arbitration

Arbitration

When you buy or sell a house, it can be very exciting, whether you’re becoming a homeowner for the first time, upgrading to a new neighborhood, or selling a home to start an adventure elsewhere. Sometimes, however, things do not go as planned.

There’s a paragraph in the standard purchase agreement from the California Association of Realtors that allows a buyer to include an arbitration agreement as part of the offer. The agreement basically states that if the buyer and seller have a disagreement that will likely amount to more than a small-claims-court-sized settlement, then both parties agree to binding arbitration.

Arbitration is an alternative to taking someone to court. It’s a dispute resolution process whereby both parties agree to an arbitrator who acts like a judge, listening to arguments from both sides, reviewing the evidence, and “awarding” one side or the other. Usually, arbitrators are attorneys or retired judges, but sometimes a real estate expert can fill the role. The upsides of arbitration are that it is typically cheaper and faster than litigation. The downside is that it is often binding, whether the arbitrator makes a bad decision or not. If there’s mistake is in your favor, that’s great; but if you’re on the losing end, you’re stuck with it.

While this may give you pause, arbitration is often a faster, less expensive alternative to litigation. Here’s how it works.

A typical arbitration starts with selecting an arbitrator. Both sides must agree to the arbitrator, preventing one side from insisting that their brother-in-law, who happens to be a lawyer, preside over the case, for example. Since most people don’t go into arbitration too often, they contact a private arbitration service to fine a qualified person.

Once the arbitrator is selected, the buyer and seller submit formal written statements before the hearing, outlining their positions on the dispute. Both sides then prepare for the hearing, which to the untrained eye seems exactly like a court trial. Both parties submit evidence, call and cross-examine witnesses, and make arguments to the arbitrator. They can also depose witnesses and gather written evidence and documents.

After the arbitrator considers all the evidence and testimony, they announce their decision (usually several days after the hearing ends). This whole process can take months, which may sound like a long time until you realize that if it were litigated in the courts, the same case could take years.

The types of disputes requiring arbitration include things like breach of contract, misrepresentation and/or fraud. The arbitration agreement most often used in Mendocino County excludes certain matters from arbitration, including those within the jurisdiction of small claims, probate or bankruptcy court.

Be aware that if a dispute includes the actions of a third party (someone other than the buyer and seller), arbitration usually isn’t worthwhile because the third party isn’t bound by the arbitrator’s decision. For example, if a dispute involves an inspector, insurer, or appraiser, unless they agree to arbitration, they can simply refuse to comply with the arbitrator’s findings.

Even if the buyer and seller did not agree to arbitration in their original purchase agreement, they can still opt to go that route in the event of a dispute. The bottom line is this: there are pros and cons to arbitration, and the best way to know if it is a good choice for you is to ask your attorney. Talk to your attorney for advice; advice WILL change based on the facts of the case.

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.

HeatGoesOut

What To Do When Your Heater Goes Out Midwinter

You may have noticed that heaters, and electricity in general, have a way of going out when Mother Nature brings her coldest winter storm of the season. While we don’t face the same freezing extremes as people in Wisconsin or Minnesota, it’s still a bummer to be cold. If you have a low tolerance for whining and you live with teenagers, a broken heater in winter can be truly unbearable.

So how can you warm up with a broken heater? After you schedule a service call, the first thing to do is to locate any places in your home where outside air can get in. Cracked windows are common culprits, as are poorly caulked or weather-stripped doors. Ideally, you’ll want to replace broken or cracked windows, but since that can get expensive and takes time, re-caulking and/or putting packing tape over cracks and holes will help keep warm air in and cold air (and moisture) out.

Keep curtains and other window coverings closed until sunlight hits the windows directly. During the day, concentrate heat in the main living quarters by closing doors to unused rooms such as bedrooms and bathrooms. To make this even more useful, you can get under-door draft stoppers at CVS. These sleeves fit under the door with Styrofoam cylinders on either side, effectively preventing drafts under the door.

