Rent to Own--Questions You Should Think About

With the current state of the Real Estate Market a rent to own situation may work for both seller and buyer. For sellers the advantage is the renter will eventually take permanent ownership of the property. For the buyer who is cash strapped or credit challenged, this may provide and opportunity to get into a home.

Rent to own can be a great avenue for both sellers and buyers, but you have to be aware of potential drawbacks. You will really need to sit down and ask yourself specific questions to decide if rent to own is really an option for you.

Questions for a Seller
*Who will tend to the property and pay for routine maintenance?
*Who pays for major repairs?
*What are the costs of setting up and managing an escrow account for the portion of rent allotted to the down payment?
*Will you manage the property yourself, or hire an agent?
*What if the renters change their minds? Who keeps the money in the escrow account?
*If the buyers change their minds, what will be required to put the property back on the market?

Questions for a Buyer
*How much of the rent is going to the down payment?
*How locked in are you if change your mind? What will it cost you to get out of the deal?
*How long will it take to accumulate enough of a down payment that you are likely to qualify for a mortgage?
*What happens if you don’t qualify for a mortgage by the specified deadline? Can you continue to rent?
*Who will be responsible for routine maintenance?
*Who will pay for major repairs?
*Do you hope to strengthen your credit rating by paying rent on time? If so, will the owner report your good habits to credit bureaus?

Entering a rent to own situation can work, but you must make sure you have addressed any potential issues before you enter into a rent to own situation to mitigate any issues that can come up.

If you have any questions you can contact me at lcartolano@apr.com or at 510.213.1139

New Law For Buyers In Oakland Help Pay for Siesmic Retrofitting

New Law In Oakland Helps Pay for Seismic Retrofitting

The United States Geological Service (USGS) has forecasted that a magnitude 6.7 or larger earthquake will occur in the San Francisco Bay Area with 62% probability An earthquake of this magnitude would cause billions of dollars of economic loss in the Bay Area, half of which would be loss in damaged residencies.Oakland is expected to lose more than one-third of its housing in a major earthquake along the Hayward Fault.

Seismic strengthening of residences—known as seismic retrofitting— not only save lives, but also housing. This helps communities to withstand the short and long term effects of a major disaster.

A study completed by the University of Buffalo in 2006 demonstrated that a 2 story wood frame house built to California earthquake standards and then shook in a simulated magnitude 6.7 earthquake, survived with little structural damage.

It is estimated that 85% of Oakland’s existing residential buildings constructed before modern earthquake codes were adopted have not been even minimally strengthened to withstand seismic activity. Permits in the past cost 10% of the cost of retrofitting (usually $7,000-$30,000) Many homeowners were avoiding the permit process altogether to defer costs. Without City inspections, homeowners cannot be assured that the work is meeting current seismic retrofit standards.

The City of Oakland has incorporated basic retrofit standards into the City’s Municipal Code, established a flat retrofit permit fee of $250, and launched a New Homeowner Voluntary Seismic Strengthening Reimbursement Incentive Program that allows new owners of older homes one year in which to retrofit their residences to the standards, and provided they complete the work according to plan, receive up to $5,000 reimbursement for their expenses. New owners must apply for the permit within 60 days of recording the transfer of ownership to be eligible for the Incentive Reimbursement Program.

What if you already own your home?

You can still take advantage of the flat $250 permitting fee for the retro-fitting.

How can I pay for the retrofitting?

Retrofitting a home can be costly. There are a few options available. You may want to consider a home equity line of credit. Or you can try doing some of the work yourself to bring down the costs. There is a handbook created by the City of Oakland a few years ago that explains how to do several retrofitting project yourself. You can check it out on the web at http://www.oaklandnet.com/earthquake/GetRetrofitHandbook.pdf

Retrofitting is a vital component to saving probably one of your greatest investments, your home.

If you have any questions you can contact me at lcartolano@apr.com or at 510.213.1139

Special Program Available for Oakland Unified Employees

Attention Oakland Unified Teachers and Employees!!

