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Finding the Best Interest Rate

I recently went online in an attempt to find the best interest rate for a 30-year, fixed-rate JUMBO real estate loan with 65 percent loan-to-value. I did not go to a comparison site, but a single lender’s site, where I entered my information and requested their lowest rate.

I shared the information a lender would need to give me their lowest interest rate: my annual income, net worth, FICO (credit) score, and property value, along with my contact information. Within a day or so I was receiving calls from 7:30 am to 7:30 pm from all sorts of people trying to sell me their loan services. My email inbox blew up with emails offering rates from as low as 2.5 percent to 6 percent.

Although I didn’t intend to have my information shared with a bunch of people, I figured I’d ask the same question of each lender: what is your lowest interest rate given the criteria above? Many of them wouldn’t give me a rate unless I allowed them to run a credit check, which I wouldn’t. The more often you allow people to check your credit score, the worse your score becomes. In essence, if I allowed them to run my credit, I’d have to stick with them.

Some lenders said they needed to run the credit check because each situation is different. While that is true—each loan is unique—their lowest rate doesn’t change. Regardless, they danced around the answer but wouldn’t give it to me.

These were nationwide companies—the ones you see ads for on TV—not local lenders. The few who did give me a rate often gave me rates that were too good to be true. I could tell I wasn’t getting a straight answer.

I realized later that I had been too vague. I should have asked for their best annual percentage rate (APR), because the term “interest rate” can be used to mean an introductory rate or some other special rate. Then they make up the difference between that low rate and the profit margin they want by charging fees (called points).

APR is a legal term. It’s a metric that was developed specifically to allow buyers to shop for loans using an apples-to-apples comparison. Otherwise, it can be really hard to know which loan is best.

If someone offers you a 30-year, fixed-rate loan at 4.5 percent with 2 points, is that better or worse than a loan at 4.75 percent with no points? As it happens, the 4.5 percent with 2 points is slightly better over 30 years. However, if you’d asked about a 15-year, fixed-rate loan, the 4.75 percent loan would be better. This is why you need to ask for the APR.

To avoid disingenuous lenders who are simply out to make a quick sale, I highly recommend asking your Realtor for a referral to a loan officer they trust. When you live in a small town, it becomes obvious in a hurry whether you’re out to fleece people or whether you’re providing a good value for your clients.

With local lenders, you won’t get calls at all hours of the day and night, but you should get straight answers. The loan process will still require a mountain of paperwork with W2s, bank statements, tax returns and the like (and if you’re self-employed, the mountain will be twice as high), but at least you’ll get a solid loan without hidden fees or surprise balloon payments.

It’s okay to buy some things online. Loans are not one of them.

If you have questions about getting into real estate, 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.

 

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Cannabis and Title Insurance

As state and federal law enforcement agencies try to figure out how best to deal with conflicting cannabis statutes, it can be difficult for some industries to figure out how to position themselves. This should not be the case for title insurance companies, because their primary job is to provide a policy that guards against unknown liens or a flaw in the chain of title (who can prove legal ownership of a property).

This is why I am baffled by recently published statements saying properties in the 28 states that have in some capacity legalized cultivation, distribution, manufacture or sale of marijuana products will not be able to purchase title insurance. This includes the purchase and sale of undeveloped land, commercial properties, retail stores, and houses—any property where marijuana has been used (regardless of whether that use is legal under state law).

Title insurance typically deals with issues like easements, old deeds of trust, reconveyances, liens and the like. It does not have anything to do with how property owners use their property.

It’s true that the government can seize property under property forfeiture laws, some of which relate to the Controlled Substances Act. The government can also change a property’s zoning or designation, or red-tag a building rendering it uninhabitable. None of these actions are covered by title insurance. Standard title insurance policies already exclude coverage for this type of government action.

In reading the title insurance bulletin, I couldn’t find an explanation to drive their anti-cannabis policy. They point to the discrepancy between state and federal laws for seizure of property, but again, that offers no explanation for not insuring title.

It is important to note that most title companies are informing prospective insureds of their anti-cannabis policy up front, so if prospective insureds proceed on the what-they-don’t-know-won’t-hurt-them basis, and later file a claim for a missed deed of trust or easement, could the title company decline the coverage if the property is involved in the cannabis industry? One title company told me no, BUT a word to the wise: if your property will be used for cannabis and the title company asks, don’t hide it! As I have said before, make full disclosures (on this and any other issues) at the earliest possible time.

