Archive for February, 2016
Monday, February 29th, 2016
As a Carlsbad resident I have to say that I have never been so happy that an election is over. For those who do not know, on February 23 the city of Carlsbad voted on Measure A – a decision which would decide on the fate of the Aqua Hedionda Lagoon and whether it would become the new home of a upscale shopping and dining destination. I have never seen this city so divided.
People were very vocal on both the “No” and “Yes” sides of the spectrum. There are 2 things I found prevalent among many people, as evidenced on social media:
1. Many residents did not truly understand the issue on which they were voting, and instead listened to all the negative propaganda on both sides. It was clear from many comments posted that people did not really understand the ramifications of a “no” or “yes” vote. Many based their decisions on opinions or fluff spewed out by those passionately representing one side. For example, a few people commented that they were voting “no” in order to keep the lagoon in it’s natural state.
The fact of the matter is that the lagoon land, which is owned by SDG&E, WILL be sold and developed. Whoever goes through the proper means to make this happen (the City allowed the current purchaser to cut corners and did not bring it to the voters until they raised a stink) will develop. It may be something not as nice as the current plans specified – such as housing – I heard a rumor about apartment buildings – which may not allow Carlsbad residents to enjoy the space.
2. Many residents acted immature and rude to those on the other side, resorting to name-calling, destruction and stealing of signs, and even threats. Behavior was disappointing. I even posted a comment on Nextdoor.com about a week before the election, trying to appeal to neighbors to be positive and to use their voices to educate the undecideds instead of lashing out insults on the other side. For about a day or 2 people responded to the post in a positive manner. But as soon as one person got nasty it went downhill from there.
Next time there is an election of any type I recommend every citizen do the following prior to voting:
1. Get educated. Read the material you can find on the topic, research it. Truly understand the issue and the opposing arguments. Don’t just rely on what your neighbor or co-worker says, or what angry people say online or write on signs posted in the city. In law school I learned to study arguments on both sides in order to prepare to make my arguments – this is a valuable lesson for everyone.
2. Keep it Classy. This was what I called for when I posted the comment I mentioned above. We live in a democratic society. People will have different opinions – how wonderful that we are allowed to express them. Embrace them and try to understand them – you don’t have to agree. Don’t go online and rant, don’t resort to violence (defacing signs, stealing signs – both of which are illegal and can get you arrested). Each one of these incidences is a valuable lesson to teach our children. Calling your neighbor a name on social media and getting angry because others don’t share your viewpoint is not classy, and teaches young people that it’s ok to not be classy.
Of course, there are some people who insist they are right and they will not refrain from shouting about it, even it it means stepping on or insulting others. My advice is to not respond to these people when they post rude comments. They are obviously looking for fuel to incite them – don’t go there. As I suggested to Carlsbad citizens, use your voices in a positive way – go stand outside a store with pamphlets or blog about your views, write an editorial in a local publication, talk with neighbors and form groups to get out there and teach others.
Keep in mind that every situation is a both an opportunity for each of us to show our true colors, as well as a teaching opportunity. Become a community leader and a teacher by staying educated and being classy.
Wednesday, February 24th, 2016
If you are a real estate agent who works in Carlsbad, or a seller/potential seller in Carlsbad: keep reading because your business or home sale could be affected by the actions of the City of Carlsbad. If you work in the real estate industry in Carlsbad, please attend the meeting to discuss this issue on March 15 at 10 AM at the Carlsbad City Hall Council Chambers – PLEASE ATTEND and spread the word!
Over the last few weeks the City has been out on weekends collecting real estate open house signs (and also yard sale signs). All the signs are brought back to city offices and dumped in the back of a building. Many years ago the City enforced their regulation that states that signs may not be placed in public right-of-ways inside the City. But for many years this has not been enforced; now all of a sudden, without any warning, signs are being confiscated. Click here to see video shot by Michael Greco of Guild Mortgage.
What the City is doing is unfair and interrupts business and home sales. Here are the reasons why:
1. Traffic interrupted/Loss of potential buyers for home sellers: Agents who hold open houses are working in the best interest of their sellers to find a qualified buyer. Sitting open houses takes time and costs money – without signs to guide people to the homes we are missing out on a large percentage of possible buyers. This is not fair to the home sellers, who want to draw as much traffic as possible in order to find that one qualified and excited buyer.
