We hear stories all the time about people who bought second, third and fourth homes using those crazy interest only, “pay what you want, when you want to” loans.    They all thought that they were going to be land barons, making big bucks on the rentals or buying the property, fixing it up and flipping it for a huge profit. 

Now, the homes that they bought in Fresno, Sacramento, Lodi….heck, all over the country… are no longer worth what they paid for them and, because of the economy, they can no longer require the high rents they were getting in the beginning.    In many cases, the owners can still afford to make the payments, but now don’t want to because they feel the value is not there, so they simply walk away from the properties.      That seems wrong to me.  

Another example…a year or two ago, there was a construction project started for a new house in my town.   Although the owner runs a hugely successful business, when he had a problem with the building, he simply stopped making payments, so the bank took the property back.     Since he “walked away” the property has been boarded up and there is a big, muddy hole in front of it, making the entire street look horrible.    

What really troubles me about this case, is that I recently heard that this same man has just purchased a $900,000 home right up the street.   How is that even possible?    And, how can he sleep at night knowing that he left a big mess for the entire neighborhood to stare at, as well as destroying the property values of the homes on either side?

And, lastly, I heard of a case the other day where the owner has a great job and plenty of money.   She can easily afford to make her payments, but wants to leave the country to join family members elsewhere and, if she sells, won’t get the full amount back that she owes.   Even though she will only be short on the loan approx. $10,000, and even though she could easily write a check for that amount, she has decided to simply walk away and let the house be foreclosed upon. 

All of these stories leave me wondering….Whatever happened to the honorable Americans we used to be?    In the old days, if a person borrowed money, they would do whatever humanly possible they could to repay it.    In many cases, all it would take would be a handshake and they were commited.     Now, it is as though people no longer care about anyone but themselves…forget about the neighborhoods, forget about the country’s economy…I’m in this for me, appears to be the attitude. 

Yes, I know that the banks are big, uncaring institutions, but a debt is a debt.   I believe in that old saying “my word is my bond.”    Obviously, as I mentioned earlier in this article, there are many people who, unknowingly, got caught up in this mess.   I don’t blame them at all and completely understand their need to walk away from their homes.   But, I feel nothing but anger for those who took advantage of the system and are now a big part of destroying our economy.    

What kind of example are we setting for our children?

Photo courtesy of Lee Panza

On Sunday, December 6th @ 5:30 p.m. there will be a wonderful event happening in the adorable little town of Brisbane, CA.   It is called “Festival of the Stars”,  and is called that because Brisbane is famous for the lit up stars that most citizens have on their homes.    Although many people start lighting them at the very beginning of December, this evening is the official night when everyone turns them on.   It is quite a sight and can be seen all the way from Highway 101.   The stars, both  large and small, are provided free to anyone who lives in town…all they need to do is add the lights.

To celebrate, every year the citizens, young and old,  gather at the top of Visitacion & Klamath Streets (Madhouse Coffee).    Everyone is given song sheets and then we march down the hill singing Christmas carols (I will be your fearless song leader.) 

 We end up at the Community Park where the holiday tree is lit and a few local groups do brief performances.  Then comes the big event – Santa arrives on a firetruck!    Coffee, cocoa and cookies are provided at no charge.   

For those of you who are not familiar with this little town, it is located between San Francisco and South San Francisco and is perched on the side of San Bruno Mountain.   You should take Highway 101 to get there.  

It’s a wonderful evening and everyone is welcome!     I hope to see you there!

Kathy Wall
(415) 608-4168
www.michaelandkathy.com

This particular condo wasn’t going to work for them, so I told them that I would send them information on other nicer complexes that I thought they might like.   On Friday, I did just that.   In response, I received the following email:

Dear Kathy,

Thank you for showing us the Mission Road place on Wednesday.   I need to let you know that since we spoke, I spoke with my Mother in law who is a realtor, and she is going to represent my parents.  

I really appreciate the time you took on our behalf and I apologize for any inconvenience we may have caused you.

Peace and Grace to you.

