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Barry & Debra Kessler

Barry & Debra Kessler
PINNACLE ESTATE PROPERTIES
Simi Valley, CA 93065

Contact Us
Barry 818-426-6415

Debra 805-422-2200

Barrykessler4homes@gmail.com

Kesslerhomes@gmail.com

Cal BRE Barry #01890084
 Cal BRE Debra #01767690 

PINNACLE ESTATE PROPERTIES Cal BRE #00905345 

 

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Real Estate Tutorials Podcast

The Simi Valley Real Estate Answerman Show is a podcast. A tutorial on Buying and selling Real Estate in California. 

How Can the Baby Boomers Use Reverse Mortgages as a Financial Tool and More?

Reverse Mortgages Have Come A Long Way Over The Years and Now Many Will Be Using Them as a Financial Tool

Participants Can Defer Date for Social Security to Collect More,  Help Pay For Long Term Care, Downsize to Make a Purchase and More

Mark Richardson CSMC Mortgage

 This is the Simi Valley Real Estate Answer Man show coming to you from Sunny Southern California. This is the podcast where we talk about buying and selling real estate, we discuss investing in real estate, renting, leasing, landlord and tenant rights, as well as California Real Estate law, we discuss home improvement, going green, Is it a good Idea to put solar Solar Panels on your roof? If it has anything do with putting a roof over your head, or somebody else’s head, we talk about it and much more on this show. So, let’s get to it right now!

Listen to The Podcast

 

I’m Barry Kessler, thanks for joining me, and I’m a Real Estate Agent licensed in the state of California and today I will be talking with Mark Richardson with CSMC Mortgage in Thousand Oaks California about reverse mortgages, and about the creative ways they are being used not only as a tool to help preserve someone’s home when they can no longer afford to make payments, but as a financial tool as well. It can be very interesting as you will find out. 

So, let’s go right now to Mark Richardson, and learn about Reverse Mortgages.

Reverse Mortgages Explained with Mark Richardson of CSMC Mortgage

 Listen to The Podcast

 

What is a reverse Mortgage?

A reverse mortgage allows a Homeowner to convert equity to cash without generating a payment.

Safeguards Against Fraud

In 2015, rules changed where you can’t lose your house

Applicants have to go through an education process prior to filling out an app

Who is Eligible for a Reverse Mortgage?

  • Over age 62 with equity in the home

You Can Choose to use a Reverse Mortgage as a Financial Tool

  • Tax Free Cash
  • Maintain Home Ownership
  • Pay for Long Term Care
  • Defer SSI Payments
  • Downsize to Make a Purchase
  • Preserve the Nest Egg
  • Increases Your Monthly Income.
  • Reverse Purchase on a Replacement Home

Be Sure to Involve your financial planner and tax people as well as your children before choosing to go with a reverse mortgage.  

Primary residence have to live there 6 months out of the year. Can’t rent it out.

Not personally libel for a bad decision from the bank, nor your heirs.


All right, I have Marks information, contact info in the show-notes for this episode of the Simi Valley Real Estate Answerman Show.

You know, I also have had experience with a reverse mortgages with my parents. My mom and dad were able to travel and see the world while being able to live in their home after retirement. Both had limited savings for retirement so when my dad stopped working at age 75, and with the equity they had in their home, they were able to get a reverse mortgage, and when my mom passed away, and my dad needed to go into assisted living, we were able to sell his home, and take what equity he had left, which was about 100,000, and is currently using those funds to supplement his pension income, making it possible for him to make ends meet without having to burden his children.

So you see, he got the advantage of the reverse mortgage, and the proceeds from the sale of the house in the end.

 

Okay, that is it for this episode of the Simi Valley Real Estate Answer Man show. Thanks to Mark Richardson for all that great information, and thank you for listening the whole way through. Stay tuned for and download all my other podcasts. In the meantime, just visit my website at barrykessler.com, or SouthernCaliforniaRealEstateAsnswerMan.com and see my blogs, listen to my podcasts and watch my YouTube videos.

 

Remember, I am a real live Real Estate Agent, I work with my wife Debra, also Top Producers with our brokerage. When you work with us, you get two agents for the price of one. If you are looking to buy or sell a home in Southern California, especially in the San Fernando Valley, Simi Valley Moorpark, Thousand Oaks and Agoura, The Kessler Team is here to represent and serve you with top notch service, and all of the finest tools in the Real Estate industry, plus tools of our own that no others can match. And for more information on Simi Valley, and the San Fernando Valley and the surrounding areas, catch my podcast, Simi Valley Life. A personal look into the area in southern California I call home. That’s www.simivalleylife.com, and listen to it wherever you listen to your podcasts.

Remember to check out our website and blog at barrykessler.com or debrakessler.com. Until next time, Thanks for listening and We’ll “See you in your next home!”

Barry & Debra Kessler

  • 818-426-6415

  • 805-422-2200

  • www.barrykessler.com

 

Mark Richardson of CMC Mortgage on Reverse Mortgages

 

About Mark Richardson of CSMC Mortgage

Mark Richardson CSMC Mortgage

3200 E Los Angeles Ave #23,     Simi Valley, CA 93065

BRE 01173987 | NMLS 238158

 

Protect Yourself From Buying Into an Unhealthy Homeowner Association, The HOA Checklist

Leonard Baron, Author of Real Estate Ownership, Investment and Due Diligence 101 talks about Homeowner Associations and has a checklist for you to weigh the health of a HOA.

This is the Southern California Real Estate Answer Man show coming to you from Sunny Southern California

This is the podcast where we talk about

buying and selling real estate, we discuss investing in real estate, renting, leasing, landlord and tenant rights, as well as California Real Estate

Real Estate Investment

law, we discuss home improvement, going green, Is it a good Idea to put solar Solar Panels on your roof?

If it has anything do with putting a roof over your head, or somebody else’s head, we talk about it and much more on this show. So, let’s get to it right now!

What you Need to Know About Homeowner Associations, HOA 101 Checklist

Listen to The Podcast

I’m Barry Kessler, thanks for joining me, and I’m a Real Estate Agent with Century 21 Everest Real Estate here in Simi Valley California and today In this episode of The Real Estate Answer Man Show, we are going to be talking all about Home Owners Associations, and I could think

Leonard Baron

of no better person to bring on and talk about HOA’s than my friend Professor Leonard Baron. My wife and I met Leonard about 6 years ago at one of the many educational seminar we take every year, to keep on top of the latest in Real Estate law, and well, all aspects of our business, and Leonard wrote a great book that I recommend that our home buyers buy and read, and that’s  his book, Real Estate Ownership Investment and Due Diligence 101. In that book, he talks about HOA’s, and what you as home buyers who are thinking about buying into a HOA Community should be looking out for, and should be paying attention to, and how you can protect yourselves from buying into an unhealthy HOA. So without further ado, let’s get to our guest right now…

Buying a House, Condo or Townhome

Listen to The Podcast

 

Thank you Leonard! That was very informative and really important information all about HOA’s. So, in the end, he really does like those nasty HOA’s. What do you know? Just do your due diligence right?

HOA Checklist

I have the links to all the things Professor Baron talked about in the show notes including his contact information and course information as well.

And if you liked Leonard, that’s great because he promised to join me again to talk more about Real Estate investing and smart buying practices in future episodes, so stay tuned for that. I will be looking forward to talking with him again and bring you all that great information soon.

Okay, that is it for this lesson from me, the real estate answer man. Thanks Professor Baron for your great advice and information, and thank you for listening the whole way through. Stay tuned for and download all my other podcasts. In the meantime, just visit my website at www.barrykessler.com, or www.SouthernCaliforniaRealEstateAsnswerMan.com and see my blogs, listen to my podcasts and watch my YouTube videos.

Investment and Due Diligence 101

Remember, I am a real live Real Estate Agent, I work with my wife Debra, also a top producer at Century 21 Everest Real Estate. When you work with us, you get two agents for the price of one. If you are looking to buy or sell a home in Southern California, especially in the San Fernando Valley, Simi Valley Moorpark, Thousand Oaks and Agoura, The Kessler Team is here to represent and serve you with top notch service, and all of the finest tools in the Real Estate industry, plus tools of our own that no others can match. And for more information on Simi Valley, and the San Fernando Valley and the surrounding areas, catch my podcast, Simi Valley Life. A personal look into the area in southern California I call home. That’s www.simivalleylife.com, and listen to it wherever you listen to your podcasts.

Remember to check out our website and blog at www.barrykessler.com.

Real Estate Investing Cash Flows and Due Diligence 101

Or www.debrakessler.com. Until next time, Thanks for listening and We’ll

See you in your next home!

 

The Home Warranty and The Home Buying Process in Southern California

The Home Warranty is a Very Important Part of The Home Buying Process. Your Realtor Should Know The Right Coverage For You and Your New Simi Valley Home.

Listen to The Podcast

The Home Warranty and The Home Buying Process

It seems that with all the excitement that goes into the home buying process, the home warranty often takes a back seat to just about everything else, it is kind of the ugly stepchild, but it is so important to the home buying and selling process. Your Real Estate Agent should know the costs and types of Home Warranties available for homes of all sizes. All homes are not alike, and each home has different needs as in different items that will need to be covered. Armed with that knowledge, the buyer’s agent should be able to determine how much you should ask the home seller for a home protection plan best suited for that property. If the home has a pool, an air conditioner, a spa, a water fountain, then wouldn’t be good if you could insure those systems for at least the first year of home ownership?

So, we have learned that it’s very important for your Real Estate Agent to understand Home Warranties.

So why do we even get involved with Home Warrantees anyway?

The reason we are talking about this subject is because, in the California Residential Purchase Agreement, there is a section where the buyer of a particular property can request that the seller of that property, purchase a home warranty for the purchaser. In fact, you can currently find it on page three of the California Real Estate Purchase Agreement, under Allocation of Costs, Paragraph 7 – D, RPA Para 7 there is a box to check where the purchaser can choose whether the seller, or they themselves, the buyer, will be paying for a home warrantee.

We have spoken about the fact that usually, the home seller will, as a show of good faith, agree to purchase a home warranty for the buyer, for the first year, and that is usually the case. So, the agent for the buyer is going to check the box asking the seller to pay for the warranty. They can check a box asking for a Standard Warranty, or an upgraded warranty. Reviewing the contract, we see that upgrade options like air conditioner coverage and pool and spa coverage have their own boxes, and there are boxes where the buyer can check one off and ask for a warranty not mentioned in the contract just by writing it in on the lines provided.

Let’s say that the home seller doesn’t want to purchase a home warranty for the buyer.

There are cases when the seller won’t pay for the plan. Maybe the seller needs every dollar they are going to get from the sale of the home and $500 will be a burden. Maybe the seller is in a short sale situation and there would be great pain to have to lose the home of their dreams and pay for the new owners’ home protection plan. That is just not right if you know what I mean. Hey, maybe you have a seller that is just plain old mean. There are those types out there too. Every seller is different so be ready if you are the buyer and you run into one of those sellers.

In some cases, the Realtor can step in and pay for some of, or even their entire Warranty plan as a closing gift.

The buyer may even choose to waive the purchase of a home warranty altogether. There are some situations when a buyer wants to make their offer look better to the seller by not asking for that $300-$500 policy at close of escrow. That is a strategy used quite often when the buyer notes that the seller appears to need the money.

