serviced before the occasional caller is even considered. Another benefit is that there is usually a service or maintenance plan that is included with the agreement. These plans regularly include things like annual maintenance cleaning, charging of the air conditioning system, cleaning of the blower, and filter replacement.

How often should I seal my blacktop driveway?
Ideally, an asphalt driveway should be coated twice a year; once in the spring and once in the fall. However, with the number of different products on the market for coating driveways, it is best to check with the manufacturer’s recommendations.

Can you tell me how to fix the foundation wall?
Before fixing a foundation wall, you should first determine the problem. There are many possible conditions, ranging from shrinkage or step cracking, which could be repaired by epoxy injections or re-pointing the mortar joints, to major differential settlement that would require costly and involved repairs. A home inspector can identify what the symptoms may indicate and where to start to remedy the problem. If it is something that is in need of a specialist, he/she will be in a better position to make this type of call. Regardless of the degree of the cracking or movement noted, if you are concerned about how to fix or repair the damage, a home inspector may be able to identify what the problem is and what repairs might be needed.

What is a failed insulated glass seal and why is it considered a defect?
An insulated glass seal is a window made up of two or more layers of glass held together in a track or frame. A gasketed channel separates the two pieces of glass, and the space between the panes is filled with a moisture-free, inert gas such as nitrogen. When a gasket fails, the inert gas between the panes escapes to the exterior of the window and regular, moisture-laden air is drawn into the space. This does not greatly affect the insulation value of the window but will affect the visibility through the glass. When this happens, the window will look dirty or foggy and you will not be able to clean it off. This is because the fogged or filmed surface will be between the two panes of glass and not on the outer surfaces. If there is a lot of moisture in the air you will also see condensation on the interior of the window.
There is no warning device on a window or door that will indicate when the seal will fail. Most window manufacturers have some kind of warranty that will cover possible seal failures, but the length of time the warranty covers varies. The longer the failed seal is present, coupled with major temperature differences between inside and outside environments, the more obvious the failure will become.

What are the problems with negative grading and how do I fix it?
Grading or slope of the land is important around the home because it will determine which direction surface water will flow. Negative grading is when that surface slopes towards the foundation wall. This can allow surface water to run directly against the wall and potentially seep into the basement or crawlspace. Regrading the area around the foundation walls repairs the majority of the basement water penetration problems. Many problems occur when people install flower gardens or put mulch up against a foundation wall. In order to properly fix a negative grading condition, the top, porous soil must be removed in the affected area and well-compacted, non-porous clay or similar soil must be added and re-graded. The newly added soil around the perimeter of the home should slope away (at a minimum rate of one inch for the first 6 feet) from the house to prevent rainwater from accumulating next to the foundation.

What are expansive soils? Can they really cause a great amount of damage in a short time?
Expansive or reactive clay soils are known to cause adverse effects on residential structures. Expansive soil expands and contracts, often times excessively, due to changes in the moisture content of the soil. These changes can cause structural problems through differential movement of the structure.

How Do I store items in my attic?
Before you store anything in your attic, you need to ensure that the attic framing is designed and capable of supporting the loads you intend to place there.
There are basically two methods of construction in the attics of single family dwellings--conventional or stick-framing, and engineered or truss-framing. Conventionally framed roofs consist of rafters or boards that make up the slope of the roof; ceiling joists that make up both the floor of the attic space and the ceiling framing for the floor below; and the ridge board, which provides both an anchoring point and additional support to the tops of the rafters. Conventional roof framing is usually made up of large stock dimensional lumber such as 2x8, 2x10, or 2x12 boards. Trusses are engineered products that are designed and built to combine the rafter, ceiling joist and ridge all into one component, and are usually built of 2x4 lumber secured together using perforated metal plates at all joints.
Unless they are specifically designed for carrying the additional load, trusses will not adequately support your stored items. You will experience cracking and damage to the finished ceiling in the floor below, as well as possible structural damage to the trusses themselves. Conventionally framed roofs may be more forgiving, however, a licensed contractor or structural engineer should be consulted before making any modifications to your attic framing.

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.

Termite Inspection FAQs

2005-02-04T21:35:00.000-08:00

Termite Inspection FAQs

Reprinted from US Inspect
Professional Home Inspections

What does a termite inspection entail?
A termite inspection is a visual inspection of the readily accessible areas of a home for evidence of wood-destroying insects (WDI) and wood-destroying organisms (WDO). The inspector will visually inspect the entire interior of a home (including accessing and entering any sub-space such as basements and crawlspaces) and exterior of the property. In areas where Drywood termites are prevalent, and in houses where there are no sub-areas, the attic may also be accessed and inspected. After the inspection has been performed, the findings are reported on the applicable/appropriate form.