Once you’ve done all you can to prevent warm air from escaping, you can do a few things to increase the indoor temperature. If your heater is broken, but you have electricity, you have more options, of course. You can bring in space heaters and allow the heat from the stove and/or oven to warm things up. Incandescent light bulbs, while not a great source of heat, do produce some. (You’ll know this if you’ve ever burned your fingers trying to change a bulb after it’s been on for a while.)

If your electricity is out, options are more limited. If you have a fireplace or wood-burning stove, you’re in great shape. If not, candles help a little, as do kerosene or propane lamps from your old camping days. Be careful with these, especially if you have small children in the home. Never leave them unattended. If you use a kerosene lamp or heater, be sure to crack a window to re-oxygenate the room. If you have ceiling fans, you can reverse their direction (or install the blades upside down) to push warm air down toward you. You’ll also feel warmer if you put rugs over hardwood or tile floors.

Although healthy adults can throw on warm pants and a ski jacket and do just fine without a functioning heater, be aware that infants and old folks have a harder time regulating their temperature. Be sure to keep them extra bundled.

While Murphy’s Law gets all of us eventually, you can sometimes prevent your heater from going out at the most inopportune time with some preventive maintenance. Call the furnace inspector in fall when you’re the only one calling, rather than in December when everyone in Ukiah wants an inspection. As a side note: be sure to ask for a carbon monoxide inspection at the same time. We recently had a property management client call to let us know their carbon monoxide alarm went off. When we called to have the heater inspected, the company did not check for carbon monoxide, only to be sure the heater appeared to be heating. I was livid.

Preparing for contingencies is rarely the most pressing thing on anyone’s mind, but you’ll thank yourself later if you find yourself in a pinch. For tips on winterizing your home, visit richardselzer.com/2017/10/23/winterizing-your-home. For more on emergency preparedness, visit richardselzer.com/2017/10/30/emergency-preparedness-mendocino-county.

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.

inclusionaryzoning

Inclusionary Zoning Discourages Development

If we thought we had a housing shortage before the fires, we really have one now. While the developers of the Vineyard Crossing housing development on Lover’s Lane in Ukiah are determined to work with the county to make the development a success, they and developers like them face significant hurdles as they try to remedy our local housing shortage. Between inclusionary zoning, proposed school impact and fire impact fees, and new building codes, it is more challenging than ever to develop new housing in our valley.

Inclusionary zoning is particularly frustrating. It requires real estate developers to give the county a certain percentage of the lots they develop or to pay a fee in lieu of the “gift”. In the city of Fort Bragg, I believe the required gift is 20 percent of the newly developed lots in subdivisions of 5 or more lots. In the 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.

Obviously, when developers must pay a fee, give a percentage of their lots to the local government, or make similar concessions, the cost of the housing they’re building will go up to cover their costs. If we want to solve our housing shortage, maybe we could start by rewriting state regulations which tie the hands of both the local governments as well as developers with unnecessary requirements.

I know local government decision makers often have little choice when it comes to state mandates. If the state requires a certain percentage of housing to be “low-income” or insists that new buildings include fire sprinklers, we must comply. Be aware, that sprinklers would have made absolutely zero difference as to which house survived the Redwood Valley fire. In fact, sprinklers would have hindered fire-fighting efforts by draining the water supply, but I digress.

Can you imagine any business that would survive if they had to give 20 percent of gross sales to the government (not profits, but sales before the cost of goods is considered)? If you add inclusionary zoning fees (potentially worth hundreds of thousands of dollars) to all the other building expenses ($12,000 sewer hookup fee, $3,000-$5,000 water hookup fee, $3.48 per square foot proposed school impact fee, fire impact fee and building permits)—all before a shovel hits the ground—you can see why only the brave or crazy get into this business.

I have attended some public meetings where people implied it is the greed of developers causing our local housing shortage. I’m not suggesting developers are altruistic. Their goal is to maximize profits from real estate projects of all kinds. However, their greed isn’t causing our housing shortage. If profit margins are thin in Ukiah and thick elsewhere, developers will go elsewhere.