It seems to me that title insurance is all about guaranteeing property ownership; I don’t understand how the cannabis issue affects it at all. I cannot imagine how any title insurance company would be liable for cannabis issues, any more than they would be if a house burned down or someone slipped and fell while walking around on the property. Those issues are addressed by homeowners’ insurance, not title insurance.

Eventually, I expect conflicts between state and federal cannabis laws will be resolved, but until then, people complying with state laws can still be prosecuted under federal law. I spoke with Mendocino County Sheriff Tom Allman who let me know that his job is to enforce state and local laws. He has no jurisdiction when it comes to federal laws, and that’s fine with him.

If you have questions about getting into real estate, 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.

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 Our Housing Shortage: Rearranging Deck Chairs While the Titanic Sinks

I recently attended several meetings that made me shake my head in disbelief. It was akin to watching people rearrange deck chairs on the Titanic while the ocean rushes in.

At these meetings, people discussed how to provide rental housing for displaced fire victims. Their recommendation was to put fire victims at the top of the list for newly available rentals. I have two problems with this. First, why should fire victims be put above others who need housing? Why, for example, should a doctor or teacher or other person coming to the area to help our community be put at the bottom of the list? Second, we have almost no rentals to offer these people, so no matter who gets priority, we simply don’t have enough housing to go around. Why are we talking about priority instead of how to increase the housing supply?

We have had a housing shortage in this valley for at least 15 years, and last fall’s wildfires made the shortage much worse. If we want to address housing, our local leaders need to recognize how supply and demand influence people’s behaviors and then make policy based on these well-established norms.

In the past 30 years, we’ve had no new market-rate apartment complexes of any consequence. Since 2010, only 92 residential building permits have been pulled in the greater Ukiah Valley. During that time, if we were simply to keep up with population growth, 420 new housing units should have been built, whether they were single family homes, duplexes or apartment buildings.

Clearly, we need more market-rate housing—housing that people who live and work in Ukiah can afford with salaries they earn from legitimate local employment. Although local government doesn’t have complete control over the housing market, they can influence the cost of development. Right now, their influence is going the wrong way.

In 2009, the county implemented an inclusionary housing ordinance. Inclusionary zoning requires real estate developers to give the county a certain percentage of the lots they develop or pay a fee in lieu of the “gift”. In our county, developers can either include low-income units as part of their development or build low-income housing in a different location as a condition of approval for their main development. This fee makes it prohibitively expensive to build market-rate housing in many cases. For the Lover’s Lane development in Ukiah, the inclusionary fee demanded by the county is $1.7 million, which makes any hope of a profit on the project pretty slim. If developers cannot make a profit, they will not build here. Would you go to work every day if your employer didn’t pay you? I didn’t think so.

In the meetings I attended, our county supervisors were getting bullied to make poor economic decisions. A lawyer associated with Legal Aid said the county could expect to be sued if the county removed the inclusionary housing ordinance. This is crazy.

If the only housing we build is subsidized for low-income residents, it will change our community. I’m not suggesting we shouldn’t have a mix of housing. We should. But the inclusionary housing ordinance is preventing market-rate housing from being built—housing for our fire victims, housing for incoming professionals who will enrich our community.

We have an opportunity to change course. We need to revoke the inclusionary housing ordinance and make it easier to build new subdivisions in the Ukiah Valley. If profit margins are thin in Ukiah and thick elsewhere, developers will go elsewhere. That’s just plain common sense. If you could do the same job in two equally great places and one place paid twice as much, where would you go?

If this matters to you, I strongly encourage you to call your county supervisor. Let him or her know you value market-rate housing and you hope they will stand up to the bullies.

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.

Spring Cleaning

Spring Cleaning and Home Maintenance

As flowers bloom and the weather warms, it’s time to think about spring cleaning and annual home maintenance. Whether you gather family members for a long work weekend or chip away a little at a time, maintaining your property protects your investment.

