Santa Cruz Real Estate  Digest,  Ed. 24
August, 2017 - In This Issue:
In This Month's Issue
In this month's Digest you will find national and local news as well as informational pieces on topics that we have found to be increasingly important in the real estate industry. 

Good news! Your credit score may have just increased. How? A study by the Federal Trade Commission found that the main credit rating agencies had significant errors in their data, resulting in skewed consumer credit scores. Read more below. 

You've finished the inspections, negotiations, mountains of paperwork, and you have received the keys to your new home. You've put a substantial amount of time, energy, and money into acquiring this property, and now, it's time to maintain it. Read below for some of the main home-maintenance routines you should be mindful of in Santa Cruz County.

Christine discusses the importance of a real estate Broker in today's increasingly technology-oriented world in Christine's Corner. 

Access your monthly, local market stats directly below!
Real Estate Market Statistics 
For Santa Cruz, Santa Clara, and  Monterey

The reports contain median home prices, real estate price statistics, valuable information about mortgage rates and much more.

Your Credit Score Just Increased by 20 points (maybe)

Great news! Home buying just got a lot easier.  A combination of two major changes in credit reporting and lending criteria could help tens of millions more individuals and families to qualify for a home loan.

In 2012, the Federal Trade Commission determined that at least 20% of those surveyed had at least one error in their credit reports from one of the three major credit reporting agencies, Equifax, TransUnion and Experian, which had negatively affected their credit score.  Errors included incorrect information from collection agencies, identity theft issues and mistakenly adding an individual's data into someone else's file.  

Many state attorneys and other regulators have been pressing the three bureaus to raise the accuracy of their identity verification and updated credit reporting.
In response, as of July 1st, many with tax liens and civil judgments reported in their file will be receiving a break. Approximately 7% of 220 million people will have their credit scores go up an average of 20 points if the information does not include the person's name, address, and also either their date of birth or Social Security number. Data must be updated every 90 days.  According to Experian, this means nearly 96% of civil judgements and 50% of tax liens will be eliminated from their records.

In addition, but not directly related, as of July 29th, Fannie May and Freddie Mac mortgage giants have changed their lending approval standards, raising their DTI (debt to income ratio) from 45% to 50%.  An overly high DTI is the number one reason homebuyer applicants get rejected. This is most prevalent for millennials, still just starting their careers while struggling to pay high student loan debts.  Lenders are happy with the change. R eal estate values have been ascending to an all-time high once again due to a significant decrease in home buyers and mortgage volume. Lenders had already been lessening their credit approval standards to compete in this increasingly tight market.

Detractors to the DTI increase are vocal in their concern that the change will add a great deal of new risk to the mortgage market again, and as Fannie and Freddie are government-sponsored, tax-payers will be paying for it. Opponents also predict that interest rates will rise to offset the increased risk.  Fannie Mae maintains that the risk will not change, as they have discovered that those with a 45-50% DTI are notably likely to have good credit scores and are not considerably more likely to loan default.  Other proponents of the new DTI say the lenders won't be gambling on a greater risk, with some predicting that there will be a tightening in other areas of mortgage underwriting. For example, lenders may require higher down payments and offer lower loan amounts. What will happen remains to be seen.
Do you think that this change will impact your ability to buy a home? Than please note that standards and criteria will likely differ throughout the mortgage lending market, so it is recommended that you consult with a variety of lenders.

Maintain Your Investment: 
Responsible Home Ownership

You've made it. You've finished the inspections, negotiations, mountains of paperwork, and you have received the keys to your new home. You've put a substantial amount of time, energy, and money into acquiring this property, and now, it's time to maintain it.
If you want a substantial return on the resale of your home, it's important to upkeep your property. Additionally, a little bit of effort put towards home maintenance here and there will prevent big problems down the road. Here are some of the main home-maintenance routines you should be mindful of in Santa Cruz County.