While I’m tempted to place full responsibility for the housing shortage at the government’s doorstep, that’s not fair, either. Market conditions definitely contribute to the problem: home prices and the cost of rent still remain somewhat low here compared to construction costs. So, the solution to the housing shortage will come from one of two places. Either real estate development and construction costs will have to go down or housing and rent prices will have to rise. Until this happens, our shortage will continue.

One way construction costs could go down is by reducing the red tape. Many building codes start with safety in mind, but somewhere along the way, common sense gets thrown out the window. If we want to find a remedy to our housing shortage, maybe we should take a look at the codes on the books and see if we can bring a little common sense back into the process.

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.

career_opportunities

Looking for a Great Career? Try Real Estate.

Every year at this time, people contemplate new beginnings. When it comes to our happiness, jobs can have a big impact, so if you’re in a job that makes you unhappy for whatever reason, this might be a great time to consider a change to real estate.

The housing market in Mendocino County and throughout California continues to roll along at an impressive pace. Home values have been rising for the better part of a decade, and interest rates remain low. Add to that the fact that many people who are currently in the industry will be retiring in the next several years, and you’re looking at a golden opportunity.

According to the National Association of Realtors, since 2008 most people remain in the same home for an average of almost nine years. With a median age of real estate agents in the U.S. being 53, it’s clear that many of the agents who helped clients buy or sell real estate last year will not be working when those clients are ready to buy or sell again.

Even if someone’s agent is still in the business nine years later, a recent study showed that people often don’t remember who helped them buy or sell their last house. This should be a reminder to current Realtors to stay in touch with former clients, and an encouraging fact for those who want to get into real estate–there’s plenty of business to be had.

Years ago, my colleague Warren Liberty (father of Factory Pipes owner Ross Liberty) said, “A job in sales can be the easiest low paying job or the hardest high paying job.” I’ve been doing this for more than 40 years and I cannot imagine doing anything else. Although it absolutely requires hard work and long hours, it also affords me the flexibility to schedule vacations when I like, attend my children’s sporting events, and be in control of my own financial future.

Most licensed agents can find a job within a day or two in almost any city in the nation. Then it’s up to them to stay in business. Although Realtors affiliate with a brokerage, they are still their own boss.

If this career path is of interest to you, talk to some people. Talk to Nash Gonzales, the real estate instructor at Mendocino College. Talk to a real estate broker or two here in Ukiah. Each one will give you a slightly different perspective on the business, but I guarantee all of them will say they can’t think of a more satisfying career.

As I mentioned, this is a great time to get into real estate. During the next five years or so, you can learn from people who’ve been selling real estate for years (some of them decades). Once they retire, not only will you benefit from their years of institutional knowledge, they can provide you with a book of business in return for referral fees. In most cases, this will be well worth the investment.

As you get further into the business, you may choose to specialize in a certain area: residential, commercial, industrial, ranches/land, agricultural properties, or new development. Each area has laws and practices associated with it, from zoning to water rights. If you’re selling ranches, plan on owning a four-wheel drive vehicle and a pair of sturdy boots. If you want to sell agricultural property in Mendocino County, educate yourself on how soil and terrain affect different types of grapes. If you want to work with a developer to subdivide land and build spec houses to sell, you better be good at details and willing to work with bureaucracy at all levels. Whatever you choose, I welcome you to the wonderful world of real estate.

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.

 

Decor

Things Realtors Wish Sellers Knew – Part II

Last week, I mentioned several things Realtors would like their clients who are selling property to know, including the benefits of choosing simple décor, not keeping secrets, only doing improvements that will provide a return on their investment, and opting to fix big-ticket items rather than reducing the property’s sale price.

Here are a few other items Realtors would love sellers to know.