So, the agent is going to check the box and or boxes and indicate what Home Warranty company the policy will be purchased from. There are many home warranty companies out there from which to choose. Your Realtor will check off the boxes applicable, again indicating what type of coverage they will be asking for. After all is agreed upon and the offer is accepted, and escrow is opened, the Escrow Officer is going to look at those instructions regarding warranty and order the particular type of policy from the company indicated in the contract.

So, you can see that you really need to learn some basics about Home Warranty plans, and do some homework before you ask for a particular company.

Types of Warranty Plans

Not all home warranty companies are alike, so I am going to, for the sake of simplification, use examples from the company First American Home Protection.

So, what is a Standard Policy?

In the contract it has a box that says Standard Policy. A standard Coverage policy is a bare bones policy. Here is a sample of what First American Home Warranty offers for the Standard Policy..

Ultimate Protection

This plan allows you to add other features to your policy. All items have their costs to cover.

Standard and Increase

Remember, when you pick up the phone to call a representative to send someone to repair an item under warranty, there will be a $60.00 or so “trade Call Fee” charged for each visit by a repair person.

Can a buyer pay a little extra above what the seller is paying to get extra coverage?

So, let’s say that the seller doesn’t want to pay more than the Standard Policy? Can the buyer offer to pay more to supplement the policy to cover other systems not covered by the Standard Policy? The answer is yes, but it is really important that you have this discussion with your Real Estate Agent and contact Escrow, so they order the correct policy.

According to Tamara, the number one problem that Home Warranty companies get calls for is plumbing systems.

What Do You Do When You Have a Claim?

In most cases, when you make a claim you will make a toll-free call to the Customer Service Department at your Home Warranty Company. They should be there 24 hours a day to take your call. Many others have an online claim department in case you don’t want to talk with anyone.

Let’s get into the home sellers coverage.

When Debra and I list a property, we purchase a policy for the home seller, to cover them with a home warranty while their home is on the market as an added bonus and a thank you to them for trusting the sale of their home to us. Sellers coverage will cover the home sellers home while it is under contract with us as if the home had any typical home warranty. So, if let’s say that the dishwasher dies on the homeowner while the home is for sale, or when it is in escrow, the dishwasher will be repaired not for $500.00, but for a $60 service call. Imagine if the seller were in a Short Sale position and could ill afford to find the money to repair a dishwasher. As a matter of fact, the last thing a seller wants to do is have to fix something for a new owner. On top of the listing insurance, we offer our clients the CRES Plan.

CRES Home Sellers Errors and Omissions Insurance

When My Wife Debra and I list a home for our clients, the home seller, we provide at no cost to them, special coverage. CRES Insurance coverage. CRES is Seller’s E & O Coverage, The Seller’s Protection Plan, administered by CRES Insurance Services, provides you coverage for up to 180 days after your escrow closes. And in the event of any inadvertent errors and omissions related to the sale of your home, you’ll receive up to $50,000, including defense CRES FAC sheet costs, which you would be legally obligated to pay in the event of a claim.

The Summary sheet to the right shows what the plan covers and what it doesn’t cover,

What’s Covered? This policy will pay on behalf of you, the seller, all amounts, including defense costs, up to $50,000 over the $2,500 deductible, which you, the seller, become legally obligated to pay as a result of a covered circumstance. The covered circumstance must occur, and claim must be made and reported within the coverage period. A covered circumstance means a lawsuit, arbitration or mediation proceeding, or alternate dispute resolution proceeding to which you submit, with our consent, instituted against you by the buyer, resulting from actual or alleged undisclosed defects in residential property which is your principal residence. For your coverage to be valid your broker’s policy with us must be in effect at the time of the completed contract (your closing) and when claim is made against seller.

For information about what is not covered and the specifics, just click on the summary sheet above.

Well, that is about all I have to say about The Home Warranty and the Home buying process.

We have learned that the Home Warranty portion of the Real Estate transaction is extremely important, and you have no excuse to fumble this one. If you are reading this blog or listening to my Podcast Episode at the top of the page. you will get it right because you now have the knowledge. I’m going to tell you something else too, now you know more about Home Warranties than most Real Estate Agents. Debra and I know about The Home Warranty, but not all agents do, so good for you for doing your homework!

Please Visit My Website at http://www.trooprealtors.com

Flood Insurance and Flood Certification in Simi Valley California

When you Sell Your Simi Valley Home, and You are in the Floodplain, Home Sellers are Required to Pay For a Flood Certification to Present to The Potential Buyers of Your Home.

I interview Diane Levinson of Gentry Surveying in Simi Valley About the Flood Certification Process

Listen to The Podcast

Simi Valley Flood Certification

They say these 3 words a lot in the real estate business, location, location, location, and if you have a home to sell that is in a floodplain or flood zone, you know that due to your location, you have been paying  FEMA, flood insurance, and if you are going to sell that home lying there in that flood area, you are going to need to have a company perform a survey and provide an Elevation Certificate.

 I promised to talk with an expert in flood certification so today, we are really honored to have Diane Levenson with Gentry Surveying in Simi Valley.

When Debra and I moved to Simi Valley 25 years ago, while we were doing our due diligence, looking for all of the permits pulled on the home we were in escrow on we were told by the guy behind the counter at the building department that he would never buy the house because it was in the 100 year floodplain, and we would be paying FEMA flood insurance. Money that we would never see again. We loved the home so much that we decided to go ahead with the purchase and pay about $850 a year. That was a yearly cost until a development in the hills above our neighborhood made vast improvements to the local flood channels and then overnight, hundreds of Simi Valley residents had their flood insurance melt away.

That scenario is not happening right now however. The Federal Emergency Management Administration, FEMA, is expanding their flood maps to cover more territory.

One thing is for sure, it is very important for an agent to know if the home that they are listing is in a floodplain. So if you are paying flood insurance Mr. or Mrs.  seller, let your agent know. And is you are an agent, you’d better know before you walk into that listing presentation.

So, the first clue to a buyer of a home that the future abode is in a FEMA recognized Floodplain, will be the NHD report Natural Hazard Disclosure, which will clearly show the issue. This when you get the call from the lender who is watching like a hawk, the ratios for the buyer/borrower, now looking at a possibility of an extra $100/ or more per month going towards flood insurance instead of oh, I don’t know, gas, food, diapers?

What is the Cost to the Seller?

Rates for single family residence is $100.00 for the preliminary report, and $500.00 for the final report in Simi Valley. Outside of the Simi Valley area, a single family residence will run $200.00 for the preliminary report,  and $600.00 for the final report. Rates are subject to distance and flood zone.

So typically according to Diane, if you have a property that is in a floodplain and there is no chance of lowering the possible annual premium from let’s say $1,500 per year to more like $350 per year by challenging the map, the fee for that preliminary report is $100 if you live in Simi Valley, and $200 if you have a property outside the area.  If Gentry Surveying comes out and can help you,  in other words, if they can save you some money they will proceed with all of the things they do for the final report. That charge is $500 in Simi Valley and $600 for properties outside the area. They take care of the entire process. Listen to the podcast to hear the entire interview. 

What is a typical annual premium for flood insurance? As low as $350/yr. and as much as $3,500/year. The average is $1,500 per year which totals over a 30 year loan to $45,000! You will never see that again.

 If you have no loan on the home, you don’t have to pay for flood insurance?  No.

The 100 Year Flood Hoax

In many cases to refute FEMAs claims a survey company has to step in and do the heavy lifting.  I mean let’s take this 100-year floodplain issue. In your mind you are thinking okay, the government says that they have determined that every 100 years, a flood of biblical proportions is going to descend on the population and wipe the place out, when in reality, it really means that every year, there is a 1 percent chance that a major flood will wipe us off the map right? How about the 200 year flood? That is a 1/2% chance for a really bad flood.

To reach Gentry Surveying call Gentry Surveying ……

255 East Easy Street Suite B

SIMI VALLEY, CA 93065

PHONE NUMBER (805) 527-5299

We are so pleased to have had a chance to talk with Diane Levinson on the Southern California Real Estate Answer Man Show!

And that is it for this lesson from me, the real estate answer man. Stay tuned for and download all of my other podcasts. In the meantime, just visit my website at barrykessler.com, or southerncalifornarealestateanswerman.com and read my blog posts, listen to my podcasts and watch my YouTube videos.

Remember, I am a real live Real Estate Agent, I work with my wife Debra, also a top producer at Troop Real Estate. When you work with us, you get two agents for the price of one. If you are looking to buy or sell a home in Southern California, especially in the San Fernando Valley, Simi Valley Moorpark, Thousand Oaks and Agoura, The Kessler Team is here to represent and serve you with top notch service, and all of the finest tools in the Real Estate industry, plus tools of our own that no others can match. And for more information on Simi Valley, and the San Fernando Valley and the surrounding areas, catch my podcast, Simi Valley Life. A personal look into the area in southern California I call home. That’s www.simivalleylife.com, and listen to it however you listen to your podcasts. 

Remember to check out our website and my blog at www.barrykessler.com , Or debrakessler.com.  Until next time, Thanks for listening and We’ll see you in your next home!

Listen to The Podcast

 

Transcript From The Conversation with Diane

I promised to talk with an expert in flood certification so today we’re really honored to have Diane Levinson with us from Gentry Surveying in Simi Valley. Diane, welcome to the show.

Diane:              Hi, good morning!

Barry:              Good morning to you Diane, so tell me a little bit about yourself and

Gentry Surveying.

Diane:              Well, here in Simi Valley, probably about 3-4 years ago I started

working for Gentry Surveying only after I had to go and get my own flood insurance. I actually ran into them at a street fair here in town and asking them can you help us? What can we do? Is there something that can be done? They at the time, they pulled up a map and sure enough we ran an area that they can possible help us in. This is also after sending letters to my local representatives. They come back with usually, kind of a choreographed letter that they give you and let you know they will. This is what it is, this is how it is. Many people have been in their houses for many many years and had multiple refinances on our house which is where we were at. Never requested flood insurance when we bought our house. We were never requested required to have flood insurance. We didn’t know that we were in a flood zone. Asking Gentry Surveying to come out, do a check on our house if we were eligible for getting removed from the flood zone or if there is anything that can be done. Lucky for us, we were actually those that were able to be helped in. After I picked up my paperwork and I said, “by the way I’m looking for job. Do you have any job openings”. And that’s where it started with me at Gentry Surveying. It’s been an interesting ride in regards to the flood zone, something that I never ever put to thought into.

Barry: Wow, I guess you really took Gentry to heart. You actually went to work

for them too. They helped you so it’s kind of neat because I’m sure that Gentry reaches out and helps a lot of people.

Diane:              Yes, yes.

Barry:              It’s funny, we have the same situation. Debra and I moved to Simi

Valley 25 years ago. The house that we’re in right now, we were doing our due diligence. We went down to inspect planning here at Simi Valley. We were checking out permits that were pull on the house. The guy behind the counter said, “you know I wouldn’t move in that house” and I said “why?” And he said, “because you’re in the floodplain. You’re going to be paying flood insurance.” That money is just money down the drain. And we look at each other like what?

Diane:             Yes.

Barry:              Really? At that point, we were paying around $1200 maybe $1300 a year

for flood insurance. We like the house enough, so we bought the house.

Diane:              Right.

Barry:              It didn’t scare us too much although looking back, we paid probably for

8 years. We were paying that kind of money and that was a lot of money. What happened was that there was  a development that came above us and they changed the way that the flood area would look. Basically, our flood insurance disappeared. We really have thanked that development really for saving everybody in our neighborhood a lot of money.

Diane:              Yes.

