What is a raised vs. slab foundation?by Scott Robinson

What is a raised vs. slab foundation?by Scott Robinson

As far as I can tell, there are only two types of foundation that rest on the ground raised and slab. I will try to get to what hangs off a cliff/cantilevered at a later time.
A raised foundation is accomplished mostly with a foundation around the perimeter of the house (sometimes stone or concrete block.), supporting the structure under the house. In real old houses say before the 1950′s they used “post and pier” foundation. There would be the foundation around the house and little posts holding up points inside between the cement exterior. Usually just wood stuck their on little cement blocks. No strapping or anchor in the ground! Now they have to be anchored with metal straps.
My step dad had some buildings like this when I was a kid. He had settling problems on a building once and we got under there with a car jack and leveled it. We then leveled  other spots and left wood supports where we had used the jack. He said it lasted through the earthquakes?
A slab foundation is when they dig out the area you are going to build the house on, lay the plumbing and some electrical, steel supports to tie into, re-bar to support the cement and then pour the cement which becomes the foundation. As I understand four inches thick. A very solid structure held together with a network of long steel rods  almost a half inch thick, called re bar.

Raised foundations are good because if you have a problem with plumbing or electrical you can crawl under the house and fix it, they aren’t encased in cement as above. If an earthquake or settling takes the level out of the house you can fairly simply level it. Much cheaper than re-pouring part of your slab.

The bad news is that over time a raised foundation is subject to dry rot, fungus, termites and rat infestation among other things I am sure. Nothing that can’t be dealt with. But in nature all things tend to have issues.

A slab foundation is what is mostly used to day. Cheap, easy and efficient, less edible and at the mercy of the elements.

In our area of  Southern California we have mostly expansive. clay soil. When it gets wet it expands, when it dries is shrinks. In Southern California we go through about seven to ten years of a lot of rain and then is seems seven to ten years of none called drought. That’s when they make us conserve water.

If the water is getting under your house the clay expands when it rains and shrinks when it  dries. This does not happen evenly and causes your house to be out of level and have cracks. At some point doors and windows won’t open or close properly. Slab foundations tend to crack and can have water come through. When the slab goes out of level it’s a major issue to fix.

Gutters that are properly set up and day lighted to the street, then kept clean will generally remedy the water problem. Unless you live by a hill or have other water issues(Some areas have ground water issues that may cause you to need to divert water. Like with an underground stream.) A hill or stream draining onto your property might need a French drain or even a culvert, which will divert water to the street or other system to get water away from the house.

Note;It’s not legal to divert water onto a neighbors property and you could be liable for any damage it causes.

I hope this clarifies any questions you had on this issue. Your questions and comments are appreciated.

Best
Scott

New law effecting Adjoining Property Owners

Commencing January 1, 2014, adjoining property owners are equally responsible for maintaining boundaries and monuments between them. For fences dividing their properties, adjoining owners are presumed to be equally responsible for the reasonable costs of construction, maintenance, or replacement of the fence. This law provides specific procedures for a homeowner to notify a neighbor of an intention to incur costs for a division fence, including a 30 day notice setting forth what needs to be done and the estimated cost for each owner. The affected neighbor receiving the notice may attempt to overcome the presumption of equal responsibility by showing that the fence is unnecessary, that is disproportionately benefits the other owner, that it provides a poor return on investment, or that it inflicts on undue financial hardship.

This is copied from “California Real Estate” January/February 2014 and they got it from Assembly Bill 1404.

Please let me know if you have any questions.

Best

Scott

New laws regarding Smoke Detectors July 1, 2014

Starting  July 1, 2014, the State Fire Marshall will not approve a battery-operated smoke alarm unless it contains a non replaceable, non removable battery with a 10- year capacity. This rule was originally scheduled to take effect of January 1, 2014, but has now been postponed until July 1, 2014. This law, however , provides a one-year grace period until July 1, 2015 for any smoke alarms that have been ordered by, or are in the inventory of the owner, managing agent, contractor, wholesaler, or retailer on or before July 1, 2014. Furthermore, starting January 1, 2015, the State Fire Marshall will not approve a smoke detector unless it does all of the following: (1) displays the date of manufacture on the device; (2) provides a place to insert on the device the date of installation; (3) incorporates a hush feature.  A previous requirement that the smoke alarm has an end-of-life feature indicating that the device needs to be replaced, has been eliminated.

