Menlo Park – Page 49 – The Real Estate Beat

FHA to Increase Fees on Mortgages!

Difficult news for FHA clients. As home prices climb on the San Francisco Peninsula, saving money for your down payment feels like a heroic act. FHA offers low down payments, 3.5% of the purchase price, but now the strings attached are growing tight. Please enjoy this article from CNNMoney.

FHA to hike premiums on mortgages

The Federal Housing Administration, which is the largest insurer of low-down payment mortgages, announced that it will raise premiums by 10 basis points, or 0.1 percent, on most of the new mortgages it insures.

Making sense of the story

A borrower opting for a 30-year, fixed-rate mortgage who puts down 5 percent or more will now pay an annual insurance premium of 1.3 percent of their outstanding balance. Someone who puts down less than 5 percent will pay a premium of 1.35 percent.
The FHA said it also will raise premiums for borrowers with jumbo loans – loans of $625,000 or more – by 5 basis points, and increase the minimum down payment requirement on these loans to 5 percent from 3.5 percent.
Additionally, the FHA said it will require most buyers to pay insurance premiums for the life of their loan. A policy that was put in place in 2001 allowed borrowers to cancel premium payments once their debt fell below 78 percent of the principal balance. One exception will be for borrowers who put more than 10 percent down at the time of purchase.
Other new policies include a requirement that any mortgage for an applicant with less than a 620 credit score and debt-to-income ratio above 43 percent must be underwritten manually. Lenders who want to issue loans to these applicants must be able to adequately document why they decided to approve the loans.

The FHA also decided to put new restrictions on reverse mortgages, no longer permitting retirees to take such large, upfront payments.

25% of Consumers Have Errors on Credit Report – I WAS DECEASED! Great article – had to share!

When I came across this article I had to share it. I also have to laugh – when my husband and I bought our first home and our credit was run – it came back that I was deceased!!!! What really made me laugh though was that all my payments – from the grave – were on time! Since you cannot get a mortgage if you are not breathing, I called my bank and corrected their error; within a month my credit report stated I was alive again. Sadly, we went through this again when we bought a car a few years later. This time my husband wad deceased. Instead of friendly help from our credit union, they hung up the phone and said they couldn’t help us. So my husband went to a notary who certified that the man before him, was alive and well and with that notarized document we were able to correct his credit report. Thankfully the dealership wasn’t too concerned and we bought the car before the correction – nonetheless – the moral of the story here… Check your credit report YEARLY! You can do so for free on sites like www.annualcreditreport.com , and monitoring it yearly will keep surprises to a minimum when trying to buy a home! Enjoy this article from the Daily News…

25% of Consumers Have Errors on Credit Report

Consumers need to be extra vigilant about checking for any errors on their credit reports, according to the Federal Trade Commission.

One in four Americans report they’ve found an error on their credit report, according to a study conducted by the FTC, which analyzed 1,001 consumers’ credit reports from the three major agencies, Equifax, Experian, and TransUnion. Researchers helped the consumers spot potential errors on their reports.

Five percent of the consumers found such large errors on their report that they could have gotten stuck paying more for mortgages or other financial products, if they hadn’t taken steps to correct it before applying, according to the study.

Twenty percent of the credit reports studied that were found to have errors in it were ultimately corrected after the consumer took steps to dispute it, which resulted in about 10 percent of consumers receiving a higher credit score, according to the study.

Consumers are entitled to receive a free copy of their credit report each year from the three reporting agencies.

Source: “Study: 1 In 4 Consumers Had Error In Credit Report,” The Associated Press (Feb. 11, 2013)

I Read this article at: http://realtormag.realtor.org/daily-news/2013/02/12/25-consumers-have-errors-credit-report?om_rid=AACmlZ&om_mid=_BRGpXlB8w0qair&om_ntype=RMODaily

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

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Rational Home Buying – Great article I Had to Share – Let Me Know Your Thoughts Too!

I love it when friends and clients come across a great real estate article and think of me! Sophie sent me this interesting article about rational thinking when buying a home. I found it most interesting and had to share. Please enjoy – and of course I added my 2 cents in italics! Would love to know your thoughts too – please leave comments!

