How accurate are the County Assessor’s Records on your San Carlos home?

If I asked you to describe the basic specifications of your home (square footage, number of bedrooms and bathrooms, and lot size) could you do it?  Sure you could.  But the real question here is this: Would your answer be correct?   How would you know?  It all depends on where you get your information.  Let’s take a look at where most people get information about their homes…

The County Assessor’s Records.

Probably the most common source of information about our homes resides in the San Mateo County Assessor’s Records.   When a home is listed on the Multiple Listing Service, the specifications of the home are most often taken from the Assessor’s records.  Why?  Convenience and impartiality.  Generally speaking, when the County Assessor’s data is used as the source of specifications,  the seller (and their agent) can’t be held liable if the Assessor’s data turns out to be inaccurate (disclaimer time:  I’m not a lawyer, nor do I play one on TV.  So take this as a general guideline.  Be sure to consult a real estate attorney if you have additional questions on this. )   So if the Assessor’s records are being used as the default, how accurate are they?

“Reliable, but not guaranteed accurate.”

Over time, the real estate industry’s dependence on the County Assessor’s Records has led to a mythical notion that these records are somehow the “legal” or “official” description of the home, and therefore they’re 100% accurate.   In reality, they’re neither.  The Assessor’s Office will be the first to tell you that the specifications they keep on our homes are for taxation purposes only.   From those three words,  you can safely assume that they aren’t going to fret over whether the square footage of your home is accurate down to the square foot.    So this means there may be a discrepancy between what the County believes your home is, and what you do.

Where do most of the discrepancies show up?  Bedroom/bathroom count, and square footage of the home.    To understand why this happens, you first need to know how the County gets information on your home.   In incorporated areas like San Carlos, they rely heavily on outside sources — primarily the City building department.     As a matter of course, the County gets copied on permits where work is completed for home modifications, so at least in theory they’re kept “in the loop.”    But if there’s a mistake in the translation of the permit, OR the homeowner had work done without getting required permits, you can see how disconnects can happen. … Continue Reading

Show Your Team’s Colors!

Is re-painting one of your children’s rooms on your “to-do” list this summer?   Yep, me too.   I don’t mind the actual painting part of painting the room, but picking the colors out is probably my least favorite activity on this planet, next to getting my teeth drilled.   Anything activity that involves so many similar choices and options just makes my head spin.  I truly admire interior designers for their ability to make something useful out a sea of seemingly identical 1″ x 1″ samples.

To add to the fun on this project, our 12-year old son informed us he’d like to paint his room the color of the San Jose Sharks.  Hey,  why not?  He’s an accomplished ice hockey player, and a rabid Sharks fan…  I could already feel the sweat trickling down the back of my neck.  How many teal swatches am I going to have to wade through to find the closest match to San Jose’s???  Let’s face it, although I’m not color-blind….I’m definitely color-dumb.  I could already picture the end result looking more like a circus tent than a hockey locker room…

So here’s the funny part.  I get to say “Home Depot to the Rescue.”  (I never thought those words would ever leave my brain, because shopping at HD is third on my pain scale after the two above)  But it’s true!   My wife Patty found out that Home Depot has teamed up with Glidden Paints to offer the Team Colors line of paints.  What is the “Team Colors” product? It is simply a “stroke” of genius on behalf of Glidden and Home Depot — they worked out licenses with a whole bunch of professional sports leagues to get the “official” colors of their respective teams.  Here are most of the affiliations they’re working with:

Glidden did all the work up front and computer-matched literally hundreds of team colors, so you simply need to check out the brochure to see if your team is in there, and then order how much of each color you want.   Done…It’s just that easy.   So, do you want the paint your game room Stanford Cardinal Red for the Big Game?  No problem.   Are you a Michigan Wolverine fan (my condolences) or an Ohio State Buckeyes alum?   Check.  Detroit Red Wings?  Covered like an octopus.  They even have the Nascar colors.  (Now, that’s dedication.)

Check out Glidden’s site for more information:  Glidden Team Colors

This takes ALL of the guesswork out of picking the colors, and let’s you focus on important tasks….like figuring out where to put all of these cool shades.  So have fun with it — showing  your team colors has never been easier!

