Buying Existing Loans

 

Last week, I shared information about hard-money loans, which are loans that often work when conventional loans won’t. This week, I’ll talk about buying and selling notes secured by real estate, a close cousin to real estate-backed, hard-money loans.

If you sold a property and carried the financing, you are now the proud owner of a note secured by a deed of trust. The note outlines the terms of the obligation, including length, monthly payments, interest rate, and when any associated balloon payment(s) will come due, among other things. (A balloon payment is a payment that amounts to more than double the value of a regular payment, and is usually planned as the final payoff at the end of the loan.)

The main job of the deed of trust is to tie the specific loan to the real estate that secures it. In a seller carry-back situation, the real estate is normally the property you sold. When you sold the property and carried the financing, there may have been good reasons to do so: a higher sales price, a faster sale, a better return on investment than was available from other investment sources; or maybe the sale could not have happened at all without seller financing. Now, however, things have changed. Your princess may be about to graduate from high school and hoping to go to college, or perhaps you want to remodel your home or take advantage of an exciting investment opportunity.

Whatever the reason, you’re currently in a position of needing cash. Happily for you, that note secured by a deed of trust is a negotiable instrument. That means you can sell it.

Depending on a number of factors, you will usually get something less than the outstanding balance owed. If the financing you provided was at a low rate or had an especially long term, the note’s sales price will almost certainly be less than the outstanding balance. If the loan-to-value (LTV) ratio is high—calculated by dividing the total loan amount by the value of the property—you can also expect to sell the note for less than the outstanding balance. Still, cash in your hands may be worth more than the value of the note.

If you choose to sell the note, these transactions are typically handled by a licensed broker who charges a commission for arranging the sale. Like a real estate transaction, it should be handled in a professional manner, making sure all escrow instructions are carefully drafted and followed, and title insurance is secured.

As a buyer of this note, you should have your broker verify that the value of the property supports the loan, and that fire insurance and property taxes are accounted for. And most importantly, confirm that the seller does, in fact, own the note—and that there are no liens that might encumber the note. Your broker can also provide a financial analysis to let you know what the rate of return will yield if all the payments are made in a timely manner (including any balloon payments).

When the dust settles, the sale of an existing loan can be a reasonable source of cash for the seller and an attractive investment option for the note’s buyer.

If you have questions about real estate investment, sales or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com.

Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

 

Buying Existing Loans, called “Real-Estate-Backed Notes”

Last week, I shared information about hard-money loans, which are loans that often work when conventional loans won’t. This week, I’ll talk about buying and selling notes secured by real estate, a close cousin to real estate-backed, hard-money loans.

If you sold a property and carried the financing, you are now the proud owner of a note secured by a deed of trust. The note outlines the terms of the obligation, including length, monthly payments, interest rate, and when any associated balloon payment(s) will come due, among other things. (A balloon payment is a payment that amounts to more than double the value of a regular payment, and is usually planned as the final payoff at the end of the loan.)

The main job of the deed of trust is to tie the specific loan to the real estate that secures it. In a seller carry-back situation, the real estate is normally the property you sold. When you sold the property and carried the financing, there may have been good reasons to do so: a higher sales price, a faster sale, a better return on investment than was available from other investment sources; or maybe the sale could not have happened at all without seller financing. Now, however, things have changed. Your princess may be about to graduate from high school and hoping to go to college, or perhaps you want to remodel your home or take advantage of an exciting investment opportunity.

Whatever the reason, you’re currently in a position of needing cash. Happily for you, that note secured by a deed of trust is a negotiable instrument. That means you can sell it.

Depending on a number of factors, you will usually get something less than the outstanding balance owed. If the financing you provided was at a low rate or had an especially long term, the note’s sales price will almost certainly be less than the outstanding balance. If the loan-to-value (LTV) ratio is high–calculated by dividing the total loan amount by the value of the property–you can also expect to sell the note for less than the outstanding balance. Still, cash in your hands may be worth more than the value of the note.

