The Renovation, Repair, and Painting Rule applies to all firms and individuals who are paid to perform renovation, repair, and painting projects that disturb paint in pre-1978 housing and child-occupied facilities.  This includes home improvement contractors, maintenance workers, painters and other specialty trades.

Those doing the actual work will need to follow three basic lead safe work practices:

1. Contain the work area
2. Minimize work related dust
3. Clean up/cleaning verification

The National Association of Realtors has produced a series of short videos that discuss the RRP rule and its applications.  Click here  to see the first video in the series that describes the RRP rule.

When selling a home, interior and exterior painting typically adds the highest return on investment.  Sellers who opt to paint are going to face higher costs due to contractor compliance related expenses.   According to the EPA’s website, in addition to a certification fee of $300, a training fee of approximately $200, contractors will also see increase in the costs associated with compliance (ie. containing and minimizing dust etc.).  

Sellers may also need to plan ahead because finding a contractor who has completed the compliance and certification training may prove to be difficult, at least initially.  As of the writing of this post, there are 14 contractors within a 10 mile radius of Los Altos who have completed the certification process.  To find local contractors who have been certified, click here .

Lastly, there are exemptions to the RRP rule:

• The home or child occupied facility was built after 1978.
• The repairs are minor, with interior work disturbing less than six sq. ft. or exteriors disturbing less than 20 sq. ft.
• If the house or components test lead free by a Certified Risk Assessor, Lead Inspector, or Certified Renovator.
• If the property owner is conducting the RRP work themselves.

For further information regarding lead hazards and home renovations, click on the following brochure.

It is unknown how quickly Congress will move to reinstate this federal program when they return to Washington on April 12^th.  As such, we are facing a minimum of a 2 week gap in the availability of this important federal program.

Buyer Tip: check to see in there is any effect on the funding of your loan with your lender prior to removing the financing contingency.  Otherwise you may up a creek without a paddle or a boat.

The 76-page 2010 Index reports the latest data and trends in economic development, workforce, housing, education, public health, land use, environment, governance, arts and culture and other sectors throughout Santa Clara and San Mateo Counties and portions of Alameda and Santa Cruz Counties. An accompanying Special Analysis section of the report each year takes a closer look at a particularly significant topic.

Some of the issues highlighted in the publication include:

• Shifts in methods of funding innovation
• Governmental forces negatively effecting the region
• Decline in employment opportunities
• Housing affordability
• High commercial vacancy rates

All is not bad, but the report is not overly optimistic.  If you like analytics and statistics than this is the publication for you.

Under a newly enacted California law, a home buyer may receive up to $10,000 in tax credits for purchasing a qualifying single-family residence in 2010.   The credit is claimed over the next three years (e.g. $3,333 for 2010, $3,333 for 2011, and $3,333 for 2012). 

There is a total of 100 million in tax credits available and once the credits are gone, they are gone.  The beauty of the program is that there are no income restrictions or maximum purchase price requirements.  The program is perfect for those wanting to buy their first home in Silicon Valley .

Note: In addition to the first time home buyer credit, there is a total of 100 million in tax credits set aside for new home buyers as well.

Further details of the program can be found by clicking here.

If you are think of buying your first home in Silicon Valley and you are a first time home buyer, please give me a call at 650 917-4250.

Disclosure:  I am not an attorney nor do I play one on T.V.  Readers who require specific advice about their individual situation should consult an attorney.  Nufff said.

California Civil Code Section (CCCS) 1710.2 basically states that a death on a property must be disclosed if it occurred within three years of an offer on the property.  According to CCCS 1710.2, a 10 year old suicide need not be disclosed to a potential buyer.   However, strictly adhering to this 3 year rule may be short sighted.

Real estate disclosure law also stipulates that a seller and his/her agent must disclose any fact of which they have knowledge that could be material to a buyer’s decision to purchase the property.  Facts about the property are considered material if their disclosure would affect the value or desirability of the property.  Is a death by suicide a material fact that affects the value or desirability of a property?   I would argue, yes.

