Two new listings!

I just put two new listings on the market, and I’m excited to share some information about them! Check out the photos and videos below, and give me a call if you have any interest (or know someone who does) in buying in Walnut Creek!

2196 Walnut Blvd.: This gorgeous lot and great location is located just down the road from Walnut Creek Intermediate. It is on a flat, half-acre lot, retaining its secluded country charm. The home was under construction when transferred to the successor trustee, and the family decided to sell as-is.

There is a separate in-law unit that needs finishing touches to stay in while constructions finishes, and the addition includes a bonus room and unfinished master suite that totals approximately 1,000 square feet. There is a 4-car garage, too. Can’t beat this location! Listed for $1,275,000. Call me for all the details.

3124 Lippizaner Ln.: This 3 bed, 2 bath, 1,964 square foot townhouse in the Trails End community near Northgate High School offers walnut hardwood floors, vaulted ceilings, an atrium, and two sliders to access the high-end back deck. The backyard views (looking over the open space) can’t be topped.

This townhouse is freshly painted and has new carpets, granite counters, and two built-in’s for extra storage. Enjoy the wet bar, wine fridge, and multiple entertaining spaces. There is a community pool, tennis courts, and Equestrian Center. You can see pictures and a video here. Listed at $890,000.

Just Sold: 729 Katydid Ct.

I recently sold a beautiful home at 729 Katydid Ct.! I’m so happy for my Coast Guard clients. One was stationed in Alameda and the other out towards Bodega Bay, so in 2014, they decided to buy in Martinez. A year ago, they were transfered to Virginia, rented the house out, but after one year decided to sell.

Virginia was much cheaper and they got a huge house with acreage. Serendipitously, I was able to connect with them on a recent trip to visit my son who lives in Norfolk, VA. We had a wonderful lunch at a rooftop restaurant and they have jokingly told their colleagues that their real estate agent came all the way from CA to meet with them!

All in all, we had five offers. It was listed at $620,000 and sold for $645,000. They were ecstatic with the results and as you tell by the pictures, staging helps tremendously especially with showing restrictions because of COVID-19. Video also helps buyers get a full perspective before deciding to book an appointment.

Just Listed: 5371 Saddlewood Ct. (Concord)

Just listed on Friday: This beautiful 1,368-square foot home in Concord! This is a 3-bedroom, 2-bath house built in the 1970s on .18 acres. It is in a prime a cul-de-sac location with desirable schools nearby. Substantial interest in the home is driving an offer date of Wednesday, Oct 7th at 12 pm PT. There is still a Bay Area inventory shortage, and with low rates, we have a seller’s market. Enjoy the video tour!

8 home selling mistakes to avoid

Opendoor published and article back in 2019, I was able to “edit” to be more current about mistakes to avoid when selling your home. Here is my version:

Half the battle of selling a home is anticipating problems before they come up. Selling a home is a major life milestone, and it can be complex when you consider all of the steps involved: preparing and listing; making repairs; finding a buyer; navigating the closing process; and finally moving into your next place.

Here are some of the most common mistakes that occur when selling a home; be informed so you avoid making them.

1. Underestimating the costs of selling

The total cost to sell a home can amount to much more than the 5-6% in agent commissions most people expect to pay. When you account for closing costs, repairs, and other concessions to the buyer, the costs of preparing your home for selling, can be closer to 10% of the sale price. For example, you’ll have to do some staging, cleaning, and painting.

If you move into your new home before selling your old one, you may have to rent a temporary place or pay for both mortgages as well as other carrying costs, such as utilities, HOA dues, taxes, and storage. Learn more about trading-in your home to avoid these costs.

A real estate agent can guide you through this and make recommendations for service providers. Many brokerages now offer concierge programs that pay for these costs upfront and get paid at closing.

