Wednesday, March 25, 2009
Questions from Landlords
Dear Sue,
I have been a landlord for several years. I am not new to the eviction process. I have done a few in the past and the process has been relatively simple.
Now I am facing an eviction that I am not that sure about. The tenant (the only one on the rental agreement) has had different people living with her. A friend of mine, also an experienced landlord, said that these “occupants” may claim a right to possess the rental and that I need to include them in the eviction action.
Is this true?
Larry Landlord
Dear Larry
Yes, it is true. Before beginning your eviction process, I highly recommend that you seek the advice of a lawyer knowledgeable in landlord-tenant law.
If your eviction procedures are unlawful you, the landlord, can be charged up to $100 per day.
Unlawful procedures include locking out the legal tenant or occupants, the disruption of utilities such as water or electricity, the removal of outside windows or doors, or taking any of the tenant’s belongings in an attempt to carry out the eviction.
If you are evicting your tenant due to unpaid rent, the court may award you, the landlord damages, court costs and possible attorney’s fees. If the court finds that the tenant was malicious in not giving up their rental unit they may award the landlord as much as $600 in penalties and it will be on the tenant’s credit report for up to seven years.
Good luck!
Dear Sue
I have a beautiful home that I am being forced to rent out for a couple of years due to a temporary job change.
We have received an application from a nice young family. The only problem is that they have children who are in gymnastics and want to set up a trampoline in the backyard.
I feel that trampolines are dangerous and don’t want the liability. My wife thinks that they would make great tenants and that they are better than any applicant we have received so far. She thinks I am being too restrictive by not allowing them to lease from us.
What do you think, Sue?
Nervous Neal
Dear Neal
I agree with you. However, since the family may also be such a good prospective tenant, you may want to consider managing the risk.
I would discuss this thought with your insurance agent. Perhaps asking your tenant to purchase, say, a $5,000,000 tenant liability policy, naming you as loss payee would be an idea to consider. Your agent could advise you on the value of the policy.
If anything happens due to use of the trampoline, there is a $5,000,000, or whatever the amount, protection off the bat.
Making the liability policy requirement a condition of the rental agreement will put the decision in the hands of the prospective tenant. It won’t get you in trouble with your wife and may be a matter of good Home $$’s and sense.
I have been a landlord for several years. I am not new to the eviction process. I have done a few in the past and the process has been relatively simple.
Now I am facing an eviction that I am not that sure about. The tenant (the only one on the rental agreement) has had different people living with her. A friend of mine, also an experienced landlord, said that these “occupants” may claim a right to possess the rental and that I need to include them in the eviction action.
Is this true?
Larry Landlord
Dear Larry
Yes, it is true. Before beginning your eviction process, I highly recommend that you seek the advice of a lawyer knowledgeable in landlord-tenant law.
If your eviction procedures are unlawful you, the landlord, can be charged up to $100 per day.
Unlawful procedures include locking out the legal tenant or occupants, the disruption of utilities such as water or electricity, the removal of outside windows or doors, or taking any of the tenant’s belongings in an attempt to carry out the eviction.
If you are evicting your tenant due to unpaid rent, the court may award you, the landlord damages, court costs and possible attorney’s fees. If the court finds that the tenant was malicious in not giving up their rental unit they may award the landlord as much as $600 in penalties and it will be on the tenant’s credit report for up to seven years.
Good luck!
Dear Sue
I have a beautiful home that I am being forced to rent out for a couple of years due to a temporary job change.
We have received an application from a nice young family. The only problem is that they have children who are in gymnastics and want to set up a trampoline in the backyard.
I feel that trampolines are dangerous and don’t want the liability. My wife thinks that they would make great tenants and that they are better than any applicant we have received so far. She thinks I am being too restrictive by not allowing them to lease from us.
What do you think, Sue?
Nervous Neal
Dear Neal
I agree with you. However, since the family may also be such a good prospective tenant, you may want to consider managing the risk.
I would discuss this thought with your insurance agent. Perhaps asking your tenant to purchase, say, a $5,000,000 tenant liability policy, naming you as loss payee would be an idea to consider. Your agent could advise you on the value of the policy.
If anything happens due to use of the trampoline, there is a $5,000,000, or whatever the amount, protection off the bat.
Making the liability policy requirement a condition of the rental agreement will put the decision in the hands of the prospective tenant. It won’t get you in trouble with your wife and may be a matter of good Home $$’s and sense.
Friday, March 20, 2009
Patience is a Virtue in REO negotiations
Dear Sue,
Two weeks ago I made an offer on an REO property. The listing agent called my agent and said that my offer was accepted. We waited for a signed offer but nothing came. My agent called and was told that we needed to provide a direct lender approval letter before escrow could be opened.
