May 22, 2012

Sprucing up before Selling Exterior Painting Strategies for your Simi Valley Home

Dry Rot and Termites Simi Valley Home Sellers

Dry rot under new paint

Getting ready to Sell your Home?  First, I want to congratulate you for least considering strategies making your home more attractive to potential home buyers. You only get to make a first impression once and the exterior of your home is the first thing a potential buyer is going to see. So if you’re painting the exterior of your home, prior to putting on the market, here’s a tip that could save you money down the road.

A reputable painting contractor will not only give you a written estimate outlining the scope work; they should also alert you to any problem areas before painting. Any wood on the exterior of your home is more vulnerable to wood destroy organisms which could include fungi and or insects. Homes in Simi Valley California often see dry rot and/or termites.

If the painting contractor you hired comes across problem areas on the exterior of your home, you should consider hiring a termite company to come out, investigate and give a written report as to the extent of the problem areas. The termite companies are completely equipped to remove and replace damaged wood and treat with chemicals to eradicate any wood destroying organisms. Any damage wood should be replaced before your painting contractor begins painting.

When the time comes to sell your property, 99% of the time, the buyer will ask for the seller to provide a termite inspection report.  Typically buyers will ask sellers to pay repair for any items listed under section 1 of the Wood Destroying Organisms Report. Home sales in the Simi Valley area see this as a customary request as this type of damage to a property is seen as a deferred maintenance item.  Many sellers do not realize that if they refuse a termite inspection or termite repairs, the buyer can still bring in their own termite inspector during the investigation period and cancel the purchase under the general inspection contingencies if that report reveals enough treatment and repairs to scare away the buyer.  Now the Seller has a material fact with this termite inspection and will need to disclose it to all future prospective buyers.

The reason why mentioned earlier that the damaged wood should be replaced before painting is, that termite inspectors are very critical of newly painted houses.  They are concerned the prior damage may be hidden behind the new paint job. Any dry rot or damaged wood under new paint is easily ferreted out during the inspection.

Sprucing up your house for a good first impression is the right thing to do. Be proactive when it comes to any issues that may pop up while you’re improving curb appeal of your home.  It will save you frustration and headaches when it comes time to negotiate with a home buyer.

Why Zillow, Trulia & similar sites cause buyers so much frustration

Trulia Zillow Simi Valley Homes For Sale

The National Association of Realtors 2011 Buyer and Seller Profile report has some interesting data, but really not that surprising when I compare that data to what I see in the field every day.  The reports stated:

eighty-eight percent of home buyers used the internet as one of the information sources in their home search process…

the second most used information source was the real estate agent. eighty-seven percent of buyers used real estate agents during their home search process…

the internet and real estate agents have remained the two highest-ranking sources by usefulness consistently for several years,

The National Association spends significant time and money on this research and if you have been looking for homes online, you will probably have a few stories to tell about the process.

The State of California is a very pro-consumer protection state. The Department of real estate and the requirement of a sales license is a pro consumer protection device. The licensing requirements in the state of California set the expectation as to how real estate can be transacted. Each individual listing contract is a private employment contract between the home seller and the real estate broker. Real estate brokers created the multiple listing service to pool their private employment contracts together under a universal compensation agreement. Essentially, this means that the various brokers will agree to compensate each other, if they sell each other’s listings.

Prior to the Internet, home buyers were only able to get information about the properties for sale in a given market by directly contacting a real estate agent. Today, during the internet age, home buyers have the ability to go online and search for homes at any time of the day or night.

What is unknown or often misunderstood is that very few websites have a complete inventory of homes are for sale on the market. Sites such as Trulia and Zillow offer information about properties for sale, but because there are not brokers, these have very limited access to the properties for sale in any given market. They rely on brokers supplying information about homes brokers have for sale. Unfortunately for Trulia and Zillow, not all brokers provide their inventories. Additionally as homes are sold or entered escrow, many times the information is not reported to Trulia and Zillow, so the information listed on those sites could overstate or understate the actual available inventory.

So where’s the best place for home buyer to look for property on the Internet? Well if you look at the results of the report I quoted above, the real estate agent plays a very important part in filling in the gaps of what’s available online.

From personal experience, many, many, many times buyers have come to me with a list of homes they have found on the Internet and 90% of those homes are already under contract in escrow. As a member of the multiple listing service, I have access to the real-time data reporting of the current inventory. While the property searches on real estate agent websites are coming from a more direct feed of the listing data, those sites can only provide limited data.

Don’t feel like you are coming up empty handed. If you understand the property search sites are limited in scope and that the pro-consumer protection posture of the state of California wants home buyers and home sellers to interact with licensed real estate agents, you can use the information online conjunction with licensed real estate agent and find a home for you.

