East Bay Realty Pro Blog

Today’s news reports indicate that 30-year, fixed rate mortgages have dropped to an average interest rate of 5.19 per cent, the lowest level since 1971. Meanwhile, unemployment claims are reported to be near the highest since 1982.

If you have good credit and have been thinking about buying a home, this is a fabulous opportunity. Don’t let fear or waiting for even lower interest rates and prices stop you from at least exploring what is out there.

As the economy appears to be getting worse and worse, the time to be a buyer could not be better. Even if you need to sell first, as long as you are buying up, you will be way ahead of the game.

See my recent blog, Should You Buy Now or Wait?

As an hourly real estate consultant, I have helped people in the East Bay. In one recent case, the client was a senior citizen who had a number of questions relating to her property. She was neither buying nor selling, but required information for planning purposes.

Several days ago, I helped another individual with a purchase contract and other documents. She is in the process of buying a home from a FSBO (For Sale By Owner) and needed someone on her side to help her through the process.

Real estate is a business that, in many ways, is slow to change. The dearth of qualified professionals doing consulting on an hourly basis is a prime example. Although quite a few agents have the word "consultant" on their business card, they use the term simply as a variation on the word "salesperson." It is the rare licensee who understands the factors that differentiate a consultant from an agent, and the difference it makes for you, the client.

In our current, tight-money economy, paying a Realtor by-the-hour for specific functions makes sense. Those I assist in this way love the service.

To understand more about the benefits of hourly consultations, and what to look for in a consultant, read my past articles: Consultant or Agent?, Consulting Helps Couple Avoid "Money Pit", and Consulting Saves Buyer’s Bacon.

On 11/6/08, I wrote about foreclosure scams. Subsequently, the California Association of Realtors (C.A.R.) legal department created a Q&A on the subject that provides details that might help prevent some distressed homeowners from being victimized.

There is too much information to list it all here, so I have excerpted some of the more salient Q&A’s from C.A.R. HERE.

In my last post, I talked about why this is a great time to buy. As many have discovered in the past week or so, this is also a fantastic time to get a new loan or refinance an existing one. According to news reports, applications for mortgages more than doubled during Thanksgiving week. This was as a result of a decrease in fixed interest rates of more than one-half point.

Of total applications, those for refinance more than tripled. Thirty year, fixed-rate loans fell from an average of 5.99% to 5.47%. These national figures correspond to what is happening in the Bay Area.

Given that rates may soon temporarily drop even lower, today is an outstanding opportunity to talk with a lender. Take care of the processing and paperwork now so you are in a position to lock in the lowest interest rates we may see for some time to come. Those who take advantage will be glad they did.

Today I did some MLS research to substantiate my sense of the current market in Oakland. The statistics backed up what I have been saying to my clients — soft prices combined with attractive interest rates add up to a special buying opportunity.

This lead me to write an article for my newspaper column. “Great Time to Buy - Fact or Fiction?” which can be read on my Web site.

In the fall of 2007, one of my clients emailed a pest control report to me asking for my advice. It indicated an active powder post beetle infestation. As I have personally had a bad experience with this destructive insect, I recommended she have the pest control operator do a chemical treatment to eliminate the problem. Given time, I explained, it could get much worse.

Today, I received an email from this client. The work has not been done and now, a year later, she forwarded a new report showing the infestation has significantly increased. The new bid is nearly double that of the original $3500. She has ordered fumigation and repair. In another year or two, the situation could have been disastrous.

Powder post beetles are not as common as termites; nonetheless, they can cause devastation to a property. They entered our home in furniture imported from Europe and bought at auction. We ended up having the entire house tented. It was an expensive, unpleasant experience.

The Univ of Florida has, online, a an excellent description with photos.

To learn about pest control reports and related problems in a home, see my previous articles, “Not Just Termites, Part 1” and “Part 2,” as well as “Anatomy of a Termite Report.”