Sincerely,

(I’ll leave her name out)

Needless to say,  I’m really irritated.  I am contemplating sending her the following letter and want my reader’s opinions as to whether it is a waste of time.     

Dear ________,

While I do appreciate your responding to my email, I feel it is important for you to realize that life for Realtors is very difficult these days and we need all of the business we can get.   Consequently, instead of doing the shopping that I needed to do for my family, I completely changed my schedule to spend time with your family.   And, clearly, prior to our meeting you already knew that your Mother in law was a Realtor and that you would be using her. 

I only ask that, in the future, you take into consideration that Realtors are people, too.  I got very excited at the prospect of working with you and your family.  I went out of my way to accommodate you and it really stung to find out I was used.  I hope that you will think long and hard before doing that to anyone again. 

Sincerely,

Kathy Wall

What do you think….Send or don’t send?

…The income limits have been raised so that now more people will qualify for the credit.   Previously, if you were a single person, you could only earn up to $75,000 and, as a married couple you could only earn $150,000.    Now, single people will still qualify if they make up to $125,000 and married couples will be able to receive it if they make up to $225,000.     And, those earning over these amounts may still qualify a credit, but for a lesser amount.         

…Previously, the credit was only available to first time home buyers, which is anyone who hasn’t purchased or owned a home in California for the last 3 years.    Now, move up buyers can qualify for a credit, too!    If you are selling and/or have sold your home and have used it as your principal residence for 5 of the last 8 years, you will be able to purchase your  new home and qualify for a $6,500 tax credit.   It’s not quite as good as the first time buyer’s $8,000, but it will still be a big help.

I believe this is great news for everyone…Home sellers will have a better chance of getting their  homes sold and home buyers will get a little extra help to make the home more affordable.   This credit, plus the incredibly low interest rates, should really give the economy a further spurt of growth.  

Kathy Wall   (415) 608-4168

On Saturday, October 24th, a group of agents from our office held a community event that turned out absolutely perfectly.    We held a combination Pumpkin Patch and Coats for Kids event.     It was hugely successful.

We provided cookies and hot chocolate, as well as goodie bags for the kids and, of course, pumpkins.   We, also,  took photos of each and everyone that wanted one and made them a special photo card right on the spot.   We even had face painting….All for free!

Many, many people brought coats for the kids, too, which was very exciting.    (By the way, for those who weren’t able to attend, please know that we will be accepting coats through the end of October.   If you bring a coat or sweater to our office, be sure to fill out a card so that you can enter the drawing we will be having to thank people for donating.    Our office is located at 180 El Camino Real, San Bruno.)

For me, the very best part about it was that it was such a diverse event.    People of  just about every age and nationality attended.  It was a great deal of fun for everyone, including those of us working at the event.     Business is all fine and dandy, but doing things for others is really what makes life worthwhile.   I am so happy that I work for a company that genuinely cares about the community.

Above, are photos of the terrific agents who participated in this wonderful event!

Kathy Wall – October 26, 2009

Now, after an incredibly negative experience with one of the largest banks operating here in California, I am leaning much more towards referring all clients to mortgage brokers, because I know that they will do the job and, most importantly, will actually care about my clients.  

In this instance, my client has very good credit and good income, but is a commissioned employee, so I referred her to an excellent mortgage broker that I often use.    Unfortunately, my mortgage broker said that, due to the way her salary/commission had been paid over the last few years,  she wouldn’t be able to qualify on her own and would have to have a co-signer.   

Since she really wanted to try qualifying on her own, my client then spoke to a representative of the aforementioned large bank, who assured her that everything would be fine, so she decided to go with them.   I realize now that we should definitely have used my mortgage broker!    Just a few of the ways in which this large bank mishandled this transaction were:

After 40+ days of having the loan package (when we were supposed to close in 30 days), they came back and said that they couldn’t use the commission portion of my client’s salary (just like my mortgage broker had originally said.)  Fortunately, my client was able to add a family member, so we could keep the loan going.    However, had they let us know at day 10, rather than day 40, we wouldn’t have been in the incredibly scary position that we ended up in, with my client possibly losing the house, as well as her entire deposit.