Barry:              It’s very important for an agent to know if the home they’re listing is actually in a floodplain. If you’re paying flood insurance Mr. and Mrs. Seller, then you better let agent know especially if the agent is out of area agent who really doesn’t know or didn’t take the time to look and see if your home was actually in a floodplain. Diane, generally when agents list their home that happen to be in a flood area, does it ever come up in a conversation, do you think?

Diane:              Nowadays? Yes. Three years ago? No. Three years ago seasoned agents had really never even thought about the floodplain. 2010 after hurricane Katrina everything changed. Any federally backed loan was being required. Like I said, my own house, we took advantage of lower interest rates and refinanced our house multiple times since we purchased it and never once did the flood come up in regard to refinancing. It wasn’t required, and all our loans were federally backed loans. But after 2010, all of a sudden, FEMA lost a lot of money in hurricane Katrina. What are we going to do? How are we going to recoup if it’s going to happen again? Let’s lay out the maps. Maps laid out across the country and they weren’t necessarily correct. Southern California, here we are. The real estate agents then even just three years ago, they did not know when it comes down to that burden of proof. Unless your told or unless you research, you don’t know. There’s a lot of homeowners that were not the sellers that were not required to have the flood insurance so like us did not know that they were in a flood zone. If they did not know, they were not being required to pay flood insurance. And how are they going to tell their agents, yes I’m paying flood insurance and I have been paying for so many years.

Barry:              Okay, so there are sellers there

Diane:              There are.

Barry:              Who haven’t been tapped in the shoulder by FEMA and said to pay.

Diane:              Right.

Barry:              But now they are.

Diane:              Now they are.

Barry:              That’s going to show up either by the lender or by the H&D Company, right?

Diane:              Right.

Barry:              So, the natural hazard disclosure company is going to send a disclosure to the buyer that’s one of the items that’s required from the seller and that H&D report as I talked about before is about anywhere between $80 and $125. That is going to show all those things; if you’re in a fire zone or if you’re in a flood zone. If you got earthquake liquefaction all that stuff. That’s really the first time when you’re going to see that, right?

Diane:              Yes, and the interesting part is that sometimes I get insurance agents that we work with here in town calling me up going, “hey and I just got my flood zone determination which is standard little form”, which you can get from the city. Pay to the city and they’ll give you their flood zone determination. This one says that’s it’s zone X but you’re telling me that it’s a Zone A-o1, which is it? And I pulled it up to verify again. It’s a Zone A-01. So even, sometimes the insurance company will have the incorrect zone, however they’re getting the determination there is some sort of conflict in there as to which one is correct. We go off a few months flood insurance maps and we have a google earth layover that has those insurance rifts, we call them firms on top of the Google map. I can pull it up instantly and take a look at it. If it is questionable. Google maps are pretty accurate. They’re not necessarily street elevation wise but where the layover is, it’s going to be almost identical to what FEMA’s map has.

Barry:              Okay, that’s actually pretty handy.

Diane:              Yes.

Barry:              Having that Google layover. So, you got a call to perform an elevation certificate for a seller which is mandatory in the sale of a home in the flood zone. Look, I have a little printout here from FEMA that says, The national flood insurance program elevation certificate is an administrative tool of the national flood insurance program which is used to provide elevation information necessary  to ensure compliance with to community floodplain management ordinances to determine the proper insurance premium rate or support a request for a letter of map amendment and you get called a lot, for that, right? We’ll talk a little bit about map amendment in just a little bit but just, so you know listeners what this piece of paper is. It is basically known as an elevation certificate and that’s where this company comes in and they do the survey to nail it down, right?

Diane:              Right.

Barry:              So, what does it cost to seller for something like that?

Diane:              With my company, we have several different rates in regard to areas. But let’s say Simi Valley here we are for single family residents we charge $600. That includes coming out doing out the complete elevation survey. We submit it into FEMA. We do that, we deal with FEMA. We deal with any questions FEMA has because sometimes FEMA will have different people in FEMA that are looking at the FEMA map specialist that are looking at these information that we send in. And if there’s something questionable, they’ll come to us. We address it and handle it and it goes from there. We also, so once we submitted it to FEMA we also provide an elevation certificate and will also take care of submitting either the elevation certificate or the LOMA to the city of Simi Valley. I’ll send it on to insurance companies for people. We do all the leg work in regard to that aspect of it. I don’t deal with your lender because the lenders don’t want to talk to me.

Barry:              Of course not.

Diane:              That’s the one thing I would have to say as a lot of people don’t understand. It’s that I don’t deal with lenders because lenders don’t want to deal with anybody other than you.

Barry:              Okay, got it. So the cost again is?

Diane:              We charge here in Simi Valley $600 for a single-family resident. We do charge a preliminary fee of a $100, that’s kind of a like a deposit. We call it a preliminary elevation survey. That means that $100 gets applied to the $600. If your house comes up as being there’s nothing that we can do in elevation certificate is not going to benefit you, you don’t have to move any further. You really aren’t required to have an elevation certificate in order to have flood insurance. You’re not even required to have an elevation certificate to get a quote. These are things that if it’s going to benefit you, people are going to purchase the elevation certificate.

Barry:              Got it.

Diane:              It is a process. We can provide an elevation certificate within a few days of our doing our survey. However, submitting into FEMA is a lot longer process and the numbers that we get back from FEMA, those are usually the numbers that are going to be benefiting you on the elevation certificate. So the initial elevation certificate, there’s two types of elevation certificates and our fees will give you the adjusted elevation certificate after we get our stuff back from FEMA which unfortunately with FEMA can take anywhere from 45 to 60 days which is usually outside of closing escrow.

Barry:              Yes. That’s a long time. But it could be changed afterwards, right?

Diane:              Yes. Absolutely.

Barry:              But it takes longer, the buyer or the seller is saying hey we’re going to…

Diane:              Right. As we all know, we’re trying to close escrow on our house and we’re in our last-ditch penny here, we were scraping the barrel. We’re required to have that flood insurance which is upwards $1500 or more. It’s a lump sum that you’ve got to pay all upfront.

Barry:              You have to pay the whole year in advance?

Diane:              Yes. One year in advance.

Barry:              Oh wow.

Diane:              I have heard and we’ve read that they are trying to work on changing that but again that’s something that we haven’t seen happen yet. Closing escrow, it’s so tough. You have to come up with all these fees. And for us, we don’t let it go through escrow, unfortunately. Our fee, we don’t let it go because escrows don’t close sometimes.

Barry:              So that’s out of pocket you sellers you have to, and by the way, lot of agents don’t let their sellers know they need to bring money into escrow too. That’s not just the buyer that needs to bring in their good faith deposit. It’s the seller that needs to bring in money to cover costs just like this. Again, just keep that in mind sellers, you are also responsible for bringing some money in the escrow.

Diane:              One of the things that they also need to think about is let’s say we do our preliminary survey and that house is eligible for removing from the flood zone. We’re jumping, cheering for these people because we know it’s going to happen. It doesn’t happen again 45 to 60 days with FEMA. But you also get a refund on your insurance policy. So, you close the escrow paying $1500 for that insurance, you’re going to get that back. A process is always a process, but you will get a full refund of that policy. Not adjusted, not a pro-rated, it’s a full refund of that policy when you get removed.

Barry:              Wow, that’s better. That’s better than finding 5 bucks in your pocket.

Diane:              Yes.

Barry:              Okay, well there is the silver lining, there you have it.

Diane:              Yes.

Barry: Alright. What’s the typical cost of flood insurance to someone who is living into a flood zone?

Diane:              If someone is going into buying their flood insurance and they’re in a flood zone. The average cost is $1500, I’ve seen upwards of $3000. But the average is $1500. Sometimes the elevation certificate, when I say we’ve got two different types of elevation certificate. There’s one that a lot of people close escrows with. It’s called the hag and lag highest adjacent grade, lowest adjacent grade. Then there’s the natural grade elevation certificate. That’s the one that is able to give, bring that $1500 policy down to $320 a year.

Barry:              Wow.

Diane:              Right now. A couple of years ago, it was $170, now it’s $300.

Barry.              What a bargain.

Diane:              Yes, again that’s another one of those things we got to wait for FEMA to give us our numbers or confirm our numbers. We usually already know what the numbers are going to be but we can’t sign and stamp our certificate until FEMA gives their stamp of approval.

Barry:              This is crazy. Just think about this kind of money. Diane just said $1500 per year is average but right to the government I don’t know why they complain they don’t have any money. Think about that you guys, that’s a ton of money. Now, if you don’t have a loan, do you need flood insurance?

Diane:              No.

Barry:              Okay. So look at that, paying off your loan. I mean, come on.

Diane:              There’s been several people that we done work for that said this is ridiculous. They’re not going to get removed. They did get reduced with natural grade elevation certificate, but they said you know what I’m done. Some people cashed in their 41k just to get that roof over their head and the government’s insurance off of their backs.

Barry:              Well, yeah, sometimes that makes sense.

Diane:              I wouldn’t necessarily comment on that, that part of it.

Barry:              I wouldn’t even, by the way you guys I am not making options. I never pretend to be. So don’t take my word for it, I’m just thinking out loud here, okay? Your company Diane, Gentry Surveying, they get called in many cases to refute FEMA’s claims a lot, right? Let’s take this 100-year floodplain issue. Think about this, in your mind you’re thinking, okay the government says that they’ve determined that everyone 100 years or so. A flood of biblical proportions is going to come and descend on the population and wipe the place out. When in reality what this 100-year flood zone really means is that every year there’s a 1% chance that a major flood will wipe us off the map, right? It’s kind of misleading, this 100-year flood zone. There’s 200 year flood zones too so that’s ½ of a percent chance every year that you’re going to get wiped out. What do you guys do to help these people out?

Diane:              Lot of it is literally just is calming people down. Right now, everybody is panicking. Here in Simi Valley we’ve got the arroyo going through town. The Arroyo is dried up from arranger on so from almost the middle of town to the east end it’s dry. What we end up doing is just letting people know that yes there is an answer, there is a possibility. Unfortunately, if you can’t get removed or can’t get lower flood insurance there is nothing else that can be done other than going with another insurance policy, another type that may be a little cheaper. Most lenders take it. But with us, we have to go within the guides of what the law says. You can fight FEMA and we’ve come across people that have spent thousands of dollars fighting FEMA. There are different types of zones here in Simi Valley. You have my street alone, they have three different flood zones on one house.

Barry:              Oh my gosh.

Diane:              Logically, people have been here for years, they look at things and go I’ve been here for 50 years, it’s never flooded like that. Well, there has been intersections that have and there have been some neighborhoods where there’s a low area. And that one house may be a house that had a little too much water coming in from the street which is most of the time where the flood is coming from is the street.

We try to explain to them, it is hard because it’s an emotional thing. California’s expensive and so most people are paycheck to paycheck. This is one more thing, one of the biggest things I have to say, don’t let your lender force place a policy on you. You are paying double what you should be paying even if you are paying at the high rate of the national flood insurance program. You are paying almost double if your lender is the one that pulls the policy.

Barry:              Wow, okay. Note to everybody, that is very very important. You were talking about a cheaper alternative to the NFIP, the National Flood Insurance Program, what is that?

Diane:              We know the the National Flood Insurance Program   is FEMA.

Barry:              Right.

Diane:              There’s multiple insurance agencies that write those policies. There’s also National Catastrophe Insurance Program. We call it National Cat. or Lloyd’s of London is backer on that one.

Barry:              We both heard of Lloyd’s of London.