Copied from “California Real Estate” January/February 2014 Their source Senate Bill 745

Please let me know if you have any questions.

Best

Scott

New law for those with 1031 Exchanges as of Jan. 1 2014

New tax law that should give 1031 Tax exchangers a good reason to buy an upleg property California instead of another state. For a 1031 exchange occurring on or after January 1, 2014, a taxpayer who acquires a “like kind” property in an exchange that is located outside of California must file an information return with the Franchise Tax Board (FTB) for that taxable year and every year there after until the capital gain or loss from the 1031 exchange is recognized. If a taxpayer fails to file the required information return and tax returns, the FTB may propose to assess the amount of tax, interest, and penalties due by estimating net income, including gain, from any available information.  The FTB will draft and make available the required information return, which will first come due in 2015 filling season.

I found this article in “California Real Estate” January/Febuary 2014. And they got it from Assembly Bill 92

Please let me know if you have any questions. I hope this helped.

Best

Scott

Pricing your home to sell in any market.

Pricing your property to sell in any market. What’s a BPO?
by Scott Robinson

A “B.P.O.”. is a Brokers Price Opinion. Banks now a days like to use B.P.O.’s to ascertain value of their inventory before they list it with an agent in the M.L.S. (Multiple Listing Service) for sale.  B.P.O.’s are much cheaper than an appraisal (Usually done by and agent for free hoping to get the listing.)but can be very accurate. Sometimes the bank will use three agents B.P.O.’s to make sure of the value.

Pricing your home to sell in any market. The best way is to hire an agent that knows what he or she is doing, you can trust and do just that, trust them and let them work their magic.  It usually takes a few years to learn the ins and outs of adjustments and neighborhoods, larger vs. smaller lots and houses, valuing a view… etc.. So choose carefully. Some agents will tell you a high price just to get the listing. So make sure whatever you are told is backed up by comps/facts, that you understand. And be sure to be patient and give the agent all the time they need to make things very understandable for you. You should never agree to or sign something you don’t completely understand and are comfortable with.

It is very important to time the market properly and price your home accordingly. Generally the best time of year to list your home is the first of April. Normally the beginning of the hotter time of the market, Spring.  Like I often say you can’t really time the market, but you can pick the best time of year, if you can plan and are lucky enough to choose.

It takes years of training and in the field experience to become a licensed appraiser or even to do a good B.P.O. so please don’t think you can outguess a real pro. Let me or your agent share the comparable listings with you. I/your agent will explain how each property compares to your property and what adjustments are made to come up with a value of your property.

I can’t tell you how many times I have taken my few months to thirty years of experience and training (I taught at Pierce Jr College for years.) and hours of specific work on a valuation to give a value and they tell me I am $100k to low?????? And “You are not giving your house away!!” (I really have heard that line a thousand times.) So if I am nice enough to take this overpriced listing, after about two weeks, I am almost guaranteed to hear my marketing sucks, why are there no offers. Well if my expert opinion had meant anything you would likely be in escrow by now. So make sure you have all the facts and understand your expert’s opinion.

I really am on your side. When I do a good job and you like me, I will get your referrals. That means  a lot to me since I am a long term  part of the business. But if you don’t believe me? it won’t get priced right and it will never sell, and you will tell everyone my marketing sucks. In most cases there is some “learning curve’, the time it takes you to start really believing me, and that’s when things start to happen. So most of the time it just takes a little time for people to really understand what’s going on. I wonder why? It took me years and I need them to get it in weeks. That’s why I like the idea of the this blog, it’s all here in writing. Even better if the friend that sent you to me had me happen to them, but life isn’t always that easy;-}

I could really write a book on that one. I guess I will do a blog at least. I have seen buyers pay fifty thousand more for a worse house, because they wouldn’t give up $2000 or so in negotiation on an ego issue and often lose the house of their dreams. Seller’s with buyers spending hours and not writing the offer because it was overpriced screaming I won’t give my house away. Well when the market dropped more than a hundred thousand for the house they did end up giving it to the bank. So if you aren’t willing to look at the facts/comps I present, and listen reasonably to my answers to your questions. Please hire someone else, and when it doesn’t go so well, please remember who told you the truth. In a good market or booming market inexperience can cost you tens of thousands, in a crashing market it can cost you hundreds or worse.  I hope someday you will let me be part of your team, because I care about you and hate to see things like that happen.

