Bay Area Real Estate and Community News

Aug. 11, 2020

Need More Space? Fast Facts on ADU’s

ADU accessory dwelling unit

Here on the Peninsula, people are needing to get creative about housing. With limited space, rising populations and multi-generational families, finding housing that fits your needs can be tricky.  San Mateo County is making a considered effort to promote and encourage residents to explore developing second units, or ADU’s. So what are ADU’s all about?

What is an ADU?

The term ADU stands for “Accessory Dwelling Unit”. This could be anything from a garage conversion to a free-standing structure on the property.  Regardless of type, they are all self-contained and smaller than the primary structure on the property. Often known as in-law units, cottages or garage apartments.

Why consider adding an ADU?

ADU’s can be used in a variety of ways.  More and more, they are being developed as rental units. Similar to a studio or one bedroom apartment, but with the feel of a single family home. These units can generate great income for owners.

Another common use for ADU’s is for multi-generational housing.  For families wanting to have an aging member live with them, but still give them their privacy and independence, an ADU can be the perfect solution.

Do ADU’s have to be new construction?

Not at all! While new construction is certainly an option (and generally required for free-standing units,) other options are to convert a garage into a unit or turn attic space or attached rooms into a separate unit.

What do I do if I want to build an ADU?

Step one is to talk with your city’s planning department and see if ADU’s are allowed, and what restrictions there might be for new builds.  All San Mateo County cities have clear guidelines on ADU’s in terms of size, zoning restrictions, and placement on the property.

Will adding an ADU impact my property taxes?

Yes and no. Your primary house won’t be reassessed (you’ll still keep your original tax basis,) but your ADU will be assessed and added to your existing property taxes.  

Keep in mind, if you use the ADU as a rental property, that will impact your income taxes.

What does an ADU cost?

With so many variables, it isn’t possible to answer this question simply.  ADU’s can be simple room conversions, more complex conversions (such as to a garage,) build of a modular unit or build of a unit completely from scratch.  In theory, pricing could range from $25,000 to $200,000 or more, depending on your process, needs and finishes. On average, $400/square foot is a good figure to work with.

Interested in learning more about ADU’s?  San Mateo County has a terrific website devoted to them, including having a calculator to determine cost vs income, as well as a workbook for planning your ADU project and information about individual city guidelines.  All of this information can be found at Second Unit Center SMC.

So what do you think, would you consider adding an ADU?

 

IMPORTANT NOTE:I have not and will not verify or investigate the information supplied by third parties.

 

July 2, 2020

Financing 101: Down Payment Under 20%

down payment

One of my favorite lenders, Jonathan King at Private Mortgage Advisors (PMA,) shares a quick and useful breakdown of ways to buy a new home without a 20% down payment...

As the market appears to shift (which seems evident by the number of offers we see on properties getting into escrow,) it would be a great time to remember about mortgage options that require less than 20%. The minimum down payment requirement is determined by loan amount and loan type (conforming or non conforming). For higher priced homes, minimum down payments offered by PMA are 10% up to a $2M purchase price. Above $2M, a larger down payment is required, generally 15% or more. For lower priced homes, minimum down payments can be 5% for a purchase price up to $715k which can be attractive to condo buyers in our area.

Back to higher priced homes... In a $1.5M purchase, the standard cash to close figure is approximately $407,000 which includes: Down payment of $300,000 (20%,) $15,000 in closing costs, and 12 months of reserves (approximately $92,000). With PMA, that figure is approximately $217,000 which includes: Down payment of $150,000 (10%,)$15,000 in closing costs, and 6 months of reserves (approximately$52,000).

By: Jonathan A. King, Mortgage Loan Officer  NMLS# 519680

At the end of the day, the myth is that you need to have 20% to put down to purchase a home.  The reality is that this isn't the case.  Given the loan amount, as shown above, you can find loans that accept a lower down payment.  But beyond this, there are other ways to get down payment support - assistance from your employer, gifts from family, silent (or non-silent,) seconds.  There are a lot of ways to be creative in your financing and to get you into a home before you get that mythical 20% set aside.

