Apply now for 2018 Leadership Positions

Applications are now open for 2018 Leadership Positions!

Becoming a SCCAOR Officer or member of the Board of Directors will allow you to:

  • Have a direct impact on the direction of your Association.
  • Network with the best in the industry.
  • Help craft SCCAOR’s Strategic Plan for the future.

The application period ends April 14th, so apply today!

 

 

Apply online — it will only take a few minutes!

Visit www.sccaor.com/leadershipapp

HOA Sales: 6 Important Tips for Buyers

by Guy Berry

When a buyer is looking at a single-family home, they usually focus on location, how it shows, property condition and price.  If a house meets these four criteria, they will make an offer. However, my experience is that when a buyer is looking for a condo or other HOA properties, they fail to understand that there is so much more to consider. Too often the buyer (and their buyer’s agent) are overwhelmed with the 300-page HOA documents. Don’t forget, these documents are a contingency of the contract. The following 6 things need to be reviewed very carefully:

 


1. Financing

The rate and type of financing available for that specific complex will be based on many things, including percentage of owner occupied, percentage of past due HOA, FHA approval, multi-story condos, litigation, and other factors. Make sure you get your buyer to a lender that understands HOA financing.

 


2. CCR’s

The important issues to investigate are the restrictions for that specific complex. The HOA might require you to park only in your garage, decide what animals you can or can’t have, the colors of your house, what you can and cannot have on your balcony, whether you are allowed to repair your car on site, cable antenna restriction, etc. This list may seem endless but even if your buyer loves the property, the restrictions might affect the buyer’s enjoyment living there.

 


3. Finances

The Buyer will be provided with a large stack of financial documents.  The first thing to focus on is how well the complex is managed. Take a look at the budget. Are they raising enough money in income to cover the HOA day to day expenses?

 


4. Reserve Study

Since the HOA will be responsible for repairing and replacing all the major components on the property (e.g.  pool, clubhouse, parking lots, lights, roofs, etc.), make sure to check if the HOA has done a recent reserve study.  Did your buyer get a copy? HOA law requires the HOA to frequently hire a 3rd party to do an onsite inventory to determine four things:

– The total life of that item (“tile roof – 40 years”)
– The remaining life of that item at time of survey (“25 years”)
– The estimated cost to replace roof (in 15 years)
– Divide that estimate replacement cost by number of years and number of units to determine how much the HOA has to collect this year from each owner for that item. This will insure they have the funds pre-collected when the roof expense comes due in 15 years.

 


5. Reserve Funds

The reserve study tells us how much the HOA should have collected in the past. HOA law states that the HOA must disclose:
– How much reserve money the reserve study should have collected to date. That would be 100% fully funded.
– How much money they have actually collected.
– The percentage between what they should have in reserve vs. what they actually have.

It is not uncommon for an HOA to be behind on collecting reserves because no one wants their dues raised.  So, should your buyer buy into a complex that is only 25% funded?  More money will be needed in the future, whether the HOA has collected enough or not.  The result may be a major dues increase or a special assessment of all homeowners.

 


6. Financial Statement Knowledge

Remember it is the seller, not the HOA, that is responsible for itemizing and delivering the correct documents to the Buyer. Is this HOA ran well?  Are they large enough to hire a property manager? (Or is the Board Treasurer, who is actually an engineer at Google, preparing these complex set of documents?) And the big question: Is your Buyer sophisticated enough to read and understand these documents? There are companies that the Buyer can hire to analyze and review these documents for them. It seems to me that when you are discussing the inspection options with your buyer, you should advise them to get qualified help in understanding what they are buying into.

 

Low Flow Disclosures

Many REALTORS® have asked about the new law requiring that Water-Conserving Plumbing Fixtures be installed in homes by 2017.

First, some background on this issue:

In 2009 SB 407 was introduced which would have required that residential and commercial properties be retrofitted at point-of-sale with low-flow toilets, showerheads, and faucets. At the time, C.A.R. argued that the point-of-sale approach would burden escrows and have a negative impact on the already weak housing market. As a result, SB 407 was amended to remove the point-of-sale provision and instead require all properties to be retrofitted by 2017. In other words, instead of point-of-sale, a “date-certain” approach would be implemented.

In 2011, C.A.R. sponsored SB 837 to add language to the Transfer Disclosure Statement (TDS) notifying the purchaser of a property of the impending requirements of SB 407. The inclusion of this information in the TDS will ensure that sellers and buyers are aware of these water efficiency retrofit requirements and provide disclosure liability protection to REALTORS®. This measure went into effect on January 1, 2012.

Do you have more questions? If so, read the C.A.R. Legal Q and A, which will answer many common questions, including:

  • Does the water conservation law create any point of sale requirements?
  • What is the significance of it NOT creating a point of sale requirement?
  • Are there any forms that allow the seller to meet their disclosure obligations?
  • Should this box on the TDS be checked if the seller is uncertain about whether there are WCP fixtures installed?
  • How should a seller answer the question on the SPQ, “Are you aware of any noncompliant plumbing fixtures?” if they are uncertain?
The full FAQ can also be found on the C.A.R. website.