 

Garage Conversions – How they might affect a home buyer or seller

Garage Conversion Simi Valley Real Estate

Yellow lines denote where the main Garage Door was prior to conversion, this one was not permitted

Garage Conversions.  In Simi Valley Garage Conversions are pretty common; not that every one has one, but I run into them often.  It is understandable why people convert Garage space to more living space, but these conversions seldom comply with local building codes.  Here are the most common issues involving a garage conversion.

Setback – Local building codes require a set back from the street to the front of the house.  Twenty-five or more fee may be required.   This setback will make it next to impossible to put covered replacement parking in front of the garage.

Required covered parking – Local codes typically require covered parking.  This covered parking may allow only a carport style cover, but this structure needs to comply with setback requirements.

Water Heaters and Laundry Hookups – Many garages are the location for the water heater, laundry hook ups and even the Heating and Air Conditions systems.  Because these systems can use natural gas, local building codes will specifically dictate how these systems are properly ventilated when installed in living space areas.

Heat – The converted garage will require heat as per local building codes.

Converted Garages that are not permitted may not receive any value consideration on an Appraisal.  So if a seller perceives value with the conversion over surrounding homes,  a buyer may not be able to get a loan to cover an increase sales price due to the garage conversion.

While this may not be an exhaustive list of all the issues a buyer or seller should consider, these are the more common issues.  The city of Simi Valley Building & Safety Department is very accessible and easy to visit for details about permits on a property and they can answer questions right over the counter about the requirement to convert a garage.

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6 things you can do to prepare for the loan approval process

Loan Application Home PurchaseGetting a Loan to purchase a home can seem complex and difficult.  Adding that there are a number of mortgage brokers  looking for your business, it is import you understand that you can quickly size up who you are considering to handle your loan application by being aware of the 6  things below.

1.  Reserves – make sure savings and reserves are well seasoned.  If you have cash you need to deposit, do that well ahead of time, months before you plan to buy a home.  Have access to these banks statements.

2. Have the last 3 years tax returns available for you  and if you are married for your spouse too.

3.  Be ready to prove your income.  W2′s, pay-stubs, 1099s, investments etc., the lender is going to make you prove your income there is no way around this.

4. Be honest about all your monthly expenses, if you understate your expenses, it will be picked up during the application process and your loan will be refused if your debt ratios are too high.

5. Do not make any large purchases or open any new lines of credit.

6. A pre approval is not worth the paper it is written on.  Until a lender can get a look at your actual – provable income and expenses, a pre approval has not gone in-depth enough to give you the assurances to know if you can get a loan.  Ask what it will take to get a DU approval.

If the lender you are working with is not asking these questions and not nagging you for documentation then consider looking for a new lender.  You don’t need to in the middle on an escrow with money spent on inspections and appraisals only to find out you can’t get a loan because your lender did not to enough front end work.

Open House Myths – Concerns for Simi Valley Home Sellers

Simi Valley Real Estate Open HouseThe open house maybe the most misunderstood practice in home selling business.  Simi Valley Home Sellers generally have no idea the risks they have signed themselves up for when demanding or requesting their listing agent provide open houses as part of the marketing plan.  Some may say

“Did Ted just say there are a risks to having an Open house?” 

Yes I did!

#1 – Just about every real estate training manual I have seen in the real estate business clearly states that the open house is really not about selling the house you have open, but rather it is about gaining new clients.  Sure there is always going to be that one real estate agent who says they have sold the house they held open, but in statistical numbers it is a very rare occasion that this is happening.  Real estate agents are trained that the people who visit open houses seldom buy that home, but might make good prospects for other homes.  So while you think your agent is extolling the virtues of your Simi Valley home, in reality the buyer that came to visit is in your home learning about other homes that better match their needs, because the buyer realized when they got to your home, your home did not fit their needs.

#2 – The people who visit your home through an open house are the lowest quality prospect you can possibly go after to purchase your home. What do I mean by lowest quality?  If you rank all the potential buyers for your Simi Valley home,  people that stumble in after following the open house sign trail would be a ‘D’ or ‘F’ rating and buyers that come to your house with a Real Estate Agent would be rated as a ‘A’ prospect.  Why?  Lets look at the following:

  • Those that come off the street have no idea if the house at the end of the open house sign trail is going to match what they are looking for in size, bedroom, bath count, price, etc. Most of the time your house does not.
  • Those that come off the street may not be qualified to get a loan to make a purchase, yet they are shopping for a home blindly, traveling solo they are not at the point to be able to write an offer if they see a home they like.
  • Those that come off the street may not be interested in buying a home, but are either nosy people or even people with criminal intent.  Prescription drugs are a big target for these kinds of thieves, some real estate agents have had purses, computers, cell phones stolen while they hold open houses.  There have been reports of real estate agents how have been physically assaulted and even raped at open houses.  Remember, you the home owner, are allowing signs pointing to your home, to attract anyone one off the street in your home.  You would not do this by yourself, real estate agents are not trained security experts nor law enforcement.  Professional thieves and con artists can gain the upper hand in an open house situation faster than you can imagine.

