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Spring 2017 Real Estate Q&A

Q: What should I watch out for when making an offer on a tenant occupied property?

A: I assume that you intend to take title to the house with the tenant still in possession of the premises, in which case you would become the tenant’s landlord. If this is the case then, in addition to all of the normal inspections that a buyer makes to determine the condition of the property, you must also determine the condition of the tenancy. First of all you should have made your offer using a standard form residential income property purchase agreement or a regular residential purchase agreement with a “Tenant in Possession” addendum (most agents will have access to these documents through the California Association of Realtors). Both documents require the seller, among other things, to provide the buyer with copies of all current leases, rental agreements, service contracts and other agreements regarding operation of the property. You should also receive an estoppel certifi cate signed by the tenant confirming the terms of the tenancy and affi rming that no defaults or claims are outstanding against the Seller. Further, provisions must be made for transfer of any existing, unused security deposit from seller to buyer because the buyer, as owner, will be responsible to the tenant for return of the security deposit to the tenant at the end of the tenancy, minus any allowable deductions. There should also be some sort of prohibition on the seller making changes to the terms of the tenancy prior to close of escrow.

 

Q: We are looking to purchase a home in the $500,000 range and are very qualified; however, we have only saved approximately $25,000 for a down payment. What are our loan options?

A: Assuming that you have good credit and acceptable debt to income ratios, there are several options available to you. The first option would be to utilize FHA financing, which only requires a 3.5% down payment. The second option would be to get a 5% gift from a family member and combine it with your 5% savings and utilize a 90% conventional loan. A third option would be to borrow 5% from an eligible 401K plan and combine the monies with your savings for a 10% down payment and 90% conventional loan. Lastly, if either you or your spouse is a qualified veteran, your required down payment would only be $10,000 on a $500,000 purchase price.

Q: I have made numerous offers and been beaten out each time by other buyers. Do you have any tips for getting my offer accepted in a multiple offer situation?

A: The real estate market in Napa County is very active right now with a low inventory of homes and a lot of interested buyers who are feeling better about the economy and their jobs. The upshot is multiple offers and homes selling at or above their asking price in many cases. The tactics that you should employ to position yourself for success in this type of market depend mostly on the specifics of the particular property that you want to offer on and they should be something that you develop in close consultation with your agent. For example, your agent will probably suggest different tactics for an offer to a traditional, non-distressed seller than he or she would if you were offering on a short sale or a bank owned repossession.

There are some general suggestions that I can make without knowing your situation. First is understanding the market for the home you are targeting so that you can offer a realistic price. Ask your real estate agent to provide you with MLS data that shows the most recent trend in price appreciation as opposed to relying solely on comparable sales. The market is moving fast and comparable sales are in many cases not indicative of current values. Second you should anticipate that at least some of the offers that you will be competing with will be “all-cash” with no loan contingency. Aside from offering a good price, the best way to compete with all-cash offers is to go through the underwriting process to be approved for a loan subject only to review of title and appraisal. Pre approval on your loan takes time and there are some roadblocks depending on the type of loan you seek, but doing so will make you look like a serious buyer and enable you to offer a shorter close of escrow period to the seller.

 

Q: I negotiated a 3% closing cost credit from the seller and want to know what closing costs can be covered by the credit?

A: A closing cost can be used for all recurring (interest, taxes and insurance) and nonrecurring (i.e: appraisal, title and escrow) closing costs associated with the purchase of your property. If the actual closing costs are less than the seller credit, the subject credit will be reduced to the amount of the true closing cost.

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2017 Silverado Country Club & Resort Membership Information

Interested in membership costs at Silverado Country Club? Silverado Resort’s two championship golf courses stand as the hallmark of the Napa Valley Golf experience. Designed by renowned architect Robert Trent Jones, Jr. and recently updated by Johnny Miller, both courses feature dozens of water crossings, elevation changes and routing through historic oak trees. The challenge, visual sensation, and special ambiance of Silverado set the standards by which all others are measured.