Rational Home Buying

My parents are considering moving house. I’ve had a front-seat window to their decision process as they compare alternatives, and sometimes it isn’t pretty.  A new house is one of the most important purchases most people will make. Because of the sums involved, the usual pitfalls of decision-making gain new importance, and it becomes especially important to make sure you’re thinking rationally. Research in a couple of fields, most importantly positive psychology, offers some potentially helpful tips.

LOCATION, LOCATION, LOCATION

People so consistently under-count the pain of commuting when making choices that the problem has its own name: Commuter’s Paradox. The paradox is that, although rational choice theory predicts people should balance commuting against other goods and costs, so that one person might have a longer commute but a nicer (or cheaper) house and so be just as happy overall, this doesn’t happen: people who have long commutes are miserable, full stop. A separate survey by Kahneman and Krueger found that commuting was the least enjoyable of nineteen daily activities mentioned, and other studies have found relations between long commutes and poor social lives, poor health, high stress, and various other problems.  Psychologists aren’t entirely sure why people so consistently under-count the pain of commuting. Maybe it’s because it’s viewed as “in-between” time rather than as an activity on its own; maybe it’s because it comes in relatively short and individually bearable chunks repeated over many years, instead of as a single entity. In any case, unless you are mentally atypical you will probably have a tendency to undercount commute time when buying a new home, and may want to adjust for that tendency.

I loved this part – Commuter Paradox! Finally a name for the epidemic I see when working with buyers. Prices can push any buyer far from their place of work. And commuting takes time, money and lots of energy. I would rather see a client live closer to work and maybe change the list of wants in order to have time to actually enjoy their lives, instead of driving for hours to that perfect home, only to have no energy to enjoy it!

HOUSES COST A LOT OF MONEY

One of Kahneman and Tversky’s famous bias experiments went like this: imagine you’re buying a new shirt. It costs $40 at a nearby store, and it costs $20 at a store that’s fifteen minutes away. Do you drive the fifteen minutes to save twenty bucks? Most people would.  Now imagine you’re buying a new TV which costs $2020 at a nearby store, and $2000 at a store that’s fifteen minutes away. Do you drive the fifteen minutes to save twenty bucks? Most people wouldn’t.  In both cases, the tradeoff is the same – drive fifteen minutes to save twenty bucks – but people were much more willing to do it for the cheap item, because $20 was a higher percentage of its total cost. With the $2000 TV, the $20 vanishes into the total cost like a drop in the ocean and seems insignificant.  Nice homes can cost $500,000, $1,000,000, or even more. There doesn’t seem to be a big difference in price between $710,000 and $745,000 houses; perhaps if the second home looked even a little nicer in an undefinable way you might be prepared to take it. But $35,000 is $35,000; if those minor advantages don’t provide $35,000 worth of value, when measured on the same scale on which you measure the value of of movie tickets, shoes, and college funds, then you should buy the first house and keep the cash.  I find purchasing decisions easier when I think about them like this: which would you rather have, the second house, or the first house plus a two-week luxury vacation to anywhere in the world every summer for the next five years? The second house, or the first house plus a brand new Lexus? The second house and dining at home every week, or the first house and eating out at your favorite restaurant every weekend for the rest of your life? (EDIT: gjm points out that it’s easier to resell houses than other types of good, so if you expect to resell your house you should really only be considering the extra money involved in the mortgage)

This is a hard one, and truly each house has it’s own pros and cons and value. So we’d need to tackle this – one house at a time.

DON’T OVERCOUNT EASILY AVAILABLE DETAILS

  The availability heuristic says that people overcount scenarios that are easy and vivid to imagine, and undercount scenarios that don’t involve any readily available examples or mental images. For example, most people will assert, when asked, that there are more English words ending with “-ing” than with “-g”. A moment’s thought reveals this to be impossible – words ending in “-ing” are a subset of those ending in “-g” – but thinking specifically of “-ing” words makes it easier to bring examples to mind.  The real estate version of this fallacy involves exciting opportunities that you will rarely or never use. For example, a house with a pool may bring to mind the opportunity to hold pool parties. But most such plans will probably fall victim to akrasia, and even if they don’t, how often can one person throw pool parties without exhausting their friends’ interest? Pool parties may be fun to imagine, but they’ll probably only affect a few hours every couple of months. Other factors, like the commuting distance and whether your children end up in a nice school, may affect several hours every day.  (a classic example here is the “extra bedroom for Grandma” – visits from Grandma are easy to imagine, but if she only comes a couple of days a year, spending tens of thousands more dollars for a house with an extra bedroom and bathroom for her is probably pretty stupid. You’d save money – and make her happier – by putting her up in the local five star hotel.)