Diane:              Yes. Not all lenders take it but majority of them are starting to take it. But basically what’s happening is that if you’ve got someone that we can’t help through National Flood Insurance Program with the natural grade elevation certificate, we refer them over to agents that can write Lloyd’s of London policies to see if the Lloyd’s of London policy will be accepted by their lender. Half the time, if it’s a $1700 policy and there’s nothing that we can do for the NFIP lowered, the National Catastrophe will bring it down to $900. With that, they don’t need us.

Barry:              Ahh. Right.

Diane:              So that’s around $600 for hearing Simi Valley. You don’t have to pay us for that. Most the time we are at the point the only thing you’re paying is that preliminary fee to determine whether or not we can even help you. That’s $100. That’s all you’re out on that one. And then we say there’s nothing we can do, let’s refer you over to Lloyd’s of London. I know of a couple of agents here in town that do write Lloyd’s of London. Brian Gentry, one of the things he always said, “I’m out here to help the people here”. But we also don’t want to step on agents toes and so I will suggest that go back to your agent and see if they’ll do Lloyd’s of London or whether or not they can refer you to an agent that does Lloyd’s of London or I have a couple that write Lloyd’s of London here in town and I can suggest.

The bottom line is, we need to make sure we help our fellow citizens here in town. We try to keep our fees lower. We try to refer them to the correct agencies that know how to write the policies or educate their agency if they want to work through them.

We’ve got some really great agents here in town that three years ago may not have known a whole lot about the flood insurance program because it was relatively new. But I’ve worked with them, they’ve worked with us. We’re all about trying to help everybody. All the best we can.

Barry:              That’s great. That’s why you guys too now. You are in Simi Valley but you do operate in surrounding areas?

Diane:              Yes. Correct. We were going out quite distance away and then it started because fuels are becoming not cost effective. We go up in Sta. Barbara. We do a lot of Malibu, down in L.A. In general, we are a regular surveying firm so we do have large surveying projects that we work on. Lot of times I might be able to throw an elevation survey on top of one that they are doing in L.A. That may be down the street or not too far away. We do Long Beach and lived on current county area. We usually don’t go out at super far because if it’s more than an hour drive away or an hour and a half drive away. The cost is becoming more. Unless of course you don’t have a surveyor in the area and you’re willing to pay for that.

 

Barry:              I’m ready. I’m ready to pay you actually to get over here. Question, San Fernando Valley got a lot of flood areas there too? Or is Simi Valley mostly bigger problem.

Diane:              Ventura County is more the bigger problem.

Barry:              Okay.

Diane:              San Fernando Valley has pockets. There’s been a couple of a pockets that have you look at the map and is like what is that, a little pond? There was a gas station at the corner of Roscoe and not too far from the freeway. And it’s one of those little ponds but the gas station itself was a pi and ef. You know it was able to be removed from the flood zone.

Barry:              Good work. Did you get free gas for a week?

Diane:              That would have been nice. Yeah. No.

Barry:              Yeah, no. Oh wow. There’s just so much to talk about here but I just want everybody to realize that the situation especially if you’re in Ventura County and Simi Valley that flood insurance can be an issue and you just have to look out for it.

Diane:              I have to say one of the hardest things for me dealing in the customer service part of this is I do hear the stories every single day, multiple times a day. They’re irate people and rightly so, they’re furious with the government and I’m kind of the punching bag, at times.

Barry:              Sorry.

Diane:              Most of the time, it’s really, really, good. People as distressed as they are. The hardest part is people at their retirement age and going into the condos. Condos are very difficult if they’re in the floodplain. We’ve had that issue with escrows not closing. There’s one retired man I felt so horrible because he was so far below where the condo was built. He was paying upwards about $3500 a year.

Barry:              Woah! Oh my God!

Diane:              That’s wrong. That is absolutely wrong. Even if it was a young person, that is wrong. Our hands are tied. We squeak everything we possibly can by on those as far as we can go without doing anything wrong.

Barry:              Yeah, of course.

Diane:              The city is working hard. Some people think the city is not working hard, they are. We are in a community rating system here which gives us a discount on these policies to begin with. Where some areas don’t participate in the community rating system and they’re paying a little bit higher. I believe it’s 15% but I’m not sure on that one, I don’t recall. Simi’s working. It is a long, long drawn out process. It is not something quick, it is not something simple. It’s explaining that not every place is going to be high, not every place is going to be low. We’ve got streets here in town where we got four houses on one side and four houses on the other that were all removed, and you got one in the middle that’s not.

Barry:              Ouch. Yeah.

Diane:              How do I explain that to the homeowner? Their neighbors aren’t paying but they have to pay. It literally can be a tenth of a foot off that prevents them from getting removed from the flood zone and it’s usually the garage.

Barry:              Wow, really?

Diane:              Yes, because most of the garages have that 4-inch step down.

Barry:              Right

Diane:              It’s attached to the house.

Barry:              Yes, that’s it. That will save them little money, maybe?

Diane:              Might, if they’re half in a foot of being removed from the flood zone that usually brings them down to that $320 rate.

Barry:              Okay, but still. It’s a lot of money.

Diane: Yes it is.

Barry:              You’ll never see it again.

Diane:              It is, I’ve been removed twice.

Barry:              Wow, yeah.

Diane:              They put me back in and then I have to submit again.

Barry:              I got to say that in our office over at Troop Real Estate, whenever somebody talks about flood insurance and flood certifications, elevation certifications and so forth, Gentry is always mentioned. It’s always the name that comes up. I want to thank you so much Diane for helping my listening audience understand what extremely important issue is. It’s very overlooked, it’s overlooked by most home sellers and most home buyers until the very end. Anyway, could you give us some contact information for Gentry Surveying, so my listeners can reach you.

Diane:              Yes. Gentry Surveying is 805-527-5299. I’m Diane Levinson, I’m the main person that sets up these jobs. Even if you’re not even sure if your house is not even close to it, give me a call and I will look it up. It doesn’t cost anything to give me a call. I’m happy to see what we can do, especially when we want to sell these homes too. Get yourself prepared. If you think you’re getting to and you think you might be in a flood zone, give us a call. Get it done even before you get that sign up in your yard.

Barry:              Absolutely. Thank you so much for fount or fountain of information

Diane:              I’m learning stuff every day.

Barry:              Fount fonts of information every day. Just remember that all of that contact information will be available on my blog on my Shout outs for this episode, episode 14 of the Southern California Real Estate Answer Man Show.

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How Do Home Buyers and Sellers Choose a Real Estate Agent?

 Home Buyers and Sellers often Don’t Know a Realtor. In this podcast I am going to talk about the different ways you can find a good agent, and how to spot a good Real Estate Agent.

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You Have Found the Southern California Real Estate Answer Man show. This is Barry Kessler Coming to you from Sunny Southern California and this is the podcast where we talk about buying and selling real estate, we discuss investing in real estate, renting, leasing, landlord and tenant rights, as well as California Real Estate law, We discuss home improvement, going green, Is it a good Idea to put solar Solar Panels on your roof?

If it has anything do with putting a roof over your head, or somebody else’s head, we talk about it and much more on this show. So, let’s get to it right now!

Thank you for joining me on this episode of the Southern California Real Estate Answer Man. I’m Barry Kessler, Realtor with Century 21 Troop Real Estate in Simi Valley California and in this show we are going to be discussing Finding a Real Estate Agent.

Let’s talk about choosing the right Real Estate Agent to help you find your home. How do we do that?

Where do these agents come from?

How do you find a Realtor?

Find Your Agent at An Open House

Well, you may meet an agent at an open house, and this is good because at an open house you can see the agent in action. You can take note as to how much preparation the agent has done for the open house. For example, In your opinion, has the agent done a good job for the seller they are representing?  That bodes well for an agent, being seen as responsible and working hard for his or her client. Does the agent have the type of personality you can get along with? You may potentially be spending lots of time with this person so make sure you mesh well.  But open houses are just one way of finding an agent.

Agents come to us in many other ways as well. They may be referred to you through a friend or family member. They may be referred to you through a friend or family member. Maybe this agent is a friend or even a family member of yours for that matter.

Maybe you found them through their website or you got their number off of a For Sale sign.

Whichever way you find your agent, I have some suggestions that will make your home buying process easier and hopefully more fruitful.

 

  • First of all, the Agent should be familiar with the area you are purchasing in. A local agent will know the neighborhoods, the home styles, floor plans and builders in the tracts, as well as tracts that may have problems. They’ll know the schools the markets the public services and so on in the city, town or neighborhood, you are looking in. In many cases, the agent will have already been inside that house you want to look at. How about that?
  • Make sure you are working with a full time agent. An agent who works full time in the Real Estate Industry will be more knowledgeable than most part timers. Real Estate contracts change at least twice a year here in California and there are always changes that need to be pointed out to buyers. A full time agent will also be more familiar with the current inventory of homes and will also have a good grasp of the current market trends as well as the proper tools needed to transact a Real Estate Purchase agreement.
  • Make sure your agent reads through the Residential Purchase Agreement with you, at least for the first offer you write. The Statewide is 12 pages of fun in the sun in California. These agreements are full of all sorts of legal mumbo-jumbo that need to be explained to the home buyer. Your Agent needs to be patient enough to go through it line by line if necessary. After that, as long as you understood the first contract, the agent can even email you the contract for you to sign electronically if they are using Doc-u-sign or a similar e-signing program.
  • And lastly, make sure you find an agent that works for you. Let your agent know in advance what you expect of them. If your agent isn’t responsive and isn’t answering your calls or emails, maybe that agent isn’t for you.

 

And that is it for this lesson from me, the real estate answer man. Stay tuned for and download all of my other podcasts. In the meantime, just visit my website at barrykessler.com, or southerncalifornarealestateanswerman.com and read my blog posts, listen to my podcasts and watch my YouTube videos.

Remember, I am a real live Real Estate Agent, I work with my wife Debra, also a top producer at Troop Real Estate. When you work with us, you get two agents for the price of one. If you are looking to buy or sell a home in Southern California, especially in the San Fernando Valley, Simi Valley Moorpark, Thousand Oaks and Agoura, The Kessler Team is here to represent and serve you with top notch service, and all of the finest tools in the Real Estate industry, plus tools of our own that no others can match. And for more information on Simi Valley, and the San Fernando Valley and the surrounding areas, catch my podcast, Simi Valley Life. A personal look into the area in southern California I call home. That’s www.simivalleylife.com, and listen to it however you listen to your podcasts. 

Remember to check out our website and my blog at www.barrykessler.com , Or debrakessler.com.  Until next time, Thanks for listening and We’ll see you in your next home!


 

 

Title Insurance and the Home Buying and Selling Process in Simi Valley, California

Why do we need to purchase Title Insurance as a Home Seller or as a Home Buyer? Why do Buyers need to Purchase Title Insurance? 

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What exactly is Title insurance?  

To understand what Title Insurance is, you need to know what Title is. Simply put, Title to a piece of property is evidence that the owner of said property is actually in lawful possession of that property.

I have included an interview in this blog post, my Podcast Episode #10, Title Insurance and the Home Buying and Selling Process.  In this show we explain Title Insurance and why home buyers and sellers need it.  Meagan Sullivan from Consumers Title in Westlake Village, California takes time to answer important questions regarding Title Insurance. So click on the audio player and listen while you read through this article.    

In this article I’m going to discuss;

  • What is Title Insurance?
  • What do Title Companies Do?
  • What is a Preliminary Title Report?
  • What Could Be A Title Insurance Issue?
  • Home Sellers Title Insurance
  • Why Does a Home Buyer Need Title Insurance?
  • What Could Happen if Someone Doesn’t Insure Title?
  • If There is a Problem, Can a Title Company Insure Around It?