How long does an inspection take?
The average termite or pest inspection takes approximately 30 to 45 minutes for a thorough inspection, depending on the size and conditions (e.g. clutter; storage of personal items, etc.) of the home and property.

Can termites live in colder climates?
Yes, termites have been found throughout the United States, even in Alaska! Cold weather does not kill them off; rather it slows them down or causes them to go into a hibernation state. As a matter of fact, it has been reported that 1 out of every 15 houses in the Chicago area have termite infestations.

Why inspect the attic if termites stay close to the ground?
The termite inspection is actually an inspection for wood-destroying insects and organisms. The inspector is also looking for ants, bugs and fungus. Sometimes, in areas where Drywood termites are prevalent, and in houses where there are no sub-areas, the attic may also be accessed and inspected. Inspectors routinely look in the attic area for Drywood termite pellets (fecal matter), which are oblong, vary in color from light gray to very dark brown, and are only 2 to 3 millimeters long. They generally accumulate on surfaces or in spider webs near the eaves area of the attic.

What do termites look like?
Subterranean termite colonies consist of three different castes--reproductives, workers and soldiers. All of the Subterranean termites are generally creamy white in appearance and are translucent, looking very much in size, shape and color as a grain of rice. The reproductives, or “swarmers,” have a pair of even-sized wings and are often mistaken for flying ants. The workers look similar to the “swarmers,” only they are a little smaller and do not have wings. The soldiers are also similar except for their oversized heads and large, crushing mandibles.

What is the difference between carpenter ants and termites?
There are a number of differences between carpenter ants and termites. The body shape of a carpenter ant is like an hourglass--it narrows between the abdomen in the rear and the thorax in the front. The body of a termite is more cigar-shaped without the narrowing between the front and back halves of the body. When wings are present, carpenter ants have larger wings in the front and smaller wings in the back, whereas termite "swarmers" have relatively equal-sized wings. Carpenter ant wings are less "veiny" than termite wings. Also, ant wings have a stigma (dark spot) on the leading edge of the front wing, and termite wings do not.
Carpenter ant antennae are bent or curved, while termite antennae are relatively straight. Also, termites eat the wood they tunnel through and ants do not.

How do you treat termites?
There are several methods available to treat Subterranean termites. A chemical treatment is the most common treatment type available for Subterranean termites. The goal of a Subterranean termite chemical treatment is to establish a continuous termiticide barrier between the termite colony (usually in the soil) and wood in a building. This is done by placing termiticide in the soil on both sides of all foundation elements to provide a barrier preventing termites from entering the structure. Technicians trench the soil and inject termiticide beneath it at 16-inch intervals. They also drill into hollow masonry block foundations and inject termiticide into the block voids. This creates a protective barrier around the property.
In-ground baiting systems are also becoming a popular method for treatment of Subterranean termites. A subterranean termite baiting system involves placement of cellulose (wood material) bait stations at strategic locations around the perimeter of the home. Worker termites, which constantly forage for wood to feed their colony, locate the cellulose bait stations and leave special scent trails to summon their mates to the food source. The cellulose material in the bait station is then replaced with a chemical inhibitor, retarding the molting process in termites and preventing them from growing. The carrier termites then bring the chemical back to the colony and--if everything goes well--spread the inhibitor throughout the remainder of the colony. Because of the growth inhibitor, the carrier and the rest of the colony will die.

Could there be hidden termite damage?
Absolutely! One of the main characteristics of termites and termite colonies is their tendency to avoid open air and bright lights, meaning they will stay underground or within wood products. It is almost impossible for an inspector to visually identify or locate an active termite infestation just by looking at the finished surface of a wall or the accompanying trim.

What can I do to prevent termite infestation?
The current standard method of preventing termite infestation on newly constructed homes is to have a pest control contactor visit the home and spray a liquid termiticide over the entire foundation area prior to the concrete being poured. The building sciences are continually coming up with new methods of infestation prevention. A homeowner could also make post-construction adjustments to the home that are less conducive to an infestation of wood-destroying insects. Common conditions that are conducive to an infestation are: earth to wood contact at support posts; cellulose debris and form boards left in the crawlspace; improper drainage away from the structure; and inadequate ventilation in the crawlspace. Correction of these conditions will greatly reduce the likelihood of an infestation.

Why do I have to treat if there are no live termites?
If there is evidence of a termite infestation and no evidence of a termite treatment having been done, the inspector must report that the infestation is active, which means in need of treatment, even though no live insects were discovered.

