Category: Uncategorized

What to consider when purchasing investment properties…

Many Real Estate investors, priced out of the Bay Area but savey enough to know that Real Estate is a solid, long term investment are migrating outside the Bay for oppotunities.  The moment local buyers start seeing the homes and prices just a few hours away from here – they start to get really excited about the prospect of owning Real Estate.

It’s one thing to buy a home you plan on living in.  It’s another thing to buy a home you plan on renting out – even if the end game is moving in down the line.

Here is a short list of things to consider when buying investment property:

  • How strong is the rental market in the area I am looking in?
  • What are rents going for?
  • What have they gone for?
  • What is the forecast of the rental market?
  • Will the cost of the rent cover the mortgage, insurance and upkeep?
  • What happens when I loose a tentant?
  • Do I have enough rainy day money to cover the loss of rent and tenant percurment?
  • How much does home maintenance cost for a rental property?
  • Will I be the landlord who fixes items – or will I want a property manager?
  • Will I manage the home myself?
  • Will I find a tenant on my own?
  • Will I draft my own contracts?
  • How much does a property manager cost?
  • What services do they provide?
  • What happens when something breaks?
  • Will you go fix it?
  • Can you afford to fix?  – By the way YOU have to fix it.
  • Do you want to be a landlord?

 

The list goes on.  Bottom line, sit down and talk with a Realtor you trust.  If you don’t know one – The Caton Team would love to interview for the job.  We can help you understand the local markets and refer you to local Realtors that can help you make an educated decision.  Apps and the net are great for information but nothing beats real world experiance.

Got Questions – The Caton Team is here to help.

We strive to be more than just Realtors – we are also your home resource. If you have any real estate questions, concerns, need a referral or some guidance – we are here for you. Contact us at your convenience – we are but a call, text or click away!

The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the upmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

A mother and daughter-in-law team with over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time.

Email Sabrina & Susan at: Info@TheCatonTeam.com

Call us at: 650-568-5522 Office: 650-365-9200

The Caton Team – Susan & Sabrina
A Family of Realtors
Effective. Efficient. Responsive.
What can we do for you?

The Caton Team Testimonials

The Caton Team Blog – The Real Estate Beat

The Caton Team Website

The Caton Team Advantage

How to Buy While Selling Real Estate

Want Real Estate Info on the Go?  Download our FREE Real Estate App:  Mobile Real Estate by The Caton Team

Visit us at:  Our Blog * TheCatonTeam.com * Facebook *Yelp Us * My Yelp * Instagram * HomeSnap* Pintrest * LinkedIN Sabrina * LinkedIN Susan

Thanks for reading – I wrote this – Sabrina

Berkshire Hathaway HomeServices – Drysdale Properties

Sabrina DRE# 01413526 / Susan DRE #01238225 / Team DRE# 70000218/ Office DRE #01499008

The Caton Team does not receive compensation for any posts.  Information is deemed reliable but not guaranteed. Third party information not verified.

Top 10 Scams of 2012 – had to share this….

Had to share this!

Top 10 Scams of 2012 The Better Business Bureau releases its annual list of the worst schemes that aimed to steal people’s money or identity.

Each year the Better Business Bureau investigates thousands of scams, from new schemes that take advantage of current events to old ploys used time and again to bilk people. The BBB uses its data, along with reports from federal agencies and other sources, to compile an annual list of the top scams — not necessarily the biggest as far as the number of people affected or amount of money stolen but rather the most egregious, says Carrie Hurt, president and CEO of the Council of Better Business Bureaus.

Below you’ll find the BBB’s list of the top scams from the past year in nine categories, plus the “Scam of the Year.”

Top Fake Check Scam: Car Ads – The Internet Crime Complaint Center, a partnership between the FBI and the National White Collar Crime Center, received many complaints in 2012 about online ads promising to pay people $400 or more a week for driving around with company logos on their car. People would be sent a check and asked to deposit in their account and wire part of the payment to a graphic designer who would customize the ad for their vehicle. There was no graphic designer or ad, though, and the check would bounce – usually after people had wired money to the scammers.

Top Emergency Scam: Grandparent Scam – This scam that’s been around a long time involves a grandchild or other relative who is traveling abroad and asks for money to be wired to him right away because he was mugged or hurt (and says, “Please don’t tell Mom and Dad.”). According to the BBB, the FBI reports that it’s easier for scammers to tell a more plausible story because they can use information the “supposed” victim posts on Facebook or Twitter. The BBB says that you never should wire money without trying to contact the supposed victim at his or her regular phone number or checking with family members to see if that person really is traveling.