 

What is Title Insurance?

Title Insurance is the instrument that protects real estate owners and their lenders, against any property loss or even damages they might experience because of liens, encumbrances or defects in the title to the property. And by the way, each title insurance policy is subject to specific terms, conditions and exclusions.

A title insurance policy is different from homeowners insurance or automobile insurance where premiums are paid monthly. Title insurance insures against things that happened in the past, during the lifetime of a particular property. Instead of a monthly payment, there is a one-time premium paid at the close of escrow.

What do title companies do?

Title companies provide coverage to protect property buyers against claims from “Defects”. The term “Defects” refers to problems with determining ownership of the property due to liens from Government or private parties, or documents recorded improperly, forgery, fraud, encroachments and easements, the list goes on.

I took this list from Stewart Title’s website which I’ll link here. You won’t believe the things Title Insurance Companies have seen. …..

What Could Be A Title Insurance Issue?

  • Documents executed under false, revoked or expired powers of attorney
  • False impersonation of the true land owner
  • Undisclosed heirs
  • Improperly recorded legal documents
  • Prescriptive rights in another not appearing of record and not disclosed by survey
  • Failure to include necessary parties to certain judicial proceedings
  • Defective acknowledgements due to improper or expired notarization
  • Corporate franchise taxes as liens on corporate real estate assets
  • Gaps in the chain of title
  • Mistakes and omissions resulting in improper abstracting
  • Forged deeds, mortgages, wills, releases of mortgages and other instruments
  • Deeds by minors
  • Deeds which appear absolute, but which are held to be equitable mortgages
  • Conveyances by an heir, devisee or survivor of a joint estate who attempts to attain title by ill-gotten means
  • Inadequate legal descriptions
  • Conveyances by undisclosed divorced spouses
  • Duress in execution of wills, deeds and instruments conveying or establishing title
  • Issues involving delivery of conveyancing instruments
  • Deeds and wills by persons lacking legal capacity
  • State inheritance and gift tax liens
  • Errors in tax records
  • Demolition and substandard building liens
  • Administration of estates and probate of wills of missing persons who are presumed deceased
  • Issues of rightful possession of the land
  • Issues concerning the rightful conveyances by corporate entities
  • Deeds and mortgages by foreigners who may lack legal capacity to hold title
  • Legal capacity of foreign personal representatives and trustees
  • Issues involving improper marital status
  • Improper modification of documents
  • Rights of divorced parties
  • Conveyances in violation of public policy
  • Misinterpretation of wills and ancillary instruments
  • Deeds by persons falsely representing their marital status
  • Claims by creditors of decedent against property improperly conveyed by heirs and devisees
  • Issues concerning unlawful takings by eminent domain or condemnation
  • Special tax assessments
  • Real estate homestead exceptions
  • Forfeitures of real property due to criminal acts
  • Issues concerning adoption of children
  • Conveyances and proceedings affecting rights of military personnel protected by the Soldiers’ and Sailors’ Civil Relief Act
  • Issues concerning interests noted in financial statements filed under Uniform Commercial Code
  • Interests arising by deeds of fictitious parties
  • Adverse possession
  • Lack of jurisdiction or competency of persons in judicial proceedings
  • Community property issues
  • Utility easements
  • False affidavits of death or heirship
  • Intestate estates
  • Probate matters
  • Federal estate and gift tax liens…….. Need we go on?

 

Home Sellers Title Insurance

Why Does a Home Seller Need to Insure Their Title?

Home sellers are asked to deliver their property free and clear of all liens to the home buyer.  There are instances where the home seller may not know that a lien has been placed on his or her property by the government or some municipality. Maybe someone worked on your house and didn’t get paid by your contractor and may have put a lien on your home. I have a long list above that may contain some of these surprises that a home seller may encounter during that Title Search.  

 

What is a Preliminary Title Report?

 

When Title insurance is ordered by the escrow company at the beginning of the home buying process, a preliminary title report is ordered. This report is the basis of what has to be done, if anything, to identify, and then to begin to remedy problems such as liens or clouds on Title. A preliminary title report will investigate certain details about the piece of Real Estate such as Ownership, Liens and Encumbrances; and property easements. Any clouds or defects are the responsibility of the seller and are not the buyer’s problem. If defects show up in the report, the listing agent is made aware of them by the title company, and the seller will be notified of the items that need to be taken care of before the transfer of the property to the new buyer. Most of the time, the seller will agree to settle any liens through their proceeds from the sale of the house and the items will be paid through escrow.

 

 

Why Does a Home Buyer Need Title Insurance?

 

There are two types of home Buyers Title Insurance. One is required by the bank to protect the bank, and the other is Homeowners Title insurance to protect you, the home buyer.

Your lender’s policy is usually required by the lender to be purchased by you. That policy will insure that the lending institution has an enforceable, valid lien on the property.

 

The reason a home buyer will want to purchase the Home Owner’s Title Insurance policy, is to protect them from those defects in Title that occurred before they purchased the property and took out the Title Insurance Policy. Without that insurance, the buyer can be at great financial risk.  With proper Title insurance, the property owner will be covered up to the face value of the policy, and the homeowners’ title policy will cover any legal fees related to defending the homeowner’s title.

 

What Could Happen if Someone Doesn’t Insure Title?

There is no rule that you have to purchase a Title Insurance policy. If you are taking out a loan, the lender will require you do, but if you are purchasing the home with cash, nobody is forcing you to purchase Title Insurance. So why would you need to pay for it?

The simple answer is because for a relatively minor one-time cost, the property buyer will be insured. If you look at that copy of the list of true Real Estate Related Horror Stories, I counted 49 items in the list from Stewart Title; I ask you…do you need any more reasons?

If there is a problem, can a title company insure around it?

There are some instances where title insurance companies can for an extra premium, insure around a certain defects in title. Title companies are currently doing lots of insuring around Solar Panel Leasing Company liens. In my blog about Solar Panels, I touch on a few of those instances.

Personally I can think of a couple instances where a home seller needed to insure around a defect. One involved a seller in a Trust Sale where the seller could not find the paperwork for the paid mortgage. The bank was no longer around and as it turned out, the seller was able to pay extra to have that defect insured from the bank coming back to the home buyer asking to be paid off. 

To wrap up let’s review, we talked about….

 

  • What is Title Insurance?
  • What do Title Companies Do?
  • What is a Preliminary Title Report?
  • What Could Be A Title Insurance Issue?
  • Home Sellers Title Insurance
  • Why Does a Home Buyer Need Title Insurance?
  • What Could Happen if Someone Doesn’t Insure Title?
  • If There is a Problem, can a Title Company Insure Around It?

 LIsten to The Podcast


Thanks again to Meagan Sullivan of Consumer’s Title Company in Westlake Village. Thanks to you for reading all the way through.

So that is about all I have for you in this episode of the Real Estate Answer Man What is title insurance. Stay tuned for more and download all of my other podcasts. In the meantime, just visit my website at barrykessler.com, or southerncalifornarealestateanswerman.com and read my blog posts, listen to my podcasts and watch my YouTube videos.

Remember, I am a real live Real Estate Agent, I work with my wife Debra, also a top producer at Troop Real Estate. When you work with us, you get two agents for the price of one. If you are looking to buy or sell a home in Southern California, especially in the San Fernando Valley, Simi Valley Moorpark, Thousand Oaks and Agoura, The Kessler Team is here to represent and serve you with top notch service, and all of the finest tools in the Real Estate industry, plus tools of our own that no others can match. And for more information on Simi Valley, and the San Fernando Valley and the surrounding areas, catch my podcast, Simi Valley Life. A personal look into the area in southern California I call home. That’s www.simivalleylife.com, and listen to it however you listen to your podcasts. And thanks again to Debbie Lee of Retirement Funding Solutions in Simi Valley, Check out her contact information in the show notes, and thank you for listening the whole way through.

Remember to check out our website and my blog at www.barrykessler.com.

Or debrakessler.com. Until next time, Thanks for listening and We’ll

See you in your next home!

Listen to The Podcast

 

 

How Much Does it Cost to Sell a Home in Simi Valley? Seller’s Closing Costs

What are home seller’s closing costs? How much does it cost to sell your home in Simi Valley California? In this episode of the show we discuss the costs home sellers pay to sell their home

 

 

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You Have Found the Southern California Real Estate Answer Man show. This is Barry Kessler Coming to you from Sunny Southern California and this is the podcast where we talk about buying and selling real estate, we discuss investing in real estate, renting, leasing, landlord and tenant rights, as well as California Real Estate law, We discuss home improvement, going green, Is it a good Idea to put solar Solar Panels on your roof?

If it has anything do with putting a roof over your head, or somebody else’s head, we talk about it and much more on this show. So, let’s get to it right now!

Thank you for joining me on this episode of the Southern California Real Estate Answer Man. I’m Barry Kessler, Realtor with Century 21 Troop Real Estate in Simi Valley California and in this show we are going to be discussing Home Seller’s Closing Costs. In Other words, What does it Cost a Homeowner to Sell a Home in California?

What Are Home Sellers Closing Costs and what do they include?

 This article is a tutorial for home sellers. Most homeowners have purchased a home and know what is involved in the buying process, but many are unaware of what is involved in selling their home. In this tutorial, I will break down the costs the home seller pays when selling their home.

Let’s Start with a Net Sheet

 When a Real estate Agent comes to list your home, along with a killer listing presentation, the agent should have a net sheet with them.  A net sheet is a breakdown of seller costs.  It’s called a net sheet; because it shows approximately how much the seller will be netting or receiving from the sale of the home.

Let’s start by telling you that to sell your home using a Real Estate Agent; in much of LA County and Ventura County, The home seller will pay between 6-7% of the purchase price of the home in total fees and commissions.

So what do these include?  Well they are as follows….I’ll list them, and then we will explain them each individually.

 Commission

  1. Real Estate Brokerage Processing Fees
  2. Title Fees
  3. Escrow Fees
  4. Governmental Retrofit
  5. HOA Transfer and Document Fees
  6. Flood Certification/Where applicable
  7. Home Warrantee
  8. Request for Repairs
  9. Natural Hazard Disclosure Statement
  10. County Transfer Taxes
  11. Paying off Mortgages and Liens

  In order to demonstrate, we will use a $ 500,000 home as an example.

Commissions

The Listing Broker‘s/Real Estate Agent’s , commission varies as to geographical location but for most transactions in LA and Ventura County,   5-6 % is the most common commission charged. This translates in the case of a 5% commission  to 2 ½ % to the Listing Broker, that is the agent the seller hires to sell the home, and then 2 ½% to the selling broker, or the agent who represents the home buyer. It is a little confusing but the selling agent is the one who brings the buyer.

In some cases, the listing agent will make a deal with the home seller by offering a reduced commission if they can find and represent the buyer and well as representing the Home seller. This situation is called dual agency and as I said, dual agency can sometimes save the home seller as much as ½%-1%. This type of arrangement for a discount is negotiated at the signing of the listing agreement.  Dual Agency has its advantages as well as its disadvantages. We will discuss this in another article.

Now let’s take that $500,000 property. If the commission is agreed upon to be 5%, that will come to $25,000, $12,500.00 to each side of the transaction. I will talk in another episode of the Real Estate Answer Man about what exactly the Realtor does to earn that commission, so look for that episode and download it when you get the chance.