If you choose to sell the note, these transactions are typically handled by a licensed broker who charges a commission for arranging the sale. Like a real estate transaction, it should be handled in a professional manner, making sure all escrow instructions are carefully drafted and followed, and title insurance is secured.

As a buyer of this note, you should have your broker verify that the value of the property supports the loan, and that fire insurance and property taxes are accounted for. And most importantly, confirm that the seller does, in fact, own the notes–and that there are no liens that might encumber the note. Your broker can also provide a financial analysis to let you know what the rate of return will yield if all the payments are made in a timely manner (including any balloon payments).

When the dust settles, the sale of an existing loan can be a reasonable source of cash for the seller and an attractive investment option for the note’s buyer.

If you have questions about real estate investment, sales or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com.

Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

 

The TRUE Cost of Building

I’m frequently asked why we don’t have more houses available in Ukiah for sale or rent. Although the Realty World Selzer Realty property management division manages about 800 properties, we typically have almost no vacancies—and that’s been true for at least a couple years. The reason, of course, follows the laws of supply and demand. Although the demand for more housing is high, the cost of building it is higher.

Part of the reason for the high building costs is that City of Ukiah is still paying off a $72 million sewer upgrade debt from five years ago. Although I like the changes in attitude I see in our current councilmembers as they support policies to encourage affordable housing, we are all saddled with debt incurred by poor decision-making in years past.

When people try to build on a vacant lot rather than buy an existing residence, they are often surprised by how many fees and expenses they incur. Recently, the sale of an empty lot fell through because the costs of developing the property ran tens of thousands of dollars more than expected. I’m not talking about the cost of the lot itself. I’m talking about the regulatory costs associated with preparing the lot.

Here are some of the costs the buyers would have incurred for the simplest of building projects: putting a mobile home on a vacant lot.

  1. Sewer, water and electrical fees: $19,000.
  2. Sewer lateral and water line from mains to the property line: $10,000
  3. Installation of four street trees installed within five feet of the sidewalk with garden stacking blocks for watering: $3,600
  4. Storm water drainage mitigation (an infiltration ditch with gravel and berm at low end of lot to stop runoff – two feet wide by three feet deep with one-inch berm): $4,600
  5. Demolition of existing sidewalk and ADA-compliant replacement sidewalk around driveway: $6,000
  6. Excavation for utilities from house to sidewalk for underground utilities: $2,200
  7. Building permits: $4,500

This amounts to about $50,000, much of it includes things the owner would not have elected to do given a choice. While every new home needs sewer, water and electrical services, the hook-up fees and the cost of connecting to those services to the structure adds up to more $30,000. That is a lot of money.

Another proposal fell through when a developer wanted to build an apartment complex on the lot behind Rite-Aid in Ukiah. The sewer hook-up fees alone exceeded the contract purchase price for the land.

The bottom line is this: before we see new construction of single-family homes, prices for those properties will have to increase. We are still waiting for the current market value of a typical home in Ukiah to reach the value it held in 2007, before the housing bubble burst.

Once that happens, we still won’t see a huge construction craze because since 2007, inflation and regulations governing construction have consistently driven up building costs.

To support the cost of building a new 800-square-foot, two-bedroom, one-bath apartment, rents will probably need to rise to about $1,200 per month. While this is not a welcome idea for people looking to rent an apartment, it is just the simple facts of life when it comes to the cost of building a multi-family complex in the Ukiah Valley. There are a few apartment projects in the planning stages, but they are unlikely to go through until the developers are confident they will have the income to support their project. Based on the shortage of housing, particularly rentals, and the fact that there will be new construction in desirable locations, I think they’ll be able to achieve these numbers.

If you have questions about real estate investment, sales or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com.

Dick Selzer is a real estate broker who has been in the business for more than 40 years.

Reverse Deferred Exchanges – Not for the Faint of Heart

Once in a while, it’s fun to discuss a topic that’s a little esoteric. While 90 percent of real estate investors will probably never have reason to be involved in a reverse deferred exchange, for those who do, here’s a little introduction. Before I continue, I must give my regular disclaimer. As I’ve said many times, I’m not an accountant, so before you decide to leap into any complicated financial decisions, please be sure to discuss them with people trained to provide expert accounting advice.