  1. A Quick Sale Doesn’t Mean the Property Was Underpriced
    Sometimes, a property will sell within 24 hours of going on the market. Sellers feel elated and deflated at the same time. They are thrilled to sell their property so quickly, but disappointed that they may have underpriced it. The fact is, there are a limited number of active buyers at any given time. Each buyer has a unique set of needs, wants, and resources, and it may just be that your property—at market value—was exactly what that buyer needed.
  2. Be Patient
    If a house doesn’t sell in a week, that’s normal! The average time on the market in Ukiah right now is about 90 days. If your house is larger than average or comes with extra land, it may take a bit longer because there are fewer who can afford it. The point is, if your house is on the market, try to be patient.
  3. Help Me Help You
    Selling property is not a spectator sport. For a Realtor to be successful, sellers must keep the property clean and tidy, and they must make the property available to show. If the seller has a dog, Fido should be at the dog sitter’s during open houses and showings. When the Realtor has questions, sellers need to respond with answers in a timely manner. Selling a property is inconvenient, especially for those who must live in the property while it is for sale. It’s no fun to have strangers looking through your closets and opening your pantry, but for those who want to sell their house, there’s just no way around it.
  4. Your Realtor’s Job is Not to Sell the House—It is to See That the House Sells
    Sellers sometimes think their Realtor hasn’t met expectations when some other Realtor finds the buyer. This always seems odd to me, until I realize that many sellers do not understand all the promotional work Realtors do behind the scenes. The reason other Realtors know about the property is because the sellers’ Realtor advertised the property in newspapers, on the radio, in MLS, online, in social media, and with a big shout out during the local MLS meeting. This is just part of what Realtors do for their clients, of course. They also assist with pricing, negotiation, legal questions, disclosures, inspections, contracts, and other issues. If you list your house with a Realtor and it sells within a few months, chances are your Realtor did their job, even if it wasn’t their buyers who signed on the dotted line.
  5. Don’t Shoot the Messenger
    When a Realtor brings a low-ball offer, sellers can get angry with their Realtor. Be aware that Realtors are required by law to present all offers. Sellers can also get testy when Realtors suggest it’s time for a price reduction. Remember, Realtors do not control the market—they respond to it. It is their job to interpret the available data and advise sellers on pricing. It is not to magically enable sellers to sell for more than the property is worth.

Because most people do not spend their professional lives buying and selling houses, they do not always know what to expect from their Realtor, nor do they understand how their actions can have an enormous impact on the success or failure of a real estate transaction.

If you have questions about real estate or property management, contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re 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 in Ukiah for more than 40 years.

 

Post Fire

Real Estate Issues After the 2017 Fires

In the wake of recent wildfires, I thought it would be helpful to answer some questions that may crop up about real estate. But first, I must remind you that I’m a real estate expert, not a lawyer. If you find yourself in any of the situations below, talk to your lawyer. I write this column to shine a light on interesting topics related to real estate, not to give legal advice.

With that disclaimer firmly in place, let’s proceed.

  1. Who bears the risk of loss in a real estate transaction after a natural disaster?

Imagine you just signed a purchase agreement to buy your dream home, and while the property is in escrow, a wildfire burns that home to the ground. Who bears the risk of loss, you or the seller? Assuming you had nothing to do with starting the fire, the seller bears responsibility for the property until title is transferred to you or until you, as the buyer, take possession (unless the purchase agreement specifies otherwise).

Most of the time, this is a fairly straightforward issue, but what if there’s a rent-to-own situation? If you move in before escrow closes, is that considered taking possession? Without a well-written rental agreement that outlines who has liability before the transfer of title, this can become a murky legal conundrum. This, my friends, is why we have a justice system.

  1. May a buyer get out of a purchase contract if the fire caused major damage?

If the property sustains major damage from the wildfire (or other natural disaster), the buyer can cancel the purchase agreement and get back any money paid toward the purchase price. Sadly, the buyer cannot recoup the cost of any inspections completed before the fire. The inspectors did their job and should be paid for it. The fact that the resulting reports are now useless is immaterial.