The best thing to do is talk with a great mortgage officer, like Jonathan, and explore the options specific to your unique situation.

Update January, 2020: Jonathan King is no longer a mortgage officer. If you're in need of a great lender, let me know and I'll connect you to some!

 

IMPORTANT NOTE:I have not and will not verify or investigate the information supplied by third parties.

Posted in Financial
June 15, 2020

Top 5 Tips for Decluttering

Decluttering Tips

My friend Karen Wray is the found of a great company called The Move Alliance on the Peninsula that specializes in decluttering, downsizing, and relocation, particularly for seniors.  I love talking with Karen about these topics because I always get such great insight and amazing tips. As a project manager, Karen spends her time helping people prepare for life’s transitions, or to just make their lives a little less messy and stressful.

During one recent chat, I asked how I could cut down on the junk that I feel follows me wherever I move. Here are some of Karen’s tips to help cut down on stuff:

Shop a little less

This seems to make perfect sense, but is much harder than you might expect.  The internet has made it so easy for us to clutter our homes up. All you have to do is think of something you might want, find it online and order it.  Half the time, by the time it arrives, you’ve forgotten you even ordered it. Some things you absolutely need, but for items that aren’t a necessity, consider creating a list.  Leave an item on the list for a few weeks; if you still feel you want it after that time, buy it. If after a few weeks you aren’t sure, just keep it on the list. More often than not, you’ll just laugh that you put it on the list in the first place and take it off.

Donate one bag a week

The goal is to have more going out than coming in.  So start with the easy stuff. Make a first pass through your home and anything you just don’t like or don’t care about, put that in a bag.  In no time, you’ll have your first bag ready to go. If one bag a week feels too much to start, try for one bag a month. The key is to just get started with moving things out of the house that aren’t needed or wanted.  It’s ideal to find old items a new home, versus throwing them away. With so many donation services on the Peninsula, finding new homes for your old things shouldn’t be a problem.

Avoid running through hypotheticals

How many times have you looked at a stack of blankets and rationalized “if I have five people spend the night, I’ll need all of these”?  Now ask yourself, when was the last time you had five people to spend the night (or whatever your hypothetical is)? If you can’t recall, you know you can pare down that pile of blankets, pillows, sheets, whatever you’re stocking up on.  It doesn’t mean you have to get rid of everything now, but at least you can get rid of one or two of those items you’re holding on to “just in case”.

Take an emotional inventory

This is one of the hardest things to do.  There are a lot of items that have various emotions and memories tied up in them, and we keep them because of what they meant to someone else.  When you come across an item like this, set it aside with others that have that same feeling. Then take a day when you’re not rushed or tired, and go through each item.  Ask yourself “does this bring me joy?”, a great tip from Marie Kondo’s book, “The Life-Changing Magic of Tidying Up”. In other words, does it truly mean a lot to you.  If so, it’s worth keeping.  If not, let it go. That unburdening can be very freeing.

Steer clear of self-storage units

Sometimes you need a storage unit.  Perhaps you’re going through a major remodel and need to move everything out of your house.  Or maybe you have business needs for a storage unit. If you do have a storage unit, it’s a good idea to dig in there and evaluate what you’re storing and why.  If it’s got a layer of dust or grime on it, you may not really care that much about it. If you forgot you own it or thought you gave it away years ago, it can probably be donated or thrown away.  Save yourself money and headaches by clearing out that storage unit and cancelling the rental.

One of the biggest challenges for getting rid of stuff and decluttering is that initial feeling of being completely overwhelmed.  Don’t let that happen to you. Start with just one tip, and go gradually. As you get rid of more stuff, you’ll find it’s easier to keep going.

What are your top tips for decluttering?  Which room is your biggest challenge?

 

Karen Wray is Founder and Senior Move Manager of The Move Alliance.