Here we go. When you buy an investment property, your tax basis is established based on the acquisition cost, and this will impact the taxes you pay when you eventually sell the property. The tax basis is loosely defined as the acquisition price plus the acquisition costs plus improvements during the time you own the property minus depreciation.

Let’s imagine you purchased a residential property 23 years ago, and you’ve rented it for the past 20 years while making improvements and repairs, as well as taking depreciation on it. Now it has a basis of $25,000 and a current market value of $250,000. Because you were an aggressive investor, you refinanced three times and now owe $200,000. If you sell this property for $250,000, your gain will be $225,000. Between state and federal taxes, you could have a tax liability of as much as $70,000. If you do some quick math, you’ll discover that to sell the property, you need to come up with $20,000 out of pocket.

You have just entered the investment world of exchanges. In a typical exchange, you would dispose of (sell) Property A and acquire Property B. As long as you follow the legal rules and use an accommodator—and Property B requires the same or more debt and the same or more equity as Property A—you can postpone paying taxes until sometime in the future.

What happens when you find Property B before you’re able to dispose of Property A? This is when you consider a reverse deferred exchange. It’s expensive and time consuming, but when faced with a $70,000 tax bill and $20,000 deficit, it could work well for you.

With a reverse deferred exchange, you purchase Property B before you sell Property A; actually, technically, your exchange accommodator buys Property B and holds it for you until you find a buyer for Property A, at which time the exchange is completed.

There are some incredibly strict rules with regard to the exchange: timelines and dates matter a lot. For example, you only have 45 days to identify the property to sell and 180 days to close escrow. The rules are so strict that 45 days and one hour is too long. And when I say 180 days, I do not mean 6 months. Just to add a little more complexity, there are additional limitations on those time frames if they cross calendar or fiscal year ends.

If you choose to undertake a reverse deferred exchange, all the complexity should be managed by your accountant, Realtor, accommodator, and title company. Your job is to pay the bill.

An accommodator’s standard fee for a standard transaction is about $500, but for a reverse deferred exchange, it’s closer to $5,000. Expensive? Yes. Far less than the $70,000 you’d pay otherwise? Also yes.

Financial challenges are one of the many pieces to this puzzle. You’ll need to come up with the down payment for Property B before you sell Property A. You’ll need to find a lender comfortable making a loan while the property is in the name of the accommodator. You’ll have to find an accommodator (ask your title company for a referral). These things take time, so don’t plan on a quick turnaround.

The good news is: you shouldn’t have to part with that $70,000.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

Save Yourself a Little Time and Hassle: Fill Out the Right Forms

 

Each time a property’s ownership changes hands, a small avalanche of documentation must accompany the transaction. Your Realtor will walk you through the process, but it’s still nice to know what’s coming. Here’s some information on a couple forms, forms that will save you time and money if you complete them in a timely and thorough manner.

The first form is the Preliminary Change of Ownership Report (PCOR), a short document that informs the county about the change of ownership. Each time a property is transferred to a new owner, the county reassesses the property’s fair market value in compliance with Proposition 13: the PCOR aids them in this process.

In 1978, Proposition 13 declared that the maximum amount of any ad valorem tax on real property shall not exceed one percent of the full cash value of such property, and that annual increases of the tax would be limited to an inflation factor not to exceed two percent. A reassessment of the property tax can only be made when the property ownership changes or when construction occurs. (California Constitution Article XIII)

Given this information, you can understand why the county is eager to know about ownership changes: it’s one of the few times a big jump in the taxable value of a property happens. There are exceptions to the reassessment rule. For example, if one family member transfers ownership to another family member, the property’s tax base remains unchanged; but typically (if not a family member) a new tax base is established when the property changes hands.

