Governor Brown sign AB 771. No more gouging of sellers when they order HOA document package.
If you sell a lot of Common Interest Developments (CID) or condos and townhomes like me, then you and the seller feel violated every time you are required to order the HOA document package from the HOA. They have absolute control over you because the HOA is the only entity which can certify and reproduce these documents. You are not able to sell a condo or a townhome unless these documents are provided to the prospective buyers.
I have not heard about $1,000 bundled fees, but I have never seen a $75 HOA documentation fee either, it is always $300 or $350 from my experience. This is my opinion, but running documents through a high speed double sided copying machine, does not warrant a $350 up-front fee and 10 days to produce these documents. I have heard repeated complaints from sellers who have to fork over these charges and receive a bundle often consisting mostly of HOA newsletters and meeting minutes of association meetings along with the requisite insurance and financial documents about the health of the HOA. Most people do not seem to object to having to pay the HOA to reproduce needed documents, but they do seem to object to paying so much money once they see what they received; thereby challenging the assertions that the feels were “reasonable” charges to actually reproduce said documents. The law also will create a form which will detail what is required and how much it will cost to obtain said documents.
Governor Brown Signs Bill Preventing Gouging of Condominium/Townhome Buyers
The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) applauds Gov. Jerry Brown for signing AB 771, a bill that prevents home buyers in a common interest development (CID), such as a condominium or townhome, from being charged excess document fees.
Homeowner associations (HOAs) are required to provide specific documents to prospective purchasers of homes in a CID — a form of real estate ownership in which each homeowner has an exclusive interest in a unit and a shared interest in the common area property. In addition to the standard residential property disclosures, purchasers of a unit within a CID must receive basic information about the structure, operation and management of the HOA that operates the CID.
Current law requires that this information come from the HOA and prohibits it from charging fees in excess of what is “reasonable,” not to exceed the actual cost of processing and producing these documents. HOAs generally have provided the documents for approximately $75 to $250. Increasingly, HOAs have been delegating document preparations to third party vendors or contractors who, under a 2007 court decision, are exempt from this fee limitation. This delegation of responsibility by HOAs sometimes resulted in home purchasers being forced to pay additional fees, as much as $1,000, for other documents which were “bundled” with the required documents.
Assembly Bill 771 (Betsy Butler, D-Torrance) addresses this situation by specifying that only fees for the required documents may be charged when such documents are provided, effectively prohibiting any “bundling” of fees for other documents with these fees. The bill also creates a new form detailing which documents are required, and requires the provider to disclose the fees that will be charged for the documents before they are provided. The seller of a CID must complete this form and transmit it to the prospective purchaser along with the required documents. This will eliminate any uncertainty for the prospective purchaser as to exactly which documents are being provided and the precise fees being charged for those documents.
Leading the way…® in California real estate for more than 100 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 160,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered inLos Angeles.
CALIFORNIAASSOCIATION OF REALTORS®
Lotus Lou, 213-739-8304
Where do homes sell in less than 2 months?
If you watch or read the National news or National papers, everyone seems to be pronouncing the death of the Real Estate market once again. There is talk of the double dip and even triple dip (who knows what that means) doom is everywhere.
But Real Estate trend cannot be reported from New York City; real estate markets have and always will be neighborhood specific. The activity in the Bay Area and Silicon Valley are quite different than other places in the nation. The demand for homes is quite good here, true, the demand may not be as good as it was during the top of the market in 2004, 2005 and 2006, but we are doing quite well in terms of demand compared to other areas.
The report below shows that of the top 10 cities, 5 are in California and 3 of those cities are in the Bay Area and our own San Jose represents the Silicon Valley. If we drilled down further, we will find other areas in Santa Clara County where homes are selling in less than two months on average.
Http Www Realtor Org Rmodaily Nsf Pages News 2011052502
The many uses of FHA 203K loan to improve a home
With more and more properties on the MLS being a distressed property and for those buyers utilizing an FHA loan, who may find themselves making an offer on a property that may need some TLC, they can utilize a companion loan called the FHA 203K.
Typically, the FHA borrower may not have sufficient funds set aside to deal with repairs, hence this program is available for those specific needs.
Here is an excellent post by a fellow blogger and Mortgage Broker, Bill Ladewig, discussing the multiple uses of the FHA 203K loan. A great product
SM
Rebuild this home with a FHA 203(k)
One loan finances the purchase and improvements. The FHA 203k includes the cost of rebuild, rehabilitation or home improvement in a purchase or refinance loan. .
The 203(k) is a great marketing tool for real estate agents that provides added value.
While it is a great tool to rehabilitate trashed REOs it also can be used to upgrade homes.
The primary criteria are: the improvement is a permanent part of the real estate and the improved home’s value must be comparable to similar homes in the neighborhood.