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Posted in Downsizing
May 29, 2020

Financing 101: Equity Lines

Equity Lines - What's a HELOC

Financing can definitely be one of the most complicated parts of the home buying process. Even after you purchase the home there are financing considerations.  I'm fortunate to have some great financing resources who make complicated things easier to understand.  One of those is Jonathan King with PMA Loans.  I asked Jonathan to share a bit about equity lines, aka HELOC's (Home Equity Lines of Credit).  It's a term we all hear, but many people wonder "What's a HELOC?", aren't sure when to procure one or how it can be used.

Here's Jonathan's quick overview on HELOC's.  If you have further questions, click on his link below and I know he'd be more than happy to answer them!

An equity line is a great way to leverage the equity in a new or current home. Equity lines can be obtained during ownership of a home or during the home purchase process. Different scenarios will have different requirements, but in general you can borrower up to 90% cltv (combined loan to value) of the home.

Equity Line Interest Rates & Payments

Equity lines will almost always have a higher interest rate, but a borrower is only paying interest on funds they are using. If a borrower has a $500k equity line with a $0 balance, they pay $0 interest. For the first 10 years, they can use and payoff (like a credit card,) the available line. After the 10th year, the borrower is required to pay down the outstanding balance over a 15 or 20 year period. The borrower can always obtain a new equity line at the 10 year mark.

Securing Equity Lines During Purchase Process

During the purchase process, buyers may want to keep some of their funds in order to complete home renovations after closing. In some scenarios, lenders require reserves. This means that funds that buyers plan to use for down payment actually must be used to meet the bank’s reserve requirement.

Securing Equity Lines Post-Purchase

Existing homeowners can obtain an equity line for “emergency” costs. Most banks have a 6 month waiting period meaning that after purchase, the owner must wait 6 months in order to obtain an equity line. PMA Loans does not have a waiting period. Borrowers can start the process the next day after closing.

By: Jonathan A. King, Mortgage Loan Officer  NMLS# 519680

 

IMPORTANT NOTE:I have not and will not verify or investigate the information supplied by third parties.

Posted in Financial
May 4, 2020

5 Tips for First Time Homebuyers

First Time HomeBuyer Tips

So you’re thinking you might be ready to be a first time homebuyer?  That’s so exciting - and totally overwhelming. Where do you start? How much is it going to cost you? How do you make sure you can get the home you want?

Take a deep breath, I’ve got you covered.  These 5 tips will help you to be ready to roll once you get serious about finding your first home.

Make A Hobby Out Of Open Houses

Long before you start actively looking for a house, you should start going to open houses.  It can be your weekend thing - a hike, brunch, open houses. So why would I tell you to go to open houses if you’re not remotely close to being ready to buy a place?  Think of it as similar to an SAT prep class - you’re not ready for the final exam, but you are ready to learn how to take the test.

The great thing about open houses for a first time homebuyer is that they’re all about learning.  You can explore neighborhoods and see which you like and which you don’t.  Check out different styles of homes and figure out what style suits you and what just won’t work.  Listen to more active home buyers and the questions they ask. Talk to agents to learn more about the area, the market and more (that’s what we’re there for).

Going to open houses is fun, especially if you have nothing on the line.  When you’re going just to learn, you don’t have to worry about the act of actually buying it.  You can meander through, take the information you need and leave the rest. The next house you go into, you’ll be all the more knowledgeable.

Think About The Future

When you’re a first time homebuyer going to buy a house, you need to think beyond just today.  It’s easy to say “I’m single and work in Menlo Park so this little place will be great.”  But what happens when you have a partner or spouse move in? And then what if you have kids?  Yes, I’m going way down the line here, but you do want to give some thought to what the future might bring, at least the next 5-7 years.

Beyond just your personal life, when thinking about the future keep in mind the elements of resale.  A time will likely come when you will look to sell your house (the average American moves 11.7 times in their life).  So even though you may look at it as your forever home, also think of it as your investment. Take a quick look at the state of the schools, the neighborhood and the economic factors around the property.  If they seem to be on the upswing, that’s great. If not, you may want to keep looking.