Be aware that fair market value does not necessarily mean purchase price—a common misconception. The county assessor’s office independently researches the value of the property based on other properties in the area and current market conditions. So if you got an incredibly good deal when you purchased the property (or if you overpaid), your purchase price may have little to do with the fair market value assessed by the county.

When you sign the Preliminary Change of Ownership Report, you are certifying the information is correct under penalty of perjury. This is not a time to stretch the truth to try to get out of paying more taxes. Just dutifully complete the information that identifies the property, the seller, the buyer, and the terms of the sale. As with many regulations, if you don’t, the penalties get expensive.

The next form is the Statement of Information (SI), frequently required by your title company. It establishes that you are who you say you are, and prevents you from being confused with someone else. Sounds basic, I know, but you don’t want to be confused with someone of a similar name who has a problematic financial or legal history. This confidential form helps prevent a mistaken identity issue. It asks for information including your full name, social security number, date of birth, driver’s license number, and marital status. It also asks for ten years’ worth of residences and work history.

You may recall that title insurance is different from traditional insurance in that it attempts to protect you and your lender from problems in the past, rather than the future. The SI helps assure that problems that could impede the sale of the property are, in fact, related to the buyer and/or seller involved in this transaction. Clearly, if you have a common name like Smith or Jones, you’re more likely to have issues, but by collecting a detailed history, the SI is often able to prove you were not, for example, the John and Nancy Jones involved in a lawsuit in Los Angles when you’ve been living in Ukiah your whole lives.

So although these forms are mundane, take the time to complete them properly. You’ll be glad you did.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 Preliminary Title Reports Are Really Helpful, Especially If You Read Them

I know I’ve said this before, but it bears repeating: when it comes to real estate documents, the large print giveth and the small print taketh away. When you decide to purchase a home, your preliminary title report will include many paragraphs full of boring (but important) information, and potentially a few paragraphs with information that could change your mind about buying the property. Be sure to read the whole thing.

Vesting

Much of the information in a preliminary title report is information your Realtor and the seller’s Realtor will take care of; it won’t require any action on your part. For example, if the title of the property is in the name of a corporation, the seller’s Realtor will have to obtain documents from a vested owner authorizing someone to sign on the dotted line. While it’s not something you, as a buyer, have to deal with, it’s important; because if the corporation is not in good standing with the state, the seller may have trouble transferring the title.

Taxes and Assessments

While you will not be responsible for paying outstanding balances of taxes and assessments, it’s good to see what they are to get a sense of what your future liabilities will be. A local example of an assessment you may start to see are those from Property Assessed Clean Energy (PACE) loans. Mendocino County recently approved these loans that help people finance energy efficiency upgrades or renewable energy installations. PACE assessments totaling many thousands of dollars will need to be paid by the seller or taken into consideration when determining the purchase price.

Deeds of Trust

Preliminary title reports also show any deeds of trust that have not been reconveyed (released). Normally, this deals with loans the current owner is obligated to pay. On occasion, an old deed of trust from decades ago appears, and it must be addressed to avoid future problems. Conceivably, a beneficiary of an old deed of trust that was never paid off could make a demand for the outstanding principal plus accrued interest. While compounding interest in your retirement account works in your favor, compounding interest from an old debt does not.

Identity

One of the critical elements of a preliminary title report is to see who exactly owns the property. If an owner’s deceased ex-wife passed her ownership stake to her children when she died, and those children refuse to speak with the owner, it may take some time to clean things up. Start right away. Also, something as simple as an incorrect middle initial can cause problems if not detected and dealt with early.

Pending Actions

Likewise, you’ll want to clean up any legal disputes. If the neighbor’s lawsuit over the encroachment of your shared fence remains unresolved, it can do more than delay the closing of an escrow, it can kill it altogether.

Maintenance Agreements

The most common maintenance agreements are road maintenance agreements. Be sure you understand both the scope of the agreement and your obligation to pay for it. Other maintenance agreements can cover common areas such as greenbelts or shared wells. Read the details.

