Arn Cenedella

Archive for the 'East Palo Alto real estate' Category

Transfer Taxes upon sale of real estate

Transfer taxes on the sale of real property are collected by San Mateo, Santa Clara, and San Francisco Counties.

These transfer taxes are paid in escrow and are part of buyer and seller closing costs.

Typically, the County transfer tax is $1.10 per $1,000 of value and are generally paid by the seller.
So upon sale of a $500,000 house, the seller will pay a transfer tax of $1.10 x 500 or $550 to the County.

Some cities also have City transfer taxes.
On the San Francisco Peninsula; San Francisco, San Mateo, Palo Alto, Mt. View and San Jose have City transfer taxes.
Generally, city transfer taxes are spilt 50/50 between buyer and seller.

The City transfer tax in Palo Alto, Mt. View, and San Jose is $3.30 per $1000 of value.
So on a $500,000 sale in these cities, the City transfer tax is $3.30 x 500 = $1650.
Buyer pay $825. Seller pays $825.

The City transfer tax in San Mateo is $5.00 per $1,000 of value.
So on a $500,000 sale in San Mateo, the City transfer tax is $5 x 500 = $2500.
Buyer pays $1250. Seller pays $1250.

So if you are buying or selling in those cities, be sure to take into account these City transfer taxes.

90 day FHA flip rule

The past 18 months I have been quite active with investors who typically pay cash for a foreclosure REO in either East Palo Alto or east Menlo Park.These investors typically fix the property up and place back on the market for sale. These transactions are known as flip due to the short turn-around time from original purchase as an REO and then re-sale to the “end user” – either an owner occupant or long-term investor who wishes to rent the property out.

Last year, FHA had a rule that stated they would NOT fund any purchase of the property that was originally purchased within the past 90 days. In fact, they would not fund a loan on a property when the contract for sale was entered into less than 90 days after to the last purchase date. Read the rest of this entry »

It is a priviledge to work with Habitat for Humanity

Last summer, I was chosen by Habitat for Humanity to be their exclusive buyer agent for Habitat’s Neighborhood Revitalization Program. Coldwell Banker and I donate the majority of any commissions earned on these purchases back to Habitat.

This Habitat program has been funded in part by contributions from the City of Menlo Park.

The City has considered buying properties in Belle Haven and doing the rehab work. Instead the City has made a wise decision IMHO in helping Habitat with their program. The bottom line is Habitat can do a better job doing what they always have done than the City that has no experience in these types of programs.

Last night, the City authorized additional funding for this program.

This will allow Habitat to continue their mission of restoring abandoned dilapidated homes to provide low cost affordable housing to deserving families.

For those unfamiliar with Habitat’s program, let me provide a little information.

Read the rest of this entry »

Real Estate Market to Rebound in 2011

so says Warren Buffet…………

The Real Estate Bloggers report that Warren says:

“within a year or so, residential housing problems should largely be behind us”

“prices will remain below “bubble levels”"

“many families that couldn’t afford to buy an appropriate home a few years ago now find it well with their means”

Click here for full article.

I would say Don’t bet against Buffet.

2384 Oakwood Drive, East Palo Alto foreclosure opportunity

I previewed the following East Palo Alto for a client of mine today.

2384 Oakwood Drive 3 bedrooms 2 baths $209,000.

This is a REO property.

Foreclosure Opportunities in East Palo Alto and Menlo Park

One of the most active and strongest markets on the San Francisco Peninsula can be found in the Belle Haven area of Menlo Park and in East Palo Alto.

Most of the listings in these areas are either short sales or foreclosures.

Run-down fixer uppers can be found sometimes below $200,000 and generally between $200,00 and $250,000.

These homes when repaired can rent for $1800 per month or perhaps sold for $300,00 or more.

Buyers need a fair amount of cash to compete in this market but good properties can be found.

I have helped numerous buyers this year in East Palo Alto and Belle Haven area of east Menlo Park purchase REO foreclosure homes and attractive prices.

One client used funds from his IRA to pay cash for a rehabbed home that generates about a 6% cash return on purchase price.

Others clients have purchased REO fixers, rehabbed them, and sold at a profit.

One of my clients, a former tenant, was able to buy their first home in East Palo Alto with FHA financing – amybe $10,000 total cash investment – will receive $8000 first-time buyer credit – and have total fixed ownership monthly payments of like $1700. They are quite happy.

Whether buy, fix and flip or buy and then rent or buy to live in, all present good options in today’s real estate market.

Please contact me at 650 566-5329 or acenedella@cbnorcal.com to learn more.

I am happy to discuss your options with you – no cost – no obligation.

The real estate market on San Francisco Peninsula has heated up

In my previous few posts, I documented that the number of homes sold in San Carlos Menlo Park and Palo Alto during the second quarter of 2009 was TWICE the number of homes sold in the first quarter of this year.

The numbers tell the story – but stories also illiminate the numbers.

I recently wrote an offer for a buyer client of mine on a property listed listed at $619,000.

My clients offered $670,000 “as is” - had a solid pre-approval and a 35% cash down payment.