Do you currently rent and wonder if you can afford to purchase your own home?

Teachers in under performing schools qualify for a special program through the California Housing and Finance Agency (Cal-HFA).

If you are a first time home buyer or if you have haven’t owned a home in the last 3 years, you could qualify for below market rate financing through Cal-HFA and a special assistance program for a down payment or help with closing costs.

Want more information about this program?
Come join us for a First Time Home Buyers Seminar for Teachers.

Please RSVP at 510.213.1139 or by email at lcartolano@apr.com

Date: October 10th 2007
Time: 7PM
Location: LandAmerica Commonwealth Title
6200 Antioch Street Suite 101
Oakland, CA 94611

Can’t make the Seminar? Give us a call and we can meet with you personally to talk about the program.

Lisa Cartolano of Alain Pinel Realtors

I Can't Pay My Mortgage? Is There Anything I Can Do?

Your Adjustable mortgage rate has just adjusted. Your mortgage payments have increased dramatically and you are having a hard time making the payments.

Is there anything you can do?

The answer is yes.

The first step is going to be talk to a lender and do it sooner than later. If you feel like you are in a situation where you will not be able to make payments, talk to a lender to see if you can re-finance your loan into a fixed rate. This may help stabilize the payments give you the peace of mind that you can afford to stay in your home.

What if you talk with a lender and it is not possible for you to refinance?

It may be that you are in a situation where you can't refinance. Maybe the house is financed for more than it can be appraised for, or maybe your credit has taken a hit and you can't get approved for a new loan, or maybe you are in a situation where you feel like you have more house you can afford.

There are options. You can sell your home. This may not be what you are thinking, but this is one way to deal with your situation if you can't refinance. You will want to talk to a Realtor to see what your situation looks like. There are two avenues of sale at this point.

1. A Standard Sale
2. A Short Sale

A standard sale is where you are able to sell the home for more than than you owe. This is what most think of traditionally when selling the home.

A short sale is where you are selling the home for less than you owe. This can be a tough situation and you will want to involve a Realtor early on to help you navigate a short sale. See my next blog for the ins and outs of a short sale.

If you are feeling like your mortgage payments are getting away from you do remember that there are options to you. Just make sure to be honest with yourself and your situation and contact a professional earlier than later.

If you have any questions or would like further information, you can contact me at 510.213.1139 or at lcartolano@apr.com

What Is A Short Sale?

Odds are you have heard the news lately about real estate. Lately we are starting to see a lot more short sales.

What is a short sale?

This is when trying to sell a home you are putting on the market for less than you owe.

There are a variety of reasons for doing this:
1. You purchased a couple of years ago and values in your area have come down since then.
2. You refinanced your home to get money for other purposes and now your home is mortgaged for more than it can sell.

Why Would I sell if I Owe More Than I can Sell it?

There are a variety of reasons why you might find yourself in this situation. Maybe you are a spouse lost your job and you cannot afford to stay in your home, you have been relocated for your job and need to move out of state, your mortgage payments have increased to a point where you can no longer make the payments.

A short sale can help you avoid foreclosure

If things have gotten to a point where payments are difficult and you feel like you are not going to be able to keep them up a short sale could be a lot better alternative to foreclosure. With a short sale you can sell the house and get out from your mortgage. If you just stop making payments eventually the bank will come knocking on your door and ultimately can take possession of the house. If this happens your credit can be damaged for several years and forget even trying to buy a home for about 7.

How is a short sale different?

If you are not using a Realtor to help you sell your home at this point, you may want to. Short sales are not for the faint of heart and they typically take a lot of time and energy.

The first step is to contact the lender and speak with someone at the loss and mitigation group. Some lenders will be up to speed and will have a list of paperwork to send out to be filled and signed off on, an others will not. The tough part of a short sale is every lender will deal with it differently.

Basically the goal is to negotiate with the lender for them to "forgive" the difference between what you owe and what it sells for. Some lenders will negotiate this up front, others will want to see an offer before they will even discuss it.

