Happy Holidays

Hello all,

I just wanted to take the time to thank you all for your continued support and readership.

I hope you all have a very happy holiday season and see you in 2007!

Warm wishes,

Nisha

P.S. For those of you who will be traveling this holiday season: In January 2007, ALL persons, including U.S. citizens, traveling by air between the United States and Canada, Mexico, Central and South America, the Caribbean, and Bermuda will be required to present a valid passport, Air NEXUS card, or U.S. Coast Guard Merchant Mariner Document.

Cal FIRPTA Withholding - State Bill 2962

California Assembly Bill 2962 revises Revenue and Taxation Code Section 18662 and 18668 for sales of California real property that close on or after January 1, 2007. The new law allows a seller to elect an alternative to the current withholding requirement based on 3 1/3 percent of the sales price. A seller will be able to choose a withholding amount based on applying the seller’s estimated gain to a maximum tax rate. The maximum tax rates are as follows:

• 9.3% for individuals
• 8.84% for corporations
• 10.84% for banks and financial corporations

If such an election is made, the seller is required to certify the alternate withholding amount in writing under penalty of perjury. The Franchise Tax Board (FTB) will have new forms available in mid to late December. Additionally, the FTB willprovide an electronic form on its website to assist sellers in calculating the amount of gain and the alternate withholding amount.

First-Time Home Buyer

Always remember that you are the most important person throughout the entire real estate process. It is easy to think that many others may have more expertise or clout, but the truth is that you, the buyer, are the one person in this transaction that makes it all happen. If you decide not to buy, the entire process comes to a complete stop.

If you plan from the beginning to approach the homebuying process intelligently and with confidence, you are much more likely to buy the home you’ve always wanted, and have the confidence that the best decisions were made.

Steps To Buying A Home

1. Make a decision to rent or buy.
2. Figure out how much you can afford.
3. Find the right real estate agent.
4. Get pre-approved.
5. Decide what kind of home you want.
6. Find the right neighborhood.
7. Begin the home search.
8. Preview the homes.
9. Make an offer.
10. Apply for a mortgage.
11. Have the inspections conducted.
12. Close the transaction.
13. Move into your new home.

Home Maintenance Checklist: December

Here a list of some maintenance items to tend to in your home for this month:

• Check the operation of all ground-fault circuit interrupter outlets by pushing the "test" button. The "reset" button should pop out, indicating the receptacle is operating properly. Press in the reset button.
• Check inside bathroom vanities and kitchen sink cabinets for moisture and other signs of leaks. Carefully inspect pipes for condensation or slow drips. Repair the plumbing system if necessary.
• Review the family fire escape plan with every household member.
• Unpack and test all electrical holiday decorations. Repair or discard any that do not function properly.
• Watch for sales on tools before and after the holiday season.

Renting versus Owning

There’s nothing quite like a home that you can truly call your own. A place where you can have the gleaming hardwood floors you’ve always dreamed of, a space to cultivate your own vine-lined patio, a way to provide a good neighborhood for your kids to grow up in, and a freedom from the whims of your landlord. These are the images that immediately come to mind, for many of us.

Yet some of the biggest advantages of owning a home are less romantic and more practical – in fact, there are financial advantages to owning a home:

• Tax Deductibility: You can deduct the cost of your mortgage loan interest from your state and federal income taxes. Since interest generally will account for most of your payment during the first half of your mortgage, the savings can be significant. Some of your costs at the time of closing (including prepaid mortgage interest) can be taken as deductions on that year’s income tax return, and points paid up front at the time of closing represent additional mortgage interest and may be taken as a deduction.
• Tax Deductibility of Property Taxes: You can deduct all of the property taxes you pay.
• Appreciation Potential: Real estate is considered a good long-term investment because it usually appreciates in value. The effects of borrowing potential can increase as the value of the home appreciates.
• Capital Gains Exclusion: When it’s time to sell your home the amount of capital gains you have to pay is reduced. A homeowner can exclude up to $500,000 per couple if married and filing jointly, or $250,000 if single or filing separately for homes that have been the taxpayer’s principal residence for the previous two years.
• Capital Gain Treatment: Congress allows preferential tax treatment on gains from capital assets held for more than one year. This would be important for a homeowner who has gains in excess of the allowable exclusion.
• Principal Accumulation: Mortgages are designed to pay the interest for the time that the money has been used, as well as to retire the principal debt over a period of time. This payment plan means that part of the payment each month is for principal accumulation.
• Personal Enjoyment: Pride of ownership is a valid reason for wanting to own a home. You can personalize your home while enjoying the financial benefits.