Have Vision

Tips for first time homebuyerBy this point, we’ve all watched enough Fixer Upper to know you have to look beyond the facade to see the potential.  When you walk into that home with chartreuse shag carpet, try to block that out of your mind's eye and look at what that room could become and how you could adapt it to be just what you want.  

Sometimes it’s as simple as a fresh coat of paint and taking out the carpet. Other times, there may be wall removal involved. But open up your mind and get creative. There is no such thing as the “perfect” house.

Make A List And Check It Twice

That Santa is a wise man with his list making, so we should all take a lesson from that.  This is especially true as you gear up to begin your home search. It’s crucial that you understand what your “must haves” and “can’t haves” are.  For some people, a pool is the be all, end all while for others, they want nothing to do with a property that has one.

A great way to start this list is during your open house tours.  You’ll see all sorts of things you’d never even thought about, so just keep a notebook handy to jot down ideas.  But another way to work on this list is to think about the way you use a house. Do you love entertaining? Gardening? Having friends over for Westworld viewing parties?  The way you live your life is the road map for your “must have” list.

It’s All About The Benjamins

Don’t freak out, money has a way of doing that to people - especially for a first time homebuyer.  In this pre-search stage, it’s the perfect time to start getting your ducks in a row.  Pull your credit report and see where your credit score falls. If needed, you can actively start to work to clean up your report and improve your score.  This can actually be quicker than you might think.

Remember, your credit score is only a reflection of your financial life so if you need to, pay off whatever debts you can (at least get individual credit cards down below 75% of credit limit,) figure out how to save money, and start working on creative planning for down payment sources (gifts, 401k borrowing, life insurance, etc.).

Bottom line, with a little pre-planning, you can make the search for your home that much more enjoyable.  And it should be enjoyable - you’ve worked hard to get to a place of home ownership!

Let me know in the comments section what some of your best home buying advice has been!

 

IMPORTANT NOTE:I have not and will not verify or investigate the information supplied by third parties.

Posted in House Hunting
April 9, 2020

Online Mortgage Solutions - A Q&A With My Mortgage Banker

online mortgage solutions

There’s no shortage of tech solutions when it comes to finding a mortgage.  If you live on the Peninsula, you’ve likely seen the Caltrain wrapped in SoFi advertising and Rocket Mortgages (owned by Quicken Loans,) seems to be advertising on TV every other commercial.  These, along with their main competitors Lenda and Guaranteed Rate, are great resources for home buyers. But are they the best way to go about procuring an actual mortgage?

I was curious to better understand that, and to look into what these tech solutions might offer and lack, so I called up my favorite mortgage banker, John Brunson, to get his thoughts.  (Full disclosure, part of the reason that John’s my favorite mortgage banker is he’s also my brother-in-law and after knowing him for 30 years, I trust his insights!)  Here’s our Q&A:

Q:  What’s the best use for digital mortgage solutions?

Digital solutions are good for simple requests.  They can provide good price discovery and ultimate execution for those most straightforward of applications.

On the downside, once you’ve provided your information to the online mortgage companies, you’ll be part of their lead generation machine and your contact info can be systematically solicited in an invasive way.

Q:  Is there anything these digital solutions are missing or incapable of that makes the “real person “ approach still best?  

The digital solutions provide a large product solution set, but one that does not solve for millions of loan requests.  It’s these individual needs that really benefit from the “real person” approach. The digital solutions are designed to primarily serve people who are salaried borrowers with spotless credit and seeking a loan of less than $679,150.

When your situation is more unique, that’s when it’s best to speak with a real person.  Certainly if you’re self-employed, or seeking a larger loan (which is most common in the Bay Area,) you’ll want to have an advocate who can help you figure out the best options.

Additionally, sometimes credit can be wrongly reported or have complications, and you definitely need someone to help you correct that.  Finally, with complex attributes such as the effects of death or divorce or something such as property or market nonconformity, you absolutely have to talk with a banker or broker.

Q:  Is the “real person” approach faster?