2. Monetary cost to agents: Open houses cost money – we spend money on advertising, the signs themselves, printed materials and snacks. Not to mention our time – we take 3-4 hours out of a weekend day to market the home for our sellers. Without signage we will waste money and time.
3. Waste of city resources – signs are temporary: Signs are out for 3-4 hours, and agents of course take them down because they are expensive and we don’t want them thrown away. Paying city employees for time and gas to take our signs down is a waste of city funds – I can think of many better ways to use the resources (that would require a VERY long and opinionated blog so I’ll spare you).
4. No clear definition of “public right-of-way:” To me, a public right-of-way is a space where the public has access, like a sidewalk. I would not want a sidewalk blocked with a bunch of signs. However, many agents post their signs back from the sidewalks in grassy or dirt areas, so that no access is blocked, and again placement is temporary.
No matter how you look at it, what the city is doing creates an economic impact on the real estate business. As brokers and agents we work hard to promote our listings for our sellers. We want to bring in as much traffic to these open homes in the hopes of finding a buyer. This creates many missed opportunities.
The city has not returned calls regarding this situation or information on the meeting. San Diego ABC channel 10 will soon by doing a story on this and hopefully the city will provide more information. All agents and brokers who work in Carlsbad: Please attend the meeting. There will be media presence and we need to fight for our rights to market our clients’ homes.
Thursday, February 18th, 2016
The concept of dual agency – where a listing broker also represents the buyer in a real estate purchase transaction – has been a subject of contention for a long time. Most listing agents dream of representing both the seller and buyer, as it leads to a bigger paycheck in the end. Of course there is a lot of paperwork both sides must sign to indicated that they are aware of the dual agency – this of course is designed to protect not only the parties to the transaction but also the agents and brokerages (hint hint: to try to prevent lawsuits).
Opponents to dual agency – and I happen to be one (in most cases) – argue that the listing agent’s first duty is to the seller, and that can hurt the buyer in the long run. Here are 3 reasons why buyers really should have separate representation when purchasing a home:
1. Allegiance to seller first: As a representative of a seller, an agent has a duty to uphold the sellers’ best interests. A buyers’ agent has the same duty to the buyer. If one agent represents both parties, you can see how this could be a big problem for one party – and the buyer is the one who usually gets the short end of the stick. For example, let’s say the seller tells the listing agent something about their situation that will affect the price or other aspect of the sale. The buyers’ agent’s job is to get the best price for the buyer, but the listing agent’s duty to the sellers (to not disclose confidential information that could affect price or other key components of a sale) clashes with the duty to the buyers – how can you get the best price for your buyers if you cannot tell them what you know on the seller side that could help them? Someone is getting left in the cold, and it is almost always the buyer.
2. Negotiations: The agent is often privy to certain information that will help in negotiations on behalf of the seller, such as the sellers’ bottom line price or other information that could assist in negotiating on their behalf. As mentioned above, this could detrimentally affect the buyers’ negotiating powers because the agent’s first duty is realistically to the seller. It is imperative that buyers have a representative who looks out for their best interests exclusively.
3. Agent Misunderstanding. As you can see, there are big problems in representing both parties. One of the biggest of all, unfortunately, is that many agents do not understand the legal ramifications of doing so. Many brokers do not oversee these sales closely enough, and the agents are left to handle them to the best of their abilities. This can and does lead to lawsuits down the road if the agent is not careful what s/he says or does, discloses or doesn’t disclose. You can see how it is the buyer who will suffer.
While I am a proponent of separate representation for the buyer and seller in a real estate transaction, there are situations where dual agency can actually be a benefit for all parties involved (commission alone should NEVER be a reason for an exception). One example is where the seller is financing part or all of the buyer’s purchase. The dual agent can be instrumental here in figuring out details. Of course, separate agents for each party can also do this. Some other situations do make sense at times, but the bottom line is that if you are a buyer you should have someone looking out for your best interests first and foremost. When you call a listing agent about a property their goal is to sell it. With a buyer’s agent that person’s goal should be to sell you the home that best meets your needs, with the ability to represent your interests exclusively.
If you are in the market to purchase a home or income property, strive to find an experienced and informative area agent to assist you – one who has strong negotiating powers and a keen sense of the legal aspects of the sale. If you do find yourself in a dual agency situation, make sure you involve the agent’s broker so that your best interests are not jeopardized.