So if I price your house to low what will happen? Well truth is it’s not a bad tactic to get top dollar for your property??!!  List it low and don’t accept any offers for two weeks. Agents and educated buyers know the market. So when  a real good deal comes up, it causes excitement. Excitement can cause a bidding war and high profit. You have to know what you are doing though. Many emotional sales fall apart when the air clears and the appraiser and or home inspector shows up. So it’s critical to have an agent with foresight who will say demand a non refundable deposit(Now a little harder to get than in the past.) on the property to show who is really serious about buying the property, and other things to create a contract that will be difficult to get out of when things cool off. A good tactic in a really flat market.

Bank/REO listings use listing low to cause excitement often. I tend to like to price it properly and take about two weeks to sell at a fair price. Truth is an appraiser will be valuing the deal and if he doesn’t give his approval the deal generally won’t close. So why not just do it right the first time?

This business is more about referral’s, then sales. If you put it any other way you lose. I admit many don’t get it. If I make a mistake valuing a property I am helping you buy, the appraiser will be right behind me with a lot of truth, making me look real dumb. If I list too high I get the listing but it won’t sell till I get the price down. Not fair to the seller.

I once knew a C21 agent we can call Greg. He was the top agent as I remember it in the country! His thing was to tell the owner/potential seller the highest price he could without laughing. It’s a long story but I went to work for him to find out his secrets. I was very disappointed. After listing high, a weak tactic, he would harass the people constantly to lower the price. I am really amazed this worked for him, and feel bad for all the people he pushed around.

The best way to sell your home is to find a place to go (May sound strange, but if you have no place to go, it is real hard to get there.). Then “time the market” if possible and price it accurately without your ego involved. I have sold a few brokers homes because they didn’t want to be involved. As I have said before, to price your home properly you must hire an agent you can trust, who will do the job right for you.

You must know the market you are in. In a raising/hot market it is generally very easy to sell your property, by “hot market” we mean one where prices are going up and there is a lot of money out there financing it. Price it to high and wait a short time and it will sell. But this is the only time that pricing high could ever profit you and it better be booming, because pricing high is dangerous. Even in these markets agents see your house has been on the market for a while and assume something is wrong with it and don’t show it till the price gets very attractive. I really like doing it right the first time.

I wonder, after seeing the work some agents do if the client ever looked at the actual work the agent does. Do they look at the listings an agent has in the MLS and read the wording they use or judge the quality of the photo’s marketing their listings.  If you think “reduced thirty thousand, now priced to sell” will get top dollar and not express desperation, please help me. Do they keep track of how long it takes for an agent to call back or how often they answer? These things are critical when you are hoping someone is doing a good job for you.

If you price it too high in a flat or falling market you will generally lose a large amount of money. One March I met a client who showed me a home that needed a bit of work. I pointed out that I felt the market was going to fall in the near future and that they should fix up their home and get it on the market in the next few weeks or the market would drop and they would lose money.  I am not sure but I think I told them it was worth about $730.

She didn’t listen to my timing concern but loved my fix it ideas and went to work. A year later after many visits helping her with her ideas to remod., she called me to list her home. When I told her $699,00. she cried for a minute and looked at me and told me I lied to her!! I tried to point out what I told her a year ago and she just didn’t get it. So she ignored my advice and listed it for $725,000.

I watched many real buyers spend hours and never come back. As I understand it they sold a few years later for around $500,000. That’s a horrible loss, due mostly to not taking the advice of the person they hired to trust?? and a falling market.

So if the market is falling and you price to high. Sooner or later you realize the agent might be telling the truth and lower the price. The problem is, that by the time you lower the price, it’s gone down so much that you are still way high unless you take a really large drop. The sooner you get it the sooner you will sell. Or if you can wait out the market. In L.A. I believe it will always come back and boom again.