One of the smartest things you can do each spring is to plan ahead. For example, if you use wood to heat your home, you can have it delivered now, so by fall it is both stacked and seasoned when temperatures begin to drop. You can also test your air conditioner before the full heat of summer is upon us. If your air conditioner doesn’t work in April, I’m confident you’ll get a speedier response from the repairman than you will during the first blazing hot day when everyone is testing their air conditioners.

Next, take a walk around your property. Make sure you have 100 feet of defensible space; note any brush that needs clearing and identify any tree limbs that need removing, growing over your roof or fences. Remember, putting off tree trimming only makes matters worse—those limbs won’t get any smaller as time goes by.

Do a visual inspection of your roof to make sure you don’t have missing or worn shingles or other damage, especially around roof penetrations like vents or skylights.

If you have a propane tank and you want to check for leaks, you can mix up water with a little dish soap in a spray bottle. Spray the mixture on gas line couplings. If you see bubbles emerge, call the gas company immediately.

As you walk around, check concrete walkways and patios for cracks, especially if it makes for uneven footing. Smooth concrete can prevent everything from stubbed toes to broken hips. Rather than simply grinding down the rough spot, see if you can take care of the root of the problem, literally or figuratively. I’m not sure why people always plant trees with shallow roots wherever there’s concrete, but they seem to.

To prevent shallow roots from ruining concrete, I just learned you can line the hole where you plant the shallow-root tree with special mesh to force roots to go a little deeper. Obviously, this is not useful if you have a 10-foot maple that’s already well established. But if you’re about to plant something, it could be helpful.

Once your walkways are smooth, take a look at the exterior paneling of your house. Is the paint in good condition? If not, don’t wait. Like those limbs hanging over your roof, peeling paint is a problem that only gets worse with time.

If you’re planning outdoor work (like roof repairs or exterior painting), don’t get lulled into a false sense of security if it hasn’t rained for a few weeks. As my mother and mothers everywhere have said since time immemorial, “April showers bring May flowers.” Be sure your project can be buttoned up to prevent water damage if need be.

Once you’ve taken care of outdoor maintenance, head inside and check the washing machine connection, continue to replace heating/air conditioning filters monthly, and consider getting your carpets cleaned.

Tim Cabral of Cabral Carpet Care recommends cleaning carpets once a year, unless you have a lot of traffic (kids, dogs, etc.); then every six months is a good idea. Tim said you can just get the high traffic paths cleaned, if need be.

Vacuum cleaners are great for top-level dust, but they cannot pull all the debris out of the bottom of the carpet fibers, debris from doggy paws, shoes, and those moments when you’re watching TV and your team scores and the salsa goes flying onto the carpet. So, while vacuuming is good, getting your carpet cleaned professionally will get rid of that deep dirt and revitalize the carpet.

If you have questions about getting into real estate, 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.

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A Science-based Approach to Water, Wildlife and Our Economy

I recently attended a presentation by Janet Pauli, Ph.D., the preeminent expert on our local water supply. She made a compelling argument about why all of us should understand a little more about where our water comes from, so we can avoid running out in the future.

This is a complex issue to tackle in a column, but I want to share some key points and encourage folks to visit www.pottervalleywater.org to learn more.

Brief History

We have two main rivers in Mendocino County: the Eel and the Russian. In 1908, a mile-long, underground tunnel was built to connect them and divert less than 2 percent of the Eel River through what was named the Potter Valley Project.

We also have two dams in Mendocino County: Scott Dam, which was built in 1922 to form Lake Pillsbury, and Coyote Dam, which built in 1959 to form Lake Mendocino. Scott Dam was created primarily to provide hydroelectric power and Coyote Dam was created for flood control. Today, the value of the water supply they provide far outweighs the value of their original purposes.

When Coyote Dam was originally built, it was supposed to be a three-phase project: 1. Build the Coyote Dam north of Ukiah, 2. Build the Warm Springs Dam in Sonoma County, and 3. Increase the height of Coyote Dam by 36 vertical feet. Because this was the original plan, easements were put in place, the bridge on Highway 20 was elevated, and the dam was engineered to support the new height. However, the third and final phase was never implemented because the existing height of the dam protected the Ukiah Valley in subsequent floods.

