Wednesday, September 30, 2009

Morgan Hill Real Estate – An Active Market.

Morgan Hill Real Estate – An Active Market.
This past week I wrote an offer on behalf of some clients I am working with on a home in Morgan Hill. It was bank owned and in need of some TLC. TLC can be an ambiguous term so here’s a description of what the home needed. The pool pump and filter system was removed, as was the furnace, as was the hood over the stove, as were the appliances, as was a toilet or two. And what else did this person take with them? The covers to the electrical outlets were also missing. That’s right. I recently bought a two switch cover plate for 89 cents at Orchard Supply and it included 4 screws. So the person that left this home was kinda upset wouldn’t you say? From talking to other agents about this home, they told me that it was a mortgage broker who was foreclosed upon. In case you didn’t know, it can be a criminal offense to destroy your property if you are being foreclosed. This home is in a neighborhood of million dollar homes and if you’re familiar with Morgan Hill, you know that buys you quite a bit.

Back to the deal. My clients offered 50% down and about $50k over a list price of $775k. But we did not get the home because we were outbid by an all cash offer for more money. The funny thing is, I still have people say to me, “but it’s a buyer’s market isn’t it?” To partially plagiarize a popular Oldsmobile commercial: This is not your father’s real estate market. -Gary Nobile, Realtor (408) 247-4029

Monday, September 28, 2009

Why Are Pending Sales Dropping?

Why Are Pending Sales in Santa Clara County Real Estate Dropping? First let’s look at the numbers. Active (for sale) single family homes in Santa Clara County have dropped from 2,200 to 2,100 this week while pending sales (sold, not yet closed escrow) have also dropped from 2,900 to 2,800. So what’s going on?
The answer is actually pretty simple. When you have more homes pending than active, sooner or later the pending sales actually close escrow. When they close escrow, the pending number goes down while the “sold” number rises. So don’t panic, there’s not another swing in the market. It’s the natural course following a market shift. The reality is that there is still an undersupply of homes on the market right now which is causing multiple offers on many properties. -Gary Nobile, Realtor (408) 247-4029

Monday, September 21, 2009

What’s in a Termite Report?

What’s in a Termite Report?
I recently marketed a home in Cupertino for a seller. As I typically do, I ordered a termite report before I put the home on the market so as to disclose to potential buyers (and the seller) any damaged wood the home may have. A termite report does more that discloses if a home has termites or other insects that destroy wood. It also outlines any dry rot that the inspector found during the course of his inspection. In addition, the report will explain any items found that, left untreated, may lead to dry rot. And lastly, the report will give a “heads up” as to other areas of the home that may need attention beyond dry rot and termites. Here’s a detailed explanation of each.

Current infestation or dry rot is referred to as “Section 1 finding”. Items that may lead to dry rot or heads up items are referred to as “Section 2 findings”. Sometimes there are areas that cannot be inspected because an inspector is unable to visually inspect the area. I often see this in areas such as the garage or attic where occupants of a home have a lot of stuff around preventing the inspector from getting a good view of potential damage. In these cases, the inspector will state “needs further inspection”. If you want to remove the stuff and have the inspector come back, be advised that there is a re-inspection fee.

Termites, beetles, etc. are a problem because they eat wood. Wood destroying organisms eating wood inside the walls and floors of your home causes the structure to weaken so it’s important to eradicate these pests. One could have termites under the home (subterranean) or above ground. Both can be effectively treated. Sometimes they can be treated locally (just within that area) but sometimes the home will need a fumigation. This is when there are termites that are either impossible to treat because they can’t be reached within the walls or there are just too many to economically treat in several local areas. If you’ve ever seen a big tent over a home for a few days, that’s what a fumigation looks like. The cost of fumigation varies depending on the size of the home. I find that a typical 1,500 sq. ft. home costs about $1,800 to fumigate if you prep the home yourself. If you want the termite company to prep it for you, that will cost about another $250. If you choose to fumigate, know that you must be out of the home for a minimum of 3 days. It’s kind of a pain to make sure your mattresses are protected and food is removed (along with other considerations) so I typically advise buyers and sellers to conduct a fumigation after the seller has moved all their stuff out and before the buyer has moved in. Other considerations are the fact that if you have a TV antenna on top of the home, it will have to be removed so the tent can go over the home, or it may be more difficult for the fumigators to fit the tent over the home.