For the best evaluation of your financial situation, consult your financial advisor. He/she will be the most qualified to discuss the financial consequences of a home purchase decision, as well as help you to establish a plan that will achieve your home ownership goals.

Why You Should Not Wait to Purchase Your Next Home

Even if you could "time the market," that strategy would most benefit first-time buyers. You see, people who already have a home usually need to sell it in order to come up with the down payment for their next home. Even if they don't, they would have to carry the debt and obligations on two homes at the same time. This can create financial hardship, even when you rent out the previous home. There are maintenance costs, renters don't always make their payments on time, the rent may not cover the mortgage and other costs, and sometimes the property may be vacant. So if you are a move-up buyer and want to purchase your next home during a depressed market, you generally have to sell your current home during that same depressed market. If you want to sell during a boom, then you also have to purchase during the same boom. It tends to equal out.

Finally, suppose you are a first-time buyer and wait think the end of a boom is near? If you guess wrong, are you going to wait...and wait...and wait...till the next depressed market? If so, you could miss out on loads of appreciation...and that is assuming you guess right about your market timing. In 1996, when the home market was struggling, who would have predicted what the next seven years would bring?

Schools and School Rankings

At the end of September, the state released the latest API score reports for California schools. You can view the scores by visiting the links posted on my website or by clicking here. The scores are organized by county, with API scores assigned to each school district within the county. and each school within the district. This data is a great way for you to compare schools when looking to buy or rent a home. These scores are calculated using results from the standarized STAR tests given out to students each spring. They can range anywhere from 200 (low-scoring) to 1000 (high-scoring).

Home Maintenance Checklist: November

Here a list of some maintenance items to tend to in your home for this month:

• Inspect automatic garage door opener and lubricate according to the manufacturer's directions. Make sure all bolts and screws are properly tightened and secured.
• Check for leaks around your washing machine. A prime suspect for leaks is the water supply hose washers. Inspect hoses and replace if necessary.
• Clean dishwasher, trash compactor and countertop appliances.

All Hallow's Eve

Halloween is coming up in one week, so I just wanted to wish you all a monstrously good time!

If you are looking for something fun for the kids to do, why not take them to the Los Altos Village Association's annual Halloween Spooktacular? It will be from 2 to 4 PM on the 31st in Downtown Los Altos (State St/2nd St). For more information, feel free to call the Los Altos Village Association at (650) 949-5282.

Useful Tool: The Home Depot Know-How Calculator

Here is a useful tool on Home Depot's website that you can use when working on projects for your home.

Take advantage of the easy-to-use project calculators to automatically estimate the amount of materials you need for popular home improvement projects. You may never buy more materials than you need again!

1. Go to http://www.homedepot.com
2. Click on “Know-How”
3. Then click on “Calculators”

What to Look for in Your Home’s Local Community

When most people are buying or selling a home, the house itself often isn’t the only major point of interest. The community around you, including the area’s economy, crime rate, and schools all play a part in your decision, because these things will directly affect you once you move into the neighborhood. Conversely, if you’re planning on selling the home in the future, potential buyers will be asking the same questions; knowing your environment is important regardless of your situation.

First off, what attracted you to the town in the first place? Was it the sense of community you felt in the town, or – depending on the location and your tastes – the quiet privacy of the rural location? A bustling downtown area? While all these characteristics are subject to rates of change, as is the economy of the area, it’s important to pay attention because the community can give you valuable clues as to the financial well-being of an area, as well as its safety.

Potential buyers and sellers should educate themselves as to how their city compares, on average, with the national and countywide crime rates. Are the police force and fire department effective and responsive to the needs of the community? Are they centrally located in the town so as to respond to emergencies quickly?