The gray area in this question has to do with the definition of “major” damage. That can be a question for arbitration or litigation.

  1. May a buyer get out of a purchase contract if the fire only caused minor damage?

Typically, no. The California Uniform Vendor and Purchaser Risk Act suggests that the seller may enforce the purchase agreement if the damage is not material, so long as the seller repairs the damage. In Mendocino County, we use the California Realtor Association contract, and it requires properties to be maintained in the condition they were in when the purchase agreement was signed. As long as the seller can restore the property to that condition, the contract can remain intact.

  1. With regard to minor damage, does the timing of the fire matter?

Yes. When a purchase agreement is signed, it is customary to include contingencies. The buyer often includes contract language that says, in essence, I’ll buy this property as long as the inspections don’t identify any unforeseen problems. If these contingencies are still in place when the fire hits, the buyer can back out of an escrow, citing the minor damage as an unforeseen problem.

Remember, any material change that could affect the buyer’s willingness to purchase the property must be disclosed. Any new disclosure can trigger a buyer’s right to void the contract (unless the seller is willing to repair the material change).

  1. Does a seller have to disclose major fire damage that has not been repaired?

Yes. The Standard Transfer Disclosure Statement specifically asks whether the property or any of the structures have sustained major damage from fire, earthquake, floods or landslides. In addition, the Natural Hazard Disclosure Statement asks whether the property is in a high-risk fire zone. So even if the property has not sustained major damage, if it is likely to in the event of a wildfire, that information must be disclosed.

  1. Does a seller have to disclose that a fire occurred close to the property if the property itself wasn’t damaged?

Yes. A wildfire in the vicinity of the property in question can affect the property’s value because the property may not be considered as desirable if it is now in the middle of a fire-ravaged community. The question is how close is close? Again that’s why we have a judicial system.

  1. Does a seller have to disclose major fire damage if it has already been repaired?

Yes. Any major repairs or renovations must be disclosed. Whenever a Realtor in my office asks me whether they should disclose something, the answer is always yes. Real estate law, honesty and ethics require the disclosure of any issue that is not obvious during a casual inspection. Keep in mind, during the escrow process the buyer is as in love with this property as they will ever be. Now is the time to share any imperfections. Don’t wait for buyers to discover problems after escrow closes (when they’re having buyer’s remorse), or two years later when property values have declined and a job transfer causes the buyer to look for someone else to bear the cost of their problem.

If sellers don’t disclose what they know, it can come back to bite them years later.

  1. What are the tax implications of the destruction of property?

Things are going to get a bit technical here, so bear with me. Federal law allows businesses to deduct the full cost of “casualty losses,” while individual taxpayers with residential properties can deduct losses to the extent that they exceed 10 percent of their adjusted gross income for the year of the loss. This is only true if the taxpayer itemizes deductions, and each loss is subjected to a $100 floor. The amount of the casualty loss is equal to the difference in the value of the property immediately before versus immediately after the loss. If you’d like more information, take a look at the following tax codes: 26 USC 165(a), 26 USC 165(c)3 and (h), and 26 USC 165(i).

Of course, I’m quoting the tax code as it stood before the recent tax overhaul. You may want to give your accountant a month or two to catch up and then ask them whether this is still the case.

  1. Can a landlord or tenant terminate a lease or rental agreement if a fire destroys all or parts of the premises?

Yes. In fact, under California Civil Code, the agreement is terminated automatically if the entire property is destroyed. If only part of the property is damaged, the tenant can cancel the lease if the damaged part was the reason the tenant signed the lease in the first place. For example, if a tenant rents a property because it has a mother-in-law unit for his aging mother, and that unit burns while the main house remains intact, the tenant can cancel the lease (provided the tenant made it clear to the landlord that the mother-in-law unit was an essential part of the agreement).

While the landlord cannot collect rent for any time after the lease agreement is terminated, they can still collect unpaid rent from before the fire.