Section 1 Clearance? Not just for FHA Loans Anymore…

You’re undoubtedly aware of how lending requirements have been tightened as a result of the severe housing situation. Lenders are requiring much higher credit scores, full documentation, larger down payments, NO late payments, etc… Well, these restrictions all pertain to the potential buyer, and their ability to fulfill the terms of the loan.

But the lending institutions aren’t stopping there. Many lenders are starting to take a much closer look at the homes they are being asked to fund. And why not? With foreclosures hitting record levels, they end up owning some of these homes down the road. There’s one VERY important condition that some lenders are starting to impose BEFORE they will fund the loan: Section 1 clearance.

“Section 1″ — What is it?

During the course of a home transaction, a “Wood Destroying Pests and Organisms Inspection” is normally completed by a qualified inspector. This is commonly referred to as a “Termite Report” or a “Pest Inspection.” (For the purpose of this discussion, they are the same.) In the back of the standard report, you’ll find the required fixes spelled out under either “Section 1″ or “Section 2″ columns. Here are some quick definitions:

• “Section One:” Noted areas of active termite infestation or other wood-destroying insects or organisms like dry-rot fungus (likely caused by water intrusion.)
• “Section Two:” These are usually areas that are highlighted because the inspector couldn’t visually inspect that area, and consequently there might be conditions that cause the inspector to believe there could be Section One issues.
• “Section 1 Clearance:” A certification that is issued by a licensed inspector when ALL items highlighted in Section 1 have been remedied. This may include chemical treatment to exterminate pests, as well as replacing damaged wood caused by infestation and/or dry rot.

Up until recently, repairs to Section 1 issues were negotiated between the buyer and seller and didn’t have a bearing on the funding of the loan. In competitive bids, the buyer would likely shoulder the task of fixing the issues, and they were usually fixed after the close of escrow but before the buyer occupied the house (Sometimes they’re not fixed at all.) If a house has significant Section 1 issues and has been on the market for a long time, the buyer may negotiate the cost of the fixes with the seller. But the lenders were seldom involved, with the exception of FHA Loans. They have customarily required a Section 1 Clearance before they’ll fund the loan.

Now, some traditional lenders are starting to follow suit…and it’s popping up at the most inconvenient of times. I heard of an instance recently where a bank came in within a couple days of the close of escrow and required a Section 1 Clearance before they would fund the loan. Needless to say, this took the stress level of everyone involved right into the stratosphere.

What can you do to protect yourself? For both buyers and sellers, make sure your respective agents are communicating frequently with the lender or mortgage broker and asking if this is going to be a requirement. Experienced mortgage brokers know their lenders well, and will normally steer clear of situations like the one above. The good ones will already have a fall-back plan already in place for situations like this.

• Important Tip — If the buyer asks for a Section 1 Clearance as part of their purchase offer, you’d better expect that the lender will require it before close of escrow, so plan accordingly.

With the ecomomy bumping along as it is, you’ll likely see this requirement more often — so in a home purchase negotiation, the sooner you know if it will affect you, the better off you’ll be.

“Permits? We don’t need no stinkin’ permits!”…Do we?

You’ve undoubtedly seen this clip from the classic flick “The Treasure of the Sierra Madre” from 1948….

Perhaps the clip captures the spirit of my parent’s generation when it came to remodeling or modifying their homes. Permits? Are you kidding me? They didn’t want any stinkin’ permits. Back then, permits were expensive, time consuming to obtain, and required inviting the unwanted building inspector to the party just to he could tell you all the things he wanted re-done. Consequently, today you’ll find countless homes where second-floors were added, the number of rooms increased, and bathrooms completely redone — all without permits.

So should we uphold the same spirit today? With all due respect to my dad, the answer is a big NO. Here’s why:

Houses with the required permits are worth more than those without.

Consider the following very typical example: A homeowner takes a 2BR/1BA 1,200 square foot, post-WWII rancher and adds a master bedroom suite and bathroom, in the process adding another 400 square feet. He decides to enlist the help of some qualified friends in the construction business to do the work for a discount, and he doesn’t bother to get the required permits.

