Radioactive Granite, Formaldehyde in the Cabinets - Are We Sacrificing Our Health for Our Vanity?

What’s Lurking in Your Countertop? - NYTimes.com

The granite, it turned out, contained high levels of uranium, which is not only radioactive but releases radon gas as it decays.

But with increasing regularity in recent months, the Environmental Protection Agency has been receiving calls from radon inspectors as well as from concerned homeowners about granite countertops with radiation measurements several times above background levels. “We’ve been hearing from people all over the country concerned about high readings,” said Lou Witt, a program analyst with the agency’s Indoor Environments Division.

Today I was chatting with a friend. Her kids bought a new home two years ago and have been in and out of the hospital ever since. After months of medical testing they finally tested the house. Turns out the cabinets were emitting fairly high levels of formaldehyde. They are in the process of ripping them out.

We tend to think that "natural" means healthy. As my step-father likes to say, "cyanide occurs naturally in plants, that doesn't mean I want to eat it".

The good news is, all of these toxins are relatively easy to test for. But, should I? I know I don't like throwing my money away on a test that's probably going to show that there is not an issue.

My best guess is that these "new" concerns will NOT be widespread. That's the argument, few folks are affected and it will not have a major impact on the consumer. Unless you, or your loved one, happens to be the consumer that gets sick.

Have Campbell Home Prices Hit Bottom?

Time to Get In The Game?

Over the weekend someone asked me if we've hit bottom - and I paused.

The challenge of playing the real estate market, like the stock market, is that it's only after the price goes back up that we can look back and ogle at "the bottom". My listings are getting more activity, there's less negativity in the market, financing is becoming available [more difficult than before but possible], we're happy to have gas under $4 [isn't that crazy!] It "feels" like we've already hit bottom and are coming out of it. I have a couple statistical reasons for you to ponder;

1) Sales per month have more than quadrupled. The number of sales per day dwindled to 338 completed sales in January contrasted with 1184 for the month as of 8/22.

California Realtors report homes selling more quickly - Pacific Business News (Honolulu):
In Santa Clara County the median price was $706,500, compared to the year-ago period's $852,500. Sales were up 2.8 percent in the year-to-year period.

2) OFHEO numbers show the national decline to be slowing with the San Jose Metro declining 8.33% since the second quarter of last year.

RATE OF HOUSE PRICE DECLINES SLOWS IN
SECOND QUARTER
WASHINGTON, DC – U.S. home prices fell in the second quarter of 2008
according to OFHEO’s seasonally-adjusted purchase-only house price index.
The index, which is based on data from home sales, was 1.4 percent lower on
a seasonally-adjusted basis in the second quarter than in the first quarter.
This decline was less steep than the 1.7 percent decline in the prior quarter.
Over the past year, prices fell 4.8 percent between the second quarter of 2007
and the second quarter of 2008.

For my last bit of non-empirical evidence; my investors are buying! When an investor can buy San Jose real estate with 25% down and break even, they come out in hordes! And they are! We've gotten some great bank owned property, foreclosure inquiries are on the rise and we've been out bid on a couple properties as other investors are beating us to the punch.

There's only one way to make money in real estate. You gotta get in the game!

16 Groups of People Kept Me Busy at My Campbell Open House

It's been a long time since I was busy at an open house.

The last open house I did, I watched "the last lecture" on YouTube on my laptop! [Great inspirational stuff, and a great speaker! Watch Randy here, but not the reason to hold an open house!]

Yesterday I was busy the whole time! It was so great! I made chocolate chip cookies - which is always fun and loosens people up so I am not the hawk at the front door - and wore my fuzzy purple socks to keep my feet warm and to slide around the hardwood floors.

Some of my groups were entire families out looking together, most groups were 2-3 people. Not once did I hear "the market is uncertain" or "we're waiting to see what happens". Most of what I heard was "We need a bigger house", "I moved here for work", "I want to be close to downtown Campbell".

There are currently 7,059 properties on the market in Santa Clara County, 324 in Campbell. For the month 1184 have sold in the county and 46 in Campbell. Which is about on pace for August.

I think the big adjustment is over. There may be some little movement; 3-4% during the holidays but, I am worried that that dip will be negated by any rise in interest rates.

What have you seen in your neighborhood?

4 Investment Lessons Learned The Hard Way

Just got off the phone with clients - a term I am using very loosely for these folks.

They bought an investment property about 30 months ago, with someone else, because their friend-of-a-friend salesperson told them it would break even. They apologetically called me a few months later. They were sorry they hadn't used me, they were trying to help this new salesperson and now they were having trouble with tenants and their new agent wasn't any help. [I looked up the salesperson on the DRE website and saw that he had been in the business 11 months.] These clients knew I did property management so they pumped me for information and help for about 40 minutes before begging off on paying for my services because they wouldn't break even on their investment.