Legal Description

In the vast majority of cases, the legal description is routine. After all, if you buy a house at 123 Main Street with a fence around the property’s perimeter, the property line is probably obvious. However, a vacant lot in Brooktrails is tougher to determine, and the boundary line on a 350-acre parcel at the end of Spy Rock Road is harder still.

Property in Default

If a notice of foreclosure exists because of the current owner’s default on a loan, your timeline may be affected. The process may be delayed or a pending public sale may rush the escrow.

No matter how boring you may find the details of your preliminary title report, I’m confident you’ll be glad you read it.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

New State Law Governs Granny Units

 

Recently, the State of California passed a law eliminating the ability of local governments to unreasonably restrict homeowners from adding a second unit to their property. One of the first considerations was to change the name of these units. They are no longer mother-in-law units or granny units; they are now Accessory Dwelling Units (ADUs).

The State regulation defines minimum guidelines for ADUs, but the language is still a bit vague, saying local jurisdictions cannot “unreasonably” limit square footage. Clearly, the second unit must be big enough to include a kitchen, bathroom, and living space. As of this writing, the City Planning Commission is considering a 1200 square foot maximum for a detached ADU (one that is not part of the main dwelling), which does, in fact, seems reasonable.

If you’re a homeowner who may want to build a detached ADU, one of the biggest benefits of this new law is the prohibition for local governments to charge any water or sewer hookup fees (the combination of which can run about $20,000 in Ukiah). The law also precludes charging additional service fees, but it does not prevent higher rates based on usage. Since water is metered, your water bill will go up, and increased water usage can impact your sewer bill, too.

When most people think of ADUs, they picture a separate structure, but you can create an ADU inside your house. Consider, for example, creating a separate living space above a garage, one with its own entrance. The ADU would share a roof with the main house, but have plenty of privacy. If you create an ADU within your house, there is no size limitation with regard to square footage; however, you cannot make the ADU larger than 50 percent of your house. Honestly, this rule is a little silly because there’s nothing stopping you from living in your ADU and renting your main house, but such is the nature of bureaucracy. I do think it’s good to enable people to divide their homes. This allows empty nesters or single people who want to downsize to stay in their home rather than having to sell and relocate.

On the bright side, ADUs may help reduce the housing shortage in Ukiah. There are some drawbacks, however. In the older Westside, for example, if a third of homeowners added an ADU, we’d see a significant increase in traffic and decrease in the availability of street parking. I’m also concerned about how our issue-laden sewer system would manage the increased load.

Another potential problem could arise if people do not position their new ADUs appropriately. Imagine if your neighbor built an ADU five feet from their back fence that aligned with your side yard, where your main dwelling is only five feet from the property line. The ADU could be positioned only ten feet from your house, and potentially provide a clear view into your master bedroom. Hopefully, people will be considerate as they contemplate where to build.

All in all, I am in favor of allowing property owners to make decisions affecting the future of their properties. My only concern about the loosening of ADU restrictions is that current homeowners bought their homes knowing the rules at the time of purchase, and now the rules are changing. I don’t really expect to see too many new ADUs with construction costs currently in excess of $200 per square foot, but things can always change.

If you feel strongly about this issue, consider contacting a member of the City of Ukiah Planning Commission or a city councilmember. Better yet, attend upcoming public hearings. They’re very informative.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

Realtor Safety Training Helps Keep Realtors and Others Safe

Usually, I write columns to inform the public about matters pertaining to real estate and/or property management. However, this time I thought I’d write to Realtors directly about ways to remain safe. Many of these safety tips can be amended for anyone who meets with clients they do not know.

Realtors often work with new clients—people they’ve never met and know nothing about. While most Realtors work in the industry for decades and never feel threatened; occasionally, a situation arises that makes the hairs on the back of their neck stand on end. I’m unaware of any recent problems in Mendocino County, but a recent news story in Phoenix reminded me of the dangers Realtors can face (www.12news.com/news/local/valley/after-brutal-murders-self-defense-training-still-not-required-for-realtors/412356141).