I have come across this moment many times. It truly depends on each person’s lifestyle. Candid conversations about what a buyer wants in their home and their budget can help work through this dilemma.

LIGHT AND NATURE

Good illumination and a view of natural beauty aren’t just pleasant luxuries, but can make important practical differences in your life.  Light, especially daylight, has a strong effect on mood. There are at least fifteen controlled studies showing that bright light reduces symptoms of seasonal and nonseasonal depression by about 10-20% over placebo. This is about equal benefit to some antidepressant drugs, and sufficient that light therapy is a recognized medical treatment for depression. Bright light leads to self-reported better mood even in subjects without a diagnosis of depression, and also leads to better sleep and more agreeable social interactions.  Light and nature have positive effects on health. Some of the most compelling data comes from hospitals, which have long realized that their patients near windows do better than their more interior counterparts. In one study, surgical patients near windows recovered faster (7.9 vs. 8.7 days), received fewer negative comments from nurses (1.1 vs. 4 notes), and needed fewer strong painkillers (1 vs. 2.5 doses) than matched controls without a view. Other studies have compared recovery of physiological indicators of stress (for example, blood pressure) in subjects viewing natural or artificial scenes; the subjects with views of nature consistently have healthier stress reactions.   Nature may have special benefits for children. Experiments with subjects of all ages and levels of mental health have shown nature increases mental functioning and concentration, but some of the most cited work has been in children with Attention Deficit Hyperactivity Disorder. Children who live in greener settings also (independently of wealth) do better on schoolwork and show greater ability to delay gratification. Large studies find with high certainty that students who take standardized tests in better lighting do up to 25% better than their literally dimmer schoolmates, and progress through lessons 15-25% faster.  You don’t have to live in the Amazon to get a benefit: even children in a concrete building with a tiny “green island” boasting a single tree did better than their peers in a building without such an island.

Yes! Light has such an affect on us and our moods. No argument here. My only 2 cents. If you cannot find a home with the right light, it’s time to talk paint and art! My first place was a sandwiched condo, we didn’t have much natural light – so paint and great lighting was key to my sanity!

BETTER FIRST IN A VILLAGE THAN SECOND IN ROME

Brains generally encode variables not as absolute values but as differences from an appropriate reference frame. That means that to really appreciate your wealth, you’ve got to be surrounded by people who are poorer than you are.  This seems to be empirically the case: a US study found the happiest Americans were rich people living in poor counties. However, this was true only of rich people living in rich neighborhoods of poor counties. As the study puts it, “individuals in fact are happier when they live among the poor, as long as the poor do not live too close”.   Of course, this doesn’t mean that you should move to Somalia for eternal bliss. There are community-wide benefits to living in a wealthy neighborhood, like better schools, and you may be better able to socialize with people from a similar class background as yourself. But given the choice between a neighborhood at the top of your price range and one at the bottom, you may find yourself more satisfied living in an area where it’s the Joneses who have to try to keep up with you.

DON’T OVERSHOP AND DON’T OVER-THINK

It’s easy to confuse “rationality” with a tendency to turn all decision-making over to conscious general-purpose reasoning, and in turn to assume that whoever ruminates about a decision the most is most rational. But there are at least two reasons to think that within reason it may be better to worry less over important decisions.  One is the finding that “comparison shopping” usually leads to less happiness in whatever you buy. Imagine being pretty sure you’re going to buy House X until you look at House Y and find out that this one has a granite fireplace, and a pond in the backyard. It may be you don’t like House Y at all – but now every time you go back to House X, you’re thinking about how it doesn’t have a granite fireplace or a pond, two features which you never would have even considered before. Whether you find this explanation plausible or not, the research generally agrees: too many choices result in less satisfaction with whatever you finally buy.  The second is the discovery that attempts to make your reasoning explicit and verbal usually result in worse choices. This includes that favorite of guidance counselors: to write out a list of the pros and cons of all your choices – but it covers any attempt to explain choices in words. In one study, subjects were asked to rate the taste of various jams; an experimental group was also asked to give reasons for their ratings. Ratings from the group that didn’t need reasons correlated more closely with the ratings of professional jam experts (which is totally a thing) than those who gave justifications. A similar study found students choosing posters were more likely to still like the poster a month later if they weren’t asked to justify their choice (Lehrer, How We Decide, p. 144).  The most plausible explanation is that having to verbalize your choices shifts your attention to features that are easy to explain in words (or perhaps which make good signaling value), and these are not necessarily the same features that are really important. In a telling experiment under the same protocol as the ones listed above, people asked to reflect upon their choices were more likely to choose the house with the extra room for Grandma than the house with the shorter commute times, because the extra reflection gave more opportunity for the availability heuristic to come into play.