Current Issues

Our biggest worries now are not related to floods or power, but to water supply and how to balance environmental concerns with economic ones. During recent droughts, Lake Mendocino hit dangerously low levels.

When the dams were originally built, people focused on economic progress and largely ignored the environmental impacts of their actions. Today, some people argue for removing all dams and allowing rivers to take their natural courses in hopes of returning to a bygone era, but this is impractical and unrealistic. We need to find a balance between protecting wildlife and addressing the needs of people who live in Mendocino County.

There is no turning back time. Removing existing dams doesn’t undo the decades of evolution caused by logging, commercial and recreational fishing, past droughts and floods, cannabis cultivation and the changing ocean currents of the Northern Pacific Ocean.

Removing existing dams would, however, require hundreds of thousands of people to find a new water source for drinking water, fire suppression, recreation, agriculture, and many commercial and industrial uses. A recent study by Dr. Robert Eyler calculated that $740 million of Mendocino County’s business revenue is directly dependent on irrigation water diverted from the Eel River through the Potter Valley Project and stored in Lake Mendocino. And the flow of water doesn’t stop at the county line. In the Alexander Valley where they use 11,000 acre-feet of water from the Russian River, the economic benefits have been estimated at $145 million.

More than 600,000 people in Mendocino, Sonoma and Marin Counties depend on water from the Potter Valley Project’s Eel River diversion for their domestic and agricultural water supplies. This water also helps meet the instream flow requirements necessary for protection of the ecology and recreational value of the Russian River.

The lakes created by Scott Dam and Coyote Dam provide a haven for bald eagles, migrating waterfowl, elk, deer and many other species. Also, although the dams hurt the salmon migration when they were built; since then, the fish hatchery, fish ladders and strategic releases of water have helped migrating fish.

To protect the people and wildlife in our area against future droughts, we need to raise Coyote Dam.

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.

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Buying a Home After the Fires 

Wildfires and subsequent winter rains have affected thousands of Northern California homes since October. If you are considering purchasing a property affected by the fires, be sure you know how to protect yourself from unanticipated costs related to the clean-up or rebuilding process.

Recently, the North Bay Association of Realtors released a fire disclosure form to assist Realtors in their work with clients, and it brought up some interesting issues.

In a regular real estate transaction, it is common for buyers to sign a purchase agreement with certain contingencies. That is to say, buyers typically agree to purchase a property once various inspections confirm that the property is in good condition and the title is clear. Inspections often include pest and fungus, well or septic, roof, HVAC, and others.

In a real estate transaction involving a property affected by the fires, a whole new set of contingencies should be considered. Soil and water may be contaminated from the fire debris or clean-up efforts and the earth under the building site may no longer be stable (especially if the trees that used to secure things are no longer standing). Even if the property in question was not burned, if it is in the same neighborhood as those that did, it may be contaminated or affected by other issues.

Buyers should hire an environmental consultant and/or engineer to test the soil and water—both drinking water and water for agricultural use—and to determine whether the land is safe to rebuild on. They should also review the pamphlet on environmental hazards published by the state of California, which goes into detail about the dangers of hazardous waste.

Hazardous waste is anything left over from a manufacturing process, chemical laboratory, or a commercial product that is dangerous and could hurt people, animals, or the environment. Sellers are required to disclose whether they are aware of any environmental hazards such as asbestos, formaldehyde, radon, lead-based paint, fuel or chemical storage tanks, or contaminated soil or water on their property. The thing is, they obligated only tell you what they know (or should reasonably know).

Even if the property has been cleaned and appears ready for a new home to be built, buyers should check with a lawyer to make sure they can use the seller’s architectural plans and that there are no debris removal liens.

Debris removal liens can come in the form of a mechanic’s lien. If work is done on a property without a lien-free endorsement and a contractor or subcontractor isn’t paid, that contractor can file a mechanic’s lien. When a buyer purchases the property without confirming that the title is clean (has no liens), the buyer can end up being responsible for paying those unpaid contractors.

Once the buyer confirms the property is safe and lien-free, he or she should check with an insurance agent to see if homeowner’s insurance is available in the area. Insurance companies are becoming more restrictive about which properties they’ll insure. The replacement cost of October’s wildfires in Mendocino, Lake, Napa, and Sonoma Counties was upwards of $9 billion, so it’s understandable that insurance companies are feeling a little nervous about fire-prone areas.