Water is also a big destroyer of wood. Often times you’ll see in a termite report that there is a leaking shower or toilet that has damaged the floor underneath the linoleum, tile, or shower floor. A seller often has no idea this problem exists because most of the time you can only see the leak if you crawl under the home. Not many of us do that. In this case, the inspector will often recommend removing the floor covering (or shower pan) removing the damaged wood and replacing everything. They will quote you a cost for a “standard grade” replacement tile, linoleum, or shower pan. But if you want a specific grade and color of tile, it will cost you more. Buyers might consider this to be a good time to remodel a bathroom. Since you are into the floor anyway, it will cost you less to remodel it now that later when you have to remove the flooring, etc. You may be able to negotiate a better price or a concession from the seller for the damage found in the inspection

Sometimes an inspector finds areas that need attention, but go are beyond the scope of his inspection. For example, if he discovers potential deficiencies with the roof, roof gutters, foundation, water under the home, etc. he will recommend an appropriate inspection by someone who is licensed to inspect those areas. A roofer, for example, is not an expert in termites, and vice versa so it’s an appropriate suggestion for the inspector to make to help a potential buyer understand what they are buying. If you’re a seller, it’s important to understand what you are a selling and how a potential buyer might attempt to negotiate with you based on the true condition of the home. It’s fairly common for a homeowner I’m working with to have no knowledge of termites in their home, but to have an inspector see them in a variety of places. That’s why it’s important to have a reputable firm conduct your inspection. I prefer one that is not on commission to sell you repairs and one that has a long, strong track record of standing behind their work. For many years I’ve trusted Able Exterminators in San Jose [(408) 251-6500] and have been pleased with the results. There are other reputable firms as well. Do your research. I've run across so many quirky things in termite reports over the years that it's impossible to cover them all here so make sure you know what you're reading. It can have a big impact on your sale/purchase! For more info, please conact me. -Gary Nobile, Realtor (408) 247-4029

Tuesday, September 15, 2009

Is Your Home Community Property?

Is Your Home Community Property?
This is a popular topic that is often misunderstood. According to IRS Publication 555, community property is property acquired during your marriage while you are living in a community property state such as California. It can also be property you and your spouse have converted from separate property (this can happen unintentionally). And lastly, community property is property that cannot be identified as separate property. Sounds simple enough, but it can get complicated.
Community property can become of particular importance when a married couple is going through a divorce. It’s important to understand what’s hers and what’s his before agreeing to a Marriage Separation Agreement (MSA). When a couple agrees to an MSA it’s nearly impossible to change, even if it contains errors. One of the more typical questions divorcing couples ask is in regards to a home that one of them acquired before marriage. Is that home community property? It depends. If you have agreed to convert it to community property, then it is. Let’s assume you didn’t agree to convert the home. If during the course of your marriage you made house payments on that home from “community income”, then it is automatically converted to community property.
To clarify, here’s a typical scenario. Let’s suppose that your parents gave you a down payment on a home when you were single. You owned the home for a few years, gained more equity, then got married. You didn’t get a prenuptial agreement because you were going to be in love forever. For a few years you make the payments on that home from money you earn during the time you have been married. Guess what, that money you earned came from “community income”.
Congratulations, you may have just converted a portion your home to community property. Later, things don’t go so well with your spouse and you both decide to divorce. Part of your home is now legally community property that can be split between the two of you.
There has been a type of divorce gaining popularity over the years called Collaborative Divorce. It helps couples going through divorce look at what’s best for all and doing the right thing instead of one person trying to “win”. Divorcing spouses each have their own coach who is a licensed mental health professional. Each also has their own Collaborative Attorney who is highly trained in both mediation and collaboration. Certified financial and child specialists complete the team who all work together to help you split amicably.
While any couple can take advantage of this professional service, it’s particularly well suited for those with children because the split is conducted without the typical ex-bashing you see when divorcing couples go through traditional court systems. We all know the kids get hurt when that happens. Because Collaborative Divorce does not use the traditional court system, it is private and may keep divorcing couples’ property and concerns out of the public’s view. And if you’ve ever investigated the cost of litigation, you’ll find that Collaborative Divorce can be a significantly less expensive alternative. No wonder this service has gained so much popularity over the years.
To find out more about Collaborative Practice or to find a Collaborative Professional, visit, the non-profit California organization of Collaborative Professionals.
For a free copy of IRS divorce related publications, send me an e-mail through my website: Please consult with your attorney or CPA before making any decisions regarding legal and tax matters. Gary Nobile is a full service Realtor serving Silicon Valley and has earned the designation “Real Estate Specialist – Divorce” from the California Association of Realtors, DRE #01068890, (408) 247-4029.