A good sign for a stable and viable economy is a healthy mix of commercial and business districts, which provide jobs to the local residents, and thus add an income source which the city can draw from to pay for upgrades and maintenance of local roads and city services. Conversely, the quality of city streets and neighborhoods tell a lot about the pride of ownership that exists within the town, as do the city buildings – the post offices, the libraries, and the schools. Even if you do not have children or don’t intend to have them, potential buyers will have concerns that include the local school systems in the area. What’s the best way to find this out? Take a drive around the area and take a look at the schools. Check for things like auxiliary trailers on the grounds – which could indicate overcrowded classrooms.

Call the school district to check on whether children always attend the school closest to their home. If this isn’t the case, find out why. If the schools are overcrowded, are there measures being taken into account for the growing local population, and how will this affect property taxes?

Last but not least, property taxes are often a make or break point for homebuyers. Higher property taxes mean that the homes have less of a square footage price, but they can also mean better quality schools and community services. Weigh in your options, and remember that keeping up-to-date on your community’s information pays off when selling your home.

Home Maintenance Checklist: October

Here a list of some maintenance items to tend to in your home for this month:

• Detach hoses in case of freezing temperatures. Remove all paints, caulks and liquid materials from garage or garden sheds.
• Inspect weather-stripping around doors and windows and repair or replace if necessary.
• Set thermostats and automatic sprinklers for winter.
• Clean gutters after leaves have fallen. Make sure downspouts are in good repair.
• When setting clocks back to Standard Time, change batteries in smoke and carbon monoxide detectors.
• Check gauges on home fire extinguishers to ensure a full charge. Replace if necessary.

Kendra Todd's "Is the Real Estate Market in Bubble Trouble?"

Here is an excerpt of an article by Kendra Todd—the winner of the third season of Donald Trump's The Apprentice—that details her opinion on the latest talk of the housing bubble:

You can't go anywhere without hearing people talk about "the real estate bubble." Such talk drives me to distraction, and I'll tell you why. It's because there is no real estate bubble. Bubbles are for bathtubs.

Despite a thousand articles in Sunday newspaper real estate sections, the bubble is a myth. The real estate markets in many areas are going through a normal correction cycle. I'm going to tell you how to recognize the signs of a correction in your market, how you can avoid getting sucked into "bubble trouble" and how you can even benefit from the current environment.

Pop Goes the Market?

A bubble is a market in which the value of the key asset is inflated based on speculation and psychology. Because of this, true bubble markets can burst overnight when something happens to shatter the perception of value. That's why the Internet boom of the late 1990s was a true bubble; people suddenly realized that ninety percent of the dotcoms were companies with no way to make money. Talking about a bubble implies a sudden burst, and real estate does not work that way. You don't go to sleep one night with your house worth half a million dollars and wake up to find it's lost half its value. Also, the real estate market is a regional phenomenon based on all kinds of factors: migration to or from an area, job growth and local economies. So while there is no bubble, there are areas in the U.S. that are experiencing corrections that will continue over the next six to 24 months. There are also markets that will appreciate over that same period. The trick is keeping your cool and taking advantage of the opportunities.

A Bubble is a Matter of Perception

Real estate is cyclical, and the cycles last for years. It's a mistake to react based on what has happened in the last six months. Speculation throws everything out of whack because it's a short-term strategy. Real estate investing must be for the long term.

The Hot Markets

Because real estate is regional there are many "secondary markets" that remain promising. These are usually smaller cities with attractive lifestyles...

These areas...have healthy economies and are good opportunities to get into now...Even when the hottest markets are in correction mode, there are always high-value markets for the smart investor, as long as you look at price point and the potential for appreciation.

Stay Cool for the Long Haul

The most important thing you can do in this real estate environment is avoid panic selling. Real estate is not like the stock market. It's like a drive through the Rocky Mountains. You will have rises and dips. Hold tight and wait it out, especially if you live in a market that has strong fundamentals, like lots of people still moving to the area. Over the long term, the value in real estate will stabilize and you'll profit...Now is...a great time to buy.