10 years later when he decides to sell his home, our hypothetical buyer is shocked to discover that he can’t sell his home as a “3BR/2BA 1,600 square foot home”   Why? Because the County as no record of the improvements, since the City never approved of the construction.  The listing agent is asking for a lawsuit if he represents this as a 3/2 when the County records show it otherwise.

Of course, this isn’t the end of the road for our hypothetical buyer.  He can apply to get the improvements permitted and registered after the fact.  Or, he can list the property as a 2/1 with an “un-permitted bathroom and bedroom.”  But for obvious reasons, it isn’t the same as a legitimate 3/2.

The old excuses of permits being “too expensive, too hard to get, etc…” don’t apply anymore, either.  Building Departments in most cities have made the process infinitely easier by doing as much of it online as possible.  You can apply for a permit, track the approval process, and be make modifications all online in many communities.  Chalk one up for the Internet.

The analogy of the used car is a simple application of this philosophy:  A used-car with a full documentation of all maintenance is always worth more than the same car with no records.  It’s no different with houses.

So if you’re planning a remodel, be sure to get all of the permits that are required.  When it comes time to sell your home, you’ll be very glad you did.

Looking for a home improvement contractor? Don’t Panic!

When it comes to home ownership, there are few things more confusing (and sometimes intimidating) than having to find and hire someone to do work on your home. How do you find a plumber, electrician, painter, or carpenter? More importantly, how do you know if they are good, reliable, and trustworthy?

Obviously, you can ask a friend or someone you know who has had work done recently. That’s always a solid, relevant datapoint…but that’s only one reference. And what if you are new in town and don’t know anyone? The good ‘ol Internet can help out. There are two websites that I will discuss that can help get you on your way:

Angie’s List: http://www.angieslist.com The name-connection to the ubiquitous “craigslist” is obvious in the moniker. Angie’s List was created in 1995 by Angie Hicks in Columbus, Ohio as a way for homeowners to track and rate different contractors in the various home-improvement trades. Since it’s inception, Angie’s List has expanded into many areas, including the San Francisco Bay Area. This site is different from others in two main areas:

• Cost. There is a fee to join ($15 sign-up, approx $5 per month.) The company rationalizes this as a way to get “honest” feedback about businesses. The thought being that only people who are serious about writing honest referrals will go through the effort and pay the cost. I don’t necessarily buy this rationale — it’s very easy for anyone to log in under a pseudo-email address and post a seemingly legit review. But for the purpose of this discussion, I’ll assume the vast majority are real.
• Grading. Angie’s List allows users to grade contractors on an A-F grading scale, just like school, for key parameters such as price, quality, responsiveness, cost etc… There is also ample area for commentary, which is always helpful. As I mentioned before, as long as the reports are legitimate, they are very helpful.

Yelp: http://www.yelp.com Yelp falls under the category of a “social network.” It’s free and easy to join, and you can write reviews on any business from pizzerias to painters. Rating is done by giving a business 1-5 stars. It is a little less structured than Angie’s List, but the commentaries are generally more pointed and frank. If someone screws up on a job, they’re going to get “Yelped,” which is the equivalent of the old schoolyard dogpile. If nothing else, the commentaries are very creative and often amusing.

Diamond Certified: http://www.diamondcertified.org/ Diamond Certified is an organization that reviews and certifies various businesses based on a rigorous qualification process. These businesses are reviewed on a quarterly basis and must maintain a certain rating to keep their Diamond Certification. The positive of this is the obvious neutrality of the rating — no relatives writing the reviews. The downside is that you’ll have far fewer contractors to pick from (maybe that’s a good thing?)

In summary, regardless of whether you find your contractor online or through a friend, make sure to take the following steps:

1. Get additional referrals or customer from the contractor (preferably a live person.)
2. Interview multiple contractors.
3. If you can, go see some of the work they’ve done. Electrical and plumbing is tough, but painting, floors and kitchens are easy to see.

I hope this helps! If you know of any other websites that cater to rating contractors, please post a comment below. If you have any questions, don’t hesitate to contact me.