If we list your home at $750 when I tell you $699,000. . If we sell it at $750 it won’t appraise, because if I can’t find the comps the appraiser won’t be able to either. So if it’s a raising market you probably will sell at some point. But if it’s a flat market or falling market, in about two weeks you will start telling me how to market your home…. So listed at $750 and I suggested $699 it sits for a month and doesn’t sell. The price now slips to $689 and seller agrees finally to go to $699, but now what you originally suggested it to high and if you don’t do your home work and convince the seller it will just keep getting worse. That’s why some listings sit on the market forever.

The truth is I know how to market a property and get top dollar for it. I love what I do and if you let me, I will do it. But if I have to overprice a listing and deal with a seller who knows more than me, we are in trouble. I have to over come the sellers learning curve. So buyers come and sit there for hours loving the house and don’t write an offer and the seller wonders why. When I call I report they bought something else, we lost a perfect buyer.

So in a flat market it won’t sell and if the market then lowers…..

In a falling market it can really get sad. I suggest you list at $699,000. Why that price? Because I took my two months to thirty years of experience and three or four hours of my time to come up with that number. I know you are probably talking to other agents and if they are higher may get the listing. I also know if I get the listing and it is too high I will have to spend most of my time working you to get the price down and I don’t feel that should be my job ( I should price it right in the beginning.). Doing my job with marketing/other agents/solving problems.  So I come up with what I think is absolutely the highest possible number I can list and sell it for, really. And when I bring my comps and other proof and obvious experience, I am often told to list it about fifty to a hundred thousand dollars higher???? Guess what happens.

The good news is that sooner or later the learning curve works out, with a little patience and we get the deal done. I really love to see the smiles on people’s faces as they get it.

Your comments and questions are really appreciated. Please email me and I will try and do a good job for you. Promise.

Is it a good time to buy a house?

by Scott Robinson/ Robinson Realty/ CA Broker lic # 00862076

I often “sort of” jokingly say “It’s always a good time to buy a house from me.” Joking sort of…. Most people’s reason’s to buy a house have little to do with the market. Most buy when they can, for financial and personal reasons. Most people don’t wait till the bottom of the market to buy a house. I have never checked the statistics for every crash and boom, but as my memory serves me most people seem to buy when prices are at their highest. The sad thing is most people usually can’t afford to buy at the bottom of the market.

Sound strange? We have tops and bottoms for reasons. The bottom tends to happen for mostly one reason, the money goes away. When money gets scarce like in 1983, the year I received my license, interest rates stayed at about 18% for about a year or so. That made it fairly hard to sell your home or buy one. Sellers who wanted to sell, sold their loans with the house and carried the rest, it was called a “wrap around loan”. The seller used their first and maybe second loan on their  home and didn’t tell the lender they were selling the house. They would just keep making the payments and the lenders in those days never checked.  Then they would often carry/personally lend the buyer the rest of the money. Some lost their homes because they didn’t plan on getting them back and didn’t have reserves to weather the storm. But many sellers did real well. Few who did their homework lost out. In this case “homework” was checking out the buyer and making sure they were somebody who would make the payments. They were stable in life and job.

Not a bad deal for many sellers if they had to take back the house they kept a ten percent plus down payment and many months of payments. Yes, it would take them 90 or so days to get them out and some wrecked the houses. But if you really checked the people out, it tended to be a pretty good deal all around. Back to the point it was a tough time to sell or buy a house.  So those that “had” to sell (Job relocation, divorce, job loss….whatever.) “creativity” was all there was. So if a cash buyer came along he was king. I must point out I wrote this a few years ago. This down market has been fueled by cash buyers many from other countries, unlike any  other down market. So there are bidding wars, when last bust nobody had any money!!

So the people that got the really good deals, as always, had cash.  Few have cash, so if you have it you can really get a good deal in almost any market. Right now cash buying one house will get you as much as a twenty percent discount. If you don’t have cash like most people you have to work a little harder and be a little more creative. This will often involve buying fixers, and I know many I have helped make money buying and selling fixer properties.

This is a very unique time in that prices are low and interest rates are low (This time prices went down, even though money stayed cheap.). So if in a year prices are lower and interest rates are higher, it will cost more to buy the same house. Higher interest rates make it harder to afford the property.  That is one of my arguments for this being a very good time to buy. Don’t miss out on this market and there are indications it is starting to go back up.