While I have focused on wildfires and natural disasters, most of what’s written here applies to single-structure fires, too. As long as the buyer or seller is not complicit in starting the fire, the information above applies. As a side note, “complicit” doesn’t necessarily mean intentional involvement. If a buyer or seller’s stupidity or poor judgment leads to the property being damaged, they are just as responsible.

One of these days, I’ll write a column on all the crazy things tenants have done, intentionally and accidentally, to damage properties.

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.

 

 

 

Cresting Market

Is the Market Turning?

At the time I’m writing this, it appears the market is cresting. We have had a pretty considerable increase in property values for the past five years. The growth hasn’t been overheated or exorbitant, but is has been steady, representing about a 50 percent increase from the lowest 2008 Recession values.

What does that mean for you? If you want to sell, now is still a good time. Keep in mind that if you sell at a slightly diminished price, you’ll also buy at a slightly diminished price, so it all comes out in the wash. The factor that makes this a great market (for buyers and sellers) is the continued low interest rates. I know I sound like a broken record when I talk about how incredible these interest rates are, but if you compare today’s rates against historical averages, you’ll see today’s rates are a bargain and I don’t think they’re going to last.

I know I’ve been saying rates are going to rise for several years now, but according to my crystal ball, I’m right this time. I can tell you, as a lender, I try to keep my loans to a maturity of five years or less. While I expect an increase in rates, the entire increase will not occur in the span of a few months. So, if you have an opportunity to buy real estate with the intention of holding it for a more than a few years, and you purchase it with long-term, fixed-rate financing, I believe you’ll be happy.

I am not recommending you throw reason out the window and buy whatever is available. I am suggesting that if you find a property you like for a price you can afford and feel good about, the benefits of home ownership and/or real estate investment are worthwhile.

So, as the market shifts from a seller’s market (average time a residential property remains on the market is less than 90 days) to a buyer’s market (average time on the market is more than 90 days), remember buyers and sellers are still interested in making transactions happen. If you’re a seller, it can be tempting to list your house for what it was worth a few months ago, but don’t. Overpricing your house will actually result in a lower sales price most of the time.

If you overprice your house, several things happen. First, buyers who could afford your house if it were priced properly won’t even schedule a walk-through. Buyers who are working with a good Realtor will also avoid your property, because most Realtors can spot an overpriced house a mile away.

Second, as your house sits on the market, people see the listing week after week and may assume there’s something wrong with it. Before buyers make an offer, they often ask, “How long has the house been on the market?” If it’s a new listing, they may assume they have to make a great offer or it will be snatched up by somebody else. If it’s been on the market a long time, they may believe you’re desperate to sell—putting them in the driver’s seat.

Finally, even if you find a buyer willing to pay too much, they may not be able to get financing. If your house appraises for less than the sales price, the bank probably won’t loan the buyer the money they need to complete the transaction.

To combat all these factors, sellers who overprice their houses at the outset end up reducing the price to below market value, reducing their revenue from the sale. So, the moral of the story is, don’t be greedy or you’ll lose out.

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.

 

Business Trends

Ukiah Business Trends

You may have noticed that we finally have some new businesses in town. The old Masonite property north of town, developed by Ross Liberty, has attracted a landscaping supply company, Rhys Vineyards, and a potential hotel, restaurant, and gas station. The landscape business is especially noteworthy because the owner is from Ukiah. Years ago, he got so fed up with local regulations that he moved his business to Cloverdale; now he is coming back. On the other side of town, Costco has broken ground and plans to open its retail store and gas station in the spring. In addition, a new hotel is proposed near the Costco site.

What does all this mean? It means the county’s economic development efforts are starting to pay off. We’re headed in the right direction. Businesses outside Mendocino County are beginning to see us as more receptive to new business.