There are many uses for the 203(k)
- Rebuild
- Rehabilitate
- Remodel kitchens and bathrooms or…
- Add Rooms
- Move homes to new lots. •
- 203k cannot be funded until home is permanently secured to new foundation.
- Start with an existing bare foundation and build a new home.
Underwriting guidelines for borrower are the same a regular FHA
- Must be owner occupied
- There are no borrower income limits.
- No purchase price restrictions
- Subject to local FHA loan limits.
- Borrower’s minimum investment is 3.5%
FHA 203k are not overly complicated.
The final loan amount will be 96.50% of the purchase price and cost of repairs plus a contingency pad
The purchase contract is written based upon the purchase price. I suggest, to avoid seller confusion, the purchase offer loan amount to be 96.50% of the purchase price with a notation the loan amount will be increased based upon repair costs.
Once the offer is accepted repair bids are prepared by licensed and bonded contractors. If the bids are over $35,000 a FHA 203k inspector must review the property and bids; below $35,000 no FHA inspector is required.
- Purchase price plus construction costs CANNOT exceed the value of comparable homes in the area.
- The contractor must understand the bid must be accurate because there will not be any additional money available.
After the construction bid is accepted, it along with the purchase contract is sent to the FHA appraiser.
The time to complete a FHA 203k is dependent on the time required to prepare the construction bid. Once the construction bid is accepted the time to close is the same as a regular FHA loan.
Education is Consumer’s Only Real Protection.
- What You Should Know About APR
- How To Shop for Mortgage Rates.
- Beware of Misleading Lender Advertising
- Education is the best consumer protection
- Rates and Point Relationship Explained
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Home For Sale: 3958 Leven Place Way, San Jose, CA 95121
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Check the facts before you open your mouth – its the first step in negotiating
Let me just start by saying this is my effort at sharing an experience I encountered today so that newer agents out there do not fall into the same trap. Hopefully someone can walk away having learned something positive from this experience.
I have always believed the first rule of negotiations is to know where you stand before you engage the other party. Pretty elementary, right? Sort of the first rule of negotiations 101.
Well, it seems that little gem of advice is sometimes lost to Realtors out there who proclaim themselves as being “professional negotiators” as if that were a special badge of honor that only a handful secretly receive. We Realtors are all negotiators, it just seems some are better prepared and do the prep work to insure they do not look incompetent.
Unfortunately, these days, in their desperation to close any deal, agents sometimes open themselves up to ridicule and more importantly, do their clients a dis-service by not being adequately prepared when they negotiate. Not only will they not get a deal, they may possibly lose the client whom they failed to protect.
I am engaged with a veteran agent (probably 30 years in the business) who is on the buy side of a deal. The deal is taking longer than anticipated because one of the lenders is dragging their feet in coming to a decision on a short sale. Everyone is frustrated including me, so I understand his impatience. But nothing can happen until the second approves the deal.
But today he was trying to re-negotiate the price on the deal in a back-handed way which I did not really appreciate. First, he claimed that the prices in the complex were falling drastically in the past two weeks and he now believed his client was over-paying for the property. I told him if he believed that to be true, then his clients had the right to back out and I would return the deposit; I have a back up offer that will be glad to fill in. (His claim of prices in the complex dropping is incorrect). Secondly, he claimed we may not close in time to claim his client’s $8,000 tax credit because we cannot, at this point close escrow by June 30 (This is true). Finally, he claimed his client was further harmed because the California Tax Credit (up to $10,000) had been exhausted within 2 weeks of it being announced (This was news to me) and he couldn’t get that either, so he wanted to reduce the offer price.
I understood the message he was trying to convey: 1) that the prices in the complex were falling and 2) the California Tax Incentives had run out and his client was depending on that. He was claiming his client was hit with a double whammy. Well, I would have been sympathetic if he had verified these claims before he made them to me and tried to unilaterally re-negotiate the contract.
1. He was simply uninformed about the prices in the complex. They were not falling dramatically, an identical unit had come on the market only 7 days ago for nearly $10,000 more than the price he offered to pay. This is basic stuff, you check the comps before you talk prices. 2. His claim that the Tax Credit fund had been exhausted, was again, an incorrect claim. http://www.ftb.ca.gov/individuals/new_home_credit.shtml The fund is only 57% depleted! I have no reason to lower the price; I am thinking he should raise the price since the house looks like a better deal now than before.
I shot down the grounds for his argument in 5 minutes. He could easily have verified the information if he took 10 minutes to go online and look them up before he made these false claims to me. This is an individual who has been selling real estate for probably close to 30 years. This was simply embarrassing for him and certainly did not make his client’s case any stronger. Now I question whether I want to continue to do business with him or simply deal with the back up offer. What was he thinking? All he managed to demonstrate today was that he doesn’t know the first thing about negotiating and now has planted a seed in my head as to whether he is a competent agent or not.
Folks, check the comps and do your due diligence before you start making claims which could back fire on you and your clients. That’s your job.