VIEW HOMES AND CONDOS FOR SALE

Golfers in search of the ultimate Napa golf experience are returning to Silverado to rediscover this historic gem. Contact us to schedule a site visit and we will provide you with the many benefits of Membership at Silverado.

Silverado Property Owners

Every residential parcel within the defined Silverado Community has a potential membership appurtenant to it.  At the time of purchase you will be required to pay the prevailing fee, either an Initiation Fee or a Transfer Fee.  A Transfer Fee is paid when membership has been maintained in a transferrable status by the seller.  A new buyer has 30 days from close of escrow to pay the Transfer Fee which maintains the viability of the appurtenant membership. If that fee is not paid, the transferable membership reverts to its potential and an Initiation Fee is then applicable to the owner wanting to activate membership or to any subsequent buyer.  Once the applicable fee is paid, the owner may activate the membership by submitting an application to the Board of Directors and, upon approval, begin paying dues.*

Initiation Fee: $60,000                                  Transfer Fee: $40,000

* It is not a requirement to activate a membership on a property that has been purchased.  A membership may be kept inactive indefinitely; however, once a membership has been activated, it can no longer be placed on an inactive status except upon special application based on serious impairment of health or death of a spouse.  Payment of a Transfer or Initiation Fee without membership activation does not entitle a property owner to use of the Silverado facilities including golf, tennis and pools.

As an owner of property at Silverado Country Club, there are multiple membership categories that are available for you to choose from.

Membership Categories for Silverado Property Owners

Membership Type

Monthly Dues

Food & Beverage Minimum

Resident (Full Golf)

$500

$260 per Quarter

Social

$360

$260 per Quarter

Non-Resident

$360

$520 Semi-Annual

Out-of-State

$225

$520 Semi-Annual

 

All Memberships include the member, his/her spouse or registered domestic partner, and any children 21 years of age or younger, living at home.  This entitles you unlimited use of the golf and tennis facility, as well as discounts in the Resort’s  Spa and Food and Beverage outlets.  Discounts on Food and Beverage are  15% and 25% respectively.  There is a $260 Quarterly or Semi-Annual Food & Beverage minimum, based on the calendar year.

Other Silverado Country Club Membership Options

If you do not own property within the Silverado Community, there are two membership options available for your consideration.

Invitational Memberships                                              Initiation Fee $60,000

Silverado Country Club offers a limited number of Full Golf Memberships to individuals who do not own property within the Silverado Community. Memberships include the member, his/her spouse or registered domestic partner, and any children 21 years of age or younger, living at home.

The monthly dues for an Invitational membership are currently $600.00. This entitles you unlimited use of the golf and tennis facilities, as well as discounts in the Resort’s Spa and Food and Beverage outlets. There is a $260 Quarterly Food & Beverage minimum, based on the calendar year.

 

Junior Executive Memberships                         Progressive Initiation Fee

Silverado Country Club offers a limited number of Junior Executive Memberships to individuals who are between the ages of 22 and 45.  These memberships do not require property ownership within the Silverado Community. Memberships include the member, his/her spouse or registered domestic partner, and any children 21 years of age or younger, living at home.

Silverado’s Progressive Initiation Fee Program allows Junior Executive Members to progressively pay their Initiation Fee and to apply their paid fees towards a Resident or Invitational Membership.

Age

Initiation Fee

Monthly Dues

(% of Resident Full Golf Dues)

22-25

$1,500

$300  (60%)

26-30

$3,000

$300  (60%)

31-35

$6,000

$300  (60%)

36-40

$9,000

$400  (80%)

41-44

$12,000

$500  (100%)

Junior Executive Members would also be responsible for a quarterly Food & Beverage Minimum of $260.


Corporate Membership Options

Silverado offers Corporate Membership options for both Property and Non-Property owners.