2. Setting an unrealistic price

The price you want and what the market will pay can be two very different things. You might hear the terms Fair Market Value, or transparent pricing, which refer to how a home is valued.

home selling mistakes - setting wrong price
From Opendoor

Your agent will provide you comparisons and data based on homes with similar sizes and features that have sold near you. These comparable sales, also referred to as “comps”, are what many real estate agents use to suggest a listing price and what appraisers use to appraise a home. Please note, buyers ultimately decide what they are willing to pay for a home and what it will sell for and if they will remove the appraisal contingency or not.

3. Only considering the highest offer

The highest offer, while exciting, isn’t always the best offer given your needs. It’s common in many traditional sales to have contingencies. These are conditions that must be satisfied for the sale to close. You may have contingencies that protect the buyer’s interests like a financing contingency or an inspection contingency.

Depending on the market, buyers lately have been removing all their contingencies in very competitive markets because they can impact the timeline and sometimes the certainty of the sale.

You’d have to consider how the added timing and uncertainty compares to a slightly lower offer without that contingency. In another scenario, you may have a buyer who is willing to be more flexible on repairs versus another who is offering a higher price but may ask for repair credits.

4. Ignoring major repairs and making costly renovations

A long list of maintenance issues can turn buyers off and potentially decrease the value of your home. More importantly, buyers expect the condition of your home to match the description. Consider prioritizing the most glaring issues, particularly those that are likely to turn up during a home inspection.

most important things to repair when selling a house
From Opendoor

Many sellers also consider making renovations or improvements to increase their home’s value. Be sure to carefully consider any renovations as your goal is to get the most bang for your dollars spent, ultimately selling for more than if you had not done the improvements.

5. Not preparing your home for sale

One of the challenges of listing your home on the market is showing your home to prospective buyers. Generally speaking, the cleaner, less cluttered, and more well-decorated your home is, the more appeal it can have. Moving.com suggests that clutter can make your home appear smaller and make it more difficult for buyers to picture themselves living in your home. In fact, staged homes sell 88% faster and for 20% more than those that aren’t staged, according to Realtor.com.

Don’t forget about curb appeal. As Moving.com puts it, “Your home’s exterior is like the cover of a book, setting the stage for what’s inside.”

6. Choosing the wrong agent or the wrong way to sell

Make sure you select an agent who has your best interests at heart. According to Realtor.com, some agents charge a flat fee, while others charge a percentage of the sales price, usually 5-6 percent. Sellers can negotiate the commission.

To help ensure you’re getting the most bang for your buck, take the time to interview potential real estate agents. Check their licensing and credentials, read their reviews and understand their experience.

7. Showings, especially in a COVID environment

Once you’ve put your home on the market, prospective buyers will want to see it. In COVID times, appointments have to be set. There are no Open Houses and the buyers who are looking are serious about buying. Thus, a virtual tour is the first step in showing off your home.

home selling mistakes - limit showings
From Opendoor

8. Not considering your broader financial situation

Many sellers don’t have a clear picture of their financial situation before selling. This can lead to painful surprises. Before you make the decision to sell, it may be helpful to assess your income, debt, and any upcoming expenses during your move. An agent can also provide an estimated net sheet.

If you’re selling your current home in order to buy a new one, you’ll want to calculate how much you can afford. Getting in touch with a mortgage broger and getting underwritten will eliminate any surpluses and give you a clear picture on what you will be able to afford.

A rollercoaster closing on 2600 Jones Rd.

I recently represented buyers and helped navigate them through a difficult process to land a great home at 2600 Jones Rd. in Walnut Creek. What started as an ordinary home-buying process for John, ended up being a bit of a nightmare as the loan kicked out of underwriting without telling us and loan contingency removal was due on Monday. We got a conference call with them on Saturday and Monday, had a “solutions consultant” calling my client. Nobody mentioned this would happen. We got the details worked out, but when I asked how long before we know if it is approved, he said 6 days and I had no confidence that Quicken would still be able to make it work as their communication and getting all the documentation they needed upfront was not optimal.

We got a notice to perform, I recommended John get approved with JVM, the listing agent had spoke to this lender and they confirmed what I was telling her, so they gave us until Friday. JVM was able to fully approve him, so we removed the last remaining contingency “the loan” and asked for an extension to close. The sellers agreed. John is a newspaper guy from Minnesota and retired from the Chronicle, who was looking for a home where his 11-year-old son and mom, would be in a better school district. The one he would have been going into was ranked a 1. John Jr. will now be going into 6th grade at WCI albeit virtually for now.