So how do you know when it’s really, really the best time to buy? Generally it will be when your accountant tells you, it will save you a lot of money to do so. But the answer to the classic question is, when you hear people saying things like; “You would have to be crazy to buy real estate in California.” Everybody is leaving the state, it’s doomed.” Or right after a big canyon fire or earthquake. I have heard those words at the bottom of the market many times, never at the top?? As dismal as things may seem at the bottom, people must realize things go in cycles. And great prices at the bottom will often be enough to make that change (As is happening now in our current economy.).

At the top of the last boom I heard people raving about getting these great loans and not noticing they were buying very  overpriced homes. There was a “frenzy” to do so all the way to the top/bust and then it all went away for about six months.

At the height of every boom, it’s a bidding war on most houses to pay above top dollar. It’s amazing to see, and then the bottom falls out? I have seen it three times, twice as a Realtor. The second one I predicted the fall and saved a few believers. The third or last one fooled me by a few years. But no worries for investors, people who want to make money in real estate, the time to buy is when you find a really good deal. Then if the market is selling/ falling, you must sell fast. If it is going up, take your time and do it right. Do all the visible repairs and time the market by selling in the spring (Generally the best time of the year to sell).

So it worries me that I am not hearing the doom and gloom like the last two. But I am still betting anything you buy will be worth a third plus more in five or so years. I have been hearing for about six years that millions of REO/Bank owned properties are about to be dumped on the market and that will crash the market. I have been waiting a long time to sell these great deals, when and where are they??

In every “boom” market, by definition a lot of houses sell, hopefully you buy before the “boom” and sell during. My dad used to tell me, “Buy when everyone else is selling and sell when everyone else is buying.” This was his (My dad was a stockbroker.) general advice which richly applies to real estate. When you hear people say “You would have to be crazy to buy now!!” It’s probably the best time to buy. I heard it right after the 1994 January earthquake. Can you imagine how much money you would have made buying destroyed properties in Northridge the day after the quake??!! In six months you would have made more than ten times your money.

For six months after the quake most people were very shook;-} Many had lost their homes and were desperate to find one among the few left. If you mentioned Northridge people would yell at you like you were crazy to suggest it!!  Six months after the quake people were jumping on “All the great deals in Northridge.  It took them six months to forget about the quake. Same with a Topanga Canyon fire. For a few months people will act weird about buying there, and then there will be a frenzy to buy.  Good deals seem to draw the people out sooner or later no matter what. So why not recognize that trend or any other and take advantage of it if you can (Have the money).

Now the truth is most people buy when they can afford and need a house.  Not at the bottom of the market. As I said, most buy towards the top(That’s usually when there is a lot of money/low interest rates in the economy. So I say anytime you come to me it’s a good time.  It’s a good time because I appreciate your coming to me;-} and I know how to make the best of the market and get you the best deal for the time and market. Since you came to me because it’s the best time for you. I may suggest waiting for some period of time(A few months can make a big difference, sometimes.), but your needs will rule this situation.

Each year has it’s periods and they effect prices and availability of homes. So depending on my clients situation we can maybe take advantage of their having cash or great credit. Or I can help them clean up and improve credit for the best deal. Depending on how fast they need to move we can take advantage of Spring having a lot of the better homes and a lot of activity or winter when few buy and there are better deals.

I always tell sellers that the best time to sell is April first. It’s kind of the beginning of Spring and the hottest time for selling real estate in most places. Some places are seasonal like Miami and get top dollar when all the tourists are in town for holidays. In many areas Spring is a fun time to buy or sell a home. It’s when all the really cool houses hit the market. The really well done homes are thought out and marketed in the same style the owners fixed them up with. But of course this depends upon your area and thus the need for a good local Realtor to point these things out for you.

The best deals are after Thanks Giving, a time when most are thinking of holidays and the market is mostly investors.

I must admit I see the possibility of prices going down for a few more years. Right now and for the last few years, prices below seven hundred thousand have been going up. Many to cash out of country investors, out of the MLS or the Multiple Listing Service I and other agents use. I know because I lost out on a couple of multiple offers this year to them. The market under seven hundred was generally hot. Over eight hundred thousand suffered, dropped and is suffering still. Some awesome deals in that price range, especially for cash.  I recently saved a cash buyer about twenty percent on a fairly new home in great shape. Some think these deals will be around forever. Don’t be fooled.