Lets look at the difference in buyers that come to your home with a real estate agent.

  • First and foremost, these buyers are much further along in the decision process and the commitment process.  By the time they have engaged representation, they are ready to write an offer when they view the home that meets their needs.
  • Their finances have been most likely pre-qualified. A good seasoned real estate agent is not going to spend time showing homes to people who cannot get a loan or have the proper finances to make a purchase.
  • A real estate agent’s pay only comes from a commission paid when the sale of a house is finalized.  The real estate agent is highly  motivated to get qualified buyers into homes that those buyers will act on and write offers.
  • The real estate agent and the buyer have “narrowed down” homes the buyer wants to see on a short list, meaning your home is now a much higher candidate for the buyer.

Yes you can have an open house. Yes a buyer for your home might show up at your open house, but when looking at the statistics on how often this happen, you really need to weigh out the risks.  Do you want to open your house like a local free public attraction, all in a very low percentage effort to attract a buyer?  If your answer is yes, hide your medications, valuables, portable electronics and understand if your open house is visited by a profession thief, they know all the common hiding places and if they are determined, they will succeed.

Think even further that many pictures of your home have been syndicated across many many websites.  There is a ton of information about your home posted on the internet when you market it for sale.  It does not take much for those people how are up to no good to utilize this information and plan their next caper.  So weigh out the risk before you plan your next open house. Ask yourself if you want focus efforts into attracting agents with well qualified buyers or total strangers who may or may not be qualified or ready to make a purchase.

 

 

 

 

Simi Valley Free Tree Replacement and Wood Chip Programs

Simi Valley City Hall SignIf you live in the City of Simi Valley and need wood chips for your yards, the City of Simi Valley’s Free Wood Chip Program is just a phone call away.  By calling (805) 583-6400 or sending an email to PW-WorkOrder@simivalley.org, you can request either an approximate 8 cubic yard load or 16 cubic yard load.  The City will dump the load on your property, usually on your driveway at no charge.  The Wood Chip-mulch mix consists of leaves, twigs and wood chips.

If you have trees in the parkway in front of your home,  damaged, diseased or missing trees can be replaced under the Self-Help Street Tree Replacement Program.  The parkway in front of your home needs to be at least 5 feet wide to qualify.  You, the home owner will need to participate in the program under the following terms:

  • Be willing to plant a 15-gallon tree(s) (materials as needed will also be provided).
  • Keep the tree(s) watered on a regular basis (approximately 10-20 gallons of water per week).
  • Keep grass and weeds away from the base of the tree(s) and water basin area.  Be careful not to use tools that would harm the tree bark.
  • Fertilize tree(s) on a regular basis.
  • Protect tree(s) from vandalism.
  • Agree to plant the tree(s) within the parkway planting area in front of your home and agree to care for the tree(s) in perpetuity as outlined above

To apply for a tree, you can call call (805) 583-6400 or E-mail the City of Simi Valley Public Works department  at PW-WorkOrder@simivalley.org.

Improved Foreclosure News – Time To Read Carefully

Housing crisis newspapersRealtyTrac recently reported that 1st quarter 2012 shows the lowest foreclosure filing activity since 2007.  This news sent waves of cheerleaders spreading the news of improving real estate market conditions.  Recently and more locally, Simi Valley and many parts of Southern California are seeing reduced inventory. This reduced inventory is giving the appearance that market conditions are improving.  Low interest rates and reduced pricing are adding to this very rosy picture, but the underlying details cannot be ignored.

In RealtyTrac’s April 5, 2012 Forclosure Market Report, Brandon Moore, chief executive officer of RealtyTrac stated:

“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated, there are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March. The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short sale activity.”

As I mentioned in my Simi Valley March 2012 Market Report, Wells Fargo projects 2 million homes making up the shadow inventory that are up to 90 days behind in payment, with no filings or proceeding against those properties. Wells also projected another 6% decline in pricing for 2012.  I am not sure that following the filing activity is going to do anything other than create more frustration.  In my dealings with Short Sales over the last 3 years, many of the people in these properties are many months behind before starting the foreclosure process and that process takes another 4 months to complete.  Understanding that the banks are trying to keep from flooding the market with foreclosures and approving more Short Sales, reports on filings can be misleading.

