7 Costly Mistakes of do-it-yourself landlords

I handle leasing for property owners all the time. Coldwell Banker Platinum Properties can be engaged as property managers if an owner wishes to hire a service who will collect rents, handle repair calls, perform monthly accounting and disbursements and render an annual statement to the owner for tax purposes.

What my conversations with "mom and pop" landlords have revealed is that many are either managing the way they did it 20 years ago, being oblivious to changing laws, or are renting their properties under market.

The top 7 mistakes are

1. Knowingly or unknowingly Violating Federal Housing Laws (big fines): Improper description of property or desired tenant in their advertising. Tenant selection based on one of the protected classes

2. Not keeping up with State and City laws regarding code requirements: Surprisingly, many rental properties are still without smoke detectors or carbon monoxide detectors. Starting January 1, 2014, a NEW law regarding smoke detectors goes into effect. Call me to find out what it is.

3. Not giving tenants proper notice of rent increase or termination: Tenants who have rented the property for more than a year must be given 60 days, not 30 days

4. Improper or late refund of security deposits (big fines): Oy! Refunds must be given within 21 days of the tenant vacating the property, and with a full accounting of any deductions.

5. Failing to update properties in step with the surrounding market area: It should be a given business philosophy but apparently escapes some property owners

6. Under or over pricing rent rates (loss of rent or lengthy vacancy): Know what your property is worth and what it isn't. Why wait for the perfect tenant (in your eyes) when you can rent to a good tenant sooner?

7. 20/20 hindsight tax planning when selling: Call your accountant or call Sylvia Jonathan for enlightenment and saving money

Call Sylvia Jonathan at (714) 856-7003 if you wish to discuss selling, leasing or managing a rental property.

 

 

Pest Inspection Before Listing Your Home

Why should you have a pest inspection before listing your home? The word pests makes most people think of mice, rats, ants, spiders and the odd gopher. But what is commonly known as a “termite inspection report” is officially called a WOOD DESTROYING PESTS AND ORGANISMS REPORT.

The  licensed company you hire to detect termite damage at your property also checks for dryrot, which is a fungus damaging wood.

Why should prudent sellers obtain a “termite inspection” before putting their home on the market? It is customary for sellers to pay for a report and repairs of active infestation damage when selling a home. The home must be free of active infestation prior to closing escrow in the case of most sales. Although this contract clause can also be negotiable, a seller can really only negotiate effectively if the COST of the repair is known. Consider the scenario below, which is a true story:

The seller accepted an offer on her home, and according to contract, proceeded to have the pest inspection performed. The hilltop home has a very large wrap-around patio, most of it covered with a wood patio cover. The contract stipulated that the seller pay for repairs of termite and dryrot damage. The inspection report showed extensive dryrot on the large patio cover: Repair/replace estimate of approximately $ 18,000. Clearly the seller was not ready for this news and tried to get out of having the patio cover replaced. Not doing the repair would have been a breach of contract, so the owner was forced to spend the $ 18,000 and repair the damage as stipulated in the purchase contract or get sued for breach.

 

How can a seller avoid such a scenario?

If the inspection had revealed such significant damage before the home was on the market, the seller could have opted to remove the patio cover. What is not there the day a buyer sees the home an buys it does not need to be repaired. Obviously this is only an option for patio covers and non-essential sheds or tree houses, not structural features like facia boards, doors and other supporting woodwork.

Advance knowledge is power. Knowing what will occur during the sales process and what the condition of their home is helps sellers make decisions which assure the best possible sales outcome.



 

Which Way Does The Wind Blow?

Anybody who has ever watched a weather vane whip in the opposite direction or a windsock go from straight to slack knows that things can change quickly. Which way does the wind blow today?

Market conditions of commodities can be just as changeable. Home sales are a market force.