A few months later they called again. They had received the supplemental tax bill and wanted to know why it wasn't paid at the closing. I explained how it worked and when I got off the phone I realized that their break even property was now a couple hundred dollars a month negative.

Tonight they called because they are out of money. They have tapped all their credit cards, one of the current tenants has lost his job and they haven't paid for August. Plus the property is worth about $85,000 less than what they owe on it before title, escrow and sales fees. Now they are shopping around for the cheapest agent to sell it.

Of course, I mentioned that most agents have no experience with short sales, that's why only about 32% of them close before the trustee sale. I reminded them that ALL of my short sales had closed and that their loan is a purchase money loan so the bank won't come after them for a deficiency judgment.

"In essence, you're not paying the fees anyway - why not hire the best?!!"

There was a long pause and they told me they'd call me back. I am not holding my breath.

So, did you catch the four lessons?

1) Taking someone's word on the numbers is like handing your money over to your crazy uncle Charlie. You have to learn to check the numbers yourself.
2) Hire a professional property manager. One months worth of vacancy will pay for 10-12 months of property management.
3) Know what the expenses are up front. Include maintenance, vacancy, insurance, the new tax base, etc
4) Hire the Best! You don't have to do it alone. You don't get an extra gold star. Instead you stand to lose a bunch of money and get a foreclosure on your record.

I feel bad for these people. I am a lot like them. I know just enough about something to get me into a lot of trouble! I have to constantly remember my own advice about using my team if you don't have your own. You need a CPA and an Attorney and a great Realtor - at a minimum.

My gut tells me that these folks aren't quite done learning the hard way. Perhaps this example will help you from learning the hard way, too!

More Loan Modifications!!

Before 2007, I had never done a loan modification. Now it is 28% of my business revenue and takes up about three hours/day of my time - so, 37.5% of my time.

Of course, if I had gotten into real estate for the money, I would have put my MBA to better use years ago!

Over this last year or two, I have negotiated some pretty amazing deals for my clients but there needs to be someone willing to negotiate for the bank on the other side. There is nothing more frustrating than having a willing and able client, that has rectified their finances and can show that they can get back into their previous perfect payment history, only to have a bank that is absolutely inflexible to work with.

That's why I was very happy to see this article;

Distressed IndyMac borrowers to get relief - Aug. 20, 2008

IndyMac borrowers to get relief
FDIC offers plan to systematically modify loans for homeowners most at risk of foreclosure. Agency chief hopes program will spur other banks to take similar measures.

Not to mention the 5 or 6 clients in default right now that will also be thrilled to hear the news!

It May Be Time to Sell that Income Property

...if you are looking to pull your $500K worth of 121 exemptions from it, that is.

Yes, I am talking about the IRS code again. Section 121:

Section 121, as amended, provides that a taxpayer may exclude from gross income up to $250,000 of gain on the sale or exchange of a principal residence if certain conditions are met. In certain circumstances, a married individual filing a joint return for the taxable year of the sale or exchange may exclude from gross income up to $500,000 of gain. This exclusion also applies to the sale or exchange of stock held by a tenant-stockholder in a cooperative housing corporation (as defined in § 216) and may apply to the sale or exchange of a remainder interest in a principal residence if the taxpayer so elects. See Code §§ 121(d)(4) and (d)(8).


One of the greatest "get rich quick" schemes of the last decade has been the 1031 coupled with the 121. Add on top of that, the ability to convert an income property to a primary residence just by living there for two years and we've hit the motherload, baby!

Well, if the real estate market hasn't already come to to a screeching halt, this new "Housing and Economic Recovery Act of 2008" will do just that. Or maybe it will jettison all those fence sitters into selling that non-performing property while they can still get $500K out of it.

Either way, if you were planning on converting a second home or investment property into a primary residence so you could pull $500K worth of tax free money out of it, your better get the "pulling" done by the end of 2008. After that, your equity will become pro-rated based on the amount of time you held the property as an investment vs how much time it was a primary residence.

That sucking sound is the IRS sucking the wind out of your profits.

First Time Buyers Win - Second Home Conversions Lose

I've been in real estate for 20 years and I am still confused when new legislation comes out. The bills are so convoluted, I often wonder what it's got to do with me.

If you're like me, you'll like the simplicity of this article on Kiplinger.com.

New Law Adds Tax Breaks for Real Estate - Kiplinger.com

Two noteworthy items: 1) new first time buyer program, 2) second homes may not qualify for the $500K exemption

Good to know!

As always, check with your CPA before making a move.

Barbarism Lives

Greece: Beheading suspect in critical condition - CNN.com

The barbarism exhibited by this 31 year old man - including parading around his village carrying his lover's head - makes me question how many years of "civilization" we really have. Have we had any?