Property Owners
A legal entity that owns property within the Silverado Development Area and purchases a membership in the name of the corporation shall be a Corporate member. As a Corporate Member, you will designate one person from the corporation who is associated with the membership. That designee and his/her spouse or registered domestic partner and any children 21 years of age or younger living at home are the membership.  No other person will be entitled to the membership privileges. The designated person may be changed with the approval of the Board.

The Transfer/Initiation Fees, dues and other associated fees are identical to the Resident Membership options. There is a processing fee of $250 with a change in designation of the membership.

Non-Property Owners
A legal entity that does not own property within the Silverado Development but would like to purchase a membership at Silverado would purchase a Corporate Invitational membership. This membership is also a single designee membership as described above, with the ability to change the designee with Board approval.

The Initiation Fee, Dues and other associated fees are identical to the Invitational Membership. There is a processing fee of $250 with a change in designation of the membership.

Additional Membership Activities & Opportunities

We have an active tennis program which is under the direction of Peter Burwash International (PBI), the world’s premier tennis management company. Of course, there are regular Bridge, Mahjong and Dominos groups not to mention a busy social calendar of member functions. The membership is comprised of a wonderfully diverse group from all over the world who all have a couple of things in common – a shared love of the Silverado Country Club lifestyle and a deep appreciation for the beauty of its incredible Napa Valley setting! We’d love to have you join us.

 

A state-of-the-art, 16,000 square foot Spa is also available for your use when you are a member of Silverado. Spa membership is not a requirement of membership and members may choose what level of participation they would prefer when joining.

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Miscellaneous Fees 2012

Golf Club Storage                                               $30

Golf Cart Rental                                                  $20

Golf Club Rental                                                 $60

Private Cart Permit                                          $590 Cart Inspection Fee

(Annual for Quarterly Inspections)          $95

Members Activity Fund (Annual)             $115

 

Green Fees 2012

Ladies’ Guest Day                                             $25

Men’s Guest Day                                              $25

Member-Guest

Weekdays Mon – Thu                                    $60

Weekends Fri – Sun & Holidays                 $70

Twilight                                                               $40

 

Social, Out of State, Senior NP Green Fees

Weekdays Mon – Thu                                     $60

Weekends Fri – Sun & Holidays                 $70

Twilight                                                               $40

 

Monthly Spa Membership fees 2012

SPA Membership Fee Single                      $75

Couple                                                                 $125

Family                                                                 $195

 

Tennis 2012

Guest Fee                                                            $10

Guest Day                                                           $5

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Silverado Country Club Developer Turns 100 Years Old

Ed Westgate celebrated his 100th birthday on May 15 at Silverado Resort, the destination resort that he created in the 1960s.

Westgate was feted by nearly 100 friends and family, surrounded by multicolored balloons floating on the ceiling, pictures dating back decades and newspaper articles on display, with Frank Sinatra playing in the background.

An avid golfer, Westgate was pictured with golfing legend Lee Trevino in 1968.

“If I’m in as good a shape as you are when I get to 100, I’ll be ahead of the game,” said brother-in-law Jack Rydman, who lives in Oakville.

Westgate, who now resides in St. Helena, started as a Stockton farmer and became a businessman who not only developed Silverado, but also built hotels and condos in Hawaii and Samoa.

Westgate’s wife Joan presided over the affair. Her children and grandchildren performed a song, adapting the “Boogie Woogie Bugle Boy” with words that described Westgate’s life.

Tony Kilgallin, who edited Westgate’s memoirs and interviewed him last month for his TV show on Napa’s Cable Channel 28, described him as the man who “built the first condominiums in California” as well as major leisure-residential projects in Hawaii.

Kilgallin said Westgate’s business career started at a young age. “At 10 years old, he needs some money,” he said. “He sends a story to Ripley’s Believe it or Not and gets $10. Now he’s a capitalist.”

Westgate went to University of the Pacific back when it was called College of the Pacific, then later to Stanford University. He became one of UOP’s major benefactors.

A contingent from UOP attended his birthday celebration.