Sometimes we cannot put into words what we like about a home. Sometimes it is just a feeling. And believe it or not – if you feel like you are standing in your home – you are! Go with your gut! I know I’ve walked into homes that on paper didn’t fit the bill – but I felt it was “the one” and when my clients walked in – they did too! Sometimes you just need to throw out the list, open your eyes and look around.

CONCLUSION

Buying a house is one of the biggest decisions a family faces, and so has extra opportunity to be improved by rational thinking. Try to buy a house with good illumination and nearby green space in an area close to your workplace where you’ll be relatively high on the social ladder. Carefully consider whether special features have genuine utility or are just highly available small details, and justify the relative differences in cost in absolute, not just relative terms. And, um, try to do all of this while following your gut instincts and not overshopping.

Easier said than done! But The Caton Team is here to help every step of the way. How can we help you?

I read this article at: http://lesswrong.com/lw/7am/rational_home_buying/

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

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

GOOD NEWS FOR SELLERS – Home prices in 20 major U.S. cities were up – biggest jump in more than 6 years!

I was beside myself when I came across this article from Money.Cnn.com. Realtors are seeing this market and are trying to get the news out there. On the SF Peninsula – we have an excess of buyers ready to move and bare bones inventory. If you are considering the sale of your home – let your Realtor know! The Caton Team enjoys sitting down with sellers and showing them where the market is and where we expect it to go. Enjoy this article!

Home prices in 20 major U.S. cities were up 5.5% in November compared to a year earlier, their biggest jump in more than six years.

The latest reading of the closely watched S&P Case-Shiller index is another sign of the growing recovery in the long-battered housing market.

The last time prices jumped this much was in August 2006, when the housing bubble was still inflating. Soon after that, prices went into a steep decline that led to a flood of foreclosures. That sparked the most serious economic downturn since the Great Depression.

“Housing is clearly recovering,” said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices. “Prices are rising as are both new and existing home sales. These figures confirm that housing is contributing to economic growth.”

Housing prices have been helped by a number of factors in recent months, including increased sales of both new homes and previously-owned houses, a drop in foreclosures, and near record low mortgage rates. A drop in the nation’s unemployment rate also is helping.

The rise in home prices is good news for more than just people hoping to sell their home. The higher prices rise, the fewer homeowners that will be underwater on their mortgage, meaning they owe more on their homes than they are worth. That can help many homeowners refinance and save money, which would pump more cash into the economy.

“The ongoing price appreciation is significant, because we expect housing wealth effects to be an important factor driving economic growth in 2013, possibly matching the direct impact on economic output from the rebound in homebuilding,” said Joseph LaVorgna, chief U.S. economist for Deutsche Bank.

Michael Gapen, senior U.S. economist for Barclays, said the fundamentals for the housing market are now strong enough that his firm is forecasting another 6% to 7% rise in prices in 2013, and a 5% to 6% rise again next year. He said the tight supply of homes for sale on the market should support continued price increases, and that the decline in foreclosed homes for sale is reducing the drag that those distressed properties had on overall prices.

How to play the 2013 housing market

“I’m not worried about these increases being overdone,” he said. “Home prices overcorrected a bit on the downside, and what we’re seeing now is a recovery from that.”

