Applying for a Home Loan? See JVM Lending’s “Don’t” List!

Once you’re pre-approved, the last thing you want to do is knock yourself out of qualifying range. My friend Jay Vorhees at JVM Lending is a great source on this issue, as he’s seen hundreds of borrowers in this situation. Now, he sends them a list of “actions to avoid” with every pre-approval letter. Heeding his advice will help you at least prevent delays and extra paperwork. Take a look!

1. Do not make large deposits that can’t be explained. When you are trying to qualify, any large deposit – think $500 for a new mattress, or all-cash payments – must be explained. Otherwise, an entire account can become invalid and unusable for qualifying. Always keep a paper trail to make large deposit explanations easier!

2. Do not take on new debt. If you increase your credit card balances, finance a vehicle, or take on debt in another way, your ratios will be impacted and it will reduce your maximum purchase price.

3. Do not take vacation days if you’re paid hourly. A single day off work can push you out of qualifying range if your debt ratios are high and approaching your limit.

4. Do not spend liquid assets. Pre-approval software relies on specific liquid asset levels. So, pre-approval amounts can change if liquid assets are significantly reduced.

5. Do not miss payments on any debts reporting on a credit report. This one is pretty obvious, and you should avoid missing payments anyway, but missing monthly payments that reduce your credit score may also reduce your qualification amount!

6. Do not co-sign for someone else’s debts. That’s a dangerous maneuver anyway, but even if you’re just a co-signer, the debt will show up on your credit report. That makes you responsible for the debt and the payments.

7. Do not file taxes with a tax liability owing, or with less income than in previous years. This mostly applies to self-employed borrowers (especially during tax season). The most recently filed tax returns will be what the qualifying income is based on, and all tax liabilities must be proven paid. JVM recommends that borrowers file an extension when possible if they are making offers during tax season.

Art Town: Geological Evolution of Mt. Diablo

Most of the art we feature here are one-off pieces. This piece, however, is multiple independent parts that come together to form one. And it’s a dazzling recreation of one of the Bay Area’s most treasured jewels: Mt. Diablo. You can check it out by the Century Theaters downtown. Give a quick stroll before or after your next movie to see it!

You can see the cascading art from the top piece (above), to the first part of the next (below). It’s granite in stone, created by Doron Robinson in 2003, and represents the geological transformation of Mt. Diablo. What a cool piece! Follow along as Mt. Diablo is created from top to bottom (or, in geological terms, from bottom to top!).

Rent in Walnut Creek causing massive restaurant and bar churn

It’s no secret that rents are extremely high in California. Rents are high in the Bay Area, especially, and Walnut Creek is no exception. For how crazy home rents can be, commercial rent prices are even worse! That’s why we’re seeing so much turnover in bars and restaurants in downtown Walnut Creek.

Napa Food and Vine

It seems like we see 10 new restaurants per month popping up downtown which keeps my blog interesting. And when those come in, something must go. Some are so short-lived, we hardly even have time to try them before they disappear!

One especially pricey area is the corner of Locust and Cypress. Sauced has taken over for Pyramid Alehouse, Sunol Ridge came and went incredibly quickly, Lark Creek Cafe is closed, and new places like Urban Alley and Gotts are popping up every time we turn around. Not to mention, the place where Chili’s was a long time ago, which most recently was Caffe Stella, is clearly too expensive for anyone to come in and stay. Not to mention Crogan’s shut down, too, which may be a blessing.

That entire intersection is constantly changing, and it’s happening all over the place in downtown Walnut Creek. I know people who have moved out of Walnut Creek, and every time they come back (even if it’s only been a few months), they say certain parts of downtown are unrecognizable. Even Walnut Creek mainstay Vic Stewart’s is going to be replaced by retail!

Roam Free

This has both good and bad effects for Walnut Creek residents. As more fancy, expensive stores go in downtown, they will raise their prices to afford their own rents. More out-of-town shoppers will clog up downtown, too. But, those of us who do live here will benefit from having more amazing new restaurants and bars to try!

Things NOT to do when your house goes on the market

You’ve probably seen endless lists about how to sell your home. Everything from choosing the realtor, to the staging, to the deliberation is under the microscope. But how often do you get told how NOT to do things? RIS Media has put together a good four-step process for how to not get in your own way when selling a home.

First, don’t over-improve the house, the article says. This is good advice. While it’s important to clean up any holes and cracks in the wall, and make sure the lighting is fresh, etc., doing too much can be damaging to your case. But if you go out and make your dream changes to the house right before you sell it, you better hope your potential buyers see it as an awesome improvement, too, and not a large project to fix.

