Consumer Warning: Underfunded Homeowners Associations

 

 



podcast



Introduction and Overview

Is your HOA funded correctly? We're going to talk into that today, as well as today's rates measure E and what you get for 2 million and what you get for 1 million in Santa Clara County,  the inventory and sales chart of Santa Clara County and the 12 Bay Area counties around the Bay Area.

Current Mortgage Rates
Today's mortgage rate jumbo 30 years is 6. 4. However, if you're a veteran or doing FHA, it's already below and 15-year fixed at 5. 5, but if you get unquoted rates here at 2 million because that's the average price of a house in Santa Clara County for 20 percent down, you have good credit.

You're looking at 5. 8, 5. 9. So we're all under the joyful 6 percent mark. We're not at 5. 5 yet. You can probably add a couple points or maybe another half-point to it to get it down that far. These are not quoted rates. You have to go through and run an application and get rates from your Loan agent your loan broker, and if you don't have anybody let me know.

Measure E and Its Impact
I have a bunch of really awesome people coming back I did have a conversation. I found somebody in the city that was actually talking to me. I haven't actually asked him or her what it's going to, do or what programs are provided for.

However, I did ask. Are you ready for this? The way it works. Now the transfer tax versus conveyance tax. We have it here. I think I talked about this last week. A house sold at 2 million at 0. 75 would be 15, 000, right? That's 0. 75. Right now, if it's sold at 1, 999, 999, it's 0. 33 percent 

30 per thousand, split 50-50, which would be 6, 600. However, I got something back saying if it's exactly at 2 million, you not only have to pay the conveyance tax but also the transfer tax. What do you do?

Sell your house at 1, 999, 999, or 2 million and 1, and then you save 6, 600, You do the math, and you figure it out. My position on this is I think it's hurting the values of San Jose single-family homes because if you look at this, ratio, we should be up here.

Our houses should be worth a lot more, but because of measure E, I think you're seeing our values being slowed down as far as increase right now. I understand there's a difference between affordability and seller greed, and I  totally get that. However, my position is if I lived in Morgan Hill Cupertino or Campbell, my house would be worth a little bit more than what it's worth now.

Just saying if you want to argue this with me or think I'm wrong, please let me know I don't think Measure E is doing a great thing for people who are homeowners Might be doing something good for people that are struggling with housing affordability or homelessness.

I haven't actually researched that and I'm welcoming you. You to do the research if you want this link It's in my blog link to my blog is in the description below this section of the episode is Brought to you by the home inspection checklist the home inspection checklist goes through Everything and tells you what to look for what an inspector would look for and allows you to decide if you're going to Fix it or not, or just disclose it allows you to do a pre-screening of what your home needs no home is perfect.
I can guarantee you that some floors are wavy. Some floors are dipped. No room is perfectly square or walls are going to be perfectly level. So don't ever expect anything perfect in a house built by human beings. The earth moves around and so do houses. So there you go.

Real Estate Market Analysis: $2 Million Homes
What you get for 2 million in San Jose, California, this is 95123. This is in the Palmia development and they built it before 2000. This house is trying to be a market maker. 2 million. Now, granted, this is the first picture which, when you have 59 pictures, you should tell a story.

The first thing that matters to you as a buyer is curb appeal, not what the inside of a living room looks like. Always happens when the Data goes, but if you look, this guy's just being selfish. He's being greedy. He has dollar signs in his eyes. He thinks he can get it for 2 million. But if he sells it for over, he's going to be paying three times more for transfer tax. Or conveyance tax or whatever you want to call it.

First of all, you have these silly-looking columns in here and I don't know why they put columns in there other than, yeah, I have no idea. I sold this model before. 2, 400 square feet, four bedrooms, three full baths. Built in 1998 on the market for 43 days. If your house doesn't sell in the first 15 days, there's something wrong with it. Condition, location, or price. And I can tell you that right now, this guy is a pure ego. he doesn't care if he sells it or not.
He just wants its price. Is the price really viable? Is it really valuable as a buyer? Would you buy that? My main test is there's no floor plan. If you're selling a house and you don't have a floor plan on it, how are people on the internet supposed to understand the flow of your house?

How are they supposed to know where the living room is, where the layout is, how it's supposed to go up and what the rooms upstairs look like, where the master bedroom is.

So all you're looking at are just static photos. Granted, there could be A video walkthrough, but sometimes people just want to do a floor plan or a Matterport, the 360 thing. I don't use Matterport. I use my own service, but in my opinion, this house isn't being marketed correctly. The first picture should be in front of the house and you should be attracting the market, not making the market.

That's why it's on the market for 43 days. There you go. That's what you get for 2, 000, 000 in San Jose, Santa Clara County. 

Real Estate Market Analysis: $1 Million Homes
What you get for 1, 000, 000 in Santa Clara County. This is in Edenville, Kayak Drive. Again, not my listing. It's 1, 034, three bedroom, two and a half bath, thousand square feet, built in 1961.

Nice little ranch. This is a nice neighborhood. I lived up here for my first seven years of being a homeowner and I love this area. 

However, you have to understand that if your house is on the market for a while, this was originally listed, and still no bites. Let's take a look at this. Original tile counter. I don't know if that's tile or linoleum. Semi updated bathroom, but not an updated kitchen. Very sparse amounts. They have how many different video pictures 13 whole pictures and no floor plan guys if you're selling your house you need to ask your agent if they can provide a 360 doll house and a floor plan it makes all the difference for people who are shopping online.

It really helps Show the value of that house. 