Sabrina’s 2 Cents: If you want to be a homeowner – don’t shy away just because prices are moving. There is a saying in Real Estate – “Don’t Wait and Buy Real Estate – Buy Real Estate and WAIT!” Why you ask? Because investing in real estate, even if it is the home you live in, is an investment. Buy Low. Sell High. That’s the idea. So if you want to be call your self a SF Peninsula homeowner – don’t sit on the sidelines and wait – come in and sit down with The Caton Team – we’ll come up with a plan to turn your real estate dreams into realty.

Related: Home building surges 12%

The S&P Case-Shiller index tracks home prices in 20 major markets. The latest reading showed 19 of them posting a gain in prices, with only New York posting a modest decline from a year earlier. Phoenix, one of the markets hit hardest by the housing crisis, posted the biggest increase, with home prices there climbing 22.8%.

San Francisco and Las Vegas, markets that were also hit by the housing boom and bust, also posted double-digit increases, while Miami, another bubble market, posted a 9.9% rise. Detroit, a city where economic problems led to a high rate of foreclosures, enjoyed an 11.9% price increase.

But even with November’s strong gains, the overall index stands 29% below the home price peak reached in the summer of 2006.

I read this article here: http://money.cnn.com/2013/01/29/news/economy/home-prices/index.html?hpt=hp_t3b

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

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

What’s the Best Season for Home Buying? Great question!

Just today I was asked this very question. “What’s the Best Season for Home Buying?” And thought this article was interesting from the DAILY REAL ESTATE NEWS. I must say though – when buying a home, instead of trying to figure everything out on your own, sit down with a Realtor, ask some questions. We’re happy to meet with you. Because truly, the time to buy is when you – as a buyer – are ready to do so. These days (2012 and early 2013) the housing market is competitive no matter what time of year it is. On average, buyers entering the market today are faced with a minimum 3-6+ month house hunt due to a lack on inventory and an abundance of buyers. So writing several offers on several homes over the course of several months is standard operations these days. If you are ready to become a homeowner – jump in and get started. So much to learn, so much to see – The Caton Team is happy to help!

Enjoy this article…

What’s the Best Season for Home Buying?

After the holidays, buyers tend to start getting more aggressive with their house hunting. Search activity usually peaks around March or April in most states, according to a new study of home searches from 2007 to 2012 conducted by Trulia.

In September, searches slow down. By December buyer searches ebb to their lowest point of the year.

“Home-search activity swings with the seasons in every state,” says Jed Kolko, chief economist of Trulia. “Buyers and sellers can use these ups and downs to their advantage. Sellers looking for the most buyers should list when real estate search traffic peaks. Buyers, however, should think about searching off-season, when there is less competition from other searchers.”

The study revealed seasonal patterns of search activity state to state. Here are the months when online real estate searches peak in every U.S. state:

January: Hawaii
February: Florida
March: Arizona, California, Delaware, Georgia, Idaho, Iowa, Kentucky, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, Ohio, Oklahoma, Pennsylvania, Virginia, Washington
April: Colorado, Connecticut, District of Columbia, Illinois, Indiana, Kansas, Minnesota, New York, North Dakota, South Dakota, Utah, West Virginia, Wisconsin
May: Real estate activity does not peak in any state
June: Mississippi
July: Alabama, Alaska, Arkansas, Louisiana, Maine, New Hampshire, New Jersey, New Mexico, North Carolina, Rhode Island, South Carolina, Tennessee, Texas, Vermont, Wyoming
August: Montana and Oregon
September-December: Real estate activity does not peak in any state

Source: “Trulia Reveals Best Home-Searching Season,” HousingWire (Jan. 29, 2013)

Sabrina’s 2 Cents: In my experience, especially this year with our beloved 49’ers in the Superbowl, the market doesn’t really start to pick up until after Super Bowl Sunday. It is funny to hear – but it is true. We see the buyers get off the couch once the football season is over and listings start coming on the market. We are ready when you are – give us a call or email!

I read this article at: http://realtormag.realtor.org/daily-news/2013/01/31/whats-best-season-for-home-buying?om_rid=AACmlZ&om_mid=_BRCsnAB8wncg3e&om_ntype=RMODaily

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

Please enjoy my personal journey through homeownership at:

http://ajourneythroughhomeownership.wordpress.com

Thanks for reading – Sabrina

Existing-home sales near 5-year high – great article I wanted to share…

Hello Blog Readers!