It took my loan Broker six days to get an approval letter from a direct lender ( the lending institution itself). The listing agent received it four days ago. The listing agent said that she had everything that she needed. She said that she would be getting back to my agent as soon as she gets something in writing from the seller.
All of this verbal communication sounds very fishy to me! I have bought and sold several properties in my lifetime and have never had the buying process take so long. It also concerns me that none of the communication is in writing.
Why is buying an REO so different than buying from a private party? How can our agreements be enforced if none of them are in writing?
Concerned Cal
Dear Cal,
According to the California Association of Realtors legal minds a buyer just has to take their chances when purchasing an REO (Real Estate Owned) property. There is no law that states that real estate negotiations must be in writing.
The final agreement must be in writing in order to be enforceable.
As for the time that these negotiations often take, I suggest being patient. Do everything you can to be prompt with their requests. Remember, if a more desirable offer comes in during the coarse of your negotiations you could be out of luck.
The REO agent usually spells out in the listing what the seller’s offer requirements are. I would suggest reviewing those instructions and presenting your offer as requested. Do what you can to keep your offer clean and simple. Of course, the best offers are all cash with short escrows!
I have never seen a lender sign a CAR residential purchase agreement. They almost always counter with their own purchase agreement addendums. I suggest that you read that addendum carefully.
You need to focus in two areas. The first is the method in which you remove your inspection contingencies. The CAR (California Association of Realtors) contract requires that the buyer remove all contingencies in writing. The REO addendum usually changes that by stating that if the buyer goes beyond the stipulated time frame, the contingency is automatically removed.
The second area of concern is the penalty for going beyond the agreed upon closing date. The usual charge is $100.00 per day. I recommend that you stay on top of your escrow closing. If the escrow is going to be delayed for any reason I would suggest getting a written escrow extension thereby avoiding the penalty.
While this process can be frustrating and unpredictable, it can also be very rewarding. In fact, it can be a matter of good Home $$’s and Sense.
Two weeks ago I made an offer on an REO property. The listing agent called my agent and said that my offer was accepted. We waited for a signed offer but nothing came. My agent called and was told that we needed to provide a direct lender approval letter before escrow could be opened.
It took my loan Broker six days to get an approval letter from a direct lender ( the lending institution itself). The listing agent received it four days ago. The listing agent said that she had everything that she needed. She said that she would be getting back to my agent as soon as she gets something in writing from the seller.
All of this verbal communication sounds very fishy to me! I have bought and sold several properties in my lifetime and have never had the buying process take so long. It also concerns me that none of the communication is in writing.
Why is buying an REO so different than buying from a private party? How can our agreements be enforced if none of them are in writing?
Concerned Cal
Dear Cal,
According to the California Association of Realtors legal minds a buyer just has to take their chances when purchasing an REO (Real Estate Owned) property. There is no law that states that real estate negotiations must be in writing.
The final agreement must be in writing in order to be enforceable.
As for the time that these negotiations often take, I suggest being patient. Do everything you can to be prompt with their requests. Remember, if a more desirable offer comes in during the coarse of your negotiations you could be out of luck.
The REO agent usually spells out in the listing what the seller’s offer requirements are. I would suggest reviewing those instructions and presenting your offer as requested. Do what you can to keep your offer clean and simple. Of course, the best offers are all cash with short escrows!
I have never seen a lender sign a CAR residential purchase agreement. They almost always counter with their own purchase agreement addendums. I suggest that you read that addendum carefully.
You need to focus in two areas. The first is the method in which you remove your inspection contingencies. The CAR (California Association of Realtors) contract requires that the buyer remove all contingencies in writing. The REO addendum usually changes that by stating that if the buyer goes beyond the stipulated time frame, the contingency is automatically removed.
The second area of concern is the penalty for going beyond the agreed upon closing date. The usual charge is $100.00 per day. I recommend that you stay on top of your escrow closing. If the escrow is going to be delayed for any reason I would suggest getting a written escrow extension thereby avoiding the penalty.
While this process can be frustrating and unpredictable, it can also be very rewarding. In fact, it can be a matter of good Home $$’s and Sense.
Wednesday, March 11, 2009
Help for Homeowners
Dear Sue,
Since my husband and I retired five years ago, our income has been a combination of his pension and investments in the stock market. Unfortunately we invested heavily (and we thought conservatively) in some of the so-called "blue chip" stocks that can now be purchased by the dozen with pocket change.
We have always been responsible people. Some have even called us conservative. We have paid our bills on time and always paid the mortgage first!