Finally, because the fires made our housing shortage worse, buyers should get pre-approved for a loan before they start shopping for a new home. When sellers have to choose among multiple offers, they often choose the safe bet—the buyer with pre-approval. To learn more about getting pre-approved (first choice) or pre-qualified (second choice) for a loan, visit my blog on the subject at richardselzer.com/2013/04/15/qualifying-for-a-loan.

If you have questions about getting into real estate, 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.

 

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Smart Homes Keep You Connected 24/7 – Part II

 

Last week, I shared some of the smart-home innovations made possible by modern technology, things like thermostats you can adjust with your cell phone regardless of your location, and smart doors and doorbells that allow you to unlock your door automatically or respond to a visitor at your door without being home.

These are just a few of the conveniences modern families can enjoy. Here are more you may not have heard about yet.

AMAZON DASH BUTTON

Don’t you hate it when you get home from a long day at work and realize you forgot to pick up cat food (again)? Amazon.com knows we’re busy, so they’ve made it incredibly easy to purchase household items with their Dash buttons. At home, I have a Dash button affixed to the wall in the garage directly above the place where I store my cat food. When we’re running low, I hit the button and it flashes green. Two days later a 25lb bag of cat food is delivered to my front door.

It’s really quite brilliant. You simply affix an Amazon Dash button on the wall or on the inside of a cabinet door (near the place your store the item in question), and when you run low on whatever it is—pet food, dishwasher detergent, soap, toilet paper, or any other essentials—you simply press the button and your wi-fi sends a signal to Amazon.com to put your item in the mail to you. Each Dash Button costs about $5, but since Amazon discounts your first order by that amount, the button is, in essence, free.

SMART REFRIGERATOR

At this January’s Consumer Electronics Show in Las Vegas, LG featured a new refrigerator that did everything except make dinner. You can look into the fridge without opening the doors, create notes and reminders, scroll through recipes, peer into your fridge remotely, and monitor the freshness of your groceries. Right now you have to manually enter expiration dates to get alerts as those dates approach. Eventually, you’ll be able to scan those expiration dates, removing the need for manual entry. Gone are the days when you have to call home to find out whether you have enough butter.

ROBOT VACUUMS

Probably one of my favorite inventions is the Roomba, in our house we call it “Robby the Robot.” Granted, this is not a smart-home innovation as far as its connection to the internet, but it sure is convenient. Our version just vacuums hard surfaces, but the newest robot vacuums can also mop the kitchen floor and clean windows.

SMART GLASS

Smart glass is another cool invention. With an electrical charge, clear glass becomes opaque. I can imagine installing this in the bathroom. When someone’s in the shower or on the commode, you make the glass opaque; otherwise, you allow the clear glass to make the bathroom feel more expansive.

SMART TELEVISION

Voice-activated television is sure handy. You can surf the net, watch YouTube, enjoy a show on Netflix or Amazon Prime, and you never have to get off the couch. I can say, “Hey Google, I’d like to watch Scandal.” Google responds, “Would you like it on YouTube or Netflix?” If I choose Netflix, Google remembers and sets it up that way next time, too.

You do have to be a little careful because advertisers have discovered that if they include “Hey Google” or “Alexa” in their commercials, they can cause your smart-gadgets to order their product for you.

ATOMIC CLOCKS

If all this smart gadgetry seems a little too much, you may consider starting with an atomic clock. These battery-powered clocks connect to an atomic clock so they are always on the right time. When Daylight Savings begins or ends, the clocks automatically make the adjustment. Maybe that’s enough convenience for now.

If you have questions about getting into real estate, 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.

 

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Smart Homes Keep You Connected 24/7 – Part I

In 1898, the commissioner of the U.S. Patent Office, Charles Holland Duell, reportedly said, “Everything that can be invented has been invented.” Wouldn’t he be surprised if he attended the Consumer Electronics Show in Las Vegas each January to see all the latest tech creations?

For decades, technology has developed at an astonishing pace, changing how we interact with each other and the world around us. One area of development has been “smart home” technology—the creation of devices and software that allow us to have remote access to our homes and keep us more comfortable when we’re at home.