Friday, February 12th, 2016
If you are a regular reader you know that I have a thing for ethics and those who violate the boundaries of professionalism in any field. We’ve all known of someone who crosses or has crossed the line. The real estate industry is no exception. Here are the most common ethics breaches made by real estate agents:
1. Going after other agents’ clients. Amazing, but yes there are slimy people out there. This actually just happened to me – another agent took advantage of my client in a very sneaky way. When an agent knows that someone is a client of another agent, to go after that person in order to get them to work with you is not just unethical, but it’s nasty. Karma will get all those people one day, but they really should not be in the business if they cannot be professional and respectful. That agent’s reputation will suffer, especially among area agents.
2. Not disclosing relevant information. This happens all too often. Some agents actually advise their sellers to NOT disclose information that could affect a sale – such as problems that have occurred in the home (broken pipes, electrical problems, roof leaks, etc.). Again, not only is this an ethical violation but it is illegal. Many lawsuits are initiated because buyers were not made aware of past problems – it is one of the main reasons for real estate lawsuits. I tell all my sellers that it is better to over-disclose than leave anything out. If you lay it out on the table it is up to the buyer to check out any issues and make informed decisions.
3. Telling home inspectors not to notify of problems or directing what should/should not be in a report. It is hard to believe but there are agents who do this. One home inspector told me that a successful area agent once told him not to notify him (the agent) of any problems concerning the roof, and to leave them out of the report! I couldn’t believe that. That is far more than an ethical violation – it is illegal. Things like this apparently go on all the time. Thus the reason you need an excellent home inspector that you trust, and also whom your client can trust. Mine is also a civil engineer and a licensed contractor – a little piece of mind goes a long way in preventing problems and legal action down the road.
4. Taking referral fees from lenders or others specified by law or statute as not allowable. This is a big no-no: unethical and also illegal.
5. Giving a client advice that is not in their best interests in order to secure a sale. Clients need to make their own decisions on whether or not to buy or sell a property. The role of the agent is to make sure the client receives all the pertinent information in order to make an informed decision. I never make decisions for my clients – rather, I offer my expertise in answering their questions and concerns. If there are problems with the property that are inherent and could cause issues down the road, I always point that out and suggest expert advice when needed. The ultimate decision belongs to the client – our role is to facilitate providing information. Encouraging a client to buy or sell when it may not be in their best interests is unethical.
There are many other glaring examples of ethical breaches in the real estate industry, and there is always the agent who invents a new one. But the above 5 examples are perhaps the most dangerous because they are crossing over into breaking laws and could have legal consequences. This is why all agents need strong training programs and continuing education to keep them abreast of new rules and laws.
The real estate industry needs to crack down on agent training and make cross-the-board mandatory programs, as well as stricter licensing requirements. Brokers also need to take responsibility with stricter oversight of their agents (if I was paid $1 for every time I had to call another broker to report something their agent did that jeopardized a contract, I would have a lot of dollars). Until such changes are set in motion we will unfortunately see more ethical/legal violations in the industry.
Monday, February 8th, 2016
Big brokerages thrive on hiring as many sales people as they can to increase profits. Some will hire anyone and others are more picky, but some of the bigger corporate brokerages offer lots of training and support to new or unseasoned agents, which is a big lure when searching for a place to hang a real estate license. The support and mentoring provided by these firms tend to draw many to their doors. But could there be a new threat on the horizon for big brokerages?
The latest brokerage to hit the real estate market is called the “Freedom Brokerage” – virtual brokerages without brick and mortar offices, which allow agents to save lots of money in most cases. Keep in mind that brick and mortar companies have to pay for their building space, utilities and supplies, as well as online programs, printed materials, websites and insurance, to name a few. They have to shell out money to keep their agents learning and motivated so that they will make money for the brokerage, but most of that money that goes out is passed along to the agents in some way (office fees, seminar fees, supply fees, etc. – there are many names).
Freedom Brokerages allow agents to hang a license with a company that lacks the brick and mortar hub (which seems very passe in today’s real estate market anyway – why pay for an office when you can do everything from a home office or other space?) This keeps the costs down. The idea appeals to many agents, who want to avoid all of the big brokerage costs. But it also is probably not the best idea for new or unseasoned agents, unless they are self-starters and do not need any hand-holding.
I applaud the new ideas that are popping up to keep real estate exciting. Personally I do not think we need brick and mortar offices. There are many options available for those who need a true office space and do not want to meet clients at a home office or at Starbucks. There are hub offices, where space is shared with other members for a monthly fee, and there are executive suites – where you have your own office or might share it with one or several others, with a live human who answers your phone possibly included. These ideas allow an agent to have an office address and space for meeting when needed.