Not necessarily.  Some of the digital solutions can process straightforward loans just as quickly as a banker or broker.  The difference is in the conversion to closed loan rate. The digital solutions have much lower conversions to closed loans (meaning they don’t approve nearly as high a percentage of the loans applied for as a banker or broker).  This really comes down to the fact that a banker works really closely with the applicant to create a solid relationship and have a customized solution for the individual. I close nearly all of my applications because I understand my clients needs so well and set them up for streamlined success.

Q:  Are online loans more or less expensive?

Both.  On the face of it, online mortgages often seem to be less expensive than going through a banker or broker.  But over the long-term, when you get into the most optimum product for your situation, you’re going to save money.  Because the digital solutions aren’t able to personalize your solution for your specific needs, it will end up costing you more and just not being the best fit.

Q:  In 2008, we had the big mortgage disaster.  I’m worried about something like that happening again.  Will the all-digital approach result in less qualified people getting loans, thereby causing more defaults?

No, the online process seeks to automate the easiest to process loans, loans which have lower risk.  If there’s any complications with the application, the loan won’t be approved, hence the lower conversion to closed rate.

Q:  Doesn’t it take working with a person to ensure you’re making the best choices for your situation?

Absolutely.  A customized mortgage solution set empowers the negotiation process to home-buying, giving an individual buyer more power when they present their offer.  A mortgage banker can help buyers to identify the optimum balance between how much of a mortgage to take and how much cash to put down. There are also certain financial life cycle decisions that need to be considered and discussed, such as Adjustable vs. Fixed rates.

For someone who is self-employed or has hard to prove income, working with a mortgage banker is really the only path to getting approved for a loan.  It’s just too complex a situation for the digital solutions to work with.

Finally, when you work with a person, whether a banker or a broker, you have a single point of contact.  Think of it like a project owner to manage your transaction. They will keep your loan application on track to streamline the process and advocate on your behalf.  Keep in mind, these bankers and brokers don’t get paid until your transaction closes (escrow signing,) so they have a real vested interest in applicants succeeding in their loan approval and getting the home they want.

If you’ve got questions on this topic, feel free to add them to the comments section below and we’ll get them answered for you.

 

John Brunson is a Mortgage Banker with Skyline Home Loans Nmls #1086320

IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.

Posted in Financial
Nov. 14, 2019

The Dangers of Overpricing

San Mateo County Dangers of Overpricing

Compass researcher, Patrick Carlisle, has taken a deep dive look into the down-sides of price reductions and overpricing.

Looking specifically at San Mateo County, Carlisle has analyzed the impact of overpricing on sale price, days on market and cost per square footage. He's broken this down for the market in general, for the luxury ($3M+,) market, as well as multi-unit residential buildings.

It's a compelling, and quick, read for anyone considering selling, but also for buyers. For buyers, the quick take-away is that there hasn't been as good a time to buy in the last few years as now.

You can access the full report below.

If you or someone you know is thinking about selling or buying, please reach out for guidance.

Posted in Home Sales
Aug. 22, 2019

Out & About Around the Bay Area

Memorial Park

Memorial Park - Bay Area

One of the things I love about living in the Bay Area, and especially about living on the Peninsula, is our proximity to amazing outdoor spaces. We have some of the finest camping and hiking spots available anywhere in the world - I truly believe that.

This past week, my son and I took full advantage of this amazingness to have our end of summer camping trip at Memorial Park - a gem in the San Mateo County park system. Memorial Park is a whopping 45 minutes from our house, but feels worlds away.

Connected with Sam McDonald Park and Pescadero Creek Park, Memorial Park is located in the southern portion of San Mateo County, and on the mountain ridge. Nestled in a dense redwood tree forest, it feels like another world, yet is easily accessed from LaHonda Road.

Memorial Park is 673 acres of beauty. There is a day use area to access trails, and numerous campsites. As a county park, people may overlook it as a great camping option and it can be easier to book a site than for some of the state parks. The park includes a nature center as well as a great camp store (cash only,) with a super friendly proprietor.