John’s son is the joy of his life, a smart kid who now gets to attend a great school in Walnut Creek! We had our own troubles getting a loan and getting everything finalized (especially with the pandemic throwing things off), but eventually, we closed thanks to the help of JVM Lending.

Now, John has got his son into a get a 2-bedroom home in Walnut Creek with a pool. I also gave a bike that I wasn’t using, so now John’s son can walk to school, ride his bike, and swim in his new home. JVM was able to underwrite them quickly during this process, and that allowed us to get everything closed on the deadline day. So many crazy things went on during this process, but I’m happy to say that John landed his son and mother a great home!

Think this is a housing crisis? Think again!

Economists are predicting an interesting forecast for the second half of this year. I have spoken to some people who have tenants who aren’t paying, and they believe in the next couple of months we will have a setback. July will bring corporate reporting for the second quarter and they now say we are officially in a recession that actually began in February before COVID. All of this is creating an interesting and volatile market. As the states continue to open up, there will be fewer people on unemployment. It will probably take a year or more to get it back to normal levels, but in the East Bay, the market is on an upturn.

File:Sign of the Times-Foreclosure.jpg - Wikimedia Commons

As my manager, Elias, wrote us in an email recently: “Educating our consumers on the local market, listing inventory, buyer activity, year-over-year statistics, and truly being [customers’] trusted advocates” are important in this time.

Here are some other reasons why we most likely will NOT have a housing meltdown:

  • According to the latest Wall Street Journal Economic Forecasting Survey (which polls more than 60 economists monthly), 85.3% believe a recovery will begin in the second half of 2020
  • Five of the major financial institutions are also forecasting positive GDP in the second half of the year
  • Four of the five expect a recovery to begin in the third quarter of 2020
  • All five agree a recovery should start by the fourth quarter
  • Overall, the vast majority of economists, analysts, and financial institutions are in unison, indicating an economic recovery should begin in the second half of 2020
  • According to Kristin we had a housing shortage before Covid and we still have a housing shortage and that isn’t changing anytime soon.

A side effect is all the new restrictions on showing a property and how it affects the consumer. We now have to send a form stating everyone is aware of the COVID environment, make an appointment for a specific time, not touch anything, wear masks, and only have two people (plus an agent) in the house at one time.

A recent experience with a client on a new construction purchase really highlights the inconveniences. They are not allowed to meet in person, and to view the new construction, you also need an appointment. They send the document via electronic signature, however, my client was moving from out of state where they are not wearing masks and have a more open policy. He was having a hard time reading it on his phone, he was in the middle of moving to the Bay Area, and thought, “when I get there, I will just sign at the office.”

That was his expectation, but the office staff was not expecting him to sign in person because they sent it electronically. They had to give him a mask, and it became a reality of unmet expectations on both sides. The take away for me is that nothing goes a planned. We have to be more fluid. And communication is key. Expectations have to be voiced, as nothing is done how it used to be.

How low can rates go?

Jay Vorhees at JVM Lending recently shared a great blog, which I have posted in its entirety below. As usual, I’ve added my two cents to the topic at the end. Hope you enjoy!

One of the most interesting aspects of the COVID-19 crisis is its effect on interest rates. In “normal” times, mortgage rates correlate closely with the 10 Year Treasury Bond. In other words, when the 10 Year moves higher, so do mortgage rates and vice versa.

Also, “the spread,” or the difference between the 10 Year Yield and mortgage rates in normal times averages about 1.5%, meaning the average mortgage rate is usually about 1.5% higher than the 10 Year Yield. Since the COVID-19 crisis started, however, the “normal” correlation and spread have disappeared.

10 Year Treasury Yields have plummeted much farther and faster than mortgage rates. In addition, mortgage rates don’t always move in conjunction with the 10 Year, and the “spread” between the 10 Year and the average 30-year mortgage rate has jumped to over 2.6%!

