What Costs of Home Ownership is Tax Deductible?

I just came across this great article that I thought I’d forward along. ¬†It talks about what is and is not tax¬†deductible¬†in home¬†ownership.




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How Much Insurance Do I Really Need?

How Much Insurance Do I Really Need? ¬†It’s a great question that I get often. ¬†Found this great article and thought I would pass it along:



Got Questions? РThe Caton Team is here to help.  Email us at:


Visit our website at:   http://thecatonteam.com/

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What does Bank Owned or REO property mean?

A REO stands for Real Estate Owned which really means the home is Bank Owned.  A Bank Owned home is a home post-foreclosure.  Meaning the bank has already foreclosed on the seller and now the bank owns the home.

The Pro’s

Buying a bank owned home is as close to a normal sale as a buyer can get when working with distressed properties. ¬†The pro – quick response time. ¬†When submitting an offer on a bank owned property the buyer can expect to get a response within a week – and once the offer is accepted the escrow period is like any normal transaction. ¬†A buyer is granted their contingency periods that start the day after the offer is accepted. ¬†It’s a breath of fresh air for a buyer since short sales are slow and painful. ¬†Because bank owned homes are smooth transactions for the most part – we do see them move off the market much quicker than the dreaded short sale.

The Con’s

Buying a bank owned home means one thing Рno real disclosures.  Sometimes it even means the home is in various forms of neglect.  The bank, having never lived in the home, does not provide the buyer with the disclosures a normal seller would provide.  The two most interesting reads not provided by the bank, aside from inspection reports, are the Transfer Disclosure Statement (TDS) and the Seller Supplemental Checklist (SSC).  These two standardized forms ask the seller a myriad of questions covering neighborhood nuisances and issues with the home.   The bank does however need to provide the buyer with the California State Mandatory Disclosures, one of which is the Natural Hazards Report which covers natural hazards around that particular property.

How This Affects the Buyer

Banks require an¬†As-Is¬†sale. ¬†This is typical of many sales. ¬†As-Is¬†means as disclosed. ¬†However, since the bank has no personal knowledge of the home – it is hard to disclose the potential issues. ¬†Since the disclosures are weak, the burden is placed on the buyer to investigate. ¬†As Realtors we cannot¬†attest¬†to the¬†condition of the¬†property or neighborhood¬†– but we do encourage the buyer to seek professional opinions. ¬†Some buyers visit the local police department and ask candid questions, I’ve even had buyers door knock the surrounding homes to speak to their potential neighbors.

As for the condition of the home – that’s the easy part. ¬†As in any buying transaction, the buyer will have contingency periods to do all their inspections at which point we’ll get the home, pest and roof inspector out to check out the home and provide the buyer with a written report. ¬†The buyer can do any inspections they want, from lead to asbestos, to truly anything that is of concern to them and for¬†their plans for the property¬†– pretty much just like any other buying transaction. ¬†The only downfall – if issues arise – often times the bank does no repairs.

How We Go About All This

Since these transaction are so cut and dry, before we sit down to write the offer with our buyers, all parties take a good hard look at the property to determine the buyers offer price.  A buyer does not perform their inspections prior to writing the offer because a home, pest and roof inspection costs upwards of $500.  After the offer is accepted, the buyer will pay for their inspections and we proceed from there.

Generally, the buyer knows what they are getting into.  Often times these homes are in states of neglect and may be missing key fixtures or appliances.  In the end, both the buyer and their Realtor take all of this into account and write their best offer.

For more tips on writing an offer on a bank owned home – stay tuned!

Got Questions?  Email us at Info@TheCatonTeam.com or visit our website at http://thecatonteam.com/

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Writing a Great Offer

I’d like to share some tips on writing an offer. ¬†It’s the bread and butter of what we Realtors do.

Before I begin, these scenarios are for real life, breathing sellers WITH equity in their home.  Stay tuned for strategies on writing an offer on a short sale property or a bank owned property.

Searching for the right home is fun – getting the home you want – now that’s my job. ¬†But it takes the buyer and Realtor working together to be successful.

Writing an offer can be very difficult for some buyers. ¬†The pressure and stress of signing their name to the line can cause a buyer to get cold feet, sweaty palms and break out in hives. ¬†It doesn’t need to be that stressful. ¬†The biggest hurdle I notice for buyers is choosing their offer price.