Brokerage Processing Fees

Most Real Estate offices have a processing fee which will set you back from $300-$500. This is the cost of running the transaction through the Real Estate Office.

Title Charges

The home seller’s portion of Title Insurance will cost approximately $ 1,320.00 on that $500,000 home. Title insurance is an insurance policy the seller buys to insure a clear title with no liens from individuals, government entities or claims of ownership by others.  Included in Title Fees, you will also see a wire fee and other Title fees totaling an additional $100.

Escrow Fees

Both sellers and buyers pay their own escrow fees. On that $500,000 home, Escrow fees will cost $1,500. That figure is arrived at by taking a base fee of $ 250.00, and adding a charge of $2.50 per thousand of the sale price of the home.

In addition to that fee, you will be paying a documentation fee of $75.00, and the seller also pays a loan payoff fee of $50.00 per loan payoff. Also be prepared to pay a wire fee of $25.00 and an archive fee of $50.00.  If you need a primer on what escrow is all about, check out my interview with Keith Parnell of All Valley Escrow.

Governmental Retrofit/LA County

The seller will be required to pay for a Retrofit certification to be performed, on homes sold in Los Angeles County. There are companies you can hire to do the certification, and the costs to the seller depend on what needs to be done. The city wants to make sure you have water saving toilets and shower heads; they want make sure the water heater is properly installed and strapped in for those earthquakes we get to enjoy from time to time and speaking of earthquakes, an emergency shut off valve needs to be installed at your gas meter. The seller needs to have a CO detector installed when selling a home in California as well as required well-placed smoke detectors, included in the certification.

Retrofit can get expensive for the seller as you can see.  If you need to install new low flush toilets or if you have to strap a water heater or install a new earthquake Gas shut-off valve, those could cost you a pretty penny.  I have had retrofit costs of as low as $95.00, but as I have just explained, that could go south fast and run into lots more money if major items need to be taken care of. For example, an earthquake gas shut-off valve installed can cost $300-$400.

HOA Transfer Fees

HOA transfer fees and HOA Document Transfer Fees only apply when you have HOA’s involved. These documents will vary but some HOA Docs can run as much as $300-$400. The buyers are going to be eager to get these so they can review them to determine what will be expected of them by the Home Owners Association, and in turn, decide if they want to buy the home with the particular HOA regulations.

Termite Inspection and Remediation

It used to be the case, that the termite inspection and work needed to be performed for Termite clearance was the sellers’ responsibility. Now, the buyer will need to bring their own termite inspector to do an inspection on the house, just as they would when they bring in a home inspector to check out the systems of the home you are selling. The buyer then will most likely ask the seller for a credit to remediate if indeed termite damage is found.

At one time, the banks were asking for the buyer to purchase a home with a clear termite, but that is no longer the case with one exception, a VA lender wants a clear termite report

 

Flood Certification

In many parts of Simi Valley and recently in many parts of Ventura and Los Angeles County, there are 100 year flood zones, and F.E.M.A. is expanding their reach, causing insurance companies to charge outrageous premiums for this 100 year flood zone.  F.E.M.A.  seems to be attempting to prop themselves up by using California money to take care of others who live in hurricane areas and along the Mississippi  and Missouri rivers where floods actually occur more than every 100 years. Okay just don’t get me started. There is new law on the books where the home seller has to have his home certified so as to show how much it will cost the home buyer to buy flood insurance. This is only necessary if indeed flood insurance is called for on the particular property for sale. This flood certification can end up costing the seller $500 for the certificate. The bad news is that this situation can end up causing headaches for a seller trying to sell their home. Stay tuned for flood insurance updates.

Home Warranty

There is a line in the Residential Purchase agreement that gives the buyer the option to ask for a Home Warranty.  You as the home seller will be asked by the buyer to purchase a home warranty plan. This policy is not required, but generally speaking, paying for a home warranty is a good faith gesture by the seller to home buyer. The seller will be asked to purchase a home warranty plan for one year. These warranties generally cost from $350-$550. This warranty is paid through escrow out of the proceeds from the sale of the home. Some sellers ask me if they have to pay for the warranty, and the answer is no, in fact a buyer can ask for whatever they want, but if you read the Residential Purchase Agreement, it plainly states that the property for sale is as is… but as I said, when the seller purchases a home warranty, they are showing some good faith to the buyer.

Transfer Taxes

Home sellers will be paying State and local Transfer Taxes. In LA County, transfer taxes are pretty steep and are based on the sale price and of course, they are always changing them. Here is where they are right now…

County Transfer Tax  Seller pays $1.10 per $1,000 of sales price.

City Transfer Tax:  Los Angeles – $4.50 per $1,000 of sales price.

( Culver City – $4.50/$1,000; Pomona – $2.20/$1,000; Redondo Beach – $2.20/$1,000; Santa Monica – $3.00/$1,000)

Calculating Tranfer Tax you owe: 

If  the full sale price of the property,  Ex: $500,000.

That would mean:

County Transfer  Tax = $500,000 / $1,000 x $1.1 =  $550.

City Transfer Tax= $500,000 / $1,000 x $4.5 = $2,250.

As for Simi Valley, there is no City Transfer tax but in Ventura County, these transfer taxes will generally set the seller of a $500,000 home back approximately $  550..

 

Natural Hazard Disclosure

In the state of California, a Natural Hazard Report is required to be commissioned for the buyer. NHD reporting companies charge approximately $85-$125 for these reports .These reports are very detailed and are interesting to read.  They include information regarding flood zones, earthquake faults, Toxic Mold information, Megan’s Law, Airport influence and their proximity and so on. We will be talking with a representative from an NHD firm in an upcoming episode of the Real Estate Answer Man, so stay tuned.

 

Requests for Repair

 

The California Residential Purchase Agreement says plainly on page 4 paragraph 9 that unless otherwise agreed: the Property is sold (a) in its PRESENT physical (“as-is”) condition as of the date of acceptance. That is all well and good, but the buyer has the opportunity to perform inspections and request repairs or credit from the seller to compensate for repairs needed on the property.  The seller has the right to refuse to repair or compensate for repairs, but sellers need to know that in most cases, buyers will be requesting repairs and they need to be prepared to address those early on in the transaction.

Paying Off the Mortgage

If the seller has not paid for the home in full, the biggest and most important part of the closing costs are going to be paying off the balance of your loan or Mortgage. Escrow will get the totals for the loan payoff from the seller’s bank including fees to satisfy and payoff the loan before the seller sees any of the money from the sale of their home. If you happen to have any liens on the house including tax liens or otherwise, those obligations will need to be settled as well.

So let’s look at the totals, and at the same time, summarize the costs of selling a home with a sale price of $500,000.

Totals

Commissions at 5%     = $25,000

Broker Processing Fee =       350

Escrow Fees =                      1,600

Title Insurance =                 1,420

Transfer Taxes =                    2,800- 550                                              

Retrofit =                                 100

HOA Documents =                    ?

Home Warranty =                  450

NHD Report =                           95

Total                    =           $29,565-$31,915      Representing a cost of approximately 5.921% to the seller       

Refunds

Property Tax Refund

The seller needs to pay their property tax up until the date when they leave the property.  If the seller has prepaid their property taxes which often are the case, they will get the prorated money back from the State.

HOA Pro rated dues will be refunded for those of you who pay HOA fees. If you have pre-paid your fees, you will be getting back some of that money.

Escrow Pad

Escrow will often overestimate the costs of doing business in order to have a pad, enough money where they don’t have to go running to the seller asking for more money. That pad is generally around $500. You may get some of that back.

Additional Costs to the Seller

Not everything can be calculated as far as costs to the seller because there are items like I have already described to you like requests for repairs.  Don’t forget the possible costs of having to do some costly Retrofit work as well.

In some cases, the Real Estate Agent may suggest the seller make some repairs or improvements before the home goes on the market. That will be another expense to the seller as well but that kind of expense will go a long way towards getting a better price on the home.  With that said, the seller does not have to make any improvements that will cost them money and create a monetary hardship. Often those repairs can be worked out at the close of escrow in the form of a credit to the buyer. That way the seller can in essence have the buyer do the repair after close of escrow with no out of pocket cost to the seller until after the sale of the home.

So that is about all I have for you in this episode of the Real Estate Answer Man What does it Cost a Homeowner to Sell a Home.  I hope that all of you home sellers have a better idea as to what it costs, and why. Stay tuned for more, and download all of my other podcasts. In the meantime, just visit my website at barrykessler.com, or southerncalifornarealestateanswerman.com and read my blog posts, listen to my podcasts and watch my YouTube videos.

Remember, I am a real live Real Estate Agent, I work with my wife Debra, also a top producer at Troop Real Estate. When you work with us, you get two agents for the price of one. If you are looking to buy or sell a home in Southern California, especially in the San Fernando Valley, Simi Valley Moorpark, Thousand Oaks and Agoura, The Kessler Team is here to represent and serve you with top notch service, and all of the finest tools in the Real Estate industry, plus tools of our own that no others can match. And for more information on Simi Valley, and the San Fernando Valley and the surrounding areas, catch my podcast, Simi Valley Life. A personal look into the area in southern California I call home. That’s www.simivalleylife.com, and listen to it however you listen to your podcasts. And thanks again to Debbie Lee of Retirement Funding Solutions in Simi Valley, Check out her contact information in the show notes, and thank you for listening the whole way through.

Remember to check out our website and my blog at www.barrykessler.com.

Or debrakessler.com. Until next time, Thanks for listening and We’ll see you in your next home!

 


 

 

 

 

 

 

 

 

 

What are Home Buyer’s Closing Costs For a Southern California Home

Both Home Buyers and Sellers have Closing Costs. The Buyer Incurs Costs When They Take out a Loan,  Buyers pay The Escrow Company, The Title Insurance, The prepayment of property taxes, Homeowners Insurance and More….

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 ,

Thank you for joining me on this episode of the Southern California Real Estate Answer Man. In this show, I am going to explain the term closing costs. What are these closing costs that you are hearing about? What are they comprised of and why are you paying them?

What Are Home Buyer’s Closing Costs?

Well, sellers and buyers pay closing costs but in this episode we are just interested in the closing costs paid by the buyer.

Generally speaking, if you are getting financing, a typical buyer is going to pay approximately 3% of the sale price in closing costs. That is above and beyond the down payment mind you.

So let’s take a home that costs $500,000.

Escrow Fees

Escrow fees will cost generally $200 plus $1.75-2.00 per 1000 so for a home costing approximately $500,000 the escrow fee will cost about $1,200. Escrow is explained in another episode, but basically what they do is take the Purchase contract, and they create a document called Escrow Instructions, whis is a road map of the path that the agreed upon contract, signed by both parties in the transaction, that the sale of the property will take. The length of the escrow, the down payment, the agreement between seller and buyer about home warranties, the length of time between the close of the sale and the turn over of the keys to the new home, all that is written in the escrow instructions. They hold the money, they take care of sending money. They are a very important part of the process, and we will have an escrow representative come in and talk about all they do in another show. but for now, just keep in mind that the typical fee for a $500,000 home will be approximately $1,200.

Title Insurance

You will be paying for Title Insurance. If you are planning on financing the home, the bank will require you pay for Title Insurance. Yes, you are right that the seller should be paying for Title insurance, and they do. They pay to have Title look over their property to make sure, and Insure that the property is free and clear of liens. However as a buyer,  the bank wants you to pay  title insurance to insure against anything you do to mess up the title for them. So for a home that costs $500,000, that title insurance policy will cost about $1,000.