In the 1980s, we thought it was high tech to use timers for lights, thermostats and coffee pots. It was revolutionary when we began recording TV programs on VCRs, so we could watch our favorite shows whenever we felt like it and fast-forward past commercials.

These days, we have computers that can teach themselves how to make us more comfortable. For my birthday, my children got me the new Nest thermostat, which not only allows me to program temperature settings, but also to access the system with my cell phone. When I was feeling under the weather recently, I used my phone to tell Nest to increase the temperature in my house because I planned to go home early. By the time I got home, it was nice and warm.

Nest also predicts my needs. I’d been turning down the heat when I headed off to bed about the same time each night. Then I went to bed early a few nights in a row, and the Nest system noticed the new behavior and turned the heat down at my new bedtime automatically.

If I’m at home and I don’t happen to have my cell phone in my hand, I can simply say, “Hey, Google. Please turn up the temperature to 70 degrees.” And just like that, my house starts warming up.

During the holidays, we had a Christmas tree with lights that plugged into a wall outlet behind the tree. Turning the lights on and off required gymnast-like dexterity and flexibility, neither of which I possess. So, we made that outlet a smart plug, and all I had to do to turn the lights on was to say, “Hey, Google. Turn the Christmas tree lights on.” Voila, beautiful lights.

Another bit of smart-home convenience comes in the form of the smart door. How many times have you approached your locked front door with arms full of groceries, fumbled for your keys, dropped your keys, then as you attempted to pick up your keys, dropped your groceries (usually the bag with the eggs)? With a smart door, this never has to happen.

You can convert your old front door into a smart door with a new lock and knob that detects your phone and automatically unlocks the door. You can also program the door to open for your cleaning lady’s digital key on Tuesdays between 1-3 PM when she’s scheduled to arrive, or provide a one-time entry key to the dishwasher repairman so he can stop the water from leaking all over your kitchen floor.

In addition to convenience, smart homes can increase safety. The smart doorbell allows you to see who is at your door and to talk to them. This is not a huge improvement over the peephole and yelling through the door, until you realize that you can respond to the person at the door from your lounge chair in Cancun. The person at the door has no idea you’re not home.

If someone does decide to break into your home, motion sensors trigger the auto-record feature of your video surveillance cameras, allowing police to get a good look at the intruder.

These are just a few of the smart-home innovations available. Who knows what’s next?

If you have questions about getting into real estate, 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.

FSBO

For Sale by Owner Leads to Lower Sales Price

It’s no secret that home sellers want to sell their property for the highest possible price, while homebuyers want to buy for the lowest possible price. One of the ways people try to save money is to avoid paying the commission typically charged by Realtors by choosing to sell the property themselves. This is called a For Sale By Owner (FSBO). Unfortunately for those sellers, studies show that residential sales that involve Realtors often sell for higher prices than those sold by owners directly.

Here’s why: Realtors know what they’re doing. You wouldn’t hop on an operating room table and say, “Hand me that scalpel. I got this.” While I admit that real estate isn’t a life or death situation, real estate law is complex and one wrong move can haunt a seller for years.

Most buyers seem to understand this. They find a Realtor to represent them, to save them time by identifying all the properties that match their criteria, to make sure appropriate disclosures are completed, and to negotiate on their behalf. The only reason a buyer would look at a FSBO is to save money. And while a buyer’s Realtor will certainly be fair and honest with the seller, that Realtor’s job is to look out for their client’s (the buyer’s) interests.

As a FSBO seller, you must do all the work you’d pay a Realtor to do. You must figure out a sales price that attracts buyers but doesn’t leave too much on the table. You must look at your house with an objective eye and make only those improvements that are likely to influence a sale. Once the house is ready, you must figure out how much to spend on what type of advertising. You must go to the online housing search engines that accept FSBOs and enter your information there. You must try to figure out who would like to buy a house like yours and how to entice them to look at your house.

You must also be available to show the property to any and all comers (without the benefit of a Realtor’s screening). An unscreened prospect may or may not be a looky-loo who is just curious and has time to kill, or a sketchy person casing your home to rob it.

And there are some things you simply cannot do without a real estate license, like uploading your property information to the Multiple Listing Service, which feeds third-party online databases used by real estate offices across the country.