“We are grateful to have him as a long-time supporter and friend of the university,” said Janet Dial, interim vice president of UOP. “He’s given a lot of support and visited the university.”

Westgate purchased the Silverado property in 1966 for $3 million as part of Westgate Factors. The new owners turned one golf course into two 18-hole championship links, the first courses designed by Robert Trent Jones Jr. who went on to become one of America’s top course designers.

Westgate built the first condos and other recreation amenities that made Silverado a destination resort. Westgate Factors sold Silverado in 1984 for a reported $19.2 million.

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Virtual Tours Help Sell Your Napa Valley Home 4/13/2016

If a picture is worth a thousand words, how many words might a video’s flood of pictures be worth? The scientists at George Washington University approached the topic a few years ago in connection with real estate virtual tour s. To those of us whose profession is helping our clients buy and sell homes in the Napa Valley, their findings were –to say the least– interesting:

 

They arrived at this conclusion: “Adding a virtual tour decreases the expected marketing time by about 20% and increases the expected sales price by about 2%.”  I’ve added the italics, but you get the idea: those are some serious stats. Since today’s fast-paced world rewards being able to get information quickly, it’s small wonder that video tours are so powerful. But to be useful, video tours need to be well executed. Napa Valley homeowners who are preparing for a video shoot can keep some general guidelines in mind.

 

For openers, it’s important to remember that the camera will be acting as the eyes of a first-time visitor, so prepare for virtual tour s as you would for an open house. Remove all personal effects like toothbrushes and medications from bathroom countertops, kid’s artwork from refrigerator doors, and collectibles throughout. Stage furniture to look inviting, making certain that rooms are not overfilled. Just as in an open house, clutter can give buyers the impression that the house is smaller than it actually is.

 

Today’s high-quality, 360-degree digital imaging can capture even tiny details, so be certain to thoroughly clean everywhere. Pay particular attention to reflective surfaces like mirrors, windows and appliances – the tiniest mark on these can pick up light and dominate an otherwise perfect scene.

 

Homes that are bright appear inviting and lead to greater buyer interest. Before shooting a virtual tour , be sure to replace any blown or dim light bulbs, clean all the windows, and open any window coverings to let in natural light. Don’t worry about too much light blinding the lens – the camera operator will ensure that doesn’t happen.

 

By keeping these ideas in mind, Napa Valley homeowners can help insure that their virtual tour encourages buyer interest — hopefully leading to the kind of shorter listing time and higher selling prices the university study indicated.  That’s why I always strive to include some form of virtual or online tour for your Napa Home listing. If you are thinking of offering your property this summer or fall, call me to discuss how we can market your home with a high quality video tour to get your home sold.

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Napa Valley Real Estate Q&A Spring – 6/2/2016

Q: I have made numerous offers and been beaten out each time by other buyers. Do you have any tips for getting my offer accepted in a multiple offer situation?

A: The real estate market in Napa County is very active right now with a low inventory of homes and a lot of interested buyers who are feeling better about the economy and their jobs. The upshot is multiple offers and homes selling at or above their asking price in many cases. The tactics that you should employ to position yourself for success in this type of market depend mostly on the specifics of the particular property that you want to offer on and they should be something that you develop in close consultation with your agent. For example, your agent will probably suggest different tactics for an offer to a traditional, non-distressed seller than he or she would if you were offering on a short sale or a bank owned repossession.

There are some general suggestions that I can make without knowing your situation. First is understanding the market for the home you are targeting so that you can offer a realistic price. Ask your real estate agent to provide you with MLS data that shows the most recent trend in price appreciation as opposed to relying solely on comparable sales. The market is moving fast and comparable sales are in many cases not indicative of current values. Second you should anticipate that at least some of the offers that you will be competing with will be “all-cash” with no loan contingency. Aside from offering a good price, the best way to compete with all-cash offers is to go through the underwriting process to be approved for a loan subject only to review of title and appraisal. Pre approval on your loan takes time and there are some roadblocks depending on the type of loan you seek, but doing so will make you look like a serious buyer and enable you to offer a shorter close of escrow period to the seller.