Underfunded Homeowners Associations
It really helps you sell it Oh, yeah, underfunded homeowners associations. This is a big deal, especially in Florida just hired 68 people to audit the associations to find out if they're funded correctly or not. This is a huge problem. 

I don't know if you remember a few years back There was a condo that collapsed and killed a couple people it was because of the lack of maintenance The homeowners association and their full-time support that they use their services that actually support and guide people, the volunteers, people on the board are volunteers, believe it or not, and they guide them to tell them what the best practices are, 
Figure out how to do it ultimately is the board's decision if they're going to fund the HOA correctly you have to have something called reserves and reserves have to be at least 70 percent funded or you're in trouble if you get audited by the DRE or whatever it is that governs in your state it's a huge problem because then there are major assessments every three years you're supposed to do a self-audit present that to the state because it's all very it's regulated, but there's a lot of loopholes on it.
And my problem here guys is one, we have the same problem here in California. One, the HOA dues are completely out of whack. They're way more expensive than they should be. They're not managed correctly in their assessments. The reserves aren't funded correctly on a huge amount of the HOAs.

Hey, Vito, I need to buy a house, but I can't afford a house and need to buy a condo. Great. Here's what we're going to do. We're going to go and look at condos and there's. A private party is a third party that offers an audit of the HOA. They look at everything, not only the reserves and the finances and the assessments and all this other stuff, but they also dig down into communication, how it's managed, all that stuff.

And it's a report and it costs five or 600 bucks, but I guarantee you five or 600 bucks. Investing is far better than you buying a house for 800, 000. And all of a sudden you have another 40, 000 assessments on you. Now it wasn't disclosed because the seller didn't know to ask. And when I sell condos, I require that we do these audits.
Why? Because I'd rather scare away the bad buyers and find buyers that understand this report is there to protect them and to disclose to them what we're actually selling to them.

Conversely, if you're a seller of a condo and you're like, I don't want to do it. I'm just going to risk it. That five or 600 that you could spend could cost you 40, 000. If an assessment or something is coming up that you're not aware of or HOA is not being managed correctly, you would like to provide that to the buyer because if they don't, they can come back and sue you.

So I'd rather you spend five or 600 and do it right. Selling a house costs money. When you cheap out on things, you wind up screwing yourself. 

National and Local Housing Inventory

Inventory And Supply Charts

Month's supply across the United States. We're up to 4. 1. This was 4. 0 last month and it just got readjusted. So may it was 3. 7 June 4.
1 and July are 4. 1 or 4. 2 means if we stop putting new houses on the market, it would take 4. 2 months to get rid of all the inventory we have right now. This picture right here is from my friend that's In the council and while they were going through the measure this discloses it.
So if you want to take a snapshot of that and then read it on the side you're very welcome to, but that's how they were selling it to figure out how to sell it to us so we can vote for it. I digress. It's 12 Bay Area counties, single-family homes only. So if you look, there's 12 different counties here and everything's doing well, except for Napa, which has been struggling for quite a while.
Okay. If you look at 6. for 6 months now, is that technically a buyer's market? Technically it's a buyer's market, but like the recession rule, it has to be two months or more at a certain thing. I would say maybe like three, four, five months at over six months. Then you're at a buyer's market in Napa. Everything else is reaching up.

However, understand the numbers here are being reported for September and September is not over yet. These are all preliminary numbers. So this number is probably going to come back down. Don't get alarmed. And think I'm going to buy a house in Napa. You absolutely can try, but, the housing there isn't as bad as what we think it is.

This also is just Santa Clara County, single-family homes. And this talks to you about 2000 homes on the market, making it a balanced market. Months of inventory is 1. 4. We need to be at six months. So we're nowhere near that. These are the cities in Santa Clara County. The same thing as the counties, same things doing everything else.

And don't forget, don't freak out about these numbers. This is a preliminary thing. I was just doing it because I wanted to make sure that we had this conversation so that when you're looking at it, these numbers next week will be down further. They'll be more normalized. So there you go.

It only took me 17 minutes of talking. All right, that's it for now. Have a great weekend. I'm Vito with Abitano. We'll see you out there.

Vito Scarnecchia Real Estate Broker, Veteran, Dad DRE#: 01407676 We’re Hiring! 408-705-6817 Vito@abitano.com Website: abitano.com https://www.onereal.com/vito-scarnecchia-1 update your home value: https://hmbt.co/bT7qRJ RELOCATION@ABITANO.COM FREE DESKTOP APPRAISAL https://www.propertyrate.com/agent/vitoscarnecchia If you are moving ANYWHERE in the world - Let me know! I know a LOT of AMAZING Agents! Book appointments here: https://calendly.com/abitano/15min Home Buyers Course YT YouTube.com/SanJoseLiving IG https://www.instagram.com/abitanogroup/ FB https://www.facebook.com/vito.scarnecchia/ LI https://www.linkedin.com/in/vito-scarnecchia/ Blog http://blog.abitano.com/ POD https://spotifyanchor-web.app.link/e/oxdH1Hwfcvb Professional Photography by Kim E https://photosbykime.com / Local Real Estate Market and Home Value Report https://hmbt.co/bT7qRJ Financial Intelligence https://docs.google.com/forms/d/e/1FAIpQLSc0R5pjHIAPguZ5GDEB-fTbGJXKpWK3coK9Khymv_GTWkMnyQ/viewform?usp=send_form https://www.onereal.com/vito-scarnecchia-1 Willow Glen's five most expensive homes https://youtu.be/3A_E2ck0ePg

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