Q: I am in escrow to sell my house and my realtor is concerned about the buyer’s appraiser valuing the house at the contract price. Is there anything that I can do to insure a fair appraisal?

A: Your realtor is justified in his or her concern. Appraisers and lenders are currently being ultra conservative in their property valuations in reaction to the sub-prime debacle and the decline in property values. Plus, prices are now appreciating in many areas and this means that comps in a particular area might be low if they are more than a few weeks old. In addition, new federal regulations that seek to shield appraisers from undue influence by lenders and borrowers have resulted in more out-of-area appraisers being called in to appraise local properties. These factors have created problems on some appraisals.

There is good news however. In response to these problems the Federal Housing Finance Agency, Freddie Mac and Fannie Mae have issued guidelines to mortgage lenders encouraging the use of appraisers who have experience in the geographic area where the property is located. Further, they have made it clear that appraisers can consult with, and accept comparable sales data from, the realtors involved in the transaction. Based on these guidelines your agent should work in concert with the buyer’s agent to insure that the appraiser has local market knowledge and to provide the appraiser with relevant comparable sales data, and data on neighborhood appreciation rates, asking prices, days on market and frequency of multiple offer situations. So be proactive in the appraisal process rather than waiting in trepidation for the result.

Q: We are relocating to Napa from another state and wanted to know if we could utilize FHA financing to purchase a home in Napa even though we currently have a FHA loan and will be renting out that home once we make the move. Is this possible?

A: If a borrower owns a home with FHA financing that will not be sold, the borrower may not purchase another home utilizing FHA financing. The exceptions to the one FHA financed property are relocation and increase in family size, so based on your question, you would appear to be eligible for a second FHA loan. Contact Mortgage Solutions for more details regarding the exceptions.
About Karen Magliocco

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
About Karen Magliocco

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.

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.
About Karen Magliocco

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

About Karen Magliocco

According to the National Association of Realtors®, first quarter statistics again point to better home sales figures. This time it was the prices of single family homes that rose in half of the major cities in the United States. Because of the wide differences between regional and state conditions, these figures are never in 100% lockstep, but Napa Valley homeowners should be encouraged by the report’s breadth: prices rose in more than twice as many cities as it fell.

Of course, rising prices are always good news for homeowners who want to sell their homes; but beyond that, the effect of movement in that direction is welcome throughout the economy. Consumer confidence is strongly influenced when home sales prices stabilize (just as it is rocked when prices fall).

There are a multiple reasons for the upswing in prices for home sales:

Employment Rates Improve

Although unemployment rates are still relatively high, the U.S. Bureau of Labor reported that the overall rate fell to 8.1 percent in April. Even for those who are currently employed, the knowledge that more jobs are out there is encouraging. When the specter of prolonged joblessness recedes, financial confidence rises and home sales can be expected to follow.

Low Mortgage Rates

Mortgage rates are still at historical lows — and the effect on affordability is dramatic. Currently the national 30-year fixed rate is at 3.97% according BankRate.com. As I have discussed before, although lenders have raised the requirements to quality for a loan, such low interest rates make a mortgage more affordable for eligible homebuyers.

Fewer Homes Available

Despite the inventory of foreclosed properties, fewer homes were available for sale this year than during the same period in 2011. Nearly always, home sales register higher prices when the housing market tightens – and that did seem to be happening in a growing number of metropolitan areas.

Higher prices for single family homes is a strong indicator of an improving economy: one that bodes well for everyone in the housing market.  Statistics do vary by neighborhood, so if you are considering selling your Napa Valley home this summer and want up-to-date, personalized information, contact me for a market update.

About Karen Magliocco

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.

Call (707) 249-1600 with your real estate questions.

About Karen Magliocco

3 weeks ago, Bank of America initiated a pilot program allowing homeowners facing foreclosure to remain in their homes as renters. There are important reasons why Napa Valley homeowners should be interested in the success or failure of BoA’s approach.

First, a note about the term “bank owned homes”. It’s not technically correct to say that there has been some huge rise in the number of them, because “bank owned homes” actually describes every home with a mortgage. The mortgage holder always technically “owns” the property, even when the homeowner retains title. However, what is true is that over the last four years, many homeowners learned the hard way just what it means to face the reality of your home being owned by someone else.

Enter Bank of America. Their press release quotes Ron Sturzenegger, a Legacy Asset Servicing executive with the Bank: “Our priority is designing a solution that helps our customer.” Although we might be justifiably skeptical of this as BoA’s sole motive, allowing homeowners to remain as renters in bank owned homes is hardly just a PR move.

The program certainly makes bottom-line financial sense for a whole host of parties, including Napa Valley real estate homeowners who have no difficulty meeting their own mortgage payments.

Under the program, a former homeowner who qualified would be able to continue working and contributing to the economy without the costs, loss of time, and anxiety involved in moving. For all property owners, the ultimate effect is to keep the market from being flooded with distress sales. Every neighborhood would benefit if home values stabilize.

Under the pilot model, bank owned homes convert to investor ownership in a much smoother transition than the foreclosure/short sale model. Instead of the lender being left with an empty property generating zero revenue in the interim, former homeowners simply become renters, making it easier for them to get back on their feet financially.

In my opinion, any move or policy that helps more people stay in homes is a policy worth discussing. BoA’s program is only in a limited test stage, but here in Napa we can hope that it will prove to have multiple beneficiaries: banks, investors, agents, homeowners and neighbors. Everyone benefits when his or her neighborhood’s real estate market is healthy!

Have a question about real estate in Napa Valley? Feel free to contact me anytime with questions. I represent Napa buyers and sellers, and am always available to chat about your own plans.

-Karen Magliocco
About Karen Magliocco