Sabrina here, came across this great article pulling statistics from the National Association of Realtors. Please enjoy this positive report on our real estate market.

Existing-home sales near 5-year high

NAR’s year-end stats show housing markets flirting with pre-bust growth

BY INMAN NEWS, TUESDAY, JANUARY 22, 2013.

Existing-home sales, prices and inventory saw dramatic changes in 2012 reminiscent of the housing boom, statistics released today by the National Association of Realtors show.

At 4.65 million units, 2012 existing-home sales were up 9.2 percent from 2011, according to NAR’s preliminary totals for the year. That would be the highest volume since 2007, when 5.03 million were sold.

Bolstered by low inventories, the national median existing-home price was up 11.5 percent from a year ago in December, to $180,800. December saw the 10th consecutive month of year-over-year price gains, a trend not seen since May 2006.

For 2012 as a whole, the national median existing-home price was up 6.3 percent, to $176,600, the largest annual price gain since prices surged by 12.4 percent in 2005.

At 1.82 million units at the end of December, existing-home inventory now represents a 4.4-month supply, the lowest level since May 2005, near the peak of the housing boom.

“Likely job creation and household formation will likely fuel (market) growth,” said NAR Chief Economist Lawrence Yun in a statement. “Both sales and prices will again be higher in 2013.”

To finish reading this article and few their charts and graphs please visit: http://www.inman.com/news/2013/01/22/existing-home-sales-near-5-year-high

Here is another great article about home sales: http://newsgeni.us/?em=info@thecatonteam.com&p=106674

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

2013 – New Real Estate Laws for California

Hello Blog Readers! Happy New Year. 2013 is going to be an awesome year in real estate for our gorgeous San Francisco Bay Area Peninsula. Thought you would like to know what goes into effect this year in regards to California Real Estate Laws!

The “Pease Limitations” that reduced the value of itemized deductions, including the mortgage interest deduction, are permanently repealed for most taxpayers but will be reinstituted for high income filers. This provision reduces a taxpayer’s itemized deductions by 3 percent of the amount of his or her adjusted gross income (AGI) that exceeds the threshold amount. Under the new law, the Pease thresholds are $300,000 for married taxpayers filing jointly and $250,000 for single taxpayers (i.e., a married couple with an AGI of $400,000 would be $100,000 over the threshold; the couple’s deductions would be reduced by $3,000 which is 3% of $100,000). No matter how high a taxpayer’s AGI, the Pease reduction cannot exceed 20 percent of the amount of itemized deductions otherwise allowable for the year.

The restoration of a tax deduction for mortgage-insurance premiums, including premiums paid to the Federal Housing Administration and private mortgage insurers. This provision expired at the end of 2011 but has now been retroactively extended for all of 2012 as well as 2013.

10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012.

Capital gains rates will remain at 15 percent for those earning less than $400,000 (individual) and $450,000 (joint). Gains above those income levels will be taxed at 20 percent. Gains on the sale of principal residences will remain unchanged and continues to exclude the first $250,000 for single taxpayers and $500,000 taxpayers filing jointly.

I received this information for the California Association of Realtors

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

SHOULD YOU BUY A HOME DURING THE HOLIDAYS?

Funny – I was just writing my own blog about our local real estate market when I came across this article from San Diego. It’s not local – but it hits home – thought I’d share and add my two cents….

SHOULD YOU BUY A HOME DURING THE HOLIDAYS?

Once Thanksgiving is over, the real estate world starts to wind down for the holidays and it typically reawakens after the Times Square ball drops and resolutions come to life.

But if you’re a potential homebuyer who’s prepared to close in today’s competitive market, you may want to keep shopping while everyone’s waiting for spring, some real estate agents suggest.

The Caton Team has found that buyers on a concrete budget find great values if they are flexible during the holidays. We’re ready when you are.

That advice may be especially relevant this year for consumers who have repeatedly lost out on deals because of a limited and continually decreasing supply of homes, but remain persistent. Buying intensity typically cools down at the start of fall through early January, which could increase the odds for those with more patience.

Home sales have increased from October to November only four times since 1988, when DataQuick began to track home sales and prices locally.

In the other years, transactions have fallen from anywhere between 0.2 percent and nearly 26 percent. Home listings have dropped off from 3 percent to 11 percent during those months in the past three years.