Mortgage rates remain higher than expected for a few reasons that I have illuminated many times. One reason is that lenders could not handle the onslaught of refi volume if they lowered rates any more. But the important reason has to do with risk. Mortgages are much riskier now because of unemployment, forbearance, and liquidity concerns; higher mortgage rates simply reflect that risk.

HOW LOW WILL RATES GO?

If the market returns to “normal;” if the 10 Year remains as low as it is now (around 0.6%+); and if the “spread” between the 10 Year and mortgage rates drops back to the 1.5% range, we could see 30-year mortgage rates drop another 1%!

Yes, that means 30-year mortgage rates as low as 2%!

SHOULD BORROWERS WAIT TO REFINANCE?

Absolutely not, and this is why.

First and foremost, the above scenario requires a lot of major “ifs.” And in this extremely volatile economy, anything could happen to derail the downward rate spiral, including inflation, new regulations or government actions, less competition in the market, renewed liquidity crises, and/or a faster than expected economic rebound.

Additional reasons to refinance now rather than waiting include: (1) most refinances are “no cost” so borrowers can simply refinance again if rates fall further; (2) borrowers can save hundreds of dollars per month by refinancing now at no cost, so why defer the savings? And (3) refinancing is relatively painless now with all of the new technology in place, so refinancing again should not be a concern.

This has been our mantra for years and it bears repeating – borrowers who wait for pristine market conditions (with respect to both housing prices and interest rates) often get burned. And that is because in this world of extreme volatility, nobody really has a clue what will happen.

Kristin’s take: I have had many conversations with buyers who are wanting to “wait and see,” and many keep asking if prices have come down. Prices have not come down (with the exception of the luxury market) and we are currently seeing multiple offers or properties pending in 5 days, especially in the entry-level market. Of course, it depends on the home: is it updated? Is it priced at fair market value or lower? And so on. I believe the window to negotiate or get a great deal was within the first 6 weeks of our shelter-in-place because there was so much unknown. For those who had a higher level of risk tolerance or just needed to buy a home, I believe hindsight will show they got a deal (comparatively).

Qualifying for a loan after returning to work

Jay Vorhees at JVM Lending has shared another great blog, which I will share below. I did not include the last section, which is not applicable to my clientele, but you can read the entire thing in the link above. Look for my input at the bottom. As always, I welcome your feedback on this topic!

Many people are wondering how soon laid off and furloughed borrowers will qualify for mortgage financing once they return to work.

Loan Agreement Signature - Free image on Pixabay

Employment Gap Under Six Months

If the layoff or furlough lasts less than six months, lenders will be able to fund most loans as soon as borrowers return to work (for conforming, FHA, and VA loans). Some jumbo lenders, however, may require 30 days of job-seasoning before they will fund.

Employment Gap Over Six Months – Returning to Same Job/Industry

If a layoff lasts more than six months, things get more complicated. If borrowers return to the same job or a similar job in the same industry, they will be able to qualify for conforming (Fannie Mae/Freddie Mac) financing 30 days after they return to work, in most cases, with 30 days’ worth of paystubs. FHA and jumbo borrowers may require six months of job-seasoning, however.

New Job/New Industry

If laid off borrowers find new jobs in new industries, they will have to “season” their new jobs for six months in most cases (and up to two years in some cases) before they will qualify for any type of loan. The exception to this rule is for borrowers who recently graduated from college or any type of professional, training, or graduate program that relates to the borrower’s field in some way. Recent grads can usually qualify for financing as soon as 30 days after starting a new job.

Kristin’s Two Cents: Another topic that has come up is forbearance -a creditor’s temporary forgiveness of debt (i.e. to postpone your payment). Many think, “Hey, why not take advantage of not having to pay my mortgage for a few months?” even if they can, because there is no harm. Well, it will impair your credit (most will report it, you will be required to pay it back once the period is over – and with rates dropping, you won’t be able to refinance for one year after you have fully paid back the forbearance. Do you want to miss that opportunity? Click for more information about forbearance.