Demand Changes to San Jose’s “Just Cause” Ordinance!

For the past several months, the City of San Jose has been developing two ordinances that impact the rental housing industry: An Ellis Act Ordinance and a Tenant Protection Ordinance. Both of these would have a drastic impact on how you manage your property. The public comment period for the Tenant Protection Ordinance and the Ellis Act will close this Friday, March 3rd at 5:00 p.m.

Below is a sample letter that addresses the major issues with the two ordinances. You can take this letter and send it on your behalf to the Housing Department to let the City of San Jose know that there are serious problems with these ordinances. It is important that the City hears from you and that they receive a volume of letters opposing these measures and favoring laws that do not place onerous restrictions on property owners. 
 
You must email the San Jose Housing Department by Friday, March 3rd at 5:00 p.m.

Sending Instructions:
1.  Copy the text of the letter below and paste it into an email
2.  Edit the “Your Name” section at the end so the letter is written on your behalf
3.  Send the letter to the following recipient: tpo@sanjoseca.gov

 


Dear San Jose Housing Department,
 
I am writing to you as a rental housing provider in the City of San Jose. I am concerned that the Tenant Protection Ordinance (TPO) is overly complicated and convoluted. As someone who owns rental property, I want to urge the Housing Department to adopt changes to the TPO that would simplify it. This would eliminate the need for each property owner to require a legal interpretation for each application of the ordinance. The ordinance, as written, will have a number of unintended consequences.

 As a property owner, I have a limited awareness of the conditions inside my units unless there is an inspection or the tenant reports a code violation. Therefore, it is difficult to determine if the reports of code violations are being rationed out to extend the term of the good cause protection. The ordinance is written to allow for repeated instances of good cause protections up to 6 months at a time if used strategically. Instead, we ask that a tenant only be permitted one instance of a 6-month good cause protection per lease term.
 
Under TPO, owners must show that code violations have been corrected prior to beginning an eviction for just cause, such as non-payment of rent. If the tenant commits an illegal act but the code violation has not yet been corrected, then the property owner is powerless from preventing further criminal activity until the code violation is corrected. Instead, we ask that any illegal activity is exempt from the TPO. As property owners, we must provide our tenants a safe place to live. This ordinance, as written, prevents that.
 
Under the Ellis Act, a property owner is required to provide one year of just cause protection to the tenant prior to filing a notice of intent to withdraw. This provision requires us to know a full year in advance of our intent to utilize the Ellis Act, which is an unreasonable expectation. This ordinance would also hurt the resale ability of our buildings as this one year requirement would impact the subsequent owner. Instead we ask that you strike the requirement that good cause protection be provided to tenants for one year prior a notice to intent to withdraw the property is served.
 
Sincerely,
 
[Your name]


 

You can read the full draft recommendations from the San Jose Housing Department by using the links below:

Draft Recommendations for the City of San Jose Ellis Act

Draft Recommendations for the City of San Jose Tenant Protection Ordinance

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Santa Clara County Association of REALTORS® and VNARP Embark on Real Estate Trade Mission to Vietnam

Looking to tap into the growing international real estate market, members of the Santa Clara County Association of REALTORS® (SCCAOR) will join the Vietnamese National Association of Real Estate Professionals (VNARP) on a ten-day trade mission to Vietnam starting on March 1st. Delegates representing both groups are aiming to foster mutual investment opportunities between real estate stakeholders in both Vietnam and the United States.

“Vietnam is forecasted to be one of the top growing economies in the next few decades,” said Evan Huynh, President of VNARP. “This trade mission will give our delegates the opportunity to exchange trade experience and learn about the best practices for investment opportunities in both countries.”

Delegates from the groups will attend real estate conferences and meet with Vietnamese companies and government agencies in Ho Chi Minh City, Ha Noi, and Danang ─ three cities currently experiencing a boom in real estate development. Several delegates from the United States will be giving special presentations at these events, including: Lieu Nguyen, the President’s Liaison to Vietnam for the National Association of REALTORS®, Ron Gonzales, the former Mayor of San Jose and President of Presencia, LLC, and Hilda Ramirez, the Director of Public Relations, Events, and Education for SCCAOR.

Guest presenters for the SCCAOR/VNARP Vietnam Trade Mission (clockwise from top left): Ron Gonzales, Hilda Ramirez, Tom Truong, David Tran, Ryan Hubris, and Evan Huynh.

Hilda Ramirez, who led SCCAOR Members on a similar trip to China in 2015, said that REALTORS® are starting to embrace the global market when it comes to real estate investment. “The theme for this Inaugural Trade Mission is to ‘Connect Cultures to Create Commerce’,” she said. “Silicon Valley is home base for technology and innovation, considered one of the most thriving economies in the world, and the economic impact happening in many Vietnamese cities is truly dynamic. We are honored to have the opportunity to join VNARP in this unique opportunity. It is essential for today’s business professional to be well versed on emerging markets.”
Silicon Valley, Ho Chi Minh City, and Ha Noi all rank in the top 10 of the World’s “Most Dynamic Cities of 2017” according to the JLL City Momentum Index. This index was calculated by examining over 40 variables such as innovation capacity, technological prowess, commercial real estate momentum, and a host of other socio-economic factors.