We still have a significant way to go before any real recovery can be claimed.  The process is going slow and I do not see anyway the banks or the government will favor any plan to speed it up.  Realtytrac’s report seems to support that stating that the average time for a foreclosure in California is currently trending at 350 days.

RealtyTrac’s report included the following for California:

Although California default activity increased from February to March — up 14 percent — the state’s overall foreclosure activity in the first quarter was down on a quarterly and annual basis. The California foreclosure rate still ranked second highest among all states in the first quarter, with one in every 103 housing units with a foreclosure filing.

This all is good new for home buyers and any chance of a run up in prices will be held in check by the distressed market.  This is a great time to take advantage of low interest rates and prices that are at all time affordability levels.

 

One of Two Rumored New Simi Valley Walmart Locations Finally Disclosed

simi valley mervyns and walmartIn a surprising disclosure, Simi Valley Councilman Glen Becerra announced that Walmart is indeed the Tenant that will occupy the vacant Mervyn’s building at the corner of Sycamore and Cochran. In February I wrote about the two new locations; both the Mervyn’s and the vacant Von’s on Tapo Street. (see:  3 Walmarts in Simi Valley?)

The announcement at the very tail end of Monday’s Simi Valley City Council Meeting by Councilman Glen Becerra, leaves more questions and concerns, than it helps clear the air.  In my February article I was very clear, that I was not against Walmart occupying this location. The old Mervyn’s building is properly zoned for this use. Public outcry could not stop Walmart, as Walmart does not need approvals to occupy this building. Some of my concerns are the following:

Why all the secrecy? Assistant city manager Gabler claims he was sworn to secrecy in interview with the Ventura County Star. Who swore him to secrecy and why was that necessary?

Why are the exterior changes to Mervyns not being sent to the planning commission? A great example is that cell phone antenna locations that are put on top of existing office buildings are required to go through lengthy approval process with the city and must go in front of the planning commission. Yes I know that the CUP triggers a planing commission review, but the wailing and moaning that goes on over the changes to the roof line of the buildings seems to be the bigger deal out of those projects. The modifications to the tops of these office buildings are infinitesimal compared to the exterior changes we will see on the Mervyn’s building. It would have been nice for the public to have had some input on the updating of that shopping center as Sycamore and Cochran hosts “The Simi Valley Business District”.  The Sales Tax Revenue and the Jobs at Sycamore and Cochran that the City has benefited from demands the city include the public in these kinds of projects. Even if the developer for the Mervyn’s building refused to name the new tenant (Walmart), the exterior modifications to the building and the shopping center that will be coming as a result of the new tenant, deserved public discussion and input.

How convenient that the disclosure was made after the appeal period expired to bring this issue in front of the planning commission. Kudos goes to Simi Valley Planning Commissioner Bibb for being the lone voice on this issue. From the outside this looks very calculated between the City Council and City Staff. The fact that the other four Simi Valley planning commissioners remained silent and did not help with the appeal may indicate that the city does not understand the importance of keeping the public informed and opening the discussion for public comment. The Simi Valley City Council has a great track record of playing Father Knows Best and the voters got tired of it and voted in two new council members to shake up the council. Lets hope they look back on the poor handling of this Mervyn’s building and get it through their heads that open public discussion will be rewarded.

I don’t agree with Simi Valley Councilman Becerra’s postion that having staff explain how the process is working would be a sufficient explanation why the public was left out of the discussion on the changes to the Mervyn’s building and shopping center. Again going back to my example, last week Verzion was in front of the planning commission because they are going to change out their antenna on a building and raise roof screening 1 foot – in comparison, it makes no sense why the planning staff would handle this Walmart internally and exclude the planning commission, thus shutting down any public input.

Councilman Becerra lamented that Planning Commissioner Bibb could not get support from another Planning commissioner for an appeal, yet Councilman Becerra neglects to explain if he was so concerned, why didn’t he appeal it from the Council and get the project in front of the Planning Commission.

One would think that after watching the train wreck of how the last City Council under Mayor Miller tried to keep the landfill expansion out of the public discussion, that it’s a no brainer that a major retail location in the center of Simi Valley should be up for public input and comment on the exterior changes to the building and shopping Center.