Another successful Love You A Latte event!

Last month (before the lockdown, seems like a year ago!), I held my annual Love You A Latte event at the Capital One Cafe in downtown Walnut Creek. I appreciate everyone who came out to support the cause and made donations to Tony La Russa’s Animal Rescue Foundation (ARF)!

It was great to see so many friends and clients come through and share a coffee or a quick chat. We ended up collecting and donating $265 plus some items to ARF!

I love connecting with everyone and have a moment to catch up over coffee along with providing for a great cause. If you didn’t make it this year due to other plans or vacations (lots of people were on vacation), I truly hope to see you next year. We may all be wanting more interactive personal connections by then. Thanks again to all those who participated either in person or by way of a donation.

Fed Rate Cuts Don’t Mean Mortgage Rate Cuts!

NOTE: We will be moving to one post a week (on Wednesday’s) until further notice since we are under lockdown here in Contra Costa County and I can’t go out and explore!

My friend Jay Vorhees at JVM Lending has an interesting take on the latest interest rate cuts by the Fed. Even since he’s written this, the Fed has made yet another cut (because of the government’s response to coronavirus killing the stock market in addition to the Saudi’s dropping the barrel prices), so I’ll try my best to tie the two together at the bottom and make sense of all this:

We were asked a variance of this question over and over yesterday: “I heard that the Fed cut the rate by 1/2 percent; can I lower my mortgage rate by 1/2 percent?” We would respond by explaining that the “Fed Funds Rate” often does not correlate to mortgage rates for a variety of reasons. I touch on this often because the confusion surfaces every time the Fed cuts rates.

When the Fed makes a rate cut, it is to the short-term “Fed Funds Rate,” which does not always impact long-term mortgage rates in the way that most consumers might expect. I blogged about this as recently as August, but here is a brief summary of why mortgage rates not only don’t always correlate to Fed rate cuts, but often go up after the Fed cuts rates:

The “markets” anticipated the rate cut and already adjusted for it. Traders and investors analyze polls, data, and Fed comments to very effectively anticipate changes and the Fed Funds Rate and the markets often adjust long before the rate cuts take place. As a result, very little happens when the Fed Funds Rate is actually cut (or increased).

Short-term rates don’t always affect long-term rates. The Fed is only reducing the Fed Funds Rate, or the rate banks charge each other for overnight loans. This is a very short-term rate and short-term rates don’t always affect long-term (mortgage) rates.

Many factors influence long-term rates besides the Fed, and below are just a few. These factors include economic data; inflation signals; geopolitical crises; and the demand for mortgage bonds. SO WHAT DID RATES DO AFTER THE FED CUT RATES? Rates were about the same after the rate cut as they were the day before.


One day later – in a shocking and surprise weekend move, the Fed cut the Fed Funds Rate to 0% on Monday. See above as to why it might not move mortgage rates. But, the Fed also committed to $500 billion of treasury bond purchases and $200 billion of mortgage-backed security purchases.

This renewed “Quantitative Easing” did push rates down slightly but that didn’t last, as the market is all over the place yesterday and probably today and extremely volatile.

MORTGAGE RATES BARELY MOVE; CAPACITY ISSUES

Despite the massive Fed intervention, mortgage rates barely moved. The reason is capacity.

There are $11 trillion in outstanding mortgages – give or take. The industry is capable of funding about $2 to $3 trillion per year – at most.

When borrowers with $5 trillion worth of mortgages want to refinance over the course of a few months, the industry simply can’t handle the volume.

And – as a result, rates remain on the higher side and are still over 1/2 a percent higher than where they were 10 days ago. The Feds’ rate cut is actually getting a lot of criticism because it will do so little to stimulate economic activity (travel, major events, supply chain issues) offset by the coronavirus concerns. It also leaves the Fed nowhere to go if things get worse. We are in uncharted waters; welcome to the new normal. At the end of the day when this settles, rates will still be low and we may see a listing and buying spree due to the sheltering in place.

Stay safe and healthy my friends!