While the county hasn’t relaxed regulations, there’s been a tremendous change in attitude. County supervisors, CEO Carmel Angelo, Assistant CEO Steve Dunnicliff, Interim Director of Planning and Development Nash Gonzalez and others have bent over backward to make sure no unnecessary impediments or restrictions are placed on new businesses—even in the face of new state regulations.

As consumers, we can expect more choices about where to spend our money, and more choice is almost always a good thing. It generally means broader selection and lower prices. Even if you never shop at Costco, when it opens, you can expect gas prices all over town to drop.

As taxpayers, this uptick in new businesses will provide a broader and more dependable source of funding for city and county governments to pay for much-needed services like roads, a new mental health facility, and the ever-increasing demands for all sorts of other services.

This new source of revenue will be needed in the wake of marijuana legalization, as the property tax base for marijuana-growing property decreases. The economic impact of diminished marijuana dollars will affect local businesses—everything from car dealerships to restaurants.

If my prediction is right, a few years from now, we’ll see less of the underground economy that currently props up our valley, and more of a conventional economy, where restaurants will see less cash and more credit card sales, and car dealers will see more sales paid for with bank loans or checks, as opposed to buyers peeling off $100 bills that smell funny. Our labor market will shift from cash-under-the-table to payroll checks, with all the attendant costs and benefits, whether it be taxes or paid health care.

With this uptick in business activity, there will be more of an opportunity for those of us in the financial and service industries as well. People coming to town to work at Costco or the other businesses I mentioned will need local services, will shop in local stores, and will need to buy or rent housing.

It’s an old expression, but very true: a rising tide raises all ships. Certainly, for those of us in the real estate business, there is opportunity on the horizon. The purchase and sale of commercial buildings and residential properties, as well as an increase in property management, is almost a certainty.

I look forward to the economic growth I see coming our way.

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.

 

Wildfire

Emergency Preparedness Hits Home

I’d like to start by saying how sorry I am for all those who lost their homes and worse in the recent fires. I know we have a long recovery ahead, but I’m confident our community will pull together and rebuild.

Given our recent disaster, I’ve been thinking about how important it is to plan for emergencies. The truth is, because the Redwood Valley fire was so fast and so ferocious, people often had no time to do anything but run. In other emergencies, however, people who have prepared ahead of time often fare better than those who don’t.

Of course, any preparation you can do to prevent a disaster from occurring is best. Those of us lucky enough to have homes still standing should make sure our properties are fire safe. Clear flammable brush at least 100 feet from your home and trim trees at least six feet off the ground. Make sure tree limbs do not hang over your roof and clear debris from your roof. If you have aboveground utilities in your neighborhood, keep an eye on electrical lines that go through trees—make sure there’s plenty of clearance. Locate woodpiles and other fuel sources at least 30 feet from all structures and maintain a 10-foot clearance area around them.

Most fires start small. If you are ready, you may be able to stop a fire from spreading. Be sure you know where the closest fire hydrant is, as well as your garden hoses and outdoor faucets. If you have a well providing at least two gallons per minute, consider filling a 2000-gallon storage tank so it’s ready if you need it.

Sadly, even with all this responsible preparation, your home can still go up in flames. Just ask the families who returned to find ash where their houses used to be.

For insurance purposes, you should create a photo or video log of all your possessions. While tedious, it’ll be time well spent if you need to ask an insurance company to pay a claim.

While disasters come in all shapes and sizes, preparations are similar. You’ll need food, water, and medications for you and your pets. You’ll need some clothes and, depending on the situation, you may need your own shelter for a while. You may also need fuel for your vehicle.

In my house we have backpacks ready to go, because they are easy to carry. In them we have flashlights (with batteries stored in plastic bags, not inside the flashlights where they will corrode). We have matches, a couple water bottles per person, non-perishable snacks, a change of clothes, a toothbrush and toothpaste, a utility knife and/or multi-tool, and a pair of boots or sturdy shoes. We also have our camping gear stored in one place so it would be easy to grab and throw in the car.