Two years ago we decided to take equity out of our home for a much needed remodel. It didn’t seem like such a big risk at the time because we had plenty of equity. We also thought that the improvements would just add to the value of our home.
Needless to say our retirement income has diminished considerably and so has the value of our home. We are now under water and it is very difficult to make our house payment.
We are between a rock and a hard spot even though we always did our best to make responsible financial decisions. In a million years I never thought that my husband and I would be in this situation. We are getting close to not being able to make our payments and we don’t have enough equity to sell. Ideally we would like to stay in our home. I don't know if that is even possible. Where do people like us go for help?
Desperate Diane
Dear Diane,
Unfortunately many people share your predicament to one degree or another. Many of those people felt that they too were making responsible financial decisions.
Fortunately the current administrations new plan for helping homeowners may include help for you. The plan is specifically designed to allow existing homeowners to keep their homes by making mortgage payments affordable
I recommend going to FinancialStability.gov. If you answer yes to the four qualifying questions you may qualify for a no equity refinance. With the current interest rates this can significantly reduce your monthly payments.
If you have a “no” answer to any one of the four questions, you may be eligible for a loan modification. Under the new plan you don’t have to be behind in your monthly payments to qualify.
Loan modifications include adjusting the payment, interest rate, loan term and in some cases reducing the principal balance.
If you do not qualify for the affordable refinance or loan modification, you have other options available to you. They include forbearance, which is an agreement to pay only a portion of your regular payment or no payment at all for a specific period of time based on your current financial situation. At the end of the time period you will begin making the regular payments as well as an additional amount to pay off the past due amount.
There is a repayment plan and special mortgage relief assistance for active duty military service members.
If the no equity refinance and loan modification options fail, a pre foreclosure or “short Sale” is an option. That is when the lender agrees to take less than is owed.
If a short sale doesn’t happen in a timely manner, a deed-in-lieu of foreclosure can be a possibility. This is when a mortgage servicer agrees to have you voluntarily transfer the deed to the property to them to help avoid the impact of a foreclosure on your credit rating.
If you need urgent help contact the homeowners HOPE hotline (888)-995-HOPE. It could be a matter of good Home $$’s and Sense.
Since my husband and I retired five years ago, our income has been a combination of his pension and investments in the stock market. Unfortunately we invested heavily (and we thought conservatively) in some of the so-called "blue chip" stocks that can now be purchased by the dozen with pocket change.
We have always been responsible people. Some have even called us conservative. We have paid our bills on time and always paid the mortgage first!
Two years ago we decided to take equity out of our home for a much needed remodel. It didn’t seem like such a big risk at the time because we had plenty of equity. We also thought that the improvements would just add to the value of our home.
Needless to say our retirement income has diminished considerably and so has the value of our home. We are now under water and it is very difficult to make our house payment.
We are between a rock and a hard spot even though we always did our best to make responsible financial decisions. In a million years I never thought that my husband and I would be in this situation. We are getting close to not being able to make our payments and we don’t have enough equity to sell. Ideally we would like to stay in our home. I don't know if that is even possible. Where do people like us go for help?
Desperate Diane
Dear Diane,
Unfortunately many people share your predicament to one degree or another. Many of those people felt that they too were making responsible financial decisions.
Fortunately the current administrations new plan for helping homeowners may include help for you. The plan is specifically designed to allow existing homeowners to keep their homes by making mortgage payments affordable
I recommend going to FinancialStability.gov. If you answer yes to the four qualifying questions you may qualify for a no equity refinance. With the current interest rates this can significantly reduce your monthly payments.
If you have a “no” answer to any one of the four questions, you may be eligible for a loan modification. Under the new plan you don’t have to be behind in your monthly payments to qualify.
Loan modifications include adjusting the payment, interest rate, loan term and in some cases reducing the principal balance.
If you do not qualify for the affordable refinance or loan modification, you have other options available to you. They include forbearance, which is an agreement to pay only a portion of your regular payment or no payment at all for a specific period of time based on your current financial situation. At the end of the time period you will begin making the regular payments as well as an additional amount to pay off the past due amount.
There is a repayment plan and special mortgage relief assistance for active duty military service members.
If the no equity refinance and loan modification options fail, a pre foreclosure or “short Sale” is an option. That is when the lender agrees to take less than is owed.
If a short sale doesn’t happen in a timely manner, a deed-in-lieu of foreclosure can be a possibility. This is when a mortgage servicer agrees to have you voluntarily transfer the deed to the property to them to help avoid the impact of a foreclosure on your credit rating.