The 2016-2017 Santa Cruz rain season was the second wettest on record. Between regular rain falls each winter and living near the ocean, it's important to be conscious of moisture in and around your home. This will help you to avoid water damage and the onset of dampness. This article suggests homeowners:
  • Install rain gutters to direct water away from the foundation.
  • Clear leaves and debris from your rain gutters at least twice a year to avoid water backup that will rot or rust your gutters.
  • Make sure that your sprinkler systems are not reaching your house.
  • Check your outdoor faucets regularly to prevent leakage, which can eventually soak the foundation of your home.
  • Be on the lookout for roof-leaks, especially during and after the rainy season.

Some of the most desirable properties in Santa Cruz are near the ocean. When buying such a home, there are special measures that must be taken to mitigate damage done by salty coastal air. This article includes useful tips for ocean-side home maintenance. For example:
  • Salty air will corrode metal easily and so it's advisable to use fiberglass framed doors and windows and avoid metal parts as much as you can.
  • Clean the exterior surfaces of your home frequently to wash away salt-build up.
  • Homes near the ocean are susceptible to dampness and mold. Keep an eye out for leaks or places where moisture accumulates in the home. Fix leaks quickly and increase air circulation in moist areas.
  • Use anti-fungal cleaners in the bathroom and consider treating metal appliances in the kitchen with a protective wax to avoid rust and water damage. 
  • When it comes to outdoor furniture, consider using cast aluminum. This material will not rust or fade as easily   as alternatives. When choosing cushions, go for materials that are quick-dry and mildew resistant such as acrylic and store them away often.
Get more valuable tips on daily, monthly, seasonal, and yearly upkeep here . If you're a new homeowner, you can find a maintenance checklist for your first year of homeownership here .

Christine's Corner

Online tools are making it easier for homeowners and buyers to search for homes, connect with one another, and complete transactions in less time. Even so, in 2016, nearly 90% of all buyers and sellers purchased and sold their homes through a real estate broker. Why? Because a financial transaction of this scale requires professional skills, knowledge and experience to close smoothly. Sellers often end up paying less in commission than they would on mistakes made lacking a Broker's expertise. For example, for-sale-buy-owner home sales accounted for 8% of national home sales in 2015 sold for $185,000 on average compared to $240,000 for agent-assisted home sales.


Why is this? One reason is often pricing. If you do not price your property well, it will likely sit on the market for too long and gain less attention, resulting in fewer offers. Additionally, without a strong marketing campaign, fewer people will see the property and you'll have the same result. Local market knowledge, a strong marketing strategy, well-seasoned negotiation skills, and transaction coordination are a lot for one person to manage. Managing showings, escrow, paperwork, and closing the deal is a full-time job and few have the knowledge and resources needed to do these things well without the help of a Broker. 

So, what are the benefits of an agent? The most obvious is that good real estate Brokers understand their markets inside and out, and know if you are getting a good deal or not. This knowledge will save you time and money and protect you. You can expect your Broker to understand:
  • The present-day state of your local housing market.
  • How to derive an accurate sales price for your home from that knowledge.
  • How to negotiate on the sales price and get you the best possible deal.
  • How to manage the real estate transaction once you are in escrow, including the paperwork and communications needed to close the deal.
  • Which technologies will make your transaction simpler and more convenient.

In addition, an experienced Broker has those small pieces of information that will end up saving a deal. For example, I was helping a wonderful couple buy a condo and the CC&R's (the Condo's rules) stated that no pets over 20 pounds are allowed in the complex. With a 50+ pound dog and having already set their hearts on this sweet home, my clients were devastated. Now, I have walked past that condo countless times, and I knew at least one person who lived there with a rather large dog, well over 20 pounds. Long story short, after some investigation and countless phone calls, I discovered that the Condo's rules had been changed but not updated in the CC&R's. My clients are now living in their dream home, have reduced their commute time from 1 hour to 5 minutes, and their furry friend gets to walk to the beach every day. Had I not known that neighborhood well, this deal could have easily fallen apart.

This is the true value of a Broker: the business acumen gained after years of getting to know the County, closing deals for clients, and creating good will in the community.
Do you like our newsletter? Use the Links below to write a review.

Like us on Facebook    Find us on Yelp