Friday, September 11, 2009

Who's Performaing at Santa Clara Art and Wine Festival

Santa Clara Art and Wine Festival – September 19-20. The Santa Clara Art and Wine Festival is here again and it’s always a lot of fun! Back again this year is The Joe Sharino Band who will be performing on Sunday afternoon in the main Central Park Arena. Joe and his band always put on a terrific show that’s sure to get people dancing and having a great time. For a complete list of events, go to This year especially, I think it’s important that we all find a way to go out and have a little fun. It’s free to attend, the food is wonderful, the people are great, and all money generated through concessions goes to local charities. One such charity is the Santa Clara Schools Foundation (SCSF). This foundation has existed for about 20 years and its sole capacity is to raise money to give to local schools for things not funded publicly. For example, many scholarships have been awarded over the years by this organization and many other local companies. But this foundation is one that local educators have come to rely upon when they are in need of something that isn’t budgeted elsewhere. Things like allowing the opportunity for an underprivileged Santa Clara student to attend a field trip or a camp. Things like projectors that teachers need to assist in teaching the students. It’s really too long of a list to explain here. But what I found very special about this foundation is that it is made up entirely of volunteers who not only donate their time, effort and energy to this organization, but also their money. Nobody asks for anything in return. And every dollar spent goes to helping the students of Santa Clara become better educated and well rounded. The foundation has a new website: that explains what they do and how they do it. You can even donate if you like. As you may know, I have a soft spot in my heart for the kids attending Santa Clara schools because I happen to be a product of that school system. I think I turned out OK (but there are probably some detractors out there). Over the years, I’ve been called upon by educators to speak to students at various grade levels in their classrooms about a variety of subjects ranging from real estate to personal finances to simply read a story to elementary kids. It’s something I really enjoy doing and am always willing to carve out time to help where I can. Since learning about the SCSF foundation, I became so excited about finding another way to help our local kids that I also volunteered for this organization. SCSF will have a booth at the Art and Wine Festival. So guess where you’ll find me... I’ve volunteered to pour wine at the SCSF booth on Saturday, September 19 from noon to 2:00. Please stop by and say hello! Cheers. -Gary Nobile, Realtor (408) 247-4029

Thursday, September 10, 2009

What Should You Disclose if Someone Dies in a Home?