When you think about it, Realtors make obvious targets. They are in a business where both the Realtors themselves and members of the public fully expect them, as lone individuals, to show a complete stranger to a vacant house, sometimes in a remote location. While this happens all the time with absolutely no problems, it could be a recipe for disaster. Both men and women are at risk, because a bullet will go through either, so here are some safety tips to keep in mind.

First, ask prospective clients to meet you at your office before going anywhere with them. This provides an opportunity for you to evaluate them and perhaps eliminate the exposure to danger altogether by declining to go. It also means others in your office have seen and can identify the person, and potentially their vehicle.

If your instincts tell you not to go, pay attention. Ask anyone in law enforcement, and they’ll tell you to listen to that little voice in your head telling you something’s wrong. Ukiah Police Chief Chris Dewey says if the situation feels off, make up an excuse if you must, but don’t go.

If the prospective client seems okay, it’s still better to be safe than sorry: make sure someone in your office knows whom you’re with, what properties you plan to visit, and when you expect to return. Turn on your cell phone’s GPS tracker and be sure to put an emergency contact on speed dial. Also, you should be the one to drive, even if the prospective client offers to. This gives you a little more control over the situation—you determine where to go, when to leave, and you can lock yourself in the car if it comes to that.

If you’ve indicated to your office that you’ll be back by a certain time, be sure to let them know if that time changes. If you do this in front of the client, he or she will know there are people waiting for you and it may deter bad behavior.

Consider taking a self-defense class. It will teach you physical defensive techniques as well as heighten your awareness of your surroundings, like being sure you have unfettered access to the only exit to a room or property. This helps you to expect the unexpected.

On the property management side of the business, we insist that anyone who wants to view a vacant property must allow us to take a photocopy of their driver’s license. In the event that something happens, this makes it easier to identify the individual; more importantly, the individual knows he can be identified.

If you’re the For-Sale-By-Owner type, consider asking a friend or family member to wait at your house with you when a prospective buyer comes to view it. Collect the interested party’s contact information up front and verify that it’s accurate (when you call back at the phone number they provided, do you reach the same person?). If you’d like to avoid this risk altogether, allow me to make a shameless plug for hiring a Realtor.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

Landscaping and Hardscaping May Prevent Buyers from Escaping

 

When you decide to sell your house, it’s important to show off its best features: the updated kitchen, the vaulted ceilings, the hardwood floors, and other amenities. However, if you forget to pay attention to the landscaping and other exterior features, prospective buyers may never set foot inside your house. According to recent studies, attractive landscaping can help your property sell faster and increase the sales price.

Most Realtors are aware of situations where prospective buyers have driven up to a house and refused to get out of the car to go inside. Their rationale is simple: if the sellers cannot take care of the outside, why would they waste their time looking at the inside? This reinforces that old adage about only getting one chance to make a first impression. And Murphy’s Law being what it is, those prospective buyers who drove away were probably the ones who would’ve made the highest offer.

Leaving the exterior unkempt is a mistake, but thankfully one that can typically be rectified with a few weekends worth of yard work and maybe a couple trips to Mendo Mill.

While good landscaping makes prospective buyers excited to see more, be careful not to over-landscape. You don’t want those buyers imagining they’ll have to spend every spare moment of their lives trying to keep up the yard. I’m picturing the perfectly manicured flowers that greet you at the main entrance to Disneyland. Are they attractive? Certainly. Would I want to be responsible for their upkeep? Not unless I had an army to help me.

Upkeep is not the only landscaping consideration. You’ll also want to think about water consumption: we’ve had many years of drought and a lawn that requires massive watering may not be appreciated. A low-maintenance yard that employs mulch effectively can reduce maintenance requirements and conserve water while providing an attractive view.

And don’t forget to look at the trees. Are they arranged to provide relief from the summer sun but allow winter sun to add warmth and cheer? Deciduous trees (the ones that lose their leaves) should provide shade in August when it’s 110 degrees but welcome sunlight through its bare branches in January and February. Are the trees too close to the house? When winter storms soak the ground and trees fall, it’s far better to lose a fence than a living room.