Memorial Park - Bay Area
Wrapping up the Summer reading for 8th grade!

Jackson and I have gotten to be pretty good campers together, adding a little something to our supplies each time. This time we added both the hammock (which I hear was comfortable, but was never able to actually sit in,) as well as a Dutch Oven (which was crucial and produced some amazing post-hike nachos!)

Memorial Park - Bay Area

We took advantage of the proximity to the two other parks to set out for some hiking. We went into Pescadero Creek Park and were amazed by the wonders we found on our nearly 6 mile hike (including the cool/creepy cover image on this post).

Memorial Park - Bay Area
Old Haul Road Trail in Pescadero Creek Park

One of the things I really love about hiking with my son is the opportunity it gives us to talk. Without video games, cell phones and work to be done, we can focus on each other and the beauty around us. Having a 13 year old, I am always super grateful for a chance like this.

Memorial Park - Bay Area
Pescadero Creek

Even though we were in Pescadero Creek Park, we didn't really think about having a stream crossing, but we did. I'd like to say we smoothly crossed over without getting wet, but we didn't. We tromped on through, enjoying the cool down. The creek also gave us a chance to have a great rock skipping competition - I won for accuracy, he won for velocity!

If you're looking for an easy camping trip, especially if you're new to camping, Memorial Park is a great place to start. If for some reason the trip is a disaster (highly unlikely,) you can always pack up and be home in very little time. But most likely, you'll have an amazing time and be able to reconnect with your family and yourself.

Enjoy!

Posted in Bay Area Lifestyle
Aug. 22, 2019

Bay Area Real Estate Survey

August 2019 Special Report

with 50 Illustrative Charts

Bay Area real estate market report August, 2019

The research and insights team at Compass is amazing and constantly providing us with the best and most current data on the market. Their latest masterpiece is the August Bay Area Real Estate Markets Survey.

Covering Bay Area real estate markets from Santa Cruz to Napa, the report provides year over year comparisons for a variety of elements such as median price and price per square foot, broken out for homes, condos, high end properties and more. There's even comparative data for our market versus the rest of the country.

If you're looking for a deep dive into what's going on in the Bay Area real estate market locally, this report has you covered. I'm happy to be able to share it here.

If you have any questions or are thinking you might want to buy or sell, please feel free to reach out to me.

Posted in Research
July 19, 2019

Out & About Around The Bay Area

Clearlake, CA

Clearlake Bay Area Lifestyle


Recently, I headed to Clearlake for a camping trip with my son Jackson. We love to get out and experience the awesome nature that's at our disposal around the Bay Area, and this was a new stop for us both.

Tagging along was our added bonus - my cousin's son Austin from Indiana (I call him my nephew who isn't my nephew because identifying family relations can be hard). It was Austin's first true camping trip and we were so happy to share it with him - even if we chuckled at his marveling at lizards and wildlife!

Clearlake tubing Bay Area Lifestyle

The Clearlake State Park was fantastic for camping. A clean, well kept campground with super friendly rangers and good access to the lake.

The boys loved hanging out in the lake (it was HOT ? while we were there,) riding their bikes and getting in a little fishing ?. Without a doubt, our most fun experience was renting a ski boat and getting out on the lake. It was great to see the different areas of the lake, to drag the boys around on the tube, and to cool down and relax a bit.

Clearlake Fishing

I enjoyed being with the boys, but also just hanging out at our campsite and reading. The views were spectacular, especially with the vineyards around the lake. I previously had no idea how many vineyards there were in Lake County! (Over 9,000 acres, just so you know.)

Clearlake Vineyards


A few facts about Clearlake:

  • The largest natural freshwater lake in California
  • 68 square miles with 100+ miles of shoreline
  • The oldest lake in North America - 480,000 years old
  • Known as the "Bass Capital of the West"
  • To reserve a campsite, visit Reserve California

If you haven't been before, I highly recommend it. You don't have to camp, you can be more luxurious, but Clearlake is definitely a great, short road trip to take!

Posted in Bay Area Lifestyle