Then, 2-1/2 months into the transaction (unheard of!!!) and just a few days before we were finally supposed to close escrow, the bank called and said that they had done a review of  the appraisal and that the seller would either have to lower the price or the buyer would need to come up with another $3,000!  

Worst of all, with the exception of one of the bank’s loan processors, they treated my client like she was just a number, paying absolutely no attention to any of the deadlines and forcing us to get extension after extension from the very patient listing agent.    On the date of the signing, which was being done at the bank because the title company was several counties away, they had my clients come in at 3:30 when they hadn’t even printed out the documents, forcing them to wait for almost 2 hours to sign and, then, because they had missed some documents, forced them to come back the next day to sign more.

It was crazy, but really reinforced my belief that, as agents, it is incredibly important to have a strong working relationship with whomever does your loans…to know that the lender doing the loan has a proven track record and will truly care about your clients.

You can reach Kathy Wall @ (415) 608-4168 or her website www.michaelandkathy.com

Radon is an odorless gas that you can’t smell and/or taste.   And, unfortunately, it is the second leading cause of of lung cancer.   According to the Environmental Protection Agency (EPA), if you smoke and your home has high radon levels, your risk of lung cancer is especially high.

Basically, radon is a radioactive gas.   It is caused by the natural decay of uranium that is found in nearly all soil.  It moves into your home through cracks and other holes in the foundation.   It can, also, enter your home through well water.   

In some cases, certainly not all, granite counter tops are known to contain dangerous levels of radon.    There is no need to panic if you have granite counters, but it is a good idea to test their radon levels.  

It is very easy to test for radon.   There are several short term tests that can be purchased at your local hardware store.  They are easy to use and can let you know if you have a problem within a very short period of time.   The EPA recommends that everyone test for radon, whether they are in an old or new home.   

If you take the short term test and your result is 4 pCi/L or higher, you should take a follow up test just to be sure.   And, if it comes back high a second time, then you should contact the EPA and do the long term test.  

If you are doing renovation of your home, such as converting an unfinished basement to living space, it is especially important to test the radon levels since major renovations can change the radon levels of any home.

There are ways to lower the radon levels of your home.   One such method is to use a vent pipe system and a fan.   These pull the radon from beneath the house and vents it to the outside.   It is called a soil suction radon reduction system.    Before beginning any repairs, it is wise to consult the state radon office for advice and recommendations.  

Home sellers would be well advised to check out their radon levels before putting the house on the market, since more and more buyers are asking about it.    In addition, every person who purchases new construction should definitely check their radon level prior to occupying the home.

For more details on the information contained in this article, please check out the EPA’s website at:  www.epa.gov/radon/.

Kathy Wall

(415) 608-4168

www.michaelandkathy.com

Recently I was covering the night shift, which goes from 6:00 p.m. – 9:00 p.m.    It was very quiet that night, but at one point, a very young man stopped by the booth and said he was thinking about selling a house he owns in South San Francisco.    I would, normally, be very excited by this (leaping up and down with glee, actually!)   Unfortunately, the more we talked, the more I realized that he shouldn’t sell this house.

It seems that he inherited it from his Grandmother and owns it free and clear.    He’s still going to college and living in the house.   And, while he isn’t thinking about it now, someday he’ll probably have a family and want a house.   If he sells it now, the money will be gone and he will be back to struggling like everyone else to afford a home.    

The long and short of it is that, (kicking myself!!) I encouraged him to keep it.   He really appreciated the advice and my integrity.    And, even though I could really use the money that this commission would have brought, I felt  good about myself as a human being.  

At the end of the day, we are here to give people good advice, not just advice that will benefit ourselves.    

Interestingly, within 2 minutes of his walking away, a couple came to the booth.   They have a house that they really want to sell and, by golly, I got an appointment to look at it the next day.   

Karma!  It really does exist!   And, (I hope and pray!) it truly does pay to do the right thing.