Sandy Kay Homes

Author: Sandy Kay

  • SCHOOLS SCHOOLS SCHOOLS

     

    The real estate market has experienced its highest  upward price trends in a long time – no surprise  – its families buying and moving to areas with good schools. More people seeking great lifestyle and the flurry of jobs. Homes in prized areas where school rank high 800’s and 900’s in API  (Academic Performance Index)  school score are the targets.  Consequently areas that have high APIs in all school sectors:   Elementary, Middle and High Schools like Cupertino, Los Altos and Evergreen are the really hot markets still with multiple bids on properties.

    A tip most home buyers don’t know is that schools may become saturated and newly registered kids will have to go to alternative schools.  Also some school that may not have as high school scores, actually have better art and liberal studies programs..  Don’t overlook the value of programs for a single number like API.

    Life style is not just about schools. A prudent buyer should look at location first , safety and stability of neighborhood, the homes amenities.  Bedrooms and the overall construction are also important. Remodeling can be minor or major. I am an experienced agent with experience in that capacity. Add up the cost of upgrades before you jump on a poorly maintained and kept short sale where there are a never ending number of surprises with deferred maintenance from the previous owners.

    So what should investors do?  They should cross schools with size of the home, construction, price, location based on jobs and shopping and other amenities. Currently there is a MAP here of Santa Clara county where you can look at Aptitude Performance Index and area.  This is a unique way to correlate home value and location. We want to find the hot investment areas or future areas of gentrification that might just be diamonds in the rough for the man with cash who wants to make money in the California market.  Call Sandy Kay at 408 202 0608 and ask me about it …and happy hunting.

  • How are Sales different now than 10 years ago?

    I remember the good old days when you could take a client out and find a home that you like and make an offer and if everyone was on the same page, the client could move in within a month or so. No more. sales go on and on and on since a lot of them are bank sales or sellers are still holding on to older prices. The banks are not at all interested in contract timelines or contingencies. Negotiations may take months or just disappear into the void where someone (who knows who) is evaluating a good offer. No wonder buyers walk and move on to other prospects in frustration.  Appraisals have to be renewed every three months and should there be a compliant seller they have to renew their information to the bank every 60 days or so.

    So 2011 has been interesting. I have seen properties where sellers have been living in bank owned homes a year after the bank has owned the property. The sellers are still trying to sell the home and the sellers agent is representing the seller!  I showed a home the other day and the seller informed me that they were planning to take everything in the house that wasn’t nailed down when they leave and a lot of things that were nailed down. Another seller I spoke to has no where to go and no plans and my buyer’s loan funds in two weeks.

    Crazy world. The reality though is that insurance, health costs, commodity prices and gas prices are going up. So what did Betty Davis say; “fasten your seat belts, we are in for a bumpy ride.”  The foreclosures are by no means over. I ran the loan to value ratio in an upscale town home complex not that long ago and guess what — one in four people had equity in their property. So if anyone there loses a job or changes their financial situation there are predicted foreclosures.

    Plus there is my conscience. It’s no fun to work with people that are having huge financial problems. Consequently, I have found just about every legal way to help sellers in default and will continue to help with financing counseling and problem solving and trouble shooting loan modifications. Most people need support and gradually get educated on the changes to their financial picture so that they can move forward with life in 2012.

    Sellers there is good news. There are many multiple offers for properties in good school areas. Ask for a home evaluation today to see how your value is doing based on my school maps.

    Sandy Kay

  • Someone who was “upside down” but got right side up

    Well as the ink on my last blog dries on the virtual page, I got this note and article from my friend Carl Reuter:

    Sandy:
    I wanted to thank you. I was about to default on my loan when I found out how underwater I was on my place and you were the one coaching me not to miss payments and to look at other options. That caused me to do a lot of research and to go up to bat with my lender and get a serious principle reduction and I managed to get refinanced through another lender. I ended up writing a few short articles on the process in hopes it may help others to get out from under similar debts.
    Thanks again, Carl