For updates on the trip, visit the Santa Clara County Association of REALTORS® on Facebook at www.facebook.com/sccrealtors

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Santa Clara County REALTORS® Foundation Donates $10,000 to San Jose Flood Relief

In the wake of the worst flooding to hit San Jose in decades, Santa Clara County REALTORS® Foundation has donated $10,000 to the San Jose Flood Victims Relief Fund. Over 14,000 people were impacted by the overflowing Coyote Creek due to spillover from the Anderson Reservoir.

“The Santa Clara County REALTORS® Foundation strives to help families and revitalize our local communities, and this includes assisting in disaster relief,” said Bonnie Wilson, the Chairperson for the Foundation. “We are inspired by the response from our REALTOR® Community, and we hope to continue our work in uniting local real estate professionals in giving back and enriching the lives of those affected by this unfortunate event.”

The Relief Fund, set up by San Jose Mayor Sam Liccardo and Silicon Valley Community Foundation, is supporting nonprofit organizations that are providing immediate and long-term relief and recovery assistance to flood victims in San Jose. The public can help by contributing online at www.siliconvalleycf.org/sjflood.

“It is heartbreaking to see so many families displaced from their homes but I am heartened by the outpouring of community support,” said Neil Collins, CEO of the Santa Clara County Association of REALTORS®. “I am proud and grateful that our Members responded to the needs of the community that we serve. Those impacted by the flooding remain in all of our prayers.”

The SCCR Foundation is the charitable arm of the Santa Clara County Association of REALTORS®, which is made up of over 6,000 Realtors and Affiliates in and around the Bay Area. The SCCR Foundation aims to bring organized real estate together by investing in our neighborhoods with compassion, foresight, and action.

Learn more about the Santa Clara County REALTORS® Foundation at www.sccrfoundation.org.

Floods in San Jose: How SCCAOR Members Can Help

San Jose is experiencing unprecedented flooding along Coyote Creek. Over 14,000 residents have been evacuated and numerous residences and buildings have been damaged. This guide has information about how to safely evacuate, donate to relief efforts, and volunteer your time to helping those affected by the floods.

Click here for the latest emergency information.

Click here to learn about how you can keep your family safe during a flood and how to clean up a flooded home.

Click here to donate to the San Jose Flood Victims Relief Fund, which will support nonprofit organizations providing immediate and long-term relief and recovery assistance to flood victims in San Jose.

Click here to donate to the Red Cross (on the donation website, make sure to select “California Floods” – see image below)

Click here to learn about how you can volunteer with the Red Cross to assist those affected by the floods.

Click here for information of free sandbags available from the Santa Clara Valley Water District.

Click here to follow California Highway Patrol’s Twitter Account for freeway closure information.

SCCAOR General Membership Meeting 02.10.2017

Senator Bob Wieckowski was the keynote speaker at the SCCAOR General Membership meeting on February 10th, 2017. The Senator spoke about several new laws and guidelines that are relevant to the real estate industry, and he answered several questions from the audience. The meeting also featured a NAR update from Dave Walsh, a CAR update from Craig Gorman, and an MLS Listings update from Quincy Virgilio. SCCAOR also honored its legacy members who have been with the association for 25, 30, 40, and 45 years.

We have compiled some relevant documents on the information that was covered in the meeting:

  • Click here for the Accessory Dwelling Unit Memorandum produced by the California Department of Housing & Community Development.  Many general questions about the new guidelines are addressed in the memo.
  • Click here for information on the Automatic Residential Fire Sprinkler System Requirments for Accessory Dwelling Units.
  • Click here for the MLS Listings Update slideshow.
  • You can also click here to watch an archived live stream of the meeting on our Facebook page, or just click on the video below:

SCCAOR General Membership Meeting 2/10/2017

SCCAOR General Membership Meeting, featuring keynote speaker. Senator Bob Wieckowski.

Posted by Santa Clara County Association of REALTORS® on Friday, February 10, 2017

Santa Clara Impact Fees

The City of Santa Clara is considering adding additional fees to new construction of residential housing to pay for affordable housing projects. This will impact the ability of new housing to be built at prices affordable to the average family. The dream of homeownership is already difficult for many families to achieve and these new fees could push this dream completely out of reach.
 
Santa Clara has commissioned a nexus study, which is a specific study that legally allows the city to justify adding hidden taxes to the cost of housing; these taxes are known as impact fees. This study would justify up to $71,800 in added impact fees for the construction per single-family home and $43,400 per apartment unit. This will not make housing more affordable in Santa Clara. Additionally, these fees will hurt property values, as the study shows the fees would decrease land values by 10% to 40% depending on how high the fees are set.
 
What can you do?
  • Email and call the Mayor and City Council with your stories about how adding tens of thousands of dollars of new fees will hurt your clients as they try to afford the American dream of homeownership.
  • Click here to read the nexus study justifying the fee increases on homebuyers and renters.