Does the termite inspection cover all types of wood-destroying organisms?
This depends mostly on state and local code. Most states use the NPCA-1 Wood Destroying Inspect Infestation Inspection Report, which limits its scope to the inspection of termites, carpenter ants, carpenter bees, and re-infesting wood-boring beetles.

Is a termite inspection included with the cost of a general home inspection?
No, it is not. The initial cost of a general home inspection does not include any other inspections.

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.

Fixed Fee MLS Listing FAQs

2005-02-02T13:44:00.000-08:00

Fixed Fee MLS Listing FAQs

What is the MLS?
Approximately 80 percent of prospective buyers begin their home search on the Internet, usually at one of the large secondary site like www.REALTOR.com or www.Homes.com , or a broker site like www.NCaHome.com. Unless your home is listed for sale with a member of the local MLS (Multiple Listing Service) with access to this site, your property may not be exposed to many of those prospective buyers.

The REALTOR® Muttiple Listing Service (MLS) is the primary database used by Realtors® to market and sell property. The MLS is an exclusive database of all of the properties listed for sale in the metropolitan or regional area of coverage. This database is generally owned and used exclusively by REALTORS® and provides them with information about all of the available homes for sale.

REALTORS® use this system to cooperate on the sale of each other's listed properties and share in the compensation for selling the homes. Before now, most real estate brokerage firms required home sellers to enter into lengthy exclusive listing agreements with a hefty commission payable in any event of sale or transfer in order for their home to be placed in the MLS system.

Q. How can I list my property on the MLS?
Through the 1Listing Program, you can list your property on the MLS for $299.00 fixed fee. In addition, your listing will appear on www.Realtor.com, www.Homes.com, and www.NCaHome.com.

The MLS is statistically, by far, the best way to sell your home. The MLS accounts for over 75%-85% of home sales nationwide and is the most effective form of adverising available (about 10 times more effective than newspaper advertising, open house, or any other method of traditional marketing). In fact, a listing in the MLS will probably sell your home even if you don't practice any other form of marketing. Since most buyers work with Realtors® and Realtors® utilize the MLS almost exclusively when choosing properties to show, a listing in the MLS dramatically increases your chances of selling your home for the highest possible price in the least amount of time.

Q. What do I need to have my home listed on REALTOR.com and other secondary sites?
Secondary sites like www.Realtor.com, www.Homes.com, and local broker sites like www.NCaHome.com are an important search tool for buyers. Realtor.com, for example, has now become one of the most visited real estate sites in the world. A listing on these sites wider exposure for your property, with access to millions of consumers all over the country.

Q. Will a buyer's agent show my home if it's not listed in the MLS?
It's not likely. Realtors® have lots of homes to show their buyers that are listed in the MLS. The advantage of MLS listings for Realtors® is that they are guaranteed to be paid if they sell the home.

Q. Is For Sale By Owner (FSBO) for me?
A recent Realty ViewPoint® survey of hundreds homeowners across the country showed that FSBOs make more money on their home sales than sellers who use real estate agents AND sell their homes three weeks sooner! Nearly 50% of homeowners try to sell their home on their own at one time or another, however According to studies by the National Association of Realtors (NAR), only 14-16% of For Sale By Owners (FSBOs) actually end up selling. The rest end up listing with an agent or taking their home off the market.

So what is stopping everyone from selling on their own? Answers: (1) EXPOSURE and (2) "KNOW HOW".

EXPOSURE: Without access to the MLS, FSBOs are at a distinct disadvantage. With just one home to sell, it's simply impossible to afford to effectively advertise and expose your lone product to enough of the public to create a sale for the highest possible price. Realtors®, by contrast, have 1,000's of homes to sell. The vast majority of buyers use REALTORs® to help them find a home because they know Realtors® know where all the homes for sale are and the buyers agent's fee is generally paid by the seller. So if you want the greatest exposure for your home to these homebuyers, advertising through the Realtors® MLS is, by far, the best place.

KNOW HOW: Most home sellers think that the process is just too complicated and worry that they'll make costly mistakes or omissions if they try to sell without an agent. Through the 1Listing Program, sellers can retain the services of NCaHome to act as their Listing Broker --- full service representation from contract to close of escrow for only $3699.00 fixed fee.

Q. When I list through 1Listing, will I have to pay any commission when my house sells?
You will pay the cooperating (buyer's) broker a commission (depending on what you offer in the MLS listing) if that buyer's broker brings you a ready, willing and able buyer who makes a offer satisfactory to your terms and price. That buyer's broker will expect to be paid for his or her effort. While the amount is negotiable, typically a buyer's broker gets 2.5-3.0% commission. This amount is specified by you up front at the time you list with 1Listing.