“During Christmas, people will be focused on the holidays and nothing really happens,” said Ken Pecus, co-founder of San Diego-based Ascent Real Estate and 20-plus-year real estate veteran.

“The first week of January, the new mindset kicks in, resolutions kick in, and in the second and third week, people look at their taxes, and almost overnight, by the end of January, you have almost twice the buyers in the market,” Pecus added.

Would-be buyers historically have bowed out during the winter season because they are overwhelmed by holiday spending and commitments. There’s also the aversion of moving in the middle of a school year. Consumer interest typically picks back up again in the New Year and peaks in the spring.

Certain buyers may be well-served to buy during the winter because of sellers who must move because of:

• A job change or transfer.

• The possible sunsetting of the Mortgage Forgiveness Debt Relief Act, said Donna Sanfilippo, president of the San Diego Association of Realtors. The potential expiration of the law, which lets certain home sellers get tax relief on mortgage debt forgiven by lenders, has pushed home sellers scrambling to list and short sell their homes before the end of the year.

In some cases though, the rush to do that is unwarranted. Consult a tax pro to determine if short selling is right for you.

• The fact they’ve been waiting to sell their home for a long time and need to buy something quickly. If you can wait a little longer to sell your home and want to maximize your profit, then wait until the peak spring months.

Even with the expected holiday homebuying slowdown, buyers should know that the inventory level may still be a challenge.

Right now, there are more than 4,700 active listings in the county, down 11 percent from October and down more than half from the same time a year ago, based on numbers from the San Diego Association of Realtors. The current level marks at least a three-year low.

In the San Francisco Peninsula – inventory has been low all year, fueling multiple offers on homes and driving prices up due to competition outweighing supply. There has been moments, for example in San Carlos we had 25 listings and Redwood City had 36 – for the whole city. That’s not enough homes for the volume of demand out here.

Buyers also may deal with the challenges of bidding against cash buyers and investors, who can look more attractive than traditional buyers.

The Caton Team has witnessed Cash Buyers at all price points – under $500,000 to over 1,500,000. Sellers have the opportunity to pick the best offer among several. And sellers are being savvy – taking higher down payments when possible. When The Caton Team prepares an offer, it is more than just price.

Their share of the homebuying market has remained strong. Almost 28 percent of total homes sold in October were purchased by absentee buyers, many of whom are investors. That’s up from 27 percent logged a year ago and in September.

Hovering near the peak, almost one-third of buyers bought with cash in October.

“I’m expecting 60 to 70 people at my open house,” said San Diego Realtor Miguel Contreras before a recent Wednesday showing at a property in La Mesa. “The property is a fixer, so it’s mostly investors.”

Sounds familiar in the SF Peninsula market. Open houses visitors are strong, and often there is enough activity to warrant an offer day before the following weekend. I’ve seen homes have one open house and take offers on Monday. That’s a break neck pace if you ask me, and I’m a veteran. My first time buyers can’t move that fast. And with prices climbing, the early bird get’s the worm if he can’t process the information fast enough.

Contreras, who worked during Thanksgiving week, said he’ll make himself available throughout the holidays to cater to what he expects to be a continued interest from investors, cash buyers and traditional buyers.

The same goes for Cherilyn Jones, another local real estate agent. Last week, she was preparing for two new listings to come online. Her most common clients are first-time homebuyers and investors.

“The investors have not slowed down,” Jones said. “We get holiday freeze, but not for investor clients. It’s hard to find them properties because their criteria is very, very specific … and the deals are not as good as they used to be.”

Article By: Lily Leung

Last Thoughts…

In our 25+ years of local Real Estate experience, buying during the holidays can truly benefit buyers who’ve been outbid all year. We’ve found homes for buyers over the holiday season that would have been snapped up in a hot second during the spring or summer. As long as buyers are flexible and open minded – there is definitely some Christmas Miracles in the making this time of year. Keep a look out for my next Cinderella Stories about Russ and Natalie and the home we found over Thanksgiving!

I read this article at: http://www.utsandiego.com/news/2012/dec/01/does-it-make-sense-buy-home-during-winter/?page=2#article

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

A Cinderella Story – Fredric and Heather

When it came time to sell their first home Fredric and Heather called the Realtor who helped them their first go around – Susan Caton. By then, Susan and I (Sabrina) had partnered up and became The Caton Team. It was an exciting meeting, sitting around the dinning room table planing for the sale of their home and discussing the hopes, dreams and reality of their next home.