If you need urgent help contact the homeowners HOPE hotline (888)-995-HOPE. It could be a matter of good Home $$’s and Sense.
Wednesday, March 4, 2009
Market Conditions in Auburn February 06-March 09
Dear Sue,
I am interested in buying an investment property. Here's the truth: There are opportunities in every market, good and bad. They are just different.
To make an informed decision, I have been researching market trends in the Sacramento and Placer counties. It looks as though the Auburn market has held up a little better than most and may be a good place to buy.
I know you are a local real estate expert. Before plunging headfirst into a real estate investment I was wondering if you had any market insights to share.
Researching Randy
Dear Randy,
I receive monthly market updates from appraiser, Jared Mickel. Jared regularly performs one of the most thorough analyses of the Auburn market that I have seen.
Jared’s most recent update indicates that over the last three years from Feb. 06 to March 09, the average home in the Auburn market lost approximately $155.00 in value per day.
In February 2006, the average sale price per square foot was pushing the ceiling of $300.00 per square foot. Today the average sales price per square foot is below $200.00.
Jared points out that there has been two serious gaps or bleeps in the market during the period he studied. The first was in September 2008 after the announcement regarding the first wave of bank failures. The market gapped down after a six-day stand still. The average price per square foot dropped in six days from an average of $225 per square foot down to around $212 per square foot.
The second bleep was a gap up. It took place in November of 08 and seems to have coincided with details of the finalization of the TARP program. The gap up was from an average of $165 per square foot to an average of $180 per square foot. I find it interesting that both gaps were triggered by “news”.
The foreclosures and short sales began to impact the Auburn market in November 2008. In the last six months the foreclosures represented approximately 19% of the closed sales. The short sales made up approximately 4%. Distressed properties as a whole represented approximately 23% of the total Auburn market. The majority of those sales were between $100,000 and $250,000.00. Of course these sales brought down the area’s average sales price!
Yesterday Leslie Appleton-Young, the chief economist for the California Association of Realtors, announced, “In Sacramento County we are through 80% of the sub-prime resets”. Ms. Young said that the greater Sacramento area was one of the first counties to go down and will be one of the first counties to recover.
President Obama’s plan was released today, Wednesday, March 4th 2009. The plan is expected to rescue millions of homeowners. I believe that over the next few months this news will positively impact Auburn’s market trend.
I hope that this has helped. Studying markets before jumping in headfirst is a matter of good Home $$’s and Sense.
I am interested in buying an investment property. Here's the truth: There are opportunities in every market, good and bad. They are just different.
To make an informed decision, I have been researching market trends in the Sacramento and Placer counties. It looks as though the Auburn market has held up a little better than most and may be a good place to buy.
I know you are a local real estate expert. Before plunging headfirst into a real estate investment I was wondering if you had any market insights to share.
Researching Randy
Dear Randy,
I receive monthly market updates from appraiser, Jared Mickel. Jared regularly performs one of the most thorough analyses of the Auburn market that I have seen.
Jared’s most recent update indicates that over the last three years from Feb. 06 to March 09, the average home in the Auburn market lost approximately $155.00 in value per day.
In February 2006, the average sale price per square foot was pushing the ceiling of $300.00 per square foot. Today the average sales price per square foot is below $200.00.
Jared points out that there has been two serious gaps or bleeps in the market during the period he studied. The first was in September 2008 after the announcement regarding the first wave of bank failures. The market gapped down after a six-day stand still. The average price per square foot dropped in six days from an average of $225 per square foot down to around $212 per square foot.
The second bleep was a gap up. It took place in November of 08 and seems to have coincided with details of the finalization of the TARP program. The gap up was from an average of $165 per square foot to an average of $180 per square foot. I find it interesting that both gaps were triggered by “news”.
The foreclosures and short sales began to impact the Auburn market in November 2008. In the last six months the foreclosures represented approximately 19% of the closed sales. The short sales made up approximately 4%. Distressed properties as a whole represented approximately 23% of the total Auburn market. The majority of those sales were between $100,000 and $250,000.00. Of course these sales brought down the area’s average sales price!
Yesterday Leslie Appleton-Young, the chief economist for the California Association of Realtors, announced, “In Sacramento County we are through 80% of the sub-prime resets”. Ms. Young said that the greater Sacramento area was one of the first counties to go down and will be one of the first counties to recover.
President Obama’s plan was released today, Wednesday, March 4th 2009. The plan is expected to rescue millions of homeowners. I believe that over the next few months this news will positively impact Auburn’s market trend.
I hope that this has helped. Studying markets before jumping in headfirst is a matter of good Home $$’s and Sense.
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