Seven Deadly Mistakes Home Sellers Make

When I tour homes for sale, I often find that many homeowners make very similar mistakes to one another when selling their properties. Here is a list I have compiled that details seven of the most common mistakes I see when people sell their homes.

Mistake #1: Complacent marketing when selling a home.

When selling your home there are no guarantees that the ultimate buyer of your home will have simply walked through the front door. In many cases you may have to bring your home to the buyer.

Effective marketing will help ensure that your property receives maximum exposure to attract a ready, willing and able buyer in the shortest period of time. When I am selling a client's home, I list the various forms of marketing I will be using and give my client a timeline of advertising. In addition to the usual forms of advertising (regional newspapers, etc.), be sure to make sure you use the Internet as a tool for marketing your home.

Mistake #2: Taking for granted the "curb appeal" of your home.

When you're preparing your house for sale, remember the importance of first impressions. A buyer's first impression can make or break whether they even want to go inside for a look. It is estimated that more than half of all houses are sold before the buyers even get out of their cars. With that in mind, be sure to stand outside of your home and take a realistic "fresh look"
and then ask yourself what can be done to make the "curb appeal" improve. Clients often ask me how to help improve their home's "curb appeal." It could make a huge difference in your final sales price.

Mistake #3: Forgetting about health and safety issues.

Be upfront and disclose to your Realtor® any problems with the property. The problems are going to be discovered anyway. A decade ago, health and safety issues were rarely a part of the typical real estate transaction. Today, however, it's common for inspections relating to health, safety, and even environmental concerns to be a part of most sales contracts. Moreover, in many states, the seller must disclosure to the buyer any knowledge of existing property problems. In many cases, these issues have been or can be factored into the home's listing price.

Mistake #4. Forgetting what you would want to see if you were the buyer of your home.

Remember that although people can be different in personality, they tend to be the same when it comes to expectations at someone else's expense. In other words, a prospective buyer would probably like to see a perfect home from top to bottom, inside and out, when it comes to your home. Try to do as many of the following item as possible to improve the likelihood of your home sale in an expedient way. On the outside Sweep front walkway. Remove newspapers, bikes and toys. Park extra cars away from the property. Trim back the shrubs. Apply fresh, clean paint throughout. Clean windows and window coverings throughout. Keep plumbing and all appliances in working order. Maintain all sealant (window, tub, shower, sink, etc.) in good condition Make sure roof and gutters are clean and in good condition. Mow the lawn frequently and plant flowers. Keep pet areas clean. On the inside, the kitchen and bathroom should shine.

Quick once-over with the vacuum; carpets should be clean. Place fresh flowers in the main rooms. Put dishes away, unless setting a formal display for decoration. Make all beds and put all clothes away. Open the drapes and turn on lights for a brighter feel. Straighten closets. Put toys away. Turn off television.

Play soft music on the radio/stereo. Keep pets out of the way and make sure pet areas are clean and odor-free. Secure jewelry, cash, prescription medication and other valuables. Enhance the spaciousness of each room.

Mistake #5. Thinking you need to be in the home to explain things to prospective buyer.

You will be better served if you allow your Realtor® to do their job without you there. Most potential buyers usually feel more comfortable if they can speak freely to the real estate professional without the owners being present. If people unaccompanied by an agent request to see your property, you should refer them to your real estate professional for an appointment.

Mistake #6. Not knowing how to price your home to sell.

Perhaps the most challenging aspect of selling a home is listing it at the correct price. It's one of several areas where the assistance of a skilled real estate agent can more than pay for itself.

Listing the home too high can be as bad as too low. If the listing price is too high, you'll miss out on a percentage of buyers looking in the price range where your home should be. This is the flaw in thinking that you'll always have the opportunity to accept a lower offer. Chances are the offers won't even come in, because the buyers who would be most interested in your home have been scared off by the price and aren't even taking the time to look. By the time the price is corrected, you've already lost exposure to a large group of potential buyers. The listing price becomes even trickier to set when prices are quickly rising or falling. It's critical to be aware of where and how fast the market is moving--both when setting the price and when negotiating an offer. Again, an experienced, well-trained agent is always in touch with market trends - often even to a greater extent than appraisers, who typically focus on what a property is worth if sold as-is, right now.