 

Q: We are hoping to refinance our current mortgage utilizing the HARP2 loan program and understand the program contains restrictions in regard to the timing of our original mortgage. What are the timing restrictions?

A: To be eligible for the HARP2 program, Fannie Mae requires that your original loan have been delivered prior to June 1, 2009; while Freddie Mac’s delivery date is before May 31, 2009. Speak with your mortgage broker to find out more information and if you are HARP eligible.

 

Q: What should I watch out for when making an offer on a tenant occupied property?

A: I assume that you intend to take title to the house with the tenant still in possession of the premises, in which case you would become the tenant’s landlord. If this is the case then, in addition to all of the normal inspections that a buyer makes to determine the condition of the property, you must also determine the condition of the tenancy. First of all you should have made your offer using a standard form residential income property purchase agreement or a regular residential purchase agreement with a “Tenant in Possession” addendum (most agents will have access to these documents through the California Association of Realtors). Both documents require the seller, among other things, to provide the buyer with copies of all current leases, rental agreements, service contracts and other agreements regarding operation of the property. You should also receive an estoppel certificate signed by the tenant confirming the terms of the tenancy and affirming that no defaults or claims are outstanding against the Seller. Further, provision must be made for transfer of any existing, unused security deposit from seller to buyer because the buyer, as owner, will be responsible to the tenant for return of the security deposit to the tenant at the end of the tenancy, minus any allowable deductions. There should also be some sort of prohibition on the seller making changes to the terms of the tenancy prior to close of escrow.

As a general matter, if this is your first rental property you should speak with an eviction attorney or service regarding the procedures and costs of removing a tenant from the property should the need arise. Further, review a good book on Landlord-Tenant law so that you will know what you are getting yourself into.

 

Q: I own a small business. Can I use the funds in my business account for all or any portion of my down payment and closing costs?

A: Most lenders require that funds being used for down payment and closing costs be verified with two months of asset statements for personal checking, savings and/or retirement accounts. In most cases, using business funds is not allowed but can be done on a case by case underwriting exception basis. Consult with your lender before committing any business funds towards the purchase of residential property.

 

Q: I am buying a home and need every penny to make the purchase, so do I really need title insurance?

A: It is impossible to give a blanket answer to your question because just as every property is unique, so is the condition of title unique to each property. I suggest that you consult with both your escrow/ title company and with your legal counsel regarding the advisability of buying title insurance for your situation. There are however some practical reasons for obtaining title insurance. The first is that if you are borrowing money to make your purchase then your lender will almost assuredly require that you purchase title insurance to cover both yours and your lender’s interest in the property. Secondly, the title company will run a public records check on the property that should point out problems with the chain of title such as defects in deeds, encumbrances on the property such as easements in favor of adjoining property owners, and the existence of neighborhood conditions, covenants and restrictions that could affect your use of the property. You will want to find these things out early in the purchase process before you remove your inspection contingencies so that you can work out problems, or try to obtain title insurance to cover your particular situation. Finally, even if you don’t want title insurance, the person who you sell to years from now probably will and a continuously insured title can smooth your resale.

Q: What are the changes that HUD is making to the FHA loan program?

A: As part of ongoing efforts to strengthen the FHA Mutual Insurance Fund, FHA announced a new premium structure for FHA insured single family mortgages. FHA will increase its annual mortgage insurance premium (MIP) by 0.10% (new rate 1.25%) for loans under $625,500 and by 0.35% (new rate 1.50%) for loans above that amount. Upfront premiums (UFMIP) will also increase by 0.75% (new rate 1.75%).

The 0.10% increase is effective for case numbers assigned on or after April 1, 2012, while the 0.35% increase on loan amounts over $625,500 is effective for case numbers assigned on or after June 1, 2012. The upfront change is effective for case numbers assigned after April 1, 2012.

Contact Karen Magliocco for any questions at 707-249-1600 or email us