What should You Disclose if Someone Dies in a Home? I just listed a home for sale in Cupertino that fell into this category which causes me to think about sharing it with you. This can be a touchy, little understood subject. Generally, I don’t like to give disclaimers because it sounds like I don’t know what I’m talking about, but my legal team says I must, so here goes. If in doubt about what you should disclose when selling a home or how to handle the estate of a deceased, please consult your attorney. OK, that’s out of the way, I hope they’re happy. Now let’s go on to the discussion at hand. If you are selling a home, you must disclose if a person has passed away inside of the home if it occurred within the past 3 years. If someone passed away and it’s been longer than 3 years, you don’t have to disclose it, but you can’t lie about it either. Here’s what I mean. You don’t have to tell a potential buyer in writing or verbally that someone passed away in the home if it’s been longer than 3 years, but if a buyer or a buyer’s representative asks you the question directly if a death has ever occurred in the home, you must tell the truth. Why is 3 years the magic threshold? Maybe the congressman who wrote the bill was spooked by ghost for 3 years before she went away (I really have no idea). There are plenty of other types of disclosures that may change depending upon if a seller inherited the property and if she/he lived in the home.
Here’s one scenario that I run into fairly often. Someone passes away inside of a home. That person had the foresight to create a trust and identify another person as a trustee. A trustee is someone who is given the responsibility to carry out the wishes of the deceased. Typically, the deceased will choose someone they trust a great deal to disposition their assets upon death. Using a trust and identifying a trustee typically avoids fighting amongst the heirs (often children) as to who should do what. When the dollars are large, the emotions and temptation are great. Regrettably, I’ve seen arguments occur amongst family members of my clients in this situation. So let’s say that someone passes away and asks her best friend to be a trustee. Let’s assume that’s you. You, the trustee, must sell the home per your friend’s wishes. As your Realtor, I would first need a copy of the trust. I would run it by my title company’s legal department to ensure that everything is legal and that you have legal authority to sell the home. I have had occurrences where additional documents needed to be prepared and notarized before the trustee could legally sell a home even when a trust was in place. Could you imagine buying a home only to learn later that the seller didn’t have legal authority to sell? Most of the time the deal wouldn’t close escrow because the title company would catch the problem during the closing process. But it would still create a lot of frustration, to say the least. Moving on, let’s further assume that you did not live in the home with the deceased. Because you have no firsthand knowledge about the home, you have limited disclosure requirements. Typically a seller must disclose everything they know about the home’s condition that would have a material impact on the buyer’s decision to buy. But since you haven’t lived in the home, these are things you might not know. Such as how old the roof is, if the plumbing has ever had a problem, etc. What you do have to disclose in writing is a form called “Supplemental Statutory and Contractual Disclosures”. In this document is where you are asked if someone had died in the home within the past three years. You’re also asked if you have knowledge about a few other items. One of these items you must respond to is regarding major defects in the property. Here’s where you need to be very careful. Even though you may not have lived in the home, if you have knowledge of a defect in the home, you must disclose it to a potential buyer! Just because you didn’t live in the home does not let you off the hook from disclosure if you know about the issue. When in doubt, disclose, disclose, disclose. What we are really talking about here is legally protecting yourself. So many people are concerned about getting a tad less money for the home if they mention everything they know that is wrong with the property. One lawsuit can wipe out those few extra dollars and a lot more. Another disclosure you will need to make is called “Hazards Disclosure Acknowledgment and Addendum”. This is where you will disclose if you have knowledge that the home has lead based paint. Most people don’t know and it’s OK to say you don’t know. You will also need to disclose “Water Heater Compliance”. This tells a potential buyer whether or not the water heater has been strapped to the wall to prevent tipping over during an earthquake. As the seller, you (the trustee) must ensure that the water heater is strapped before you close escrow and transfer title to the new buyer. In California, it’s the law. It’s cheap so don’t worry too much about it if your water heater isn’t strapped on the home you’re selling. My clients often ask me if they have to bring the water heater installation up to the current code which can into several hundred dollars depending upon how it was originally installed. That’s not required, only that it is strapped to the wall. A buyer may request that you bring it up to code, but that’s a negotiable item and you are not required to do so. You will also need to provide to the potential buyer an Environmental and Geological Report. As your agent, I would order these for you. As your agent I am also required to prepare another set of disclosures to present to a potential buyer that is more involved than a traditional sale, but that’s not something you’ll need to worry about. One more disclosure I’d encourage you to provide, though it’s not required, is a disclosure saying that it’s the buyer’s responsibility to verify any building permits. Sometimes people add on to their home. Sometimes they get permits, sometimes they don’t. Sometimes a great looking addition was not constructed with permits. By completing a disclosure like this, it puts the liability on the buyer to search for permits. This provides you, the trustee seller, with a layer of insulation above and beyond what you may not know. Being a trustee and selling the home of a friend is one of those things you hope you really never have to do. But if you do, please know that the deceased has put a great deal of trust in you. Congratulations. That person thought very highly of you and can pay you no higher a compliment. For specific questions, please contact me. -Gary Nobile, Realtor (408) 247-4029