Prepaid Property Taxes

Another thing you will be paying are property taxes. In Ventura County, property taxes will set you back 1.25 % of the purchase price on an annual basis. During escrow you will be required to pre-pay some of the property tax. It could be as much as 6 months prepaid, so that could be some money, for that $500,000 home that will be $ 3,125.  These are recurring costs.  For as long as you own that home, you will be paying your property taxes twice a year so you will be paying that $3,125.00 in November, and then again in April. November 1st and April 10th.

Prepay Your Property Insurance

Next you will need to pay your property insurance in advance. That’s for fire and liability and you will be required by the lender to pay that in advance. That policy on a $500,000 home will set a buyer back about $900-$1,200 per year. We are talking about California here and that means Earthquake country. Many of us have Earthquake insurance through the California Earthquake authority. That Earthquake policy will set you back on the half million dollar home, approximately $1,000-$1,500 per year over the regular insurance coverage. Also if you are in a flood zone, you will be asked to pay your flood insurance in advance too, so watch out for that.

Points and Lending Fees

So what is next, well if you are taking out a loan on this property you are going to have to pay fees to the lender and these things they call points. Now, if you are not taking out a loan but are paying in cash, you won’t be paying all these fees, and you won’t have to pay for that Title insurance we were talking about earlier that you have to pay for the bank. So what are these fees and points and how much will those cost you?
The points are a percentage of the money borrowed so lenders are generally going to charge 1-2 points or 1-2 percent of the loan total. Then you will have to pay an appraisal fee of $450-$500, a loan tie-in fee, a credit report fee, a few other fees thrown in. Those will be added to the 1-2 percent you will be paying in “points”.

So let’s say you are financing $400,000 on this $500,000 purchase, you will average approximately $6,000-$7,500 for all of the lender fees.

Property Inspections

You will be paying for inspections. A home between 2-2500 square feet will cost between $350-$500 for a full professional home inspection. There are many home inspection companies out there who do nothing but that for a living. You will also be needing a termite company to come and inspect the property to see if there are any of those little critters out there that need tending to. That should run no more than $100. I will be talking with a home inspector and a termite inspector in one of my upcoming episodes of the Southern California Real Estate Answer Man so look for that.

So what other inspections will you be doing that will set you back some money? Well, if the home has a chimney, you may want to spend some money having that individually inspected. You see, a home inspection company may see something wrong with a chimney, but they don’t tell you what an expert would tell you. That expert will charge you around $350 for that inspection. You may want to have the sewer line inspected with a camera to see if it is clogged, damaged or cracked. That inspection will set you back about $350. So we are about at $1,000 for your inspections. The general inspector may suggest that you should have other items looked at more closely like your roof, or your HVAC system, plumbing and the like. Now these things can cost you nothing to have checked over because you are going to have repairmen and craftsmen come in to give you estimates and costs.

Just keep in mind that you have only a small window in most cases to perform your home inspections, so get the inspector in there early, and if they point out an issue that they suggest you consult an expert, you will have time to get that HVAC person, or the plumber, electrician or a roofer in to give you an estimate or their opinion on the cost to remedy the particular issue. Then you can ask for the seller to give a credit for a fix, or if the seller doesn’t want to give you the credit or perform the repair themselves, at least you know how much it will take to make the required repairs. You can walk if it looks like a big problem that you don’t want to deal with, but again, get those inspections done early.

In Conclusion

On a home purchase of $500,000 in most of Southern California The following fees are approximate figures associated with costs of buying a home.

  • Escrow Fees  Approximately            $1,200
  • Title Fees  Approximately                  $1,000
  • Property Taxes  Approximately      $3,125
  • Insurance  Approximately                 $1,200-2,700
  • Points and Lending                                $ 6-$7,000
  • Inspections                                                $500-$1,000

So there you have it, As I mentioned at the beginning of this show, the closing costs for a 500,000 home are going to be setting you back approximately 3% of the purchase price or around $15,000.

We can talk about having the seller pay some or all of these closing costs, but that will be another episode of the Southern California Real Estate Answer Man.

If you are buying your home with cash, you will pay about half that amount, like $7,000, maybe even less instead of $15,000. Now that’s a substantial difference but hey, not all buyers can pay cash. But if you can, we will discuss that in another episode as well.

And that is it for this lesson from me, the Real Estate Answer Man. Thank you for listening the whole way through. Stay tuned for and download all of my other podcasts. In the meantime, just visit my website at www.barrykessler.com, or southerncalifornarealestateanswerman.com and see my blogs, listen to my podcasts and watch my YouTube videos.
Remember, I am a real live Real Estate Agent, I work with my wife Debra, also a top producer at Century 21 Troop Real Estate. When you work with us, you get two agents for the price of one. If you are looking to buy or sell a home in Southern California, especially in the San Fernando Valley, Simi Valley Moorpark, Thousand Oaks and Agoura, The Kessler Team is here to represent and serve you with fantastic service, and all of the finest tools in the industry.

We work with one of the largest premier relocation services in the world, so wherever you are moving in the states or around the world, give us a call or send us an email and let us work for you.
And remember to check out our website and blog at barrykessler.com.
Thanks for listening.
See you in your next home!

Barry Kessler   818-426-6415

Buying a Mobile Home in Simi Valley or Moorpark, California

There are many things you need to know before you can even qualify to purchase a mobile home in a Simi Valley or Moorpark mobile home park. Many prospective buyers are not aware of the many rules and regulations set by these mobile home parks.

 

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My First real estate sale ever was a mobile home. As I was showing properties at all of these parks, I decided to take pictures and create a web page that would be a review of all of the parks in Simi Valley and Moorpark. Over the years, this page has become very popular. I get calls from it every day from people who are curious about Mobile Home Parks. With rents so high here in Southern California, it is natural to see more interest in the parks. 

The reason I am doing this podcast and writing this post, is I am hoping to direct callers to this post, and hope that they have a listen, and they can get the information they are looking for and more, on mobile home parks before they call me.

First, Mobile Home Parks are not the dumping ground for the poor and downtrodden. They are for the most part, really nice places. Pools, Community meeting rooms with card tables, pool tables, cooking and banquet facilities for a special occasion. Pools, spas, some with tennis and basketball courts nice places.

So what I’m saying is if you are thinking about moving your ex wife into a nice mobile home park or maybe you have a crazy relative or drug addicted child you want out of your house. You can’t do that. There are very strict standards that these parks stick to, and tenants must agree to abide to the rules in the lease that you sign with the park. 

 Lending on Mobile Homes

Due to the fact that Mobile Homes or Modular Homes are considered Personal Property rather than Real Property, lending on Mobile Homes Requires Large Down Payments, Higher Interest Rates and Shorter Repayment Terms. 

I Get questions on financing of mobile homes. Mobile home lenders are different breed of lender. Mobile homes for the most part used to be registered with the DMV. They had vehicle license tags, axles, the whole 9 yards. That is why they are treated as Personal Property. 

Mobile homes that were built before June of 1976 are known as Pre-HUD mobile homes. Homes built after June of 1976 are called modular homes and are of course, post HUD. Pre HUD Mobile Homes were built from less safe materials. The safety standards were improved greatly in homes built after 1976.

Lenders therefore will require at least 25% down on a mobile home built Pre-HUD. You will find that interest rates are higher and loan terms are shorter for mobile homes of any age. Generally 10-15 years at the longest. For a comprehensive up-to-date list of mobile home lenders, send an email to me, and I will send you the list. 

The buyer of the mobile home must be the person living there.

When you buy a mobile home, the park expects you to live there. They are not interested in having someone buy the unit, and rent it out, lease it out or move in someone other than that buyer. Parks also want to know about other adults living in the same unit. You might think to yourself that more adults means more income for the household, but what if the presence of that extra adult actually brings down the spending ability of the household?  It does happen, and when it does, the park wants to know about that too. If it is a 55 and older park, a senior community, park management as well as park homeowners will be keeping a wary eye out for people living with residents who are under 55. They are allowed to stay with Grandma and Grandpa, but not for extended periods of time. 

The Buyer Needs a Good Credit Score

A park applicant needs to show a Credit score of 650-675 or better to qualify for most parks, but there are some exceptions. Some parks will look at the entire picture of someones credit background. If the applicant was going along just fine and then, they had a foreclosure due to a job loss, then they got a job and went back on living a credit worthy life, you may find some parks will make exceptions. 

The Buyer Needs to Show a Good Income to Debt / Expense Ratio

You need to prove to the park, that you make enough money to pay for your space rent and possibly your mortgage, if you finance the mobile home. So, the management will look at your Income to Debt Ratios. There are utilities, basic food and necessities to be added in. Car payments and gas and insurance. All of these things are factored into the equation to enable the park manager  to decide if this applicant is park worthy. 

So to qualify you will need to bring in tax returns and current bank statements, pay check stubs and the like. You will be asked to read and sign a lease with the park.The Park will also want to monitor your financials to make sure you can continue to keep paying. Some of these parks require that you bring in proof once a year as to your state of financial well being.

Some may decide that you will need to be evicted and give you 2 months notice to sell your home or they can take possession of your home and ask you to move it. Then they can move it themselves and have another moved to that location, or fix up the one they just evicted you from and sell it themselves. 

Parks Have Pet Restrictions

Parks have regulations and restrictions on the number and size of your pets. Most will limit the homeowner to one dog or one cat. Some breeds are discouraged and large dogs can be rejected. Many people think that discriminating against a certain breed or size dog is wrong, but let’s look at the situations the park management puts themselves into. Let’s say that a tenant is walking their small dog along the street in the park and coming in the other direction you have a smaller sized tenant with a really big dog. A dog who wants to taste the smaller dog. This scenario unfolds every day in parks near you. The park management is responsible for keeping the park safe, and that includes large, unruly dogs. Some parks have to allow comfort animals, but not all.

Restrictions on adding on to your unit

Parks Frown on Expanding or Building on Your Space

Building a structure on your lot separate from your existing home. Fences or  an outdoor office space, after a couple of warnings, the park can, and probably begin eviction proceedings where the parks legal fees will be paid by the homeowner. The homeowner, even if they own the mobile home free and clear, can be forced to sell the unit in 60 days, or walk away. It costs too much to move a mobile so it will either be worked on and sold by the park, or removed and a new unit will be put in by the park, and they will find a new tenant or buyer.

 

So let’s review

  • LENDING ON MOBILE HOMES IS DIFFERENT FROM A REGULAR HOME LOAN.
  • YOU MUST QUALIFY WITH ANY PARK YOU MOVE INTO.
  1. THE BUYER OF THE HOME MUST BE THE PERSON LIVING IN THE HOME.
  • THE PARK NEEDS TO KNOW ABOUT ANY ADULT LIVING IN THE UNIT.
  • SENIOR PARKS ARE VERY STRICT ABOUT MINORS STAYING TOO LONG WITH THEIR GRANDPARENTS.
  • THERE ARE LIMITS ON ANIMALS.
  • YOU NEED A 650-675 OR BETTER CREDIT SCORE.
  • YOU NEED TO PROVE YOUR INCOME AND HAVE GOOD INCOME TO DEBT RATIOS AND MAKE ENOUGH $$
  • YOU NEED TO FOLLOW PARK RULES AND THE CONTRACT YOU SIGN WHEN YOU APPLY FOR THE PARK.