This offer had only an appraisal contingency and would close in 30 days.

The buyers had read and approved all reports, inspections, and disclosures.

So basically the offer was as clean an offer as any seller could want.

Offers were due earlier this week in the early afternoon of the offer day.

In the morning, I checked with seller agent and was told there were 8 offers.

By the end of the day, there were 25 offers on this property!

I am not sure what property sold for but it was over $700,00 and I suspect closer to $750,000 by the time the dust settled.

I have heard of other properties priced in the $400,00 to $500,00 range in Redwood City selling for $100,000 over list.

So if you are waiting for the bottom, I think we may have already hit bottom and have started back up.

This is certainly true under $1,000,000 price range.

Habitat for Humanity purchases their first REO in Menlo Park

Habitat for Humanity just entered into contract to purchase a home in the Belle Haven area of Menlo Park.

With the price of bank foreclosure REOs being so low, Habitat has started a program to buy existing homes, rehab them with volunteer labor and turn them over to new owner occupants.

If you have any lender contacts that handle REOs, please let me know as it might be to everyone’s benefit to have some of these REO purchased by Habitat for sale to owner occupants as opposed to selling to investors. (At the present time, most REOs are purchased by investors.)

As the exclusive buyer agent for Habitat in San Mateo County, give me a call and let’s talk.

Is it a good time to buy?

That is the $64Million question on many folks’ minds.

Here is my “take”:
In my San Francisco Peninsula market, I would say:
Are there good values to be found? Yes.
Are we at botttom? Probably not. I expect contiuned downward pressure on prices. (In most San Francisco Peninsula cites, values are down maybe 10% to 20% from the peak in 06/07)
Is it a good time to buy? Yes: 1)  if you find a house you  really like  in the community where you want to put down roots 2) you have a long-term perspective – say 10 years and 3) your job situtation is pretty stable and 4) you buy comfortably within your financial means – this is not the time to stretch.

Jay Thompson The Phoenix Real Estate Guy provides a similar perspective on the Phoenix market which has been hit much much harder than our own market.

What say you?

What do my Homescopes blog buddies around Northen California have to say?

Possible Solution to Foreclosure Problem – Open for discussion!

On the San Francisco Peninsula, the City of East Palo Alto has been ravaged by foreclosures.

There are currently 89 homes listed for sale and over 70 of these are either REOs or short sales.

The average price in East Palo Alto went from $200,000 in 1998 to over $600,000 by 2007. Tripled!

The current average price is say $250,000.

Most other peninsula cities saw average prices DOUBLE during this time.

I believe the extra run-up in East Palo Alto was due to sub-prime financing that got borrowers into loans they had no chance to pay back on homes way too expensive for them. East Palo Alto probably has the lowest per capita income of any city on the Peninsula.

I believe most of the people who bought homes in East Palo Alto the past few years are good hard-working people who due either to language issues or a lack of financial knowledge unwittingly bought homes and took loans they could not afford. This was done more by a lack of knowledge than any plan to “game” the system.

I am working with one couple recently referred to me. Before meeting me, this couple bought a house for around $550,000 in East Palo Alto about 3 years ago. When the initial teaser rate expired on their purchase loan, they refinanced and now find they can not afford the payments as the rate adjusted again. Making the situation worse, the cost of the refinance was rolled into the refinance loan. The husband works TWO jobs and the wife also works. They have a son in high school who will go to college – something his parents did not.

Their house may be worth $275,000 now and they owe $550,000.

Their lender is Countrywide. For 6 months now, they have tried to worked out a loan modification and have gotten nowhere.

These folks are good hard-working people. They want to pay their bills on time. They are NOT dead-beats. They did not take out $100,000 HELOC to buy a new Mercedes Benz and big screen TV. They fact that they can’t not make the payments has nothing to do with their personal integrity and desire to do the RIGHT thing.

Drum roll – open to comment and critique – here is my solution for folks like these.

If their lender will not agree to a loan modification, these folks should be allowed to walk from their house with NO DAMAGE to their credit rating. The government could then direct FHA to make these folks a loan to purchase a new home for say $275,000. FHA would not hold the foreclosure against them. FHA would qualify them with the STRICTIST standards. The folks may not be able to afford a $550,000 but they certainly afford a $275,000. Let them walk across the street and buy this house. Give them a 30 year fixed rate – use a 31% to 32% qualifying ratio make sure income is documented. These folks will not default on their new loan.

I guess what I am saying, why penalize these folks because the market in their area collapsed? and because the professionals (both loan and real estate) that got them into the house did not do a good job?

This approach would not require any government money and would be financed with the usual FHA MI premiums etc.

The lender would take the loss – not the government – not the US – not us.

This couple would be able to remain homeowners albeit in a different house.

And my sense is if this program would go into effect, I think you would find lenders much more willing to do a loan modification because if they didn’t buyer would walk and buy house across street.

The program might only apply to designated FORECLOSURE DISASTER ZONES – perhaps by census tract.

What do you think?

Taxpayers not on the hook. Lenders take the loss. Buyers are able to remain owners. Win-Win?

Comments please.