Please note, as professional Realtors we cannot tell the buyer the amount they should offer.  Realtors, such as The Caton Team will provide the buyer with a comparative market analysis to show the buyer the value of homes in the area compared to their chosen home Рthis information will help the buyer decided their offer price.  A buyer must come up with their price on their own and feel comfortable with their price.

To be frank Рprice is almost always the most important aspect of any offer.  If the price is right for both parties Рit can be smooth sailing.  However, there are several other aspects of an offer that also weighs in Рthe terms of a contract.  For instance, what is the time frame to close escrow? Generally close of escrow is a 30 day window.  Can the buyer close sooner?  Sometimes a seller likes that.  Sometimes a seller may need more time in the home after close of escrow Рso a buyer could rent back the property to the seller either at fair market rent or perhaps even free.  How long are the buyer’s loan and property condition contingencies?  A very competitive offer will have a short window for contingencies.

Writing an offer is serious business.  So serious in fact that for the offer to be considered legitimate Рit needs consideration.  Consideration is a fancy word for money.  The money comes as a buyers good faith deposit (which is part of their down-payment), generally 3% of their offer price which is put in our office safe until the offer is accepted.   In fact the purchase contract is also a receipt for the good faith deposit.

When a buyer sits down to write an offer Рthey must be serious about buying the home and committed to seeing the sale through and closing the escrow.  To be frank Рif  a buyer is just fishing for a price and does not care whether or not they get the home РPLEASE be upfront and honest with the Realtor.  There are offer strategies for each buyer’s scenario.  Upfront, honest communication is the essence of a healthy Buyer/Seller and Realtor relationship and the only way to attain the client’s personal goals.

On that note, getting the home a buyer wants is truly a meeting of the minds between both buyer and seller.  Very very very rarely have I seen the strong arm approach succeed in OUR local market.  The offer and subsequent counter offers are a method to find that happy middle where both the seller wants and can sell their home and the buyer wants and can purchase the home.

First, a buyer needs to consider what they are up¬†against. ¬†Are they the only offer? ¬†Are there multiple offers? ¬†Has the seller chosen an offer date – where all offers are due and reviewed in one shot? ¬†Don’t worry – this is where The Caton Team shines.

Let’s cover each situation since it warrants its own game plan. ¬†What does it take to write a good offer?


This is a buyer and Realtors dream.  Being the only offer Рthe buyer has the opportunity to write an offer in their favor (within reason).  Being the only offer, takes the edge off the buyer to come in with their highest price and best terms offer.  It can possibly result in a few counter offers back and forth to find that happy medium between buyer and seller.  During the boom Рbeing the only offer was a pipe dream.  Surprisingly, as our local San Francisco Peninsula market recovers Рbeing the only offer is still rare on choice homes.  Given the opportunity remember that buying a home is finding a happy medium between all parties Рso come in with a fair market price offer to reflect the homes location and condition is always a good starting point.  Coming in too low Рand well Рyou just might anger the sellers and get just about nowhere.


A multiple offer situation is when there are several offers coming in on one house and generally the Listing Agent (Realtor to the Seller) will have an offer due date, where all offers must be submitted at that time and then presented to the seller all in one shot.

Here comes the tricky part. ¬†As professional Realtors the Caton Team is proactive and like any good Realtor – will call the Listing Agent to get the scoop. ¬†I introduce myself to the Listing Agent the second I get wind my buyers are¬†interested. ¬†This helps me¬†gauge¬†the¬†activity¬†around the home so I can advise my¬†clients best. ¬†As Listing Agents, we rarely know exactly how many offers are coming in. ¬†We generally gauge the interest by how many disclosure packages are out. ¬†As you may recall from previous blogs – whenever possible the Buyers Agent will get any and all upfront disclosures from the Listing Agent. ¬†The Listing Agent keeps tabs on how many disclosure packages are out and informs the Buyers Agents. ¬†It’s not an exact science, but we make it work.

Another key factor to consider is the sellers motivation for the sale.  We take the time to find out why they are selling and as Buyers Agents we call the Listing Agent to ask some questions.  Some of out top questions are:  Does the seller have to sell?  Or is the seller looking for the right price in order to sell?  Is the property their personal residence or was it an investment property?  Is the property upside down Рin other words Рis the property a potential short sale where the lenders cooperation is necessary to actually close escrow?  Is their a family crisis or sadly a divorce that is forcing the sale?  Each bit of information we can get upfront helps our buyers with their decisions.    And understanding both involved parties can bridge the gap.