Once you’ve got the landscaping attended to (i.e., trees, shrubs, flowers and lawn), it’s time to look at the hardscaping—concrete walkways, decks, fire pits, pools, ponds and lighting. Are tree roots lifting the concrete path to your front door, causing a tripping hazard and looking messy? Is that deck railing that prevents a 10-foot drop sturdy enough to lean against? For safety and visual appeal, make sure your hardscaping is in good repair.

If you like yard ornaments, feel free to use them, but do so sparingly. It’s best if your yard resembles a cover shot from Better Homes and Gardens as opposed to a yard that looks like it was recently attacked by a flock of flamingos. With both interior and exterior décor, it is not the seller’s taste that matters; it is the prospective buyer’s taste. Less is more. Neutrals are better than extreme colors. Provide something close to a blank canvas that the prospective buyer can paint on with his or her imagination.

If you have used your yard as a de facto dog park, it may be worth hiring a professional to spruce things up, or at least create a plan to do so. The elbow grease can be yours, or as some of us have learned, that’s why God invented teenagers.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or call (707) 462-4000. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

We Can Keep Complaining About the Housing Shortage or We Can Support Those Who Want to Address it

 I attended a meeting on May 4 hosted by property developers Guillon, Inc., where a dozen or so of the 80 neighbors who were invited came to hear Steve Honeycutt present information regarding a proposed development on the north side of Lover’s Lane in Ukiah. Guillon would like to buy 23 acres from the Dolan family and rezone the land so they can build single-family homes in the $325,000 to $375,000 range.

After the meeting, I pulled a list of all single-family homes currently for sale in Ukiah priced at under $400,000. We had a total of eleven.

Ukiah’s had a housing shortage for years, and up to this point, no one has stepped up to address it. Just talk to some of the bigger employers in town and they’ll tell you how detrimental the housing shortage can be. Both Adventist Health/Ukiah Valley and Mendocino College have said they plan to hire 20 new people in the next 12 months, but they don’t know where these people will live. In two years, the hospital hopes to open a family medicine residency program, which will bring six doctors and possibly some support staff. I don’t know where they’ll live, either. Even Mendocino County has been trying to hire people to administer the new cannabis ordinance and they’ve lost prospective employees because they couldn’t find housing.

On March 27, the Ukiah Daily Journal noted, “Two out of three biologist positions essential to the cultivation permitting program are still vacant after half a year of recruitment efforts, said interim agricultural commissioner Diane Curry. Of more than a dozen applicants the department has interviewed since November, none have been able to accept the job because of a lack of available housing in the area.”

To address this lack of housing, Guillon would build houses in a price range that’s affordable for many Ukiahans. Unlike some developers who would rather not deal with inconvenient feedback from neighbors, Guillon invited all property owners within 550 feet of the perimeter of the project site to the meeting of their own volition and on their own dime, to gain the neighbors’ perspective and feedback early in the process. While people voiced a few concerns, the overall response seemed positive, so I’m not sure why the newspaper article that followed focused on the downsides of the project. Really, the only concern of any consequence is the potential traffic issue, and Guillon is willing to take care of it. The other issues were often inspired by NIMBYism. Everyone wants more housing, but not in their backyard.

A question was raised about why we should take agricultural land out of production to build houses, but vineyard owner Paul Dolan said the soil on the proposed 23-acre building site isn’t good for grapes. In fact, he said it produces about half of the tonnage of the rest of the vineyard—he loses money farming that section. However, because he and his family are committed to keeping fertile agricultural land in farming, they plan to put the remaining 150+ acres of the Lover’s Lane vineyard into a land trust. So, I have no problem with rezoning 23 low-producing acres for this project.

I’ve lived in Ukiah for more than 60 years. I am the father of five children and, candidly, I’d like them to have an opportunity to move back to Ukiah, to find jobs and places to live. Unfortunately, unless something changes, it seems less and less likely that anyone’s children will be able to return.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.