Top Employment Scam: Mystery Shopping – Legitimate companies do use mystery shoppers to provide feedback on customer service, merchandise quality and other quality-control metrics. However, there are plenty of illegitimate offers for this sort of work. Scammers often tell prospective mystery shoppers that evaluating a wire-service company is part of the job and that they need to deposit a check and send back part of the money (and, of course, the victim finds out that the check has bounced after the money’s been wired). According to the BBB, the Mystery Shopping Providers Association says its members don’t prepay shoppers. To find a legitimate gig, visit www.mysteryshop.org.

Top Advance Fee/Prepayment Scam: Nonexistent Loans – Loan scams tend to be advertised online and promise things such as no credit check or easy repayment. However, you have to make the first payment upfront, buy an “insurance policy” or pay some other fee to secure the loan. This past year, there was a new twist on this loan scam: Consumers were threatened with lawsuits and law enforcement action if they didn’t pay back loans they said they had never even taken out in the first place. According to the BBB, some victims were called at their workplace, or their relatives were called. The embarrassment of being thought of as a delinquent caused some victims to pay even when they knew they didn’t owe the money, the BBB says.

Top Phishing Scam: President Obama Will Pay Your Utility Bills – I actually wrote about this scam last year. Thousands of people became victims of scammers who called, sent text messages, showed up at homes or used social media to tout a federal assistance program that would pay up to $1,000 on utility or credit-card bills – but there was no such program. Consumers were asked to give their Social Security numbers and other personal information to access what actually was a phony bank account and routing number to use when paying their bills online. To avoid such scams, never give personal information out over the phone unless you initiated the contact.

Top Sweepstakes Scam: Jamaican Phone Lottery – In this old scam that resurfaced last year, the calls come from Jamaica (area code 876) but the person claims to represent BBB, FBI or other trusted group and tells the victim that he’s won a large cash prize or government grant. The catch: You have to pay a fee to collect your winnings. If you get a call like this, hang up and report it to the BBB.

Top Identity Theft Scam: Fake Facebook Videos – Scammers used Twitter to send people direct messages claiming that there was an embarrassing video of them on Facebook, with a link. When people clicked on the link, they got an error message that said they needed to download a new version of Flash or other video player. The file was actually a virus or malware that could steal personal information from the computers or smart phones of people who downloaded it. Twitter recommends reporting such violations, changing your password and revoking connections to third-party applications that you don’t recognize.

Top Home Improvement Scam: Sandy Storm Repair – Scam artists took advantage of the damage caused by Hurricane Sandy by promising homeowners to make repairs. They asked to be paid in advance and never did the work. The BBB recommends always asking contractors for references, checking credentials and using BBB.org to find trusted contractors.

Top Sales Scam: Fake Olympics Goods – Scammers took advantage of the London Olympics to set up Web sites offering merchandise that didn’t exist. People who tried to purchase items simply lost their money. And counterfeit sports memorabilia also was common year-round. The BBB recommends buying directly from team stores and sites, or from legitimate retailers – not from people hawking wares on the street or outside stadiums. You’ll pay a little more, but it will be the real deal.

Scam of the Year: Newtown Charity Scams – Social media pages dedicated to the victims of the Sandy Hook Elementary shooting appeared with hours of the tragedy in Newtown, Conn. Some were created by scammers asking for money. According to the BBB, the FBI has already arrested one woman for posing as the aunt of one of the children killed, and state and federal agencies are investigating other possible fraudulent and misleading solicitations. “Although the number of people defrauded and the total dollars stolen is most likely low, the cynicism and sheer audacity of these scams merits our selecting it as the Top Scam of 2012,” the BBB says.

By Cameron Huddleston, Kiplinger.com

I read this article at: The Kiplinger Washington Editors. Kiplinger.com.

Got Questions? – The Caton Team is here to help.