The recent years during the housing crisis have allowed buyers to dictate most terms of sale, with sellers bending over backwards to accommodate. 2013 is a game changer in many areas. Sellers may enjoy multiple offers on the most desirable properties, and if a buyer is “difficult” the seller may not agree to play ball and push the issue. The “chickens have come home to roost” and buyers need to be more careful with their demands.

While enjoying a resurgence of a market that was more in their favor this Spring, sellers should nevertheless try not to be too “cocky”. Deals still fall through when they really should not. A cancelled escrow delays seller’s gratification and raises questions in the subsequent buyer. Stow the emotion, the ego and the greed and treat selling your house like a business decision. Story of two sellers:

A. Buyer offers a good price for the home but then lists a rather long list of “fix-its” to their conditions to purchase. Smart sellers, who were represented by Sylvia Jonathan, listened to their agent, swallowed and complied, happily walking away with more money than anticipated and closing on time.

B. Seller obtains a full price cash offer and turns it down. Why? Seller, who was not represented by Sylvia Jonathan, decided he should get 10,000 more for the home than the list price. They are still waiting for another offer...

When Sylvia Jonathan is your listing agent, you will not let a good fish slip through your net, regardless of the market conditions!

 

SHORT SALE MILL? NOT HERE!

[caption id="attachment_1933" align="alignleft" width="135"] Homeowner Just a Number for Short Sale Mills[/caption]

When homeowners are going through mortgage distress, they usually have had the frustrating experience of countless phone conversations with their lenders. A few will triumph and lock in a loan modification if the stars are aligned just right. Many will face  having to sell the home or getting foreclosed on.

Now the solicitations from short sale mills are flooding into their mailbox, boasting hundreds, even thousands of completed short sales by these agents, attorneys and their companies. These numbers might impress some sellers, but when a homeowner is sick of being a "number" and needs to be tended to with care and compassion, being a file somewhere between short sale number 876 and 900 is not a comforting prospect. Short sales are time-consuming, and an agent who lists dozens a month does not have the time to service the listing and negotiate with the lenders. So the file gets assigned to a short sale mill where there is an "intake clerk", a "negotiator" and sometimes a "closer". Some companies are even out of state. The agent's assistant(s) and transaction coordinator will be the seller's go-to people.

My own approach to short sales is: Quality over quantity. I have closed all my short sale listings, and my clients were satisfied with the attention and assistance they received. A good deal of hand-holding and guidance through the process is par for the course.

When you are ready to short sell your home and want the level of service and assistance you deserve, call Sylvia Jonathan at (714) 856-7003.

[caption id="attachment_1932" align="aligncenter" width="239"] Happy Customers[/caption]

 

 

 

Brokerage Firms Who Use Deceptive Advertising

[caption id="attachment_1918" align="alignleft" width="135"] Bait and switch trap[/caption]

There are a handful of real estate brokerage firms and agents who use deceptive advertising of low brokerage fees, aka commission, to prospective sellers to get them to call in. These agents claim to sell a home for a fee that, if it were true, makes every other agent appear out of the ballpark in the commission they charge.

Commissions are negotiable and not set by law. A broker offering competitive fees is acting in a business-like manner. That is not the problem.

So where is the deception? The advertised sales commission is "snake oil" because it only covers half or less than half of the total fee the seller must actually pay at close of escrow. At some point, the additional buyer's agent commission gets disclosed to the seller, either when the contract is shoved under their nose for signing, or when the seller drills the agent because something seems off in the math. That's when the seller learns that the advertised rate is NOT the rate he or she must pay.

Would you want to do business with an agent you intend to hire to represent your best interest after discovering that the facts are packaged as a bait-and-switch and you have just been baited?

When you discuss selling your home with Sylvia Jonathan, you receive straight forward information on how the process works and what ALL the fees are. You receive an estimated net sheet so you know what goes back in your pocket at close of escrow. Call (714) 856-7003 and get the FACTS, not snake oil.

[caption id="attachment_1778" align="aligncenter" width="300"] Real Estate Matchmaker[/caption]