For some buyers, a death by suicide (no matter how long ago) is a material fact and they would want to know about it before proceeding.   For other buyers, it doesn’t matter.  But how does the seller and/or agent determine who has issues with death by suicide versus those who don’t?  Can you rely on the buyer’s agent to ask a direct question about the subject?  Maybe, maybe not.

What I have found in almost 18 years in selling homes locally is that most sellers don’t want to talk about it much less disclose it.  They cling to the fact that CCCS 1710.2 places a 3 year cap on such disclosure.  They know if they disclose a death by suicide, their home will sell for less. 

This just goes prove my point.  Sellers don’t want to disclose a death by suicide because they know it will result in a lower sales price.  What sellers don’t understand is that by acknowledging that their home will sell for less (if they disclose the death by suicide) they are confirming that the disclosure is a material fact that must be disclosed. 

Anyone have any other thoughts on the topic?

I liked 1537 Ashcroft Way in Sunnyvale.  Listed by the Levy Team of the Sereno Group, this 3 bedroom, 2 bath home was nicely remodeled with a huge lot (over 14K feet).  It’s located in a great neighborhood and backs up to the creek.  It is listed at $1,099,000 (it sold in 2005 for $1,100,000). 

The home has one large high voltage transmission tower in the backyard and one next door.  I wrote a post a few years ago about high voltage transmission lines and their affect on real estate prices that might be useful to any potential buyer of this property.

Articles in the San Jose Mercury News and the Seattle Post Intelligencer have explained some of the problems of the HVCC.   Appraisals are becoming more expensive for the consumer while the appraiser is paid less because the Appraisal Management Companies (AMC’s) are taking a part of the appraisal fee to process the order.

In addition, some AMC appraisers aren’t necessarily knowledgeable about the subject property’s local market.  Just yesterday, an appraiser gave me her card which claimed that she specialized in Alameda, Monterey, San Benito, San Mateo, and Santa Clara counties.  Huh, what…that’s five counties and several thousand properties.  Wow, she must be a quick study with a photographic memory and reliable car!  As a consumer, what can one do?

The system should become more efficient as time goes by.  In the meantime, expect delays and budget for higher costs.  It might make sense to have a back up lender in place should the first one not be able to perform.   If possible, you might consider longer periods for financing contingencies and/or longer escrow periods.

KNOW the values (condition, size, purchase price) of comparable homes in the immediate neighborhood BEFORE you ratify a purchase offer.  Have your agent pull up the recently sold properties (within the last 3 months) as well as those that are currently under contract.  Try to get the purchase details of the homes under contract from the listing agent (some may discuss this, others won’t).

The premise of the HVCC is excellent, but it will need some more tweaking if it hopes to eliminate the current problems it has created for the appraisal industry and ultimately the consumer.

Note: the most recent update of the HVCC’s frequently asked questions FAQ’s (July 2009) can be found here.   The update clarifies two points.  First, it states that lenders should use appraisers who have clear experience in the geographic area of the subject property.  Second, it clarifies that appraisers are not prohibited from talking to real estate agents.

Owners Title Policy

In Santa Clara County it is customary for the seller to pay a one time premium for the new buyer’s title policy.  The amount of the title policy is based on the sales price of the property.  The owner’s policy indemnifies the buyer against loss and provides a defense in the event of claims against the buyer.  Coverage last as long as the buyer remains on title.

The Owner’s Title Policy protects the new homeowner (buyer) from:

1. Fraud associated with the title ownership
2. Liens existing against the property at the time the policy was issued
3. Mistakes in the public record that are not caught before the sale
4. Inaccurate or conflicting wills and trusts related to the title
5. Missing heirs who suddenly appear and claim to own the property
6. Forged or misfiled deeds and other documents
7. Errors or flaws in the title that are not discovered in the initial title examination

Lender’s Title Policy

In Santa Clara county it is customary for the buyer to the pay for title insurance premium for the Lender’s policy on the home loan.  The amount of the policy is based on the amount of the loan, not the purchase price of the property and covers the lenders interest in the property if any of the above (1-7) occur.