Email Sabrina & Susan at:  Info@TheCatonTeam.com

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

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

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-city

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Instagram: http://instagram.com/sunshinesabby/

Pintrest: https://pinterest.com/SabrinaCaton/

LinkedIn:  http://www.linkedin.com/profile/view?id=6588013&trk=tab_pro

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Another great article I had to share… Americans Sees Biggest Home Equity Jump In 60 Years: Mortgages

Americans Sees Biggest Home Equity Jump In 60 Years: Mortgages

 Shared article from Bloomburg and LinkedIn

Home equity in the first quarter rose to $6.7 trillion, the highest level since 2008, as homeowners taking advantage of record-low borrowing costs to refinance their loans brought cash to the table to pay down principal. The 7.3 percent gain was the biggest jump in more than 60 years, according to an analysis by Bloomberg of Federal Reserve data.

It’s the strongest sign yet that Americans’ home-loan debt burden is beginning to ease after the record borrowing that created, and ultimately popped, the housing bubble, leaving almost a quarter of homeowners with mortgages owing more than their properties were worth, said Richard DeKaser, deputy chief economist at Parthenon Group LLC in Boston. Half the mortgages refinanced in the fourth quarter reduced loan size, a record, according to Freddie Mac, the government-owned mortgage buyer.

“The willingness of homeowners to carry housing debt has been radically altered,” said DeKaser, former chairman of the American Bankers Association’s Economic Advisory Committee. “When the market was booming, a mortgage was used as a leveraging tool, and now it’s seen as a risk.”

Measured as a share, rather than in dollars, homeowner equity was 41 percent of U.S. residential property value in the first quarter, including homeowners who don’t have mortgages, according to the Fed study released last week. The last time the share was that high was in the third quarter of 2008 when it was 43 percent.

‘Bubble Burst’

“People got too overleveraged in the boom years, and that left them with too much debt when the bubble burst,” said Paul Miller, a managing director with FBR Capital Markets in Arlington, Virginia. “Now, they’re trying to put themselves back on solid ground.”

Residential mortgage debt peaked in 2007 at $10.6 trillion, doubling in six years, according to Fed data. Since then, it has fallen 7 percent as the value of all residential property has dropped 23 percent.

Americans aren’t just bringing money to the table when they refinance their mortgages. Many also are choosing to shorten the term of their loans, which increases monthly payments. The average mortgage term fell to 27 years in March and April from 29 years February. Almost all U.S. mortgages have either 30-year or 15-year terms. When the average falls, it shows more people are choosing the shorter period.

The average U.S. rate for a 30-year fixed mortgage has tumbled since early 2011 to 3.71 percent this week, rising from last week’s record-low 3.67 percent. Refinancing applications, meanwhile, are at a three-year high.

Lackluster Recovery

DeKaser of Parthenon attributes the reduction in mortgage debt to a “fear factor.” A lackluster recovery that still has one of every 15 people unemployed has persuaded some borrowers of the wisdom of thriftiness, he said.

“People are worried about falling home prices and they’re worried about the economy,” said DeKaser. “If they can afford it, they’re paying down their mortgages instead of buying things because it makes them feel like they’ll sleep better at night.”

Home prices tumbled for six straight months through March to the lowest level in a decade, 35 percent below the peak prices of the housing boom, according to the S&P/Case-Shiller price index of 20 U.S. metropolitan areas. A 3.4 percent increase in home sales last month may signal prices are beginning to stabilize, according to Eric Belsky, managing director of Harvard University’s Joint Center for Housing Studies, in its “State of the Nation’s Housing” report issued today.

Economic Growth

The U.S. economy probably will grow at a 2.2 percent pace in 2012, the third year after the end of the recession, according to the median forecast of 93 economists surveyed by Bloomberg. That compares with a 3.9 percent average expansion rate in the third-year period following the 1982, 1994, and 2001 recessions. In 2013, the growth rate probably will be 2.4 percent, according to the economists’ average estimate.

Homeowners who are able to shorten the terms of their loans or reduce their balances when they refinance are the lucky ones, said Chris Christopher, a senior economist at IHS Global Insight in Lexington, Massachusetts.

“Homeowners who are paying down mortgage debt are the survivors,” said Christopher. “They probably didn’t lose their jobs, so they’re in a better position to do that.”

About 23 percent of mortgage holders are underwater on their loans, meaning they owe more than their homes are worth, according to CoreLogic Inc., a mortgage data and software firm in Santa Ana, California. About 2.1 million properties were in foreclosure in April, according to Lender Processing Services, a mortgage data firm in Jacksonville, Florida.

‘Bubble Days’

“Consumers’ view of the housing market clearly has been radically changed since the bubble days,” said Dean Maki, chief U.S. economist at Barclays Plc in New York. “We saw what happened to people who were way overleveraged.”