So the offer due date is set – now we hit the table and write the offer. ¬†Suddenly the buyer is feeling some pressure. ¬†Several people like “their” house and in order to get the house the buyer truly must put their best foot forward. ¬†Now, what does that mean? ¬†That means writing, literally, your best offer – the offer you can stand behind and say – “This is my best offer – and if I do not get this house for my price…. then the other buyer paid too much!” ¬† If a buyer cannot say that about their offer – than they are not putting their best foot forward and the buyer may not get the house – or even a chance to be considered.

The flip side.  A buyer writes a low offer Рhoping for a counter offer Рor just praying the other buyers move on.  Then they find out the home sold for way more and the buyers offer was left in the dust.

As Listing Agents in a multiple offer situation with 10 offers in hand, the seller cannot and generally will not counter each offer.  The lowest offers are often set aside and if there are a couple similar offers, the seller may opt to counter those Рbut if one offer shines better than the rest Рnow a days Рthe seller will take the best offer and not bother countering anyone else.  Like I said, to be truly part of the negotiations, a buyer must come in with their best foot forward Рotherwise Рsadly Рthey are left in the dust.

No matter the situation the buyer faces, The Caton Team is poised to work through the maze. ¬†With over 20 years combined Real Estate¬†experience there isn’t a hurdle we cannot tackle. ¬†With so many variables, each offer¬†truly¬†becomes a world in itself. ¬†Each home is unique for their location, condition and¬†amenities. ¬†The task of weighing all the options can be daunting but we are here to help.

Got Questions?  Email us at Info@TheCatonTeam.com or visit our website at http://thecatonteam.com/

Follow my personal journey through homeownership at http://ajourneythroughhomeownership.wordpress.com/


How To Read Disclosures

Congratulations –¬† you‚Äôve found a home you‚Äôd like to write an offer on.¬† This is very exciting!¬† The first step before writing an offer is to review the disclosures that have been provided by the seller in advance (if given the¬†opportunity).¬† Here are the instructions on how to go about reviewing the disclosures package & preparing yourself to write an offer.

1. Grab a highlighter, pen, paper & post-it notes.

2. You will need to read & review the entire disclosure package before we get together.

3. We will review your questions & concerns before we write an offer & answer them as best we can & make notes to ask the seller, inspectors & the listing agent during your contingency period.

4. Please DO NOT WRITE on the disclosures Рit is OK to use a highlighter.  Write you questions & concerns on a separate piece of paper & use post-it notes.

5.¬†As you read each page, most forms will have a ‚ÄúBuyers Initials‚ÄĚ or ‚ÄúBuyers Signature‚ÄĚ at the bottom of each page.¬† PLEASE SIGN & INITIAL WHERE REQUESTED after you have read & reviewed the page.¬† Please note – regardless if you ‚Äúlike or dislike‚ÄĚ what you are reading – you will need to initial & sign where necessary.¬† The purpose of the disclosures package is to inform you of any known defects upfront.¬† How we (your buyers agents & you) go about repairing/correcting said issues is part of the contract & negotiations.

6.¬†You will need to sign ALL upfront disclosures before we write the offer ‚Äď doing so in advance will shave 1 to 2 hours from our appointment.¬† Giving us more time to discuss your options.

7. Once we’ve discussed your questions & concerns you can make an educated decision on how much you want to offer & what issues you want clarified or corrected.

8. Please allow 2-4 hours for our offer appointment.

9. Bring the signed Disclosure Package to our appointment.

Please Bring With You the Following:

  • Copy of you Bank Statement showing Proof of Down Payment & Closing Costs
  • Loan Approval Letter
  • CHECK BOOK!!!!!¬† Please remember that your good faith deposit of up to 3% of the Purchase Price must be available funds

Got Questions РThe Caton Team is here to help.  Email us @  Info@TheCatonTeam.com or visit our website at http://thecatonteam.com/

To read my personal journey through homeownership Рvisit http://ajourneythroughhomeownership.wordpress.com/  Enjoy!