So if you are considering leaving a brick and mortar corporate brokerage, look into the options. If you are a seasoned agent and a self starter, or even a confident new agent with someone who can help mentor you (although personally I think new agents need extensive training, and may get it best from established brokerages), it is a great idea which will save much money. Why pay all your fees to a big brokerage if you don’t have to?
Wednesday, February 3rd, 2016
With the deadline for payment of the second installment of property taxes already here, here is some helpful information for all property tax payers:
Annual property tax bills are sent out once a year, on October 1, and are payable in two installments. The first installment is due November 1 and is delinquent if not received by 5:00 PM on or postmarked by December 10. The second installment is due February 1 and is delinquent if not receive by 5:00 on or postmarked by April 10. A 10% penalty fee is assessed for delinquency on the first payment, plus a $10 fee is assessed for a delinquent payment on the second payment.
Home buyers: If you close escrow on a house after the tax bills have been issued to the seller in the Fall, you will not receive an additional copy or second reminder before the second installment is due, but you are still liable. Futhermore, the bill(s) you may have from the previous owners may not have your name on them, but you are still liable. If you do not have the bills or have any questions, please see below to contact your county tax assessor.
PAYMENT DEADLINE SUMMARY
Installment Due Date Delinquency Date Penalty (if delinquent)
1st: November December 1 December 10 10% of amount due
2nd: February April 1 April 10 10% of amount due + $10
TAX PERIOD COVERED BY EACH INSTALLMENT
1st installment: Covers taxes from July 1- December 31
2nd installment: Covers taxes from January 1- June 30
Changes: Keep in mind that most counties have a cutoff time in which to make changes, which is around March in the year the bills are sent. If you have any questions please contact your local tax assessor’s office.
Tax Assessor Offices from Los Angeles to San Diego Counties:
San Diego County Tax Assessor
Los Angeles County Tax Assessor
Orange County Tax Assessor
San Bernardino County Tax Assessor
Riverside County Tax Assessor
Supplemental Tax Bills: You may receive a supplemental tax bill during your first year of ownership of a home. The supplemental bill covers additional taxes owed based on the purchase price of the home (as property taxes are calculated on sales price in California). Please note that supplemental tax bills are not paid out of the lender impound account, and it is the responsibility of the new owner to pay them upon request.
Thank you to Chandra Self of Eaton Escrow for contributing the above information!
Monday, February 1st, 2016
If you are a buyer you have likely noticed that inventory is scarce right now, in San Diego county as well as many other areas. As we head into the Spring/Summer “busy” home selling season, many wonder whether the inventory will pick up, and that has some buyers and sellers worried.
Here are some of the likely reasons why inventory levels remain low right now:
1. Rate increases. In December of 2015 the feds slightly raised interest rates, with the hint that more increases would follow. Many buyers got off the fence and are not out looking for houses before any further increases might price them out of the buyer market. This could be good news for sellers, but it seems they are not jumping to list their properties – likely because they are concerned with finding replacement property themselves.
2. Buyer inability to qualify for a loan. Many buyers may not be able to qualify for loans. Price increases in 2015 and mortgage interest rate increases could cut out the ability of some buyers to qualify.
3. Sellers don’t want to give up prop 13 tax basis. Some sellers may not want to list their properties because they could lose their Proposition 13 tax benefits if they sell – especially if they purchased their homes when prices were lower, the assumption being that a new home purchased will be priced higher and thus have a higher tax base.
4. Sellers worry they won’t find replacement property. This was mentioned above, and it is a Catch-22 situation: sellers may have plenty of interested buyers and great offers, but they are afraid because of the lack of inventory available for finding replacement property; thus many sellers stay put.
5. U.S. and foreign economic issues. Although this may not play into selling and purchasing decisions as much as some of the other reasons, it could be a deal breaker for some buyers/sellers, who may perceive threats in the economic system and decide it is best to stay put until things feel safer.
The bottom line is that we do not know how the inventory will be affected as we head into 2016. Buyers who are qualified should probably focus on finding properties sooner rather than later, if they want to avoid interest rate hikes. Sellers who have replacement property, are moving out of the area, or must sell for other reasons will likely find themselves in a great position to sell. Make sure to talk to a knowledgeable and experienced local area agent and mortgage professional to understand what it going on in your hyper-local market, so you know when is the best time for you to buy or sell real estate.