EOCP Director, Wendy Jackson, and Don

This past Friday, on behalf of the Oakland Association of Realtors (OAR), I visited the East Oakland Community Project (EOCP), AKA “Crossroads,” and installed a “Sharing Closet” sign outside their room designated for donations to the residents. As I discussed in a previous blog, EOCP is the largest homeless shelter in Alameda County.

While sitting in the lobby, I noticed a sense of calm and well-being in the building. This was in striking contrast to the feeling in their former location, a very old, converted factory in poor repair. The new facility is a transformative place where people can regain their dignity.

In 2004, as OAR president, I created the concept of Oakland Realtors and their clients donating various items, such as business clothing for job interviews, to EOCP. I was gratified to learn that the new building incorporated into its architectural plan a huge storage room with shelves and rolling racks dedicated to the Sharing Closet. The custom designed sign, a gift from OAR members, was a fitting commemoration of the upcoming first anniversary of this landmark residence for those in need.

The California Association of Realtors (C.A.R.) has just added a new information service to its Web site sharing great tips and ideas on how to green your home, office and life. “At Home with Green”™ includes an index of green resources, terminology and principles. It also offers information on buying a green home, greening an existing property room-by-room, and “selling green homes to eco-conscious consumers.” As a C.A.R. director, I am proud that our state organization is taking a leading role in such an important cause.

The National Association of Realtors just started offering a course toward obtaining an advanced, green designation*. It is so new, only about 200 Realtors have this credential.

*For more information on Realtor designations and why they are significant, see my article, “Deciphering Those Letters.”

Yesterday, I showed an Oakland house in a very popular area. This neighborhood has long commanded a premium because of its proximity to one of the best shopping districts. At the height of our past seller’s market, however, there were numerous red flags regarding pricing that buyers, and their agents, ignored.

One danger signal I have always pointed out to my buyers is price per square foot (ppsf). Although this metric is most appropriate to subdivisions of similar homes in outlying cities, it also works well as an important point of reference in older, East Bay communities with few, if any, subdivisions.

In 2002, I published an article, Pricing by the Square Foot, with a follow-up in 2004, Pricing by the Square Foot Revisited. Both advised buyers to pay attention to how much they paid per square foot, especially for smaller properties. The 2004 article warned how some houses exceeded $600 per square foot, a very high number in Oakland at the time. I saw this as a warning light.

As for the home I showed today, it was purchased at over $700 per square foot and is now listed for less. In my opinion, the seller will be fortunate if it sells at $600 per square foot. Even at that, unlikely, figure, the owner is in for a six figure loss, and this does not include the substantial cost of buying and selling.

I share this information to help those who might be in the market now. Understanding both nearby comparable sales and ppsf is critical in deciding on a reasonable bid. Taking ppsf into consideration will also assist sellers in pricing their property at a number that is likely to attract offers.

Unless you are a buyer or seller who is a local real estate expert, which is uncommon for those not in the business, make sure to work with an agent who you not only trust, but who knows and cares enough to communicate vital information so you can make the right decisions.

Yesterday, I received a call from a fellow asking for advice for his friend. He said she was having mortgage payment problems and wanted to know who she should call to help her deal with her lender. Given her situation, I warned him how, in southern California, some people are getting ripped off by shysters posing as professionals offering to assist desperate homeowners.

In fact, I do not know any loan mitigation people I can recommend. This is a new “specialty,” created in the vacuum of the U.S. foreclosure crisis. I suggested he tell his friend to be careful about hiring anyone to help her negotiate with the bank. This is especially true if they ask her for any money prior to performing services.

Not coincidentally, today I read a press release from the California Attorney General’s office explaining how they broke up a ring doing just this thing (“Attorney General Brown Breaks Up Foreclosure Scam Ring”)

My advice to the caller was to have the homeowner/borrower call the lender directly. Another option is to contact Housing and Urban Development (HUD). They are supposed to have counselors to help those approaching foreclosure. Although most scams are currently in the southern part of the state, if they have not popped up here already, they are sure to surface in the Bay Area.