Click here to find out who pays for title costs (it’s based on the county where the subject property is located).

Comparison Shopping for Title and Escrow Services

Los altos no longer has several title companies in town.  Most offices have either consolidated or closed business altogether.  Consumers can ask their real estate professional for a reputable title and escrow company and/or go to Title Wizard to compare title and escrow fees and services. 

Lastly, below are tips that the Title Wizard web site recommends when comparing title and escrow fees, policies, coverages etc.

An application needs to be submitted by the resident (deadline to submit application is March 6th).  Requested tasks are reviewed with the homeowner and a team is assigned to do the work.  The goal is to have all the work competed by a small team of volunteers in a single visit.  Wednesday, May 6th will be the day that workers will perform the work for residents of Los Altos and Mountain View.

Last year I spent most of the morning at a Mountain View residence cleaning up the front and back yards, trimming overgrown hedges and pulling weeds.  We managed to fill 6 large trash bags with debris.  We also organized the homeowner’s garage.

If you know of a senior or home bound individual who needs assistance, please forward an application.

Some records of older homes (homes built prior to around 1940) have been lost or destroyed.  In addition, when many of the city/county records systems were transferred to computerized record systems, the data was entered incorrectly (entered manually).  Lastly, many homeowners have completed some non-permitted additions to their properties that wouldn’t be included in the official records because the addition isn’t legally there.

Example Of Building and Planning Record Errors

Several years ago, I represented a homeowner of a property that was adjacent to Stevens Creek near Fremont Avenue in Los Altos.  The county records indicated an 18K square foot lot.  This property was on a large lot, but it looked nowhere near 18k square feet.  After intensive research, we found out that there was an interior lot owned by the water district that had been incorporated into the county records description of this property.  Fortunately, we waited until we had the correct information prior to marketing the home.

Example Of Seller Recollection Errors

I can’t tell you how many times I’ve been out on a listing appointment and the homeowner’s recollection of the property’s size and the information from the county records differ.  Most of the time, the seller is innocently hoping the home is bigger (so they will get more when it sells).  But once they see a property description from a reliable source, they realize it isn’t.  No harm, no foul.  However, there are instances where the seller might not be so innocent.

Last month I was on a listing appointment with a homeowner of a Los Altos property that had an unusual floorplan.  It looked as if a garage had been converted into a living/bedroom with bath.   I showed the homeowner records that indicated that the home was 3 bedroom, 2 bath home.  However, the seller believed it to be a 4 bedroom, 2.5 bath home with approximately 450 more square feet than my records indicated.  (note: I am using fictitious numbers because the home is currently on the market).

How To Determine Market Value For an Addition that May Not Exist

When we got to the point of determining the home’s market value, I told them that I would recommend that it be priced at $1,500,000 until I could verify that the home was in fact larger as they had claimed.  They wanted it priced at $1,750,000, a $250,000 premium for something that may not legally exist.  Its odd footprint also reduced its market value.

The home was listed by another agent at the higher price.  I hope the agent did his due diligence and verified that the home was in fact a 4 bedroom 2.5 bath home with the additional 450 square feet.  Otherwise, the agent and seller may find themselves in legal trouble as soon as the new buyer recognizes the discrepancy. 

Recommendations For Sellers

1. Price the home according to its verifiable size.
2. If there is a discrepancy, hire a licensed appraiser to measure the home and provide the appraiser’s  information to any prospective buyers.
3. Disclose any alterations done to the property (whether you did them or not).
4. Direct any buyers to the appropriate building/planning office so they can do their own due diligence. 
5. Clarify everything about the property before putting the home on the market for sale. 

Remember, buyers will buy almost anything as long as the problems are disclosed up front.  However, buyers get squeamish when they are hit with a surprises.