In the competitive Bay Area real estate market a buyer needs to be ready to make a fantastic offer the moment a home pops on the market. If a buyer has to sell their current home – writing an offer contingent on the sale of a home is not as attractive to the seller as a non-contingent offer. Therefore, we agreed that the best course of action was to sell their current home to be prepared to pounce when their next home came on the market.

This can be a scary moment – where will the family live if we don’t find the next home. Nonetheless, the hunt for their next home began way before the for sale sign showed up in their front yard.

So Heather and Fredric did a fantastic job getting their home ready for sale. Before our first open house The Caton Team had wind of interested parties. Within a week their home was in contract. Oh my!

So the serious house hunting hits. We’re out day and night checking out everything on the market, new and old…and we start writing offers. Good offers, solid offers. But we keep getting out bid, sometimes by all cash, sometimes just larger down payments or out of the the ballpark offers. Regardless, the sweat starts beading. Now we’re talking short term rentals as the close of escrow on their current home slowly approaches….and we are very thankful for the 30-days of rent back we negotiated to give us a little more time. That was extremely helpful, but not enough. So, a short term rental was located. More offers. Out bid.

Suddenly there is buzz around a certain Silicon Valley IPO. The weeks leading up caused a mini boom on the peninsula. Offer dates, multiple offers, no contingencies, all cash – you name it – things were a bit nuts. Then the dust settled, and as a boom of new listings flooded the market a week old listing was suddenly overlooked. We wrote an offer. Out of the blue, another offer comes in. This house was awesome. We couldn’t let it get away. Proud to say our reputation preceded us and the Selling Agents knew we’d get the job done – when it came down the the nitty gritty, we helped our friends and clients prepare a terrific offer package and in the end their offer was accepted.

The phone call to your clients when you get to share the good news that they got the home of their dreams – well, it’s one of the best phone calls around.

Thank you Fredric and Heather for trusting The Caton Team with all your real estate needs. Here’s to many happy years in your new home.

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

A Cinderella Story – Michael and Tatjana… A Picture is Worth a Thousand Words

When Michael and Tatjana reached out to The Caton Team – we were very excited to be their Realtors for their first home purchase. We got them preapproved with Melanie Flynn of First Priority Financial and hit the ground running. They were so excited, started checking out properties and sooner than later, we began to write some offers.

With fingers crossed and prayers whispered we waited on pins and needles to hear back on their first offer… they didn’t get it. The first time you lose a house – it’s the pits. The second and third time it doesn’t get any easier. Tatjana and Michael started to lose hope. Who wouldn’t?

But The Caton Team wouldn’t let them lose out on their dream. As full time Realtors, we’ve spent countless sleepless nights hoping and praying our client’s dreams come true. We knew – you have to get back on the horse, try, try again….there are other fish in the sea.

And they did – but they had one request. They no longer wanted to write a letter to the seller that included their adorable family photo. In shock, I asked why. They were adamant – ‘what’s the point? The seller is looking for the most money and highest offer.’ I smiled. We could hear the disappointment in their voice. But we had faith. We couldn’t change what we were doing. The offer package The Caton Team prepares for each offer is thorough and it is successful. Sometimes money talks. But sometimes, it’s the other items in the offer package that get the recognition.

As we waited to hear back on their offer I was looking at the copy of the photo we sent of their family. I’ve known Tatjana since the 6^th grade and here she was, with her husband and two beautiful sons… The phone rang, couldn’t get to it fast enough. It was the seller’s agent. I could hear the happiness in her hello. They got the house. Quickly she interjected – it wasn’t about being the highest price, they weren’t. It was about the letter and the picture. (It still brings tears to my eyes.) Turns out the owner was deceased and had charged her best friend with handling her estate. Her wish was for her home to be sold to a nice family – not an investor. She had built that home from the ground up, raised her family there, and she wanted her best friend to pick the sweetest family for her home. And boy they couldn’t have found a better family.

Sometimes it really isn’t just about the money.

Congratulations to Michael and Tatjana – to many happy years and memories in your new home!

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

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