Next, don’t over-decorate. Simple, neutral colors and decorations will be just fine. Similarly to the first point, if you decorate your home with a bunch of lace, lavender and lemon scent because they are things you like, you’ve done too much. What if a buyer walks in and is immediately overwhelmed by it all? Keep it simple. Remember, the buyers are the ones who get to decorate when they move in. This is why I pay for a staging consult; because it tells you what to remove, and then I highly recommend doing some staging as it makes a huge difference in how your home is photographed. The online view of those photos will be the first impression a prospective buyer gets, and will help them decide if they want to see your home in person.

Third, and probably most important: do not BE THERE when the buyers arrive. If your realtor is going to show the house, try to get everyone (pets included) out for a couple hours. Go to a movie. Have lunch at the park. Find a way to get out of the potential buyers’ ways, so they aren’t attacked by a bunch of people upon walking in. Remember, they want to see themselves in the house. Not you!

Lastly, don’t take things too personally. You’ve put a lot of blood, sweat, tears, money and memories into your home. When a buyer lowballs you or requests repairs, don’t be upset. They are trying to afford their newest home, too. And they might tell you the reason they have to offer low is because of something they think needs updating that you disagree with. Bite your tongue, and keep negotiating. Remember, it’s all a business!

Road Trips: Mt. Rose

Winter is here, and it’s time to hit the slopes! Hopefully, we get some more snow this week! I love going up to Tahoe to ski, especially when the sky is blue and the snow is powdery. But, unlike many who probably prefer Northstar, Squaw and Heavenly, I love Mt.Rose!  It is where I learned to ski growing up, it is a local’s resort and it has some great runs, especially if the chutes are open.

skirose.com

Mt. Rose is the highest peak in Tahoe and usually gets the most snow every winter. But it’s also just a cool place to hang out! Most of the mountains in Tahoe have villages, bars, restaurants, ice skating rinks, and other things to help you relax and recover after a day on the snow. And Mt. Rose is no exception, but it has a more casual local vibe with fun activities on the mountain and just some great runs (“Northwest” is my favorite), including a few with a view of Lake Tahoe!

In fact, they have some unique events like the Santa Crawl, where you can get heavily discounted lift tickets by dressing up as Santa for the day while you’re on the mountain. They also do a Beerfest, New Year’s Eve spectacular, poker runs and many other events throughout the year. Recently, they also added a “Magic” lift, a dual conveyer belt for one of their hills (it’s the 1st one in North America and only the 2nd one in the world!).

skirose.com

I always have a great time when I go to Mt. Rose. Usually, I stay in Reno and then it is just a 20-minute drive up the hill, but it is also easily accessed from Incline or Kings Beach; even from Northstar. They have a newer lodge on the old Slide side of the hill and many locals on a nice day will tailgate in the parking area. The Mt. Rose lodge is more crowded, but the bar is my favorite, with no kids allowed and a taco/burrito bar.

Amazon goes brick-and-mortar in Walnut Creek

Everyone knows Amazon for being the world’s foremost e-retail giant. In fact, you probably ordered – or at least looked through – Amazon items for gifts this holiday season!  As I mentioned in an earlier blog, they started building some brick-and-mortar bookstores, including one in downtown Walnut Creek.

I recently bought a gift at the store located in Broadway Plaza between Kate Spade New York and Aritzia. It was like any other bookstore, except for a few Amazon-specific twists. For example, you can pay with the Amazon app at the register as long as you are a prime member and you get the Prime discount. As a Prime user myself, I really liked that perk!

The books all have Amazon user ratings and reviews posted underneath them, which nicely combines the convenience of shopping on Amazon.com with the classic, enjoyable feeling of being at a real bookstore. I have to say, since Barnes & Noble was replaced, it’s felt like there weren’t any good places to browse or buy physical books downtown.

Now, you can go to the future of books – Amazon’s bookstore – right in the heart of the shopping district. You can buy a cup of Peet’s coffee right in the store and peruse books like the good old days or just take a break from the hecticness of shopping.  Wait, isn’t that what you are doing at the Amazon bookstore? Maybe not? The concept is to have top sellers, a kids area, and, of course, a place to sell Amazon technology like Alexa.