Mistake #7. Not planning your move earlier enough.

Many sellers simply don't plan their move early enough and then feel totally overwhelmed at the time of moving out of the house. If you are able to move at any time of the year, don't wait until summer, the peak-moving season. Consider also that the first and last few days of the month are extra busy. If you plan to sell your house, get it on the market as soon as possible. Keep a record of all expenses related to the move, some of which may be tax deductible. Fill out the Personal Household Inventory for each room. This is important for establishing the amount of declared valuation for the shipment and as a permanent inventory for insurance purposes. List, as nearly as possible, the year of purchase and original cost of each item. Attach any invoices or records of purchase to the completed inventory. Prepare a separate high-value inventory if the shipment will contain articles of "extraordinary" value. The following list includes items that might fall into this category: Antiques, Art Collections, Cameras, China Collections, Computer Equipment, Crystal, Figurines, Firearms, Jewelry, Manuscripts, Oriental Rugs, Silver, Stones or Gems, Tapestries, TVs or Stereos. Also, unless you have been given a binding moving estimate where a, firm cost is established in advance, the exact cost of a move cannot be determined until after the shipment has been loaded on the van and weighed. The weight on which charges are based is calculated by weighing the van before and after loading. The total cost of the move will include transportation charges, any charges for declared valuation, plus charges for any extra services performed at your request. All of these charges are based on tariff rate schedules.

Planning a Great Garden

A great way to improve the value of your home is to improve your garden. When looking at homes, beautifully-done landscaping is always an attention grabber for agents and buyers alike. When I preview properties, I always take a good look at the exterior and garden areas. In fact, according to MONEY magazine, an investment in landscaping has the potential to return anywhere from 100 to 200 percent when a home is sold!

The key to planning your garden is to plan carefully and spend wisely in such a way that you not only improve the value of your home but you also attain maximum enjoyment now. Here are some tips to keep in mind for when you plan your new garden:

• Set a budget. Some experts suggest spending approximately five percent of your home's value on landscaping.
• Take into account the environmental features of your property. Plan for both sun and shade during both summer and winter. Look for good and bad views. Listen for noises you may want to block. Know what type of soil you have.
• Think about your needs. What kind of yard and features will best support your outdoor leisure activities?
• Let yourself dream. Look at books and magazines (there are some great real estate magazines out there that feature gorgeous properties!) for inspiration. Keep note of specific plants, trees, gardens, yards, pools, patios, decks, and fences. Be sure to allot yourself more than enough time to brainstorm ideas for what you want to garden to look like.
• Create a backyard blueprint. Sketch a plot plan that shows the physical features of your property.
• Consult an expert. A landscape architect or contractor can use your ideas and plans to create an outdoor living space that truly fits your personality. Even if you opt to do the work yourself, it's a good idea to hire an expert for the planning stages.
• Savor your outdoor space. Careful planning and spending will ensure that your outdoor areas complement your lifestyle and enhance the look and value of your home!

A Slow Market?

Lately, there has been a lot of activity in the media about the slowing market, the rise in housing inventory, the few number of new homes being built. They frequently mention the burst of the housing bubble that the country--and, in particular, the Bay Area--has enjoyed for several years.

This increased speculation on a slowing housing market has led many buyers to slow down. The other day, I was showing a property in the highly-coveted Seven Springs neighborhood of Cupertino to some buyers. They certainly expressed interest in the property but they also felt that--with the current market situation--they could hold off.

That same property sold within four days of the list date. This just goes to show that, if the house is right, it will sell quickly. There are still many eager buyers out there, and, with increased inventory, these buyers have realized now is the best time to buy!

Welcome

Hello! My name is Nisha and I will be your guide to the real estate market in the Peninsula and South Bay regions of Northern California. Based in Los Altos, California, I have been in the business for several years now. I work at Intero Real Estate Services, which, according to the National Association of Realtors, is the fastest-growing real estate company in the entire country! On this blog, I will share my knowledge of the business and update you on the latest going-ons of our local real estate market.