Speaking of third party, one of the most important services Realtors provide is assistance in negotiations. As a FSBO seller, you need to follow up with potential buyers to see if they are interested, thereby tipping your hand as to how eager you are to sell. Realtors who follow up are simply doing their job.

Let’s say everything went your way: you found a buyer and are ready to sit down and sign a contract. Here’s where things can really get challenging. Do you know which inspections to get and who should pay for them? Do you know how to write contingencies into the sales agreement? When I began in real estate more than 40 years ago, a transaction file had about 30 pages, 28 of which came from the escrow company. Now, the Mendocino County Disclosure form alone is 11 pages long. And the ramifications of not making the required disclosures, whether standard forms or disclosures to address a specific issue, can be financially devastating.

Not surprisingly, many FSBO sellers eventually decide to list with a Realtor. Sadly, by that time, the listing is old news rather than an exciting new prospect, so it can be harder to sell. However, a good Realtor can often highlight the property’s best features and find buyers who are just the right fit.

If you have questions about getting into real estate, 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.

 

MCCC

Mendocino County Construction Corps

As long as there have been schools, there have been students who knew sitting in a classroom all day wasn’t for them. This feeling doesn’t necessarily go away when it comes to the workplace; not everyone is meant to sit behind a desk. But because kids often hear that they have to go to college to amount to anything, they don’t consider other avenues.

Well, I’m here to present another avenue: getting into the trades. In Mendocino County, many tradespeople are approaching retirement age and they cannot find enough people to replace them. I just attended a meeting of the Mendocino County Construction Corps (MCCC) program, a pilot program that encourages high school seniors to pursue a career in construction, and I enthusiastically support it.

MCCC is made up of tradespeople and business people, educators, and community benefit organizations. It’s a great example of community members recognizing a need and working together to address it.

As a real estate broker, my business depends on having enough housing for the people who live in our valley. Right now, we have a shortage—one that just got worse because of last October’s fires. I love the idea of local people supporting themselves financially by becoming carpenters, plumbers, electricians and general contractors. I also love the idea of having enough plumbers in town so if my washing machine breaks and water is flowing all over my house, there’s someone I can call who can help me immediately.

In recent years, there’s been more school funding for what they call “career technical education” (CTE), programs that help students get the skills they need to pursue careers that do not necessarily include going to a four-year university. CTE programs remind students that there are plenty of people who make a good living fixing cars, growing food, and building houses, among other pursuits.

While there is some money for CTE programs, it’s limited, so when Ukiah Unified School District CTE Coordinator Eric Crawford was inspired to start the MCCC, he knew he’d have to figure out how to fund it with grants and donations. He pulled together a steering committee and since then, he has been able to raise more than 75 percent of the funding needed to provide 14 weeks of education for the 21 students who were chosen through a rigorous selection process.

The program includes weekly evening classes and four all-day Saturday classes on subjects like power tools, reading blueprints, construction safety, first aid/CPR, framing, roofing, solar, plumbing, concrete, electrical, construction math and more. Students also learn to drive a forklift and other heavy machinery.

Once they complete the coursework, which is mostly hands-on practice, the students participate in a two-week boot camp where they help build houses for Rural Communities Housing Development Corporation and the Hope Crisis Response Network. At the end of all this, they’ll receive a $750 stipend for their work and a tool belt with tools to get them started.

Local tradespeople who believe in the importance of supporting our community and who like the idea of creating a pool of well-trained people have volunteered to teach the classes. John Boies of Granite Construction said Granite encourages employees to give back to the community, which made it easy for those who like to teach to sign up.

In addition to teaching, several local businesses signed up to be major donors (donating $1,000 or more) include Christensen Construction, Friedman’s Home Improvement, the General Contractors Association, Granite Construction, Guillon Inc. Construction, John McCowen, the Mendocino County Office of Education, Mendo Mill, Menton Builders, Jim and Arlene Moorehead, Realty World Selzer Realty, and the Ted and Wilma Westman Fund of the Community Foundation of Mendocino County.

After the boot camp, local contractors will have the opportunity to hire MCCC graduates. If you’re interested in learning more about this program, visit https://sites.google.com/uusd.net/mcccwebsite.

If you have questions about getting into real estate, 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.