“Paying down mortgage debt is bad for economic growth — putting your money into your house usually means you’re spending less,” said FBR’s Miller. “It’s good for our economic health in the long run, though, because it improves household balance sheets.”

Retail sales in the U.S. fell in May for a second month, prompting economists to cut forecasts for economic growth as limited job growth and income gains hold back consumers. The 0.2 percent decrease matched April’s drop that was previously reported as a gain, Commerce Department figures showed yesterday in Washington.

National Income

Annual increases in national income slowed to $581 billion in 2011 from $693 billion in the prior year, according to the Bureau of Economic Analysis. The first quarter’s $127.7 billion gain puts 2012 on course for a $510.8 billion increase, the lowest since income dropped in 2009.

“People are looking around them and seeing people they know getting their salaries cut or losing their jobs,” said Miller, a former examiner with the Federal Reserve Bank of Philadelphia. “If you want security, you can put your money in a savings bank for half a percentage point, or you can pay down your mortgage.”

FBR’s Miller said when he refinanced his home loan last year, he “brought a big check to the table” to reduce his mortgage balance. The reason?

“So my wife would leave me alone,” said Miller. “Just like a lot of people, she wants to have no mortgage debt.”

To contact the reporter on this column: Kathleen M. Howley in Boston at kmhowley@bloomberg.net.

To contact the editor responsible for this story: Rob Urban at robprag@bloomberg.net

I read this article at: http://www.linkedin.com/news?actionBar=&articleID=5618900800320319555&ids=e3sMd30TdjsVdzsRd3sQc38SdiMNcP0UdzkVc3sVc3gMdz0NczoRb3cRdzwTdPATejoOe3oVe30OdzkIdPAMe30VdjkNd3wUe38Nej4SdiMRdjkVcjcMczcMc3wMc3AUcjoR&aag=true&freq=weekly&trk=eml-tod2-b-ttl-0&ut=2jlgJTY8XTUBg1

Got Questions? – The Caton Team is here to help.  Email Sabrina & Susan at:  Info@TheCatonTeam.com

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

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

Yelp us at: http://www.yelp.com/biz/the-caton-team-realtors-sabrina-caton-and-susan-caton-redwood-cityå

Or Yelp me:  http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Appraisals – The Hurdle

Finding a home these days is journey in itself.  Getting the home you want is the next headache.  In the last year we’ve seen deals fall apart at the bitter end – over the appraisal.  Realtors take this very seriously.  We do not want overly inflated appraisals that got banks and purchasers in hot water in the past.  We also do not want to see ridiculously low appraisal either – especially in markets where housing is in recovery and values are slowly increasing.  Realtors, their clients and lenders want to see realistic appraisals.
Lately – it is taking banks more than 30 days to close a deal.  Close of escrow periods are extending from the typical 30 day window to 45 days and beyond.  Some deals are falling apart when the appraisal is much too low and neither side will budge on price, or clients are forced to pay the difference if they truly want that particular home – which can be a hot mess.  The Caton Team strives to protect our clients and will guide each buyer or seller through the best course of action – and often times the best course is different for each client.
Ways to avoid this headache.
We are blessed on the San Francisco Peninsula to have a variety of job markets in the Silicon Valley and the Biotech industries. If you’re in the market to purchase a home – The Caton Team highly recommend you work with a LOCAL lender and as professional Realtors we request local appraisers as well.  Appraisal companies have changed dramatically since the boom – and for good reason.  However, when you get an appriser who generally works in Modesto (for instance) they will not have a good grasp on the peninsula market – and often the appraisal come in to low.  The “Appraisal Review” is becoming the norm these days – when the difference is too great – and adds days to the close of escrow window.
The bottom line.  Be smart.  The Caton Team always provides our buyers with a Comparative Market Analysis which is a Realtors version of an appraisal.  We take into account the activity of similar properties in similar areas in s short window of time to determine the value of the home when writing an offer – therefore offering a solid offer with a realistic price.  Recovery of our real estate market will take time – and for those of us fortunate enough to call the San Francisco Peninsula home – we know it will recover.

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

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

Yelp me at: http://www.yelp.com/user_details_thanx?userid=gpbsls-_RLpPiE9bv3Zygw

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

Below is an article I’ve found addressing these concerns that I thought I would share with my fellow readers… enjoy.
Aced Out By an Appraisal
Published by Preston Howard

One of the most frustrating things about the new world of real estate finance is the good old fashioned appraisal.