So using a current and extensive knowledge of the market, preditive searches for properties and sage negotiating skills I get the best deal for those who need to buy in any market, especially this one. As much as the normal home buyer tries to time the market, they are throwing away money on a rental or a house that doesn’t fit their needs. Not getting the tax benefits of home ownership. Not enjoying making it theirs and profiting from their creativity, by trying to wait out the market. And most miss the bottom anyhow. Most investors who wait could have “flipped” two or three while they waited and made quite a bit of money.

So most should start saving money for a down payment. Check your credit and start cleaning up any issues. Credit issues are much more fun to work out at your leisure than at the last minute after you have spent months finding the home of your dreams. So after you find a lender you like to work with and get a pre approval letter. Then you are ready to start checking out neighborhoods.

Please let me worry about the problems and help you solve them before they become issues in our deal.

Your questions and comments are appreciated.

I hope you are enjoying this awesome day;-}

What is an Appraisal?

What is “appraisal”?
by Scott Robinson/ Robinson Realty/ Broker Lic # 00862076

Appraisal is the process where an individual appraiser/appraisal company  is hired by the bank, paid for by the borrower/buyer to come up with an accurate value for the subject property. This is done so that the lender can come to an agreed loan amount. Usually you will ask for a loan for say 80% of value. This appraisal will give them an exact amount that 80% is. It’s very hard to overpay for house nowadays due to the more difficult appraisal regulations developed in the last few years.

The appraiser looks at the property, measures and draws a plan of the house and property. He takes extensive notes on the amenities and issues adding and subtracting value to the property(Pool, what condition.. ) Each factor being important and make adjustments so they can come to a value. He/she should compare your new kitchen to a home with an older kitchen and make a higher adjustment in your value for your new kitchen.

Before he or she does this, he/she will then use their computer to find three very similar properties in like neighbor hoods( A like neighborhood is one that has similar properties to the subject (Size of house, care of property, often year built….).( The subjects neighborhood extends as far as the similar homes do.) If we are lucky we find our “com-parable’s” within blocks of the subject, sold within a few months, within a few hundred square feet in size and property, within ten years or less of age. With all of these values the closer the better, and thus less guess/adjustments.

When and why a property sold can also have a dramatic effect on what it’s value is relative to yours. Why a property sold;REO, Short Pay, divorce, probate, regular sale,  can all effect the value of a subject property and cause need to adjust the property for your normal sale. An Appraiser knows that when a property sells REO, divorce, short pay, that the property is in distress.  Generally the property is not as well taken care of and the conditions of sale effected the price.  Since REO, Short Pay, Divorce aren’t conditions of the house but of the sale a quality Appraiser will make “adjustments” for those issues. Even though those “situations” don’t relate to the condition of the house, they usually cause a need for a fast sale and often lower price.

The appraiser will then do research and some driving to learn all they can about the subject property and the comparable properties. In many cases calling the listing agents and getting more details to compare the properties, after seeing them. Then making a decision after carefully weighing all the differences, pluses and minuses.

It’s a really interesting process with many factors involved. In a booming market (market with raising prices.) two month old sold prices maybe too low for “today’s” sales! So you have to adjust those comps/sales by a percentage up for one market market and down for another. In a rapidly falling market you must do the opposite or you will be giving too high a value.

It takes time and experience to know how to do the adjustments. How much more is a home worth with a view, pool or larger yard? Some views and pools are worth a lot more than others.

In today’s loan world one bit of good news is that the appraisal process, regulations on the lenders, and the lender’s attitude make it highly improbable that anybody in the near future will pay more than a property is worth. Something I used to see happen quite a bit.

The new laws make it so banks can’t use appraisers that they have a relationship with. Now in some ways I agree and it was abused by many. On the other hand I work some very unique areas such as the Girard Tract of Woodland Hills, or the hills of Chatsworth, Topanga in the canyon and Malibu and if you have an appraiser that is familiar with the hood it really can make a difference in a good way. Some come to areas I work and can’t believe how high or even low the prices are?? So their lack of impartial judgement scares me.It’s also nice to know the guy you are using is good at it and always having to rely on someone you don’t know is a little scary. Either way things were very abused for a long time so now we have to suffer a little.

I am here for your questions. Thank you all for all of your positive input.

Best

Scott