If you have time to pack more than just the essentials, consider the irreplaceables: photo albums, family heirlooms and keepsakes, important documents, and if you can, your computer. For more information about disaster preparedness, go to www.ready.gov and www.redcross.org/prepare/disaster. There, you’ll find a wildfire safety toolkit, as well as many other resources.

One of the most important ways to reduce stress during a disaster is to be sure your loved ones are safe. Agree upon an out-of-town family member or friend who everyone can call to report in. Also, in case you cannot get in touch with one another, agree upon a location away from your home where you could all meet.

For locals impacted by the Redwood Valley fire, be sure to visit the Local Assistance Center at Mendocino College. It’s a multi-agency support center where you can register for assistance of all types. Also, I encourage everyone to attend the community fundraiser Saturday, November 4 at the Redwood Empire Fairgrounds. For details, visit www.mendocinostrongtogether.com.

If you have questions about real estate or property management, contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re 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 in Ukiah for more than 40 years.

 

 

 

wrongway

Dumb Reasons People Don’t Buy the House They Want

When you decide you’re in the market to buy a house, you can: 1. Do this the smart way, and maximize the likelihood that you’ll end up with a house you like and can afford; or 2. Do this the dumb way, and rush headlong into a complicated process without the support or information you need to be successful.

It always amazes me how many people opt for #2.

Most people don’t buy and sell houses very often, so it’s understandable that they don’t know much about the process, but if you’re going to make one of the biggest purchases of your life, it seems as though a little homework and some help from experts would be a good idea, right?

Mistake #1: Not Selecting a Realtor

The first mistake some people make is to try to save money by opting to go without a Realtor. A good Realtor can save you time and money. They walk you through the process, preparing your for each step so you have as few setbacks and surprises as possible. (Is it self-serving for me to say this? Yes. But is it true, anyway? Yes.)

Mistake #2: Not Getting Qualified for a Loan Up Front

The second mistake people make is to start looking at houses before they know what they can afford. This wastes time and can be very disheartening. It’s far better to schedule an appointment with a loan broker to get “pre-qualified” or “pre-approved” for a loan. Pre-qualified consists of sitting down with your Realtor to figure out roughly how much income you have and how much debt you carry (car payments, insurance payments, tuition payments, etc.), as well as whether you have any savings for a down payment. Being pre-qualified is much better than not being pre-qualified, but it’s not as good as being pre-approved.

To become “pre-approved” is more involved, but it can dramatically increase the chances of getting the property you want. Pre-approval requires a thorough review of all your assets, liabilities, tax returns, W-2s, credit history, and any other relevant financial information to begin the process of applying for a loan. Basically, the only difference between being pre-approved and applying for a loan is that when you’re pre-approved, you haven’t found your property yet.

Getting pre-approved increases the chances of having your offer accepted, and it puts you ahead of your competition, if you have any.

Mistake #3: Choosing the Wrong Loan Broker

Working with an out-of-town or online loan broker can be a risky business. Real estate loans are complicated, so ask your Realtor for a referral so you know you have a loan broker you can trust, one who will walk you through the process—and look out for your interests.

Mistake #4: Putting in a Low-Ball Offer

In a seller’s market, sometimes it’s wise to put in a full-price offer. Sound crazy? It’s not. It’s fine to negotiate in a buyer’s market, but don’t lose your dream house because you thought you were supposed to play hardball.

Mistake #5: Messing Up Your Financing With a Big Purchase

Once you’re in escrow, don’t buy a car with $500-a-month lease payments (or make other, similarly expensive purchases), because big purchases can change whether you still qualify for your loan.

Mistake #6: Running Out of Cash

In addition to a down payment, you’ll need cash for several other expenses when you buy a house. You may have to pay a premium for private mortgage insurance, fund a lender’s escrow account, or pay upcoming property tax and insurance bills. Plan accordingly (your Realtor can help you with this).

Sometimes escrows fall through, but you can reduce the chances of a failed escrow by avoiding these unnecessary mistakes.

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.