    I share the following in hopes it may help fellow homeowners in crisis.
    Myself, along with many others in America are “upside down” or “underwater” on their homes. I found I’d be lucky to get half of what I’d paid for it and I found the bank wouldn’t give me a re-finance to get out from under my 5 year fixed interest only loan. With the economic slowdown my income had decreased dramatically as well. I started to research my options as it didn’t make sense to keep paying for a home I owed $450k on that was worth less than $300k.
    A little research taught me that 95% of the folks that go to their mortgage company for a “loan modification” end up defaulting on the loan. If one gets behind in payments the bank is happy to add all those costs onto the back end of the loan and may lower the payment amount and possibly reduce the interest rate but it will cost you and they will not forgive any of the principle. You end up with an even bigger loan! The common misconception is that the lender won’t even talk over options unless you’re already behind in payments. At that point you are faced with foreclosure, which wrecks your credit for 7-10 years or you could “short sale” the home for less than fair market value which would only ding your credit for 2 years. I found the option by not defaulting. I Googled the topic and was able to untangle myths from facts and discovered the “Short payoff re-fi”, also called a “short re-fi” or “short payoff”.
    If you qualify, you can negotiate your loan down and still keep your house. Here’s how it works; the homeowner secures a loan elsewhere, essentially a re-fi, but for slightly less than the current market value of the home and they or a third party loan mod specialist presents that offer to their original lender and convinces that bank to accept a lesser payoff, making it clear that the borrower will have to short sale the home or default on the loan if the offer is refused due to financial hardship. The short payoff re-fi means a lesser loss for the bank since the home refinances for about the price of the future short sale and eliminates the costs of foreclosure. As more banks like BofA and Citibank, are seeing the merits of these types of payoff, they are allowing it. You may find a list of banks online. I’ve been dealing with Citibank but and found some of the folks in their short sale department didn’t have a clue about the new short refi program. I went to my mortgage broker and had to educate him as well. Besides being at a lot better interest rate, my monthly payments will drop by over a grand. The whole process took 6-8 weeks. Citibank got a “broker price opinion” of the property value, their appraisal, and negotiated my payoff based on that value.

    Before you get too excited here’s the catch; you have to be able to qualify for a FHA loan which is the only one approved for short payoffs, still have good credit, no missed payments, only one loan on the property and prove some financial hardship. It also helps if the original loan is owned by the bank rather than a third party investor. I believe that is called a portfolio loan and it simplifies the process because the bank doesn’t have to get approval from investors.

    I originally Googled for “short payoff refi” and found links to some companies that will do all the legwork for around $3000. It’s illegal in California for them to take any money from you till escrow closes so they basically work for free, hoping all the pieces will fit together and get paid at the end. This unfortunately means they may not work as hard on these types of loans and in my case I got discouraged at the slow responses I got and decided to do the legwork myself. Its taken a lot of phone calls and internet research to get the facts straight. I can see why more people don’t know about these options.

    None of us signed up for home loans thinking we would one day face losing our homes or be forced to renegotiate the amount we owed just to keep the home. For many of us offering the bank less is the only option and before we shed a tear over their loss, go see Michael Moore’s newest movie, Capitalism- A Love Story. I am no expert on any of this so please don’t seek me out for advice. I encourage you to do your own research, tell everyone you know that’s in this situation and be persistent. Go to your mortgage broker and educate him or her, get the new loan, pay your old loan off for what the house is really worth and don’t forget to get your taxes reassessed for the new value of the home. Good luck.

    Carl Reuter is a local renewable energy contractor and long time resident of Santa Cruz that loves living here even though it’s a costly place to call home.

  • The Oak Story Continues

    So the amusing speculation about why oaks explode when there in no rain or lightning still remains a mystery.  So many things in life are.  I am positive that the change of our beautiful 85 degree weather to 105 over night had something very much to do with it.

    Laila Zaccaraiah, my agent at Allstate, mentioned that I was the second call that day regarding an exploding oak.  I had even seen an old oak fall on a barn in hot weather before.

    Heat causes things to expand and if the liquid sap in the tree expanded more rapidly then the dry crust of the tree could handle then maybe it was too much for the oak and the tree had to give somewhere.  Down goes the branch on Gustavo’s car.

    So feet back down to reality.   Who is going to pay for his car?  I remember hitting a deer once when I was driving in the back country between Paso Robles and San Simeon to the horse farm owned by Mrs. William Randolph Hearst.  Boom.  No way around it.  The car insurance company paid 100%, no deductible out of my pocket.  It was an “act of God” they said.  I think they took the deer fur off the bumper.  It wasn’t my fault.