Q. What if I need help with the contract or closing?
At any time you may upgrade to retain NCaHome as your Listing Broker, and receive full service Listing Broker representation for $3699.00 fixed fee.

Q. How long is my MLS listing good for?
A. Your MLS listing agreement is for 90 days. Most listings, when priced correctly, sell before the expiration. You may cancel your listing at any time upon 10 days prior written notice. You may also extend your listing for an additional 90 days for free.

Q. If I sell my house to a buyer who isn't represented by a real estate broker, will I owe any buyer's broker commission?
No. If there is no buyer's broker involved, you don't pay any buyer's broker commission.

Q. How is the 1Listing Program different from other real estate firms?
NCaHome is a full-service brokerage for 1.5% (not 3.0%) commission. NCaHome created the 1Listing Program to provide homesellers with the tools they need to make selling on their own a viable alternative. 1Listing provides the most cost effective means of getting your home sold. Through the 1Listing Program, NCaHome offers the following services:
- Fixed Fee MLS Listing Entry Only for $299.00 fixed fee.
- Full Service Seller Representation for $3699.00 fixed fee.

Other real estate companies fall into some of the following categories:

Traditional Brokers usually charge 6.0 % (3.0% each side) to sell your home in the MLS.

National Franchise Discount Brokers pay overhead transaction and franchise fees to their franchise owner, and are generally unable to offer the same costs savings you realize with 1Listing. Moreover, they do not necessarily have any credentials, experience, and expertise in California residential real estate transactions.

Internet-Based Referral Website Operators may not even be licensed to sell real estate in California. Most of these websites operate referral arrangements for agents-- they'll "refer" you to an real estate agent to list your property in the MLS.

Q. Will buyer's brokers be reluctant to show my listing?
As long as your buyer's broker compensation is comparable to other firms (2.5-3.0%) , few real estate brokers would reject an opportunity to earn a commission. Your MLS listing will look just like every other listing in the MLS and will indicate how much compensation you're offering to real estate brokers who bring a buyer to your home.

Additionally, fixed fee for service real estate is an emerging trend and fast becoming a recognized and accepted alternative in the industry to traditional commissions. More importantly, it is against the REALTOR® Code of Ethics and Federal Anti-Trust laws for real estate brokers to conspire to avoid a particular firms listings based on the fee charged. In fact, with the advent of "buyer agency", agents would be in violation of Agency Laws and risk of loosing their license to sell real estate to not show their buyers all of the available properties that meet their criteria, regardless of which firm lists the properties in the MLS.

Q. Once listed, how can I view my MLS listing?
Go to either Realtor.com or the local MLSs corresponding public website to view a condensed version of your MLS listing. Unless you are a licensed Realtor® and a member of the MLS you cannot access the MLS to see your listing. This is an exclusive proprietary system reserved for the use of member Realtors® only. Upon request, we can fax or mail you one copy of your home's listing as it appears in the MLS.

Q. Must I Use a LockBox?
No. It is not necessary to use a lockbox. However, Realtors® may be reluctant to show properties without lockboxes. Most of the time, when showing property, Realtors® are on a short time schedule. A lockbox makes access to your home convenient for both you and the Realtor®. We strongly urge you to consider using a lockbox to make showings easier for everyone and to increase the number of showings of your home.

Q. Can I use my own photos for the MLS?
Yes. Submit them to 1Listing via email in jpeg or gif format.

Q. Can I make changes to my MLS listing?
Yes. Once we input your home information into the MLS, you will receive a copy of the MLS listing printout. If there are any mistakes, please let us know at once and the corrections will be made. After the initial input and review, you may make changes to your MLS listing by submitting them to 1Listing in writing via email or fax.

Q. Can the 1Listing Program handle buyer calls and showings for me?
Yes, you can arrange in advance with NCaHome to show your property to unrepresented buyers.

Q. Can the 1Listing Program represent me in contract negotiations?
Yes, if you retain NCaHome as your Listing Broker for $3699.00 fixed fee --- NCaHome will represent you full service, from contract to close of escrow.

Q. What are the qualifications, credentials and experience of NCAHome/1Listing?
NCaHome invites you to compare the qualifications, credentials and experience of its Broker, Joe DiPaola, with others in the industry.

1Listing is a California fixed fee listing service for California sellers. Visit us at www.1Listing.com or call (707) 693-0100.