Short sales can be hard to sell.

Get help early!!! A Realtor will be able to help you navigate the negotiations with the bank. In some instances it can take weeks of phone calls to even get a person with the lender that has the authorization to make any decisions regarding a short sale of your home.

Buyers can be wary of short sales

As a buyer you may have the perception that something is wrong with the house. Or if something is unearthed during an inspection will you the seller be able to negotiate work that may need to be done.

It is really important to look at your situation to see what makes the most sense for your situation. Get help early and be realistic about your situation. It is not a happy place to be in, but if you are able to successfully complete a short sale you can limit the number of financial headaches for yourself in the future.

If you would like more information about short sales, you can contact me at 510.213.1139 or at lcartolano@apr.com

Charming Cottage Condo

Charming Detached Cottage Condo Located In The Heart of Temescal

4230 Shafter Ave Oakland, CA

Offered at $375,000



Conveniently located near public transportation, Piedmont Ave, Rockridge and Temescal shops, this home has a lot to offer at a fantastic price.
*1 Bedroom
*1 Bath
*Wood burning Fireplace
*Custom Plantation Shutters
*Designer light fixtures throughout
*New Roof
*Low HOA dues

For more information contact me at 510.213.1139 or at lcartolano@apr.com

*****Special Financing Available to First Time Home Buyers through a program offered by the state of California. In order to obtain more information about these home loan programs and other loan programs, please call 1-888-766-7692 ext. 90460 for a 24 hr. FREE Recorded Message******

Moving On Up...

I was recently asked for some insight from clients, friends and neighbors what they might want to see on my blog.

Jen wanted me to talk about moving up from your first house to a bigger home to accommodate a growing family and changing needs in a home.

If is very common to purchase your first home you find your needs have changed.

Maybe you had kids and then figure out the house you are currently are living in is too small, is not in the school district you would like, you may want to live in an area that is less urban, or maybe you want to be closer to amenities and public transportation. You will need to evaluate your situation and how your needs may have changed.

The first step would to be to sit down and really think about what you want in a new house and write it down!
**How many bedrooms and bathrooms to do you want?
**Do you want a house with no stairs?
**Is there a particular school district you want to live in?
**Do you want to live in a more suburban setting?
**Do you want to live closer to public transportation?
**Do you have a particular city or community you want to live in?

Write down everything. Remember this is what you want. This list may change, but get it all down on paper.

Now evaluate your wish list with your current house. Do any of the your wants match what you currently have?

The next step you may want to enlist the help of a Realtor. You will need to evaluate your current home as if you were going to sell it. What kind of equity do you think you might have to use to help with the purchase a new home?

Have a Realtor help you with a market analysis of your home so you have some ballpark figures to work with.

You will need to evaluate the marketplace for you current home as compared to a home in the area you would like to move. Again your Realtor can help you determine what the marketplace is doing in the areas you are interested in moving to.

If you live in an area where homes are going for $500,000, upgrading to a home for 2 million may not be realistic (unless you have the winning lottery ticket).

The market has changed and the strategies for selling and upgrading to a new house have too.

Be realistic.
Housing prices have changed. Keep in mind a 5% decrease in prices in a home worth $500,000 is only $25,000 and a 5% decrease in prices in a home worth $800,000 is $40,000. The neighbor up the street may have sold their house 2 years ago at $100,000 over asking, but in this current marketplace this more than likely won't happen.
Be smart.
It may be a much better approach to sell your first home and then look to buy the upgrade. It will also be a lot easier to take the proceeds from the sale of your first home and directly use that money to help with the purchase of the new one.
Think Like a Buyer
--Even when selling your house. In any market the buyers are the one's who set the prices. What buyers are willing to pay for ultimately sets the stage for the sale of your home.
Get Help. Use a Realtor and lender to help you evaluate your situation. If you can sell your house and reap a fair amount of equity, but can't qualify for a loan for the second home, you may want to reconsider what your options are.