    Regarding my homeowners policy: au contraire.  If we had maintained the tree properly which we did by removing excess dead wood from the frame and kept the oak healthy, then it wasn’t our fault.  No liability, no payment.  If we neglected the tree and it was sickly, then it was out fault and the insurance company would pay for it.  Problem was then we look like neglectful people.  All that means is a recipe for the insurance company to raise our rates.  Catch 22.  Still no way to fairly get Gustavo’s car fixed.

    I asked Gustavo to call his car insurance company.  Hopefully they will shed some light on the situation and help out.  Meanwhil I’m feeling bad about his car and a $3126 bill.

    My father used to say.  Don’t bother paying insurance.  Take every penny that you spend on insurance: that’s about 8-10% of my income and put it in investments.  You’ll have a lot more money. I wonder if he was right.

  • The Exploding Oak

    While I was working at my desk yesterday signing a new listing, the giant oak outside my window exploded.  There was a loud sound that you can imagine is the one written in the balloon over the cartoon guy that gets smacked on the head.  “Crack”  A hundred times louder.  I ran outside to find that a giant limb from the oak tree that oversees this place had fallen on the red van owned by the guys here putting in the garden pavers.  No one was hurt but it was a mess.  My second thought was the oak.  It looked Ok, just a big jagged opening into the pulp where the branch popped off.  Now a huge leafy branch caving in the roof and windshield of Augusto’s car.

    Why do oaks explode?  So the easiest example to explain is why oaks explode in lightning storms.  Basically they usually don’t.  Why?  A single bolt of lightning carries a peak current that’s ten thousand times the energy of a light bulb.  In a storm when the oak is wet they don’t explode.  The water acts as a great conductor and the lighting might look pretty dramatic as it runs down the tree but it doesn’t explode.  Now, if the oak is dry and the lightning strikes through the bark  and hits the water filled sap line, and runs down from the inside out and explodes the tree from the inside out.  Cool.  I knew a surfer once that was hit by lightning (twice) and was just fine.  He was also bitten by a Great White and did fine but I’m heading too far into the karma zone.   Back to the oak.

    The bark of the oak is thicker than most other trees.  It generally takes much longer for anything to get through it including water.  That means that when lightning actually gets to the heart of the oak, the tree being dryer on the outside and wetter on the inside really looks dramatic when it explodes.

    So in our case here it’s summer and there’s no lightning!  Yesterday was one of the hottest days of the year.  A friend of mine called in the afternoon to say their rabbit had collapsed.  I walked downtown and people were lying everywhere under the big trees at the library and the post office reading books or just not moving.  I took the butter out of the refrigerator to make a pie and within 20 minutes I coudn’t get it all out of the paper.

    So I have been trying to figure this out.  There are no shortage of blog spots that agree that on really hot days oak tree limbs fall.  I have seen a giant limb, almost one third of the tree, go down in September and take out a corner of a barn.  One answer I read was when its really hot the tree pulls back its liquids to the core depriving outgoing limbs from getting water.  The rapid drying out fractures the wood in weaker limbs.  Dead limbs don’t go because they are already used to not getting water.  If the weather is hot for a long time and the temperature goes up slowly, the pull back affect is not as dramatic and the limb just dies.

    So why that limb.  There are about 50 others like it that wouldn’t have hit the car.  This is where my explanation comes in.  There have been workers here for a month.  Usually we don’t have anyone out here.  One car maybe none a day.  Now there are at least 6 or seven cars driving around the oak several times a day.  I kind of like the electricity idea from the inside out.  There have been strange currents around here lately.  They are running heavy equipment.  The ground has been completely torn up albeit along way from the tree getting this big construction project completed.  The electricity (OK its knob and tube around here)  has been causing mini black outs and driving me crazy trying to work on the computer.  The oak is sick of it.  He wants these folks done.

    I mentioned this to the contractor who gave me a really funny look.  Then he added.  My guys saw the whole thing happen.  The limb gave way missing Jeannine’s car by inches.  She was here cleaning up things in the house.  It actually bounced backwards and upwards to land on the top of Augusto’s car.  Nice.  Thanks Oak.

    So I called my trusty insurance agent Laila Zaccaraiah at Allstate.  We’ve been with them for years.  “It’s an act of God,” I say.  “We shouldn’t have any deductible!”  “You’ve been our faithful agent for years. We’ve never had a claim.”  She’s calling the adjuster.