 

Okay, that’s all I have for you today on the Southern California Real Estate Answer Man Show. Thank you for listening all of the way through. I I want to remind you that if you are looking to buy or sell a home in Simi Valley, Moorpark or Thousand Oaks, in The San Fernando Valley Burbank or Hollywood, I am a real live Real estate Agent and I would be pleased to assist you in your Real Estate endeavors. I work along with my lovely wife Debra Kessler, also a Top Producing real estate agent with Troop Real Estate. We work with the latest tools in the Real Estate Industry; we are tech savvy agents. We make and produce our own YouTube videos and podcasts. We use you tube to market your properties.   We have the tools and the experience needed for you to have a smooth and successful real estate transaction. We are backed by the largest and most successful  Real Estate broker in Ventura County. Century 21 Troop Real Estate is a full service brokerage with Escrow, Title and Mortgage bankers as well. And Debra and I have a support team that would make others blush. So what I’m saying is, we want to be your Real Estate Agents for Life. Give us a call at 818-426-6415 and visit our website at www.barrykessler.com,  watch my YouTube Videos, listen to all of my podcasts and read my blogs about real estate buying and selling as well as places to visit in Southern California. And while you are at it, peruse the properties on my website and have fun.   

 I have restaurant reviews as well as neighborhood reviews and information. If you have any questions or if you have a question that you would like me to answer in an upcoming podcast, send me an email and maybe your question will become my next episode of the Real Estate Answer Man Show.

Until then, happy house hunting and I hope to be handing you the keys to your new home.

Thanks for listening, and please join me again for another episode of the Real Estate Answer Man Show.

 

Will Solar Panels Improve The Value Of My Home

Homeowners Need to Be Careful Investing in Solar Panels if they are Thinking About Selling Their Home. Buying can Very Cost Inefficient, Leasing Can Make it Difficult to Transfer to The New Buyer

 

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I get asked this all of the time. If I put solar panels on my roof, will it make it harder or easier to sell my house? And, what is the difference if I lease them or if I buy them outright?  That’s a great question and I’m going to answer them right here and now, and the answer is…wait for it….it depends.

Now I don’t want to get on the wrong side of those of you who are environmentally fastidious, but I’m going to be treading on some toes here. The toes of those in the solar industry, the toes of those who are very concerned about the environment, the toes of those of you who have already taken the leap without thinking about what limitations you may have put on the sale of your home, and what if you have already paid for those panels yourself and skipped the lease?  Yes, I’m going to annoy all of those people and more by the end of this article, but so be it. Does it count that I drive a Prius? Okay, here it is the good, the bad and the ugly of the subject, Will Solar Panels Affect the Sale of My Home?

 

Let’s Start with the Leased Variety of Solar Systems

 

1. Leased solar systems 

I’m sure that you have had them knock on your door in their snappy outfits and ask you if you had ever thought of going solar and proceed to tell you how much money you can save on your monthly energy bill. Companies like Solar City and Verengo Solar offer no cost installation and 20 year leases of solar photovoltaic, electric generating solar panels. Having solar panels of the leased variety can save high energy users lots of money on their monthly electric bills, but they may also make it more difficult to sell your home. Most of these solar leases are transferrable but the buyer of the property will need to agree to assume the lease that the home seller signed with the solar leasing company.

Remember we are talking about California here and in other states, there are different laws like for instance, in some states you can’t buy a home with a solar lease if the buyer is using an FHA loan, so check your local laws.

During the home buying process, at the beginning of the escrow period, the buyer will have an opportunity to review the solar lease agreement as part of the sellers’ disclosures. After reading the lease, the buyer will determine if he or she wants to proceed with the purchase of the home and take over the solar lease from the seller.  Sometimes the buyer will request to see the lease before they write up an offer.  That’s a legitimate request because often times the buyer doesn’t want to wait until escrow is opened, and a deposit is made before they get the “Solar Surprise”.

Another hurdle the buyer will have to clear is getting permission from the leasing company to assume the solar lease. The solar companies will require the buyer to have at least a 680 FICO score or better. The application for and the signing of the contract with the solar leasing company will require the buyer to enter into a leasing agreement during the home lending period and that can have a sour effect on the ability to get a home loan at the right rate or even at all. VA lenders are especially sensitive to these leases so your lender needs to be aware of the solar panels and needs to have the savvy and know-how to inform the underwriters of the situation.

So if the buyer proceeds with the purchase of a home with leased solar panels will that harm or degrade his or her credit rating to the point where they will not qualify for their loan on that particular home?  Tim Love of Capital Mortgage Services says no, not really.  If the buyer can prove for example that by having the solar panels on the roof, they will be saving money on their utilities, then the loan underwriters can be made to see that the lease of the panels will not be an extra expense, but in fact, a money saver and not a burden .If the savings can be shown to the underwriters of the loan, then it will not affect the borrower’s ability to obtain a mortgage.

So the good news is that most solar leases are transferable and for most lenders, the panels are not a major hurdle, just minor ones that could potentially turn into major problems.

The next question I get is ….

Will Solar Panels Improve the Value of my Home?

 

2. Purchased Solar Panel Systems

If you have purchased your own solar system, you are probably confident that the panels will improve the value of your home so your major concern should be, will I get my investment in the solar panels back when I sell my home. In California, appraisers look at leased solar panels as personal property so they don’t take into account the value of leased panels in the appraisal process, but to those of you who have made the investment, will that improve the value of your home, or will their investment in solar panels not hold their value?

I went to one of my best friends who also happens to have been a Real Estate appraiser for B of A for 27 years with the question; How do you evaluate a home with a solar electric system? His answers were very interesting, and they all made perfect sense.  Well, kind of.

Let’s say for example that a seller says they paid $50,000 for their solar system and they have no electricity bills as a result. What should the appraiser do? Well, what they should do is look for what they call matched pairs, in other words, the appraiser needs to look for homes that compare in square footage, location, and what not, and they need to find homes that compare both with and without a solar system on the roof. We are talking about systems owned by the seller and not leased; remember that appraisers look at leased systems as personal property, so the appraiser needs to compare homes with systems that were purchased by the home owner. Now, that’s really hard to do because most of the solar panels that you see on roofs around town are of the leased variety. How does the appraiser or anybody for that matter know the difference just by looking at them on the MLS as to whether or not those panels are leased or purchased?  You can’t!  An appraiser can compare homes with and without pools pretty easily because there are lots of homes in Southern California with pools, or a home with an enclosed patio can pretty easily be compared because there are plenty of those too. The appraiser can see for example that the home with the pool sold let’s say for $10,000 more than the comparison without the pool, same for the enclosed patio, but solar, not so easy but the listing agent should and will disclose to the appraiser the fact that the system was purchased by the seller.

So in addition to the troubles that appraisers have in figuring out the value of these purchased solar panels is that there is no place on the MLS, the Multiple Listing Service that realtors use to post and advertise property listings, there is no place dedicated to solar. If local MLS’s had a Solar Panel section where an appraiser could go to in order to do a proper comparison, it might make a difference but there is no place currently on the MLS in California, to enter these details. If there were such a section in the MLS, the listing agent would be able to enter the solar panel specifics into the system. Are they  leased or purchased, how many Kilowatts, the quality of the system etc..  But the fact of the matter is that there are just not enough homes out there, I think that the figures are about one in a hundred homes in the Southern California Area have solar on their roofs. There just aren’t enough homes out there to make a comparison. And what about the appraiser? The appraiser would have to become an expert on solar. They would have to know the different manufacturers, the science behind the kilowatt hours and production and how efficient each one is. It is just not possible for an appraiser to know all of this.

So the answers to those of you who have purchased your own solar systems, wait, hold it… I have news for you; you will not get back the money you have spent on the system when you sell your home.  You may have saved lots of money on your energy bills and the longer you have lived in that home, the better, but the truth is, most appraisers will take those systems into consideration but you will be lucky to get that appraiser to evaluate those panels at being worth 25% of that $30-40,000 investment you made. Sorry!

Now you need to remember that a seller may get lucky and meet a like-minded, ecologically and environmentally concerned buyer who will gladly pay extra on top of the appraised value to get the solar system for their newly purchased home, but again, you have to be lucky. It’s just like a homeowner who has sunk $40,000 into a family pool and may only see $10,000 of their investment realized when they sell. The same holds true for the solar panel buyer.

Now before you get really angry with me here, let me tell you that if you are planning on living in the same home for many years, like decades many years, and you use lots of electricity, then your purchased solar system will do you well. You will be saving not only money, but the environment while reducing carbon emissions. But,  only if you are looking for those long term returns does it make sense to purchase PV panels.

So, if you are planning on selling your home within the next five years and are planning on investing in  PV panels to improve the value of your home,  I suggest you upgrade your kitchen and bathrooms instead. You will actually get that investment back, and more. That would be a far better investmant than purchasing a solar system.

 

The Legal Pitfalls of Going Solar

We have been talking about solar and selling your property so I think we need to address some of the legal codes that have popped up here in the state of California that affect homeowners who install any type of photovoltaic solar panel system.  These Solar Access Laws appear in the Civil, Government, Health and Safety and Public Resources Codes. Here are a few codes that may be of interest to you…

Civil Code Section 801.5 that says that neighbors may enter into agreements such as solar easements to ensure that enough light hits their solar panels.

Government code section 65850.5 permits subdivisions to include solar easements applicable to all subdivision plots.

Public Resources Code section 25980 contains the Solar Shade Control Act, under which trees and other natural shading planted after the installation of a solar collector may not cast a shadow that covers more than 10% of a neighboring properties solar collection absorption area between the hours of 10 A.M. and 2 P.M.

Then there is the Nuisance Civil code 3479 which is known as the “unreasonable interference with the use and enjoyment of the property of another. “  One potential impact of these PV panels, the photovoltaic solar panels is the extreme glare associated with them. In certain alignments, mirror surface solar panels may direct and even concentrate reflected sunlight and intense heat and glare toward neighboring properties. So it is very important when installing these panels, to take into consideration your neighbors and the glare factor. You may have a lawsuit on your hands if your neighbor is put out by the reflection and the glare from your solar panels.

Other potential adverse impact on neighboring properties may be a loss of view as in height restrictions, municipal view ordinances or CC and R’s from home-owners associations may also come into play.

Lastly, I need to point out that as of the printing of this article, October 27, 2014, the majority of solar panel users in California have leased systems. The folks who have gone solar have figured out that without all of the government incentives and rebates, solar makes no sense. It is too expensive and not efficient enough yet. I have to go no further than Leo Laporte, the Tech Guy who when asked by a caller last month what solar panels he would suggest said, none. He said that they were getting better but were highly inefficient and he had no suggestions for the caller. Leo is a real Green type of guy and he had no good answer for his caller. Need I say more?

Well, that is all I have for you today on this subject, Will solar panels on my roof make my home easier to sell or harder and will they improve the value of my home.  On the real estate answer man show. Thank you for listening the whole way through. Stay tuned for and download all of my other podcasts. In the meantime, just visit my website at barrykessler.com, or southerncalifornarealestateanswerman.com and see my blogs, listen to my podcasts and watch my YouTube videos.

Remember, I am a real live Real Estate Agent, I work with my wife Debra, also a top producer at Century 21 Troop Real Estate. When you work with us, you get two agents for the price of one. If you are looking to buy or sell a home in Southern California, especially in the San Fernando Valley, Simi Valley Moorpark, Thousand Oaks and Agoura, The Kessler Team is here to represent and serve you with fantastic service, and all of the finest tools in the industry. Call us at 818-426-6415.

Remember to check out our website and blog at barrykessler.com.

Thanks for listening.

See you in your next home!

 



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 Simi Valley, CA 93065
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