A Quick Review on the Different Real Estate Markets…

Google buying a home and words like short sale, REO, bank owned, or regular sale pop up.  All these terms can be a bit confusing.

Right now, on the San Francisco Peninsula market we are experiencing three very different niche markets.

  • Regular / Normal Sale
  • Short Sale
  • Bank Owned Sale

Allow me a moment to explain what these three niche markets are and how they affect the buyer.

Regular / Normal Sale

These may feel like transactions of the past Рbut a normal sale is when the seller owns their property and the mortgage on the home is below the current home value.  In other words Рthe seller has equity in their home.  Equity is the profit for the seller.  The best part of a normal sale is working with living breathing humans who will respond to a buyers offer within a normal period of time and provides the buyer with disclosures upfront that sometimes include a recent home or pest inspection.  A quick glance at Redwood City last week (July 2011) showed 73% of the homes on the market are normal sales!  Wow Рnot what you expect if you listen to the news!

Short Sale

These transactions are trickier than the rest.  A short sale means, the seller owes MORE on their mortgage than the home is currently worth.  They have negative equity.  If circumstances change in the sellers life and they now need to sell their home Рthe home is placed on the market like a normal sale, however, when an offer comes in and the seller accepts it Рit is their bank (where the mortgage is held) that needs to agree to take a shortage on their loan Рthus the term Short Sale.  Doing a short sale hurts a seller’s credit less than allowing the bank to foreclose.  For a buyer it means patience since the response time for a bank to review their offer is anywhere between 3-6 months. Generally the seller still resides in the home and can provide disclosures upfront, though money is tight and the seller may opt to have the buyer pay for their own inspections.  In Redwood City last week 17% of the homes on the market were known short sales.

REO (Real Estate Owned) or Bank Owned Sale

The REO or Bank Owned property is a post foreclosure property. ¬†That means the bank has foreclosed on the seller and now the bank owns the home and is selling it themselves. ¬†The good news – a bank can respond to a buyer’s offer within a week – instead of the 3-6 months on a short sale. ¬†The bad news, there are NO additional disclosures on the property aside from the CA mandatory disclosures. ¬†The buyer holds the burden of conducting their own home and pest inspections (plus any other investigating they desire)¬†during their contingencies. ¬†¬†Since the bank has never lived on the property they do not complete a Transfer Disclosure Statement that covers – along with many other items – neighborhood nuisances that a seller would have to disclose. ¬†Have no fear – as the buyer you are protected and will have time to inspect the home to ensure it is in satisfactory condition. ¬†Last week in Redwood City – 8% of homes for sale were bank owned.

(The remaining properties were 1% Auctions, 1% Court Confirmation /Probate Sales)

Got Questions? РThe Caton Team is here to help.  Email us at Info@TheCatonTeam.com or visit our website at http://thecatonteam.com/

Please enjoy my personal journey through homeownership at http://ajourneythroughhomeownership.wordpress.com/

Ready to Get Pre-Approved? Here is your checklist…

The first step in becoming a home owner is getting pre-approved for a home loan.

These days, a  minimum of 3.5% is required  for FHA loans up to $417,000.

Otherwise you’ll needed between 10% and 20% for a down payment for purchases above $417,000.  Depending on your financial picture.   Note you will also need about 3% of your purchase price for closing costs.  We’ll review what closings costs are when we sit down together.

Before you contact a lender, gather the following items:

  • 3 months worth of pay stubs per person or other proof of income
  • 3 consecutive & most recent months of Bank Statements: ¬†Checking, Savings, IRA‚Äôs, 401k, Retirement & Investment Accounts
  • Most recent Tax Return
  • Social Security numbers

To prepare for your appointment, take time to calculate your monthly/yearly household budget and determine you comfort level.  This will help you decide whether or not purchasing a home is right for you and your family.  Prepare a:

  • Household Budget
  • Bills & Expenses Budget
  • Future Budget factoring in your new home expenses.

We are here to help you each step of the way.

Got Questions – we’re here to help. ¬†Email us at Info@TheCatonTeam.com or visit our website at http://thecatonteam.com/


Visit us on Facebook: http://www.facebook.com/pages/Sabrina-Susan-The-Caton-Team-Realtors/294970377834

To read my personal journey through homeownership Рvisit http://ajourneythroughhomeownership.wordpress.com/  Enjoy!