What to know about the new tax bill limits in 2018

The GOP finally pushed through its tax package, and the reaction has been interesting to say the least. While some seem to love it (The Wall Street Journal said the bill is the best thing to ever happen to our economy), many others hate it. Regardless of how you feel about the bill, it is signed in now and it’s time to see how it affects you, as a homeowner, seller or buyer.
My friend Jay Vorhees at JVM Lending put together a blog detailing some main points about the GOP tax bill and how it may affect real estate. Here are the main thoughts:
1. Current homeowners will be grandfathered in and still allowed to deduct interest against $1 million of mortgage debt. In 2018, buyers will be limited to $750,000 and interest against home equity lines will not be deductible.
2. State and local tax deductions will be capped at $10,000. This will be difficult for people in California.
3. Standard deductions are doubling to $12,000 for single filers and to $24,000 for married filers, so many homeowners won’t have to deduct their interest and property taxes anymore.
4. We have no idea what exactly the bill will do for the market when all is said and done, but for now, we can expect the low-inventory, high-demand market to suffer in high-end areas down the road, while remaining neutral in the short term.
5. To fully understand the bill’s impact on you, see a CPA. Defer your commissions. And if you’re planning an out-of-state move, consider relocating to a low-tax state like Florida, Texas or Nevada.
I’d like to expand on #5 quickly – as Jay mentioned, there will be a new $10,000 cap on tax deductions starting in 2018. If you paid off your property taxes before January, you should be able to save thousands of dollars on that by avoiding the new rule for a year. And if you are planning a move out of the Bay Area to another part of California or another state, you should be consulting a realtor or a CPA to see what kind of savings you can get!

Pantone’s Color of the Year…Ultra Violet!

Another year, another color. The Pantone Color Institute has selected its 2018 “Color of the Year,” which it expects to influence design choices next year. According to the release, Pantone chose Ultra Violet because it conveys “originality and ingenuity.” They said they are fascinated and intrigued by the shade.

Pantone.com

I can’t disagree. It is a lovely shade of purple, which to me represents a majestic royalty – something or someone who is the best in their field. New apple watches are of a similar color, for example. It’s just a sheer coincidence that I like this color so much and also happen to color all my logos with a similar hue. Total coincidence. Objectivity at its finest!

In all seriousness, it is a really neat color, and I applaud Pantone for its choice. As for using it in a house? I have mixed emotions on that. It is pretty strong, and could freak people out to use such a deep, dark color on walls and other features of a home.

That said, this Houzz article includes some great shots of rooms redecorated with the Ultra Violet hue, and you can see that – if used properly – it would really make certain rooms pop.

From the Pantone website itself, they call the Ultra Violet color (PANTONE shade 18-3838) “a dramatically provocative and thoughtful purple shade.” Executive Director of the Pantone Color Institute, Leatrice Eiseman, says:

“We are living in a time that requires invetiveness and imagination. It is this kind of creative inspiration that is indigenous to PANTONE 18-3838 Ultra Violet, a blue-based purple that takes our awareness and potential to a higher level. From exploring new technologies and the greater galaxy, to artistic expression and spirituatl reflection, ituitive Ultra Violet lights the way to what is yet to come.”

Purple shades are always associated with royalty and artistic excellence (so, again, if someone like, say, you’re real estate agent had a purple logo…just saying!), as made famous by icons like Prince, David Bowie and Jimi Hendrix.
Also according to the Pantone website: “Ultra Violet symbolizes experimentation and non-conformity, spurring individuals to imagine their unique mark on the world, and push boundaries through creative outlets.

Historically, there has been a mystical or spiritual quality attached to Ultra Violet. The color is often associated with mindfulness practices, which offer a higher ground to those seeking refuge from today’s over-stimulated world. The use of purple-toned lighting in meditation spaces and other gathering places energizes the communities that gather there and inspire connection.”

Wow, that’s like a color horoscope, and makes me proud to have a similarly-shaded color scheme to my work!

Why rates went down after 4th Fed increase?

My friend Jay Vorhees at JVM Lending wrote another interesting end-of-year blog recently, regarding rates. Despite the Fed increasing rates for the 4th time in 2017, they are still down. Why is that, and how does it affect you?

In Jay’s blog, he notes that 30-year fixed rates have fallen 1/4 percent over the last year even though the Fed has done four increases. On that note, he asks why the Fed’s rate increases don’t push up mortgage rates?

In response, Jay gives two main reasons:

  1. Short-term rates don’t always affect long-term rates
  2. Many factors (besides the Fed) influence rates

Inflation, geopolitical strife, economic news and demand for credit and bank loans are the other main factors named by Jay. Most of those are very relevant in today’s societal and political climate. Basically, the Fed helps influence rates, but isn’t the sole influencer – if investors are pushed out of stocks or bonds into the other, due to war, a poor week on the stock market, etc., rates will change just as rapidly.

So, what does this mean for you?   Rates are going to continue to fluctuate. They are still low, so if you are considering buying, it might be a good time to get off the fence and make a move in 2018!