You can have a borrower who makes more money than the amount of the loan that they are requesting with an 800 FICO score and a stellar financial profile. The file can get underwritten and the deal can be the most solid deal that a bank has seen, but no one is safe until the appraisal comes back confirming the value requested. Homeowners who have been through this painstaking process know what I’m talking about. Realtors walk around in doldrums of disgust as their brokerage commissions go up in smoke. Fellow mortgage brokers bury their heads in shame and pain as deal after deal dies at the hands of an appraiser. However, the unfortunate thing is that there appears to be no end in sight.

The reality is that there were many appraisers out there who severely inflated our housing bubble by doling out overly generous values. However, the appraisal flu has spread throughout the ranks of entire armed forces of the appraisal brigade. By and large, conservative appraisers are coming in lower than ever, while aggressive appraisers have become more conservative. Lots of appraisers have quit the business entirely, while others have become property inspectors! Why is this?

Part of the pressure is coming from banks that want more conservative valuations due to enhanced regulatory scrutiny. Other forces at play include an overly abundant inventory of distressed properties. In the past, appraisers made adjustments for distressed sales; but in many markets, this is no longer the case. Given that so many appraisers are no longer making adjustments for distress, valuations are coming in 15-20%. Both instances have stalled the recovery of the housing market. Inexperienced appraisers from 50 miles away are being utilized to value properties in niche, pocket, and specialized markets. Accordingly, market knowledge is overlooked and expertise is left out of the equation. The scant facts are coming in and the effects are damaging. National realtor boards approximate that ten percent of escrows have been killed due to a low valuation. Another twelve percent of transactions are stalled in limbo, while a final eighteen percent have had to return to the negotiating table for a price change.

So, what are we to do? This calamity started when New York governor Mario Cuomo fought hard for the installment of the Home Valuation Code of Conduct (HVCC). Since its inception, mayhem has been unleashed across the real estate industry. What was meant to “protect the consumer” has essentially harmed the consumer, paralyzed our industry at a micro level and the economy at a macro level. Real estate professionals have been mobilizing, and the results have been mediocre at best. With the advent of the Dodd-Frank Financial Reform Bill, the HVCC has seen its “sunset”; however, the low appraisals continue to persist. The one thing that is now allowed is that anyone “with a beneficial interest” in the transaction can contact the appraiser and provide comparable sales to substantiate values. While this sounds promising, many lenders still heed to the rules of HVCC and will not allow brokers or borrowers to contact the appraiser. (Talk about not following the rules). Thankfully, some consumers are taking matters into their own hands. I have encountered homeowners who just so happened to be writers and have profiled the issue in front-page articles in the Los Angeles Time while others have been able to get their woes heralded in The Wall Street Journal. Constituents across the county are lobbying members of Congress and the Senate to draft legislation to change the HVCC. However, I don’t believe that anything major will be done until those in power are denied a loan.

Much like there were the “Friends of Angelo” who got preferential treatment with refinancing with Countrywide (many of which included various Federal lawmakers), the same will most like have to apply in the appraisal industry. When Congressmen, judges, and commissioners start to receive declination letters en masse due to low appraisals, then we will see a shift in the pendulum. I haven’t heard of Ben Bernanke getting a low appraisal on his home or President Obama. However, I do believe that if Max Baucus (Chair of the Senate Finance Committee) gets a low-ball appraisal, then the issue will get traction. If the “Gang of Six” all get forced to the negotiating table due to a low valuation, I have a feeling that our deficit will take a back seat to Senator Coburn and Senator Conrad’s desire to lock in a rate that hasn’t been this low since both gentlemen were in elementary school.

In summary, we are all tired of watching deals go up in smoke over conservative appraisals. It’s a shame to not go forward on a deal with good credit, strong cash flow, and clean collateral when you don’t know if you are at 75% or 85% LTV. Collectively, we need to advocate change and encourage local and national champions to spearhead the issue. Money is being spent, deals are being lost, and tempers are flaring. Enhanced legislation and examination are needed to stop the run away train of low valuation. Therefore, call your member of Congress and express your frustration. If you have access to media, spread the word. Our equity depends on it and ultimately, so does our economy.

Preston Howard is a mortgage broker and Principal of Rose City Realty, Inc. in Pasadena, CA. Specializing in various facets of real estate finance.

Republished from Broker Agent Social Network Newsletter. Aug 2011.