Selling and buying a house can be a very stressful time. There is a lot to do and emotions can run high. There will be certain roadblocks that can cause bumps in the road to you ultimate goal of upgrading to a new home, but with the help of a qualified Realtor and lender you can be on the road to your new home.

If you have any comments or questions regarding moving up to your next home, you can contact me at lcartolano@apr.com or at 510.213.1139

The Buying Process What Steps Do I Take Step 7

From Accepted Offer to Homeownership (Escrow Timeline)

Your Relator has submitted and offer for you and it has been accepted. Now the rubber hits the road so to speak.


First you will probably talk with your lender. They will need to tie up any loose ends with you and will contact the appraiser to appraise the property. One piece of advise: Do NOT make any major purchases!! Before your loan will fund, the lender will pull your credit one more time. If you make any major purchases like buying new furniture or a car, this can affect your credit rating and could affect your loan. Wait until you hav the keys in hand to your new home before you make any large purchases.

Next you will have a home inspection. This means your Realtor probably set up at time for a home inspector to come in and take a look at the condition of the home. You might also have a roof inspection, chimney inspection, foundation inspection, or sewer lateral inspection at this time. This will depend on what information the seller provided and what you feel is important to find out about the house. Often after the general inspection, they will recommend certain areas be inspected further.

During the inspection time period you the buyer will need to do your own investigations. You will want to check out the neighborhood at different times of the day, try to talk to neighbors, check out crime stats. Remember YOU have to be comfortable with where you are buying and only you can make those decisions.

Often times during the inspection time period items will come up that need repair. This is were a lot of negotiating can go back and forth between both sides. You the buyer may want to ask for some of the work to be done and the seller may or may not be willing or able to. It is important for you to keep in mind what is realy important to you and what are potential deal breakers.

Once we get through the appraisal, loan approval and inspection time periods you will in writing remove all your contingencies. After you remove contingencies you are pretty much committed. Negotiations are complete between buyer and seller and now the title company will wait for the lender to deposit funds (the money you are borrowing), disperse funds to the seller and transfer the deed of trust to the property to you the buyer. During this time you will also meet with the title company to sign loan documnets, and instructions for the deed of trust transfer.

Once the deed has been recorded with the County the keys are yours!

If you have any questions or comments you can contact me at lcartolano@apr.com or at 510.213.1139

The Buying Process What Steps Do I Take Step 6

Putting Pen to Paper (so to speak)

This is usually the time when some buyers become a little nervous. This is a big purchase and when you see it in black and white it can be a little unnerving for some.

The first page of the contract is the one where you will probably spend the most time going over with your Realtor. Here you:

1. Set the offer price
2. Indicate the amount of earnest money you are putting down.
3. Set the escrow time period (if you want to)
4. Set the time frame for loan and appraisal contingencies

I won't bore you with all the legalese that is in the contract as a whole but there are some other very important aspects to the contract that you will want to be aware of:

1. The inspection contingency time frame. During the inspection time frame you may have an inspector who will perform a general home inspection and you may also want to have a foundation inspection, sewer lateral inspection, chimney inspection, and roof inspection. It will all depend on what information you were given by the seller and what kind of information you want to know about the house.

During this time frame you are also are to check out the neighborhood. Are you comfortable with the neighborhood? I always suggest driving by the new house at various times of the day and night.

If you are purchasing a condo this is the time frame when you will look over the HOA documents to check to see if there have been any issues with the building, if there are any special assessments, what kind of rules and regulations they have.

With your offer you will also probably include a list of disclosures that you will need to sign. There are some disclosures that will be specific to which city you are looking to purchase property and if the listing agent of the property has provided any disclosures regarding the property.

I will have a blog that discusses disclosures in detail so keep an eye out for that one.

Now that you have everything signed, and a check written, it is time to get the offer over to the seller to see what happens!!

If you have any questions or comments you can contact me at lcartolano@apr.com or at 510.213.1139.