Tuesday, September 8, 2009

Interest Rate Changes Can Be Costly.

Interest Rate Changes Can Be Costly. I was recently sitting down with a client and we were strategizing about different scenarios that could help them get the most amount of home for their money. As I mentioned the other day in this blog, interest rates recently took a surprising drop. So we calculated how much money these buyers would save or how much it would cost them if rates go back up again. For a $500,000 mortgage at 4.875% (30 year fixed), their monthly mortgage would be $2,646. If the rate goes up to 5.875%, their monthly payment would go up to $2,958. That one percentage point in interest rate would cost/save them 12% on their monthly mortgage. With the amount of money the Fed has pumped into the economy, I would not be surprised to see 6.25% mortgage rates within 12 months to head off runaway inflation (just my opinion). Let’s look at what that would do to this buyer’s monthly payment. It would cost them $3,079 a month. That’s a 16% increase from today. We know we’ve already hit bottom in terms of prices in this area. Here’s my point. Some buyers are still waiting to buy. From this point forward, I believe waiting will come with a cost. If you know me at all, you know that I don’t typically go around spreading wild predictions just to cause people to do something I want them to do. Actually, it’s quite the opposite. I feel a sense of obligation to anyone who accepts my advice and I don’t take that level of trust lightly. That’s why I don’t make these kinds of predictions unless I have a factual sense of cause and effect. If there’s someone you know who’s been waiting to buy, please share this with them. . Or if you prefer, I can sit down with them and go through the details. Two years from now they will thank you for it. -Gary Nobile, Realtor (408) 247-4029

Friday, September 4, 2009

Deciphering Today’s Real Estate is on TV Tomorrow

Deciphering Today’s Real Estate is on TV Tomorrow. Saturday September 5th at 5:30 p.m., I will be interviewed on a public service TV station for their Spotlight on Real Estate segment. It will air on Comcast Channel 15 in San Jose and Campbell. It will also be streamed from (log in early in case you need to download software to see it). I will asked to discuss today’s real estate market conditions along with a brief two year history of real estate in Silicon Valley. The segment I’m featured in is at the beginning of the program and will last about 10 minutes. I’ve prepared a nice graphic for those of you who are more visual in nature to help make it easier to understand today’s market. Hope you enjoy the program and I’d be happy to answer any follow up questions you may have about the information presented. -Gary Nobile, Realtor (408) 247-4029

Thursday, September 3, 2009

Mortgage Rates Drop

Mortgage Rates Drop. At our weekly sales meetings, we cover various topics. One of them is interest rates. While most have predicted that interest rates will rise within the next 12 months, we were pleasantly surprised to learn rates had dropped this week. We are again seeing some fixed mortgages in the 4.875% range. Jumbo loans are in the low 6% range. Not coincidentally, we polled agents in the meeting and 12 agents were involved with multiple offers last week. Some deals had 2 offers, some had as many as 15. The number of Pending Sales of single family homes in Santa Clara County is at approximately 2,800 while homes for sale are down again to approximately 2,200. The trend certainly seems to be continuing that there are more buyers than sellers. (408) 247-4029