One of the more amusing comments by Councilman Becerra was that he did not think Simi Valley was a two Walmart Town.  Is that because Simi Valley is going to be a 3 Walmart town?  Councilman Becerra has his share of the blame for Simi Valley becoming a Two Target and Three Walmart Town; past decisions of prior councils set the ball in motion for this to happen, the question remains if Simi Valley can learn from it’s mistakes on the dais.  History always provides a lesson as we had a City Council member back in the 1980s that stated we needed “Low Traffic Generators” for businesses in Simi Valley.  I am not sure if that disastrous philosophical view has ever left our city.  We have built our retail hopes on attracting shoppers from outside Simi Valley and have rejected the needed internal growth that would have sustained our retailers and attracted new employers.  Low traffic generators don’t bring quality jobs and only provide anemic sales tax revenues. So far Simi Valley batting 1000 in both those categories.

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Carbon Monoxide Alarms – Do you have them in your home?

carbon moxide alarmsBeginning July 1, 2011, the Carbon Monoxide Poisoning Prevention Act brought by California Senate Bill – SB 183 now requires all single-family homes with an attached garage or a fossil fuel source to install carbon monoxide alarms by July 1, 2011. In Simi Valley almost every home I have been in, has a natural gas furnace in the house or attic and most homes have gas appliances in the kitchen. These gas appliances and the furnace trigger the installation of the carbon monoxide detectors.

The alarms are required to be installed outside of each sleeping area and at least one per floor of living space. The mounting height according to the National Fire Protection Association (NFPA 720), appears to not effect performance. I have read that density of carbon monoxide is similar to that of air at room temperature, and carbon monoxide generally mixes readily with air. Considering that the CO alarms come in a plug in style, battery operated or hard wire installation mounting height may not be an issue.  However, some firemen I have spoke to recommend a lower installation height rather than up on the ceiling. You can buy a combination smoke alarm/carbon monoxide alarm, but plug in CO alarms are readily available and require no mounting hardware. Smoke alarms are still required, this new law does not change the smoke alarm requirements.  For those who want to be extra cautious you can place a CO alarm in each bedroom.

The Difference Between Updating & Remodeling your Simi Valley Home

Simi Valley Real Estate Udating or UpgradingThe primary reason anyone should have when improving their personal residence should be for their own enjoyment and comfort factor. The side effect or secondary benefit of adding to the comfort factor of your own Simi Valley home, is that those improvements could add value to your home if at some point you decide to sell. These improvements have a much shorter lifespan than most homeowners understand.

As of September 1, 2011 the new Uniform Mortgage Data Program® (UMDP) has gone into affect to provide common set of requirements for appraisal and loan delivery data. This program was established by Fannie Mae and Freddie Mac.  I have included some of the definitions and ratings to give you a better idea how the GSEs are trying to create more uniform standards for appraisals.

Not updated -  Little or no updating or modernization. This description includes, but is not limited to, new homes. Residential properties 15 years of age or less often reflect the original condition with no updating, if no major components have been replaced or upgraded. Those over 15 years of age are also considered not updated if the appliances, fixtures, and finishes are predominantly dated. An area that is not updated may still be well-maintained and fully functional, and this rating does not necessarily imply deferred maintenance or physical functional deterioration.

Updated -  The area of the home has been modified to meet current market expectations. These modifications are limited in terms of both scope and cost. An updated area of the home should have an improved look and feel, or functional utility. Changes that constitute updates include refurbishment and/or replacing components to meet existing market expectations. Updates do not include significant alterations to the existing structure.

Remodeled -  Significant finish and or structural changes have been made to increase utility and appeal through complete replacement and/or expansion. The remodeled area reflects fundamental changes that include multiple alterations. These alterations may include some or all of the following: replacement of a major component (cabinet(s), bathtub, or bathroom tile), relocation plumbing/ gas fixtures/ appliances, significant structural alterations (relocating walls, and or the addition of square footage). This would include a complete gutting and rebuild.

Below are a sample of a few of the ratings and definitions to give you an idea what this may mean to the value of your home.

Condition Ratings and Definitions (C1-C6)

C1The improvements have been very recently constructed and have not been previously occupied. The entire structure and all components are new and the dwelling features no physical depreciation.

C2The improvements  No deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished or rehabilitated. All outdated components and finishes have been updated  and/or replaced with components that meet current standards. Dwellings in this category either are almost new or have been recently completed or renovated and are in similar condition to new construction.

Quality Ratings and Definitions (Q1-Q6)

Q4 – Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standards or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Material, workmanship, finish and equipment are of stock or builder grade and may feature some upgrades.

Q5 -  Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. The dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.

The above sampling was created by Fannie Mae and Freddie Mac and any loan underwritten with Fannie and Freddie guidelines is going to be appraised with this new system.  So if you are planing updating or remodeling, keep this in mind so you can maximize your investment.